Could you please elaborate on your remarks about the EMU and the Euro. That is the piece of the puzzle I cannot fit. If you don't mind...please.

It hit me a couple of days ago. I keep hearing from Pastors and other Godly men and women that they see a dark cloud hanging over America. Well I think that cloud is the spirit of GREED. (6th Horseman?. Everyone thinks they will be rich in the future just by investing in the stockmarket. They have total control over their lives.

HA! you can't have control over your own life if the market is rigged.

The only way to bring America back to the Godly way our forefathers wanted isn't through the government. Everything in that direction has been stacked against us. The only way for people to return to God is if they lose everything they earned and saved. When the stock market crashes you will see one of the largest religious revivals ever seen in America as people with no hope turn to God for help.

The reason I am trying to accumulate as much Gold as I can is in order to help my family when they lose all the money they have invested. My Father thinks I am nuts and is worried that I am losing all that interest I could be earning in the stockmarket. I look at my little hoard of Gold as his salvation from poverty.

Just had to get this off my chest.
Thanks,
THX

USAGOLD -- Yes, even the WGC does not set the world straight on the IMF as you do !!! I only setforth that posting as it was in part, from what FOA was quoting.
I too feel that the IMF will fall during the forthcoming dark battle.

Caven Man -- I truly feel that we gather here at the FORUM among these Knights and Ladies of the Tableround as we were destined to participate in the learning experience setforth by our Host, MK. -- What is it that you find here that is not found elsewhere ? --- THE answer is TRUTH, kindness and civility!!! -- I have surfed the web for long periods and stopped a number of times in search of what this FORUM has. I have found my home. Please jump in all you "lurkers" and express your doubts, questions, and comments. Like I tell my "students", "There is no such thing as a dumb question ! -- Only dumb answers." So now you all see why I am quiet much of the time.
<;-)

This is my home also. I happen to like the host although we have never met. Do you ever ask yourself the question; what if I am wrong? By the way, do you know what "IMHO" means speaking of stupid questions? Signed....the student

The pursuit of money......it is ruining our culture from the top down and bottom up. We shall see if you are right. I think you are. It is time we all learned a lesson. If so, the medicine will be strong but hopefully, we will find the cure for what ails us. Didn't Santayana say something like the third millenium will be religious or it will not be? Help me out there with this fellow Knights and Ladies.

Cavan Man --- Took me a while to pickup on the abbreviations used in cyberspace to save time and save the ones that have a hard time spelling the "King's Angrit" !
IMHO mean "In My Humble Opinion"
BTW, (By The Way), variations of that are IMNSHO which adds "Not SO"-- but we will never see that use on this FORUM.

Lot's of issues raised by FOA - in answer to Steve H. - I am still at a loss, even if do agree mostly with FOA's conclusions, there are still some deductions, which are either not totally coherent or do need more explanations.
I agree on the difference of paper gold and physical bullion markets, but when the whole shebang of derivative, forward and carry trade in gold took hold, there have been the CB's lending or leasing to bullion banks-we all know who they are-, who in turn sold the physical to the market in order to generate cheap $'s to lend to hedge funds as well as producers. IMHO, it is the bullion banks, which guaranteed to return the physical asset (AU) to the CB's and that is where the systemic risk is located.
I can't care less about the wisdom of Barrick or some of the Aussie hedgers, except being detrimental to their own demise. What I'm more interested in is the fact, that most CB's in the gold lending/leasing business are awaking to the fact that their gold is effectively sold and there may be no way to recuperate it at agreed terms, notwithstanding the fact that their only hard currency asset was devalued at least 30 to 40% in no time -the meagre interest they have recouped in the few years of leasing may have outstripped the storage costs but in no way makes up for the massive devaluation of their only true currency reserve - another euphemism for new technocrat's paradigm, or is it imbeciles?

Anyway, in view of the (mostly speculative, sorry derivative carry trade shorts in AU), the generally accepted size being a whopping 14.000 tons of gold shorts in the "paper gold" market, while the physical demand is booming, growing exponentially since years (while production is falling for the first time in years),it is only vis a vis the US$ that gold is marking new lows, the POG is up vs all other currencies!).
The fundamental problem as Paul Volcker, Dr Yen et al. have expressed openly is the dependency on the only global reserve currency - THE US (credit bubble, stock market ...) $ - , to prolong the (virtual) concept(-ion) of an ever-expanding economy of the new era.
In this sense some of the BC's seem at war with gold. It does seem to be a losing proposition, since most of the aledged BC sellers probably will wake up to the fact, that they don't have any AU left, which would be available in unencumbered status.
Yes, I agree - make you some gold - but also keep in mind the game is played by heavy-weights, who will not surrender easily -, though they've forfeited a lot of the $-future via expanding the credit bubble aggressively.
Enjoy your weekend....

Cavan Man, you asked, "Would you pay off your mortgage if you had the cash today? Would or should that be a priority?"

I recently had this same topic of discussion with a friend, and this is what I told him.
I don't feel that would be the most prudent course of action. (Perhaps you, Cavan Man, have already come to that conclusion if you mustered the patience to read through my typo-ridden response to Julia.) Obviously, because we can't predict future events with absolute certainty, it is prudent to pursue a course that capitalizes on your foresight of the most likely outcome, but also leaves you nimble enough to deal with something you don't expect.

By sinking all of your monetary savings into your home mortgage, you give up a lot of flexibility. The dollar is far more likely to tank than to get significantly stronger. By taking out a mortgage, whether you view it this way or not, you are effectively "shorting" the dollar. That is, you are selling your dollar-denominated productivity at the time the mortgage is written, to be "covered" (bought back) with your future productivity denominated in perhaps cheaper dollars.

If you are of the mind that dollars, as a monetary asset, will be getting even cheaper, don't be so quick to close out this short position. Let it ride and make the payments as needed. But don't squander your available savings in the meanwhile on something like a trip to Hawaii. In that example, it won't be there to redeem as needed for future payment obligations should a problem develop with your personal productivity/earning power. Gold is a safe and flexible asset class that eliminates a number of your financial uncertainties. Flexibility is vital. If you paid off your motgage, and some situation were to develop in which you needed cash, you would find it more difficult to liquidate a portion of your house to raise this money than you would to sell/spend some of your Gold. Further, if the dollar tanks, the higher(!) interest rate on any new home equity loan you might seek would probably be difficult to deal with. Meanwhile, the dollar/Gold exchange rate would soar, and a small amount of Gold savings could be used to cover old contract obligations (such as existing loan payments) or make the needed acquisition of goods with its purchasing power that wouldn't go south with that of the dollar.

In summary, my friend saw the prudence in this approach under the existing economic environment: to sit on his mortgage, making the minimum payments necessary to service the debt. Extra earnings would be saved, some as cash but most as Gold. If the bank moves to increase the interest rate on his variable-rate loan by some onerous amount (like we see in countries that experience devaluation of their currency), he would at that time, and only at that time, consider paying down as much principle as possible. I guess if you have a fixed interest rate, you might as well ride that particular "dollar-short" all the way down. Suffice to say, lenders don't like devaluations as much as borrowers do. But as a borrower, your key question must be, "Can you ensure a future income stream?" Because even with cheap dollars, and an entry-level position as a store clerk paying $40 per hour, it doesn't do you any good if you are completely out of work and out of Gold (now priced MUCH higher!). How would you service your debt? I hope this has been helpful.

As I said to Julia, a person needs Gold for the exact same reason that a person needs money. It's what it is! ---Aristotle

To Gandalf....thanks! To Aristotle.....I have the same opinion; just looking for affirmation. I could not have expressed my (our) rationale so eloquently.

CoBra(too), I don't believe I have ever had the pleasure of exchanging words with you in the past. It is long overdue. "Greetings! I'm glad you have joined our good company."

Cavan Man, I didn't see your EMU and euro question to me until after I posted that piece on mortgages. I'll toss something together in a moment...

Sorry - I seem to get carried away with my own answers...or is it questioning my own answers...

FOA - If the CB's and producers leased or forwarded gold - as I understand via bullion banks to counterparties -it would, probably not take much (AU) in terms of the first default of these counterparties (LTCM-?, why else would it be a systemic risk - except all other delta option et al derivative instruments invested in Russian bonds to exaggerate interest difference - just kidding???)- to be unable to cover -at all!
Gold, as it seems has mostly found private buyers, who increasingly feel the pressure of having to "compete" with the US$. A luxury no one wants to repeat from here on! Not even the euro, which may be (have been)the catalyst, next to a single SE-Asian currency to question the supremacy of reprintable paper $ as sole reserve currency.

Again answering my own questions - sorry - unintended - Pls
comment! Regards CB(too)

http://www.bloomberg.com/bbn/topsum.html?s=e7cf922636569fe39db7943c0d3c79f0Friends,
The IMF/US dollar financial managers/backers LUST for one thing more than anything else! Confidence in their precious (sik!) paper, as FOA and others have previously commented. When that confidence is truly threatened they (the PPT crowd) will stop at nothing to keep the ship afloat. But they are only men and women like us, not "gods", so it (confidence) will come to an end. Maybe sooner than we think.

I agree with the wise ones of this forum. BUY PHYSICAL AU!
Paper means/holds nothing.

Keep Well!!

PS If you can, look at a very long term (back to 1979 at least) chart of the US-30YR T-Bond. We appear to be hovering just above the long-term support trend line. When (not if) this is broken LOOK OUT BELOW!!! And LOOK UP FOR AU!

"Aristotle, could you please elaborate on your remarks about the EMU and the Euro. That is the piece of the puzzle I cannot fit. If you don't mind...please."

At the moment, time has grown short for me. I had promised a friend I would try to wrap up some paperwork on a project today, and that awaits my further attention. So finding myself short of time, I realize that your question is HUGE! I wish you had been more specific when you requested elaboration. If I may be so bold as to guess where the trouble spot lies, I will offer this short answer. If I have mis-guessed, let me know and will target that area when time allows.

How will the EMU and euro help "save the world," so to speak? We must revisit the economic gridlock that develops when money goes bad. There is a vicious circle when the workers that fill a demand are also the customers that create the demand in a closed (self contained) system. If you have no money and no income to generate demand for a product, such as cookware, or portable radios, the company certainly won't be hiring you or anyone else to manufacture such items that can't be bought. Either everyone works and consumes, or nobody works and consumes. Quickly, let's revisit my key example to Julia:

<"...In the example of rent, even though the dollar has devalued by let's say 50%, your rent won't double until your landlord can modify the rent agreement. However, countries exporting goods to the US would immediately double their prices (as it would be done for them on the foreign exchange markets during the proper exchange rate computations.) Your salary at work won't increase until your employer doubles the price of his products in order to pass these increased import costs along to the customers. As you are both a worker AND a customer, you can see how a certain gridlock can seize the system. Gold savings is the ultimate lubricant. In a sense, through Gold you help to save yourself AND save the world...some jobs simply won't exist unless there is demand for their product, often manifested in the presence of discretionary income or savings of others.">

To better see how the EMU and euro will save the world from gridlock, use my old standby trick of simply thinking of countries as Big People. If we have some people that don't go down with the ship--meaning, that they use money that functions independently of the dollar--they will remain as a viable entity to help relubricate the cogs and gears of an otherwise seized up global economic machine.
The euro was created to be specifically self-sustaining and independent of other national currencies. Its value will be held in its ability to purchase Gold and to settle contracts.

America has a choice to either put up protectionist walls and create a closed system where we only trade goods and services internally with our tree-bark money (as in the Marco Polo visit to the Great Khan), or else we accept the bitter pill of our cumulative past monetary mismanagemant and look to those remaining viable parts of the world (non-EMU/dollar nations) to grease our wheels. ---Aristotle

I absolutely second the motion: "learning experience setforth by our Host, MK. -- What is it that you find here that is not found elsewhere ? --- THE answer is TRUTH, kindness and civility!!! " I would also add a person can get quite an education on this site. I, for one, am very grateful for all of the above.

Sir Aristotle,
Thank you for recognising a humble newbee on the internet and the forums of real value, which I seem to luckily have stumbled upon early.
After some consideration on the available gold forums I have taken a chance to jump into the IMHO, most sophisticated round table of honoured knights of the golden grail and end up feeling mostly inadequate in articulating my beliefs and fears (probably) in such a knowledgeable and noble place.
IMHO-in the long run the fundamental economics of demand/
supply will not be controlled by PPT - it will be controlled
by us - the market (participants).
Take care and thank you for your consideration
C.B.(too),

Aristotle, My heretofore perspective on the Euro was/is tha t it simply is a new currency created out of the need to have one because of the EMU. With a single currency and economic union, Europe becomes a much bigger player; probably the upside looks better this way for growth and prosperity. Souns like there is another agenda I am not aware of. That is the reason I ask the question.

Gandalf...I wanted to thank of your description of the situation in Thailand prior to and just after The Contagion ripped through that unfortunate country. I can remember reading a National Geographic on Malaysia just before the The Contagion hit there. NG featured the twin towers in Kuala Lampur, the tallest buildings in the world. I thought to myself "Why are they building skyscrapers to the sky in a country where most of the fields are still plowed by oxen?" It was an obvious incongruity. It was only later that I found the reasons why. Now those buildings too remain an empty monument to greed and stupidity and the people remain impoverished. I've handled baht chain as a curiosity back in my youth...It is a kind of currency with each link of standard weight and fineness. Jewlelry in much of the east is really currency. When gold's detractors point disparagingly to the demand for gold jewelry as the mainstay of the market -- and thereby denigrate it as money -- they show their ignorance about gold as money in the East. Thanks Gandalf -- a great post.

P.S. Don't get me started on the IMF. I was just registering my usual complaint about the press� anti gold bias more than anything else.

Cavan Man: The significance of the euro? Up until its introduction, there was no paper competitor in the treasuries of the world for the dollar. Now there is. Though it is off to a rocky start, I do not think it will continue to be rocky. Now the dollar is the best of a bad lot. If the current inflation rates continue (based on oil), the real rate of return on the dollar will collapse and we will have a flip flop. I think the euro could be the beneficiary. At the same time, Peter Asher's recent post on the subject got my attention. There is much to what he says. I need to consider his post. And Peter, by the way....

Peter....We are a ways from a the sixth...........As you can see the Fifth is beginning to wreak the havoc I had anticipated. Number five could be a major problem for the paper money crowd. The Gulf has effectively devalued the dollar. We just don't know it yet.

Tomcat...Y2K is the wild card in the deck -- and those playing this poker game had better not forget its presence. Please keep us informed on the most important aspects of the bug's growth and infection of our economic system, as you are quintessentially qualified to separate the wheat from the chaff to our collective benefits. So, good sir, what is the latest on this issue? I know you're holding out on us.

FOA...Do we know how much of the gold carry trade has gone into U.S. Treasuries? I don't think there is a figure available but I wonder if you have heard anything. Do you think that the British sale might be a call on their gold reserve resulting from a counter-party having gone belly-up? (sorry for the crude reference) And if so, do you believe other central banks could be similarly burdened? What I mean is they have to bail out the counter party to save their own banking system. Please answer at your leisure as you know you have much to deal with, but I think you see I do not ask this casually.

Thank you for your on-going presence here, FOA. I am sure that you see how much the Table Round appreciates your regular visits.

Turbo...I wanted to say that we have had many reports similar to the one you reported here. I think that the employees at the banks don't have a clue what they are supposed to do with respect to Know Your Customer. Though the idea has supposedly been beaten down in Congress, it seems to be still in effect. I don't understand this. It is strange. We have reports of strange questions for people buying cashier's checks and trying to withdraw cash. Those encountering problems along these lines need know that this is their money that they are asking for. Don't be afraid to raise a fuss. The assumption that we are all drug dealers laundering money is ludicrous.

We had a gun show in Denver today and it had double to triple the attendance over last year. Though the press would like to classify all these people as criminals...once again this is ludicrous.

Buena Fe...I think you are on to something looking at the bond chart from 1979 on. That's when the hard money rally ended and the paper money rally began. OK all you engineers, let's pull out those charts and run the the EW numbers and Fibonaccis and see where we are at with this? Does it look like the long term gold chart from 1968 to let's say 1981? Just wondering. ??? Try running it in constant dollars, as well as nominal. Let's see what we come up with. A silver eagle for the best technical presentation comparing the two by Friday of next week.

To all: Thank you for your kind comments. They are sustaining. But it is you who make this FORUM what it is.
And we are among the top gathering places on the Internet. I cannot believe the number of requests we have gotten for posting privileges just in the past week.

MK- Could you expand on your comments regarding Arab Oil devaluing the dollar? It sounds like you believe their efforts to get the price up are directed specifically at the dollar. When prices for any good or service rise the "money" buys less so it (money) is devalued right? If AB raise their wholsale price for BUD then they devalue the dollar also. Commodity prices are entirely subject to supply and demand yes/no? Less production equals a higher price. I have commented on that same scenario in the forest products (paper) industry. Please explain. Thanks.

THX-1138 (6/5/99; 15:25:32MDT - Msg ID:7209)
Some personal thoughts - Thanks for sharing some of those personal thoughts. They were good words, I see as you do. Back to basics, God, maker of the original money, and Gold, created by the Master himself. Nice to hear of another believer, in Gold and in God.

http://www.ft.com/search97cgi/vtopic?action=view&VdkVgwKey=%2Fapache%2Fdocs%2Farchive%2Fqc9faa%2Ehtm&DocOffset=7&DocsFound=196&QueryZip=%3CMany%3E%27gold%27&Collection=Coll2&Collection=Coll4&Collection=Coll6&Collection=Coll7&Collection=Coll3&Collection=Coll8&SortOrder=Desc&SearchUrl=http%3A%2F%2Fwww%2Eft%2Ecom%2Fsearch97cgi%2Fvtopic%3FQueryZip%3D%253CMany%253E%2527gold%2527%26Filter%3Dftfilter%252Ehts%26ResultTemplate%3Dj99reslist%252Ehts%26QueryText%3Dgold%26action%3DSearch%26Collection%3DColl2%26Collection%3DColl4%26Collection%3DColl6%26Collection%3DColl7%26Collection%3DColl3%26Collection%3DColl8%26SortOrder%3DDesc%26ResultStart%3D1%26ResultCount%3D10&After reading that report from the World Gold Council (WGC) posted earlier something started to bother me. Look at the above article from the London Financial Times (LFT). The total sales of Ms. Fukuda quotes for official sales for the last 10 years is 312 tonnes, but the article from the LFT states 6,700 tonnes of "Official" gold being sold, a difference of 6,388 tonnes. Who's right? Was 6,388 tonnes of gold sold or loaned out that the World Gold Council didn't know about?

I'm sorry I didn't post this later but it just dawned on me where I last saw these numbers.

-Beowulf

Correction: My previous post should read "The Financial Times", instead of The London Financial Times.

Earlier today I referred to paying off one's mortgage as a protection against economic turbulence. Aristotle's reply is quite valid and very astute. However, one should at least pay out into the future a bit in any event. While inflation can be a plus for debt holders, severe deflation can be a disaster.

Some people will not have much equity at stake, but those who have a high percentage of equity in their home not only have something substantial to loose, they are a more tempting foreclosure target.

Our own situation is more unique, as we regard our property as irreplaceable and wish to have it free and clear in any event.

As Janis Joplin sang in 'Bobby McGee',-- "Freedom's just another word for nothing left to loose."

Friends,
Have you ever bought something (like a car or a house), or created something (like a great dinner party or a piece of art) that stood out far above in comparison to what your friends owned/created, that you feared turning your peers into instant enemies due to their possible reaction of envy/jealousy? So instead of being proud of it and showing it off, you kinda talked it down and scaped every bit of humility together that you could muster so as to ease their initial reation to your accomplishment, hoping that maybe after a little time went by they would appreciate it as much as you do!

Well I don't know if I communicated this thought very well, and maybe someone else has or will say it better, but I believe that this senario describes how Europe feels and has been acting about their little creation called the Euro!

They have been very humble, almost contrite, although a might bit aloof about the whole thing IMHO. And yet if ANOTHER/FOA are correct in their assertions, this little thing called the Euro is really a financial neutron bomb to the dollar paper crowd.

Time will tell all.
Keep Well

Goldsun, Thanks again for your earlier post. Julia


TO North of 49, USAGOLD, Cavan Man, The Scot, Gandalf, Aristotle, FOA and Peter.......

What a great bunch of guys you are. I've been away and when I dropped in to visit my favorite "Knight Spot" tonight, ..well......... I was overwhelmed to find so much has been written to me. I have made copies of your responses to my multitude of questions and will read them all tomorrow since it is quite late (or early) here now. It will take every bit of my mental ability to grasp it all I'm sure. You are kind to take the time to share your thoughts with me. I consider every one of them a gift and a piece of the puzzle of "how our economic world works" in these times. I'm truly blessed to have found this place.


TO Peter - Can't wait to hear that "long winded" response you mentioned. Thank you for considering my questions.

TO FOA - this all started with my questions for you, my friend.. I apologize. I feel I may have been insensitive to how busy you are right now. I look forward to your input when you have the time. Thank you.

All - Looking forward to reading all of the good stuff inbetween the posts to me.

Good night. And thank you again.
Julia

A comment was made in this forum a day or two back regarding the creation of a unified military for the EU. The establishment of the euro in combination with the newly created unified EU military seems to suggest that Europe has finally decided that it has had enough of Americas reign of dominance. The establishment of a single currency that is independent of the machinations of the US monetary system, coupled with a strong military that is independent of (and perhaps somewhat disdainful of?) NATO, suggests the near fulfillment of a goal of progressive disassociation from Americas heretofore-unchallenged international control. The recent OPEC alliance for price control is another cog in the wheel (or should I say 'nail in the coffin�?).

Why is it, I have the feeling that there will be no safety net (bailout) there for us when we fall?

http://www.gold-eagle.com/editorials_99/sheldon010199.htmlFrom the above site:

"The tip-off that the BBM's have exhausted their potential leases of gold and silver was when LTCM had to use the FRB to bail itself out instead of just borrowing or leasing precious metals and selling the hard assets for cash to cover their emerging market and trading losses.

So what happens now? I suggest the following scenario may unfold over the next ten years...."

My take on his scenario is that it will be compressed to within one year. I say that because of Y2K and oil and short covering. In other words, the rubberband is wound tight on the balsam wood toy airplane and when the kid lets go of it, it will fly immediately. IMO.

http://www.gold-eagle.com/editorials_99/gold-eagle picks up (with my permission) the currency war comments.

http://www.gold-eagle.com/editorials_99/harris060799.htmlCorroboration and reaffirmation....

http://www.the-times.co.uk/news/pages/Times/frontpage.html?999From Sunday's London Times:

"...The draft summit statement stated that "the European council is not at all concerned by the current development in the euro's foreign exchange rate".

However, the passage was excised after some heads of government expressed fears that trying to send out a message that there was no need to panic would induce just that...."

I interpret that quote differently. They have a trump card and haven't played it yet.

http://www.venerosogold.com/library/Must read on Bank of England Gold sales especially part ii about 1/3 the way down where the A/FOA agenda is confirmed vis a vis:

'The deliberate deception again leads one to the conclusion there is a hidden agenda behind the sale [BOE] ... implicitly suggesting an ideological battle between an Anglo-American camp, and the Continental Europeans on the other...."

This is further cooberation to the intepretation of A/FOA. It further points out that A/FOA fall defintely belong to the Continental European camp. Based on the period of postings here and on Kitco and the consitency in their theme from the beginning with the exception that they started out discussion gold for oil then later Euro for oil tells us that the hidden trump card is oil.

Further to the discussion, the quality of the information over such an extended period of time demonstrates the insider knowledge of these two posters inside the European camp. The increased urgency in there message may be intrepreted to mean that the outcome is nearing its end game or just a more openly fought conflict on the gold and currency board where the final victory will be world reserve currency status.

The facts and opinions and events do seem to corroborate the battle of the currencies as to be the OVERWHELMING EXPLANATION FOR CURRENT WORLD FINANCIAL EVENTS PERIOD. ALL NEWS AND PRESS RELEASES FROM BOTH CAMPS CLEARLY FALL INTO ONE OR THE OTHER CAMP PERIOD. THE OPEN BATTLE FOR WORLD RESERVE CURRENCY IS ON AND IN THE OPEN.

Recent statements by the Euro banking authorities in support of the Euro and the removal of the statements playing down the Euro's recent fall is clear evidence that the TIMES article falls into the dollar camp and their interpretation of the Euro bank official is not even close to the remarks true meaning.

teller refused to cash your check from your brokerage house. Most likely, your check was for more than was in your bank account, in which case, he/she would require you to wait for the funds to clear [usually, 4 days]. This is often a good practice, but can also be viewed as simply a way for the bank to "work the float" on you. However, it is possible that the Federal bank examiners are "encouraging" the bank to follow certain practices whatever they are called. Belive me, they do know how to "encourage."

It occurs to me that NO banker is going to lend money without collateral and a collateral agreement attached to loan agreement. Is that true in the Gold-Carry setup??? If it is, then it would seem to me that it is the mining company stockholders that are going to [ultimately] pay the price when the gold-carry unravels. It would also be true that the Central Bank would be the ultimate winner because they would end up virtually [if not actually] owning the mine because the chain of collateral would be from the mine to the boullion bank to the large commercial bank to the Central bank. True or False??

See....I knew you held a piece of the proverbial puzzle. Your black tie is showing!! You can't hide it anymore!!

I remember when you were out there in the Yukon??was it? talking to us from an oil rig?? or something like that?? You were in a storm where you said the wind was blowing huge pieces of ice around like they were marshmallows?? I was really glad when you got back in one piece from wherever that was.

My point is that you have life experiences different from mine and no matter what the topic we discuss together, you will always have your story to tell from those experiences that will add a fresh perspective to what I have experienced.

Your wise comments (msg 7151) about cycles in nature as well as the markets helped soothe the fretting I felt nagging at me. Thank you. I want to relax and learn to ride the waves that occur from the cycles of the markets. But just like learning to bodysurf the ocean waves, I expect to have my face rubbed in the sand and gulps of salt water strangle me a few times before I get it right and can ride the long ones in to the beach. After patiently waiting, trying to maneuver myself to be in just the right spot at just the right time, missing a big one or getting dunked by one because I wasn't prepared for it to happen so fast, finally I catch "a big one." Ahhhh! It is a wonderful feeling of success after riding it to shore, lying in the sand, basking in the "golden " sun, letting the little "after-waves" wash over me pulling sand from under my body as the tide continues its natural ebb and flow cycle....... It was worth everything I went through to get there.

My experience has taught me that I can make alot of headway if I search out the "how to's" from other people. My father taught me the joy of bodysurfing and even now in my more mature years, I still feel the wonderful rush of joy when I catch a big wave and ride it in to the beach! He is no longer with me in this life, but what I learned from him, which was alot more than bodysurfing the waves ofcourse, will affect my life always. Same goes here.

Thank you so much for being here. In the words of someone I call a mentor, "We will watch this new gold market together, yes?"
Julia

The central banks rely on the bullion banks as counterparties for repayment (i.e., Morgan Stanley, Goldman Sachs, Credit Suisse, Scotia Mocatta etc.) via a standard contract agreement. If a mine goes belly up, the bullion banks are forced to get the gold to the central bank creditors. The bullion banks are then usually forced into bankruptcy proceedings to be repaid -- the recent Royal Oak situation being a good example. Scotia Mocatta -- a gold lender to Royal Oak -- is in line with everybody else to be repaid at (10�) on the dollar. They will not get gold from Royal Oak, yet gold, not paper currency, is what they owe. They will have to make good to the central bank somehow. This fact of gold lending life explains much in the way of the behavior of the bullion banks in the options markets, and explains the vested interest bullion banks have in keeping the price down. In times like these with the price down, this is not a problem. SM goes into the market finds the gold and returns it. In an environment where the price is rising, or lease rates are rising, and there is a scarcity of metal, they have a problem. Now picture that on a mass scale (not an isolated incident) and you begin to see what some have talked about around here in terms of a major gold spike at some point along the way. You also begin to see what I am talking about when I ask FOA/Another if the Bank of England is acting as gold provider of last resort to the London Bullion Marketing Association. It could be that it is either that or face acute problems in the British banking sector due to one or more bullion banks being pushed to the ropes.

When these loans go to bankruptcy court obviously there is more than one creditor knocking on the door. The courts are called upon to sort things out. The most likely scenario would be the sale of the mine(s) and whatever other assets are laying around and parcelling out the proceeds. In the meantime because mines are high maintenance engineering projects, you have rapid depreciation of the assets in real terms (not one of those neat little regression schedules), i.e. the mine fills with water, equipment goes bad, miners leave for better prospects, environmental problems intensify, lenders become very cautious, etc. I'm sure you get the picture. Sure, through a series of financial machinations the central bank has call on that mine, but what do they have in reality. (Sort of like those empty towers in Malaysia -- the tallest, empty buildings in the world!) Thus, they rely on the bullion banks. This is the hidden time bomb in the gold market of which only those of us with an acute interest in the yellow metal are even faintly aware.

P.S. You're right that the mine company stockholders pay the ultimate price and should scream the loudest. The Royal Oak stockholder now holds essentially a worthless piece of paper, while the creditors pick over the corpse. It's a no win situation, and to think that the mining companies brought this danger to the doorstep themselves by going along with this gold lending business from the very start. Perhaps they didn't understand they were committing industrial suicide -- I don't know. Like much else in today's world, many in the gold mining industry settled for short term profits at the expense of long term health -- seemingly clever until that darkened figure appears at your (not somebody else's) door.

I am happy to see people like Chris Thompson at Anglo and John Willson at Placer fighting the good fight publicly in behalf of the industry. They are to be credited for making a courageous stand.

http://www.worldnetdaily.com/bluesky_keyes/19990904_xcake_terrorism_.shtml
Hey Mike - enjoyed reading the last couple of week's posts. I see you are considering another horseman. I would nominate the above article for your consideration. It would appear some have decided to take it upon themselves to run the world. The above article and another by Bob Novak are indeed chilling in their possible ramifications for all. Novak's can be found at;

http://www.suntimes.com/output/novak/novak031.html

It seems to me these people know we are on the verge of financial collapse and they have no intention of giving up any political power. Terrorism appears to be the tool of choice to keep the great unwashed in line until some new financial system can be implemented.

I saw you asked Tomcat about the current situation concerning y2k and I hope you don't mind me throwing in my 2 cents. The situation in a word could be described as desperate. Very few entities could be described as ready to carry on business as usual. I'm starting to believe my own pessimistic conclusion concerning the economic ramifications of y2k has indeed been way too optimistic. This is shaping up as a total economic collapse of historic proportions. I've failed to find any evidence to the contrary. Virtually every industry in the world is far, far behind in remediation efforts and this does not bode well for any currency except gold. I think it is time for all to put aside any further concerns and concentrate on getting through the next few years in a much smaller economic environment. Although I agree with the Another/FOA theory of a new payment system coming on line I believe they have underestimated the economic impact from y2k and the resulting decline in oil demand. I wouldn't be surprised to see overall demand for oil fall by half or more. We will see. At any rate, time is now very short concerning making preparations for y2k and with the advent of new state-sponsored terrorism disguised as some sort of good, we have the makings of a completely unheard of economic and political environment in which to wind our way through.

ET

MK.....Thank you for making it possible to come here and find intelligent, gentle people to talk to about gold and the ways of the world. You are a good leader and I appreciate the time you took to answer my questions.

I remember the 70's. I don't remember being especially inconvenienced though. I look back and can say I was oblivious to what was happening in world economics. In the US there were lines for gas but I had food, shelter, water and a job. This devauation will be different when it happens wouldn't it? Nixon had taken us off the gold standard then, right? And people began to see gold as an antiquated relic and were willing to stay in US$ and ride it out? Whereas now, gold is chomping at the bit, trying to loosen its shackles which the IMF/US$ bunch is struggling to keep on it. This time there is so much more debt attached to our currency and so little gold to pay for it with years ahead already sold. (I'm treading on thin ice here trying to piece together things that I have read or think to be true. So, please feel free to correct me.)

As I understand the chess game that FOA has mentioned in his post, the two players are, the IMF/US$ bunch versus BIS/Euro bunch. And like chess there are many different pieces. To name a few I understand, euro, inflation, y2k, manipulation, oil, but I know there are others that I don't fully understand like gold carrying trade, COMEX, derivatives. Isn't all this more sinister than a group of businessmen and eastern rulers deciding that they were not getting enough for their oil in the 70's. Doesn't that signal a worse situation than the 70's??

Do you think that if one is prepared for y2k, one is then prepared for the mother of all $ devaluations?

Got to be at a meeting soon so I must go.
Thanks, Julia

Would you be willing to share what you have done personally to prepare for y2k?

Julia

It has been a real summer weekend, fronts of thunder storms kept at bay and leisurely contemplating the generosity of sharing the indepth thoughts of so many at this forum.

The war at Kosova, hopefully, becoming history, though not quite yet with the doubletalk of Milosevic, who now does not seem to have anything more to lose; Nor the misery of the refugees nor the bombed out Serbian people nor Europe's clear mandate to rebuild this region in their own (back-) yard. It is slowly dawning upon ones mind that the post WWII world order is rapidly being dumped to history.
The new era, and I don't mean the new paradigm of IT and hi tech approach, the forever lasting economic growth apostles stand for and are preaching to the "brave new world" (not only day traders), may be emerging as a total discontinuation from what we became to accept as the parameters of the way we chose to live and manage our affairs in life. The inevitability of discontinuities will affect all and it is no wonder that governments will do everything possible to resist change-since their election to power was in the past.
As I've reread some chapters of "The Great Reckoning", by James D. Davisdson and William Rees-Mogg (published 1991), where they already deplored the destruction of gold convertibility as the major mistake to the discipline of creating stable expectations, we now face, IMHO, major upheavals in view of the almost total dollarization of the global economy, with its apparent fallouts in major regions of global society. The introduction of the euro currency being the catalyst to rapid change and conceptual reorientation and, as I feel, the SE Asian block will counter with their own currency block, the world will discontinue todays appearance(s) by tomorrow.
At the twilight of the second millenium B.C., I feel, we did not even heed and digest the bloody lessons of the 20th. century, in spite of gigantic technological advances, which can never replace the yardstick of balanced and fair advancement of mutual respect and understanding.

The Rise and Fall of the proverbial "Roman Empire", revisited may be a future topic of a Steven Spielberg blockbuster (get tickets).

Sorry for taking up (too) much space in philosophising.

Hey Julia - I began preparing three years ago but basically I went at it with the idea that my income could be reduced to zero due to a financial collapse. I moved out of the suburbs about a year and a half ago and bought ten acres and a house out in the sticks in Kansas. My wife and I have always gardened and canned a lot of food so all we've done is increase the size and scope of our garden. We've come up with a couple of backup water sources aside from the county water system. We've installed wood stoves and basically purchased enough supplies to last us for a couple of years if we have no money or supplies get very expensive. Like Aristotle, I've always kept most of my savings in metals rather than paper. I guess our biggest fear has been having to go to the government for assistance so we have taken it upon ourselves to eliminate this possibility and be in a position to help our neighbors. Most of the people around here are pretty self-sufficient and are y2k aware so I guess we've achieved a certain piece of mind.

I do believe bank runs and martial law are inevitable. I don't believe in the end that government will be of much assistance to most. They haven't prepared any more than any other entity. I'm also convinced that certain areas will experience some civil unrest and the government will have it's hands full maintaining order. You'll likely have to provide your own security in some areas.

On the plus side I do believe that those that are prepared will fare well in a new, more free political and economic environment. I'd say you will need to get by on your own for the first 6 months or so but an economy will emerge, if not an economy similar to today's. I think what has happened in Russia over the last few years is likely what will happen here in the US. The world didn't end, it just changed.

If you have any specific questions, I'll be happy to tell you what we've done. Contact Mike for my email address.

ET

I should have heeded this ancient advice - and not only in my typos.
Thanks anyway for your patience....

This writing started out as a response to Julia, but as more and more of us responded to her, the subject evolved into more than just devaluation.

Before I get into the essence of this laborious treatise, I would like to add to some commentary regarding our Forum itself. It was said yesterday that "TRUTH, kindness and civility" were the key ingredients that make the Forum special. I would like to add a fourth, and in doing so, answer a question that was raised several days ago. A poster wanted to know why one of our most highly praised contributors (in their words, "of such great intellect") would take the time to write on this Forum? That fourth ingredient is COMRADERY ! That certainly is my most cherished aspect of this group.

So, on to the subject at hand:
'Economic Cannibalism' is a term I have created to describe the aberrations that cause the distress in our economic system. The excesses of consumer credit (and the squandering of credit) cannibalize our wealth by using up much of the affluence of our productivity in satisfying our immediate pleasures at the expense of greater productive ability to enhance our lives in the long run. Credit is, of course, what currency is all about.

When concerned about devaluation, one has to focus on just what currency is. I think I've pointed out before that Gold is asset money and currency is credit money. Simply put, currency is someone's 'title' to goods or services produced by the country issuing it. Whether the holder has earned it, borrowed it from someone who did, had it advanced by a CB printing press, or traded for it with a currency from somewhere else, it is just that, a title. The government may or may not secure that title with 'asset' money. Operationally, the citizens of the issuing nation deliver things in exchange for it. Then they have 'title' to someone else's production.

It's how much production that title will buy that is the essence of inflation, deflation, Dollar up, Euro down, etc. So what determines how much that currency will buy? A piece of my post #6941-5/31 (The one that "got Michael's attention"(Thank you, Michael) would apply to all currencies, not just the Euro and Dollar

<>

Both consumer credit and squandered credit, weaken the strength of any economic structure by spending created product on that which will not produce in return. While consumer credit is the lubricant that oils the wheels of the economy, it is also the via for the abuse that cripples the work flows of society. To elaborate: Even in our new "just in time" inventory economy, borrowed capital is needed to pay for the production and delivery at each stage of the source-to-consumer chain, and if future earnings are 'spent' in the present for things that make one's life more productive, then the economic machinery operates more powerfully. But, when credit functions to purchase a more affluent life style than the value of what one is producing, a tune is being danced to for which the piper has not yet been paid.

Squandered credit is, of course, even more disabling to the power of an economy. Michael described one form of this in a nutshell when he wrote, regarding Gandalf's description of the Thai collapse, "Why are they building skyscrapers to the sky in a country where most of the fields are still plowed by oxen?" Empty buildings planned to receive external currency as rent, but earning none, while internally, nothing is spent to enhance the most basic primitive production facilities. All materiel advance is tapped out with no economic exchange created to replace it. In the final tally, it's not tapping out credit that triggers collapse, it's the absence of the ability to repay it.

The malignant forms of credit squandering are more familiar. Social programs that encourage non- production (much worse in the EU than in the USA, and part of the Euro's weakness), armament, and munitions. (How much of that product has gone up in smoke in Yugoslavia?) And now somebody has to foot the bill for a 100 billion dollar reconstruction project.)

As we approach this Millennium milestone, I think of some of the visions that were around when I was a kid. We thought we would ring in the year 2000 with cities around the globe filled with affluent people living in an architectural paradise, while colonizing the solar system and maybe a star or two. Instead we're worrying about who's currency ox gets gored, who will eat a full meal, and whose kids will survive the bombs and bullets. Forgive me for this turning into a sermon, but sometimes one thing just leads to another.

So Julia, you did ask after all about devaluation and what to do about the threat.
,
In responding to Steve and Tom yesterday, I outlined the method of escaping the effects of a devalued currency. Don't store any value in it! If you don't have a property or other resource you feel comfortable with, then Gold is the sure thing to hold value. While the purchasing power of Gold may, in times like this, decline, it is certain that when it is the monetary medium of choice or necessity, Gold will buy dear!

GOLD IS A MONETARY ASSET ---- CURRENCY IS CREDIT.

Currency can be devalued and defaulted. In the long run, it is not a question of whether an ounce of gold will buy $100, $300 or $800 worth of things at any particular time. The fact that it will ALWAYS buy something, is what makes Gold eternal.

Julia, you had asked soneone else for a Y2K preperation plan. Let me give you one example. It may be work, or it may fail completely. I think the "Betting Odds" are with me. Step one. Borrow as much money as you can. Buy 1oz bullion coins that are .9999 fine gold for about $290.00 each. Sell half of the Gold in late December. You will propbaly get $1,000.00 each for them at that time. Pay off the loan in Febuary or March of year 2000. The money will have devalued about 50% which means you only had to actually pay back half the money you borrowed. Give the rest of the cash to the poor and keep the balance of the Gold. You will have done a very good deed and God will have rewarded you for it. Sincerely, The Scot

P.S.

P.S. When you go to repay the loan, if the bank is gone, be sure to give all of the cash to the poor. The Scot

I have really enjoyed everyone's comments on Gold Leasing and Y2K. Not having a very strong background in how leasing works I need help. Who borrows against the gold and who sells it to buy US Bonds which go up as gold goes down and sells it for a profit? Can someone take me from the first step to the last so that someone like myself understands how the entire transaction works. Thank you for your patience in advance. I have learned so much from all of you

Your post on econmic cannibalism is both enlightening and inspirational. Inspirational in reminding us that we are on the right track with gold (the asset currency).

It was also inspirational in that while reading it I kept thinking of the increasing productivity of the third world and how some of the profits of that productivity are stolen via their national debt burden. Hopefully, with a future gold backed financial system, these productive countries will actually see the fruits of their labor.

I am both tired and guilty of eating the fruit of their labor.

Found this at that other board, and wish someone to advise if this is a feasible worry, or another "red herring". Thanks <;-)
----
> Date: Sun Jun 06 1999 15:20
> Silverbear (Y2K-2 ) ID#119246:
> Copyright � 1999 Silverbear/Kitco Inc. All rights reserved
> I've been a COBOL programmer for about 15 years. The shop were I work is diligently working on the Y2K problem but no long ago we realized that making the code Y2K compliant is just part of a much larger problem.
> Like us, many other large corporations are now discovering or soon will discover that much if not all or their corporate data is saved on records which contain an "effective date" and a "termination date" which is what tells the computers processing their data, when a given record is "effective".
> The problem is, when these databases were originally built years ago, the programmers knew the systems couldn't handle dates after 12-31-1999. So what did they do? They put 12-31-1999 or 12-31-99 in the termination date when the databases were built. To make matters worse, users have been keying termination dates of '12-31-99' on records for years because entering 12-31-00 would end up as 12-31-1900. Worse yet, many programs were coded so that if the termination date was left blank when a record was added, the program would plug it with '12-31-99' or '12-31-1999'.
>No problem, just change all the termination dates to say
'01-01-3000'? You know how long it takes to do this on trillons of records? And what about all the records that have been added this last year with a valid termination date of '12-31-1999'? How do you tell these records from the ones where the termination date should be open ended?
> What happens if you make a record with a termination date of '12-31-1999' open ended and as a result it overlaps the dates on another record that is not supposed to become effective until say '01-01-2000' but has already been loaded for next years new pricing, etc? Do this and you end up with more than one record with the same key in effect at the same time. I won't even go into what programs do when they encounter this but needless to say it's not good.
> To sum it up, we can make every program on the planet Y2K compliant and come '12-31-1999' much of the worlds data is going to cease to be "effective". Fixing this data is going to be just as big or a bigger problem than fixing the code. It will require looking at every single record on every database in the world. It will require massive downtime for systems while the databases are off line during the massive updates that will be required.
> Worse yet, it will require many more programmers as are currently working on the code to fix this the data in time. Where will they come from? There's not enough time to train more now. You know how many companies test for Y2K compliance? They set the system date on a spare machine greater than '12-31-1999' and then run the production data from yesterday against their current production databases. Guess what? The date of service, invoice date, etc. on yesterdays data works fine with the bad data because the date of service, invoice date, etc is still less than
'12-31-1999'.
> In otherwords, most Y2K testing as it's been done to date has not even identified this problem!
> Do not look for this on 60 minutes anytime soon. Any shops that are now aware of this will be keeping very quiet until they have time to determine how bad the problem is.
>
>You have been warned.
>======

http://www.gold-eagle.com/cgi-bin/gn/get/forum.htmlChris in response to your comments on gold-eagle, which I won't post here without your permission (this time), I would like to remind all that 'my theory in 6820 is merely a summary of what I believe A/FOA are posting. I state that I believe I understand what they are proposing and put it in a way that I could understand it. Nothing is ever black and white but that was as close to b&w as I could come.

I am not sure what NWO means although I have an idea. Occams Razor theory states the simplest explanation is the best:

Some countries not happy with US$ debt.
Devise a new currency not so encumbered.
Convince 11 countries to use it.
Back it with gold.

Seems straight forward to me. What you propose is another step or two in the above, making it more complicated. Whatever the motives are it seems that the A/FOA posting explain much of what goes on. I am open to any explanation as long as it explains the meat of the matter. So far I give A/FOA an A for effort and consistency.

I published what I did so others could also understand. How each of us reacts to it is to each our own. My regret in all of what they posted, if true, is that as an American I wish that the US had, does, and will manage its finances better. One thing is for sure the A/FOA message can't be ignored, especially if true. What do you think?

for the poster looking for leasing info, it is tough to grasp because I believe there are two kinds of gold leasing. First is the European style and the other the American style. FOA alludes to these. In the European case, apparently these are done with the CB keeping the gold, in the case of the other, I believe they let the gold go. The leasing isn't truly a lease per se as the CB's really loan the gold or a certificate. The lease rate is the difference between the interest rate and the gold loan rate, leaving a lease rate, which can go negative. Ted Butler over at the gold-eagle site has a number of good posts on leasing. I tried to find the URL but was unsuccessful. Perhaps you could drop Vronsky a note and he could tell you the URL.

Yes, time will tell all. August gold now...$266.??

Michael,
Your post about the convoluted court "workout" of bankrupt mines is one for much consideration. In the event of mine assets being managed by a court trustee, I add: A massive increase in gold prices during this time would require the trustee to reopen the mine at a large profit, even during long drawn-out negotiations. Any new government taxes on such profits would require escrow for later payment "ahead of other players". Also, bullion bank claims would be
fully paid in gold (over a very, very long time) as the new economics of mining make such claims worthy to be satisfied. I do think the BBs will be fighting the government over any new taxes. Truly a mess. Please see below!

Please note that Mr. Faber suspects some CBs to buy back gold at a much higher price. I would add that they will use Euros to do this as that currency will be the "transactional" settlement medium for gold world wide. A price of $1,000 and higher will mark the end of the dollar as is presently known.

Also, his thoughts of "excessive profit taxes" are becoming a more common view as trends reverse. Again, I add that the "journey" from $280 gold to $1,000 gold "will" bring his massive increase in mine stock prices. The problem for most investors will be in timing the selling point. I
think, few will be able to sell their positions in the two or three days time required for gold to make this trip. Does anyone that thinks the shift from this era of gold price management into the era of paper gold "loss management" will bring a gentle price rise over months and years. If one
trades their position on that "premise", I think they will be holding these mine investments for much longer than anticipated. Any new tax legislation will be, no doubt, "grand fathered"! We shall see.

I apologize for not having the link to this story. Perhaps someone can provide it?

Dr Doom: gold, Murdoch, Soros

By Tony Boyd

Dr Marc Faber is the Hong Kong-based contrarian also known as Dr Doom. He writes a monthly newsletter called the Gloom, Boom and Doom report for 900 institutions and wealthy private individuals including some of Australia's better known multi-millionaires. Here he talks to Tony Boyd about his latest views.

On the gold price
Let's assume for one reason or another the psychology in the world changes in favour of an inflationary psychology
or for whatever reason people say they want to own gold.

With the world's population of 6 billion people, if each
person buys one gram of gold each worth about $13 that
would be about 6,000 tons of gold when there is an annual supply of 2,500 tons. The swing factor will be dramatic.

On gold and central banks I am prepared to bet with anyone in Australia that the central banks, which today are selling gold at less than $US300 an ounce, will go back and buy it at more than$US1,000 a ounce in a few years' time.

I am convinced it's going to be that way because I think
eventually the power will be taken away from the central
banks and the world will go back to some kind of financial system that has automatic built-in stabilisers.

The gold standard had some faults but the whole industrial revolution and the tremendous growth in the
world that occurred between 1800 and 1930 occurred under a gold standard, so you cannot dismiss the fact that the gold standard had some merits.

On a soaring gold price I think the gold price will go up so dramatically that governments will introduce excessive profit taxes on producers or, worse, expropriate them altogether.

If the gold price moves from say $US280 at the present
time to $US400, gold shares will go up by up to 200 per
cent, easily. So you have more leverage in gold shares, but if the gold price goes to more than $US1,000 then I would worry about excess profit taxes.

First'searching #7253,
Check out FOA post #7186 6/5/99 which I consider a masterpeice of logic,and USAGOLD's earlier post today,than attack archives-your Gold education has begun!

Second,@ Peter Archer and Tomcat;
Great post Peter,on economic cannibalism,I would like to add something I picked up on, if I may.
About 2 years ago I was selling an un-named(legal) product made in the U.S.A. when a customer remarked loudly that,I can get that(un-named legal product) cheaper at the discount store. So, I researched it.Seems the product he was referring to was made and produced in mainland China,and exported to the U.S.Upon further research I found; For the cost of hiring one U.S. worker(beleive it or not) 1200 Chinese workers could be hired.How can workers in high cost of living countries compete with that? By the way this product has to be produced manually.One other thought,the exchange rates have a lot to do with this un-equalization,if a one world Gold currency(measured in grams of Gold.Example:one dollar = one gram of Gold) ever came about, IMHO, trade would be equalized,however a side effect would be a lower standard of living for affluent nations and a higher standard of living for emerging nations.

Now,my opinion, on the U.S. public.
Yesterday, I started an innocent conversation with a local Jeweler/Goldsmith I've known for about 3 years.I asked him what he thought about the recent drop in the world spot price of Gold.
His reply,(remember he's a Goldsmith);Oh,words to the affect of,"Gold is a barbarous relic." I proceeded to explain a small portion of what I have learned on this forum to him. After a few minutes,his mouth dropped open, and the really's,and you don't say's'started coming,and wouldn't let up. After about 1/2 hour we both had to go to work.
I than realized the total population of the U.S.(except for the Gold disscussion groups) has been thoroughly and completly duped by the mainstream anti-Gold campaign.FWIW(for what it's worth).........beesting

Question: DO the workers in the 11 Euro Countries make the same wages performing the same duties?
Example:A grape picker in Italy,a grape picker in France,a grape picker in Germany?
Thank you in advance........beesting

Beasting, thank you for thinking through my post #7188 (7186 was steveH). I have always found that the "masterful" mind belongs to the one that can understand what the writer has written! In this day of language "slang", offered in every country, reading has become the most difficult task.

SteveH, also thank you for your grade of "A". I believe everyone that follows USAGOLD will pass this class in good economic health (myself included). We live our lives to produce something of value to others. This is indeed the basis of world trade. However, "fair" trading requires
understanding of each other as much as mastering the knowledge of "the transaction". This forum exposes the true nature of that progress as we gain the knowledge understanding people as well as ourselves.

Also, I add this story to your evolution. "Have you ever talked to someone that said the sun would rise in the east and then the world would end? When asked if they could explain? The reply was, I don't know the mechanics of rising suns. I'll leave that to the experts. But truly, this
world will end after the light, because it came to me in a dream. Dreams, I asked? I could never figure those either, but they are true, came the reply.

Thanks FOA

As soon as Gold opened in Hong Kong, someone droped a load on Spot the Dog !! --- Dropped it over one US$ to 264.40 and it wiggled around plus or minus a bit for two hours before it popped back up and is now 264.70
<;-)

It's most interesting that from the introduction of the Euro at the first of the year, the price of Gold in USD and the Euro/USD exchange rate have slid about 10% each to this date. This slide has almost occurred in tandem as it relates to the USD. Now from the Euro point of view, this really cannot hurt to much as exports to the US Zone have become 10% more competitive, while the Euro Zone industrial base enjoys interest rates half of what their counterparts must live with here in the US. The competitive advantage enjoyed by Euro Zone business is rather heavy handed at this moment. Now if you start to look around the Globe, the same picture is emerging. Now what occurs here is a massive export of US Dollars to these Economies. Or in other words, an increase in US Dollar reserves due to the increasing pace of exports to the US Zone from points around the Globe. And of course, the only threat to these USD Reserve holdings would be a potentital devaluation of the Dollar. So back to the price of Gold in USD's. Is not the "low price of Gold" in USD's, not a reflection of the potentital risk of devaluation to your USD reserves. After a devaluation, the price of Gold in relation to the devalued currency always buys more currency units. So prior to that devaluation [and now with a slight hint of potentital devaluation in the air] would not that currency [USD] demand a low Gold price as risk/based insurance needed to hold massive amounts of the USD currency as reserves. Now of course to take advantage of this insurance, you would have to convert a portion of your USD currency reserves to Gold. And of course the world must never know, so this conversion would take place in the world Central Banks secret dealing amongst each other. So maybe the lower we see Gold go in USD's, the greater the worlds USD reserve holders believe the risk of USD devaluation is close at hand. We see no Euro Zone/Pacific Rim CB's selling gold. Only the US/IMF group appear to be sellers.

beesting (6/6/99; 21:19:50MDT - Msg ID:7260)

My answer is no. But, I suspect there is more to your question. Please, continue?

I will make time to return and reply in seven hours or so. Other duties call. thank you beesting

Where in your opinion will Aragorn III's "Thunder in the night" occur ? --- Now we watch the Spot gold start out the week "Downunder" and move to HK before reaching London and ending in the US. -- Do you await the BoE, bailout of the Brittish BB's before the blastoff in the price of Au ? -- OR will the cause be from another tightning of the OPEC taps before the Y2K effect sets in ? -- Let us hear your pronostications on the timing of this event. Thanks for everything you have pointed the Goldhearts toward, and we shall all meet you sometime at the future world gold trading site in the East.
<;-)

Michael, on Saturday, I believe, you asked that I make a contrubution the forum on Y2k. I believe you said that I was holding out and perhaps that is true. Y2k has been discussed on the internet so much and for so long that I have felt that many are not interested. Despite this, at your request, I will give it shot.

First, let me list a few disclaimers. What I am about to say about Y2k is my opinion based on a one year study. Note I said opinion. That is the biggest problem with y2k. It is hard to draw conclusions based on an event that we have never experienced before. I am suspect of anyone who claims with certainty that Y2k is going to be a blip in the road or a catastrophe.

Second. My background: I was for many years a systems engineering consultant that was brought into large aeospace projects (rocket launches, etc.) that were behind schedule (just like many y2k projects). I witnessed dozens of engineers telling me how things were ok because their project was ok. We always started out with dozens of subsystems that had checked out ok on an individual basis. We never knew the real status of a rocket payload until wie assembled all the subsytems and tried to get the sysetem working. It was after the initial test of the complete system that reality set in.

An unproven system is not, I repeat not, the sum of its parts. The approach to Y2k is fix the subsystems, put them all together, don't test everything working together, and hope that on Jan 1, 2000, the many systems connected together will work.

The systems work it did was years ago. For the past twenty years I have been a business consultant. Currently I am involved in ten partnerships.

Ok, why am I of the opinion that y2k is going to have serious consequence. Here are 10 reasons:

1. First, believe it or not, y2k as a problem is not even defined correctly. As most of you know, y2k progress is reported by stating how well each company is doing on their internal remediation. Solving internal remdediation is only one part of the problem. The big problem is getting the software and hardware of many sub-systems talking together properly after their internal remediation has been completed. 1999 should have been the year for system/system testing. Instead, large intrasystem tests of many computers communicating are only being done by the US based banks and a few other industries.

2. If at least 20% of all firms experience substantial delays due to their internal y2k problems then delays are enough to create a dominoe effect which will create more that a 20% decline in productivity. This model is based on a personal math model that I sketched out. Internationally, 20% of the firms are going to experience delays. In the US this may or may not occur.

3. A year ago, I did not believe the government progress reports. I still don't. Some reports say that fortune 500 companies are 90% done. If industry is so far along on y2k projects there would tens of thousands of y2k software types looking for jobs; instead, their is a shortage of qualified y2k programmers.

4. US industry depends on US and foriegn suppliers; some of whom won't make it. GM, depends on close to 100,000 suppliers. Close to 5000 of those suppliers, I am told, are very critical. My opinion is that GM and many firms like GM have a massive supplier problem.

5. European utilities are in trouble. Japan started late and many are still in denial. Foriegn oil companies are behind. Italy and Venesuala are still trying to get a y2k budget approved. This list goes on....

6. My opinion is that their will be a small number of bank runs both internationally and in the US. These will be televised. The media, unless prevented by the government, will amplify these events. The media has under-reported on y2k. The bank runs will be publicized by the media and there will be a flight to gold, silver and, US treasury notes.

7. One of the big problems is that cash based businesses will withold some of their cash income instead of depositing that cash. My opinion is that this is a larger problem than Joe Sixpack withdrawing $1000 from his savings.

8. I believe that in December a small percentage of firms will shut down early. They will take a holiday. This will be publicized by the media and there will be a flight to gold, silver and US treasury notes.

9. During the tense days of December I believe their will be a small percentage of countries experiencing politcial turmoil. This will be publicized by the media and there will be a flight to gold, silver and US treasury notes.

10. Finally, in December, I believe that about 10% of the public are going to "get it" and this will be publicized by the media and there will be a flight to gold, silver, and US treasury notes.

Will all this be enough burst the bubble? Can't say, since the Plunge Protectioin Team may have more up their sleeves. I can say with assurance, however, the PPT are going to be very busy in December. And if the bubble does burst then it will be due to y2k or some other reason than the current Plunge Protected Mania.

One last point. If gold and silver go sky high in December then I believe there will be a POG crash in January because, oddly enough, I beleive January will be somewhat mild, y2k wise. The effects of Y2k won't start being felt heavily until March or April when inventory/supplier problems start to show up.

So, Michael and friends, there you have it. As you can see, a lot of how I feel is do to my opinion on how the public and media play on eachother. Lets hope I am wrong! But in the meantime: gold! Get you some!

Michael, on Saturday, I believe, you asked that I make a contrubution the forum on Y2k. I believe you said that I was holding out and perhaps that is true. Y2k has been discussed on the internet so much and for so long that I have felt that many are not interested. Despite this, at your request, I will give it shot.

First, let me list a few disclaimers. What I am about to say about Y2k is my opinion based on a one year study. Note I said opinion. That is the biggest problem with y2k. It is hard to draw conclusions based on an event that we have never experienced before. I am suspect of anyone who claims with certainty that Y2k is going to be a blip in the road or a catastrophe.

Second. My background: I was for many years a systems engineering consultant that was brought into large aeospace pro�2�@�H �E�)��D���H x3H�D���H �D��x3H.0 dc[ 72012�)�(Traffic-Server/1.1.7(8) [ 1])
If-Modified-Since: Sun, 10 JAN 1999 22:21:09 GMT

�D�
Px3GET /WH/roswellrods/cave2/cma.jpg HTTP/1.0
Referer: http://www.roswellrods.com/ab34.html
Connection: Keep-Alive
User-Agent: Mozilla/4.04 [en] (WinNT; U)
Host: www.roswellrods.com
Accept: image/gif, image/x-xbitmap, image/jpeg, image/pjpeg image/png
Accept-Language: en
Accept-Charset: iso-8859-1,*,utf-8

�D�k
0x3GET /WH/roswellrods/artbell/shad2.jpg HTTP/1.1
Accept: */*
Referer: http://www.roswellrods.com/ab24.html
Accept-Language: en-us
Accept-Encoding: gzip, deflate
User-Agent: Mozilla/4.0 (compatible; MSIE 5.0; Windows 98)
Host: www.roswellrods.com
Connection: Keep-Alive

�F�P�L��E�@�D�ion: Keep-Al�2�
�E@�H k 0x3�*`�H��C�z"3�*pz"�.gif HTTP/1.0
Rz"1|��://w�z"1y�trd.o�z"1��
Us�z"1��zill�z"1}dNECC�z"1_P") We�z"1s ,2
H�z"1�"shep�z"1��cept�z"1y�4 ima�z"1|�", im�z"1y�\age/�z"1}�png�z"1y�$ding�z"1y��pt-L�z"1�$ en�z"1s'�set:�z"1�*,ut�z"1_Ld�z"1�"���z"1_K�s/ss�z"1y��ldsi�z"1"�/1.0�z"1_Q"ttp:�z"1Ne|pher�z"1��tml�z"1_R� Moz�z"1y�\]C-N�z"1y',; I)�z"1}�.0.2�z"1}"seas�z"1y��Acc�z"1}��if, �z"1�"map,�z"1�� ima�z"1��ge/p�z"1_[\ncod�z"1|�"ccep�z"1y�de, �z"1��hars�z"1y�-1,*�z"1�|�z"1�\�0�z"1y��rs/b�z"1s/"bann�z"1}4ll.g�z"1y�TAcc�z"1_Q�fere�z"1}$w.es�z"1s��ers/�z"1�4/boo�z"1y�Lngbo�z"1s�cept�z"1y"�r
A�z"1|�ng: �z"1"�e
U�z"1y�"ozil�z"1y�latib�z"1��1; W�z

NOW, please comment on my posting #7255.
<;-)

FOA,you are so kind to share your financial knowledge with us(North Americans-all of us our different we're from all over the world) we can only repay you with insights into our thoughts,I hope that is enough.
In the U.S. there is currently demand for certain skilled occupations;Doctors,nurses top athletes. These occupations can very easily legally work in the U.S.(with proper immigration papers) demanding and receiving higher wages than they may get in their respective home countries.Hence, a higher standard of living for themselves and their families.
Now, my point is,wages may not vary from country to country(as they do now)with the use of a single currency(Euro),in the long term,when workers are payed in Euro's only.FOA do you agree with this?
Let me put this thought in perspective for our North American friends.
Example: A Canadian,or Mexican loses considerable purchasing power when exchanging their Peso's or Dollars for U.S.currency when traveling to the U.S.
In my humble opinion if North America and other Latin American Countries ever went to the all U.S. dollar system (similar to what the Euro Countries are doing) after a long time would an equilibrium be established?
Again In My Humble Opinion, only with some type of dollar that includes Gold as it's base support.......Got Gold.......beesting

I have been caching up on the last several days of forum reading, and one thing that has come up several times is the reference to God and of one's view of their belief in a "personal God". As one who is not a Christian, I thought to offer another perspective.

The Buddha taught that "Religion is not to prepare one for death; it is to prepare one to live".
Often we say that he or she died of cancer, heart attack, stroke or other illness. However, the real cause of death is birth itself. Illness and old age is only a condition. From these words of wisdom, we must realize that what is important is how to live one's life between birth and death. Each of us is born as a human being in this world. The question to us is, are we living, as a human being should? It is an ancient question.

Throughout our live, we accumulate possession's, get married, have children. They are all impermanent. As we grow older or upon death, our possession's pass on to our children, our home is sold, and our children eventually die. Everything is evolving and impermanent. Changing hands you might say. Our human existence, in many ways, is like riding a commuter train, we are constantly watching others come and go, until it is our turn to disembark.

We all take turns in living and leaving this life. What makes life meaningful is not that we all "get on and off" life's train, but whether or not we realize the deep significance of the journey before we reach our exit.

Gold has brought the people of this forum together. This commonality all of us share is also a metaphor for all of us searching how to live this life as a sentient being, how to protect our family, our wealth, to live with strength and joy, and to appreciate our existence. Gold is seems to me is more permanent than anything else in our existence.

Socrates statement of "Know Thy Self" is to know why one "knows" gold.

http://www.gold-eagle.com/research/butlerndx.html$267.20.

Some heavy bids of 20 contracts right now.

The above link is the Butler link I was looking for earlier. In that you will find a few articles on gold leasing.

FOA, I am still trying to figure out your story of the rising sun. Best I can figure is the person listening was more concerned about the mechanics of what would cause what was said then the actual event itself. Yep, that must be the message.

Regarding the rise in the price of gold, if it goes from 267 to $1,000 in three days, and then moves higher still, these excess taxes you mention make sense, but I have yet to see our government move that quickly. I see your point of knowing when to sell shares during such a rise, it is always best to remove profits in any rally. Perhaps this will be the rally of all rallys then excess profit taxes will obviously dent it greatly, if I see your point here. Of course, just the mere mention of that could dent it too.

Here is Bill Murphy's speach given at a recent mining convention.

Here is GATA Chairman Bill Murphy's speech to the
Northeast Investment in Mining Conference last Thursday
at the Marriot Marquis hotel in New York.

CHRIS POWELL
Secretary, Gold Anti-Trust Action Committee Inc.

* * *

Much is being said about the Gold Anti-Trust Action
Committee, but unfortunately most if it has been sound-
byte analysis. So today I thought I would try and set
the record straight by explaining the background of
GATA, what we are trying to accomplish, and what it can
mean to all of you.

I have a background of some 25 years in the commodity
markets, but until the past few years had little
interest in gold. In my formative years I was fortunate
to be around and learn from some great economic minds.
One of the great commodity traders of all time is Dan
Ritchie, the chancellor of Denver University. I saw him
turn down both the Harvard chancellorship and D.K.
Ludvig's request to run his empire. Ludvig was probably
the wealthiest man in the world at the time.

There was Ray Dalio, who heads up the esteemed
Bridgewater Associates, who manage $15 billion
including some foreign government portfolios. And then
there is Frank Veneroso, whom most of you know from his
work in the gold market. But Frank is well-known to me
for his consultative expertise in advising the IFC, the
World Bank, and many governments in macro-economic
matters. The finance minister of Mexico called for "the
priest" (Frank) when they had serious financial
problems.

I learned a great deal about the commodity markets from
all of them, and having been a limit-position futures
trader myself at times, I think I have come to learn
something how about how markets trade.

So it was with great excitement and with the help of
Donald & Co.'s, John Brimelow that I decided to launch
my own financial website, www.lemetropolecafe.com,
around Labor Day last year. I was fortunate to attract
some outstanding financial commentators. Charles
Peabody, oft quoted by Barron's Editor Alan Abelson, is
one of the top banking analysts in the United States.
David Tice of the Prudent Bear Fund is constantly on
CNBC. Paris' Eric Barande is well-known among the
central bankers of France. And Dr. Neville Bennett
teaches Japanese history in Canterbury, New Zealand,
while writing for the National Business Review.

But more to the point of why we are all here today.
This past September the gold market looked to me like
it was poised for one of the big moves of all time.
Demand was strong and it appeared that the supply
plagues of the past couple of years were subsiding. Any
pre-EMU selling by European Central Banks would be over
by the end of they year. The Asian crisis and scrap
supply shock, which included a 300-tonne mobilization
from Korea alone, was behind us, and it appeared that
producer forward selling would be greatly slowed
because of the low gold price. That left only leased
gold as a major supply concern.

At the time I thought this might be a plus. Long-Term
Capital Management was blowing up. Over that summer we
had heard that they were short some 300 tonnes of
borrowed gold as part of a "carry trade." The gold
price started to rally toward $300 and we licked our
chops as we prepared for LTCM to buy back its
position.

Then the word spread that LTCM was let out of this
position in an "off-market transaction" -- a rigged
trade so that the price of gold would not shoot up.

The fall went on and every time it looked as if the
price of gold would take off, the same crowd of bullion
banks would knock it down. We then heard that this same
cartel was offering unheard-of relaxed credit terms to
producers if they would just sell forward. It was
reported to us that a well-known gold analyst was
requested by his higher-ups to tone down his
bullishness on gold. At the same time we twice received
feedback from very reliable sources that U.S.
officialdom asked Asian officialdom to refrain from any
aggressive gold purchases.

After all this the Counterparty Risk Management Group,
led by Goldman Sachs and J.P. Morgan, was formed to
manage risks in the financial sector along with the
likes of Credit Suisse. How long do you think it would
stand if Chrysler, GM, and Ford got together to do the
same thing in the automobile industry?

There was much more and I wrote a piece called
"Scandale Gold." Le Metropole member Chris Powell, the
managing editor of the Journal Inquirer in Connecticut,
said it looked to him like we might have violations of
the Sherman and Clayton anti-trust acts here, so we
should stop complaining and do something about it. That
is how GATA came into being.

We put out a press release and then I was on CNBC.
Coincidentally, Merrill Davidoff, a senior partner of
Berger & Montague of Philadelphia, one of the most
prestigious law firms in the U.S., had just signed up
at my website at the suggestion of John Devlin of Bema
Gold, so we contacted him.

Chris, GATA's hard-working Vice Chairman John Meyer,
and I flew down to Philadelphia a few days later. What
a dream! Merrill, who is here today, was very
knowledgeable about the gold market, and our other
attorney would be Jerome Marcus, just off of the front
page of The New York Times as it was discovered that he
was the behind-the-scenes brains of the Paula Jones
case. Further, Berger and Montague had been plaintiff's
counsel in such powerhouse cases as the Michael
Milken/Drexel Burnham case, the Exxon/Valdez case, the
Orange County case, and many others.

The clarion call went out for support from people all
over the world just like yourselves. Many of your
fellow gold shareholders and a few mining companies
quietly gave us the funds to retain this dream law
firm.

Then we needed a plan to seize the day.

Perhaps I have had too much idle time these past years
and watched too many movies, but after seeing the TV
serial about the great Zulu warrior of South Africa,
Shaka, I decided to fashion our battle plan after his.
To vanquish his foes, Shaka formed a diamond formation
that became an enveloping horn. We would do the same.

At the front of the diamond was our retention of Berger
& Montague. This firm is so highly regarded that our
adversaries and supporters alike would know that we are
for real. Those who might have information about
manipulation in the gold market might more easily come
forth and speak confidentially with our lawyers.
Merrill and Jerome would be available at times to fly
anywhere in the world to speak with those who have
information.

Merrill and Jerome told us: "This is a just case about
price-fixing. It goes on all the time."

Thus we would confront the colluders head-on with legal
power.

Right about then I was flooded with emails and amazed
at how many people said that threats would now be
coming our way. They questioned us whether this might
be too intimidating -- confronting Wall Street's
giants, the most powerful financial entities in the
world. The only way I could answer the intimidation
question was that everything seemed relative.

About 30 years ago I was playing wide receiver for the
Boston Patriots of the old American Football League in
a game against the Kansas City Chiefs. Over the middle
I went on a pass pattern when out of nowhere Hall-of-
Famer Willie Lanier punched me in the face. Down I
went. A bit dazed, I staggered back to my huddle. As I
reached the line of scrimmage, I looked up and saw 6-
10, 280-pound Buck Buchanan and 6-9, 300-pound Ernie
Ladd glaring at me. I thought that if these two both
hit me at the same time, I am a goner.

Now THAT'S intimidation! That was big way back then.

While proceeding with our investigation, we would call
for the left flank to flare out and start to encircle
those who have no regard for the free market. The left
flank would be a public-relations campaign that
targeted Congress. We would alert Congress to the size
of the gold "spec" borrowings and the gold loans. We
believe them to be 3,000 to 10,000 tonnes. Since mine
production in 1998 was only 2,529 tonnes, we believe
the gold loans have become too big to pay back in a
short time. They have now become a "systemic risk"
problem, and if they are not reduced soon, they could
cause another savings-and-loan type of financial
crisis.

I went to Washington and met with U.S. Rep. Jim Saxton,
chairman of the Joint Economic Committee, his staff
director, and their senior macro-economic adviser. I
also met with the senior counsel of the House Banking
and Financial Services Committee and the staff director
of the Capital Market Subcommittee, which I found out
is investigating Long-Term Capital Management for anti-
trust violations.

I urged them all to look into our contentions in the
most vigorous manner. I suggested that they quiz
Federal Reserve Chairman Alan Greenspan the next time
he testified before committee.

Whether it was a result of GATA's effort or not, the
following has occurred:

1. Saxton issued a strong statement against the IMF
gold sales the day after my visit. A well-known bullion
dealer analyst said that "GATA mugged Saxton" into
making that statement.

2. Greenspan WAS quizzed in his next banking committee
appearance about the very issues we raised. Some of his
comments are controversial, but he did say, "Gold
represents the ultimate form of payment in the world."

That is now on record and I feel reasonably confident
that we would not have that statement if it were not in
good part because of GATA's efforts. I would be also
remiss if I did not laud Larry Parks of the Foundation
for Monetary Advancement, who has been very effective
in this area.

The understanding by many market followers that the
gold market is being manipulated is spreading rapidly
now.

My namesake and technical analyst guru, John Murphy,
came out on CNBC and said he would not analyze the gold
market because it is manipulated.

And just last Friday I received this note from South
Africa.

"Dear Bill:

"Just thought I'd let you know that I'm noticing almost
daily in the South African press the odd mention of a
possible conspiracy in the gold market. Today, in a
widely read financial daily, the Business Report, we
have a nice 20-odd paragraph column on GATA, yourself
being quoted at length. It comes across quite well.

"The columnist says all we need to find now is the
smoking gun. Well, the way these things are being
discussed publicly lately, who knows? It might be soon.

"Regards,

"Francois."

Meanwhile and very curiously, the mainstream U.S. press
has refused to present our side of the gold story.
Ditto with the London press; the Financial Times of
London actually told a prominent gold analyst that we
were "dangerous" -- but to whom?

Yet, all in all, I would say the left flank has begun
to unnerve our foes. Outstanding progress is being been
made.

We have now unleashed the right flank and progress is
being made there too. The plan was to go to the gold
companies via the press and letters to their CEOs and
ask them to speak up for their industry, to take some
action, and to get behind us.

Now we realize the producers have a big dilemma. He's
called "Hannibal Lechter."

For the bullion bankers are eating the producer's
lunch. They are flooding the market place with gold
supply via 1 percent gold loans known as the "gold-
carry trade." They flood the media with bearish
propaganda which tends to feed on itself and scare the
producers half to death, pleading with them to sell
forward even at these very low gold prices.

The producers have been "silenced like lambs."

Why? Because Hannibal is their credit lifeline, their
banker. The gold producer privately loathes what is
going on, but fearing to alienate Hannibal, does little
or nothing about it. The result of that silence has
produced a slaughter.

Meanwhile "Hannibal Lechter" makes fat fees and a
fortune by investing his virtually interest-free gold
loans in other investment vehicles. How would you like
it if your papa came to you today and said, "Son, go
borrow what you want, practically no risk, practically
no interest, and invest it." How well do you think you
could do? If you had some bad debts that had to be
repaid, would that sort of proposal help you get back
on your feet?

"But Dad," you might say, "such a deal. How can that
be?"

"Oh, don't worry, Son. We'll make sure the gold price
does not go up for some time. You won't have to worry
about paying back the gold loan with a higher gold
price. Only some poor, gold-producing countries, gold
producers, gold miners, and gold shareholders will
suffer, and they don't matter."

Alan Greenspan's twice-made comment, on July 24 before
the House Banking Committee and July 30 before the
Senate Agricultural Committee -- "Central banks stand
ready to lease gold in increasing quantities should the
price rise" -- set the recent stage for this big-money
game and for the manipulation of the gold price.

The gold market manipulators have taken no chances of
losing control of this rigged market and money-making
bonanza. Their line of defense points -- first right
above $300 -- have ratcheted down to $296 and then
$290. But this scheme could blow up in their faces at
any time. The natural supply-demand deficit, which
Frank Veneroso thinks could be 1,500-2,000 tonnes this
year, is making it harder and harder to keep the price
down. For example, the natural supply/demand deficit is
four to five times the intended Bank of England sale.

According to Haruko Fakuda of the World Gold Council,
the British decision to sell gold was a "political
one." What does that really mean and why was it done?
Could it be that the manipulators were running out of
supply to hold the gold price down? Does the fact that
Goldman Sachs' international economist, Gavyn Davies,
just happens to be Tony Blair's economist, have
anything to do with this political decision?

That is too much to deal with here. Suffice to say we
have been very heartened by the recent comments coming
from leaders of the producing community.

Chris Thompson, chairman of Gold Fields, led off with a
comment about the dealers trying to talk the market
down by spreading unfounded rumors. That was followed
by John Wilson, president of Placer Dome, who spoke of
"malign forces" acting together to hold down the price
of gold.

We are asking all the gold companies to get behind our
big-tent campaign in some way. In addition to
conducting an investigation of the gold price
manipulation, we are lobbying Congress to vote against
the IMF gold sales. You might like to know that Tom
DeLay, the House power broker, is circulating a letter
right now about his grave concerns in this matter. He
joins congressional heavyweights, Jim Saxton, Tom
Daschel, and Dick Armey, who are opposed to the IMF
gold sales.

We also are pressing on with the banking committees,
feeding them information about the size of the gold
loans, and we are encouraging them to find out what is
going on here for themselves -- before a crisis
develops.

To do all this we need the support of the industry. The
World Gold Council is doing a fine job in promoting
gold demand around the world. But there are things we
can accomplish that are just too sensitive for the gold
council to touch.

We are asking the senior gold producers for some decent
financial support on a confidential basis, and we want
every gold company, no matter how small, to purchase
one of the fine-art limited-edition GATA prints. If
they cannot afford the $500, we are asking them to be
responsible for finding just one shareholder who can
afford it.

In this work of art, Absolut Vodka artist Alain Despert
has brilliantly captured the spirit of GATA. The people
in his painting are all of us. By taking our own
concerted action we can make a difference.

The diamond formation has just begun to turn into the
"enveloping horn." We believe that without this onerous
supply of borrowed gold it would take an equilibrium
gold price of $450 to $500 to clear the market. What
would that do to the share price of your favorite gold
company?

With your help GATA will surge forward. It is only a
matter of time before a John Dean comes walking in the
door or someone sends us a stained dress. The
enveloping horn will close in on the "Hannibal
Lechters." They will have to cover their shorts and
retreat out of the back end of our horn. The price of
gold will rise dramatically and then all of us here
will be the ones with the happy grin.

-END-

http://www.the-times.co.uk/news/pages/Times/frontpage.html?999From the Times

June 7 1999 EUROPE

Germans turn against euro

FROM ROGER BOYES IN BONN

GERMAN faith in the euro is crumbling, according to an opinion poll published yesterday. It is bad news for Gerhard Schr�der, the Chancellor, as he tries to mobilise voters for the European elections, which are being held in Germany on Sunday. According to Dimap Polling Institute, 59 per cent of Germans are now convinced that the euro will remain a weak currency. In January only 28 per cent were so pessimistic. The euro was sold to the Germans by Helmut Kohl, the former Chancellor, on the basis that the new currency would be as strong and stable as the mark. The Germans were sceptical about this - for a year two thirds of the nation opposed the euro - but the mood seemed to be changing. There was no choice but to accept the euro since no referendum was on offer.

But the fall of the euro against the dollar has shocked many Germans who feel they were cheated by the politicians. The Dimap figures demonstrate that 75 per cent believe the weak euro is limiting economic growth in Germany.

The most entrenched scepticism was recorded in eastern Germany, where people who exchanged their communist currency for hard marks only nine years ago are suspicious of European economic and monetary union. Those aged between 45 and 59 were also strongly sceptical: 75 per cent said that the euro was a weak currency.

Blair tries to bury the currency issue

BY ROLAND WATSON, CHIEF POLITICAL CORRESPONDENT





Euro sweets prove success TONY BLAIR yesterday urged voters not to turn Thursday's European elections into a referendum on the single currency, amid Labour fears that the euro could prove a vote-loser for the party.

Mr Blair said the health of the euro should not influence how people vote. He said voters would have a chance to give their verdict on monetary union when the Government called a referendum on the issue, and instead asked the electorate to judge the Government this week on the "constructive" role he had forged for Britain in Europe.

However, the Conservatives are poised to push the single currency to the heart of their final drive in an effort to ensure that it dominates the last three days of campaigning.

The Tories' last election broadcast, to be shown tonight, will focus on Labour's support for the euro and tomorrow Mr Hague will unveil an election poster which states: "The pound is only safe with the Conservatives."

Mr Hague will also use two campaign rallies, in the West Midlands tomorrow and in London on Wednesday, to make a final pitch to voters who normally back Labour or the Liberal Democrats but who have reservations about the future of sterling.

Labour will seek to inject some life into its campaign today when John Prescott takes to the "battle bus" that he used during the 1997 general election. With the turnout predicted to be the lowest ever at around 25 per cent, Labour will also use Mo Mowlam, the Northern Ireland Secretary and one of the most popular ministers with the public, to front today's press conference.

Following its failure to sign up Alex Ferguson, the Manchester United manager, for the Euro campaign, Labour will feature Lisa Potts, the former teacher who was awarded the George Medal for her bravery in a machete attack, in the party's last election broadcast tomorrow.

http://plants-magazine.com/chelsea99/sultan.htmlReview
"I have to admit that my favourite garden was The Garden
Of The Book Of Gold by His Highness Shaikh Zayed bin
Sultan Al-Nahyan. One couldn't fail to be moved by the
sense of tranquillity and reverence which emanated from
this temple-like garden with the centrepiece of the gold
engraved marble structure. It wasn't a coincidence that the
water feature leading our eyes to the book of gold look
resembled the aisle leading up to an altar in any church we
may know.

Strong links to Muslim and Christian faiths was carefully
combined to a wonderful effect. The 12 beautiful and
proud palm trees mirrored the 12 apostles. The reverent
tone was set by Phoenix dactylifera with citrus and
Ptychosperma providing the secondary planting. Native
desert plants were also planted. As the official press
release stated, "The garden demonstrates an air of
tranquillity and calm. Water creates the feeling of coolness
and arbours face the reflecting pool allowing for repose
and quiet contemplation". If there has even been a truly
accurate description of anything, then this was it.

As with Arabella Lennox-Boyd's winning garden last year,
the Garden Of The Book Of Gold made one feel as if the
hustle and bustle all around was simply non-existent - the
garden demanded your attention in a kind and benevolent
way as if seemed to pulsate a profound sense of
tranquillity. The memory of this truly inspiring garden is one
which I will be privileged to treasure for many years.
Incidentally, after Chelsea '99, the Garden Of The Book Of
Gold will be reconstructed at a property of His Highness! "
http://members.aol.com/netgarden/chelsea2.html

Inspiration
http://www.netrox.net/~mjtaylor/adhem.html

http://www.afr.com.au/content/990607/market/markets3.html Date: Sun Jun 06 1999 23:10
Goldteck (Long-Term Capital Management near miss demonstrates world market's vulnerability ) ID#431200:
Copyright � 1999 Goldteck/Kitco Inc. All rights reserved
By Tony Boyd, Global Markets Editor The Bank for International Settlements has shed new light on the near collapse of the highly leveraged hedge fund, Long-Term Capital Management. In doing so the central bank to the world's central banks has shown how vulnerable the world is to another financial crisis and the possibility that it could strike without warning. In its annual report released today, the BIS said LTCM was perhaps the world's single-most active user of interest rate swaps. "By August, 1998, $US750 billion ( $1,153 billion ) of LTCM's total notional derivatives exposure of more than $US1 trillion was in such swaps with about 50 counter-parties around the world," the BIS said. "This swap exposure represented more than 5 per cent of the total reported to central banks by dealers vis a vis 'other' financial institutions in the ( June 1998 ) survey. "While the current exposure of its counter-parties was fully collateralised, these had taken no protection against the potential increases in exposures resulting from changes in market values. "Only when LTCM's dire situation became known in September did counter-parties start to seek additional capital. "The fund's efforts to raise cash by selling its most liquid securities were felt in markets around the world, transmitting the shock wave from low-rated ( non-liquid ) securities to benchmark instruments. "Thus even if the Russian default was the trigger, the turmoil of last autumn stemmed primarily from the build-up of excessively large concentrated exposures to customers who proved to be more vulnerable to market, credit and liquidity risks than had been supposed." The BIS said that the LTCM crisis revealed the inadequacy of information supplied by leveraged investors to the extent of their market-risk exposures, the nature of their trading strategies and the validity of their risk management methodologies. "This ( the LTCM crisis ) showed that core financial markets are insulted less then ever from crises that appear at the periphery of the system." It said that existing statistical frameworks could not be readily used to arrive at a comprehensive and consistent value of global positions. Although efforts are being made to improve transparency, "the conceptual and practical challenges should not be underestimated". "Pending a resolution of their issues, there will have to be continuing reliance on current data sources, with their weaknesses factored into market participants' decision making processes," the BIS said. The annual report concluded by warning developing countries to move cautiously in their dismantling of controls on short-term inflows and to guard against capital outflows by building foreign exchange reserves. It also highlighted the way in which international banks have become drawn into lending which is not based upon relationships, a trend that is exacerbating market risks. "Market risk is more highly correlated with credit risk than previously thought, since market exposures are often built on leverage, and credit risk is also more highly correlated with liquidity risk than previously realised," the BIS said.

http://biz.yahoo.com/rf/990607/f9.htmlEuro sinks to new depths, gold +0.80

Looks like it is just you and I this morning so far. August gold is now...$268.20 with very strong bids (40s).

Euro seems to be getting bashed just like gold now...hmmm?

http://biz.yahoo.com/rf/990604/gs.htmlIndian vegetable oil defaults possible - traders
BOMBAY, June 4 (Reuters) - Falling world prices might force Indian vegetable oils importers to default on recent purchases, mostly from Malaysia and some South American countries, industry sources said on Friday.

Traders said they did not rule out the possibility of some defaults having already taken place.

``Everyone is worried because defaults are looming now. It appears that a lot of April and May contracts are still not executed,'' one leading industry official told Reuters.

``Importers are rolling over their contracts. The market continues to go down and their losses are rising.''

http://biz.yahoo.com/rf/990607/it.html--------------------------------------------------------------------------------
Related Quotes

^DJI
^IXIC
^SPC
^IIX
^PSE
0.00
2478.34
1327.75
289.98
546.56
+0.00
+75.02
+28.21
+13.22
+20.41

delayed 20 mins - disclaimer


Monday June 7, 6:46 am Eastern Time
China gold price reforms may burnish lustre
By Nailene Chou Wiest

SHANGHAI, June 7 (Reuters) - A plan to bring China's gold prices more in line with the global market could encourage better designs to lure more customers, but in the short term demand could weaken in the face of falling prices, trade sources said.

A State Development Planning Commission official was quoted by the official Xinhua news agency on Sunday as saying that the proposed reforms would involve revamping the ways domestic wholesale and retail gold prices were set.

Albert Cheng, Asia area manager of the World Gold Council, said price reform was a positive step to enhance gold's attraction as jewllery and offer Chinese consumers more choice, though not necessarily lowering the overall cost.

Currently jewellery manufacturers had no incentives to improve designs because gold prices quoted in retail stores included material and labour, he said.

By separating the charges, the gold price reforms would encourage improvement in design and increase the appeal of gold jewellery in the face of competition from platinum and diamond, Cheng said.

The World Gold Council estimated that gold demand in mainland China rose a year-on-year five percent in the first quarter to 55 tonnes.

Xinhua put China's gold consumption, including non-jewellery use, at approximately about 192 tonnes, which makes it the fourth largest gold market in the world.

Gold jewellery store managers in Shanghai said if the reforms simply meant lower prices, they feared consumers might shy away from buying gold at least for a while.

``Generally customers buy gold when prices were rising and held back when prices were falling,'' said a manager at Shanghai's Old Temple Gold Jewellry Company.

If people expected prices to fall, they people would be even less inclined to buy now, he said.

Currently world gold prices were hovering above 20-year lows at $263.85. Chinese consumers pay an average 20-35 yuan ($2.40-4.20) higher per gram than items sold in Hong Kong, Taiwan, Thailand and Singapore.

No timetable was set for the gold price reforms.

On the supply side, China planned to produce 175 tonnes of gold this year, up from 172.8 tonnes in 1998.

An analyst at a major base metal company which produces gold as a by-product, said China's drive to increase gold output had slowed in recent years because gold was no longer a significant part in China's foreign reserves and liberalising gold distribution was to be expected.

``The obsession with gold has changed,'' he said. ``Now other central banks are clearing gold from their reserves, it's time for China to relax the control.''

China's gold reserves totalled about 400 tonnes or less than three percent of its $147 billion forex reserves.

($1 equals 8.28 yuan)

I agree ( 95% + ) with Christine.

The plot goes back at least 250 years.

And depending on the way you look at it, it may go back all the way to the civilization at Sumer.

Don't spend too much time on current events, there is not a great likelyhood that you can do anything about them.

The final Acts of the Play may be about to be performed.

Ask, if you do not already know, what controls the FED,
what controls that which controls the FED.

Follow the family trees and look at all the interfamily arrangements, and you to may discover what is controlling current world wide events.

QUESTION: If someone believes that the value of Au will increase Then why would they sell it ????????

This has puzzeled me for some time.

Your post yesterday on Y2k illustrates a very important point that I tried to emphasized in my Y2k post. Here are a few key lines from your (actually Silverbear's original post) post:

"Like us, many other large corporations are now discovering or soon will discover that much if not all or their corporate data is saved on records which contain an "effective date" and a "termination date" which is what tells the computers processing their data, when a given record is "effective".....

....In otherwords, most Y2K testing as it's been done to date has not even identified this problem!"

Yes, this is the point. Y2k is a new problem for engineers and programmers and they won't understand the important problems until the start testing their work. The public has be duped into believing the the y2k solution merely invloves a change of date in the code. That is an oversimplification. It would be more accurate to say that Y2k is a word that refers to a class of hundreds of different date problems, many of which are still to be discovered. Unfortunately, many of those undiscovered problems won't be found until Jan/Feb and Mar of 2000!

Your post about the Jewler being unaware of what is happening with gold is "spot on" (pun intended). We forget how powerful the media really is. It sometimes feels that the world has a mind of its own and that the media's job is to hypnotically implant messages that soon become the worlds reality.

Hopefully, the internet will free us from our bondage of the media. After getting the truth, get you more gold!

beesting (6/6/99; 23:51:29MDT - Msg ID:7269)
Follow up to msg#7260 to FOA.

In the U.S. there is currently demand for certain skilled occupations;Doctors,nurses top athletes. These occupations can very easily legally work in the U.S.(with proper immigration papers) demanding and receiving higher wages than they may get in their respective home countries.Hence, a higher standard of living for themselves and their families.
Now, my point is,wages may not vary from country to country(as they do now)with the use of a single currency(Euro),in the long term,when workers are payed in Euro's only.FOA do you agree with this?

Let me put this thought in perspective for our North American friends. Example: A Canadian,or Mexican loses considerable purchasing power when exchanging their
Peso's or Dollars for U.S.currency when traveling to the U.S. In my humble opinion if North America and other Latin American Countries ever went to the all U.S. dollar system (similar to what the Euro Countries are doing) after a long time would an equilibrium be established?

beesting,
I see your point, and it is a good one. Yes, wages will tend to converge and compensate equally for each form of production and skill. However, this will only work if the money creation is under one "many government" roof, such as the Euro zone. Many point out that this is a weakness of this new currency and will pull the union apart. I disagree and state that it will become it's strength.

Prior to EMU, each country changed it's exchange intervention policy to the benefit of local workers, usually providing a loss to it's currency. At least that was the overriding game plain. Now, the currency will retain the favorable attribute of "management" with the control of "diverse government needs" and lose the baggage of "maintaining mismatched skill compensation". Yes,
some citizens will be shocked to learn that their "better pay" was the result of currency intervention, not their special standing in life. It will promote a bitter struggle over time. But, it will result in far lower inflation rates in the member countries where citizens had no strong currency.

In contrast, this dynamic is far different from your example of Mexico converting to dollar use. They will have no "usable opinion" in the money policy of the US and yet still retain a lower living standard. As an example, Kansas as an independent country? All labor and resources would be
exploited from that state for the benefit of the rest of the US.

Also, note that the dollar is well past the point of management. It's timeline has come to an end as it's debt has rendered it into a "collection only" currency. For it to regain any balanced reserve use, worldwide, it's base would have to be contracted many times over. A loss to US citizens that will never be allowed. Again, this is the very attribute that so drives the quest for Euro success. In
time I would expect many other countries to join the EMU and convert to exclusive Euro use.

The gold of Arabia has made this path, for them, a very level one, indeed. The coming free market in gold will, not only judge all currencies and nations for the entry status, but create a fair way to value their contribution to world trade. We shall see.

Please continue your consideration. FOA


Voyager (6/7/99; 0:40:11MDT - Msg ID:7270)
Sir, Excellent post!


SteveH (6/7/99; 1:25:42MDT - Msg ID:7271)
FOA, I am still trying to figure out your story of the rising sun???

Steve, perhaps best applied to NWO discussion?

"Regarding the rise in the price of gold, if it goes from 267 to $1,000 in three days, and then moves higher still, these excess taxes you mention make sense, but I have yet to see our government move that quickly."
Steve, on this issue, they will move no slower than with the speed of one who finds a gold coin upon a sidewalk!

FOA

MARKET REPORT(6/7/99): Gold traded higher this morning after being unable to make
up its mind on a direction in overseas trade. The London Reuters gold wire this morning
reports some some selling in Japan and Australia and its usual chorus of nay-saying from
the London trading crowd. The yen is unusually strong today against the dollar but the
European currencies continue to erode against the dollar with the Kosovo peace talks'
breakdown having a debilitating effect. The British pound is in virtual free fall and has been
since the May 7, 1999 Bank of England (BOE) gold auction announcement. With the BOE
sales coming up in early August most traders believe that the price will be rangebound to
lower in advance of the sale and they may be correct. At the same time, there could be some
surprises. The history of official, planned and announced sales (going back to the U.S.
sales in the 1970s) shows that buyers tend to forestall their purchasing until the sales
actually take place. Already gold analysts are predicting that the first auction will be
over-subscribed. If the London sales turn out to be a closed doors affair wherein London
insiders are mainlined the gold and it never sees the light of day, then a sharp rally could
ensue off these lows. A turnaround could occur prior the sale if investors and market
players foresee a strong, ready market for the BOE metal (which I think is going to be the
case).

Along these lines, Bridge News reports General Manager of the Bank for International
Settlements (BIS) Andrew Crockett saying today "that despite sales of gold reserves by
central banks, gold would continue to play a major role in the reserves of central banks.
Crockett said that since most central bankers seemed not to want to sell much more of their
gold soon, he did not expect the price of gold to fall much further. In rather surprising
show of candor, the BIS warned of an overall deflationary bias in the world economy
despite "overheating" in the United States. "In fact, a generalized resurgence of inflation
seems less likely than further disinflation or even deflation,'' the BIS said in its analysis of
the state of the world economy in a Reuters report out of Basle, Switzerland.

All in all, it could shape up to be an interesting week.

The featured article in this month's News & Views centers on government finance in an
article entitled "The Financial State of the Union." I'm sure it contains many
surprises for our readers. There is a great deal of difference between what our government
leaders are telling us and the reality with respect to the government's books. This issue is
one or our best and most informative. Please go to our ORDER FORM or call Marie at
1-800-869-5115 for a Free Copy of News & Views -- our widely read monthly newsletter
-- and introductory packet on gold ownership.

http://news.bbc.co.uk/hi/english/world/africa/newsid_362000/362913.stmEthnic violence in the oil-rich Niger delta is reportedly raging out of control, with hundreds of people fleeing the fighting.

Stresses oil, and tests the Kosovo-precedent.

http://biz.yahoo.com/rf/990605/bq.htmlChina considering devaluing currency in response to euro weakness!

Hadn't considered the competitive devaluation ramifications of a weak euro.

http://news.bbc.co.uk/hi/english/events/the_launch_of_emu/euro_latest/newsid_362000/362933.stmItaly exacerbated the trend of depreciation, and the euro will remain weak if doubts continue over the ability of Germany, Italy and France to maintain budget deficits.

http://news.bbc.co.uk/hi/english/business/the_economy/newsid_362000/362606.stmA union leader warns Bank of England experts that thousands of jobs will be lost unless interest rates are cut this week.

No problem. Just give them all new jobs printing money. See the fundamental flaw?

MK mentioned UK gold sales in August. Most of us know he meant to say the first sales were scheduled for early July. This note is for those who didn't...

"the first UK auction on July 6"

http://dailynews.yahoo.com/headlines/od/story.html?s=v/nm/19990604/od/gold_collection_1.htmlSuch good souls there..."the government would draw the line if they discovered that people were being forced to take part."

http://dailynews.yahoo.com/headlines/ap/international/story.html?s=v/ap/19990604/wl/kazakstan_gold_campaign_1.htmlAbout 1,000 Kazaks have handed over their gold jewelry to the government in a campaign to help the economy.

What? No greenbacks?

I read IN THE FOOTSTEPS OF GIANTS this weekend, and will say as others here have said, that this book is a "must read" which provides one with an understanding of the interrelationship between gold and oil. I read this book as I do all books (and discussion forums) -- with an open mind to absorb what is presented and to make my own judgement on the merits of the subject-matter as presented. Based on what I garnered from the book, I now have a clearer understanding of the "hows and whys" of the actions of the CBs, BIS, various governments' and banks' taking turns on announcing gold "sales", and a plausible explanation of why the cost of oil in the U.S. remains out of sync with most countries in the rest of the world. I found it so interesting that I read it in one brief sitting, and will go back and re-read it again. MK and ANOTHER -- Thank You!!

On Y2K, Tomcat's #7266 yesterday was excellent. Great job! As Tomcat states in point #1, the issue is intrasystem communication (and intersystem, too) . I can't tell you how many people I've talked to in automotive, aviation, tooling, etc. that say their systems are Y2K-compliant (whatever that means, as each one has their own interpretation), but completely miss the point of how interconnected all aspects of commerce, finance, and manufacturing are today and how things can slow down in a hurry when there are system-to-system communication problems. Simple example: If the average vehicle contains approximately 3,000 unique components, how many can be built if the supplier of, let's say radiators, has a systems communication problem with the vehicle assembly plant or an internal processing problem and can't furnish radiators for some period of time? How many vehicles can be sold if even appearance items like a molding or other piece of trim is missing? Remember, JIT inventories are lean and tight -- in general, no more stocking of much more than a day or two of inventory or raw materials at the supplier and the OEM. Stockpile ahead of time? How do you predict which of the thousands of parts or hundreds of thousands of suppliers will have a problem and protect for it? All the risk assessments in the world can't predict that which has not been experienced before. The "peeling of the onion" will indeed be a revelation. I believe that the unravelling of these types of Y2K issues in many fields will be a key contributor to economic slow-down world-wide.

Protect your wealth -- trade paper for metal and hang on!

http://www.latimes.com/CNS_DAYS/990606/t000050792.htmlSPECIAL REPORT: GLOBAL Y2K CRISIS? / GERMANY
Ready or Not? Some Shrug Off Problem, Others Fear Worst

http://www.boston.com/dailyglobe2/157/metro/Ready_for_anything+.shtmlReady for anything: Some N.E. towns are gearing up for Y2K, disaster
(a fairly good article)

Mike you have made some very good points about the supply chain and Just In Time inventories. I have found that very few people have any idea how many suppliers are needed to get a fairly simple manufacturing job done and how delays in parts can mess up the entire system. GM might need a fairly simple circuit board but the manufacturer of that board might depend on 50 or 100 suppliers. Each of those suppliers depend on several suppliers.

Just short delays at each supply level can create much longer delays at the final manufacturing plant. People don't realize the delays can grow. Supplier #1 can have a week delay which forces supplier #2 to retool and work on another product resulting in a three week delay. This delay forces supplier #3 to retool and work on another product a have a five week delay. Supplier #4, finding out the will be a five week delay, lays off some workers and shuts down part of a shop for a six weeks and then loses a week or two getting it started again. This is a non-linear chain reaction!

For my business I had to study Y2k for a year and advise my clients. In that year I found very few companies that were dealing with the supplier problem. They were spending millions on y2k and spending only $20K on surveys of thier suppliers which would only get a 50% response! Buyers would shrug their shoulder and say, "Oh well, it will all work out in the long run". They are right. A very "long run"!

One last thought. In high tech manufacturing, like in chip manufacturing, it sometimes takes months and even a year to change suppliers. And those chips a critical to millions of products. Millions.

I won't have a year to wait around but I'll have gold. Get thee some more!

By Melanie Lovatt, Bridge News
New York--Jun 7--COMEX Aug gold futures settled unchanged at $267.20 per
ounce after edging to a 5-day high of $269. Traders said that gold got a boost
overnight as the dollar weakened against the yen and was aided higher in the
Europe session by supportive comments from the Bank for International
Settlements. However, after that, activity stalled and COMEX trade was extremely
quiet and dull, traders said.

General Manager of the Bank for International Settlements (BIS) Andrew
Crockett said today that despite sales of gold reserves by central banks, gold
would continue to play a major role in the reserves of central banks.
He said that since most central bankers seemed not to want to sell much more
of their gold soon, he did not expect the price of gold to fall much further.

On Friday IMF Managing Director Michel Camdessus said that any sales of
International Monetary Fund gold reserves will be conducted in a manner that
will limit negative effects on gold markets. Camdessus added that he is hopeful
a decision will be made on the sale of a portion of the fund's gold reserves to
finance debt relief before the IMF's annual meetings this fall.

Overnight in Asia, spot gold had rebounded over $265 resistance on the
dollar's slip against the yen. Gold's move down to $400 per ounce in Australian
dollar terms also prompted some buying, noted Tony Caen, senior precious metals
dealer at Credit Lyonnais Rouse.
Traders said that gold players remain nervous of a short-covering rally
given the overwhelming number of shorts that remain in the market. COMEX
commitments showed Friday that while short positions in the previous week fell
4,731 contracts, they were still at a high 88,396 contracts, compared to only
9,625 long positions.

However, with last week's drop to a fresh 20-year low still fresh in
everyone's minds, traders said that gold nevertheless remains vulnerable to a
further slide as negative sentiment continues. Traders noted that today's stock
market climb may have been responsible for sapping some of gold's earlier gains,
while in the meantime, it received little direction later in the day from the
dollar and the bond market.

Reprinted at USAGOLD with permission. For details please go to:
http://www.crbindex.com/
No further reproduction without written permission

http://biz.yahoo.com/rf/990607/5b.htmlMore than three-fourths of investors polled said it was at least ``moderately likely'' that the Dow will drop below 10,000 points in the next six months.

http://biz.yahoo.com/rf/990607/6c.htmlTraders waiting for May CPI release and A. Greenspan's speech next week.

While the dollar needs outside data and speeches, gold itself is as good as twenty orators on its own behalf.

http://biz.yahoo.com/rf/990607/67.htmlIMM currencies end mixed, yen near sharp peak, euro pressured by stall in Kosovo negotiations. (Which currency is principly funding this war, anyway?)

http://www.thestreet.com/markets/marketroundup/754192.htmlNew York Stock Exchange trading saw its second-lowest level of the year.

http://www.state.gov/www/about_state/history/vol_viii/185_199.htmlGold related excerpt (four memos) that you may find revealing about the mechanics of important decisions during troubled times. Apologies for length...but you should read this, particularly the last one.
-----------------------------
187. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/
Washington, March 9, 1968, 4:45 p.m.

[/1/Source: Johnson Library, National Security File, Subject File, 1968 Balance of Payments Programs, Memos and Miscellaneous [1 of 2], Box 4. Secret. A handwritten notation next to the dateline on the source text reads: "Rec'd 4:46 p."]

SUBJECT
The Gold Issue

Walter Heller gave me a rundown on last night's meeting of the Dillon Committee. (Sec. Fowler's Advisory Committee, consisting of: Dillon, Roosa, Heller, Kermit Gordon, David Rockefeller, Edward Bernstein, Frazer Wilde, Andre Mayer, and Bator.) They met informally in New York to go over the options on gold and the balance of payments and will report to Sec. Fowler.

Their conclusions were:

1. The tax bill is a must. They agree on a strong public statement which they will release next week after going over it with Fowler.

2. They are unanimously opposed to an increase in the price of gold as a way of dealing with the present crisis.

3. Most would prefer to keep the present gold pool arrangement going but they do not believe it will be possible to negotiate with the Europeans the arrangements necessary (specifically, the gold certificate proposal) to turn the market around and restore calm.

4. They, therefore, believe we will have to close the gold pool operation and let the market price go. They believe it is essential we do this in cooperation with our gold pool partners and preferably at their request.

5. They were somewhat fuzzy on particular plans for getting non-gold pool members to cooperate and suggest we perhaps can use the IMF for this purpose. They believe we will have to act within 30 days and must have a clear idea of where we want to go and how we plan to get there.

Comment: As you can see, these views are not very different from our own. After the meeting of the Central Bankers in Basel this week end, we will have a better idea of what the Europeans are willing to do, what the prospects are of keeping the gold market open and quiet, and what would be the most orderly way of bringing about change. Deming returns tonight, and Bill Martin on Monday.

Fowler is working to get the gold cover bill on the floor of the Senate on Tuesday. Passage of the bill should help quiet things down./4/

[/4/In his Economic Report to Congress on February 1, President Johnson proposed legislation to remove entirely the gold cover requirement as 25 percent backing for outstanding Federal Reserve currency notes. See Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1968-69, Book I, pp. 136-137. The House of Representatives narrowly passed this legislation on February 21, and the Senate also approved in a close vote on March 14. President Johnson signed the legislation into law on March 18. (P.L. 90-269; 82 Stat. 50)]

Walt

___________________________________
188. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/
Washington, March 12, 1968, 6:25 p.m.

[/1/Source: Johnson Library, National Security File, Subject File, Balance of Payments, Vol. V [2 of 2], Box 3. Secret; Sensitive. A typed note at the top of the source text reads: "7:00 p.m. meeting with Bill Martin." No record of this meeting has been found.]

Mr. President:

Here, as we understand it, is what Bill Martin found out and will report to you.

1. With respect to a change in the price of gold, the British and Dutch are inclined to flirt with this option. The Germans are wobbly. The Italians, Belgians and Swiss are strongly against.

2. He achieved agreement on the statement/2/ and the willingness to back the gold pool with $500 million, with another $500 million contingent. (At the rate the market in London is going, this will only last a matter of days.)

[/2/Reference may be to the communiqu� issued by the Bank for International Settlements in Basel on March 10, in which the central banks contributing to the London gold pool reaffirmed "their determination to continue their support to the pool, based on the fixed price of $35 per ounce of gold." For text, see The New York Times, March 11, 1968, p. 60.]

3. The Europeans realize that we all may face soon some quite unpleasant choices; but they are not clear about what these choices are and what will be required of them if we are to hold the system together. They are prepared to close down the London gold market and let the free market price of gold float. What they have not thought through are the terms of the intimate collaboration which will be required to make that kind of system work--especially how to deal with the consequences of a two-price gold system.

4. In the light of this situation, Treasury, State, Federal Reserve, Council of Economic Advisers, and White House staff people have been driving all day, at Ed Fried's insistence, to get in shape an operational scenario of the kind that is attached. The essential object of the scenario would be to get certain minimum essential commitments from the other members of the gold pool before the closing of the gold pool was announced. On this basis we could proceed in reasonable order to a monetary conference.

5. We do not yet know Joe Fowler's or Bill Martin's personal views of this particular scenario. But we will be presenting it to them either late this evening or tomorrow morning.

6. It emerged from the Basel meeting that the U.S. tax bill and the austerity of the British budget of March 19 are absolutely critical factors. Joe Fowler and Bill Martin have been working Mills over hard on this point. They are also talking to the Republican Policy Committee this afternoon.

My own feeling is that the moment of truth is close upon us; and we shall have to convert some such scenario into action within the next few days.

Walt

____________________________________
189. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/
Washington, March 14, 1968.

[/1/Source: Johnson Library, White House Central Files, Confidential File, FI 9, Monetary Systems. Secret; Sensitive.]

SUBJECT
Gold

Your senior advisers are agreed:

(1) We can't go on as is, hoping that something will turn up.

(2) We need a meeting of the gold pool countries this weekend in Washington.

(3) We want to negotiate the following package:

--Interim rules on gold.

--Measures to keep order in the financial markets.

--Acceleration of the SDR's.

(4) With the right kind of interim package, we could maintain our gold commitment to official holders.

(5) If we can't get this package, we would have to suspend gold convertibility for official dollar holders, at least temporarily, and call for an immediate emergency conference.

(6) This probably would mean a period of chaos in world financial markets, but it may be the only way to push the others into a sensible long-run arrangement which avoids a rise in the official price of gold. We are unanimously agreed that a rise in the price of gold is the worst outcome.

The decision you must make now is whether the London gold market should be closed at once./2/

[/2/President Johnson agreed to the temporary closing of the London gold market on March 14. A statement by Secretary Fowler and Chairman Martin on the closing, March 14, affirmed the U.S. Government's commitment to continue to buy and sell gold in official transactions at $35 per ounce and indicated that they had "invited the central bank governors to consult with us on coordinated measures to ensure orderly conditions in the exchange markets and to support the present pattern of exchange rates based on the fixed price of $35 per ounce of gold."]
(a) Arguments for closing:

--Avoid losing perhaps $1 billion in gold tomorrow (we lost $372 million today).

--Such a gold loss would further shake the confidence of central banks and trigger their coming to us for gold.

--Makes it easier to arrange an emergency meeting of the gold pool countries this weekend.

--Evidence of U.S. decisiveness.

(b) Arguments against closing:

--Involves U.S. taking the lead in throwing in the towel.

--Closing the market will strengthen the hand of those who believe the official price of gold will be increased.

--May reduce the U.S. bargaining position with the Europeans.

--Gives us another fling at the Gold Certificate proposal.

Walt

___________________________________
190. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/
Washington, March 14, 1968, 5:20 p.m.

[/1/Source: Johnson Library, National Security File, Subject File, Balance of Payments, Vol, V. [2 of 2], Box 3. Secret; Sensitive. A handwritten notation next to the dateline on the source text reads: "Rec'd 5:50 p."]

Mr. President:

To give you a feeling for what lies ahead, I enclose two working documents:

--a scenario for negotiation with the Central Bankers of the Gold Pool and

--a draft communiqu� indicating what we would like to be able to announce on Sunday night.

On page 3 of the first document (para. 6) there is an outline of what might be in a Presidential statement on the occasion of the communiqu�.

After we met with you, Joe talked to several of us about the attitude of the Hill with which he has been dealing, and the attitude among the Central Bankers.

He describes the attitude on the Hill as one of almost anarchistic willingness to pull down the temple around their ears on the grounds that our budgetary expenditures are out of control. He feels that the Europeans have the same kind of feeling and cannot understand that our Executive Branch and Congress are incapable of generating a tax-expenditure policy that would keep us in reasonable order.

He is almost in despair about being able to negotiate a package without some sign that a tax increase is at least over the horizon; and he is in despair about getting a tax increase unless there is some kind of commitment to expenditure limitation.

I know enough to know that I have no competence in figuring out how this nagging political problem can be solved. It obviously goes to the heart of our nation's capacity to carry its external commitments; maintain the world trade and monetary system; and avoid a serious domestic breakdown in our economy.

But I did want to report to you this further conversation.

Walt

Please check out the poet over at kitco "GAMBLER" Mon Jun07 1999 I.D#441250. Sounds credible?? Remember "ANOTHER" started posting ther first.

In my message poet should read "POST sorry keystroke error:)

To All,
A thought has been tugging at me for a while. I would very much appreciate any input you might have. If BOE origanally decided to sell off some Gold in hopes of devaluating their money, so that they might join in on the Eurro at a more favorable rate and If this announcement has lowered the price of Gold and is devaluating the Pound. And, since the people seem to be very much against the sale. Might they change their mind at the last minute and cancel the sale?
Help me, am I the only one who feels that this might have been planned all along??? The Scot

Thanks for your affirmation of my previous post. Having spent the first 15 years of my career in a manufacturing position that required an understanding of the business from concept through production and responsibility for the results, I've learned a thing or two along the way. One of the things I've learned is that most everything in life is a process. Teaching, selling, buying, manufacturing, providing services all entail a process. Understand the process and you can improve it and change it as required. Planning and being flexible to change are very important as you know.

Now I wish to learn more of this gold process in the world's markets. That is why I appreciate the thoughts and input of all who frequent this site. It is clear that in the world of gold, the process of transactions, trade, and the relationship of gold to oil/banking/currency/commerce/debt/etc. are undergoing massive change (although I'm learning that some aspects have been going on for a long time). I will continue to study and learn the basics from those at this forum who have much more experience and insight than I, and then continue to learn and understand where we have come to today. The "rules" may change, but the objectives and desire to preserve wealth remain the same.

I have no intent of attempting to turn discussion on this forum to millennium events, even though I believe there's the probability of significant impact to many of our livelihoods. What I find of interest is that many intelligent people I speak with are quick to make this subject a very devisive issue. It seems that it is usually those who have much at risk in the market, in their indebtedness, in their particular line of work that are the first to argue the point and write-off any chance of a rational discussion. Most will not even acknowledge information that points to the possibility of problems. It is probably human nature of fear of the unknown.

Attempting to make some plans for the unknown is what brought me here in the first place. But I have since gained a new perspective of the world through the thoughts of those who post here. For that I am forever grateful. I wish I had more time to post and develop discussions here, but the demands of work and the time invested with family take precedence. Computer time for me should free-up as summer vacation approaches for my sons. As it stands right now, I'm getting booted from the computer as my wife and three boys need it for their work and studies.

Thanks to all for the continuing education!

Towncrier#7300,
The part about taxation hit me at the wrong time,just got back from IRS local office and was informed we owe another $300 on 1996 return,grrrrr!!

FOA msg.7282, Thank you for your insight and response to my message from yesterday.If I may I would like to expand on your statement:
Also,note that the dollar is well past the point of management. It's timeline has come to an end as its debt has rendered it into a "collection only"currency.

Part#1--I don't think the U.S. taxpayers(most of them)are aware that the worldwide banking system is being supported by them. Lets go over this again.
Governments,especially the Japanese,buy and hold interest bearing U.S. Government debt to back their respective currencies and give them(the currencies) worldwide value instead of Gold. Why,because a 5.5% interest rate of return in U.S. dollars may equal 10% or more rate of return in their own currencies when foreign exchange rates are factored in.Therefore, the U.S. taxpayer is paying interest to whoever holds the debt instrument(T-bills,Bonds,etc.) This is really IMHO,where most of the tax money goes. Here is the number for debt of 5.6 trillion dollars at 5%, interest only: $280,000,000,000 annually.
Now,who knows what these U.S. dollars are used for once they reach foreign lands?(worldwide anything?) Please think about this.

Part#2--Sic the IRS on the bums.
Sic-means bite
Bums is an American expression used to voice displeasure with a group;In this case Goldman Sachs, and other brokerage houses,and hedge funds.
These entities deal in Trillions of dollars annually and avoid U.S.Taxation by use-ing the tax laws to their advantage.They as a group,could very easily pay all the U.S. taxes due,and pay off the national debt in a very short time ,if the tax laws were changed.
Example:1-Companies that receive passive income only(income from investments)don't pay U.S. taxes,only company employees when drawing a salary from the company.
2-Most large investment firms conduct their international business offshore(Cayman Islands and many others)and are only subject to local taxing authorities.
The reason the tax laws work to their advantage,IMHO, many in the U.S. Government,Senators,Congressmen/woman have investments that they also want to protect from taxation, so they have the power to pass laws to protect their own investments.
While in Japan many years ago,I discovered a different taxation system that worked well for them:
Companies and corporations pay all the taxes,from their profits.It's enough money to run the country smoothly.
WORKERS PAY NO TAXES ON INCOME PERIOD!!!
WORKERS DON'T HAVE TO FILE INCOME TAX FORMS!
Does anyone reading this think that would be a better system for the U.S.A.?
Permission is granted to copy or forward this post to any entity.........beesting

Do indeed get back to this forum when you get the chance. Your background in manufacturing could be of great help in some of the discussions.

As for learning about the ins and out of gold in a way that will not take up computer time, I have a suggestion. Go to the archives of this forum. Print out a few days of posts and write down questions as you read. As you do this many questions will be answered. You can also use the hardcopy for future reference.

Gandalf the White (6/6/99; 21:51:59MDT - Msg ID:7265)
Question to FOA
-----------Where in your opinion will Aragorn III's "Thunder in the night" occur ? --- Now we watch the Spot gold start out the week "Downunder" and move to HK before reaching London and ending in the US. -- Do you await the BoE, bailout of the Brittish BB's before the blastoff in the price of Au ? -- OR will the cause be from another tightning of the OPEC taps before the Y2K effect sets in ? -- Let us hear your pronostications on the timing of this event. Thanks for everything you have pointed the Goldhearts toward, and we shall all meet you sometime at the future world gold trading site in the East.<;-)-------------------

Hello Gandalf the White,
If we listen closely, I think Mr. Aragorn III's "Thunder in the night" may have just begun with a quiet statement. As USAGOLD and TownCrier pointed out today, the BIS is talking.

"General Manager of the Bank for International Settlements (BIS) Andrew Crockett said today that despite sales of gold reserves by central banks, gold would continue to play a major role in the reserves of central banks.
He said that since most central bankers seemed not to want to sell much more of their gold soon, he did not expect the price of gold to fall much further."

I suspect this statement is the beginning of a "threat of action". The WGC knows that (GW, read my last few posts) only two Euro CBs sold gold for "reserve alignment" prior to EMU. No public accounting was ever made as to the placement of that gold. It is no longer on the books, but did it remains in Euro friendly hands? Now consider all of the writing that analyst and officials have offered over these last few years, that Europe was unloading gold! Yet, after untold physical sales and paper shorts by dollar / IMF factions, the BIS states "gold would CONTINUE to play a MAJOR ROLE in the RESERVES of central banks"! I ask you, what Central Banks could they be referring to? Does the ESMB (Euro System Member Banks) come to mind?

Does this statement, "He said that since most central bankers seemed not to want to sell much more of their gold soon, he did not expect the price of gold to fall much further." really mean, if the dollar / IMF wants gold lower in price, they will have to sell gold (not paper)??? And, if they don't / can't sell any more real gold, the paper price will fall no further?

Further, as I have stated before, the current paper short position only has "credibility" if gold falls further in price. Otherwise, the paper is worthless as no gold can be delivered against it. Also, with the G-8 meeting about "derivatives" about to open the shorts books for viewing, this gold era is about to close! Watch Comex OI these next few weeks!

GW, the timetable will be as long as it takes for the next chess player to make their move. Not long, I think! FOA

Good kind sir:

I ask you straight away; what controls the FED? What controls that which controls the FED? 250 years you say? Please enlighten this FORUM. You are in good company. Here, civility rules and we all value your opinions.

Dumb QuestionIf the Euro backers desire an alternative to the Dollar as reserve currency of choice, why not announce to all the world that the Euro is backed by GOLD? Thanks.

As an avid gold stock investor I eagerly read these opinions and hope for the best, but I fear anyone hoping to cash in on "the big one" may be very disappointed in the near 1-2 yr term. I believe we wil witness the most mendacious acts of fiscal stupidity and piracy within the next few years as the wheels come unglued. Remember;no carburetor has ever had as much nitro poured into it as this one so we're in uncharted waters. My hunch is that the economy is analagous to the expansion of a star. As it grows it eats through more layers of the underlying elements. Externally you see little diference, but underneath each element is being converted quicker than the last, ultimately until iron. When this occurs no amount of energy can be released to sustain the mass and instantaneous collapse is certain. Gold was created in just such an event, while paper is worth no more than the crap you fill your blue box with. Idiots like Greenspan, Gore,L Ron Hubbard and many others think they can "out-think" physics, but ultimately we will hit "iron" and gold will be a very nice substance to own. I havn't seen anyone filling their blue box with gold yet. Lots of paper though.

http://www.kitco.com/lease.rate.html
I think the daily precious metals lease rates are back on Kitco after a long absence...I hope for good.

The Hobbits and I shall watch the chessboard closely !! -- Do not worry, they never miss one of your posts. -- Now they awaken before dawn and look to the East to see if a "new day" is to arrive. -- They are ready, no matter what happens, as each now carries 480 grains of Au at all times.
<;-)

$265.50.

from WMM on kitco:

Date: Mon Jun 07 1999 20:29
WMM (Deflation) ID#48217:
Copyright � 1999 WMM/Kitco Inc. All rights reserved
I posted this on the BGO board in yahoo. Thoughts here would be appreciated......

Sorry but I'm not buying the deflation arguement until convinced otherwise. Here are some of my thoughts yours' are appreciated.

1. The CPI number is garbage. Its for tourists. The fact that sizes are smaller, I'm replacing items twice as fast than 10-20 years ago because the quality sucks, and last but not least the CPI is politically managed. It tend to be overweighted on "import type" items. You will also note how "food and energy" is always downplayed unless it benefits a low CPI number.

2. I think the USA has been in a monetary disinflation/deflation mode since somtime in 1996 ( best guess )
Those countries that tied their currencies to ours ( Asia & South America ) got hosed badly. To add further insult to injury, the IMF went in and destroyed what was left of their economy. It doesn't take a genius ( or a Greenspan ) to manage an economy into low inflation when your currency is strong and the rest of the world is in the tank.

3. The world appears to be reflating and the USA is joining in expanding M3 by double digits over the last 1 year plus. Since we are reflating in parallel the USD remains strong on a relative basis. BE WARNED All those dollars sloshing around will come home to roost I believe sooner than latter.

4. The Fed's bias towards tightening is a facade. Around the same time they make that announcment they engage in a large series of coupon passes dumping more liquidity into the market.

5. With all this wonderful productivity in the "new economy" in conjunction with a strong USD and exporting nations in the dumps, one would think that the CPI should be negative. That is the consequence of real deflation. I prices should have been declinging say, 2% and instead the rise 2%, the the real inflation number is 4%. Again assuming you buy the CPI.

6. Political reality. Given a choice between a deflationary recession/depression and stagnant ecomony with inflation, the government will pick stagflation. It is less painful on the masses and they can hide from the real problem by blaming someone else. ( Like the Arabs in the 70's for the "oil crises" which was really a dollar crises )

7. Every government in thoughout history of fiat currency has always and everywhere inflated. Inflation benefits the debtor not the creditor. The largest debtor in the world is the U.S. Government. There be mild bouts of deflation along the way when it is politically expedient, but inflation is always the end game.

Thoughts?

in the red $265.30...

Another kitco:

Date: Mon Jun 07 1999 17:46
JP (Commercial loans at US banks rose $2.7B last week to $948.7B) ID#237237:
With the banks fully loaned out, a rise in interest rates will cause illiquidity problems which will end up in massive defaults. Banks capital
is at minimum these days. Any bank runs will cause problems which may not be solved by the US government. Dollar shortages are worsening and the third world countries have just about given up on any future payments of principle debt. The IMF is loaning money to Russia so they could pay interest on previous loans coming due this year. What a farce.

kitco:

Date: Mon Jun 07 1999 10:03
Gambler (Josef) ID#441250:
Copyright � 1999 Gambler/Kitco Inc. All rights reserved
I mention this date for several reasons. I believe that people who work hard for their money deserve to keep what is theirs and to someday retire in comfort. Governments are notorious for squandering and stealing the hard earned money of their citizens. Gold is the time tested commodity that best serves as money providing discipline for government leaders and preserving the purchasing power of its owners. I started accumulating gold stocks and other pms in August of 1998. Prior to this date, I was bearish on gold. The insiders, and there are many to a greater or lesser degree, knew that gold would continue in a bear market because of the gold carry trade, CB leasing, hedge fund/banking exposure, currency bailouts, Asian/Russian/S. American debacle, political agendas, etcetera. Recently, this atmosphere has been reaching a climax. I have been posting about the significance of the US Treasury yield and made some very specific posts about information I am privy to concerning the gold carry trade, hedge fund/bullion bank problems, hedge fund/currency predicament, etc. I can not mention any names but as you are reading this, an incredible war is going on amongst some very powerful and influential financial and government leaders. The particular gov leaders are viewed as complete asses by their financial peers. Some very bad blood has been developing over the past year between various foreign financial leaders ( China & Japan play a key role ) , some US and British bankers, German, French and US government political, etc. I have accesss to some of this information as stated in prior posts. Because I have been privy to information from a few in the loop, I have done very well over the years. Because I am tired of seeing governments steal their citizenry blind, I would like to see alot of investors benefit from this fantastic bull market in gold that is shortly upon us. I am very excited and have bet one of the farms on this upcoming explosive move. We are in the beginnings of a seachange in public perception of gold's place in the world. This change will be so significant that many will make millions in just a few years. Many insiders are now accumulating pm stocks because of what they know is currently in progress. Never was their a better time to be a contrarian. July 5th - July 9th will be a very revealing week. The masss will understand the new paradigm concerning paper currencies, gold and other commodities. The following Monday, July 12th will be very significant for gold and pms. I was very specific in a few posts made several months ago and of course was not taken seriously. I gave the exact date this time because it will be a very significant day for gold and its perception. Gold will finally take off because of the spreading awareness of the risk to world financial systems. Envision firefighters trying to put out fires as paper burns. ( Stocks, bonds, currencies, etc. ) Of course you can't take my word on this as you don't know me, but I will take some satisfaction in pointing out a very significant day for all to see. And I believe most will miss the launch sad to say. Probably the same ones who rode gold down into this abyss where we find ourselves now. My portfolio since mid Agust of 1998 is still up 22% after the continued basing in gold. So, although gold has continued to languish, its been an excellent time to accumulate pm stocks.

Good luck Josef and continue to accumulate gold stocks

http://www.bis.org/press/index.htmPress Releases


BANK FOR INTERNATIONAL SETTLEMENTS
CH-4002 BASLE, SWITZERLAND
Press release Press enquiries: +41 61 / 280 81 88
Ref. No.: 25/1999E
7 June 1999

Annual General Meeting: Address by the President of the Bank for International Settlements
The following are excerpts from the speech delivered by Urban B�ckstr�m, Chairman of the Board of Directors and President of the Bank for International Settlements, to the Annual General Meeting held in Basel today, 7 June 1999.

At this point I should like to take a look at the global economy and consider some of the policy issues we face. There is now a much greater spirit of optimism about world economic prospects than was the case only a few months ago when we were all anxiously waiting to see what the fallout from the Brazilian crisis might be. It was not thought implausible that Brazilian inflation would get out of control, that Latin America would experience a renewed flight of capital and that the devaluation of the real would spark another round of devaluations, perhaps even extending back to Asia. With the memory of the repercussions of the Russian crisis and the near failure of Long-Term Capital Management all too fresh, the possible impact of such events on overextended global financial markets was another source of great concern.

In the event, none of these fears have materialised. The Brazilian situation itself appears to have stabilised, with the impact so far on other Latin American countries contained. Both the IMF and the OECD are now forecasting global growth of about 2�% in 1999 and further acceleration into the new millennium. The United States is expected to see an orderly slowdown, Europe to pick up speed, South-East Asia and Latin America to recover convincingly, and output in Japan to cease to fall. Asset markets already seem to be counting on such an outcome. Equity markets have risen worldwide, rebounding to record levels in the United States and Europe. Capital inflows into Asia, including Japan, have supported sharp increases in share prices, and a number of Latin American sovereign borrowers have been able to tap international bond markets within months of the Brazilian devaluation. Credit and liquidity spreads in many markets have also fallen sharply, albeit not back to the excessively low levels seen this time last year.

However, these favourable developments should not lead us to conclude that the danger has passed. Indeed, the principal risk at this point is that the sense of urgency in the need both to manage current problems and to prevent the emergence of new ones will be lost. This would be irresponsible since there remain some evident threats to international financial and economic stability and, perhaps even more importantly, there may well be vulnerabilities that are not so evident. Recall that the scale of the Mexican crisis in 1994 was foreseen by very few. In South-East Asia the onset, duration and scope of the recession were all missed by the forecasting community. At this meeting last year, no one had anticipated the extent of the turmoil in financial markets that would be generated by the Russian devaluation and moratorium. The way in which rising credit spreads led to losses by highly leveraged investors, liquidity shortages and the virtual drying-up of some markets was generally not anticipated. Let us be honest with ourselves: the track record shows that there are many things that we do not understand and cannot predict. It would be highly imprudent simply to assume that all will be well.

If many unexpected problems have surfaced over the last few years, many expected problems have failed to materialise. Whether this means the fears were not justified in the first place, or rather that problems have continued to build under the surface, remains to be seen. Perhaps the greatest of the unrealised fears has been that the US economy would slow down sharply before spending elsewhere had recovered sufficiently to support the global economy. This has not come about, in large part because of the continued strength of consumer spending in the United States. But the coincidence of declining private saving rates and a widening current account deficit is a matter of continuing concern. If investors became less willing to hold the rapidly expanding external debt of the United States, a falling dollar might increase nascent inflationary pressures in the United States, even triggering a hard landing. Fortunately, this has not happened, though the sharp rise in the yen in the third quarter of last year and last month's CPI statistics provide illustrations of how quickly the unexpected can arise. Another fear, again related to current trade imbalances, has been that of rising protectionism. While such pressures have been kept under control to date given continued growth in most of the industrial world, the challenge of maintaining an open trading system would surely increase were unemployment to begin rising again.

Another concern has been that equity markets, particularly in the United States but also elsewhere in the industrial world, might fall back rapidly and in a disorderly manner. With personal saving rates now near zero in many of the countries with highly valued stock markets, a marked decline could well herald lower spending and growth. For some years now, many analysts have questioned whether the expected growth of profit rates implicit in equity prices has not been unrealistically high. At the same time, others have asserted that technological progress and corporate restructuring provide the foundation for a new economic environment that will support significantly higher profit growth in future. The evidence to date on the validity of this assertion is scanty. In the meantime, it is prudent not to ignore an abundance of evidence that markets are prone to overshoot on both the upside and the downside.

The expected acceleration in the growth of global demand reflects the recent easing of monetary policy in most industrial countries and many emerging market economies. This easing, including that following the autumn crisis in financial markets, has been made possible by continuing disinflationary trends arising in part from high levels of excess industrial capacity. Moreover, the loans made earlier on to finance this expansion of capacity, in Asia in particular, still weigh on the health of the international financial system and have provided a further rationale for monetary easing in many countries. The recent experience of Japan reminds us, however, that the efficacy of monetary policy may be limited by the zero nominal interest rate constraint, particularly if prices are already falling and this is expected to continue. Concerns that an associated decline in the exchange rate might serve to export deflation to others may be a further impediment to policy activism.

Nor are these the only constraints on the use of accommodative monetary policy. What also seems to have been reasonably well established by the events of recent years is that such policies can themselves contribute to turbulence in financial markets. Easy and low-cost financing over an extended period may drive up the price of financial assets, even at times when the rates of return on the underlying real assets are declining. This is what happened in Japan in the late 1980s and in South-East Asia subsequently, and may help explain the sharp rebound in equity prices in the last few quarters. Periods of monetary accommodation may also lead to a more cavalier attitude to risk-taking on the part of lenders. Such tendencies are accentuated by competitive pressures to maintain or increase rates of return on capital. However, the build-up of excessive leverage sets the stage for the type of market turbulence seen in the wake of the Russian moratorium when investor sentiment suddenly reverses.

If there are limitations to the use of monetary policy in some circumstances, then other policies might have to be relied upon more heavily. Policies of microeconomic reform remain the top priority to spur non-inflationary growth. Given that the overhang of excess capacity will hold back investment in many sectors for years, it also becomes more important to deregulate and open profit opportunities in other sectors. If such opportunities could be augmented by more favourable labour market policies, which might themselves eventually build confidence by creating jobs, the potential for a significant strengthening of medium-term economic prospects would surely be enhanced. These microeconomic reforms could, in countries where medium-term fiscal consolidation is sufficiently advanced, also be supported by the countercyclical use of fiscal policy.

Given the costs and the difficulties faced in managing the successive crises experienced over the last few years, it is not surprising that considerable attention has been paid to how future crises might be avoided. One obvious insight is that affected emerging market economies must reform their domestic financial systems. Simultaneous restructuring of the corporate and banking systems, and a clear recognition and allocation of losses, is required if profitability is to be restored and sustained. Further progress in establishing a sound legal infrastructure covering both bankruptcy procedures and effective corporate governance would also seem very high on the list of priorities.

To say that the key to avoiding future crises in emerging markets must be found in domestic reforms is not to deny the international dimension of the problem. Excessive capital inflows and outflows did exacerbate domestic problems and steps should be taken to deal with the possible recurrence of such events. To begin with, the dangers inherent in adjustable peg exchange rate systems need to be clearly recognised. There should also be less hesitancy in using market-based prudential instruments to prevent the build-up of excessive external indebtedness. And finally, countries that receive capital inflows should also prepare for the day when the movement might reverse. Countries that are vulnerable in this regard should consider carefully the adequacy of their foreign exchange reserves, particularly when measured against their short-term external debt. Since large numbers of countries cannot build up their reserves by increasing their trade surpluses simultaneously, this would seem to argue for greater use of contingent lending facilities provided by the private sector. Given such arrangements, recourse to the new IMF Contingent Credit Lines would then add public sector to private sector affirmation that the domestic policies being followed by the borrowing country are sensible and sustainable.

If domestic self-help is the best response, even to problems with an international dimension, part of the solution may still be found in measures to change the way in which international financial markets sometimes operate. While financial liberalisation and international financial integration bring unquestioned benefits, they can also be subject to episodes of excessive risk-taking. In recent years, there does seem to have been imprudent lending, and not just to emerging market economies but also to borrowers within the industrial world. In part this has been spurred by competitive forces. These seem unlikely to diminish as financial restructuring accelerates. However, the potential of public safety nets to distort incentives and breed complacency can also be discerned and these structures should be re-evaluated. It is important that all investors are held accountable for their decisions. The international community should also ensure that all investors and lenders play their part in the resolution of any future financial crisis and, to this end, should implement, inter alia, changes to international bond covenants that would facilitate debt restructuring should this become necessary.

The events of last year have also made clear that greater efforts are needed to strengthen the functioning of markets lest market processes themselves add to volatility during periods of stress. The expanded role of markets in channelling funds from surplus to deficit sectors and for managing a variety of risks is one factor making this imperative. Information asymmetries lie at the heart of market failure, and the market's way of resolving them can give rise to unpredictable outcomes. Ensuring that markets have adequate information about national economies, the strength of financial systems, aggregate positions in markets and the financial standing of counterparties is important. Equally, if not more, important is to ensure that market participants' approach to risk management reflects the full balance of costs and rewards implied in their decisions. Finally, it is also necessary to consider the micro-prudential policies that apply to individual firms in a wider setting, including the potential for unintended aggregation effects. Internal risk assessment procedures must recognise the interrelationships that exist between categories of risk before, not when, markets are under strain.

The fact that markets are becoming increasingly global means that efforts to promote financial stability must also become increasingly international. One underlying theme of the many meetings held last year at the BIS and elsewhere has been the need to involve directly the emerging market countries likely to be affected by the decisions taken to promote monetary and financial stability. This reflects a very practical consideration. Implementation will be an even bigger challenge than setting international standards in the first place, and a sense of shared ownership will materially improve the chances of such implementation. Allied with other incentives for change, including surveillance by peers, the IMF and the World Bank, progress can be made if we keep insisting that progress must be made.

Let me finish by noting my personal satisfaction that the BIS, and the various groups and committees which meet here, continued last year to make substantive contributions to the pursuit of both monetary and financial stability. These efforts will be taken further, with the assistance of additional input from the newly established Financial Stability Institute and the even newer Financial Stability Forum. Recent episodes of financial crisis and macroeconomic disturbance underline how much work still needs to be done. Yet there is considerable comfort in knowing that the global community is addressing these issues in a serious and systematic way.

Many wise words.. Thank you for sharing them with me.

Voyager, I have contemplated the life and teachings of Gautama Siddhartha, the Budda, while studying ancient India in the history lessons my husband and I teach our son in homeschool. Our study of ancient India introduced us to Atlantis and Manu, and the Indian trinity of Brahma (Creator,) Vishnu (Protector,) and Shiva (Purifier,) as well as Rama and Krishna, avatars of Vishnu. Passages from the sacred texts: Vedas and Upanishads, and the epics: Mahabharata, Bhagavad Gita and Ramayana, gave us a poetic experience of the life of ancient India. We go on to Persia, Mesopotamia, Egypt and Greece before leaving ancient history this year.

I have always had great respect for all religions of the world and this history course is bringing to my little part of the world an avenue to learn about them. I have a sense of peace leading our son into this study whereas some Christians would not want their children exposed to them. And I respect my fellow believers� beliefs about that , though I find that I have the same hesitations to discuss this historical journey with just anyone to the same degree that I hesitate to discuss my journey with gold.

We study many creation and flood stories through this history course, not just the Hebrew writings we Christians more commonly study. And as we read them carefully we came to realize that alot of each story's elements are similiar to the others. One has to come to the conclusion that something BIG happened to and in the ancient earth and those times were told in many different ways through the eyes of human beings experiencing the same events. As was necessary, ancient history, or legends as we call them today, including Hebrew history, was recorded in the only way they had then, by passing them down verbally, generation to generation. What some Christians tend to do is compartmentalize God and Creation and "the" flood for themselves ignoring the vast amount of insight that other religions have into God's true nature, the ancient birth of mankind into the world and the subsequent events that changed the world around them (our y2k???).

Jesus of Nazareth taught his desciples that the greatest commandment is to love God with all your heart and mind and soul, and to love your neighbor as yourself. The common thread between all religions, IMHO, is that it all starts with our personal willingness to look within ourselves first and become willing to be emptied of prejudices and opinions and worldly influences in order to become enlightened. Jesus put it this way, "in order to be born again".

We're not so far apart in our beliefs are we? But we don't need to believe the same religiously in order to walk side-by-side on this journey with gold. It makes for very interesting conversation when the POG is down, don't you think??!!! And like I said, I am hungry for more knowledge about other religions and the pieces of the big puzzle they hold in this world.

Peace and Gold to you. Julia

Sent my partner the 6820 post when he asked how gold was going. Haven't been sending him anything because of responses like this. Anybody else getting this?

Steve you are an extreme case. I wish you could see yourself. You have no
balance. Everyone knows their will be corrections in the market. The
difference between you and I is that after the STS loss I told myself I
would buy only stocks would good sound business models. You tried to reason
your losses instead of learning from them. You became entrenched in your
view to prove yourself right and the more you became wrong the more you
tried to prove yourself right. You have been wrong so many times but you
never try to learn from it. I wish you had the same passion in computers.
Please do not take this the wrong way Steve you are a good guy but your
compulsive behavior could be clouding your judgment.

--end--

"You have been wrong so many times but you never try to learn from it."

Try this variation of his thought on for size:

Paper currency systems have gone south (been wrong) so many times. Have you ever tried to learn from it? ---Aristotle

http://biz.yahoo.com/rf/990608/o5.htmleuro performance should be measured against the early 1998 Ecu level of $1.08 rather than the January starting rate above $1.17

http://biz.yahoo.com/apf/990608/china_comm_1.htmlChange can be a good thing...

http://news.bbc.co.uk/hi/english/uk/newsid_363000/363761.stm"There's no such thing as guarantees in real life."

http://news.bbc.co.uk/hi/english/uk_politics/newsid_363000/363800.stmThe report suggests that public expenditure as a proportion of GDP in most European countries "has more or less reached the limits of acceptability".

Sound money requires sound fiscal policy.

MARKET REPORT(6/8/99): Gold got hammered again this morning in New York
following an equally disastrous session overseas. The Reuters London wire reports
"aggressive selling" in Tokyo and Sidney that carried over to London with gold testing
support at $263. With the Bank of England sales coming up, there continues to be a virtual
absence of buyers in the options and futures' markets. Once again, we raise the question
why any official seller of gold would announce the sale before the fact and drive the market
substantially lower. The Bank of England has thus far lost just under $700 million to the
market and we are still nearly a month away from the actual sale. Please note the virtual
silence from the Blair government and Bank of England on this issue despite the growing
opposition among the British people. As we have said here repeatedly, there is substantially
more to this sale than meets the eye. If we continue to hear reports of strong physical
purchases, the obvious question will arise: Are certain counterparties in the gold market
filling shorts of physical metal with this gift wrapped opportunity courtesy of BOE?

Bridge News files this less than clear explanation to the reduction in gold assets at the
European Central Bank:

"Total gold assets registered by the European Central Bank system were down 16 million
euros at 105.307 billion euros in the week ending Jun 4, the ECB said today in its weekly
financial statement. The decrease was caused by the unwinding of a technical transaction
between two central banks that had taken place at the end of 1998 in connection with the
subsequent transfer of foreign reserve assets to the ECB, it said. In addition, foreign
currency assets were unchanged on the week at 234.2 billion euros on Jun 4, the ECB
said."

How do you lose 16 million euros on an internal transaction -- particularly when the metal
is going up in the currency denominating the transaction? Did some gold leak out? The ECB
has made much hay about transparency and unambiguous transactions. Assuming that
Bridge News is not being deliberately opaque and ambiguous, we would have to say the
ECB is the guilty party in this regard. What happened to the gold? Meanwhile the euro itself
staged something of a recovery this morning on a comment by Bundesbank president
designate Ernst Weltke that "$1.08 was an appropriate reference rate for the euro."

The latest News & Views is at the printer and will be ready for mailing in about a week.
This month we ramble through the many issues surrounding the gold market and give the
reader a good, solid overview of what's happened in this topsy turvy market of the last
month or so. If you are looking for some short and sweet analysis as to what is going in the
gold market today from a multitude of sources, you'll like this upcoming issue. It is a quick
and interesting read. Please go to our ORDER FORM or call Marie at 1-800-869-5115 for
a Free Copy of News & Views -- our widely read monthly newsletter -- and introductory
packet on gold ownership.

http://biz.yahoo.com/rf/990607/bay.htmlLast month, the U.N. Security Council indicated it would allow Iraqi unlimited oil exports, somewhat undercutting OPEC's widespread efforts at cut-back's and conservation.

Watch the tables turn as the old "oil-for-food" assistance program to Iraq becomes a "dollars-for-oil" assistance program to the West. Will Iraq become America's 51st state? (Don't take TownCrier TOO seriously...)

Steve, I hope I am not overstepping my bounds, but since you posted the response from your "partner", and entitled it Therapy anyone?, I will take the liberty to comment.

Part of my work over the past 25 years has been identifying and eliminating negative people from businesses. Negative people mess projects up and lose money for all involved. These negative folks have intentions are always "good" and "honest". Right? But somehow, the those around them make mistakes of judgement. If that quote is representative of how your partner communicates to your or others then I can tell you that he is not only negative. He is openly destructive! Can you imagine growing up with a father like that?

I can assure you that it is a regualr practice in corporate mangagement to identify and eliminate negative/destructive people. This is an unadvertised activity but it nevertheless occurs. Any corporate leader who is not weeding these people out is doomed to failure. The fact that this practice is not talked about doesn't mean it doesn't exist.

I known several people who are very very sharp but they don't seem to get anywhere. Many of them have the characteristic to put up with these negative/destructive types.

Some people hit others with sticks. Some use their fists. Others, in the name of help, use words. Sticks and fists damage one's body. Negative/destructive words penetrate the heart and destroy one's confidence.

What an excellent post to Voyager! I just can't get away from this Forum; shouldn't have stopped this morning. There is much to be learned from the East; so much about near and far Eastern cultures that is not taught in the West. You are wise to teach your children all good things that the world has to offer. Indeed, beginning in Sumer, we see common threads tying the ancient Sumerians to the Hebrews beginning with Abraham in the Old Testament. I know you understand the difference between "Revealed Truth" and philosophy(ies). I enjoy reading your posts!

PS: In your study of world religions, I suggest you get to know the Orthodox Church. Good luck on your journey.

Sir Tomcat is exactly right on. I know a lot of people just like your friend. I try to avoid them. Your posts reflect much intellect, understanding and knowledge. I really look forward to seeing "SteveH" at this Forum. Best regards...

Please substitute this sentence in today's report:

"With the Bank of England sales coming up, there continues to be a virtual absence of aggressive buying in the options and futures' markets."

Lately, I have been in and out of town an awful lot [problems with an 89 year old mother]. Have relyed on usagold to get me back up to speed whenever I return. You, and several others deserve a very real "thank you" from me. As far as I am concerned, your "partner" seems to be in love with the wrong guy.
By the way, you were a very busy boy this morning....thanks.

http://biz.yahoo.com/rf/990608/t9.html"Now, undeniably, whether we look at manufacturing sector, whether we look at retail or the services sector in our district, we're seeing prices moving up."

http://www.bis.org/about/index.htm Hello all kind sirs and ladies. Looking on the BIS web-site:
"The BIS employs the gold franc solely as a unit of account for balance sheet purposes, assets and liabilities in US dollars being converted into gold francs at the fixed rate of US$ 208 per ounce of fine gold ( approximately equivalent to 1 gold franc = US$ 1.94 ) and all other items in currencies being converted into gold francs on the basis of market rates against the US dollar."
I find it curious that a seemingly arbitary number of US $208 was chosen. Is it arbitary? I hope so! Any of you have an inkling as to why?

By the way, Steve and FOA: I have been going through your posts to make a A3 sized flow chart of the gold carry trade ( CB's to BB's to Mining Co's, arrows of intrigue linking up Gavyn Davies to Goldman Sachs and Blair/BOE, Greenspan to BIS etc - all very exciting stuff which I thank you both profusely. )

http://biz.yahoo.com/rf/990608/uj.htmlRegarding Britain's first gold auction on July 6, a minerals strategist said, "I wouldn't rate it higher than say a 50 percent probability that someone might put in a crazy bid. It's a small amount of gold being offered."

A "small amount of gold" that has somehow managed to stand the market on its head...
Prediction: auction will be oversubscribed at prices well above spot. This is metal, not paper that we're dealing with here. Many will walk away empty handed.

JCTex. Mark is a good friend. He is just concerned. He is more positive than I.

Xavier. It would be good to take a look at said flow chart. Can you post somehow; what program to view?

http://www.theunion.com/news/N5Suadgo46150.htmlHello all,

Here's a link about a group who wants to
"call for a moratorium on gold exploration and an end to cyanide heap leaching - the practice of dumping cyanide on piles of low-grade ore to extract gold"

file this under "people who want to live their life, and yours..."

Its on A3 paper now, but I'll draw it on Excel and load it up on a web page, before the weekend, for your scrutiny and comments!

I'm one week new to this site. very interesting!! wondering with all the short-sited people in the country, wouldn't this be ideal time to by cheap call options on metals? I think by late summer y2k panic will set in and metals will take off regardless of what the big boys want.

"...wouldn't this be ideal time to buy cheap call options on metals?"
Although the feeling would change from battle to battle, when the war was over it was seen that truly, there was never an ideal time to be whistling "Dixie". Aggie, I hope you see my point.

got gold?

The way the price of Gold fell today their may not be any bidders at the BOE Gold sale next month.
So,I'll start the bidding:
I bid;$9999.00 U.S. a peice for 2-400 ounce bars plus 2 slightly salty tasting large boxes of tea reportedly washed ashore near Boston harbor,dates unreadable.

Since the announcement of the BOE Gold sale, the BOE has lost about $1200 per 400 ounce bar.Real astute business people!! Something real funny is going on,or is the BOE dealing in HOT(American expression for stolen) GOLD!!......beesting

Good to see you back!!! Missed your input to the Forum......beesting

"2. They are unanimously opposed to an increase in the price of gold as a way of dealing with the present crisis."

WOW! Officials NEVER use the word "crisis" unless things are dire.

"After the meeting of the Central Bankers in Basel this week end, we will have a better idea of what the Europeans are willing to do, what the prospects are of keeping the gold market open and quiet, and what would be the most orderly way of bringing about change."

In case you didn't know, Nixon's ultimate decision in 1971 to end the dollar's international convertibility to Gold was done WITHOUT the direct consultation or involvement of foreign trading partners. It was essentially "lightning in the night" (to borrow my good friend's popular term...Aragorn, I owe you a pint of Newcastle when circumstances permit!)

"3. The Europeans realize that we all may face soon some quite unpleasant choices; but they are not clear about what these choices are and what will be required of them if we are to hold the system together. They are prepared to close down the London gold market and let the free market price of gold float. What they have not thought through are the terms of the intimate collaboration which will be required to make that kind of system work--especially how to deal with the consequences of a two-price gold system."

Read that one twice, folks!

"Your senior advisers are agreed:
(1) We can't go on as is, hoping that something will turn up.
(3) We want to negotiate the following package:
--Interim rules on gold.
--Measures to keep order in the financial markets."
(5) If we can't get this package, we would have to suspend gold convertibility for official dollar holders, at least temporarily, and call for an immediate emergency conference."

Temporarily. A permanent disconnect with gold was not envisioned as possible, nor even is it now.

"(6) This probably would mean a period of chaos in world financial markets, but it may be the only way to push the others into a sensible long-run arrangement which avoids a rise in the official price of gold. We are unanimously agreed that a rise in the price of gold is the worst outcome."

Does time change perceptions?

"The decision you must make now is whether the London gold market should be closed at once.(President Johnson agreed to the temporary closing of the London gold market on March 14.)"

More lightning in the night!

"(a) Arguments for closing [the London Gold pool]:
--Avoid losing perhaps $1 billion in gold tomorrow (we lost $372 million today).
--Such a gold loss would further shake the confidence of central banks and trigger their coming to us for gold."

"(b) Arguments against closing:
--Involves U.S. taking the lead in throwing in the towel."

An admission that our money had gone bad due to mismanagement and poor fiscal policy...direct fallout from a costly war in Viet Nam--as evidenced by the final comments in the memos:

"After we met with you, Joe talked to several of us about the attitude of the Hill with which he has been dealing, and the attitude among the Central Bankers.

He describes the attitude on the Hill as one of almost anarchistic willingness to pull down the temple around their ears on the grounds that our budgetary expenditures are out of control. He feels that the Europeans have the same kind of feeling and cannot understand that our Executive Branch and Congress are incapable of generating a tax-expenditure policy that would keep us in reasonable order.

He is almost in despair about being able to negotiate a package without some sign that a tax increase is at least over the horizon; and he is in despair about getting a tax increase unless there is some kind of commitment to expenditure limitation.

I know enough to know that I have no competence in figuring out how this nagging political problem can be solved. It obviously goes to the heart of our nation's capacity to carry its external commitments; maintain the world trade and monetary system; and avoid a serious domestic breakdown in our economy."

America wrote international checks that it couldn't afford to cash. The piper has yet to be paid, and the scenario that has been thoroughly addressed by FOA can be viewed as a direct consequence of much of the fallout from this time period and onward.

Gold has never left the monetary scene, although many people are now not old enough to remember Gold as money. I think some people suffer from the Santa Claus syndrome
regarding gold being money. They romantically WANT to believe it is true, but deep down they fear it is a myth with which they might be deluding themselves. For those people, these memos are hard evidence that "Yes, Virginia, there really IS a Santa Claus!"

Wouldn't you concur? It is difficult to see such official discussions and entertain any further doubt about Gold. Gold is money. And while national citizens may be fooled during an extended interim "suspension of Gold as money," the international pipers will be paid in the end. Use your knowledge and time wisely.

Gold. Get you some. ---Aristotle

By Melanie Lovatt, Bridge News
New York--Jun 8--COMEX Aug gold futures settled down $3.40 or 1.3% at
$263.80 per ounce after plunging to a contract low of $262.80, which is
also a fresh 20-year low on continuation charts. Key to its fall was spot
gold's earlier move below $265 support, made against a backdrop of overall
bearish market sentiment ahead of the UK Treasury's Jly 6 gold auction.

Traders said that gold extended its early morning weakness throughout
the day, and became the target of dealer sales toward the 1430 ET close.
"I think it is feeding on its own malaise and potential buyers will not
come in until there is a sign the market has stabilized. While it is in a
tailspin there is no sign of this," said James Steel, analyst at Refco.
Bill O'Neill, analyst at Merrill Lynch, said that gold is showing an
"erosive technical chart" with lower highs and lower lows.
Leonard Kaplan, chief bullion dealer at LFG Bullion Services
described today's activity as "more of the same."

"As the market deteriorates, 20-year old charts mean nothing and
what's truly important are round numbers," he said. "The only people who
are buying it now are those who like standing in front of trains," he
said, referring to the overwhelming shorts, severe downtrend and fast
approaching UK Treasury sales.

"What you're seeing here is a very nervous market pressing lower --
there's an unwillingness to go long because of the obvious trend,"
commented David Meger, senior metals analyst at Alaron Trading, noting
that the UK's forthcoming sale is "looming like a dark cloud over the
market."

He said that there is "a lot of ambiguousness over technical support
levels -- what we're finding is psychological support. He noted that gold
prices are moving into "uncharted territory."
However, he subscribes to the growing theory in the market that gold
may see a strong rebound after the UK Treasury's Jly 6 sale. "In the 70s
we saw the lowest price before IMF sales and then the price rallied," he
noted. [Sure did! It rallied to more than $800 (in 1980 dollars) from a lower starting point--TC]

Meanwhile, total gold assets registered by the European Central Bank
system were reported down 16 million euros at 105.307 billion euros in the
week ending Jun 4, the ECB said today in its weekly financial statement.
The decrease was caused by the unwinding of a technical transaction
between 2 central banks that had taken place at the end of 1998 in
connection with the subsequent transfer of foreign reserve assets to the
ECB, it said.

While some market observers had viewed this news as bearish, both
O'Neill and Steel commented that it was in fact neutral. Steel said that
the transaction was made from one central bank to another, which nets out
flat, while O'Neill noted that the amount in question is not even very
large.

However, more bearish was a statement from the Australian Treasury
Department. Treasury officials said that while prices for coal, iron ore,
zinc, copper, lead, nickel and aluminum would likely start to "trend up"
in the current fiscal year 1999-00 (Jly-Jun) the price of gold is expected
to remain weak.

(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN

I wanted to voice my agreement with Aristotle that those memos from the Johnson years are of singular importance to all of us and thank Townie for digging that up -- history viewed from behind the curtain.

It shows to what lengths governments will go to manage the gold price. It also shows that you can have protracted time periods -- going for years -- where the price is successfully managed at least in outward appearance. There has been much discussion of late among analysts about the Anglo-American connection with respect to anti-gold policies and its opposition to the continental European view. It must be remembered that only a few years after that string of memos, the Nixon administration did "throw in the towel" and the free price of gold skyrocketed and it all happened because of the relentles physical demand for the metal both by private parties and governments. I will say again what I have said so many times before here and elsewhere: There is much commonality with respect to gold policy between this era and the days of the London Gold Pool in the 1960s and early 1970s. The players are same (except now Japan is a player.) The policies (on both sides) are the same. The initial results are the same. The methods, however, are different. It would be reckless to assume that this replay would end any differently than the original in the 1970s. Already we see oil rising which is essentially a statement on the part of the oil producers that they want value, not just paper, for their resource. We see Europe continuing to hold to gold. We see inflation rates beginning to ratchet up in the United States and a burgeoning money supply. How long until we see the dollar in retreat? The next step will likely be devaluation of the dollar -- not formally as what occurred in the 1970s, but informally in the marketplace. i.e.

Here comes the Towel!

And I believe the dollar depreciation will be against the euro and gold. The Japanese, it appears, will do everything in their power to keep the yen cheap against both the dollar and euro and China appears ready to follow.

You can see from my last post which way I'm leaning on the Y2K capital flight issue. I am not on solid ground yet though.

Can any of our Y2K experts here help me with how Europe stacks up against the United States in remediation progress particularly in the banking/finance sector?

Kindly excuse this stupid question, but isn't the spot gold market the market for physical gold - i.e., one needs physical gold now or immediate rights to physical gold, so one buys it on the spot market, as opposed to buying or selling a contract for the right to future delivery at a given price. If the spot gold market does reflect the price for physical gold (which is lower than the COMEX gold contract), does this undermine the theory that price of paper gold does not reflect the true market value of physical gold, because paper gold is manipulated downward? Kindly excuse me if I have made a crude error here.

http://biz.yahoo.com/rf/990608/8a.htmlComment on today's low volume bond market: "It was just an absolutely boring day. It was pretty painful. It was a tough day to make a living."

Meanwhile, another strategist said "The market is just terrified that for the first time in nine years you have an inflation problem."

http://www.detroitfreepress.com/business/qborrow7.htmRead the comments of a couple of Wharton School MBA students in the first few paragraphs of the linked article.....frightening. I can't believe these two guys represent the norm. God help us if they do.

OK MK, the Hobbits are all ready to sit on the floor and learn your thoughts on the depreciation of the US$. Please explain your thinking of why the US$ will not be officially changed, and if not, how it will deflate. We all know that the Euro is backed directly in part with Gold reserves and therefore has far more value than just pure paper. -- But, please explain how Japan and China will distance themselves from the US$, as their exports will mostly receive US$. Now that the long Bond has hit 6.0% interest rate, will that not cause further increase in foreign holders of these bonds to make conversions to other international instruments like gold and the Euro. Is this how the US$ will be deflated ? --- More education please.
<;-)

Aristo,
Thank you for the kind offer -- a pint of Newcastle would be enjoyed as would the company. In that consideration, I offer a simple tale for all...

From experience, do we make an exit of the pub, or find anger to replace past satisfaction when a Happy Hour is unexpectedly announced? Do we cite poor judgement for the enjoyment of the early ale, and refuse more-- as was originally planned-- because the unforeseen opportunity now allows three-for-one?

Of course, we do not. The smiles widen, and the day continues. Good Sir, I respectfully decline your offer. While in my company, I can assure you your dollars are not spendable. I shall be pleased to do the buying until last call is made.

A strange pub, this one. Operating hours are not posted, and no clocks are there on the wall. No worries, as we get what we came for, and take what we get... Newcastles at the going rate.

A visit to a small shop while on travels two weeks past provided me with a symbolic token of misplaced livelihood. As I left the shop, in my palm there now rested one ounce Krugerrand, dated 1980. I assure you that it is no different today, at the price I paid, than it was when originally purchased in earnest by someone for $800 at that time. It was sold in capitulation (moments before my arrival), no doubt, for cash to chase whichever the latest stock to be trading at its peak. Events will reveal this person to have made but one purchasing error, as gold bought for $800 and twenty years early will be revered by generations as the very demonstration of intelligence and wealth-management acumen. And yet, Happy Hour is now called, three-for-one. Whatever is one to do?

got gold?

US Bond market-levergage & could there be an Orange County Crisis of Massive proportions @ the lemetropole cafe, also same author BoE Goold Sale...A Blow to market sentiment at GE!
SteveH your BIS post of Backstrom, while being an excellently balanced speech on the state global economic and financial affairs had some unusual,IMHO, clear warnings as to overheating US economy, accumulation of too much debt to finance US consumer and business and lastly rapidly escalating trade deficit.
Also I feel there have been dire warnings towards the hedge and counterparty community between the lines, which were illuminating. " It is important that all investors held accountable for their decisions ... and pay their part of the resolution of any future financial crises".
Do I read this as the first open, official rejection to the practises of FRB and PPT coming to the rescue of of the "too big to sink" counterparty, derivative gamblers?
@Aristotle: thank you for your history on the Ldn. gold pool. I guess I became a gold bug in the early 70's, when SA
Mines paid dividends, where you could recover your principal in a few years by yields only- anyway I'm happy to be here still learning. Pronounced CB gold sales usually mark the end of the PoG decline, as you and MK state has been a reliable contrarian indicator in the past, though this time the net sales to the market have been marginal over years or are you counting the leases, which effectively may turn out become outright sales? The psychological (intended!) impact
seems to have wreaked most havoc and still is. Anyway, the paragraph on the two tiered market already evidenced up to the end of Bretton Woods and the closing of the gold window by Nixon in 1971 bears a timely analogy to the present dilemma.
Regards CoBra(too)

http://www.usagold.comHi, everyone! I've been a lurker here for about a month and consider all of you my friends. I, too, am struggling to understand the mysterious ways of the gold market. I, too, have been purchasing gold, silver, and platinum as fast as I can get rid of those pesky mutual funds.

Julia, an article you might find interesting can be found at www.the-moneychanger.com. It's called "It Couldn't Happen Here" (in the Y3K section) and describes a hypothetical (but possible) rapid deflationary scenario. There are other good articles at that site.

I have a couple of questions I've been dying to ask and hope that someone can help me.

(1)If Clinton and his thugs should confiscate gold, wouldn't gold owners be able to sell it on the world market (and probably at better prices)? That's assuming that the Bilderberger gang doesn't outlaw gold worldwide. But then, how could they possibly do that?

(2) How does one go about purchasing Euros? I understand that they're sold electronically. If for privacy reasons I don't want to be on the Euro list, could I buy physical marks, francs, etc. and trade them in for physical Euros later on?

Steve H and Town Crier, thank you so much for your faithfulness in scouring the financial and political news and bringing to our attention items that could impact the gold scene. Steve, thank you especially for copying "Gambler's" post from Kitco. I've been noticing an increased sense of urgency here lately, and it is helpful to have some dates.

Leigh (a lurker no more)

(With that, I hope Aristo does not mind my exploitation of his earlier suggestion.)

It would be difficult for any person to conclude that the spot gold price is determined by on the spot physical demand, though in theory that is at it should be.

The physical market is so overwhelmed, so dwarfed by the paper markets, that the unmanaged crumbs of metal that fall through the cracks must leave the dogs looking to the table above for insight into value. Finding only paper in abundance, no insight is found, and they are given away at such a paper price. (I am ever grateful for those such as Michael here that tirelessly sweep the floor for our convenient opportunity.)

You will see that as LBMA trades 1,000 tonnes of gold on paper in the course of daily business, there is no hope for the small voice of a bullion coin to call the tune. As such, Santa does walk among us these days.

You do not see a run on banks these days (let us ignore Y2K for the present discussion!), because there can be no visceral fear that the money has been over lent. The very nature of modern money allows for its creation through the lending mechanism, and by existing as account entries, the numbers can not physically "run out". Such is the wonders of modern banking, and the shortcoming at the same time--the currency stands upon the weakest of legs.

Enter the gold loan. These same banks that create money for a conventional loan find that the same process works well for a gold loan. These mechanics are topics of past and future posts, so I will omit them for sake of brevity here. The problem however, is that limited gold has been loaned/promised time and again to many entities. As time reveals these loans not to liquidate as they should, the formerly content holders of gold on paper now each rush to be among the few made whole by physical delivery of the scarce product...sweepings from the floor being all that is readily available. An old fashioned run on the bank, you might say! This paper functions as "modern money" for the giants among us. Gold at $260 they tell me? Let there be no doubt, Virginia, there IS a Santa Claus!

got gifts?

Mr. Kosares,
I again, thank you for presenting this forum. It does give the fair view for eyes "not so clear" in nature of world. Your thoughts, are smooth for all that touch. A needed display and welcome relief from common banter. Writing here does attract other persons of the "honest feelings" and "deep views". They do carry with them the "reality of life", a quality lost to many of this day. A
quality so needed for future defense of ones family wealth.

My words are slow for a time, as events move forward. Truth spoken once be priceless, spoken many times and value is lost. Time will prove all things, not the repetitive voice, yes? Later, my speech will discuss "what has just occurred" and meaning of such. These future events will demand much text and and thinking, wait we do.
I not mean to slow my good friend, FOA, for he does offer a great deal for the reading. I does tire even my eyes, at times! It is the fair say, I speak, for some require many words, others few.

Sir, I write soon again, on the changing tide. The new flood tide of gold! Another

It is good to receive your companionship once more. Greetings! We are well met, it would seem, on the dawn of a new era through the rebirth of ancient truths. Gold yesterday remains gold tomorrow while all else changes.

Please return as your time and thoughts allow.

Time must be nearing for gold's meteoric rise. Another just posted.
His message is clear with a hint of
desperate measure. An omen I feel. He seems to say, I will say this
once and once only (so you better listen friends -- that is my take).
Be ready.

http://cbs.marketwatch.com/news/current/futures.htx?source=htx/http2_mwJust as I was finishing creating this link and to thank Aragorn for his words, I witness the return of ANOTHER! Please, ANOTHER and Aragorn, do not consider me so presumptuous to feel that I am contributing to these discussions. I am but a humble student doing research, merely providing an article on the futures pablum that is being fed to the general public. An excerpt from said article:

"People are sidelined now that we know these sales are coming," said Meger. It would make no sense to enter the market now when the price of gold is expected to be lower and cheaper later, he added.

Kitco is showing gold up $3.60 overseas. Wow what a change from today.

www.lemetropolecafe.comLe Metropole members,

Charles Peabody has served commentary at the
Hemingway Table entitled, "Large Bank Exposure
to Interest Rate Swaps". It is a short piece so
I inserted some other recent Peabody commentary
at the end of his commentary.

"CMB and JPM are the two largest players in the
interest rate swap market"
"the groups most hurt by the move up in rates"
"fuel for the asset bubble is coming from"

For the last 6 months Charles Peabody has told Cafe
members to expect the following:
1. unintended consequences as a result of Alan Greenspan's
interest rate cuts
2. bond yields would have a 6% handle ( almost no one else
thought the would ever happen this year )
3. the bank stocks would correct 40% to 60% from
their highs
4. There are LTCM type problems that would surface
in late spring

Well, the long bond touched 6% today so we congratulate
Charles. If what we heard about the hedge funds was
on target today, it is very likely his other predictions
will become reality too, maybe soon.

One more comment about Charles. He still strongly believes
this will the year for gold bulls and he also believes the
next commodity index to surge will be the CRB as powerful
grain markets appear to be right around the corner.

Stay tuned. www.lemetropolecafe.com will be the happening
Cafe to hang out in this summer.

Le Metropole Cafe

All the best,

Bill Murphy
Le Patron

Le Metropole members,

Charles Peabody has served commentary at the
Hemingway Table entitled, "Large Bank Exposure
to Interest Rate Swaps". It is a short piece so
I inserted some other recent Peabody commentary
at the end of his commentary.

"CMB and JPM are the two largest players in the
interest rate swap market"
"the groups most hurt by the move up in rates"
"fuel for the asset bubble is coming from"

For the last 6 months Charles Peabody has told Cafe
members to expect the following:
1. unintended consequences as a result of Alan Greenspan's
interest rate cuts
2. bond yields would have a 6% handle ( almost no one else
thought the would ever happen this year )
3. the bank stocks would correct 40% to 60% from
their highs
4. There are LTCM type problems that would surface
in late spring

Well, the long bond touched 6% today so we congratulate
Charles. If what we heard about the hedge funds was
on target today, it is very likely his other predictions
will become reality too, maybe soon.

One more comment about Charles. He still strongly believes
this will the year for gold bulls and he also believes the
next commodity index to surge will be the CRB as powerful
grain markets appear to be right around the corner.

Stay tuned. www.lemetropolecafe.com will be the happening
Cafe to hang out in this summer.

Le Metropole Cafe

All the best,

Bill Murphy
Le Patron

August gold $264.40.

Mike55 and ALL,
Hope you understood that Another was complimenting everyone here for their fine posts. I think the banter remark was directed at other mediums. It seems I am the one that's overwriting at times??

Aragorn III,
Santa Claus gold prices for anyone that can get it delivered! You bet!

Welcome back, my good friend. It has been too long and much has happened. I and many others at this FORUM look forward to your THOUGHTS on this most interesting of situations in the gold market. Thank you for your good wishes and timely return. The pleasure is mine............

http://www.kitco.com/gold.graph.htmlCheck out the graph. Spots jumping up and down like he's trying to break his leash. Go Spot Go.


Wait...what am I saying. I get paid Friday. Stay down Spot, PLEEEEEEEEEEEEASE. Those that have abused you will soon get their just deserts. Just stay down till Friday.

Yes, I understand. Thank you. You overwriting!? Never, IMHO. Now I listen and learn.....

As it is relevent here:

Date: Tue Jun 08 1999 16:55
ORO (Jims - What is the official party line?) ID#71231:
Copyright � 1999 ORO/Kitco Inc. All rights reserved
All I know are the statistics support some market views and do not support others. As a former R&D Engineer, I can only say that I will tend to believe what is supported by statistical evidence.

e.g. The USAGOlD Forum postings from ANOTHER - up till a few days ago I did not believe at all that it was authentic, or that if it is that the scheme would work as planned. What brings me to remove some doubt from this scenario is that the main event in May - from which point many current trends started ( dollar, gold, oil, interest rates, stocks ) was the BOE announcement of their gold reserve sale. If these 415 tonnes of gold are the main event of importance in the currency and financial markets of an economy with a $10 trillion GNP ( currency moving almost 4% in one month ) , then there is some truth to the story of the currency chess game of the US and the EC. All the preconditions of a US centered financial crisis are there ( have been there since 1997 ) , with the recent money supply growth rate slow down in spite of continued Fed coupon passes being the sign of the fuze having been lit.

Rubin's resignation is the marker of the cracked axle on the wagon just making it over the hilltop. The first to jump off the wagon would be the driver.

Greenspan's comments late last month on the EC CB gold games ( sell to induce others to sell so that they can quietly pick up the cheap gold ) were a giveaway of his expectation that his lifelong dream of a gold standard is now a concrete possibility. The ejection of the soft money dissident from the Fed is another sign of the times changeing.

So.. there may be something more than a grain of truth in the convoluted story of ANOTHER/FOA. I give it now a believability factor of 40-45% - up from 10-15% before the events of the last five weeks.

Comments?

"......there are lies, damned lies and, statistics."

my concluding remarks not delivered. More rest is needed, perhaps!

This paper gold used as a modern money alternative has a remarkable "split personality". As a contract, it delivers the value of gold over the span of years while at the same time bringing down the apparent value of real gold--this because it brings many years of future gold production into virtual existence in the market today. The "old fashioned run on the bank" will essentially be a "run on the world" for available gold metal. All eyes will at such a time return to the physical market to show the on-the-spot value. The Bank of England gold auction next month offers more than mere unmanaged crumbs of bullion, and helps to bring the physical market back to bear on spot value. Two items only I should be happy to see reported within the hour following the bid deadline: number of qualifying gold recipients, and lowest qualifying price for delivery to all. A crash-course education in the art of being human seems to be drawing nigh. I feel students of history shall be the best prepared for the final exam!

FOA--Yes. We agree on delivery! I highly recommend the "Newcastle" while the "bar" remains open!

http://www.usagold.com/wgc.htmlTHIS WEEK IN GOLD has now been updated! Appearing at USAGOLD by permission of the World gold Council, click on the link above to be swept back through a week in time, viewing the world gold markets through the eyes of WGC staff from offices throughout the world.

(Hi ANOTHER! Glad to see you visiting!)

I wrote this to a poster on another forum. I am weary of the game we are forced to play. I have worked hard to do the right thing and I have been screwed for it. this is not the country I was born in. I believe in gold and guns. I am tired of being the patsy for the govt. I don't care what happens anymore. My children will not see the end of the rainbow as I have.

The gold and money angle isn't the most sexy aspect of y2k. I'd much rather talk about guns and revolution. However, saving ones' wealth has got to be a feature of y2k planning. I am a corporate banker by trade. My family has been in the business since 1857. I hate banking. It is a game for criminals. I realize this after my whole life in it. Gold will defeat the fractional reserve system. I think that people should be in control of their own lives. The govt in the US is corrupt and will suck us dry. The only hope we have is defunding the monster by refusing to pay the illegal taxes they demand. I have always voted and written my congress asshole. It has made NO DIFFERENCE WHAT_SO EVER. I am following my convictions in this matter. I hope you do too. I no longer care what they do to me. My children are grown and funded. The govt must take what they want at gun point as I am beyond caring for their rules anymore. I have nothing more to lose. God bless us all.

8. Letter From President Johnson to Secretary of State Rusk
Washington, May 14, 1964.

Dear Mr. Secretary:
On July 18, 1963, President Kennedy, in a Special Message to Congress on Balance of Payments, outlined a comprehensive program to eliminate the deficit in our balance of payments, and stated that this nation will maintain the dollar as good as gold, freely interchangeable with gold at $35 an ounce. I have reaffirmed the July 18 Message as the policy of this Administration.

While we can take justified pleasure in our progress, the deficit is still with us and much remains to be done before the job is finished. It remains imperative that we continue to push all parts of our program to achieve equilibrium in our international accounts. Only in this way can we assure that confidence in the dollar will be maintained and that the United States will continue to meet its national objectives, both at home and abroad.

I count on you to continue your efforts.
Sincerely,
Lyndon B. Johnson
___________________________
191. Editorial Note
In their March 14, 1968, public statement, Secretaries Fowler and Martin invited the Central Bank Governors to consult on the gold problem (see footnote 2, Document 190). This initiative led to a meeting in Washington on March 16 and 17 of the Central Bank Governors of the seven nations active in the gold pool. The Managing Director of the International Monetary Fund and the General Manager of the Bank for International Settlements also attended these sessions.

On March 17 the Governors issued a communiqu� supporting the U.S. Government's policy of continuing to buy and sell gold at $35 per ounce. The communiqu� also noted the U.K. Government's determination "to do all that is necessary" to end its balance-of-payments deficit

The Governors believe that henceforth officially held gold should be used only to effect transfers among monetary authorities and, therefore, they decided no longer to supply gold to the London gold market or any other gold market. Moreover, as the existing stock of monetary gold is sufficient in view of the prospective establishment of the facility for Special Drawing Rights, they no longer feel it necessary to buy gold from the market. Finally, they agreed that henceforth they will not sell gold to monetary authorities to replace gold sold in private markets.

The Governors' decision in effect led to two gold markets, one for official transactions only with the price fixed at $35 per ounce, and the second for private transactions with the price freely determined by supply and demand.

____________________________
194. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/
Washington, April 2, 1968.
SUBJECT
Stockholm Monetary Conference
1. Stockholm completed another phase in the IMF Special Drawing Rights plan. It brings us closer to creation of "paper gold".
The central issue was whether France would be able either to stall the proposal or change its basic character. Either outcome would have caused an international monetary crisis and a major drive to raise the official price of gold. Faced with this choice, the other European countries joined with us to settle the remaining questions and put the plan in shape for the ratification process.

2. There were few differences between the U.S. and France's European partners. The main reason for compromises was to help Germany, Italy, Belgium and the Netherlands take the political heat at home of dividing with the French on this fundamental issue. They had to be able to show that they were not knuckling under to the U.S. but were acting to protect world prosperity on an issue where France was unreasonable. This required a demonstration that they and the U.S. would go the last mile to meet French demands without prejudicing the plan or the quality of the SDR as a reserve asset.

4. The willingness of the Four to stand up against the French is a major political development. It demonstrates again that there are limits on how far de Gaulle can push them.

5. The French claimed that the system could not work because our economy had gotten out of hand and we were dumping unwanted dollars on the world. In joining with us, the Four showed they had confidence that we would bring our financial house in order and, specifically, that we would pass the tax bill. The tax bill has now become as much of a world issue as the controversy over the price of gold.

6. We are playing the Stockholm meeting not as a victory of the U.S. over France, but as a victory for the world monetary system and for reason in world financial affairs.

__________________________
199. Memorandum From Secretary of the Treasury Fowler to President Johnson
Washington, June 6, 1968.

Mild devaluation of the franc should not cause so much substantive economic shock that it would threaten the international monetary system. But the monetary system is in such fragile condition that even a mild devaluation could bring about massive fund movements--into Germany and perhaps Italy, where revaluation might take place, or into Switzerland for safety. Almost certainly, it would have an adverse effect on sterling, which is still very weak. The U.K. reserves are short and are mortgaged to the hilt. Much pressure on sterling could force the U.K. to float. Should that happen, there would be repercussions on the dollar and, perhaps, general monetary chaos--with everyone trying to get out of currencies and into gold.

Whether the monetary system, in its present form, could survive this series of steps is problematical. The U.S. might well have to cut the gold convertibility link to the dollar and float itself. And that would destroy the present system and probably badly cripple world trade.
_______________________________
Sounds to me like gold has been too vital to be lightly cast aside, even on the eve of a new millennium!

It's great to have you join us again. You are missed when you're not here but your THOUGHTS! remain with us. It is a wonderful gift you have given us, a light in the darkness as we witness the signs you speak of. It is such a comfort to know you are well. I am like a dry sponge soaking up your wonderful THOUGHTS! whenever you are here.

Your place will always be here for you. Please come back when you can.
Julia (aka Yellowbird)

Thank you for your most thoughtful and gracious response.

I hope to carry on this discussion later. Our company is going through a new computer conversion, all-new software and hardware, so my energy is nearly totally focused in that direction. Who ever invented the year 2000? It is a very expensive.

I am very pleased to see the effort you and your husband are devoting to your son. Our children are also our first priority, as I believe the other parents of this forum are equally devoted to their children. Both of my children now have a foundation of gold to begin their economic life. Perhaps the children of this forum will be the ones to bring the world to a more enlightened existence.

P.S. Have seen IMHO referenced here many times. What does it mean?

Sir,
I read your message three times. I could have very well written it myself as I am in complete agreement. I love my country but I hate my government. This monster is completely out of control and it is going to get worse.
Last evening I watched a documentary on the Discovery Channel titled "Big Brother." It detailed the incredible snooping going on in England, Canada and the U.S. The data banks are being filled to overflowing with even the smallest aspects of our lives --- what we do, what we say, where we go. All of it goes in and is available to a whole host of gumment snoops. Key words in electronic transmissions trigger recordings, DNA samples are being stored without your knowledge, health records are being shared and, of course, the ever-present video cameras are all over the place. In London, for instance, it is easy to track your car anywhere you drive.
Think of the power a modern day Stalin or Hitler could have. This is the power the secret agencies of the U.S. gumment now have.
One of the final stages is to do away with cash and gold and replace them with electronic "money." Every purchase would be recorded. Your preferences, habits and "cash flow" are all up for study. From information comes control. If you are overweight by gumment standards and recorded on your universal I.D./electronic money card, that 1/2 gallon of ice cream in your grocery cart could be withheld "for your own good."
I am certain that my gold purchase of a few months ago is recorded and filed in some data base.
Like you, I no longer care and do my best to survive as free as possible.

$263.10.

IMHO - In My Humble Opinion

It is my pleasure to "talk" with you. Looking forward to more discussion when time allows. I too am busy, focusing on school after a two week break and preparing for next year.

But I'll be building on my child's future as we watch what happens with gold.

Until later,
Julia

MARKET REPORT(6/9/99): Gold continued its southerly trek this morning shedding
another 90� from the price in thin trade both overseas and in the early New York market.
Reuters reports minor short covering at the $262 level. Bridge News reports "heavy bargain
hunting" as the metal broke below the key 1000 yen per gram mark in Tokyo. Also gold got
a boost from incoming Bundesbank president Ernst Welteke who said that Germany had no
interest in gold sales and would hold on to its reserves "to see whether we need the gold
reserves for other purposes."

Gold has dropped nearly $30 since the Bank of England announced its decision to sell over
half its reserves causing a loss of $700 million in the value of British gold reserves -- a self
inflicted wound that has many wondering just exactly what the British had in mind when
they decided to announce the sale publicly and cause this wild run down in the gold price. It
is now beginning to surface that there is a split between the British treasury which favored
the sale and the central bank which opposed it. Terry Smeeton, as reported here previous,
who used to head up BOE's foreign exchange and gold desk, has come out publicly
questioning not just the strategy employed but the wisdom of the sale itself: "This is not a
policy I would have advocated when I was at the bank," he says. "It is clearly a Treasury
decision in which the Bank has had to acquiesce."

Frank Veneroso's Gold Watch newsletter, read widely by gold insiders, reports an
interesting twist to the even which first appeared in the respected Gartman letter. I though it
would be interesting to pass it along for your reference:

"There is a rumor sweeping through the markets concerning Mr. Gavyn Davies, one of
Goldman Sachs European economists[Ed. Note: at this point, for the sake of transparency,
we must note that Goldman Sachs is a long standing and revered client of The Gartman
Letter in New York, London, Hong Kong, and Tokyo, on the international equities, metals
and foreign exchange desks; thus reporting a rumor concerning Goldman is a bit more
difficult than would be the norm, in all honesty. None the less, the rumor is being given
such wide dissemination that we've no choice but to report it here] and a close friend and
economic advisor of Prime Minister Tony Blair and Chancellor of the Exchequer, Gordon
Brown. The rumor suggests that it was Mr. Davies who urged Mr. Blair and Mr. Brown to
prevail upon the Bank of England to reduce its gold reserves. The rumor further posits that
Goldman Sachs is short 1000 tonnes of gold for future delivery. We are, of course, not
privy to Goldman's gold trading position.The rumor, true or not, is becoming more and
more widely debated by gold market participants."

In addition to this interesting tidbit is a rumor from one of our sources that LTCM (Long
Term Capital Management) the hedge which required a high profile bailout last year could
be short as much as 1000 tons, not the 300 to 400 previously reported. Whether or not
these two large short positions are at the heart of the BOE sale or not remains to be seen.
Perhaps we will never know the truth on this matter, but it remains one of the strangest, if
not the strangest episode I have witnessed since involving myself in the gold trade some 26
years ago. The fact of the matter remains: These gold short positions cannot be filled by any
other means than to find the physical metal and repay the creditor. Gold loans must be
repaid in gold. As Standard Charter London pointed out in its report this morning: "trees
don't grow to heaven and roots don't go to hell" and so a watch out for some short
covering."

In the latest News & Views, we ramble through the many issues surrounding the gold
market and give the reader a good, solid overview of what's happened in this topsy turvy
market of the last month or so. If you are looking for some short and sweet analysis as to
what is going in the gold market today from a multitude of sources, you'll like this
upcoming issue. It is a quick and interesting read. Please go to our ORDER FORM or call
Marie at 1-800-869-5115 for a Free Copy of News & Views -- our widely read monthly
newsletter -- and introductory packet on gold ownership.

http://news.bbc.co.uk/hi/english/events/the_launch_of_emu/euro_latest/newsid_364000/364487.stmRough waters in England, smooth(er) sailing in Germany.

http://biz.yahoo.com/rf/990609/h6.html``Gold is not regarded in technical terms these days. It is causing a problem for technical traders; there is nothing for them to hang on to,'' a dealer said.

Good! It's time for them to step gently outta the way...

$261.20.

Dow -53.
LT Bond yield 6.03%

Nasdaq 22.25

PoG uncharted or not - it's always darkest before dawn. It is painful for the longs, but how painful it is for the shorts I don't even want to imagine. We'll soon see some of the shorts panicking and trying to cover before the pack (cover on what/ - paper?) The physical is gone and sold - period.
This kind of open and gross manipulation of markets is just as strong as the weakest link in the chain - IT IS BOUND TO SNAP- (sorry for shouting).
I am convinced, this end game (battle)is coming closer with the day to be the last stand of the spin-meisters of paper markets. Yes, I'm getting mad, but never in terms to surrender to the jugglers of paper only in terms of getting more assured not to give in.
Never - go gold!!!

CoBra(too).

Agreed.

Gold in new territory and for what, the greatest paper chase in history whose ultimate outcome is physical gold delinked from a fallen paper market in which all paper holders will likely have wall paper that doesn't even match what they have already. A sad testimony to our regulators and our markets.

But what a great buying opportunity, eh?

http://www-ai.ijs.si/eliza/eliza.html
For anyone else that be needing some therapy.....

Go ahead tell her your troubles!

GF

That's:

....might be needing.....

http://www.kitco.com/cgi-bin/goldyear.cgiAbove chart gives monthly and daily Gold prices for 1979.Thank the fine people at Kitco for it.
The last time we were at this level for the spot price of Gold was between:
May-18 to May 21 1979-Gold price-$256.40 to $262.00.

However,think positive 1979 was a rising BULL market for Gold,here is the low price for 1979:
Jan.15,1979-Gold price-$216.85.
Here is the high price for 1979:
Dec.28,1979-Gold price-$512.00.

A difference of $295.15 per ounce for the year 1979.There was not nearly as much investment money around in 1979,as there is in 1999, trillions.When the GOLD BULL starts charging this next time don't you want to be a part of it?
P.S.I am in no way involved with Gold investments as an occupation..........beesting

Steve, Sir, I can only reply with an old Chinese quote:
"War doesn't determine who's right, war determines who's left!"
That's my desperation...

Today hourly contract rate on Comex is over 325 or more. Last hour was 577 and two hours ago it was over 600! August gold strikes into 250's but still holding 260+.

Normal hourly average volume is below 175 or less.

If there really is a war on Gold, ie, US$/IMF vs ECB/BIS,
how is it that it seems only ONE side is firing missiles
while the other is in constant retreat ? My very real concern
is that WE all may very well be deluding ourselves and the
simple truth of the matter MAY be that Gold is in very
serious trouble for a long time to come. I do firmly believe
that of course in the "LONG TERM" Gold will win but many
that frequent this form, myself included, may not be around
in the long term. Furthermore, depending on time frames of
course, many of us may in fact leave our offspring with
LESS rather than MORE. Forgive me if this post seems
overly negative but I am simply trying to look at things
realistically. Each and Everyone's situation is different.
Personally I don't have another thirty or forty years to
wait this out.

Any and All comments will be greatly appreciated.

Good Luck All.....

IMO, we are seeing a classic shakeout of all longs. Only the strong hands will remain, the price will spike lower then once stops are cleared, boom, off she goes. Physiscal will probably get sucked up at record levels at these prices. I suspect some of these folks buying at these levels will want delivery and if it happens en masse then game is over. Shorts are out of control with no gold to back it up. This is an end-game desperation move, IMO.

BOE never intended to sell it's Gold, their real intention was to buy Gold???? Food for thought..The Scot

Latest precious metal quotes from 6/9/99 20:37
Precious Metal Last Change Change %
Gold US$/Oz 259.35 -2.90 -1.12
Palladium US$/Oz 352.00 3.60 1.02
Platinum US$/Oz 366.50 2.90 0.79
Silver US$/Oz 5.05 0.09 1.78

Scot: what physical? Where? none out there in qty.

http://www.usagold.comHello all,
I'm new here and was wondering if Platinum Eagles is a golden investment for the future? :)
...since Gold is very reasonable and likely to Explode upwards, wont Platinum follow?
thanks,
Sunny

Thanks Steve for watching the MKT's for us busy folks! -- Looks as if GC9Q mananged to end at about 261.0, or about $2 above the low for the day. HUGE volumns! Let us watch the OI and see if it increases like FOA advised.

SunnyP --- May I first welcome you to the FORUM and advise that you go into the well lighted Archives and read a bit. You will find that Gold is "money" and Pt is "only a commodity". Better to do as Aragorn III and Aristotle advise and get the REAL stuff.
<;-)

Take note: A man who drives like hell -
is bound to get there - IMVHO - Do not deviate (sorry deriviate)... go straight ... to 6,5% on the long bond and leave the rest (assured) to the market. It will do a great job to straighten out the imbalances you've caused - did you really need to rebuild the bubble last year? Why didn't you heed your own advice - you'd have been the hero of the millenium - now? Who knows - I for one don't even want to find out.
The best reputation only lasts as long as noone finds it non(-ir)reputable-... while the team is abandonding ship at excelerating rates.
Talking about renegades ... the sense of urgency is palatable!
Yes, St.H. I'm getting mad at the paper shorts, their counter parties, spin meisters of the CB's, the PPT's and all overt and covert market manipulators.
Desperate? -YES! - As it becomes public knowledge that these big boys will protect the hyper leveraged gamblers - in order to save the system (too big to sink - heard that before Titanic).
Systemic risks won't be allowed as long as US$(and some of the rest of the world) is not de-leveraged and credit expansions will go on until the last Dollar (balloon) will be pricked, as easy as the last virgin in the US.
Pop goes the weasel ... go gold ... make u some!

Whatever I (have to) say, seems to stop all other conversation - so be it - sorry for having intruded!
Good luck!

What hard evidence is there of a current supply shortage of physical gold? Has anyone on the Forum demanded delivery of the physical gold represented by a gold contract, and not received the physical gold? If this were happening, would there not be a plethora of lawsuits concerning dishonoured gold futures contracts? If the spot market did not actually result in the delivery of the physical gold for which the parties contracted, how and why would it still be in operation?

Why do you not just let it all hang out! --- Tell us your true feelings. <;-) --- I do not think that the last few postings have stopped anyone from posting, I think that they are awaiting the last of the NEAP tides arrival to then see ANOTHER's forthcoming FLOOD tide begin. (It may well be seen in the volume on the COMEX today as pointed out by SteveH. Let us watch the OI and see. --- The Flood tide shall surely be something that we all may tell our grandchildren about.
<;-)

By Melanie Lovatt, Bridge News
New York--Jun 9--COMEX Aug gold futures settled down $2.70 at $261.1
per ounce, managing to trim some of its losses after a slump to a fresh
20-year low of $259.20 on continuous charts late in the session. Gold fell
on selling from New York dealers, although as the 1430 ET close neared,
some of them turned buyers, bringing the price up.

Traders said that gold continues to slide on a deteriorating chart
picture accompanied by an overall bearish market outlook ahead of the UK
Treasury's first gold auction Jly 6.
Its fate was effectively sealed as spot made an early morning break
below the $260 per ounce level. COMEX Aug's brief push under $260 in the
afternoon was also seen as a bearish signal, said one trader. More
negative news filtered into the market just before the close, as Merrill
Lynch analyst Bill O'Neill cut his downside gold target by $10 to $240 per
ounce.
Gold received little support as the dollar extended Tuesday's weakness
against the yen and positive noises this morning from Germany's Bundesbank
did little to stop it spiraling lower.

Bundesbank President-designate Ernst Welteke had today cautiously
argued against gold sales by the German Bundesbank. He said the effect of
gold sales on some of the countries that should benefit from it was
unclear. He also said that gold reserves could be used for other purposes,
but didn't specify their nature.

Meanwhile, on the currency side, one trader commented that if the
dollar had not fallen against the yen both Tuesday and today "gold could
be down by another $5."
Nevertheless, the selling eventually ran out of steam and Aug was able
to edge up from its low as one of the NY dealers switched course and
turned buyer, said traders. "The dealers were selling and there were just
no buyers," said one trader.

"It's a continuation of the same trend--we saw some supportive levels
basis $262 spot but we took this out in Europe--the spot market was then
more focussed on $260," said David Meger, senior metals analyst at Alaron
Trading.
He said that while some large dealers were selling, the price was
falling "more on a lack of buying" than heavy selling. "The market lacks
any type of a buyer right now," he said. Players suggest that any buyers
will be extremely tentative ahead of the Jly 6 Uk gold auction.
"It looks like $260 might be somewhat supportive for the time being
-- people are uneasy below the $260 level," he said.

(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN

http://biz.yahoo.com/rf/990609/bb2.htmlRussian Eurobond prices could rise further in the near-term now that the country has sharply reduced its debt burden by deciding not to make Soviet-era bond payments.

Nice to see that a history of defaulting is a positive thing these days. What a world!

http://biz.yahoo.com/rf/990609/bdc.htmlThis doesn't look good... talk of a trade war developing.

If the premise of trade is to exchange equivalent values, what is the problem. Ohhhhhh, that's right...attempts at job protection, and protecting a southbound currency.

http://www.homestead.com/purifoysfutures/purifoy.htmlDown loaded last three days of commodity action after "enjoying" myself in Florida. Interesting markets. Still no buy in gold until we see a purging reversal. My guess it will be sooner than later. But, comment tonight is the sell indicators on the dollar that I have observed. First time in a long time. If true, gold bear market is doomed.

Keep 'em comin' We all feel the pain, believe me. Somtin ain't right in Texas or in gold market manipulation to the n-th degree. System is under lots of stress otherwise it wouldn't be actin this way, 'tis a fact, imo.

I agree. Must be physical deliveries aren't being made much on COMEX. They do post eligibles frequently. Same with coin market. I had asked another about this. Why aren't we seeing evidence of shortages in physical if there really is a shortage. FOA?

www.goldminingindex.comSteve Kaplan--

THOUGHT OF THE DAY: Total COMEX gold open interest was 203,955 as of Tuesday's close. A reading at this level when commercials are heavily net long has always led to a major short-term rally. As confirming evidence, total COMEX gold options volume on Tuesday registered 16,857 puts vs. 12,433 calls. The usual ratio is 3 calls for each put; in addition, the options volume total is about four times normal, as is typical of a market at a major short-term extreme. Meanwhile, the Journal of Commerce index closed Tuesday at a seven-month high; this is one of the most reliable leading indicators for the price of gold. The final, best reason to be bullish on gold: William O'Neill, director of futures trading for Merrill Lynch, lowered his gold price target on Wednesday afternoon to $240.

Michael?

kitco by ORO (gold?):

(also check out 16:18 on kitco)

Date: Wed Jun 09 1999 19:59
ORO (BOE gold sales - the bank multiplier effect - the end of it is near) ID#71231:
Copyright � 1999 ORO/Kitco Inc. All rights reserved
If paper gold is the equivalent of credit being oferred by a bank at an 11 multiplier, than the promise of 415 tonnes of gold are the equivalent of over 4500 tonnes of paper gold through this multiplier effect.

The question arrises from this "stand in their shoes" game:

1. I am an insider LBMA BB and I know I have dibs ( non-competitive bids ) on the BOE physical and I want to sell this gold before the bank does.
I go to another BB ( BB2 ) and lend them a gold certificate which I write.
Knowing that I am insider on the BOE sale I will not be asked to prove that I have the gold or gold equialent ( oil ) in the ground through an agreement with a mine
2. I now have a gold loan to BB2 in my hand and can now sell this obligation on the market. Second BB has a certificate that can be lent to BB3, whose obligation BB2 will sell on the market.
3. Before and during the BOE sales I buy back a BB obligation to make sure I am covered and don't have to bid high ( that originally came from my "printing" a gold certificate ) .
4. When most of the borrowers in the game are covered there remains only one and a bit more obligations to buy.

This way the gold is "pre-sold" ten or more times over. Since the process takes time, we see a steady decline in gold. The end result is the same.

I believe this can be done to some extent with any commodity and with any currency and is one of the reasons the $ in which they all trade is so strong though the banking system and the hedge funds have been creating money at an unprecedented rate throughout this period. The net growth of the commodity and especially the gold debt is small relative to the ammount initially sold - or promissed for sale. Since the rollover process takes little time going forward and the despiriting effects on the market are sufficient to remove buying interest from the public investor, the covering process can be extended for a long time.

Thus, despite active buying of gold by China, Japan ( cones to 15 and 5 million oz on each dip day ) , SE Asian individuals, commercial buying and Western ( US ) buying of gold, there is a sufficient supply as long as the institutional buyers are happy with paper gold.

Applying this to miner hedgeing: Using a three year production hedge with a 10 multiplier we get an initial "short power" of 75,000 tonnes ( which the banks owe each other - NOT THEIR NET OBLIGATIONS ) . Since the net short position over time will grow only in relation to the interest payed on the gold loans ( average of 2% ) . Then the annual growth of net short positions on 3 year's production is 1500 tonnes ( 150 tonnes without the multiplier ) . Since this has been going on for at least five years, the net short position should be 7500 tonnes over the mine production hedge and the total should, therefore, be on the order of 15,000 tonnes or more.
If the timeframe is extended, the ammount grows.
If the multiplier is smaller the excess over the 7500 tonne net producer hedge would be smaller.
If the lease rate is lower ( I chose this number by the eye ) this will also reduce this excess.

A few interesting behaviors of the mining community make this situation particularly profitable to the BBs and particularly dangerous as well:

1. As the market price drops, a mine will stop mining and processing the low quality gold ore that accounts for most of the resource and will mine the higher grade ore that is much smaller portion of the ore body and will produce more gold in order to keep the operation going - at this point the "cash costs" drop.
2. The net result of this process is depletion of the best portion of the ore body and early closure of the mine.
3. Once the number of mine closures reduces gold output beyond the increases in production from mining higher grade ore the physical mine supply is reduced. This seems to have been the case, as net production has started falling steeply ( 7% drop this quarter ) .
4. This stage is the "end of the game" as the forward sales are no longer possible because growth in future production can no longer cover the existing obligations or the interest they bear.
5. Once th price of gold rises the producers produce less of it because they transition to lower grade ores and produce less gold as the price continues upwards, until new mining capacity is opened.

One of the reasons the BOE had to conduct the sale was that contracts coming due could not be filled with expected future physical mine production and would cause bankruptcies in the BB community and undermine the UK banking system as the net exposure of the LBMA members is so large.

By the time the BOE sales are over, there will be an even greater net short position in gold and the BOE gold sales will not cover it.

This is particularly significant because of the heavy individual, Japanese and Chinese CB buying which is one way and will not come back to the market.

SteveH,

I had a somewhat similar experience in a coin shop to the one you described some time ago, when I recently made my first modest, physical purchases. The owner suggested that, if I were an investor (i.e., he meant a speculator), he could procure a bulk order of gold or silver coins, with a reduced premium, thereby enhancing the chance for a profit. Given that my employment contract expires in less than two months, not a good idea for me at this time, but obviously he did not feel he was facing a supply shortage. Now perhaps he was referring primarily to silver, but my sense is that he was indicating he could procure both species of specie.

Next topic: We could be in the midst of a gold rally, but that rally is manifested by dishoarding by reluctant large holders of gold - for example, the BOE. Instead of a rise in the POG, we may be witnessing the elimination of an impediment to future gains later in the rally, or in the next gold rally. I know I speak nonsense to those who believe gold is the only true long-term money (I believe gold is money, just not the sole true money), but gold's current value as reflected vis-a-vis other currencies also matters to me. Hence, I wanted to share my theory, which I must admit is pure speculation.

A good night and pleasant dreams to all.

All of us who are regular posters have had the sinking feeling that what we just posted was a conversation stopper. I know I have and having talked with many posters personally I know that others have had the same sinking feeling on occasion. I think you have to realize that, particularly at this site, you have a large number of professional people who come and go at the site when they have the time or inclination and are not always present to add their two cents in a conversation. Give your posts time to garner a response and brew in the minds of your fellow knights and ladies. Be assured that there are many who read your words even if a response is not illicited immediately. I have seen posts go for days without a response (including those by yours truly) and then somebody comes upon a relevant addition or response. I have learned not to take it personally.

I would like to suggest that these posts are like coining money -- make that golden money, of course. Once they are hammered by the minter and posted, they are there forever for all to see until such time that Y2K renders us inert or electricity is dismissed from the face of the earth. In other words, let it flow, Cobra, and don't think you aren't being heard. Your words are coin of the USAGOLD realm. Make yourself heard even though at times your efforts seemingly do not bear fruit -- it comes with the territory.

I am taking a long weekend and I am in need of chivalrous service. Since I do not know whether or not I will have internet access, I am asking each of you to assume the responsibility of the Daily Market Report. Please enter your edition during the course of the day on Thursday, Friday, and Saturday and the winner will be the recipient of a glittering one-tenth ounce Philharmonic. The two runners-up will receive a Silver Eagle. Please mark your entering post as *******Today's Gold Report (surrounded by stars) ********* The spot prices must be indicated except on Saturday of course. I have left a note at the Daily Market Report for readers to go to the FORUM for today's report. This awesome responsibility is yours. Good luck. We shall see if we have any budding Rush Limbaugh's out there.

You must enter a report at least two of the three days to qualify. They can be posted at any time of day but each post for that day must be entered before midnight finds the mountains.

(At the same time if I do have access I will post a report either here or at the Daily Market Report and the contest will proceed as outlined here.)

May the best Gold Report win the gold!

$259.70. This sucks!

But what a great buying opportunity, eh?

I like this one too (something to cheer us up):

"Date: Wed Jun 09 1999 22:05
kapex (I sincerly hope that all here recognize the opportunity that ) ID#275194:
Copyright � 1999 kapex/Kitco Inc. All rights reserved
is unfolding right in front of our eyes! The fact that some are BOLDLY stating how very wrong we are/have been/will be if we stay invested in Gold after it has already declined is the stuff of bottoms!
I'm so glad to see Gold take out the 20 year lows as it has shown sentiment for what it truly is.......out of the market COMPLETLY!!
A small group at kitco is all that is left. And now we have new and old posters telling us how very wrong we are. THANKYOU! The fact that every analyst on Gold out there is negative and no one can point to support lines on the charts is .......well music to my ears! Can you imagine how low these #'s will be ( as if there not already screaming BUY! ) tomorrow let alone how low they are NOW!

http://business.fortunecity.com/wrigley/585/Markets/AUAGBB.htm

Being a contrarian is not the sanest way to invest and it WILL get you there early more often than not, but if you can just realize for a momment that, if EVERYONE is on one side of something, then the logical thing is to take the opposing side. Sentiment Extremes of this magnitude do not come but a few times in a lifetime. Gold and Stocks both.
But oh yes, you guys and you know who you are, really think that NOW is the time to bail out of PM's and the shares, and what invest in the stock market? I don't think so.
Also some of those same people are talking about this from a trading standpoint and that really doesn't apply to most here. To those that are trading futures and options on futures I would agree that stops and such are warrented, hell I wolddn't play the long side of these markets with futures right now either. But that does not matter when you are accumulating solid mining companies and PM's at these prices! Especially when no one else wants them. It takes a strong will to go aganist the crowd. But when you see across the board pessimism as is being exhibited on the PM's, it won't be long. IT NEVER IS!!! Repeat after me guys........IT WILL NOT BE LONG! ...."

Mo from Kaplan --- The important item of OI increase!!! -- Note the 7,500 + increase in OI. That is the largest + or - recorded in a long time!!! Looks as if the Commercials are yelling to the shorters -- "oh no! don't throw any mo gold into the briar patch. Oh NOOOOOOO !!!!"
<;-)
PS: NOW looking for the "Thunder in the night" during a nearby day.

Wednesday's COMEX gold estimated volume was a heavy 65,000 lots. The rollover out of the June contract is now almost complete, with June open interest down to 1,163 (as of Tuesday's close). Total COMEX gold open interest on Tuesday surged 7,537 to 203,955 contracts, demonstrating strong commercial accumulation on a day when gold fell $3.40, which is bullish. An open interest this high when commercials are heavily net long has always signaled a major short-term rally.
<;-)

This is an airline company that has not made a profit in eleven years. The theory is that the debt carried is too big to fail. Could the same be said of the US? Despite our fundamental economic problems which have been well documented here, are we too big for the rest of the world to let US fail? I invite comment from all of the learned scholars who regularly post this FORUM. Thanks!

We've sure got our share of lightning and thunder in the night right here. It's so bad I must begin unplugging my favorite appliances, computer included!

Just wanted to say a quick word of thanks to the world for these gold prices. It is always nice to see the coversion of my salary yield a raise (more metal!) over the previous month, even when the ol' employer hasn't paid a dime more. Gotta love this program!!

Gold. Make you some. ---Aristotle

Yo, Paymaster! Raises for ALL my men!

If you were around in the '70s, you know that higher rates, per se, were not what slew the beast. After just about everything else had been tried, it was TIGHT MONEY that finally did the job. Eventually, tight money will happen here, too...but not yet. The Volcker/Reagan recession of 1982 was a doozy, but it was necessary to stem inflation that had been expanding for a decade. The current inflation is brand new. Few on Wall Street have even acknowledged it yet.

If you are discouraged, remember this: the road to worldwide economic recovery has largely been built upon dollar liquidity. And just as that dollar liquidity is refreshing markets around the globe, so is it fostering $20 billion monthly trade deficits for America. Now that Kosovo is winding down, watch how the dollar behaves in the foreign exchange markets. The problem is, most other countries are reinflating also. So where does one hide?

Eva Peron discovered when she tried to create wealth on a printing press that inflation is the inevitable result. She was an extreme example, yes. But the principle here is the same. For a time, those in power may succeed in conning the shirtless ones, but they never can defy simple arithmetic.
Meanwhile, if anyone watching gold prices hour by hour is agonizing over every downtick, I would respectfully advise finding a better use for one's time. Right now we are in an emotional panic that has absolutely nothing to do with anything except fear. How long it will take is anybody's guess, but it is not the end of the world.

Hello Gentlemen, I've been watching the movie " THE BLUE MAX" In what i consider somewhat of a classic. To the point in one of the flying scenes " HEIR COBRA" machineguns jam and he only able to get off 40 rounds the odds are now 4 to 1 he does get away,but in a WAR you can't always win every Fight. That does not mean we will lose this War. The Paper shorters only know half of the story where as we know have been educated by the very best here at this forum. When the shorts do catch on it will be to late. Think tatics gentlemen, we know more and we will fight this thing to the Death!! Now gentlemen is a time for courage,fortitude and Bravery this is what a true Knight of this round table must now be. Think for a moment about all that has been revealed to us if you think this battle is something IMAGINE what the real battle front must be like at this point in time and space? Remember united we stand divided we fall. It is time my fellow Knights to put on our full armour and wage a mighty Battle against the forces of Darkness and slay the Dragons! This is where we must stand together for there are many more people out there that are truly suffering due to the lows being set in the GOLD market. We must fight on and be a becon in the night and their tower of strength for those that are to weak or have lost their FAITH. NOW ONWARD CHRISTIAN SOLDIERS!! Lets give HELL!! P.S All shorters must perish!! We will not take Prisoners, and may the glory be to GOD!!!!!!!!!!!!! Golden Truth.

$259.90 and that is the truth.

Good post golden truth.

With all the negative talk in the chat rooms these days,
perhaps it is time to look what the chart is saying..
You may have heard of the term "slanting wedge"-We have what
I believe to be a classic DOWN SLANTING WEDGE formation in
gold. ...\...this is followed by a rapid rise../.. Many will
be left in the dust when it happens----

http://www.thisislondon.co.uk/dynamic/news/business_story.html?in_review_id=146708Japan's gross domestic product rose a breathtaking 1.9%
in the first three months of the year, dwarfing analysts'
expectations of a 0.2% gain. On an annual basis, GDP was
up a massive 7.9%...

I wonder... Could it have anything to do with this? -

http://ukr.seganet.com/saturn/serious.htm

"Japanese government to hand-out $175 vouchers to
'stimulate economy'
Japan has begun its first hand-out of
shopping coupons, part of a government effort to
stimulate the ailing economy. Parliament at the same time
approved a budget which will pump a further $700bn into
the economy. "

http://www.pathfinder.com/asiaweek/99/0219/newsmap/japan.html

Week of February 12, 1999

"MANY LOCAL GOVERNMENTS in Japan began
distributing government-sponsored shopping coupons.
To stimulate the economy, vouchers worth 20,000 yen -
$175 - are being given to children below 15 and bedridden
or low-income people over 65, some 35 million Japanese in
all."

The coupons were approved in November 1998, so
people had a bit of time to make spending plans and
perhaps production was increased in anticipation?

Hey, it's good to see you back! But, doggone it, you swiped part of what I was working on for my Market Report, now I got to cook up something else!

Anyway, keep banging the drum on infaltion and don't be a stranger, Stranger!

GF

Investors will want to invest in Japan rather than overseas
The yen could appreciate- rumours of BOJ intervention last night to stop this happening.
On the other side of the coin, the dollar would fall, investment funds flow out of the US, bond yields would increase, stock markets fall, Japanese rates rise, end of
yen carry trade, more pressure on US rates to increase, import prices rise, more inflationary pressures, all in all in gold's favour!

http://www.members.home.net/augery/Xweekly.htmlIf anybody is interested in charts.
Julia

I should add to my previous post: Be sure to look at BOTH charts. They are different projected directions the market could go.

Hey Stranger - good to see you haven't forgotten your password.

You wrote;

'If you were around in the '70s, you know that higher rates, per se, were not what slew the beast.
After just about everything else had been tried, it was TIGHT MONEY that finally did the job.
Eventually, tight money will happen here, too...but not yet. The Volcker/Reagan recession of 1982
was a doozy, but it was necessary to stem inflation that had been expanding for a decade. The
current inflation is brand new. Few on Wall Street have even acknowledged it yet.'

I'm not sure it is brand new, but maybe just a continuation of the old, eh? I don't see how any slowdown in attempted money creation can be allowed to happen. If tight money returns as you say, it's likely cause would be market driven rather than politically driven as in the 80's. Don't you think Volcker's fed action was an attempt to salvage the dollar economy and still not move back to a gold standard? Do you think this is still possible today? Didn't someone mention awhile back that the Euro's creation was directly caused by a lack of alternatives to a dollar based economy?

You wrote;

'If you are discouraged, remember this: the road to worldwide economic recovery has largely been
built upon dollar liquidity. And just as that dollar liquidity is refreshing markets around the globe, so is
it fostering $20 billion monthly trade deficits for America. Now that Kosovo is winding down, watch
how the dollar behaves in the foreign exchange markets. The problem is, most other countries are
reinflating also. So where does one hide?'

Yes - it would seem this is the plan once again, at least as far as the dollar based countries are concerned. I believe there is some merit to the idea that what happened in the 80's is not what we will see this time around. Since the Euro's introduction, the world now has an alternative to a completely dollar based world economy. I'm not so sure this reflation is going to be as successful as it was two decades ago. The debt bubble created now seems immensely larger than that faced in either the Johnson or Carter years. I still believe there is a finite limit to this bubble and all it will take to deflate it is some kind of economic shock.

You wrote;

'Eva Peron discovered when she tried to create wealth on a printing press that inflation is the
inevitable result. She was an extreme example, yes. But the principle here is the same. For a time,
those in power may succeed in conning the shirtless ones, but they never can defy simple arithmetic.
Meanwhile, if anyone watching gold prices hour by hour is agonizing over every downtick, I would
respectfully advise finding a better use for one's time. Right now we are in an emotional panic that
has absolutely nothing to do with anything except fear. How long it will take is anybody's guess, but
it is not the end of the world.'

Yeah - agreed, but it might be the end of the world as some know it. The dollar based economies are likely to never see this world again if the reflation you describe is unsuccessful. I would still contend that the real economy has been deflating for decades but has been masked by this monetary inflation. I don't see how the bankers/governments really have any choice but to continue their attempts at reflation but I'm not so sure they will meet with the same kind of success they've had the last thirty years.

No panic here. Isn't this a buying opportunity?

Good to see you back.

ET

Thank you so much for the link you posted. A great deal of good information. Julia

Sorry to be so late in saying this.
I just wanted to tell you that your post was great. It gave me a real picture of life in Thailand after the devaluation of their money. I really appreciate the time you took to respond. I can plan better when I have examples like yours. Thank you.

By the way - what is a farang?

Julia

Julia (6/6/99; 14:00:34MDT - Msg ID:7244): "Do you think that if one is
prepared for y2k, one is then prepared for the mother of all $ devaluations?"

I think so. That is one of the neat things about "Y2K" preparations --
they are not must Y2K preparations, they are ANYTHING preparations. If
you are thoroughly prepared for Y2K, then you are thoroughly prepared
for just about any untoward event or disaster imaginable (or at least
any such event that CAN be prepared for). And that includes economic
disasters, if you have properly switched out of paper and into
tangibles. Metals are of course the most concentrated tangible, but do
not neglect the other stuff -- food, clothes, etc. Example: I just
bought 4 pairs (for me, a 4/5-year supply) of very high-quality sneakers
at K-Mart for $20/pair. These cheapies are made in China, and China is
toast, Y2K-wise; not to mention the coming dollar crisis. I do not
expect that we will be able to buy high-quality sneakers for $20/pair a
year or two from now. Maybe $60/pair. Maybe $100/pair. In the shorter
term, sneakers might do quite a bit better than gold. There are many
other examples. The point is: stock up on any/everything that you need
and use regularly. Buy 5 years supply. You'll use it up, no matter what,
and prices cannot possibly get much lower than they are today.

We watch this new pork 'n beans market together, yes? :)

(just kidding, Another/FOA! love your posts...)

-----

ET (6/6/99; 13:23:54MDT - Msg ID:7243): "I saw you asked Tomcat about
the current situation concerning y2k and I hope you don't mind me
throwing in my 2 cents. The situation in a word could be described as
desperate. Very few entities could be described as ready to carry on
business as usual. I'm starting to believe my own pessimistic conclusion
concerning the economic ramifications of y2k has indeed been way too
optimistic. This is shaping up as a total economic collapse of historic
proportions. I've failed to find any evidence to the contrary. Virtually
every industry in the world is far, far behind in remediation efforts
and this does not bode well for any currency except gold. I think it is
time for all to put aside any further concerns and concentrate on
getting through the next few years in a much smaller economic environment."

... PRECISELY! Thanks. I am increasingly convinced that the main Y2K
fallout will be economic, and that it may take many months to fully
ripen (i.e. for things to unravel). Within the Y2K prep community there
is a tendency to overstress acute-disaster types of preps (propane
stoves, first aid kits, etc, etc.) -- which are certainly OK, and part
of the picture. But the acute phase is unlikely to last for more than a
few weeks or months (and will likely be episodic and spotty,
geographically). The economic fallout will take a few months/quarters to
build up a head of steam, and could be devastating. We shall see.
Meanwhile, prep for a depression. REDUCE EXPENSES. I am thinking of
getting rid of my car; I am fed up with paying whopping insurance, plus
repairs, etc. (plus I am fed up with this whole insane pave-the-world
autoerotic culture of ours). Might get a small motorcycle, at 1/3 the
maintenance cost. I just rented out a room upstairs, effectively
cutting my rent in half. Point: do NOW the things that you might be
DRIVEN to do in a depression. As I think Davidson and Rees-Mogg (not
sure of that source) said in the how-to-prepare section of one of their
books: take in a recent immigrant as a tenant; then watch them and COPY
them (i.e. how they manage to scrape by on $450/mo and send the rest
back to fambly in the old country). Learn from the experts.

-----

Leigh (6/8/99; 18:13:03MDT - Msg ID:7351): "A Lurker Steps Up To The
Table.... If Clinton and his thugs should confiscate gold, wouldn't gold
owners be able to sell it on the world market (and probably at better
prices)? That's assuming that the Bilderberger gang doesn't outlaw gold
worldwide. But then, how could they possibly do that?"

Great question, Leigh! (and welcome to the club, here!) No one offered
an answer to your question. I have wondered about this same matter,
myself. They cannot confiscate/outlaw gold EVERYwhere, can they? Seems
that that would require more draconian international coordination than
is really possible. So, for those of us who might like to trade some of
our gold for other things when it hits $2000/oz (or whatever), I guess this
means smuggling physical out of the country...

-----

Golden Truth (6/10/99; 1:00:25MDT - Msg ID:7413):
"WE SHALL NEVER SURRENDER!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!"

Thanks for the exhortation. We all need bucking-up from time to time...
even the non-christians among us... :)

USAGOLD (6/8/99; 13:59:54MDT - Msg ID:7344): "Can any of our Y2K experts
here help me with how Europe stacks up against the United States in
remediation progress particularly in the banking/finance sector?"


Michael, here are some URLs that might be of use (these are NOT
well-screened, and not as (Europe-specific) as I would like; just some leads for you):

http://www.y2ktimebomb.com/IW/AK/iw9910.htm
http://www.csis.org/html/y2k2agend.html
http://www.policy.com/issuewk/issuewkarc.html
http://www.y2ktimebomb.com/Economy
http://146.115.133.76/about/news_stories/2000.html
http://y2kwatch.com/showart.php3?idx=190&rtn=/articles.html&showsubj=1&mcat=1

... also, here's a clipping (no URL) that might interest you:

----------

The Year 2000 Bug Is a Menace, No Doubt About It

Jan 27, 1999 - International Herald Tribune

By: James P. Bond, coordinator of year 2000
operational initiatives at the World Bank

It is a startling fact that by next Jan. 1 most developing countries will
not have fixed their year 2000 computer problems. These threaten them,
along with neighbors and trading partners, with damaging consequences.

A World Bank survey of 139 developing countries found that only 35 percent
have a national plan to make systems Y2K-compliant. Last month, officials
from 120 countries gathered at the United Nations to discuss the problem
and agreed that their governments would assign it the "highest priority."

Having a national plan is only the first step. Carrying out such plans is
costly. Wealthy countries and large companies have the funds and skilled
people to immunize computers and operating software from the millennium
bug. Many developing countries do not.

Or they see the threat as vague and distant. Yet many developing countries
have regional sharing arrangements under which, for example, they rely on a
neighbor's electrical supply which uses computer microchips and software
that may not be Y2K-compliant.

Middle Eastern countries depend on computer-managed desalinization plants
for water. Oil drilling rigs around the world use embedded chip systems,
some of them buried on the ocean floor. Food and fuel distribution
networks, health care, education and road, air and maritime links could be
severely affected.

Emerging markets already weakened by capital flight could see their
recovery delayed as investors steer clear of companies which are not
Y2K-compliant. A worldwide interbank working group is conducting
assessments of Y2K progress in six key sectors, with a view to guidance in
making investment decisions. Many mutual funds are already avoiding
companies that do not have millennium bug action under way.

It is in emerging markets that the capacity to fix the bug is weakest. One
private-sector study found that companies in the worst affected East Asian
crisis countries have cut computer spending by more than 20 percent.

At the same time, these and other developing countries risk being further
undermined by a brain drain as high salaries and relaxed visa restrictions
in wealthier countries siphon off qualified computer experts just when
their skills are most needed at home.

The lack of interest in this issue is surprising. The millennium bug,
living mysteriously and unseen within the microchips and software of the
world's computer systems, could trigger a global catastrophe. The problem
is technical. Most of us are reluctant to acknowledge how much we depend on
technology, so political leaders have only recently been persuaded to take
action.

Even if we can succeed in overcoming this resistance to accepting the
problem as serious, the challenge still looms large. It is already too late
for most developing countries to carry out enough Y2K preparations to avoid
disruption.

Instead they should urgently devise contingency plans, identifying critical
sectors and systems water, power, food, health care, telecommunications,
transport, finance and trading and checking the bugs in them, while
preparing backup plans should these systems fail on Jan. 1.

Estimates of what it will cost to fix the millennium bug worldwide vary
greatly, but we can get some idea by analyzing what major players have
earmarked for the task. Chase Manhattan Corp. is spending $363 million, and
DuPont Co. $400 million, while the U.S. Education Department's projected
Y2K costs are $45.5 million

The World Bank, the OECD and a handful of donor countries such as Britain,
the United States, Canada and Italy, together with other multilateral
development banks and international private-sector organizations, have
undertaken an effort to raise Y2K awareness and mobilize technical
assistance and funds to help developing countries.

These efforts are extremely modest, given the enormity of the task and the
global impact of a failure to act. It is now obvious that next Jan. 1 will
unleash a chain of problems that will touch everyone on the planet, with
the most damaging effects hitting the least prepared, namely, governments
and businesses providing services to the world's poor.

Efforts by the World Bank, the United Nations and others can support some
Y2K fixing, but their most important effect should be a wake-up call to
national and local governments, companies and international organizations
to get involved in preemptive action now.

Developing countries must devise contingency plans for those vital systems
that are not yet Y2K-immune.

The writer, coordinator of year 2000 operational initiatives at the World
Bank, contributed this comment to the International Herald Tribune.

My bet is "Forienger"

GF

Yes, Julia, Goldfly is correct, "farang" is Thai for "foreigner", but not all non-Thai. -- Like, Japanese or Koreans, and many others are not referred to as farang. -- Quite easy to pick out the farang in Thailand, because of physical stature and method of dress, shall we say farang standout like sore thumbs.

Great to hear you again Stranger! -- Welcome back. -- Missed you.
<;-)

After hitting a new twenty year low of $257.00 in Asia, spot gold slowly and steadily rose in Europe. Rumors of New central bank sales by the none Eu countries of Greece, Sweden and Denmark, fueled the fires of the current selling panic that has seen gold fall more than 30 points since the Bank of England announced its pending gold auction. Greece, the 'prime suspect' in the latest episode of so far unrealized Central Bank sales, categorically denied any plans to liquidate any of their 106 tons.

As of 11:00 AM EDT. The Dow is down another 73.45 points and the S & P 500 is off 14.29 . This is the third down day for Wall Street after last weeks rally failed to approach the record highs set last month. Will this Bull Market end, "Not with a bang, but with a whimper"?

Spot gold has risen further in N.Y., now trading at $259.50, While those who have bought gold for trading profits continue to sell the precious yellow, those who buy gold to keep it are being given a historic opportunity to accumulate more of the worlds oldest form of investment. At this time, most technical analysis indicates a classic selling climax that could turn into a raging recovery at any moment. According to one London dealer``Market participants remain nervous and a substantial short-covering rally could notS be that hard to trigger,''

Stay in touch with this Forum throughout the day for further reports from other posters.QCa

We need an update on the MKTS ! -- OK --
S&P down over 11 which means the the DOW should be down over a hundred points, but the PPT is still in there and it is only down a little more than 40 ! The long BOND is "tanking" and rates are setting up the FED to make an upward correction to rates and that will be the pin in the balloon to start the rapid deflating (POP) of the stock market. --- Gold is holding its own at this subterrian level and the COMEX "open interest" (OI) is taking off into the ionosphere. --- Can you all see the storm clouds gathering ? --- are those cumulus clouds ? --- can the Thunder be far behind ? --- Things are getting exciting. -- GET READY to rock and roll !!
<;-)

You really ment to advise that the Denmark, which has not yet joined the EU, was not going to sell any Au.
So much to remember!
<;-)

Sorry Peter, the "none" was a "non-" was it not?
Can not read straigh this morning.
<;-)

http://www.angelfire.com/wa/wfh/y2kproj.htmlWe recived this by E- mail

I am sending this post to everybody on my list because there is a real effort to keep the general public from seeing it. I don't know who is behind the removal but it has been posted at atleast tenother sites and has disappeared from everyone of them.
The place where it originated was the Naval War College and that site has been shut down one week after it published this report. If you are not concerned about what it says, just delete it from your message base.

skully

http://www.homestead.com/purifoysfutres/purifoy.htmlWent long gold this morning. Good possibility we are seeing a reversal or least intermediate bottom. At least low risk.
Good luck fellow goldbugs.

Your right, Non-, not none. Spellcheck doesn't catch that kind of typo, I'll have to start using the grammer fixing program. Ive avoided it because its a very arrogant and bossy electronic robot that thinks it's right all the time

*********MARKET REPORT**************
Before Noon NY Time --- June 10, 1999
As seen thru the eyes of any of the 5 Million
On-line Day Traders !! (This is one that
you have never seen before !!)
-----------------------------------------------------------
GREAT day at the NYSE !! Action is hot and
heavy and the top ten action stocks of the day are:
(at HIGH NOON )
BDT up 33 % -- +1/2 at 1 13/16 on vol of 575K
NERX up 29% +5/8 at 2 5/16 on vol of 714K
ZOOM up 25% +3/4 at 5 9/32 on vol of 114K
ACEI up 22% +5/16 at 1 11/16 on vol of 415K
IGLC up 20 % +15/32 at 2 5/8 on vol of 450K
MLOG up 19% +11/32 at 2 5/32 on vol of 117K
WFR up 18% +1 1/2 at 12 1/2 on vol of 280K
MESG up 16% +2 3/16 at 13 9/16 on vol 880K
PLXT up 15% +2 3/4 at 22 1/8 on vol 253K
ARMHY up 15% + 4 1/8 at 32 1/2 on vol 470K

This is because the day traders are not watching
the BLOOD releasing from the other portions of
the market. Such things as:
DOW down 0.93% or - 99 points at 10,594
S&P down 1.17% or -15.5 at 1303.
NAS down 1.17% or -30 at 2489
R2K down 0.7 % or - 3.0 at 442
30 /yr bond interest rate at 6.6%
----
Now for the Goldhearts ---
XAU.X up 3 % at 61.60 having made a positive
reversal on the charts. ----- AND
GC9Q (Aug, Au) at 261.4 after having visited below
259 for a while.
---
MORE, Later IF you all can stand it !
<;-)

Victory in Kosovo who's next?

Gold: 261.2 UP 0.10
Silv: 5.11 Up 0.09
Euro: 1.047 Up 0.10
(Current)


After exploring new 20-year low territory overnight, gold has moved up this morning, August Gold is currently up 10 cents.

At a recent conference in Philadelphia, Alan Greenspan left a number of the cr�me de la cr�me of international banking with the idea that the U.S. may soon be raising interest rates for the first time in two years. The intent would be to keep inflation under control by making it harder to borrow Dollars. Many analysts would say such a move resembles closing the barn door after the horses have already bolted.

It was also reported that a number of the meetings participants voiced concerns about the softness the Euro has been experiencing. The Euro as been in an almost continual slide since it launched at the beginning of this year. The 'benign neglect' of the ECB has left currency watchers wondering just what the intent of the Europeans is toward their shiny new fiat.

On another note: The war on Yugoslavia appears to have reached an end. The Yugoslavian government has capitulated and troop withdrawal has begun. This begs the question however: Where will NATO go next? Rumor has it (a rumor has to start somewhere, right?), that riding the wave of victory in the Balkans, U.S. warplanes will begin bombing the cities and infrastructure of mainland China early Monday. The declared objective will be to dislodge the Chinese from Tibet, a country forcibly assimilated into the Chinese hegemony in the 1950's, and undergoing continual bouts of "ethnic cleansing." An unnamed military source is quoted as saying: "The embassy was just a warning shot, now we're gonna stick it to 'em good."

That's it for today fellow Goldkeisters. If there is any further developments, you're on your own. I've got work to do. Of course, I expect that this is not the last Market Report of the day. Tomorrow my report will be by a Guest Commentator, because you all are my connection to the Gold markets, and if I just repeat what you tell me- it's not much of a report, is it?

GF

The Euro UP should read 0.010

AEL (6/10/99; 7:43:13MDT - Msg ID:7424) "bits and pieces"
Leigh (6/8/99; 18:13:03MDT - Msg ID:7351) "A Lurker Steps Up To The Table....

I asked FOA and Michael similar questions back in May:... 1) about the possibility of confiscation or excessive taxation if/when gold goes to $10,000, and 2) how to liquidate some gold after the price of gold skyrockets, and the social situation has gotten chaotic. You can my original question here: BC (5/9/99; 10:53:27MDT - Msg ID:5807).

1) FOA felt the government will have to encourage the use of gold ownership to maintain stability in the country. See: FOA (5/9/99; 19:11:04MDT - Msg ID:5826)

2) Michael offered some thoughts for how things might unfold in the U.S. based on the crises that have occurred in some of the Asian countries. See: USAGOLD (5/9/99; 12:05:08MDT - Msg ID:5809)

Basically he feels that direct gold barter will be difficult, because most people don't know real gold when they see it. Instead, he suggests that entrepreneurs would probably set up exchange centers for gold redemptions.

Hope this helps.

BC

MARKET REPORT(6/10/99): Gold drifted down to test the $257 level in overnight trading, but received some "good
support" at around the $258 level when world gold trading found its turn in London. Support was found from some of the larger banks, although a trader noted that it remains a "sale" for one particularly large New York dealer at prices much above this point. Gold perma-bear Bill O'Neill, strategist with Merrill Lynch has predicted a low of $240 over the next three month period. Regarding today's action, one trader said. "It's definitely been good size changing hands. Maybe a large producer decided to dump it and lock in whatever they can."

On that note, we found this comment to be quite revealing. I suggest you read it twice: "I am long for the first time in a long time today. The price has got to stop somewhere and for the first time it looked like maybe the sellers were the wrong type and the buyers were the right ones,'' said one London dealer.

Central Banks of Greece, Denmark, and Sweden (three countries that remain outside the euro union) have denied recent and persistent rumors of gold sales. Panayiotis Pliatsikas, director of the foreign exchange department of the Bank of Greece added, "As you know, our foreign exchange reserves stand around $21 billion and there is no reason for us to sell gold." THAT, my fellow goldmeisters, is as close as it gets in officialdom to saying outright, "If we did find ourselves with a need to support our currency, we have $21 billion of other nations' money. That is A LOT of paper, and therefore, our gold holdings are quite secure-- they would be the last to go. Again, while the paper remains, there is no reason for us to sell gold." Amen, brother.

Russia, too, despite its weakened ruble has managed to hold tightly to its gold. Bridge reports from Moscow announced today that the foreign exchange/gold reserves of the Central Bank of Russia as of Jun 4 were at US $12 billion, unchanged from May 28. In other world news, Tokyo reports that the downturn in gold, coupled with a stronger yen has driven this week's gold prices below 1,100 yen per gram, a key psychological level, though it has not yet triggered massive bargain hunting by Japanese private investors as had been earlier expected by traders. Many investors are waiting for a further fall in retail gold prices in Japan before rushing to buy retail gold bars, they said.

On the financial scene, U.S. Treasury Secretary Robert Rubin said during Thursday's news briefing ahead of a weekend meeting of Group of Seven finance ministers in Germany that there are risks "in both direrctions" to the U.S. economy, and an ever-present need to watch inflation. We must ask ourselves, if the risks are in both directions, do we find ourselves upon a veritible "Razor's Edge", and what one element might be found to provide a measure of safety against falling off? Rubin also warned that the U.S. trade deficit could not be sustained indefinately, although the administration's preference for a strong dollar remained unchanged.

Y2K draws ever nearer, and Reuters reports that the White House joined Wall Street's top regulator on Thursday when
the President's "Council on Year 2000 Conversion" and the Securities and Exchange Commission (SEC) said they had developed a "Y2K survival kit." The kit is to help brokerage firms, markets, regulators and news media provide information to the public about Wall Street's Y2K readiness. Chairman of the White House's Y2K council John Koskinen said, "By joining together, we hope to reach the greatest number of Americans and answer any questions that they may have about how the date change could affect their financial accounts and transactions." I'm sure you join me in feeling glad that the White House has proved itself in recent years to be a trustworthy voice in an uncertain world. A-hem. (wink, wink)

As I go to "fetch this over to the server" (as MK always says), the spot price has drifted up during early New York trading, peaking above $260. At the moment, the world remains plagued with Y2K, currency devaluations, a heady stock equities market, rising oil, and a falling 30-year bond. Gold is currently priced at the enticing level of $259.40, while the DOW is down 140, the Nasdaq is down 43, and they can't give the long bond away even with interest rates now above 6.05%. Gold market analysts have commented that they hold doubts as to the market's ability to deliver physical gold under current demand. Time will tell the tale. That's it for today, fellow Goldmeisters. Enjoy the day!

In the latest News & Views, MK reportedly rambles through the many issues surrounding the gold
market and gives the reader a good, solid overview of what's happened in this topsy turvy
market of the last month or so. If you are looking for some short and sweet analysis as to
what is going in the gold market today from a multitude of sources, you'll like this
upcoming issue. It is promised to be a quick and interesting read. Please go to our ORDER FORM
(click on the "Info Packet" link near the top of this page) or call
Marie at 1-800-869-5115 for a Free Copy of News & Views -- the widely read monthly
newsletter -- and introductory packet on gold ownership.

Excellent "Gold Market Report" i say absolutely marvelous as i got out of bed this morning i was saddened to think, that M.K would not be writing his market report. I truly enjoy your gold reports M.K just in case yon didn't know that! Yet Town Crier you provided me with a substitute so close to the genuine article that all i can say is "THANKYOU"

Excellent Market Report

If possible, I don't know what your source was, could you
post a URL for the following.

"Gold market analysts have commented that they hold doubts as to the market's ability to deliver physical gold under current demand. Time will tell the tale."

TIA

http://biz.yahoo.com/rf/990610/2n.htmlUndersecretary of Finance Miguel Kiguel said the country had issued $1.8 billion of a planned $2.9 billion in domestic debt, and also issued around $6.5 billion of $8.7 billion in international debt markets. The balance of the $17.5 billion requirement for 1999 will come from international loans and other sources.

"No problem." Right! Not as long as you can borrow from Rumpelstiltskin to pay the Piper...

http://biz.yahoo.com/rf/990610/1v.htmlThe Labor Department said U.S. import prices rose 0.7 percent last month after a revised 1.0 percent increase in April that was previously reported as up 0.8 percent. May marked a third straight month of rising import prices, led by a continuing increase in petroleum costs.
***********************
Thanks for the support, Golden Truth. Toss in a "Goldmeister" here and a "Goldmeister" there and anyone can sound like MK. You give me too much credit! Thank you, Sir!

HopeingII, there is no URL to give for that comment. The information was obtained through personal conversation and e-mail contacts with people in The Biz. (and to think most people always thought "The Biz" referred to Hollywood... Nope. Gold is bigger)

By Melanie Lovatt, Bridge News
New York--Jun 10--After a jumpy
session, Aug gold settled down $1 at $260.10 per ounce. It had first
extended Wednesday's fall, moving to a fresh 20-year low of $258.50 in the
overnight session. It then managed to recoup its losses towards the middle
of the session, and then finally gave up its gains again right at the end.

"All the other precious metals continue to outperform gold -- gold is
anticipating a round of official sales from the UK then in future from the
IMF and Swiss," said Bill O'Neill, analyst at Merrill Lynch.
Aug gold had initially managed to rebound from this morning's 20-year
low, receiving strength from silver, a dip in stock and bond prices, and
continued weakness in the dollar against the yen.

One trader noted that gold had received some "good support" at around
the $258 level from some of the larger banks, although noted that as it
climbs much above this point, it remains a "sale" for one particularly
large New York dealer.
"There was very good selling of $260 puts and some option related
covering --this was the catalyst for today's bounce," said Caen. Also
helping gold was a denial from the Greek central bank that it had been one
of the market's recent featured gold sellers. The bank made the denial
after speculative reports Wednesday that Greece had made sales.

Some players are suggesting that gold has plunged in recent weeks not
only because of bearish sentiment ahead of the UK Treasury's first gold
auction Jly 6 but also because some central banks have been selling to
"get in" ahead of this date.
"Whether it's a central bank or large producer selling remains to be
seen," said one trader. "It's definitely been good size changing hands.
Maybe a large producer decided to dump it and lock in whatever they can,"
he added.
While some players fear a short-covering rally, given the dominance of
short positions, others nevertheless remain adamant that gold remains weak
and any rallies will be used as selling opportunities.

(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN