By Steve Marcy, Bridge News
Washington--Jun 30--US House Republican leaders today
told Bridge News they are opposed to a Group of 7 plan for
the IMF to sell a small part of its gold reserves to finance
an expansion of an existing debt-relief program for the
world's poorest, most heavily indebted countries.
However, the second and third top House Republicans said
they don't know how or when the House will act on the issue.
For the sales to go forward, Congress must approve them.
House Majority Leader Dick Armey of Texas, the second in
command, said the proposed sale is akin to "selling the
family jewels so that you can engage in a destructive
policy."

House Majority Whip Tom DeLay, the House's third-ranking
Republican, said the sales would "set a bad precedent"
because "anytime the IMF got in trouble, anytime they want
to do something they shouldn't be doing, they'll sell
gold."
DeLay said he wasn't heavily versed in the issue and
there hasn't been much discussion of it so far. "I'm not a
financial wizard, but it's starting to get on the radar
screen, and it concerns me greatly," he said.

"They're buying themselves liquidity without
accountability," Armey said in explaining his opposition.
"I've not been happy with the IMF. I don't think it's been
an agent of stability for world markets. I think it's been
very destructive all over the world."
"We've tried to hold them accountable," said Armey, who
was chairman of the Economics Department at North Texas
State University before his election to Congress in 1984.
"To me, selling gold is just a way to put themselves right
back where they have been."

Sales advocates have said the amount IMF would sell is
too small to have any impact on world gold markets. Armey
said he also wasn't worried about the sales' impact.
"I'm not worried about what they're doing in world gold
markets," Armey said. "That's just money. I'm worried about
what they do by way of buying themselves the ability to
leverage bad economic policy without being accountable."

The G7 at its summit meeting in Cologne last week
approved IMF selling between 5 million and 10 million troy
ounces of gold, about 5% to 10% of its reserves. Timing of
the sales wasn't specified, but Treasury Secretary Robert
Rubin has said the sales would be designed so they would
have no market impact.
Rep. Jim Saxton, R-N.J., plans to introduce legislation
that would prevent the IMF from selling its gold reserves
unless it sells them back to the countries that contributed
the metal originally to the IMF's reserves.

Armey said he didn't know enough about Saxton's
legislation to say whether he could support it. However, he
did send House members a letter Tuesday saying, "if the IMF
does not need the current gold reserve, the profits from the
IMF gold sales should be returned to the contributing nations."

(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.

On oil: As strong as it is, oil should not go much, if any beyond $20 a B. Saudi's and others know that above that price natural gas can be turned into oil (lots of gas), also a zillion barrels of tar sands and very heavy oil becomes economic. On silver: the only reason I prefer silver to gold is that I do not think there is very much silver left except at much higher prices. Also, remember we have low stocks and almost no speculation or hoarding. My experience in the past is that if prices start to really rise people will increase the offtake even more. The big $50 an oz run up in 1980 took out a lot of the silverware and junk silver. Last, almost 80% of silver is a by product of copper, zinc and gold. But I would be happy to see gold run alongside of it, or ahead of it, whatever. After watching the frontline special last night (the crash)I have a new born respect for those who believe there is grand manipulation of gold. I just cannot see the real outline of its true form. The next few months should be interesting. I have been cruising around looking for the best value in leveraged positions with the idea that there may be a good run here and looking to increase my positions. The values I have found are really beyond belief. Last an amazing statistic: In the 1974 or 64 silver run up, the average of the first 20 silver stocks ( in alphabetical order)on the spokan exchange were up 104 times in value (I read that stat almost 20 years ago, so take it with a grain of salt.

It should've occurred to me that there might be more behind your question the other day. I sincerely hope it was obvious that my reply post was painting a caricature of my handle and not of "biker dudes". (<--- turbohawg attempting to nimbly extract foot from mouth). It's quite possible that I'll turn up with one some day myself ... right now, tooling around in my little sports car gives me plenty of thrills.

My intention was to comment on your Fed comments, but Enjoys Tulsa said just what I was thinking. That probably comes as no shock to you. It's my belief there is a magic level at which higher rates will pop the credit bubble (if something else doesn't first), leading, as you're well aware, to spiralling deflation of the money supply, but I don't have a good feel for what that magic level is. When that deflation sets in, rates may still skyrocket due to a collapsing dollar, a scenario the 'experts' don't seem to be considering.

Ok, given your demonstrated interest in probing the psyches of various posters, how 'bout spilling a little on the genesis of the Stranger ... this I've gotta hear.

http://www.jasonhommel.com/aristotle.htmIt's 59k in size. Large. I couldn't figure out how to eliminate the page breaks when copying it over. Sorry. It looks ok on a full screen at 600 x 800, but it might print out funny.

http://www.jasonhommel.com/aristotle.htm

Check the POG, 264.3 & spot at 262.75

http://www.jasonhommel.com/aristotle.htmI opened up the .htm file in wordpad, and did a search and replace and thus, deleted all the break returns. So, it's all fixed. Also, it's 58k now... Alright, so I'm off to read it one more time! 8-)

Thank you for your insightful thesis. I have a question that has been bothering me. In essence the gold market has been cornered by oil producers. They have been paying above spot to begin with. Why not take over unprofitable mines that are unhedged and pay themselves above spot to keep the supply of gold to themselves continue as before in lieu of allowing a shortfall in supply to occur? This would accomplish two things:

1) Oil producers will continue to accumulate gold, and in effect, a "TOTAL" control of gold market.

2) Demand of their asset, oil, would continue as before. If this demand dried up because of international turmoil in financial markets and subsequent collapse of economies, they will have harmed everyone, including themselves.

They could establish a floor on the POG by negating the effects of hedge fund shorting. Say the cost of production is $360/oz. Allow the price to rise to this level and no more. They can then accumulate "ALL NEWLY MINED" gold(real money) and still satisfy shortfall for demand by public and fabricators and at the same time maintain price stability. In effect they will be paid for their asset(oil) by accumulating all excess gold produced now and in the future, outside of normal demand.

For them to destroy their customers is counterproductive. IMHO. Does this make any sense to you or others?

PS: Would the powers that be nationalize their mines to stop this gold cartel? I think not! They will want to continue as before and this act of nationalization would be to their detriment.

PPS: A gold standard would be forced upon the worlds currencies by proxy.

http://www.murabitun.org/WITO/intro.html Thank you Aristotle for your "Life on earth: Gold and the free market."

If so much gold has transferred and is being transferred to the OPEC nations could we be looking at a new world trade medium that does not include the US$ or the Euro?
Could the Euro be a first step in a long term plan to establish the Islamic Dinar and Dirham as the new "currency?" The following is from the web sit "The History of the Islamic Dinar and Dirham.

THE RING - The trap and decay of the Khalifate

Up until the XV century the Muslims were in total charge of world trading. From then on the Europeans started to take over by the power of the ring.

The ring is a simple mathematical equation, which, as mentioned by Richard Wagner in his famous opera, gives total power to the person who uses it, although it contains a curse: "Whoever uses it, will never be loved". Power was not wielded by gold, but by storing it in a guarded cave. People slaved to mine it, but were ruled by whoever possessed the
ring.

This mathematical formula attached to debt and symbolic money destroyed the Muslim Khalifate. This mathematical formula is what banking is all about.


Think 30 years ahead, buy gold NOW.CH

http://www.investech.com/Jim Stack is now posting weekly on his webpage charts that were available only to subscribers. One of the two charts this week is on gold stock capitalization.

If you scroll on down to 'Previous Charts of the Week' and click on the 6-14-99 chart there is another related to gold, this one regarding gold in euro terms since the first of this year.

MARKET REPORT(7/1/99): Gold leveled a bit after trading almost a dollar higher near
this morning's open with rumors floating the market that the Bank of England is calling in
its gold leases to shore up reserves for the upcoming auctions. Gold closed up sharply
yesterday on a late surge of buying power that drove the yellow higher. Lease rates on gold
bolted higher yesterday as well and some analysts believe that higher lease rates are a
prelude to higher gold prices. Also pushing gold is the decidedly inflationary position on
interest rates revealed yesterday by the Fed's quarter point increase in interest rates and its
switch to a neutral -- from hawkish -- stance on monetary policy. The Treasuries market is
getting hammered this morning despite the dollar's rise against most major currencies. The
euro got clobbered this morning -- down over a full cent and moving quickly toward parity
with the dollar. Currency analysts were at a loss to explain the euro's strange behavior
which doesn't seem to square with the rest of the markets response to yesterday's Fed
actions. One analyst was quoted by Reuters as saying: "Unfortunately, if you are looking
for news (on the euro), we don't have any actually." So, all in all, it's been a fairly active
morning for a transition day going into a long weekend.

In gold news this morning, UK government phone lines were jammed yesterday and today
with irate citizens calling on a special hot line to complain about the Bank of England gold
sales after the World Gold Council placed full page ads in the nation's largest newspapers
explaining to the people what the government intended to do with their gold. ``In 10 years
of operation we have never had such a response,'' said a (concerned) spokesman for the
call centre. At one stage the call centre's switchboard was so heavily log-jammed that its
system crashed. Forty operators have been hired to field the calls.

More proof of the dichotomy between Wall Street and Main Street on the gold question
surfaced yesterday in poll results released by the World Gold Council. The poll reveals that
"76% of the US public see gold as important to strength of both the US dollar and the
economy. 'It shows that most are opposed to a sale of gold assets', said the WGC, which
represents gold producers. 'My supposition is that the policy makers are detached from
public attitudes on gold reserves,' said Ethan Wagner, of public affairs consulting firm
Wagner Associates, who commissioned the survey on the WGC's behalf."

Wall Street and the government bureaucrats hate gold. Main Street world-wide loves gold.
Wall Street does everything it can to keep a lid on the price and interest in the yellow at a
minimum. Main Street continues to accumulate the metal at bargain basement prices. Wall
Street believes that keeping the price down is a deterrent to purchases. Main Street sees
these artificially low prices as an incentive to purchase. Standard Charter Bank of London
recently reported that the world's gold refineries cannot keep up with demand and that a
bullion shortage had developed. Wall Street, I am sure, is beginning to wonder which big
trading firm is going to run for the door first when the short covering begins. The rumor is
that some already have. Main Street is content in the understanding that it has safely tucked
away the one asset that can unquestionably weather any storm created by Wall Street's
excesses.

The gold rally which began in New York yesterday extended into Asia and Europe
overnight. I will leave the last few days reports up over the weekend. I will be out of town.
If I have access to the internet I will post a report tomorrow and possibly Monday. If not,
this will be it until Tuesday. Have a Happy Fourth. God Bless America and all the good
people who live here!

You didn't offend me at all, turb. The term "biker" conjures up the very same caricature to me that you described. I do have the pot-belly, by the way, but none of the rest applies.

I also believe there is a magic interest rate that will burst the bubble, but it is a magic REAL interest rate. Nominal rates alone won't do it. The bond market is already delivering higher nominal rates, of course, but higher REAL rates will have to await tighter money. As you have rightly pointed out, money growth does appear to be slowing lately. However, I would not bet one dime that this is a change in policy. If one looks at the "M"s over the past two years, the big liquidity injections have happened coincident to crises such as Russian default and Brazilian devaluation. In between, the rate of growth has been allowed to subside somewhat but nowhere near enough to reverse the trend. Just yesterday, A.G. took the opportunity to remind us all that his hands are tied. He cannot, and will not, slow the bubble here because of the risk over there. Unfortunately, or fortunately, if one owns gold, there is still too much fragility in the world economy for the Fed to tighten now. Do you think this will change with commodity prices so close to twenty-year lows? I don't.

Perhaps the most delicious aspect to all of this was watching the mindless surge in bonds yesterday. Somebody obviously took the Fed's message to be, "we don't see any threat from inflation." With that, they couldn't buy 'em fast enough. What a shock they are getting this morning.

As to the origins of "The Stranger"... like you, turbohawg, he had to come up with something, and that was the best he could do. Who knows, perhaps he chose the name because circumstances prohibit divulging his identity.

So what is the bond market telli

Could it have been that the rise in stock prices on the "Spokane exchange" was 104 PERCENT ?

http://infoseek.go.com/Content?arn=a1601LBY703reulb-19990701&qt=gold+silver+platinum+palladium+rhodium+-olympic+-olympics+-medal+-medals&sv=IS&lk=&col=NX&kt=A&ak=news1486From >>((Patrick Chalmers, London Newsroom +44
171 542 8057.
london.commodities.desk+reuters.com))

``There's a suggestion that somebody's trying to squeeze things, trying to build up a long position on the basis that the sale outcome is going to be taken fairly positively and that there's going to be quite a bit of short-covering,'' said one London analyst,
who asked not to be named.

Dealers and analysts have been at a loss to predict exactly what might happen as Britain begins its programme of cutting reserves from 715 tonnes to 300 tonnes in the coming years.


`Taking the day off would be a pretty smart tactic. Almost anything you do is going to lose money,'' said Andy Smith, Mitsui Global Precious Metals commodities analyst.

I would like to congratulate Aristotle on his extraordinary Five Part series on the relationship between oil and gold, gold and humanity. I am especially thankful, not just for what he did for all of us interested in the subject, but for the young people coming up behind us, who might make their way to gold in future years and need intellectual grounding to make their intuitive understandings stick. They aren't going to get it at most of the universities (unless things change), so they'll have to find it here.

Let us make it the first entry in a new section of USAGOLD called "The Permanent Hall of Record" so that anyone searching for this sort of information can find it. Let us not take lightly that which we place in this Hall. Any knight or lady is free to nominate a post or series of posts for the Hall. It must be seconded intelligently (and or cleverly) by at least three other knights or ladies. The more members who speak in its behalf, the better its chances of entry. A final determination will be made by me under consultation with my advisory council as to whether or not a piece should be entered into the Hall. As Towncrier has already asked to be appointed Keeper of the Records, we will ask him to make Aristotle's Five Part Series the first entry, and trace the flow of nominees and seconds. Aristotle, I must ask that you give this fine work a title. It will take a week or so to get The Permanent Hall of Record up and running.

Fellow knights and ladies.......I want to thank all of you for making this such a fine place to gather. We keep this Table Round as our personal intellectual holding to advance our own knowledge and wisdom as well as the knowledge and wisdom of others. Each a member. Each a contributor. Each an important voice. Let this Permanent Hall of Record be our shrine.

As with all our endeavors, we will start this as an experiment and make sure that it does not present problems or create unnecessary tensions around the Table, before accepting it as a permanent institution. Don't forget that this FORUM started as an experiment -- an experiment that has gone very well.

Let the discussion continue..........

The Northern Miner Volume 85 Number 19 July 5-11, 1999






EDITORIAL & OPINION -- COMMENTARY -- Who killed the golden
goose?


By Pierre Lassonde

Whenever logic falls short of explaining actions or facts in the popular mind, conspiracy
theories tend to surface. We saw this in the aftermath of president Kennedy's assassination,
and we're seeing it today, with gold at 20-year lows. We think we know who killed Kennedy,
but we'll never know for certain why. As for the Golden Goose, there's even less mystery as
to who, and yet the why is just as enigmatic.

The single greatest damage caused to the gold price has been indiscriminate leasing, by central banks,
of their gold reserves at give-away interest rates. The current one-month lease rate for gold bullion is
less than 1%, while the 12-month rate is around 1.5%. Compare this with U.S. T-Bills for the same
duration going for 4% to 4.8%, and you find a spread of more than 3% in favour of U.S. T-Bills.

U.S government T-Bills are the most risk-free form of dollar-denominated debt. Gold, which is not a
debt of any government, is denominated in U.S. dollars. Does it make sense that it be priced at a 75%
discount to U.S. T-Bills? I think not. Perhaps a 25%, or at most a 50%, discount ( as with the silver
leasing rates ) might be more appropriate. The gold lenders -- that is, the central banks of Switzerland,
Germany, etc. -- are conferring on borrowers billions of dollars of benefits while their gold reserves
have been depreciated by more than $50 billion in the past year alone. These suicidal rates are a gift to
the speculators, hedge fund managers and producers who hedge.

In the meantime, producers who have hedged their short mine lives or high cash costs of production
( such as the Australians ) have enjoyed a huge windfall. Some have made the most of it by hedging up
to 10 years of production or, in some cases, not only their entire reserves but all their resources. For
long-life producers that are heavily hedged, this could prove to be a pyrrhic victory, as they are helping
to reduce the value of their remaining ounces in the ground, which can be four to five times larger than
their hedge books. Clearly, the biggest winners are the speculators, the people least interested in gold.

The sale of gold reserves by central banks is another issue. In the past, it could be done without
affecting the market. Canada, for example, disposed of close to 1,000 tonnes over 10 years without
causing so much as a ripple. Why, then, has the Bank of England's proposed 415-tonne sale, to take
place over several years, been so devastating? Gold has lost 10% of its value in just over a month. The
answer is simple: different times. In a non-inflationary environment, such as we experience today, the
great bulk of gold's demand is in jewelery. Jewelery demand, in turn, is directly a function of world
economic activity. Right up until 1996, the world economy was solidly growing, mostly because of the
tremendous expansion of the Asian tiger countries, which also happened to be large gold buyers. Gold
demand grew accordingly, more than doubling in that timeframe and absorbing large central bank sales
yet keeping prices in the range of US$360 per oz.

Not so today. With the Asian economies in disarray, and Europe barely escaping recession,
incremental gold sales can be absorbed only at lower prices. If the central banks continue to ignore
these market conditions, their sales could overwhelm whatever demand there is and drive gold prices
right down to US$200 per oz., if not lower. The gold market is not as infinite as the central bankers'
incomprehension of its workings! Producers have reacted in typical miner-like fashion by boosting
output to cut cash costs. At a time when gold is hitting 20-year lows, production is setting new records.
Does that make sense? Obviously not. The miners have driven down their cash costs of production to
about US$200 per oz. at the end of 1998 from US$250 in 1995. This didn't do much to help the bottom
line as gold plunged more than US$100 per oz. in the same period. Even worse, a great deal of the cost
gains were achieved by mining at grades well above reserve grades: for example, in the U.S. some
millhead grades are 36% higher than the mine's reserve grade. In plain language, it's called "high
grading," and it can't go on forever, as orebodies are being depleted at a much faster rate than is
prudent.

In the past two years, about US$3 billion in gold mine investments has been written off, and more will
follow. At US$260 an oz., 40% of worldwide gold production is losing money on a total-cost basis. It is
not surprising that, in light of the dismal returns generated by this industry, the equity markets have all
but disappeared for the more junior companies and shrunk considerably for even the seniors.
Unfortunately, the mines and mills that were built with easy money are now hard to shut down and
contribute to the downward spiral in the price.

What can be done? Plenty, as it turns out. First, gold lenders should recognize that gold is denominated
in U.S. dollars and not Japanese yen. Much like the physical market, the gold-lending market is finite.
By charging below market rates ( compared with, say, silver, where the stockpile is already in private
hands ) , central bankers are encouraging massive speculation in one of their reserve assets. If they
were to help develop new financial instruments using gold, they might be able to put more of their
reserves to good use without giving them away. How difficult is it to understand that they have
everything to gain: from higher interest revenue to larger capital gains on their gold reserves to a more
stable financial market.

Second, central banks should co-ordinate and monitor the effect of their sales on the gold price. It
would be entirely to their advantage to refrain from driving down the price by holding back sales in a
weak demand environment or, better still, picking a price of say US$300 per oz. as a floor to any sales.

Whether they like it or not, as long as six central banks own about 30% of all the gold ever mined, their
actions will have a profound influence on the market. As for producers, the longer they wait to take
action -- that is, to cut production -- the worse things will become. Maybe the world economy will
briskly turn around and save the day, and maybe the CIA killed president Kennedy.

-- The author is the president of Franco-Nevada Mining and Euro-Nevada Mining, both of
which are based in Toronto.

http://biz.yahoo.com/rf/990701/qw.htmlI'll give you one slip of my paper for one slip of your paper...

http://biz.yahoo.com/rf/990701/p2.htmlDoesn't the use of the word "euphoria" in a headline give you cause for concern?

No, 104% would be nothing unusual. It was 104 times. Remember those stocks were mostly a few pennies each - so what we are really talking about is a stock going from .02 to $2.00. Coeur was one of those companies - it went from.02 to $20,00 (2.000%). Echo Bay - I think started the same way. They had a small rich silver mine which went to the moon when silver went to $50 and they took the porfits and bought the Lupin gold mine which has been its meat and potato's for many years. If we get a run in silver to say $10,$15 or $20 I know many silver stocks now selling for pennies which will probably go to many dollars. By my calculations silver should be over $30 right now to have an accurate relative strength to gold, whith gold at $260. The reason I have concentrated on these junior stocks is that I have had many stocks run to 20 times the value I paid; and we have been in a bear mkt for almost 20 years, all the time I have been trading. I am patient and can wait for the really big move. Could be soon. PS I do not play the Spokan stocks. I do not know if that exchange still exists. I do my mining stock trading on the Canadian markets.

http://biz.yahoo.com/rf/990701/qj.htmlHappy Days are here again!
Happy days are here, are here again!
Happy days are here again...

Spot gold just popped through that $263 barrier. The possibility that gold is finally moving from distibution to accumulation is becoming more probable with each dollar of recovery. This appears to be a carefully controlled buying pattern designed to acquire, without setting off a short covering panic.

http://biz.yahoo.com/rf/990701/js.htmlJapanese officials had recently warned that steps would be taken to curb any excessive yen appreciation. Rumors are that the BoJ and the ECB have been buying euros for yen which has helped the euro pare its losses.

http://biz.yahoo.com/rf/990701/qc.htmlRussia urgently wants new IMF money so it can repay old loans.

In the early 80's there was a company in Hemlo called Golden Septre - the acronym was GOD and that stock went from .02 to $20.00, and actually showed the hi and low on the bottom of the screen. We always got a kick out of that one.

http://biz.yahoo.com/apf/990701/imf_russia_2.htmlA promissory note in exchange for a loan was sent to an offshore firm which skewed the Russia reports to the IMF to the tune of $1 billion.

Gee, a billion here, a billion there...pretty soon you're talkin' some real money!

Sorry, I meant to include all in my post Pete (7/1/99; 7:36:25MDT - Msg ID:8291).

I also meant to elaborate on allowing price to go no higher than cost of production. The gold cartel(oil), in order to continue producing and supplying a vibrant market would then have the power to say to the USA, or whomsoever they desire, "This is it! We will continue to supply our asset(oil)
as long as you maintain the value of your currency at this level. We can and will adjust the POG & or POO if you do not get your houses in order." They now have what they desire, most if not all present and future gold production(real money) for their their prime asset. Their next problem is how can they collect on their gold contracts that they deem in default or undeliverable? Evidenced by the recent announcements by the BOE, IMF, and Swiss gold sales. Pressure is probably being exerted by cartel for a portion of reserves held by the major powers to release some of their physical gold to cartel, ere the cartel take all by default. If they do not cough up a portion of their reserves, I believe cartel has informed them the ball game is over. Why else would they sell a strategic reserve that
defies all logic and is very unpopular to their citizens. A plausible explanation for announced sales??????

For this cartel to cause upheavals in the markets would be akin to shooting themselves in the foot, so a compromise with CBs is in their best interest. IMHO.

This small mind needs help from those more astute and
knowledgeable, please tell me one way or tother that I'm in left field and get lost, or there is some merit to my simplistic thinking.

Thank you,
Pete

PS: Who do you believe will acquire the gold from announced sales???

Looking better all the ti-i-i-ime.

Hopefully, this week's action in gold is NOT analogous to this philosophical joke. ---A fellow fell out of a tenth floor window and as he was passing an open window on the fifth floor, was heard saying to himself; "So far, so good."

By Melanie Lovatt, Bridge News
New York--Jul 1--Aug gold climbed, settling up 80c at
$264.40 per ounce after making a 12-day high of $264.70.
Gold climbed on growing fears that the market will see a short-covering
rally after the UK Treasury's gold auction set to take place early
Tuesday.

Gold edged higher on continued talk that the market will see a short
covering rally after the UK Treasury's auction Jul 6. There is market
speculation that the auction will be over-subscribed. A UK Treasury
official told Bridge that a lot of potential buyers have said that they
intend to bid at the auction. A Bank of England spokesman
also confirmed that the UK Treasury is not recalling any of the gold it
had leased to market participants in the runup to the Tuesday auction.
"The dealers want this to be good auction," said Bill O'Neill analyst
at Merrill Lynch. He noted it is likely to be well bid and said that gold
would probably see "a good bounce back" afterwards. While today's climb in
the dollar today against the euro did not help gold, gold is tending to
react more to official sector news than financial news, he noted.

Gold lease rates continue to move higher with 1-month at 1.70%,
2-month at 1.60% and 3-month at 1.59% and 1-year at 1.90%. "They are
double to triple what they were a month ago," said Kaplan, noting that
this is not typical for "this time of year."

He said that high lease rates at the bottom of a market (gold hit a
fresh 20-year low in June) typically signal that the market has bottomed
out.

"I see a change in gold's long term perspective if gold doesn't make a
new low within a couple of weeks of the UK auction," said Kaplan.
He said that if the auction price is higher than the market price and
cash jumps over $265, a short-covering rally could be "explosive."

Some players are predicting that prices could reach $280, although that's a
long shot, Kaplan said. David Meger, senior metals analyst at Alaron
Trading, said that gold also got a boost from the US Federal Reserve's
shift Wednesday to neutral from its previous tightening stance. The Fed's
25 basis point hike Wednesday was widely expected.

Gold is also seeing some support from growing opposition to the
proposed IMF gold sales and US legislators today introduced a bill which
would force the US to veto IMF gold sales unless they are in the form of
restitution to member countries.

(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/990701/z0.htmlU.S. Senate approves Summers for Treasury chief

MK? Anybody else around know the last US business day available for gold/currency exchange prior to next Monday's overnight auction in the UK? Is today it?

Anybody?

http://www.kurtsaxon.com/select10.html
Kurt Saxon: "I believe bullets will be the
main currency after the crash...."

(http://www.kurtsaxon.com/select10.html)

http://biz.yahoo.com/rf/990701/wr.htmlAn excellent piece of work. Check it out.

koan: ". I have been cruising around looking for the best value in leveraged positions with the idea that there may be a good run here and looking to increase my positions. The values I have found are really beyond belief."

......... care to share a few with us, friend?

"I will need 15-30 gallons per day IF Y2K really is anything."

... no, you won't. 1 gallon per day for drinking and minimal hygeine will do it. One thing you do need: a CASE of those pre-moistened baby doo-doo cleaner-uppers -- great for no-water cleanup, personal bathing, etc. These things will be worth MORE than gold if the water pressure goes down.

"I will need 15-30 gallons per day IF Y2K really is anything."

... no, you won't. 1 gallon per day for drinking and minimal hygeine will do it. One thing you do need: a CASE of those pre-moistened baby doo-doo cleaner-uppers -- great for no-water cleanup, personal bathing, etc. These things will be worth MORE than gold if the water pressure goes down.

http://biz.yahoo.com/rf/990701/rw.html
BIS says financial markets not ready for yearend rollover.

Article follows;

BASLE, Switzerland (Reuters) - The world's financial markets are still not ready for
the Year 2000 change and much work still needs to be accomplished, the Joint Year
2000 Council at the Bank for International Settlements said Thursday.

"The productive exchanges today between senior representatives of major public and
private financial sector organizations made clear the significant progress on readiness
being made in financial markets," Council Chairman Roger Ferguson was quoted as
saying in a statement.

"However, the meeting also indicated that much work is still to be accomplished;
therefore we will need to remain focused in our efforts and avoid complacency," he
said.

The Joint Year 2000 Council Thursday held a meeting of public and private sector
representatives of the world's banking, securities and insurance industries.

It noted participation in mandatory tests for the SWIFT (Society for Worldwide
Interbank Financial Telecommunications) interbanking payment system
remained low and urged supervisors to check whether participants had
successfully tested with the system.

The Joint Year 2000 Council was established in April 1998. It is jointly sponsored by
the Basel Committee on Banking Supervision, the Committee on Payment and
Settlement Systems, the International Association of Insurance Supervisors and the
International Organization of Securities Commissions.

http://biz.yahoo.com/rf/990701/4p.html"If Wednesday was a dream, then Thursday was a nightmare for the U.S. Treasuries market."
Another really good one that you should read.

http://biz.yahoo.com/rf/990701/zb.htmlMost IMM currency futures end lower, euro erodes

http://www.usatoday.com/news/index/kosovo/koso1006.htmMany of the figures used by the Clinton administration and NATO to describe the wartime plight of Albanians in Kosovo now appear greatly exaggerated as allied forces take control of the province.

That is good news for humanity, bad news for U.S. politics.

I had to take a much needed break from typing. Jason Hommel, thanks for the effort to assemble the miniseries into one ordered piece of text. 58k...Whew! Had I known what I was in for when I embarked on that mission, I surely would have quailed at the task, and picked another pursuit.

MK, thanks for the recognition. I am humbled by your honor, yet glad to see the efforts of fact-checking and research were deemed so worthy by others. I guess you never know until after the fact, though I had a hunch it would be as helpful to others as it was for me. All I did was to lay out Aragorn's framework with my own research of the various historical quotes and numbers as needed to provide an accurate, stand-alone essay. It would appear from the relatively few questions that I have succeeded in my charge. MK, with your coordination I would be happy to work with TownCrier to edit out the various typos and small blunders.

Give me a chance to take a better look at some of the specific comments, and offer what replies I can.

Gold. Get you some while the world is still in denial... ---Aristotle

Thanks for the comment. I was in fact referring to gasoline. I may not have been clear in my post. AS far as water goes. Have a great well. A 20x40 inground and about 42 inches of rain
Thanks again.

Al

I am sorry, but the premise of technical analysis is the increase of open interest with higher prices in a commodity. Short covering is weak, but that is what so many have been counting on. For each long there is a short. I must be missing a point on this conspiracy thing but gold is going up simply because it is it's time. Not because of God or whatever. BOE, etc. aside I have waited almost 30 years for this market. Best not to not muddle it with conspiracy theories. Having said that, there has been a lot to learn from this forum. Thanks to all for my continuing education.

http://dowjones.wsj.com/n/SB930869846264290350-d-main-c1.html"In an alarming note, NAPM's prices paid index moved to its highest level
since October 1997. The index came in at 53.5 in June, up from 52.2 in
May. As recently as December 1998, the index was at 31.1, indicating a
strong acceleration in prices over the past six months."

I try to keep specifics at a minimum as I try to conform with the USA forum protocal. I can say this much regarding leverage, first: it depends on what you think is going to happen. If you believe as I do that gold will be lucky to reach the low $300's in the next twelve months - leverage is sort of out of the question for that metal. but if you think gold is going to $10,000 like some on this forum, just look at the stock options on the Toronto exchange. There are stock options on that exchange that would make the buyer a million dollars with a purchase of a thousand dollars if gold just went to a $1,000 an oz in the next twelve months. I actually own some, but they were a mistake. As I have posted many times I am hooking my star on silver and am purchasing both long and short term options close to the money, and a few way out of the money. I have a larger position in the junior silver's and an assortment of other companies, many of which have all sorts of goat pasture (which does fine in a bull mkt).

Somehow I don't see all the issues covered here. He certainly doesn't hold any credence to the A/FOA posts. He views CB's as to be all on board demonitizing gold, which I believe has been shown false. I see partial truths, not all issues discussed, and history thrown in to throw off the main point that gold is being manipulated. Why didn't he say, "I admit this that and the other event seems a bit too coincidental and suspect but the reason is this...that... and you know what else...."

2:30p EDT Thursday, July 1, 1999

Dear Friend of GATA and Gold:

Martin Armstrong of Princeton Economics
International has replied to Professor von Braun's
reply to his essay of June 28.

While I have received some hostile and even violent
reaction to my posting Martin's commentaries because
they disagree in part with the beliefs of many
advocates of gold, I think we benefit immensely from
being able to test our views against those of such
an expert and historian. Martin honors us by
engaging and arguing with us. I always learn from
him even where I disagree with him. And where we
disagree, as decent people we should be able to
agree to disagree.

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

* * *

Dear Professor von Braun:

The statistics you quote about the gold market may
be reliable, but then again they may not be. For the
smoke-and-mirror act that is going on is in fact the
assumption that there is a huge conspiracy to drive
down the price of gold.

The word "manipulation" implies that there is some
goal to be achieved. No one seems to have defined
that goal, and the assumption that a conspiracy has
been in motion among the central banks for some time
shows the lack of understanding that governments
themselves have no memory beyond the current
administration.

Regarding being "off the gold standard," I am sorry
to inform you that the European Central Bank changed
the classification of gold from an asset "backing"
to the same category as a currency. That is the
"official" demonetization of gold on the part of
central banks.

If there is a conspiracy involved, it is indeed to
demonetize gold, perhaps without making a public
statement. But that is a change in monetary policy
objectives and it is simply due to the fact that
most governments are facing monumental debt problems
just past the year 2010. Their way of meeting that
problem is as always the silent debasement or
devaluation of the currency while increasing their
ability to collect revenue.

The sales of gold by the central banks of Europe
began in late 1996 and continued into 1997. Most
sales were done on a forward basis and then the gold
was delivered. The purpose behind the liquidation
was to "cook the books," if you will, to reduce
their debt-to-gross domestic product ratios in order
to meet the criteria to join the European Monetary
Union. The German government actually sold its
entire gold reserves on a journal transaction to the
Bundesbank. The price of this transaction was never
disclosed. The paper profit was used by Germany to
meet the criteria for the EMU.

This is the primary reason why the Bundesbank
opposed IMF sales, because the Bundesbank also has
the highest cost of gold on its books.

It does not make sense that the central banks,
including Germany, would try to drive down the price
of gold. What purpose does this serve? Surely, if
the goal is to fight inflation, governments have
already manipulated the consumer price index
statistics to achieve that goal.

Targeting gold is no longer a critical issue for
governments. We have been off the gold standard now
for nearly as long as we were on it in the postwar
era. Governments won. They have been able to create
money at will and are free at last of any restraint.

Gold is by far not worthless. Gold has simply fallen
out of favor, as have most other commodity
investments. When people can earn 15 percent on
equities and perhaps double their money on
individual stocks in a matter of weeks, it is hard
to get them to buy anything else.

The decline in gold is directly linked to the
decline in demand by investors. Such demand is never
constant and it swings back and forth between
sectors. Our models are based upon global
correlations. Based upon such analysis, it does NOT
appear that gold is doing anything abnormal that
would constitute a "manipulation."

That word is used freely as an excuse for having
been wrong on expectations for gold. To argue that
gold is being manipulated is in reality a statement
that gold would not have declined against
expectations has there not been some giant
conspiracy.

A bear market in gold is NORMAL at this time, given
the strength of the dollar, the fall of the euro,
and the rise in equities. When gold reached $875 in
1980, the dollar was declining and making its
historic low. It is impossible to expect a raging
bull market for gold when investment money has more
attractive alternatives.

The central bank sales from Australia were in fact
front running what the bank already knew was coming.
The purpose of the International Monetary Fund's
holding gold was to lend it to nations in trouble to
meet gold payments. Now that the gold standard is no
more, the IMF lends dollars. The IMF goes hat in
hand begging for more funds and refuses to offer any
tranparency to its contributors. The IMF gold sales
are the result of governments getting tired of
handing over cash and getting nothing in return. The
IMF has simply been told to start using some of its
own capital. The only problem is that 90 percent of
its liquid assets are tied up in gold reserves.

I do not see how telling the truth is trying to
scare anyone out of gold. It was Princeton Economics
International that blew the lid off the manipulation
of the CPI.It was PEI that uncovered the
manipulation of the GDP statistics. We hold no love
for governments and regard them as self-interests
that are most often opposite of the interests of a
free society. If we saw any sign of a coordinated
effort on the part of the CBs to manipulate gold for
some sinister purpose, we would be the first to
point it out.

There is no denying that any shortfall between
supply and demand in gold is being made up by CB
selling. Unlike England, most central banks sell
gold first and announce later. We do see a policy
shift to where the central banks do not see gold as
a reserve asset. This is their view. We have also
been on record that floating exchange rate systems
throughout history have ALWAYS been followed by high
volatility and a return to a fixed exchange rate
system. This is a fact and it will be inevitable
after 2003.

As for NORMAL technical trading patterns, it is NOT
uncommon for any bull market to make a correction
that retests its high of the previous cycle. In the
case of gold, that stands at $192 in 1974. This BY
NO MEANS is bearish for gold long-term, nor does it
imply that gold is worthless. It also does NOT
suggest that gold will never rally again. We believe
firmly that a major sector shift back to
commodities, including gold, should materialize
either next year or by 2003. Our models strongly
suggest that the next peak for the commodity markets
will arrive around 2007.

But none of this has any impact on the short-term.
If you would like to see a true free market, then
you should welcome the liquidation of gold by
central banks and get it over with once and for all.
At least at that point they will be unable to lend,
lease, or sell gold.

The key will be a shift in investment demand back to
commodities. We saw a brief hint of that following
the 30 percent decline in Internet stocks after
April 8. That trend did not prove sustainable.
Nonetheless, that trend will re-emerge in the near
future -- just not in 1999.

There have been many monetary standards through
history. Western culture began with cattle, moved to
grain, and then to silver. Gold did not emerge as a
circulating medium of exchange until 600 BC in
Turkey.

The Greeks issued no gold coinage until the age of
Alexander the Great. The Romans used bronze as money
for the first several hundred years and did not
issue silver or gold until after the First Punic
War. When Rome fell in 476 AD gold disappeared and
the silver penny formed the monetary system. Gold
did not resurface as money until the reign of Henry
III in England during the 12th century. That is why
the British pound is still called "sterling" today,
a referance to silver as the monetary system.

China used bronze as money along with paper money,
which shocked Marco Polo. China never issued silver
or gold coins until the 19th century.

The United States abandoned the gold standard during
the Civil War, and gold also traded on the New York
Stock Exchange until the return of the gold
standard.

Monetary systems come and go. What we are seeing is
not the only lapse in a gold standard, and we may
see a return to the gold standard beyond 2010,
despite the objections of government.

Nevertheless, all this changes nothing and it means
nothing to gold now. Those who want to see a return
to a gold standard should be very careful for what
they wish. The dream may come true at the cost of
another confiscation.

Gold is still a viable hedge against government. Its
role is fulfilled because it is the only commodity
that is easily transported and internationally
recognized by the same grade and standard. That
cannot be said even of oil. Silver is just too bulky
and its storage is costly.

In conclusion, we see no manipulation and no goal
for manipulation. We do see liquidation and the
disinvestment on the part of the central banks. We
see this as a normal process of the business cycle
and nothing more.

Coincidences are merely that and too many people are
just looking for a reason why the price of gold is
declining. We should not forget that the United
States and International Monetary Fund held regular
gold auctions between 1976 and 1979. Those sales did
nothing to depress the price because demand was
strong. When Russia was a big seller after 1980, the
rumor was that the Swiss would NEVER allow gold to
decline below $400. Now there are too many people
trying to blame too many other people, and meanwhile
there are too many theories that are clouding an
issue that may be rather simple after all.

MARTIN ARMSTRONG
Princeton Economics International

-END-

www.kitco.comDate: Thu Jul 01 1999 22:31
strat (A nice piece on gold...) ID#93241:
http://www.jasonhommel.com/aristotle.htm

Apparently, "Aristotle" ( haven't I heard that name before? ) posts over at the other guy's forum ( USA Gold ) . Good read. Optimistic for gold.

re: #8264. Amen. And my two favorite holidays are Thanksgiving and the 4th Of July, in that order

http://prudentbear.com/bbs/index.cgi?read=53284on the Prudent Bear board; you might enjoy it

sample:

"Given the absolute global disaster that awaits us upon the unraveling of the "carry trades", the
defense of the U.S. dollar is of the highest priority. REPEAT: THE DEFENSE OF THE U.S.
DOLLAR IS OF THE HIGHEST PRIORITY! ALL trading decisions you make need to keep this point foremost in mind."

Hello Martin? didn't your Mother tell you it's not nice to lie to people? Come on Martin? why don't you tell the Truth? "We should welcome the Liquidation of GOLD From the C.B" How COY Martin? "The I.M.F goes hat in hand asking for money"? Are we talking about about the same I.M.F that destroy countries finacially? You make me sick. You say there is no manipulation????? You are insulting the the intelligence of every Human Being on the face of the Earth. Why did A.GREENSPAN say the" C.B's stand ready to lease GOLD in increasing quantities should the price rise??" Why would they give a shit if GOLD was just a commodity,Hello Martin? Come in Martin, time to come down from the ivorytower. You MR.armstrong are in bed with the rest of them,just don't try and grab our asses also. Buy GOLD now and watch out for Ass Grabbers. EH Martin?

When one is investing, REALITY and knowledge are the most important tools. I do not know if Armstrong is correct or not, but I suspect that he is correct. When I cannot get my mind around a subject I look for another approach. Gold: would it make sense that just about all commodities and the CRB are at historical lows, but gold should be different? It makes more sense that it is low. The truth should be whatever the truth is. Especially, when we are just talking about a metal. It either is being manipulated or it is not. Period. And we should all want to know only that.

http://www.jasonhommel.comAbout two years ago, I began studying about God and Money. These two subjects are among the most difficult to understand on earth, except, perhaps, for human behavior.

People, although not very rational, can be predicted to certain degrees, and sometimes we can be influenced with frightening ease. No, I'm not saying I'm good at influencing people--not like the media anyway. Movies, TV, Newspapers all gear people's thinking in so many distracting ways. Even my University of Colorado at Boulder education was a complete pro-government socalistic propaganda-trip!

When I began, I did not at first realize how much my personal studies of God and Money would overlap and explain each other, and be so antagonistic towards the establishment's views. The subjects of truth, contracts, law, nations, and taxes all flow with ease from both topics. So too, do gold, history, power, welfare, statists, and more.

I mention this all here in the beginning because I do not think I can talk about money without mentioning God.

After much geological studies on the Flood and Creation, I came to believe the Bible as the word of God, and I take it for it's literal, common meaning. From reading the gold forums, reading the news reports, and doing the simple math, I also believe that there is a world conspiracy to depress the price of Gold through shorting/leasing/oil trading. I also believe from the stated plans of media figures and world leaders, that we are heading quickly to world government. "Thousand points of light" "Nationalism is dying" "Global Economy" "New World Order" "too many international organizations to count", etc. The Bible seems as if it predicts both world government, and a depressed gold price in the last days.

The point of this essay is not to prove these assertions, I believe they are self evident to all who have time to study the issues. I merely present them to let you know my bias and perspective.

Gold bugs should have a lot in common with Biblical literalists; both are seekers of truth and honesty, and thus, see and reject governments as a source of salvation because of the excesses of fraud, waste, sloth, and tyranny. Truth and honesty are moral values that are eternal and self evident, yet, unfortunately, so unpopular. I think this is one of the reasons why I am drawn to reading the gold forums; the people here love truth and honesty, and it does my soul good to see it.

Although there are many reasons why a return to a 100% gold-based money system would be better for everyone, there are other reasons to hold gold--more than I will list here; such as obeying Biblical commands to not lend for the sake of an increase, staying away from fraud, & having honest weights and measures.

I believe the world is going to go through major upheavals with y2k, with a total collapse of our way of life as we know it, and a world government is soon to follow on the heels of chaos. This will not be the reign of Christ nor any sort of Golden Age, but rather, it will be the time of the AntiChrist.

Christ gives the last church in the beginning of Revelation (3:18) one final piece of advice before all the bad things begin to happen in the Great Tribulation that follows: "Buy of me gold tried in the fire that thou may be rich..."

This advice and a warning.

Who writes the calls? Who makes it possible to buy an option? At the time you buy a call or option, the seller DOES NOT HAVE the actual physical commodity to deliver! Options don't cut it in a short squeeze. You need actual physical delivery. What is going to happen to the market when there are more people scrambling to get gold than there IS gold? Calls will go UNCOVERED. Orders UNFULFILLED. Bankruptcies. Broken Contracts. The decline and default of Big Banks, the United States government, and more.

That's what Alan Greenspan, is trying to prevent. And if the big banks default, and government collapses, what makes you think a tiny investor's contractural claim on an order of gold in the future will be honored?

Gold options are completely worthless in this market of manipulators. Do you think they will hand over their wealth to you as they bankrupt themselves?

No! In the coming wave of bankruptcies, those comitments will not be honored. The very definition of bankruptcy is the default of monetary contracts. Yes, the shorts will default to the banks, and the banks will default to you if you are holding calls and options.

And let's be optimistic, and assume you can receive a payment "settlement" in this weird thing called "cash." Do you know how many steps it takes before you can actually get a hold of your cash in case you want to use it in a time of financial crisis? First, you punch out your option, if you can. Then, you either go down to your brokerage house to get a check, which they may decide to delay for a day or two or even a week in a crisis. Then, you go down to a bank to cash the check in, and sometimes they put a "hold" on your money for up to three weeks... Wait, aren't these the very same institutions who will be bankrupt from a wild bull market in gold? And you should hope that if you are waiting three weeks to see your money that inflation is not running 1000% a day or worse as it has in the past when other fiat money systems were collapsing.

The failure of LTCM threatened the entire system!

Merryl Lynch recommends a "hold" on DROOY-- a tiny outfit holding gold options. It's one more way they can fleece you one last time before the big bang. Also, it's a way they can siphon off dollars from those who would otherwise truly be long in Gold. It's no big sudden news to get excited over, they've had the recommendation since January.

Let me quote from the Protocols of the Elders of Zion;

"At the same time we must intensively patronise trade and industry, but, first and foremost, speculation, the part played by which is to provide a counterpoise to industry: the absence of speculative industry will multiply capital in private hands and will serve to restore agriculture by freeing the land from indebtedness to the land banks. What we want is that industry should drain off from the land both labour and capital and by means of speculation transfer into our hands all the money of the world, and thereby throw all the goyim into the ranks of the proletariat. Then the goyim will bow down before us, if for no other reason but to get the right to exist."

The only way to be long in Gold is to actually take physical posession of the stuff, and not let go no matter how low the price falls. After all, why should you care if the price falls if you are only investing extra money, and you actually have the physical stuff? Calls and options unexercised because of market manipulation and a depressed gold price... you have just been robbed. Calls and options exercised after a bull market in gold that bankrupts the big boys? Good luck! You have absolutely nothing when they manipulate the market against you and you are in options; whether the market drops slightly or swings violently upwards. But when you have the real metal, they can manipulate the market all they like, and all your gold is still in your hands, unchanged.

IN FACT, THE ULTIMATE GOAL OF ALL FIAT MONEY SYSTEMS, AND ALL TAXATION SCHEMES, AND ALL INVESTMENT PLANS, IS NOTHING LESS THAN TO PHYSICALLY REMOVE THE ACTUAL PHYSICAL GOLD FROM THE HANDS OF THE PEOPLE. THE ONLY WAY TO FIGHT FIAT MONEY, IS TO TAKE POSESSION OF GOLD AND SILVER PERSONALLY.

And when the pay day comes in for the yellow metal, it'll go to those who heeded the words, "buy gold tried in the fire" that is, the stuff that lasts, not the paper, not the electronic promises to pay.

There is an incredibly large option position in Gold in December '99 at around $400, but I have not read much about it since I first heard about thist on Gary North's website. I think it's supposed to be over ten times as much as normal or something.

If gold moves up in a crazy way, there's no way option contracts will be honored. Just my opinion, backed by my study of world events, my understanding of bankruptcy law, the stated intent of the authors of the "protocols", and my interpretation of Scripture.

OK, I know many people on this forum have lost money in gold options before, it's hard not to have done so in the last 20 years. But that is no excuse to try to use options to regain what was lost in the past. Don't throw good money after bad. Stop playing the shell game that's rigged against you. You'd be better of going to Vegas!

Now, here's where I begin to speculate a bit more.

If the Rapture happens this fall and/or winter, and y2k chaos hits extremely hard as I think it will, national governments will either collapse or start martial law.

After a monetary collapse, and actual physical metal is determined to have all the value in the world, maybe being valued up to 100 times it's current value, posessors of silver and/or gold will have a sudden newfound wealth. Unfortunately, any government that still exists, or any government to come will have an incredible interest in those metals, and their goal will be, as always, to get the gold.

Either they rob, kill, or imprision you. After all, the last time gold was this cheap, it was illegal to own it, both domestically, and internationally from the U.S. point of view. That's right, using inflation adjusted dollars, it was 1972 that last time gold was valued this low, not 1979.

The world government that rises from the chaos is not going to have a friendly gold standard. Well, they might have a gold standard at first, but it won't be friendly to the seekers of truth. The AntiChrist to come will control the gold, and he will cause all, both rich and poor, to accept his new money system, a mark in the right hand or forehead, without which no one can buy or sell. (Rev. 13)

Perhaps at that time those who have hoarded up wealth for the last days will cast their gold and silver in the streets because it will be worthless.

[Ezek 7:19] "They shall cast their silver in the streets, and their gold shall be removed: their silver and their gold shall not be able to deliver them in the day of the wrath of the LORD: they shall not satisfy their souls, neither fill their bowels: because it is the stumblingblock of their iniquity."

Or perhaps, people will do this to save their lives because if they are caught with the precious metals it might spell a death sentence. Or perhaps this will be God's method to proclaim one last final worldwide declaration of the truth for the whole world to see what they are choosing, the rejection of all things honest and true, gold and silver, and the acceptance of the ultmate evil; voluntary enslavement to the master of fiat money instead of being a slave to God.

My conclusion? Friends, buy gold and silver--the actual physical metals with your excess investment dollars--those you have left over after you have fully prepared for both y2k and/or three and a half to seven years of tribulation. (Food preparations are not expensive--a year's supply of wheat or pasta costs a mere$250.) Perhaps holding the actual physical metals will bring great riches to those who hold them, and perhaps holding gold and silver coin will enable you to testify against the world when the time comes, but the riches will be temporary, like all earthly things. And so, do not put your ultimate faith in anything other than God if you value the truth that honest money of gold and silver represent. And when you invest what you don't need, think carefully about your investment choice. Sometimes there are people who have not yet met their basic food needs, and it's good to know that an alternative place to store your wealth, where neither moth nor rust consume, and where theives do not break in and steal, is in heaven.

http://news.excite.com/news/r/990701/16/odd-internetHow dare we advocate gold, which is nothing less than a veiled attempt at promoting a bank run. Unless, of course, they persist in declaring that gold is not money... heh, heh...

This story found at Excite! under "Oddly Enough" category.

Man Arrested For Note On Internet
Updated 4:15 PM ET July 1, 1999

BOGOTA (Reuters) - A Colombian man was arrested Thursday in connection with an anonymous note on the Internet that sparked a limited run on deposits at a leading bank.

The arrest was thought to be the first ever in Colombia for something posted on the Internet, and comes amid growing concerns about parts of the country's ailing banking sector.

A statement from the state security police, known as the DAS, identified the suspect as Jose Omar Olaya Rivera, 24, and said he had been charged with sowing "financial panic."

The run on the Davivienda SA, a top mortgage bank, occurred on May 26 after a message posted anonymously on the Internet said it was about to be taken over by government regulators.

It was not immediately clear if Rivera was accused of authoring the original note, which the DAS said had been traced to the United States.

But the police agency said he posted a second note on May 28, apparently from his home in the Pacific coast city of Buenaventura, claiming responsibility for the original message and threatening similar acts in the future.

"The people are sick and tired of high interest rates," the second note said in part.

About $3 million more than usual was withdrawn from Davivienda on May 27. Total withdrawals amounted to between $17.5 million and $20 million, about the level seen daily during the Christmas season.
-----------------

My comment:

Here they arrest a man because he caused $3 million in withdrawls? First of all, since when is it illegal to take money out of a bank???? Secondly, they don't even know how much was taken out that day, it varied by their own report by $2.5 million!!! So how can they charge a man of causing $3 million in withdrawls????

I think the flaw in Martin Armstrong's reasonable sounding treatise on gold lies in this small excerpt.

>>The word "manipulation" implies that there is some
goal to be achieved. No one seems to have defined
that goal, ---- <<

Suppose we rewrite that to say: "The proof of manipulation would be in finding the goal to be achieved by it"

Nowhere in his essay does Mr. Armstrong address the short position in gold. Now in an earlier article of his, he stated: "For every short, there is a long. Likewise, in his post today, Technician said: "For every long there is a short". However, that is not my understanding of a "short sale." For every buy there is a sell of course, but a short sale only means that the Item sold was borrowed rather than owned. It does not mean that there is a long position out there for it to be closed against. Sure, the item must be obtained and delivered by the short seller, but he may or may not have to buy it, in the case of gold, he can mine it for instance. But Armstrong tried to make a case for there being an equilibrium between Longs And Shorts at all times. No, a short sale can be actually, long gone (pardon the pun). That seems to be the case with the CB gold. It's been borrowed and sold and securely stored by whoever bought it and may or may not be sold at some point in the future. The short seller must obtain SOME gold from somewhere, but the actual borrowed gold he sold is not plugged in to the equation!

So, there is one possibility for a goal to be achieved, and, there is also another. Tonight's article referred by AEL from "The Prudent Bear" made a very concise and believable case for the Titanic Currency Liner to be on a collision course with the Debt Iceberg. Now when that ship captain of the Titanic pulled the wheel hard over and called for full reverse, he probably knew in his bones that his ship was going to hit.

It is totally believable that the people of wealth who run the global economy are aware that the momentum and course of the present fiscal voyage has been full speed ahead in the fog of fiat money delusion. They may know "in their bones"that the "ship" will sink. Well, just what is the life-boat, and who gets on it? We know that when the value stored in paper currency sinks beneath the waves, that gold is left floating high and dry, and you can bet that the first class passengers will do everything they can to make sure that they are all in the life boats. There is a lot of tonnage of gold out there to be taken possession of. You've got to get the tourist and steerage class over to the other side of the boat to do it.

So there, in analogy form, is the other goal for manipulation. Get the price of gold down, get large quantities available and buy it up. As Tommy Bear says: >> If any weakness in stocks or anticipation of a slowdown in the U.S. economy begins to spook the currency markets, the U.S. dollar WILL ultimately fall, the carry trade bubble WILL ultimately pop, the domestic debt bubble WILL ultimately pop, and the bears on this board will finally get their day of reckoning. My prediction is that once this happens, it will be so bad that we'll wish it never did, regardless of how much it benefits us. <<

Those who have all the gold, however, may not share that wish!

I guess one could cut and paste from spellcheck into the subject box.

$264.30.

Regarding AEL's link:

"...Given the absolute global disaster that awaits us upon the unraveling of the "carry trades", the defense of the U.S. dollar is of the highest priority. REPEAT: THE DEFENSE OF THE U.S. DOLLAR IS OF THE HIGHEST PRIORITY! ALL trading decisions you make need to keep this point foremost in mind...."

My question is why? What is the benefit of doing this? If the hole is dug deeper and the fall to the bottom greater than why not let cycles cycle?

As an aside, I watched morning financial news on CNN today. In the first half-hour I saw nothing but robust enthusiasm for low unemployment, the DOW, the NASDAQ. I believe a Mr. Jones, an Economist, did say he was flabbergasted(sp?) that the Fed didn't raise the rate higher. He said the neutral bias and the small increase merely fueled the markets more as everyone knew that he should have done more.

From the AEL link you can see that any attempt to widen the gap in the LT Bond Yield and the S&P Yield shows that the inevitable is being forestalled, a higher rate hike would have increased this gap further. So it would seem saving some ammunition for later might fit it the plans.

But what long term benefit is there by delaying if the problem is only being made more severe. I just hope it isn't thought to be the difference if it happens now vs latter the difference between a meteor five-miles in diameter vs 20 miles in diameter as either would be devastating to say the least. So for the PTB (powers that be) to say, "So what is the point, we might as well stave it off as long as possible" can be understood in that context of severities. Let us just hope it isn't that bad.

I must say I don't like being in the glass is half empty camp all the time, but sometime you have just got to wince and scratch your head, eh?

http://www.gold-eagle.com/gold_digest_99/inger070199.htmlInger -- "This Fed is not primarily trying to "prick" a stock market bubble, but constrain demand at a time that foreign and domestic pricing power is being gradually reestablished, which is their mandate. That interestingly; means the Fed will look at today's market response, and ponder another hike."

So perhaps the delay is to allow foreign markets time to recover thus making any downturn here in the US less troublesome. (the glass is half full)

http://www.gold-eagle.com/editorials_99/taylor070199.htmlTaylor -- "...And with 1% of Americans owning more than 50% of the stock market, the longer this binge lasts, the greater will be their power to dominate our political process."

The glass is half-empty.

Thank for all your posts and links.

You said, "But what long term benefit is there by delaying if the problem is only being made more severe."

I beleive AG et al are delaying the bubble problem until they can transfer the blame to the Y2k storm which will occur in Oct/Nov/Dec 99.

Date: Thu Jul 01 1999 23:53
Shadowfax (Best I have read in a long time) ID#297378:
Copyright � 1999 Shadowfax/Kitco Inc. All rights reserved
// Seeking Truth In A World Of Lies and Deception //

by Ron Brown, North American Investment Services

We live in a world of confusion and contradiction. Though we seem to be
living in a period of unequaled and unending prosperity, it somehow seems
hollow and artificial, as if it could all end tomorrow. The booming stock

market has gone beyond insanity yet people still think it will never end.

Whenever I have trouble making sense of the distorted and obviously
conflicting information presented to us daily by government and the media,
I remember what President Roosevelt said...nothing in politics happens by
accident. I believe that is true today. In fact, I believe every report
or statement from the government is measured and designed to forward some
orchestrated agenda.

Recently, two topics in particular seem to be the source of more than
usual confusion, lies, and deceptions...

// Y2k and the Gold Market //

There has been an obviously orchestrated propaganda blitz since March 1999
regarding Y2k and the gold market. Below I offer nine observations and
some conclusions on this most intriguing situation.

OBSERVATION #1: Y2k has become a Propaganda War.

Jim Lord is one of the more respected Y2k experts in the world. In a
recent issue of his Y2K REALITY WATCH newsletter, Jim Lord identifies two
of the most important points I believe are missed in the Y2k debate.

First, the battleground of Y2k is not about solving the problem, but about
winning the propaganda war for public opinion. Second, Mr. Lord correctly
points out that the greatest threat of Y2k is the impact it will have on
the banking system.

Both points recognize it's not the "problem" but the "perception of the
problem" that creates the crisis and thus it's own reality. Y2k or not,
the financial system of the world is a gigantic bubble looking for a pin.
The only thing holding it together is consumer confidence. Regardless of
its magnitude, Y2k is a sharp pin that threatens to prick that veil of
confidence.

OBSERVATION #2: The gold market appears to be a rigged game.

In a news release dated 4/22/99, the GOLD ANTI-TRUST ACTION COMMITTEE
( GATA ) , announced that noted anti-trust and securities law firm
specialist, Berger & Montague of Philadelphia has been retained to
assist in its investigation into the alleged manipulation of the gold
market. GATA states "the price and supply of gold are being controlled by
a cartel of Wall Street investment houses and bullion banks with the
possible encouragement of the Federal Reserve and the US Treasury." This
confirms what many of us have suspected for years.

Anyone who has reviewed some of the EXECUTIVE ORDERS inacted by current
and past Presidents of the United States of America should be aware that
the events of today are really part of a much bigger plan. The crisis we
are headed for is not the result of bumbling idiots in high places. These
executive orders did not get on the law books by accident. They represent
a highly organized agenda to undermine our freedoms and national
sovereignty. Any plan of action must not ignore this frightening but
stark reality.

OBSERVATION #3: The world economy is collapsing.

Actually, the system began to unravel two years ago in the Pacific Rim
where the combination of stock market collapse and currency devaluation
destroyed as much as 80% of the wealth in Korea, Indonesia, Thailand, etc.
Despite IMF efforts to defuse the problem, the crisis quickly spread to
Russia--which is an economic basket case--slowing the economies of Europe.
The "Asian Flu" then proceeded on to South America where Brazil now
teeters on the brink of disaster. If Brazil goes, all of South America
goes.

I could elaborate, but I think you get the picture. The world financial
boom of the last 18 years is trying to collapse while the international
bankers who created this Ponzi scheme are trying desperately to hold it
together...at least until they can blame it on Y2k.

OBSERVATION #4: The United States is the "Buyer of Last Resort."

When you analyze it, the only thriving economy in the world is the United
States. Furthermore, I am convinced monetary authorities are using the US
to prop up the whole world. Think about it. The dollar is strong not
from it's own strength, but because the currencies of other nations are
weaker. Flight capital from failing economies throughout the world,
seeking refuge in the US, continues to fuel our financial markets. The
rich get richer.

In our prosperity, the United States has gone on a buying binge, importing
goods from all over the globe at distressed prices. Our trade deficit now
exceeds a record $20 billion per month and grows larger every month.

It's our imports that keep the world economy afloat, so the United States
economy must be kept strong, at least until the world recovers.
Unfortunately, distressed prices from abroad have deluded most Americans
into thinking there is no inflation. So, before we go further, let's
briefly discuss the subject of inflation, because it's our
misunderstanding of inflation that is at the root of our looming financial
crisis.

OBSERVATION #5: Most people don't really understand inflation.

We are programmed daily to believe inflation is "rising prices." It is
critical to understand that "rising prices" are *not* what inflation
*really* is. Inflation is the increase in the supply of money and
credit--period. Since everything we call money is really debt, inflation
is the increase in credit.

While it is true that the normal result of expanding credit is a rise in
prices, it is incorrect to equate the two. It's kind of like analyzing
rain. If you start with the assumption that wet streets cause rain, you'll
never come to a logical conclusion. In the same way, if you assume
inflation is higher prices, you'll never understand the true cause of it.

Politicians and bankers will continue to point their fingers and blame
everyone and everything for inflation except the true culprit--themselves.
It is the unconstitutional Federal Reserve System and fractional reserve
banking that magically creates credit, also known as debt, out of thin
air. The problem is that a system built on a foundation of debt can only
exist as long as the people maintain confidence. If confidence waivers the
debt bubble collapses causing the opposite condition--deflation.

By understanding what inflation *really* is we see that inflation has
never slowed down in spite of the spin promoted by the mainstream media.
The enormous growth in our debt structure and the value of equity markets
is proof that the supply of "money" has expanded dramatically. The only
thing that has been contained is the perception of inflation.

Secondly, because of the massive debt structure in the world, deflation
must be avoided at all cost. Remember that in a monetary system based on
debt, everyone's assets are really someone else's IOUs. In a depression no
one can pay off his IOUs. But, deflation is exactly what's happening as
world markets decline! To offset the deflation overseas the US markets
are being inflated massively to keep the world solvent.

OBSERVATION #6: The FED is continually avoiding near disaster.

In July-September of 1998, the US stock market almost fell off its
pedestal as stocks dropped 25 to 30 percent across the board. To prevent
a further panic the FED and its "plunge protection team" rushed in. They
opened the money spigot full blast to prop up failing markets. Of course
after the recovery the media establishment bragged about how resilient the
markets are, further entrenching the arrogance and complacency of a market
frothing with greed. It's as if nothing has changed. But something has
changed!

OBSERVATION #7: You eventually have to pay the piper!

Inflation fear is once again rearing its ugly head. The bankers cannot
run the printing presses nonstop without rekindling the perception of
inflation. As we discussed earlier, perception creates it's own reality.
Once the fear of inflation is ignited the whole credit bubble comes under
attack and confidence is undermined.

OBSERVATION #8: Inflation fear drives interest rates up, bond prices down.


The natural result of rising inflationary fear is higher interest rates
and thus lower bond values. Let me explain. Who's going to lend money at
5 percent if they perceive price inflation is 8 percent? Likewise, if
long-term rates rise to 8 percent, who's going to buy your bond paying 6
percent--unless you sell it at a discount. In other words, if long-term
interest rates rise from 5 to 6 percent, that's an increase of 20 percent
which would have a corresponding drop in the value of bonds. To
summarize, as interest rates rise the bond market comes under extreme
pressure.

OBSERVATION #9: Bonds are the foundation for our house of cards.

Finally, the point I want to make is our entire monetary and financial
system is built on a foundation of debt. The world debt structure has
grown well in excess of $100 trillion, and that doesn't even include
derivatives.

All debt instruments have a maturity date in which they must either be
repaid or renewed. Literally trillions of dollars of debt instruments
mature each year and must be rolled over. As interest rates rise and bond
values decline this becomes more and more difficult. The foundation for
our gigantic house of cards begins to crumble. If not stopped immediately
the process will quickly veer out of control; thus, shutting down economic
growth, collapsing the stock market bubble, and triggering a panic
stampede out of all paper assets. Obviously, an UNACCEPTABLE CONCLUSION.

CONCLUSIONS:

Make no mistake; the unraveling process has already begun in earnest.
Inflationary fears have driven long-term rates above 6 percent and the
bond price index has dropped to the lowest level since Oct 97. Monetary
authorities are now faced with the challenge of restoring confidence
before it wrecks the whole system. Inflationary fears must be calmed
immediately! Anything that undermines confidence must be attacked, and it
must be attacked immediately and with a vengeance. That is the answer to
our initial questions and explains the propaganda blitz to calm Y2k fears
and depress gold prices. They both represent an immediate threat to
confidence and therefore had to be dealt with severely.

// Y2K A Threat To Bank Solvency //

As Jim Lord explains, banks have only $3 for every $250 on deposit. Cash
withdrawals in preparation for a possible Y2k meltdown pose an immediate
threat to bank solvency. So in typical bureaucratic fashion, the truth has
to be compromised to protect people from themselves. So, the lies and
cover-ups spew forth as the establishment media acts to convince people
that Y2k is no longer a threat. My advice--don't buy into it.

If anything, the problem is greater than most people think simply because,
regardless of the magnitude of the problem technically, Y2k is a very
sharp pin that will prick the veil of confidence that holds a fragile
banking system together.

// Gold Is A Threat to the Financial System //

While a bank run on cash threatens solvency in the banking system, gold
threatens the system itself. Remember, gold is the only "real money" that
historically has provided the backing for all legitimate currencies. It
was only in the last 75 years or so that international bankers, led by the
Rothschilds, infiltrated western governments to remove the gold backing to
all currencies.

Despite all attempts to eradicate gold as the monetary standard, gold is
and always will be the money of last resort. Whenever confidence waivers
people will stampede out of paper assets and seek the refuge of gold,
silver and other tangible assets.

// The War On Gold Accelerates //

Because gold tends to rise as monetary fears increase, the perpetrators of
this fraudulent system are very sensitive to the price of gold. They will
do whatever is necessary to artificially hold the price down. The larger
the credit system gets the more critical the problem, since it takes a
smaller and smaller fraction of flight to cripple the system and trigger a
panic.

For example, in today's world if just 1 percent of the money in the system
tried to run for the exits, it would translate into well over a trillion
dollars. Do you think there is a trillion dollars worth of gold anywhere
in the world to meet such a potential demand? Well, there isn't!

In fact, one man by the name of Warren Buffett purchased 20 percent of the
world's annual silver production with less than $1 billion, and drove the
price of silver from $4.60/oz to over $7/oz in the process. What would
happen if a $1000 billion...a trillion...tried to enter the tangible asset
market? I think you see their predicament. They must do whatever is
necessary to make sure gold never gains any upward momentum.

// The Gold Lease Time Bomb //

International bankers have been struggling for years to hold gold & silver

prices down and have created their own monster in the process. Years ago,
in the early 80's, the central banks initiated a program where they leased
gold to large institutions who in turn sold it into the open market to
raise capital.

Mining companies used this technique to sell forward future productions,
but the greatest abuse of this practice was by giant mutual funds that
would use the proceeds to invest in financial markets. Do you see the
problem? The sale of borrowed gold has suppressed gold prices
temporarily, but it has created a short position that eventually must be
repaid.

It is now estimated the short position may exceed 14 thousand tons � over
5 years annual production! This amount of gold is not available. I hope
you can see that the bankers must manipulate the price of gold in every
conceivable way to put off the day of reckoning. Any rise in gold prices
will trigger a massive short squeeze!

// Gold Auctions--an Act of Desperation //

You've no doubt heard of the threatened gold sales by the IMF and the Bank
of Switzerland ( possibly 1300 tons ) plus auctions by the Bank of England
( 415 tons ) . The last time this happened was Nov 78 when Jimmy Carter
announced gold auctions just prior to gold prices exploding to over
$870/oz. The threat of auctions was mostly hype then, and it's mostly hype
now. It didn't stop the panic then and it certainly won't stop it now.

[Editor Note: One house of the Swiss government recently voted NOT to
sell their central bank gold which reduced this concern temporarily.]

My Advice: Don't let the hype intimidate you. That's exactly what they
are trying to do. Continue to accumulate the position you need during
this lull while prices are low and metals are readily available. When the
monetary meltdown accelerates, prices will expand and supply will dry up
overnight.

// THE BIGGER PICTURE //

The international bankers who created the Ponzi scheme we call a monetary
system know better than you and I that it's about to collapse. In fact,
it's part of their long-term plan to force the world to accept a "World
Central Bank." As David Rockefeller said, "given the right crisis the
world will accept our New World Order." But the timing must be right.

Rising interest rates or a panic flight out of paper cannot be allowed to
be the perceived cause of the crisis. That would expose their fraud. I
believe the "right crisis" they need is Y2k. What a perfect cover for
their coup! After all, they can exclaim, "Every thing was wonderful until
the awful Y2k crisis came along."

// A FINAL THOUGHT //

The deeper you explore the coming crisis the more overwhelming it seems.
The natural tendency is to stick your head in the sand and pretend the
problem will go away. That's why so many people believe the propaganda.
It's the old "tickle my ears" syndrome. As good stewards we are called to
seek the truth and do our best to prepare for ourselves and for our
families."

You realize, I am sure, that your prediction below is almost verbatim what was broadly forecast for y1k. Have we learned nothing in a thousand years?

"I believe the world is going to go through major upheavals with y2k, with a total collapse of our way of life as we know it, and
a world government is soon to follow on the heels of chaos. This will not be the reign of Christ nor any sort of Golden Age, but
rather, it will be the time of the AntiChrist."

http://www.nigerianews.net/cgi-local/getNewsArticle.cgi?id=2370"THE proposed industrial action by the Petroleum and Natural
Gas Senior LEADERS of the Group of seven Industrialised
actions (G-7) have endorsed a new initiative that will allow
for reduction of up to 70 per cent of the external debt currently owed by the poorest developing countries.."

Well worth a read. This is the kind of garbage that's put out in the third world press.

MARKET REPORT (7/2/99): Gold was sideways going into the long July 4th weekend.
Today will be the last trading session in the U.S. ahead of the Bank of England auction on
Tuesday. It will be shortened session. It could get interesting in New York today even
though most other markets will be winding down particularly if any news gets out about
who might be bidding on the BOE gold and whether or not it will actually reach the street or
end up in some other central bank's coffers the result of a satisfied lending arrangement
previously gone bad. Dispelling rumors floating the gold to the contrary, the BOE told
Bridge News yesterday that it wasn't recalling gold leases in advance of the auction -- the
reason, some analysts and trades believed, for the spike in lease rates in the past few days.
Lease rates are down fractionally this morning an indication that the market might not be
totally reassured by the BOE disclaimer.

In other news, key members of Congress have introduced legislation to stop International
Monetary Fund gold sales unless the gold is returned to the member countries who
originally contributed it. The bill stands a good chance of passage with House Majority
Leader Dick Armey one of its co-sponsors, though we suspect there will be strong
opposition from the Clinton administration. The bill calls for the president to veto the IMF
gold sale. One wonders if the President can veto a call for a veto -- a complexity to consider
on this 223rd birthday of a declaration of independence that makes such a constitutional
consideration a possibility.

I will leave the last few days reports up for weekend reading as you pull out that patio
recliner and bask in the warmth of summer. Have a good holiday, my fellow goldmeisters.

I have the good fortune of internet access this morning. I recommend the Sternberg Natural History Museum in Hays,KS to everyone.

Aristotle, I will take the time at some later date to verify the historical facts of record in your series although I have no doubt as to their veracity. My question is this; how did you and Aragorn come by these insights and conclusions? Can I assume correctly that your explanations and theories are the product of considerable research and thoughtful analysis; a bi-product of considerable intellect? In other words, and please don't misunderstand, how can I be sure that the tale you have told is accurate? Thanks.

>My question is why? What is the benefit of doing this? If the hole is dug deeper and the fall to the bottom greater than why not let cycles cycle? <

That's a damn good question ... there's no doubt that Greenspan knows the mess the US has created. The post by TommyBear over on the Pru Bear Board (per AEL's link) and the article by Ron Brown that you posted diagnose the big picture well, in my opinion. Why didn't they let the US take a hit 4 or 5 years ago rather than blow the problem up to these extremes ?? (That's when they went from merely inflating to exploding the money supply).

The suggestion by Tomcat and others that they're pushing the implosion into Y2K makes a lot of sense, but still, why didn't they allow the market forces to prevail long before the consequences became this severe ??

I can only cynically assume that it was ultimately a political decision based on a psychotic president's narcissitic drive for power and a 'legacy'. He had to be a two-termer, you know. He had to beat impeachment. He had to have a 'good' economy to exist as anything but a piece of yesterday's trash. The hell with everyone else.

Now, are they deliberately pushing into Y2K so the blame can characteristically be placed somewhere else or will the Fed use Klinton's status as a lame duck to go ahead and change policy or will it be business as usual ??

I don't know, but impeachment is safely behind us now, and in the last month and a half, the money supply has begun contracting (although, it bumped up across the board last week). Note also that, curiously, in that last month and a half, insiders Rubin, Rivlin, and Yellen have announced that they're bailing. Mere coincidence ??

sooner or later, it's not going to matter what their intentions are ... the market will take control. Bonds are indicating that has begun ... the Fed appears to have painted itself into a corner.

Silver is looking to make a new breakout at $5.375. It traded Europe, night before last at $5.38. All other metals flat to down. Only PAAS is responding - they have great long term stock options, but a risky huge Russian play - sort of to the moon or what. But the big money seems to like it. I noticed the top quality silver juniors that are way oversold even by todays standards are being sucked up. HL had some short term options at 5 that doubled this morning. Always like to check Kitco to see what Gollum's take is. He has his eye on this, as do I.

I suppose what with Martin's reputation and position it's
somewhat understandable that he would comment on the
issue of Gold Manipulation, however, I can't help but feel
it rather odd that he does so with such intensity.

Let me put it this way. If an individual is truly knowledgeable about some subject, isn't the more likely
response upon hearing something that is totally absurd, to
simply say, nonesense, you don't know what your talking
about.

It seems to me that Martin puts considerable time and effort into writing hundred's (perhaps thousand's) of words about a subject that he claims is absolutely baloney. Methinks he
protests too much. I would question very much what he has to say given that he is in a position where "what he has to say" may in fact influence other people's views.

http://biz.yahoo.com/rf/990702/tk.htmlOil market rally solid at 18-month highs

http://dailynews.yahoo.com/headlines/ap/ap_us/story.html?s=v/ap/19990702/us/remembering_the_moon_1.htmlSee for yourself!

http://biz.yahoo.com/rf/990702/ss.htmlBoE auction is not just a sale...it's an EVENT.

http://biz.yahoo.com/rf/990702/yw.htmlMost IMM currencies end abbreviated day higher

What I am expecting regarding silver is that the average Joe and Jane will start increasing their purchase of 100 oz silver bars and coins - this will further exacerbate the already short supplies which in turn will increase price, which will in turn increase purchases. Silver supplies, unlike gold are real finite. The user's will also start taking delivery and paying the storage costs, and the commercials should be increasing their long positions. I like to see small constructive moves like this because in a shortage situation there is time for people to purchase and the silver goes into strong hands which will not sell except at much higher prices - as apposed to the speculators just running up the futures mkt. The probable main reason that both gold and silver have trouble moving is, the tremendous technical damage both have suffered over the years. This is not true for the other white metals.

By Tina Petersen, Bridge News
Washington--Jul 2--
Aug gold was very quiet ahead of the UK Treasury's gold
auction, settling up 20c at $264.6 per ounce.

Aug gold was surprisingly quiet ahead of the UK Treasury's gold
auction Tuesday, according to traders. However, one trader said that he
did not expect gold "to do much ahead of the long weekend anyway. No one
was expected to initiate new positions ahead of the auction anyway. Any
movement today was just position squaring."

While many expect to see a short-covering rally following the UK
Treasury's auction, one contrarian broker said it is possible that gold
could plunge as much as $10-11 Tuesday as further possible gold sales
await.
However, others maintain that 80,000 ounces is not a significant amount.
"Besides, the charts look good. It looks like gold has bottomed. We're
slowly making higher highs and higher lows."

One trader said he expected the auction to be well bid, which could
catch the market short. "There's good demand for the metal," he said.
"Everyone is interested in taking a piece. It should be disposed of in a
quick fashion."

--Aug gold (GCQ9) at $264.6, up 20c; RANGE: $264.7-263.9

(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'm a Canadian who travels to the US every 6 months or so for business and shopping. The level of price inflation I've seen in the last 3 years is incredible. It must be approaching 12% or higher. The official figures cannot be correct.Two of the main reasons I believe the average person hasn't realized this is
A; They don't travel at all, so they have no relative basis for judgement about prices and exchange rates,etc.
B; If they do they have no problems because US currency is accepted and is gaining against the local paper.Great, more trinkets can be brought home. The price of food, meals, and alchohol in the Pacific NW is going up very sharply. The price of fuel has remained stable though.Curious.

can the person in charge explain why my postings about inflation keep getting removed?

May I claim my victory? My call of bottom in gold 22 June, in this forum, has been and will remain accurate. Not only that but Tuesday will leave a gap not to be filled. I have been firm in my bullishness in crude, copper, gold and now silver. We are entering an era reminiscent of the late 70's. Be prepared for the ride for it will be wild and can be very profitable. I predicted $25 crude by years end on this forum and also maintain that opinion.

My website is crude and 100% non-commercial. I feel at this junction of time it serves a great need. I have had many grateful emails encouraging me to continue and I will as long as CFTC does not complain. I am not a CTA and am not defined as such according to the CFTC's very own definition. In fact, I have emailed them for clarification but as to date, no reply.

These types markets we are entering respond very well to technical analysis, they are trend followers. Even simple moving average works and more sophiscated methods work much better. If you trade commodities, keep your ego somewhere else or u will be chopped to ribbons.

I believe the $ is tremendeously over valued. If u don't believe that and welcome cheap European vacations then ask me what I hear from farmers in Kansas and elsewhere. They are dying out there friends while we enjoy cheap imports. This $ thing will become a political problem soon even if $ has not topped which it might have.

If You wish to visit my site email me at edwin_pu@yahoo.com. I consider providing web site URL here on forum in bad form. I wish to be an attraction for USAgold not a competitor.
ET, Bet a beer I will call buy on DM first;)
Hope I did not ramble, good trading

It is nice to read other posters trying to figure out these complicated mkts. I read all your stuff and you do a good job. I agree on the dollar. I am surprised the US doesn't lower it to provide relief to the farmers and other commodity producers. James Baker, I think that was who it was, lowered the dollar a great deal, in a straight down move, in the 80's. I seem to remember the yen being like 185 or more at the time. The dollar is way too strong and its strength undermines our industrial base as well as farmers and other commodity producers, not to mention our unbearable trade deficit.

Silver over the past 20 years has had two more or less famous floors $4.84 which held nicely this year and $7.00. Here is my prediction of what we will see in the next 12 months. Silver will work its way above $6.00, at which point every computer in the world will trigger a buy signal ( many technicians will say $5.80), but I remember the emotion of the past of the $6.00 price. From there it should go directly to $7.00 which will then become a floor. It will range between $7.00 and $10.00 until the supply shortage really becomes acute or the dollar falls and then it is any ones guess. Having said this, over the past many years when I feel this bullish is when I should be buying puts. I read that the ratio of gold to silver is 10 or 12 to one. Can anyone confirm that? Last, I do not think the BOE sale will have any impact on the gold price as all those variables are usually worked in when there is this much transparency. But I do not feel strongly about this its just a guess (like everything else) and would love to see a move in gold to the $280 level or more.

http://www.afr.com.au/content/990703/world/world5.htmlMr Yen blows through
lest the bubble burst

Asia-Pacific,
By Peter Hartcher
It was confirmed during the week that one of the world's top finance officials, Japan's Eisuke Sakakibara - known as Mr Yen - is about to retire from his job as the country's main international negotiator. But why?

He told an acquaintance that he decided not to press for another year in the post because he expected that Wall Street would crash during that time, and he did not want to be around to try to deal with the consequences for Japan.

It was Sakakibara who first conceived the brilliant nickname for the US economy - bubble.com. The US is vulnerable, he says, to the possibility that the internet-led stockmarket bubble will burst with awful consequences.

It would not only drag down the US economy, he fears, but jeopardise the entire system of global capitalism. It is quite extraordinary, of course, that the vice-minister for international affairs at Japan's Ministry of Finance should utter such thoughts aloud.

Apocalyptic pronouncements from a responsible official are potentially destabilising. And the Americans, Sakakibara's closest and most important allies, hate it.

But his warning does serve as a sobering reminder of the awesome challenge that the US faces.

The Federal Reserve's Alan Greenspan is working to bring the eight-year US boom to a gentle moderation, a soft landing.

The problem is that history shows hard landings are infinitely more likely to occur, producing wrenching recession.

Greenspan's decision to raise interest rates by the barest possible increment during the week - and then saying that no more action is contemplated at the moment - shows him to be like the comical minesweeper of schoolyard humour.

He is advancing gingerly into the minefield with his hands over his ears, feeling his way forward with one foot outstretched, tentatively tapping the ground.

He has to expect that his leg might be blown off at any second and is moving with terrified caution, and without equipment of any sophistication.

Greenspan may be the world's most powerful central banker, but he is still armed with nothing more than two old-fashioned instruments of words and interest rates.

The US is nurturing a technological revolution at its economic breast at the moment. That is not in doubt.

The key question to ask of Wall Street, however, is this: Are investors pricing the effects of this revolution correctly?The stockmarket can only ever represent the value of the companies in the economy it represents. A simple and obvious point, yes.

So how do you explain this? The total value of the US stockmarket has been the equivalent of around 50 per cent of the total output of the US economy, on average, over the past 60 years. Today it is around 150 per cent.

In other words, the market has historically been prepared to value a dollar of economic output at 50�. Today the market values that same dollar of output at $1.50.

Why should this historical relationship swerve so violently away from standard? Is it possible that stocks today could be worth three times the amount of real economic activity that they have traditionally represented?

The orthodox answer is that the technological revolution is transforming the productive power of that economy, and so the old rules no longer apply.

The Bank for International Settlements, the Swiss-based club of the rich-world's central bankers, is not so sure.

It is sometimes argued that the effects of recent high-tech investments may be especially large because they embody significant technological advances.

However, while computers have been a major component of recent investment spending, they still account for only 2 per cent of the net non-residential capital stock.

Thus, even if the returns on investment in computers are higher than for other types of equipment, their effect on aggregate productivity growth has been relatively modest until now.

No-one, naturally, can be sure of the future, and the BIS hedges by saying that computers may become an important source of productivity advances in future years. But until and unless that happens, any pricing of the technological revolution must be speculative.

Sakakibara has to have an even chance of being right that a surge of money is simply pushing stock prices to unreasonable levels, creating that oldest of investment phenomena, a speculative bubble waiting to burst.

In this view, the market is valuing a dollar of economic output at $1.50 not because investors seriously expect this to be the correct level, but just because a wave of hyper-liquidity is chasing a limited number of stocks and pushing prices to ridiculous heights. And Sakakibara has seen this phenomenon at close quarters in Japan's bubble economy of the late 1980s. But it is also possible that he has other motivations.

A top official in a rival Tokyo ministry says that Sakakibara was not offered the option of another year in the job, but that he has been forced out by the seniority system of the Japanese bureaucracy. And officials in the US Treasury suspect privately that Sakakibara's attacks on the US may be partly tactical - designed to deflect US criticism of Japan's spectacular economic mismanagement of the last decade.

One thing seems certain, however. They will not be rid of him.

Sakakibara, an extremely accomplished intellectual as well as one of the world's most high-profile finance officials, will be leaving the ministry in a month or so and will spend some of his time writing and lecturing, including during a visiting professorship at the Australian National University.

In this new incarnation, the US economist David Hale sees Sakakibara emerging as a leading spokesman for Asia, an advocate of Asian solutions for Asian problems and an challenger of US policy.

The best way for the US to disarm him, of course, would be by a soft landing. Good luck, Dr Greenspan.


-change-


Le Metropole members,

Professor von Braun has served a response to
Martin Armstrong ( Dos Passos Table ) at the Kiki
Table entitled, "Professor von Braun solves the
mystery".

It is well done and well thought out.

I spoke with Frank Veneroso about Martin Armstrong's
piece and have offered up a clarification for Mr.
Armstrong that follows the Prof's commentary at the
Kiki Table.

Today's activity was very quiet, but silver, oil and copper
all closed higher once again with gold finishing out right
above unchanged. Bullion dealer Chase offered HUGE size in the
gold pits for the second day in a row stopping any serious
rallies.

The open interest dropped over 5,000 contracts in yesterday's
action so the specs are covering while the bullion dealers
sell. A bit of the same old pattern we have seen for such
a long time.

It is especially disconcerting when one hears this today from
Kelvin Williams, Executive Director of South Africa's Anglo
Gold Ltd: " The auction is going to be oversubscribed by three
or four times the amount of gold on offer" ( confirming what
we already told you ). He went on to say, " one of our
counterparty banks has indicated a firm intention to make a
bid for the full 100%". Perhaps, this confirms the rumor
that Goldman Sachs was going to do just that. We will know
more by 11 AM, or so, London time on Tuesday.

Regardless, something does not sit right again here. Why are
the bullion banks offering size going into an auction that
is oversubsribed 3 or 4 times? What oversold market like gold
produces such feeble rallies with such strong demand? If
Goldman Sachs IS such a big buyer - who are they buying for?

I have a sickening feeling that the manipulation of the gold
market is intensifying and I will deal with that soon. I say this because it is clear that the natural supply/demand fundamentals
are improving daily. Our camp says there is a 150 tonne, or more,
natural supply/demand deficit that must be met EVERY MONTH.
Central Bank selling is minimal, so is producer forward selling,
and the Asians are rebuilding gold stocks after their crisis so
scrap supply is zilch. That can only leave leased gold
borrowed from central banks hitting the market. Could that
1,000 tonne short position at Goldman Sachs partly be gold
borrowed from the U.S. Fed? If Goldman is buying back gold at
the auction, is it doing so in behalf of the U.S. Fed? Is
that why they called the BOE into action to sell gold? Some
quid pro quo between the U.S. and British governments?

This is all very disturbing. You know that we will do what we
can to try and get a better handle on all this. The more
that GATA investigates the gold market, the worse the stench
becomes.

Whatever happens in the short term, it is clear that the shorts
will blow up at some point in time in the not too distant
future for the longer they keep the gold price down, the
greater will be the deficit and the gold loans will be just
that much bigger as they continue to grow and grow.

The shorts WILL have their butt handed to them and the
resulting short covering panic will cause the gold price to go
far, far higher than most can imagine.

Le Metropole Cafe

All the best,

Bill Murphy
Le Patron

Aristotle (and Aragorn) said, "...With the simple but vital central bank guarantee against the default of these Money (Gold) loans, the House of Saud, for example, would have not qualms about supplying the cash side, effectively buying not the Gold metal immediately, but rather the rights to receive the borrower's Gold repayments over a span of time. Just like a home loan on the secondary market. And the Money (Gold) of the central bank need not ever move or change ownership unless the borrower defaults on the loan and the CB is obligated to guarantee payment...."

It would seem then that the need for the BOE to make 25 tons physical available currently must mean they are acting as a loan guarantor and are having to fess up the gold to back a deal where payment in gold is due but insufficient gold is available to meet the payment. The other sales of gold being attempted worldwide (IMF, Suisse) seem to be representative of other loans coming due in gold where payment in not available.

But where does the Euro fit in to all this?

koan, is that your good post over at kitco under Pete?

What if all of the other gold sales in the last two years were also payoffs to gold loans gone south? This means that the end is near for easily available gold payments because it seems that the BOE is the backer of last resort. They are now reaching into the shoe box under the bed, the one with the 1936 $2.00 bills.

FOA, what say you?

I can now see the clear need to pass a law making it illegal for any entity other than a gold producer or an entity with physical gold owned and present (not loaned or borrowed) to transact in the gold-carry trade. Had this law been in place and adhered to then we wouldn't have this mess, eh?

www.kitco.comDate: Fri Jul 02 1999 18:06
Fergus (Doing the Right Thing) ID#284226:
Copyright � 1999 Fergus/Kitco Inc. All rights reserved

The S&P500/Gold ratio closed today at 5.290, a new 200 year all-time high. The ratio is now 23.9% over 1998's year-end close of 4.268, and 55.5% over year-end 1997's close of 3.402. We are 88.8% above 1968's peak day of 2.802, and 241.9% above 1929's top day.

The average number of gold troy ounces needed to buy one unit of the S&P500 at the five peaks of stock market cycles of the past 200 years is 2.025; the average low ( for four bottoms ) is 0.149. The most recent low ( in 1980 ) was 0.132. The ratio is an astounding 3,907% above that low, which works out to about 20.8% per year for the last 19.5 years, that the S&P 500 has outperformed gold.

On the other hand, from 1968's peak day in stocks ( 2.802 ) , vis-�-vis gold, stocks declined 95.3% to the bottom in 1980 ( 0.132 ) -a wrenching 22.5% per year decline for roughly 12 years. And now we are 89% above that 1968 peak!

FWIW, each of the four major declines in S&P Composite stocks ( again, relative to gold ) since 1800 has been at a progressively greater annual rate of decline. Here is a list of them:

Decline from 1802 peak ( 0.167 ) to 1857 valley ( 0.057 ) = -65.9%, or -1.9% annually
Decline from 1881 peak ( 0.318 ) to 1896 valley ( 0.184 ) = -42.1%, or, -3.6% annually
Decline from 1929 peak ( 1.547 ) to 1942 valley ( 0.221 ) = -85.7%, or, -13.9% annually
Decline from 1968 peak ( 2.802 ) to 1980 valley ( 0.132 ) = -95.3%, or, -22.5% annually

If the past means anything, the ratio is telling us that stocks are absurdly priced right now, relative to gold. Put ANOTHER way, gold is dramatically cheaper than it has ever been, relative to stocks.

A couple of quotes come to mind:

"As far as I am concerned, the stock market doesn't exist. It is there only as reference to see of anybody is offering to do anything foolish." --Warren Buffett

"The trick is not to learn to trust your gut feelings, but rather to discipline yourself to ignore them� "The true contrarian waits for things to cool down and buys ( things ) nobody cares about, especially those that make Wall Street yawn." --Peter Lynch, in One Up on Wall Street

I believe that the trick now is to heed the words of Peter Lynch and Warren Buffett--to discipline ourselves to ignore the pain in our guts, and do what we know is right. Aside from us goldbugs, no one cares about gold right now ( especially the physical variety ) , and stocks are being offered at foolishly high prices.

Forget trying to time the bottom. Only those on the inside will know. And forget all this nonsense about gold becoming irrelevant.

Gold is extraordinarily cheap right now, period, and we know it. It's time to get past our guts and fears--past the pain we all feel--and do the right thing: buy an asset that no one cares about; an asset that has stood the test of time unlike any other for thousands of years, gold

I only post my 2 cents here. No need to bother others. I'll go read it now out of curiosity.

I reAD another article by Armstrong and am not sure what to think. But one statement caught me when he said gold could test the 1974 low of $200. But $200 in 1974 would be much more today $500, $600, etc. But I also realized I am guilty of the same flaw when I use old floors like $4.84 for silver in the 1980's. But I guess really it is ultimately the technicians who use numbers which are not adjusted and thus not real? But they tend to use them.

http://biz.yahoo.com/rf/990701/rw.htmlFinancial markets are not ready for
Year 2000-BIS

BASLE, Switzerland, July 1 (Reuters) - The world's financial
markets are still not ready for the Year 2000 change and much
work still needs to be accomplished, the Joint Year 2000 Council
at the Bank for International Settlements said on Thursday. . .

11:55p EDT Friday, July 2, 1999

Dear Friend of GATA and Gold:

The exchange between Professor von Braun and
Martin Armstrong of Princeton Economics International
continues here, with the professor's reply to Martin.
Enjoy.

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

* * *

July 2, 1999


Dear Mr. Armstrong:

Thank you for taking the time to comment on the
article entitled "The Gold Market Mystery -- Fact or
Fiction?," which appeared at Bill Murphy's web site,
www.lemetropolecafe.com.

Let me first say that the Rocket School of Economics
recognizes the expertise that Princeton Economics
International provides in its forecasting services
and appreciates the effort that has gone into
establishing your data bases, as well as the very
good information you provide to the market via your
well-read websites.

I have reread your essay, "Gold Manipulation or
Exaggeration?," as well as reviewed your response to
Philip Skarshaug.

There are several issues that arise.

The first is that the activities of central banks,
regardless of who they are, must be regarded as
being part of the free-market concept, since it is
difficult to imagine more than one free market and
even more difficult to imagine the existence of both
a free market and a controlled market at the same
time. Although as you note, this has been tried
before.

I do not believe that central banks are involved in
manipulating the price of gold to the downside any
more than I believe that politicians have the best
interests of their constituents in mind when they
make decisions on monetary policy. But I would say
that the actions of central banks have to be
regarded as an aspect of the free-market system,
since it seems impossible to have both systems. The
element of control the central banks assume they
have may be as much a myth as the unicorn.

Whether the European Central Bank changes the
classification of gold from an asset-backing entity
to a currency does not change that gold is gold.

The price of gold is set in London by members of the
LBMA. This fixing is in U.S. dollars. Regardless of
who holds gold and regardless of how they describe
that gold holding, the value of that holding is
determined by market participants.

The market factors are of course supply and demand,
the one buyer/one seller principle. But at present
the published supply/demand numbers do not make
sense. If these numbers are correct (and I agree
that this is a big "if") there is a shortfall of
gold.

I do not agree with your assumption that this
shortfall is being met by Central Bank selling. We
may be talking 4,200 tonnes over the last three
years, which is an amount that would have to have
been reported eventually, and this has not happened.

I would concur with the concept of a policy of
demonetization best described as an international
policy that has not been publicly expressed in terms
of central banks and their gold "reserves."

While this policy of demonetization has not been
publicly expressed, I am sure that discussions about
it have been held with the member banks of central
banks, formally or informally. And shame on them.

It is our belief that mining companies' forward
sales account for, at most, only half the gold that
has been leased/loaned (and consequently sold
into the market), and it may not be correct to
describe the mining companies as the primary
borrowers. This certainly was the case from 1985
through 1995, but we believe that a shift took place
late 1995 and early 1996 and that it coincided with
the current decline in the gold price, which began
in February 1996.

The last three years have seen an increase in the
leasing or mobilizing of central bank gold reserves.
Just who the primary borrowers are is a difficult
question. Whether they are bullion banks, investment
banks, hedge funds, or Arab sheiks, the borrowing is
not being done under the watchful eyes of the
regulators you refer to. Perhaps a "nudge, nudge,
wink, wink" policy may be at work here.

A paper contract for delivery of physical metal at a
future date is not the same thing as owning the
physical metal itself, and we believe that too many
contacts have been written that are good only as
long as the music continues; when it stops and the
market turns, there will be a scramble to obtain
physical metal.

You imply that the Bank of England was being up-
front about its intention to sell a large part of
its gold reserves and decided that it would be
"jolly decent" of them to let everybody know in
advance of the sale. We do know that the sale
was opposed by the bank itself and was a political
decision, if a very costly one. We agree that
politicians are on average "stupid" and that they
have short memories and even shorter attention
spans.

But I would not jump to the conclusion that the Bank
of England's timing was coincidental, since "stupid
is as stupid does." Before concluding mere
coincidence here, we will watch the activity over
the next few weeks to see whether it happens again.

What may be occurring is the beginning of a shortage
of physical metal itself, which would be a good sign
for the gold bulls but not good for the shorts.

Not all central banks hold the view that gold should
be sold, and the European central bankers have
longer memories than their U.S. counterparts. Your
own comments about the shortcomings and dangers of
floating exchange rates and their, something you
have been warning about for some time, and the
potential for a return to a fixed exchange rate
system are views that have not been overlooked by
the central banks.

Of course returning to the gold standard is a lot
easier if you have some gold -- a point that the
Germans and the French have not missed, I think.
Neither have the Americans.

Gold loans/leases to mining companies are of course
covered by reserves in the ground that can be used
to repay the commitment; we have no problem with
that. But gold that has been loaned/leased to any
other entity apart from a gold owner that has been
sold into the marke place with the proceeds used for
some other form of investment are at risk if
repayment depends on gold's being purchased as
opposed to newly created (mined).

Which brings us back to the shortfall in supply and
demand numbers from the World Gold Council and GFMS.
Something smells a bit here.

Gold is, of recent times, always the fallback
position when things go wrong with paper currencies,
and yes, it is easily transported and
internationally recognized. Indeed, it is a good
hedge against political whims, errors, and plain bad
policy.

We agree with your comments about the International
Monetary Fund, an organization that is well past its
user date and should be replaced. The odds do favor
IMF gold sales simply for the reasons you have
stated. They don't have any money left and their
liquid reserves are gold. How a U.S. politician can
stop this event from happening is a mystery to me.
Politicians' resolve can disappear in seconds and
I'm sure that some "goody" is being kept for this
purpose by the Clinton administration.

You say your models point toward a major shift back
to commodities that could materialize next year or
by the year 2003. We agree and suggest that it may
have already started. Certainly the energy market,
along with sugar, hogs, and now copper, appear to be
coming off historic lows.

We do NOT disagree with a final low for gold in the
$200 area, which could see the start of a new bull
market for the metals.

But we respectfully point out that highs and lows
each contain their respective peculiar
characteristics, and that the presence of
absurdities associated with each is a requirement.
Overselling to obtain a profit has happened before
and this may simply be the case with gold.

But having knowledge of an intent by central banks
that may not be available to the public and then
acting on such knowledge has no place in a free
market, and I believe that that is GATA's complaint.

Any anti-trust action is brought about as a result
of an identifiable attempt to give direction to a
market that is based on either a control
practice, as in Microsoft, or a collusion of market
participants. Certainly the gold market has the
potential for this.

The secretive nature if the major players, along
with the London factor, something you pointed out in
your response to Phillip Skarshaug, in your comments
about insider trading in commodities, and in your
comment about the lack of reporting in Britain,
equally apply to gold.

Keep in mind that Watergate may have gone away if it
had not been for the efforts of just two Washington
newspaper reporters. Whether GATA is a two-man army
or not, its complaint may have some merit, and I
would not regard it as a group of gold bulls trying
to justify their wrong investment decision.

Not everybody has the desires to follow the trend.
Market participants do have the right to know what's
going on, and it is good that there are people who
stay with their chosen field and are prepared to get
vocal if they see market activity they don't
understand. Otherwise we would have very one-sided
markets. Once again your comments to Mr. Skarshaug
about the silver market come to mind.

Once again thank you for your response.

Professor von Braun

This makes for interesting reading. Given the contempt that elected and non-elected govt. 'officials' have for the citizenry, it may have a ring of truth to it also.
************************************************************
Copyright 1994, 1999 by Freemarket Gold & Money Report. All Rights Reserved. First published on April 25, 1994 in FGMR Letter #143

Over the past few years I have become acquainted with a wealthy, retired American industrialist who has an interesting story to tell. To preserve his privacy, I will call him Andrew which is not his real name.
Andrew was born in New York before the First World War to wealthy Jewish parents who had only recently emigrated to the United States. He was educated in both the United States and Europe, speaks several languages fluently, and is as comfortable in any European capital as he is in any American city. He has three homes in the United States, and two or three more in Europe.
Andrew is a 'man of the world' in the positive sense in which that phrase can be used. That is, this phrase reflects his vast knowledge and keen perception of world affairs, and over the years, I have come to deeply respect his wisdom.
Andrew is also well connected. His library is full of photographs taken of him meeting world leaders. Seeing this gallery is like viewing a who's who in government and business. One immediately understands from these photo's that here is a man who was close to world events for decades.
Interestingly, the photo's stop in the mid-1960's, but it is here that his story begins. Andrew sold all of his business interests and retired around age 55. As he explains it, he felt that he could no longer devote sufficient time to manage his diverse businesses. The changes being inflicted on the United States by President Lyndon Johnson meant that Andrew would now need to spend all of his time managing the wealth he had been able to accumulate. In his view, the economic and monetary order by 1965 was changing, and he would have to change as well.
The transition was made within a few years. He sold his business interests and most of his stock portfolio. By the late-1960's, real estate in Europe and the United States and investments in Gold mining companies became the two pillars of his investment portfolio. In the mid-1970's, he also started buying Gold bullion. It was during this period that Andrew had the occasion to meet Edward Durrell, one of those legendary figures in the 'sound money movement' protesting, even rebelling, against American government policies that were destroying the purchasing power of the Dollar.
Ed Durrell believed that the Federal government was not being honest with the American people. He believed that substantially all of the Gold held by the US Treasury had been dishoarded, and he began to make his views widely known in the 1970's. He contended that the US Gold Reserve (which is presently reported to be 262 million ounces) was vastly overstated, and that this deception was being perpetrated on the American people by successive US administrations either ignorant of the truth or afraid to tell the truth.
Ed Durrell's evidence was largely circumstantial, but nevertheless part of it was also somewhat compelling. For example, he noted that the Gold disposed by the US government by auction in the late 1970's was 'coin melt' quality, i.e., the Gold that had been confiscated in the 1933 seizure by FDR and 'melted' into bars less than 99.9% pure. Ed Durrell believed this lower grade Gold was sold because the pure bars were missing.
There were other examples. Ed Durrell noted how the Financial Times of London had unceremoniously and inexplicably fired its long-standing business and economics reporter, W. Gordon Tether, once he reported in that paper the allegations that the US Gold Reserve had been surreptitiously dishoarded. Ed Durrell's point was that a cabal in the US government did not want the truth to emerge about the missing Gold, for obvious reasons. Most persuasive, however, was his argument about auditing.
The US government had not undertaken a proper audit of the Gold since President Eisenhower was in the White House in the 1950's. Ed Durrell's argument was simple. If the Gold was truly there, then commission an external firm to properly audit the Gold to prove that it exists. His argument sounds logical and simple enough, but curiously, the US government always refused. Moreover, the excuses given were not credible.
The excuse most often used by the US government was that an audit was too expensive, which is really no excuse at all. First of all, even if the audit had cost several million dollars, this amount is insignificant compared to all the money spent each day by the government (much of which we all know from reports of the Grace Commission is routinely wasted).
Further, isn't a few million dollars a reasonable amount of money to spend to ensure that the US government's most important monetary asset is secure and intact? Besides, wasn't it worth spending a few million dollars to complete the audit just to rebuke Ed Durrell and to prove him wrong so that he would no longer be a thorn in their side?
When viewed in this way, the candor of the US government makes one wonder. Was the US Government being obstinate, or did it really have something to hide?
Andrew thinks the US government did, and still has, plenty to hide. He thinks that Ed Durrell was right and that most of the Gold is missing. Here is how Andrew tells it.
In his view, Lyndon Johnson was absolutely the worst President that this country ever had the misfortune to elect. Andrew believes that Johnson was a man with no scruples or conscience, and little sense of right or wrong. This disparaging view is similar to that portrayed in some of Johnson's less known biographies. To Johnson, power was the only truth. But as Andrew explains, not only was Johnson despotic, he was stupid.
Although he can't prove it (and nobody can until a proper audit of the US Gold Reserve is once again completed), Andrew believes that Johnson was the victim of his own megalomania and the dupe of some conniving people who were advising him at the time. To understand his argument, you have to appreciate and understand the circumstances prevailing in late 1967 and early 1968.
The Vietnam War had rapidly escalated, and the protests had already begun. Johnson's credibility was being questioned not only on foreign policy, but domestically as well. The US government's commitment to maintain the Gold Standard then in effect was suspect, and the Gold reserve had declined from 442 million ounces in December 1964 to 370 million ounces by November 1967 in response to the growing demand for redemption’s at the $35 rate of exchange then in place. In short, the environment by the end of 1967 was fractious, and Johnson's grip on power was dwindling. Because power was his life, Johnson was forced to act.
Understanding these circumstances as well as Johnson's weaknesses, one or more people with access to Johnson's ear (if Andrew knows who they are, he hasn't told me) presented Johnson with a scheme. They told him how he could 'defend' the Dollar as the grand deed to bolster his flagging popularity and win back the support of the American people.
All he needed to do was 'flood' the London market with Gold, thereby more than satisfying the growing demand for redemptions of the Dollar. They led Johnson to believe that once everyone realized how much Gold was available, the demand for Dollar redemptions would decline, and everyone would be satisfied holding Dollars again instead of Gold.
According to Andrew, Johnson then concocted a secret plot. The entire US Gold Reserve, then over 400 million ounces (excluding the 15-20 million ounces of 'coin melt' Gold which could be determined to be Gold from US reserves), would be shipped to the Federal Reserve in New York and the Bank of England in London to be 'dumped' on the market to teach a lesson to the speculators. Not only would there be more than enough Gold to meet the growing demand for Dollar redemptions, the Gold price would drop. The Federal Reserve and the Bank of England would not immediately sell Dollars and buy Gold, thereby 'allowing' the Gold price to fall momentarily below $35. Once the speculators were 'crushed' in this way, the Federal Reserve and the Bank of England would step back in to buy the Gold under $35 per ounce and then surreptitiously return it to the US Treasury with no one being any the wiser. Only it didn't work out that way.
Over a period of several weeks in early 1968, the Gold was secretly transferred and 'dumped' on the market, but to President Johnson's shock and horror, the market absorbed it all. He had been duped. The people who concocted this plan knew that their group had more than $14 billion of resources (400 million ounces times $35 per ounce). They therefore willingly exchanged their Dollars for the Gold 'dumped' on the market. The rest of the story is already well known.
In March 1968, the international monetary system in effect since the 1944 Bretton Woods Agreement was abruptly ended and replaced by the "two-tiered" Gold system. There would now be a free-market Gold price, higher than the $35 "official" rate. Further, the US government would no longer redeem Dollars for Gold because as Andrew explains, the US Gold Reserve had been depleted by Johnson's insane folly. There no longer was enough Gold to make redemptions.
The so-called speculators, and their friends who 'advised' the President, had made a fool of Johnson. The $14 billion they invested in Gold immediately rose in value as its price climbed above $35 per ounce.
It is also known that shortly after the March 1968 meeting establishing the two-tiered Gold price, President Johnson surprised the world by announcing that he would not run for a second term. Andr頢elieves this humiliation over the Gold to be the real reason President Johnson decided to step down from the pinnacle of power. Subsequent administrations unwilling or afraid to deal with the truth, have continued the cover-up.
It's a great story, but is it true? Before dismissing it out-of-hand, consider this. We all know now that President Johnson lied about the Gulf of Tonkin Incident. It has been proven to be a phoney event, staged by the US government to justify greater involvement in Vietnam. If Johnson lied about that, who's to say he didn't lie about the US Gold Reserve?
I suppose the only answer lies with an audit. The US government says that the GAO has inspected the Gold in the US Gold Reserve, but an inspection is not the same as a full audit. Until a full and independent audit is completed, we will never know whether the Gold is there or not. The few million Dollars that it would cost for the audit seems a small price to pay for the peace of mind knowing that the Gold is there. And if this essential monetary resource isn't there, I would rather not think the unthinkable.
To contact Mr. Turk: James Turk jamesturk@fgmr.com

Site down or everyone at play?

Everyone is waiting for 11:00 English. BOE u know. Yes, they are all off to play;)

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=000YisSee above link for some good ideas and lists of the many items for which we are dependent on overseas sources. Some interesting and novel ideas for hard-asset investments can be found. Ball bearings, anyone?

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=000YisSee above link for some good ideas and lists of the many items for which we are dependent on overseas sources. Some interesting and novel ideas for hard-asset investments can be found. Ball bearings, anyone?

http://www.pei-intl.com/TOPICS/CONFU614.htmSite did seem down for a bit or buuuusssy.

Check out the above site. Here is a snippet to wet the appetite:

"After having studied these models for over 25-years, we do not remember another period quite this complicated to decipher. Usually one would see many more cross-market similarities � much more of a cross-market macro-rhythm. What we see instead is a global financial system that already is disjointed and likely to become more so in the weeks to come. If the world feels like one giant stop-loss, it may be because that is exactly what it is: hedge funds continue to net liquidate positions right and left and retreat one by one to the sidelines."


FOA, you watching?

Thanks ; .Along with, >>If the world feels like one giant stop-loss, it may be because that is exactly what it is:<<
The following exerpt is a key obsevation.

>>Occasional spikes higher keep the dreams of riches alive in the popular media, but in reality, no one is getting quite as rich,quite as quickly, or quite as easily as they were before April 8th.<<

I also loved this tidbit from Bill Fleckenstein's (who is an avowed sort selling hedger) StockSite yesterday.

>>Investing in the real thing... I would like to make one interesting point. Steve Case from AOL has chosen to buy 41 percent of Maui Land and Pineapple, kind of an asset-rich company that owns what you might think it would own. I have been waiting for more people to try to turn what is arguably a lot of very valuable paper that contains no intrinsic value, for some of the good, old, hard tangible assets.

It will be interesting to see if more people follow
Steve Case's lead and try to monetize some of their Internet paper for some real honest-to-goodness assets. Of course, that's part of what you've seen in home prices, as bidding wars have erupted in cities where Internet millionaires are located. It's a process that may be starting along the lines of more of an inflationary bias.<<

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

I have this picture of someone blowing up a very large and strong balloon at a party and everyone holding their ears knowing that the bigger it gets before it bursts, the louder the bang will be. --- There will be a double meaning to the expression "Stock market 'boom'.

Someone once said: "the sophistication with which one solves a hypothesis is dependent upon how many variables one can hold in consideration at any give time." As I am not an economist I cannot fairly evaluate their analysis, but I pick out what I can, and I am always looking for a few more variables. It was fun to read.

www.gold-eagle.comThanks to KIWI for the post. Perhaps someone should tell the jeweller he should get a supoena for all instances where the BOE has been the lender or last resort as a guarantor of gold loans. In other words, certainly the 'fanny mae' role by the BOE wan't done on a handshake? Get the paper.

The question would then be "What do you mean the BOE used English gold to guarantee shaky gold loans?"

This would be a scandale because what it would show is that insufficient gold existed outside the BOE reserves for the BOE to have assumed said risk. Further, if this is the true reason for the BOE sale then the English might ask, "Why has the wool been pulled over our eyes as to the REAL reason behind this divestiture of our gold?"

IF the BOE sale is to settle a debt as a 'fanny mae' lender of last resort, there must be a paper holding them to it. Where is that darn shredder?

Perhaps Mr. Rose could dig that piece of paper up, eh?

In a tight physical market (or just a commodity of limited supply) how can a hedge fund or bullion bank lease gold that is still in the ground beyond one year? This is the type of legislation that was needed to prevent just this type of alleged debacle. Of course, it goes back to the traffic light accident statistic analogy whereby so many accidents warrant a traffic light, one major accident warrants it immediately. The difference in the gold market to a traffic light statistician is that in the gold market they don't keep statistics and what is know isn't divulged.

Major Australian Newspaper Article Blasts BOE Gold Sales
(KIWI) Jul 04, 09:23

A SOUTHAMPTON jeweller is taking the Government to the High Court tomorrow in a last-ditch effort to halt the Bank of England's planned gold auctions.

Kim Rose, owner of Eclipse Jewellers, is taking the unprecedented action only hours before the first auction of 25 tonnes of Britain's gold reserves. He is accusing the Government of incompetence and irresponsibility and is seeking an injunction to prevent the sale.

"I believe the Government has handled this issue in a reckless and damaging manner. It has triggered a huge fall in the price of gold and it is irresponsible to proceed with a sale at these levels, even more so to invest some of the proceeds in the crumbling euro.

"Gordon Brown has forgotten that the gold reserves belong to the people, and he owes them a fiduciary duty to behave prudently with our reserves. I am just a small jeweller, but I feel someone should make a stand and I hope others will rally round in support."

Rose has taken legal opinion, which says he has a case. He will take senior counsel's opinion today, but hopes to persuade a judge to block the auction pending a full
hearing.

While an injunction is unlikely to succeed at this late hour, concern over the Government's handling of the sale has been growing since the announcement on May 7. This triggered an immediate fall in the gold price, which dropped from $289 to below $260 at one point, before rallying last week to $263.30. The fall has wiped $650m from the value of the UK's gold reserves.

The World Gold Council plans to submit a petition against the sale to Brown tomorrow and says it has had overwhelming public support for its campaign. Last week more than 3,000 telephone callers registered their protest, causing its computer system to crash.

Tuesday's auction is intended to be the first in a series designed to sell 415 tonnes of Britain's gold reserves over the medium term and invest 40 per cent of the proceeds in the euro. Five sales are planned this year, involving a total of 125 tonnes.

Keith Irons, spokesman for the WGC, said: "The Government has seriously damaged the jewellery business and Britain's interests. It has acted in a capricious manner and woefully under-estimated public opposition."

Rose says Britain should defend its reserves. "Our gold reserves have traditionally been the nation's nest egg, provided for over the years by generations of taxpayers.

"It is my intention to do what I can in the absence of benefactors to fight on the nation's behalf and stop this EU-inspired idea which does not stand up to scrutiny. The price slide has stalled trade across the jewellery and gold coin business and to proceed with these auctions will only make it worse. Many feel exactly as I do."

After the sales the proportion of gold in the UK's official reserves will fall from 16.7 per cent to 7 per cent, about half the proportion held by the European Central Bank and equivalent to the gold reserve proportions of Burundi and Albania. Bullion market
sources say the Bank of England is unhappy about the auction and is carrying out Brown's orders "under protest".

The Treasury's reply to criticism is that pre-announcement would enhance market transparency and expedite the selling process. But Rhona O'Connell, precious metals analyst at T Hoare Canaccord, said: "The only transparency I detect is that we can all see through the Government."

Under the "single price" mechanism for the auction, all successful bidders will receive their gold at the lowest successful price. Bids are expected from central banks and the auction has drawn inquiries from individuals. The sealed bid sale, scheduled for Tuesday, is said to be four times oversubscribed with bids at or just below the current spot price of $263.30 an ounce.

www.kitco.comSo I wonder who decides the lowest accepted bid? Now wouldn't it be a gas if the lowest accepted bid was $150/ounce. That would mean gold would immediately drop to $150/ounce and they would get their gold for the same. Seems like a perfect opportunity to do the markets work for them. Smells of price fixing to me as a knowing party could bid 25 tons at $150 and be accepted.

Date: Sun Jul 04 1999 08:38
Xavier (Found it!) ID#27240:
Copyright � 1999 Xavier/Kitco Inc. All rights reserved
( from Glen )

Date: Tue May 11 1999 16:23
glenn ( Aution!! One more time!! ) ID#423288:
Copyright � 1999 glenn/Kitco Inc. All rights reserved
I thought we went threw this 'Lowest Bidder' stuff once.
It seems that some of you still do not get it so I cut
and paste what I said on ( Fri May 07 1999 11:49 )
-----------------------------
"with all successful bidders paying a single price equal to the lowest accepted bid"

This means that they are selling 25 Tons. Not a whole lot at one time. They are
expecting bids for many different sources and if you add all the sources up the
TOTAL amount they are willing to bid for my be 100-150 Tons!
They then take the bids from the highest biders until they have sold the 25 Tons.
Then all the bidders pay the same amount for the 25 Tons.

ie....
Bid 1 - 281.20 for 10 Tons
Bid 2 - 281.50 for 5 Tons
Bid 3 - 280.10 for 8 Tons
Bid 4 - 280.90 for 10 Tons
Bid 5 - 280.80 for 10 Tons

In this case Bid 1 will get 10 tons, Bid 2 will get 5 tons and Bid 4 will get
10 Tons and all three pay 280.90 for the Gold while Bid's 3 and 5 get nothing!
It a good way of doing things.
----------------------------------------------
Now just so that you don't get lost here think about it.
If you wanted to buy 1 ( one ) Ton of Gold in this aution
( and you were aloud to do so ) then just like everyone
you would want to buy that One Ton as cheaply as you could!
Even if you think that Gold is going to $1,000,000/ounce, why
over pay. So if you want that One Ton and it was a straight
aution you would place your bid at a relitively 'Low' price
not wanting to over pay, plus you might be affraid that the
market might not be able to take all that gold and tank
( or something like that ) . But the way the Brits are doing it
there is no insentive to do that. If you really want 1 of the 25 tons
they are selling you might just place a $282 bid. Even knowing that
gold is far below that price right now you would be guarenteed your 1 ton
while knowing that you will be getting the same fair price as everyone else.
It makes for a smoother auction. Really!.

http://www.2air-inc.com/letter.shtml from kitco from above link. This has been posted before, but in case you are just tuning in. Do you see shades of previous discussion herein. What is truth here and what is not?



Date: Sun Jul 04 1999 06:21
strat (Thanks, EpicAutumn for posting this URL yesterday...) ID#93241:
-
I decided to take the liberty of posting the whole letter. Thoughts? Comments?

The following is a quote from a letter written by Mr. Johnson, a retired financial analyst in his eighties, to his sons.

"Houston Texas"

Mr Dear Sons,
This is about the sting that will smash the great bull market. This is about the sting that will derail the gravy train the sting is already in place and it's a trigger has already been pulled. The sting merely has to unfold. The public suspects nothing.

The sting is a confidence game in which the victim is set up to believe that he can not lose, that he has a birds nest on the ground. Then at the last moment the trap is sprung, and his dreams of riches turn to rags. This sting was made in Japan, with a strong assist from Switzerland.

To get a better idea of the Swiss connection, we have to look at the Bank of International Settlements ( BIS ) in Basle. The BIS is the central bank's bank. It was formed in 1930 to handle the collection of German war debt following World War 1. It's members are the central banks if the industrial world, such as the Bank of England, the German Bundesbank, the Federal Reserve bank, and Bank of Japan, and so on. It is certainly the most powerful financial institution in the world. Never once in it's long history has it ever had to ask for help from any government.

A definite coolness exists between the BIS and the United States. This goes back to the Bretton Woods Conference in 1944, held to set up the machinery for resuming world business after World War II. Even through this conference established the gold backed U.S. dollar as the only reserve currency, the U.S. did everything it could to torpedo the BIS and give sole power to the American sponsored International Monetary Fund. The was was notover in 1944, but the combatants still together in their efforts to defeat U.S. grab. In the final showdown, the Europeans and Japan never completely trusted the U.S.

As the years went by, the BIS suspicions were justified. The U.S. began to abuse it's reserve currency role by simply printing dollars. American companies began to buy control of businesses all over the world. In 1971, President Nixon took the dollar off the gold standard, and introduced the novel idea of floating currencies. Meanwhile, the U.S. national debt began to increase each year, until it now stands at over $5.5 trillion, an astronomic amount that can never, ever be repaid. It was clear that the U.S. was out of control.

Along about 1972, I began to spend a great deal of time and effort in studying the BIS and it's agenda. The first thing I found was that although the U.S. had turned it's back on gold, the BIS were by far the largest holder of gold, with more than a billion ounces. This amounts to an outright corner on gold.

The next thing I learned is that the BIS are extremely closed mouth. It keeps a low profile. It's favorite M/O is the sneak attack. They have their own word for this "coup." Their ideal coup is one where the victim is taken by surprise, and does not even know what hit him. The BIS tries to leave no finger-prints. Thus, their coups often become perfect crime.

The third thing I learned was that the BIS had two ironclad objectives. Both were so bold they would take your breath away:

1. To destroy the Soviet Union, as a threat to world peace.
2. To destroy the dollar as the world's reserve currency.

We all know that the Soviet Union collapsed in 1989. This was done by the BIS without firing a shot. They simply loadned large sums of money to the Soviets, and then called the loans. Just a routine castration! A simple foreclosure. This is how they got the Russian gold.

The second goal, of bringing down the dollar as reserve currency, has not yet been reached, but I believe it soon will be. This brings us to the present sting operation.

If you are going to derail the dollar and the great bull market, you better bring a pretty big check book. He new money coming into mutual funds is running about $20 billion a month. Unless you can top that kind of buying pressure, you don't have a chance. How in the world do you shoot an animal that big and powerful? In my opinion, the BIS and it's Japanese partners have come up with an ingenious answer. It is big enough to work. It goes like this:

The sting began two years ago, in August 1995, when a rash of bad loans and insider scandals brought the Japanese banks to their knees. The BIS became alarmed, and advised the Japanese to lower their loan rates to 1/1%. This created an enormous gap between the Japanese rate and the 6-1/2% U.S. rate. Into this gap poured speculators from Japan and everywhere else. The speculators would borrow yen in huge amounts. They would then sell the yen, and put the proceeds into U.S. paper thus making an enormous guaranteed return. This came to be known as the "yen - carry trade". This yen carry trade has been going on for over two tears, in virtually unlimited volume. It created a huge demand for U.S. bonds, which in turn sustained a huge and unprecedented bull market in stocks.

In similar fashion the Japanese found that they could do the same thing with gold and this became known as the "gold carry" trade. The speculators could borrow gold at 1%, sell the gold, and then invest the proceeds in U.S. paper, with a huge guaranteed return. How delightful! How delicious! But how lethal!

I say lethal this yen carry, gold carry Ponzi scheme has created a "potential short squeeze of colossal magnitude:. ( Michael Belkin, Strategic Investments, May 4 1979 ) Sooner or later, these fantastic leverage schemes must be unwound. The gold and the yen which were borrowed and sold short will have to be brought back and the bonds that were bought with borrowed money will have to be sold. The totals involved are probably well over a trillion dollars, or far beyond the mutual funds yearly take. Anything could trigger this debacle. As long as gold keeps going down or as the yen keeps going down, no problem. as long as bonds keep going up, no problem. But once gold starts to rise, or the yen starts to rise; or once bonds start to fall, these huge positions will be unwound. There would be a run for the exits, and the panic would feed on itself. Margin calls would ruin the leverage speculator in short order. There would be no way to stop the carnage. All it will take is a coup to the waterfall. we had the coup on June 24, 1997, though it was only vaguely understood at that time. The Japanese Prime Minister Ryutaro Hashimoto, told a luncheon meeting at Columbia University, "I hope the U.S. will engage in efforts and in cooperation maintain exchange stability so we will not succumb to the temptation to sell off treasury bills and switch our funds to gold".

In a matter of minutes, the NYSE collapsed, and the DOW closed down 192 points in a mini-panic. The victim's saw the trap for the first time! Then the media and Wall Street fell all over trying to control the damage, saying Hashimoto was misquoted,etc., etc. The various exchanges staged a desperate anti-gold raid, and soon had gold down to 12 year lows. The street breathed a sigh of relief and returned to it's summertime siesta.

But the damage was done. Now look at the mess that confronts the big time gamblers. we now have gold at new lows and the bonds at new highs. Surely this is a speculators dream come true-well, isn't it? No, this is the sting. The yen-carry and the gold-carry is still in place and they still have to be unwound. The temptation Hashimoto mentioned now becomes unbearable. The Japanese cannot resist the chance to sell the bonds near their highs, or the chance to buy gold near it's low. Do you imagine that the bonds will stay high or will stay low? No way! The unwinding begins to feed on itself, and the 5000 mutual funds and all their friends will be unable to do a single thing about it. That's what you mean by the sting.

I have no idea whether Mr. Hashimoto was acting on his own, or whether his words were part of a larger plan. I knnow one thing though. This gu is no innocent babe in the woods. Before he became Prime Minister, he was Japans Finance Minister. He knew the ropes. He knew the big wheels at BIS. He knew all about yen-carry and gold-carry. He was telling his people that the game was over. Remember these are friendly little folk's that gave us Pearl Harbor and the Kamikaze, when Hashimoto spoke, the thought flashed across my mind that the Japs had won World War II.

Another thought- the Japs could acquire fold in a different way. They could sell our bonds and buy the EMU, the new European currency that the BIS are sponsoring to replace the dollar. The EMU is expecting to be a package combination of gold and paper.

So there you have the anatomy of the greatest sting in history. It is real! It is in place. It cannot be stopped. It can only feed on itself and get more and more desperate as the shorts are squeezed to death. And best of all for the BIS, the finger-prints on it are not Swiss - they are Japanese. Call this "Karate Chop."

Think about this, and call me with your reactions. There is more to this story. Stay tuned.

Much Love, Dad

Mr. Aristotle,
Your "Aristotle Life on Earth: Gold and the Free Market" is a fine work! Myself and everyone thank you for writing it. I did not wish to offer my posts during your composition, so I waited. If I may, some of your thoughts will make a good addition to further this cause.

Time, is very close to "proving many things"! We will most certainly document these "eye opening" revelations on this forum, as they occur. Today, I offer my brief introduction.

Steve,
I have been busy for a while. Will discuss with you several things later. thanks FOA

Introduction

------ A gentleman leans over the fence and tells his neighbor that gold is going to rise in price from it's current $300. As the person on the other side of the fence thinks differently, they both agree to a binding bet. In three months, we will settle up with a payment of the change in the price of one hundred ounces of gold. Whatever it rises, the "bull" collects that amount. Likewise,
whatever it falls, the "bear" collects from the bull. Each puts a $1500 payment guarantee into a common shoe box and gives it to another neighbor for safekeeping. ---------

As an observer of the above, we have just witnessed the creation of a wager not unlike a comex futures contract. On each side of the fence stands a long and a short, that together create an open interest of one contract. Neither has any intention of buying gold, nor do they expect
physical gold to be a part of this bet. Yet, at cocktail parties and on public internet forums, one claims to have "brought gold" and the other states that he "sold gold".

To build a further understanding of this transaction: Both of these gentlemen, probably don't have the $30,000+/- to buy or deliver 100 ounces of gold. Human nature being as it is, if they did have that much, they would most likely increase the bet to ten or twenty contracts. Clearly, the
intent of this paper market, is to bet on the price of gold as it is determined by the buying and selling of other physical traders. The western public should take these trades for the concept they truly represent. ""I (the long side) bet on the "price" of gold not because we need or want the physical metal. Rather, my wager is that others will need real gold to protect themselves from bad monetary systems. In fulfilling that "need to own", these others will drive up the dollar price and I will make money while working within the confines of our good monetary system.""" The shorts make the opposite bet, in that they think the world monetary system will work itself out and induce "the others" to sell all their gold. That is, gold they brought in the first place, because they did not know that our money managers could repair the world financial system.

Yes, today Western longs and shorts are playing out these two views of the gold market. Yet, both sides are using paper gold bets to represent their beliefs. Truly, the major majority of this market does not buy or sell physical gold to represent their investment concepts. There are a few
that buy coins and bullion, but, even in their large amounts, it is only a drop in the paper gold bucket.

This, my friends, is the very nature of western trading of gold. The mindset is to treat it as a concept for making currency, not protecting existing wealth. The exact same mentality exists when one invests in the gold mining industry. Even when these players see the faults in the dollar, and loudly proclaim it's inflationary downfall, the largest part of their assets go into the business of
producing real gold in exchange for more of the same paper currency. It is a means to build wealth through paper asset appreciation, using the very financial system the "concept" says will fail without physical gold.

There are many mental angles and philosophical side steps one can take when understanding the above. But, in this concept lies the very basis of the flaw in the current gold market. A paper market, built upon world misconceptions of currency values and the historical reasons for owning
gold. The present deployment of world assets into a paper system of valuations is liken to traveling a trail of no return. History has shown that the assets accumulated in this way will never be transformed into "the things of life"! The paper wealth you currently own is no where near the real value your currency says it is. With the above introduction, we have begun close to the end of this journey. In the upcoming chapter one, we return several miles to walk ground already well traveled. We will observe concepts on the right and the left, not discussed by other guides. The very sights that make such a trip, "worth wile".

" You will see this trail thru the eyes of history and feel old ways as new Thoughts!" Another

FOA

Nice to hear your "Thoughts" again. Welcome back i was starting to worry we,ed never hear from you again.

Hello F.O.A in your post-Msg ID:8384 you mention quote " History has shown that the assets accumulatedin this way will never be transformed into "the things of life"! Unquote. DO you mean "OIL"? The reason i ask is because i read an interesting article over at gold-eagle the posters name is "ZulaGold" he was straight to the point and mentioned that Africa should remonetize GOLD by telling the World that Africa will now be paying Arabia in Gold for their OIL purchases. Joe and Jane average public would then realize GOLD is money again.This sounds so simple. Africa has lots of GOLD,Arabia has lots of OIL. Both countries need what the other has, i think this is very sound Logic and can see it happening in my minds eye. Almost forgot ZulaGold's post was on July2/99 @02:28.

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=0012Togood thread on this subject

Aristotle, well done. You justified my confidence and exceeded my best expectations. Your presentation of the history made for a more profound display of the many subtle elements coming together than I could have delivered. A helpful roadmap for a journey that each man must ultimately travel for himself. As with all things, that must stand alone in response to the questions such as from Cavan Man: "how can I be sure that the tale you have told is accurate?" You must read the signs for yourself, as we live in a world where even a president of a great nation can be found to ask about "what the meaning of "is" is." You must read the signs that you feel are not in dispute, and reach the truth at the end of the road when you find the shoe that fits as no other.

I would like to offer a small but important modification to this commentary. You wrote in regard to these financial arrangements with gold (money!):

"There is nothing sinister in all of this. The price of Gold has fallen simply because the principle buyer at the Golden "Rotterdam market" has found another avenue in which to obtain the Money (Gold) desired in exchange for oil. This is very much like the Bundesbank offerings that I told you about earlier. Please appreciate the patience in this approach, and the commitment it shows to Money (Gold), knowing full well that for many years it would be getting ever cheaper while you yourself would appear the fool for buying it from the top all the way down. But the big payoff in the end is near..."

Although, as you say, the principle buyer had found another avenue than the spot gold market through which to convert paper currency into money, it was not a guarantee that the spot price would FOR CERTAIN get cheaper. That outcome depended upon the willingness of all others to continue to hold paper currency, which 20 years of hindsight reveals the shoe that did fit. And while the interim might indeed make them look the fool for continuous commitment to real money since the earliest days of high paper currency prices, who knew enough of the activity to poke fun? And had this been general knowledge, the price would be properly set even today, perhaps witnessing the burning of paper years ago. As it is, the choices are made for the end of the journey, and the road is chosen as necessary.

SteveH, your summary of the BoE sale is a good one. If the CB-guarantees must be honored, how else to do this other than announce a sale to the bullion banks? Consider the circumstances that we must face today if these bullion banks might otherwise fail (without this CB source) to deliver the gold payments on the loans they facilitated as the original borrowers fall into default. The key to this mystery--that you can buy cheap gold while others cannot--is volume of business.

Pete, I will have words for you, perhaps later as time will allow. But for now, in regard to your proposition, ask why should the oil producers pay for this gold twice, and also ask why would they choose to become gold producers too? The goal is not to "corner" all gold, but to secure real money for past and present efforts.

got gold?

More when I return...

The Hobbits are looking forward to another SERIAL to expand the lessons from the masters. -- Great intro FOA! --
Put out the call, Townie, the Tableround is going to be the place of action as we await the BoE "1st Auction" results. -- I am not leaving my seat.
<;-)

http://www.gold-eagle.com/editorials_99/banker070599.htmlIn this text, I see what appears to be a reference to the US being a lender of last resort with US gold. Tell me I am not reading this.

Welcom back FOA.

-- banker at above link (a snippet)

"...Under these circumstances low prices will induce the Asian bloc to come in as purchasers in particular
when the NYSE will lose its momentum and reflect a strong downtrend striking the dollar and set off
large capital outflows to safer places, even into the Euro � the next Reserve Currency � at the expense
of a somewhat lower but safer return.

The undercapitalised hedge funds presently engaged in a second gold bearer run as well as speculative
reported Yen positions versus US Treasury Bonds, will get themselves into deeper trouble. The weaker
ones will not be able to push forward the delivery dates of gold-bearer sales indefinitely, due to the
market resistance enumerated above. Already the Bank of England has now indicated to fix a floor price
for its intended gold sales!

When markets are falling, hedge funds are failing and lenders are running, then Greenspan will have no
choice but to try and avoid a complete collapse of the economic system as forecast by Kondratiev 100
years ago...."

In a nutshell: DEMAND: Buffet buys 127 mil oz. He thinks a big increase in demand will be caused by new silver zinc batteries (40% silver) and other general demand - he should know! SUPPLY: You cannot really increase supply adequately because 80% of silver is produced as a by- product of zinc, gold and copper - you are not going to open a copper mine to get a couple of grams of silver per ton. Lots of silver only runs 30 grams or so per ton on its own. I think silver would have to go well above $10 oz for supply and demand to balance (I would guess 20 to 30 $ per oz) Could be a big story. Stay tuned.

If what I am seeing at Bloomerg is correct, yen is down about 1%, Despite a technical promise of a move up. I think they are playing the same movie! Gold down .75 not so bad. Battle of titans Tuesday, I think.

Thank you for your questions. As time is needed for me to answer in detail, and the 4th is upon us, my time is limited as of now.

A quick reply to your question, " why would they pay for it twice." Maybe they have no choice? A compromise would be in order not to destroy their cash(money, gold) cow. What would it gain them to stop this cow?

Next question, "they only want real money(gold) in partial for their asset, oil, and do not desire to corner market in gold." As Aristotle has so eloquently said, "the profits and market for oil has been expanding tremendously," or something to that effect, that amounts to $100 billion/yr or better. The gold production of 2500 tonnes/yr and resulting dollar value pales in comparison to oil sales. After
20 +/- yrs of accumulating hedged gold on paper, maybe their isn't enough supplies available in the future to satisfy their outstanding contracts. Could it be that they are cornering the market for gold inadvertently?

One question! Why have they raised the price of oil recently by 40% +/-? This could be a big clue. This one factor means something is amiss.

Thanks to you and Aristotle for your insights that have been thought provoking.

Pete

Yes, It is true. Found this for 5 July out of Japan. "The Bank of Japan rushed to prevent any strengthening of the yen by aggressively buying dollars at �122 in early morning trading. It has repeatedly intervened to keep the yen weak in recent days, due to fears that a stronger currency will undermine any recovery."

So, 1 yen drop, weakness in sf, dm and .60 drop in gold is as predictible. Pathethic really.

Is it true some of the guys on Kitco are drunk:) Just kidding of course.

"Now my friends, recall that because the authorities in their
ivory tower said that one of the moneylenders was at risk,
and said nothing regarding which one it was, all rushed to
pull their funds and no moneylender survived. If those
moneylenders truly had your money in safe keeping they
could have supplied it all. You see, it was once true that
the people used metals for money that were truly worth
their money value. I mean of course gold and silver. And
copper and other metals of lighter stature too, for small
change. Of course many times a king would debase the
coin of the realm, but that is another story. Now these
money banks that held your money in gold and silver for
safe keeping once gave out certificates that people
exchanged for their trade, for the convenience it brought,
and that was fine so long as the banks honoured the
certificates with gold and silver. But the greed of bankers
is renowned, and before long they would take to issuing
paper money in quantities more than they had real money
on deposit. And it did not stop there, as they created
money in numbers more than they had paper certificates.
I say that this creation of money, as a loan to be repaid to
the bank, should be compared in your minds with the
actions of a thief, as the banks lay claim to something that
they truly do not possess. And it is practically risk-free for
them, since they either receive your interest or lay claim
upon your assets as collateral. Now, once the supply of
paper money begins to circulate without backing by gold
and silver, the value of that paper starts an inevitable fall
as there is more money than there are goods to exchange
for it, since traders waste no opportunity to raise prices if
they think that people are happy to come forward with the
paper. The money banks also in creating loan money
asked for interest; that is to say more money must be
returned to the bank than was issued. But how can more
money be returned when all the money that exists is that
which the bank has already given out? This impossible
fact is hidden in the circulating flocks of paper because
much paper money circulates and not all is paid back at
the same time. The consequence is that the amount of
loaned paper money must ever increase, and the value of
paper money must ever fall. Look at your history books
and you will see that this is true whenever paper is not
backed by gold. But on day one, goods were made only to
the extent that real money existed to exchange for them!
After all, that is the only way we know how to set the value
of one thing against another and the value of a thing
against that of real money. What keeps this paper game
going, when goods are no longer exchanged for money of
the same real value? What happens is that people, feeling
confident that they can exchange and bank the paper,
produce new goods against the paper. They sell their
goods for paper... then they exchange their paper for
others' goods. So my friends, this game may continue for a
long time, as long as people feel confident in their paper.
But history has shown us that no paper currency ever lasts
as long as gold. Once people lose confidence in their
paper money, the seeds of its destruction are sown.
People are no longer happy to exchange their goods for
paper. They ask for more paper than before, thinking this
will preserve value, but next week even more paper is
required for the same item. As the value of the currency is
lost, so too are the tradespeoples profits. People cut back
on their purchases. Traders go out of business. With less
money flowing in the market, the value of the paper is no
longer being lost. In fact, for a time, it can increase. But
confidence, once lost, is slow to recover. With the people
holding on to their paper, the goods in the shops do not
sell. The whole village's trade has slowed to a crawl. The
moneylenders fail to realise their profits. Sooner or later,
the paper starts to lose its value again. One way or
another, the short life of paper money comes to an end,
and all those goods produced against paper must be sold
off at a loss to the producer.
You who have lost your wealth to the fall of the
moneylenders know this well.
Friends, I propose a better way to store and exchange
value!"

Doug Casey is writing in the June 1999 issue of his International Speculator (www.douglascasey.com - unfortunately the access to the newsletter requires a user name and a password, which I don't think I am allowed to divulge - if you insist, contact me thru migrator@www.cz), that

" Some say it's a conspiracy to depress the metal's price; enabling people who are supposedly short thousands of tonnes of gold to make a killing. ....

" I think the real reason is more prosaic. Most gold bulls have died or retired over the course of this extraordinarily long bear market. And there are very few people left alive who remember gold being used in day-to-day commerce, which was the case pretty much world-wide before 1933; in fact, even those who remember silver in coinage, before 1966, are getting a bit long in the tooth. The current crop of economists, bankers and the like have been educated to believe it's perfectly alright for a currency to be a floating abstraction, and so far, so good. The idea that gold is necessary as a numeraire for currencies has been pretty well discredited in conventional circles; the dollar rules. And who needs an investment with such an abysmal long-term track record? Certainly not the public that thinks it's going to get wealthy on day trading Internet stocks.

The IVH

A quote from Australian Gold "Bidding in the competitive tender will close at 11.30 a.m. Tuesday with the result due some 40 minutes later." I would not think anyone would be interested in bidding until the last minute. Weak gold weak bid. Strong gold strong bid. My reasoning tells me that the sell price will be in line with spot gold at that time. Does that make sense?

Technician,

What makes sense is that the BOE controls the price. Their agenda will determine the outcome. Can we therefore deduce their agenda from the outcome? Don't know but I suspect that whatever we think or feel will not influence nor will it help predict the auction results.

I suspect that the BOE is pressured to get good value for the gold as they would be heavily critized for selling it below or perhaps even at spot. In fact, the only way they would not be criticized would be to sell over $291 as that was the value when they announced the auction. Yet, what is to say we will find out what the gold sold for?

Since the auction is behind closed doors and controlled by the BOE, we really don't know what will happen.

If I really wanted the gold, or just wanted to create some havoc, I'd make a high bid. Then, if my bid was rejected, or I were asked to pay a lesser amount, I'd make sure every citizen of Britian found out that the country's gold had been sold too cheaply.

I've spent the last couple of days reading from the Forum Archives. Great stuff - especially the posts from Another and FOA from September and October!

http://biz.yahoo.com/rf/990705/km.html" ... You have two scenarios, one is that there is a lot of bidding going on for it and you get a spike and the gold market goes higher. Or gold goes lower straight away"

http://news.excite.com/news/r/990705/11/minerals-sweden-goldSTOCKHOLM, (Reuters) - Europe's largest gold mine, Sweden's
Bjorkdal, has stopped production and is up for sale after its operator was placed into receivership last week, bankruptcy administrators said Monday.

I am expecting the price of gold on tue and wed to be pretty much what it has been this last wk - $260 and change. This is just based on years of watching things of this sort (BOE auction) seldom figured correctly. I noticed on other sites that the last few weeks many were sure that gold would roar after the auction (because of massive short covering) and because someone had bought lots of $270 calls. Now that gold is down today and things do not look as bullish the same posters are calling it manipulation by the BOE, Greenspan or whoever. "They", whoever they are, wanted the price kept down. Well.
On a post I made yesterday regarding rumors that Buffett was buying silver because he was expecting increased demand in general and silver - zinc batteries in particular, I forgot to mention they are batteries for electric cars - not flashlights. How much does an electric car battery weigh? The silver portion is 40%. P.S. I guess Buffett ownes a lot of stock in some company that produces other types of batteries.

to do that.

Found this at www.gold-eagle.com (repost):

WSJ article
(hugo) Jul 05, 11:50

LONDON--Gold prices plunged in the spring when Britain
said it would sell 125 t of the metal in a series of 5
auctions.But now , as the first auction is about to
take place , Gold is beginning to glitter a bit (hey,
did you ever read that before in WSJ , beginning
to glitter ? )....."Gold is terribly oversold" says
Colin Griffith , head of precious metals trading at
Standard Bank of London......there could be another rally to around 270 , before producers take advantage
of the revival and inject more supply into the market,
he says....
Kevin Crisp believes the price of Gold is bottoming
out (is he crazy ??).At the moment , global demand is patchy , he says , but Asia is recovering, and more
investors are beginning to fear inflation (thought
it is dead ??) , from which Gold is a traditional
hedge ......If the IMF sales don't go ahead , sentiment could improve and Gold could rally to 280 to 290 an ounce by the end of the year ("fix still in but
someone please help us " ??), Mr Crisp predicts. A Swiss Gold dealer agrees, saying investors are beginning to bargain hunt for Gold following the price declines in
May and June .Mr. Smith of Mitsui Bussan contends, however , that Gold is in a downtrend, and adds that respective stockpiles of CB's and long time disenthanted private investors are hanging over the market.

By Bruce McMahon, Bridge News
London--Jul 5--IPE Brent crude and gas oil futures ended firmer today,
extending Friday's gains. Brokers said support was provided by aggressive
buying in the Brent physical market by a European major and comments from
an Iranian oil official suggesting OPEC Jun compliance was 93-94%.

MARKET:
--"The question is, will these gains be sustained?" said one broker.
"Volumes were lackluster today. People are looking to see if Aug WTI
reaches the $20 level."

--A senior oil ministry official from Iran, a member of OPEC's output
compliance watchdog panel, said today that member compliance to pledged
output cuts in June under all measurable criteria had hit 93-94%,
predicting that discipline would improve to a "full and excellent" level
in July.
Deputy Iranian Oil Minister Kazempour Ardebili said there was "no
concern" that expected higher prices on the back of greater demand in the
second half of the year would tempt OPEC and non-OPEC oil producers to
cheat on their output pledges.

--King Fahd said today that Saudi Arabia was "optimistic" about the
oil market, which is witnessing a recovery of crude prices, and renewed a
pledge to stabilize prices without giving up a "fair" quota or share of
production, the official Saudi Press Agency said. The king was addressing
the Consultative (Shura) Council.

--The United Arab Emirates' oil minister said an OPEC summit meeting
would be constructive and positive, but Obaid ibn al-Nassiri said such a
decision would be up to the heads of the states involved. Nassiri was
commenting on a call from Venezuela for a summit of oil producing
countries, the official UAE news agency WAM reported today.

(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.

GOLD AWAITS OUTCOME OF BID TO BLOCK BOE SALES
London--1134 GMT--Jul 5--Gold and related currencies are waiting for
the outcome of a High Court action being taken by a UK jeweler against the
BOE's planned gold auctions, due to start Tue. The jeweler, Kim Rose of
Eclipse Jewelers in Southampton, is reportedly trying to take out an
injuction vs the UK govt, arguing that the gold sales would further
depress the price of the metal.

EUROPE PRECIOUS METALS REVIEW: GOLD STEADY, AWAITING AUCTION
London--Jul 5--Spot gold trade was extremely quiet this morning as the
market braced itself for Tuesday's first gold auction by the UK Treasury,
and ahead of the Jul 4 holiday in the US today. Silver continued to be
capped around US $5.30 per ounce in quiet trade, while platinum and
palladium remained under slight pressure as buyers stayed on the
sidelines.

METALS COMMITMENTS ANALYSIS: GOLD SPEC SHORTS STILL DOMINATE
New York--Jul 2--Today's Commodity Futures Trading Commission
commitment of traders report showed huge gold speculative short positions
have seen little decrease up to and including Tuesday's trading session.
Traders said the overwhelming number of speculative shorts set the stage
for a short-covering rally after the UK Treasury's first gold auction at
around 0715 ET Tuesday.

TOCOM PRECIOUS METALS REVIEW: GOLD FIRMS ON STRONG DOLLAR
Tokyo--Jul 5--Tokyo Commodity Exchange gold futures were firmer from
Friday, supported by the stronger US dlr/yen, but the absence of massive
buying prevented prices from rallying sharply, dealers said. Palladium was
weaker across the board as Friday's weak NYMEX discouraged players from
holding long positions, they 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/apf/990705/imf_gold_s_1.htmlIMF managing director Michel Camdessus said "I have no reason to doubt the good sense of the United States, and I think we will be able to convince them that the way we will proceed poses no major danger to the gold market or to American gold mines."

A higher BOE sale price would go a long way toward fostering such a sense of assurance, wouldn't it?

http://dailynews.yahoo.com/headlines/ap/ap_us/story.html?s=v/ap/19990703/us/albright_brooches_1.htmlA brooch you probably won't see pinned to the lapel of Secretary of State Madeleine Albright, but made with her in mind --an 18-carat yellow gold piece showing a face being punched by a fist.

News from the lighter side of gold.

Let me see if I have this correct? -- On Tues morn, London time the "Dutch type" Auction bidding will close at 11:30 am. -- The results and winners are expected to be announced within an hour after the close or perhaps shortly after "Tea". -- This is a select Group of bidders that allowed to bid, but just suppose that the Hobbits, Orcs and Ents were somehow within that Group. -- The Hobbits have saved their "pictures of dead Presidents on green paper" counted them and baled them in bundles, and determined that they wish to bid so as to be sure that they will not be out of the winning Group. BUT, they determine that they do NOT have enough US$ to bid for more than one tonne of the Gold. They decide to bid for one tonne at $275. to assure that they have a chance to be successful as one Hobbit heard that one Gold bar in the Auction of 25 tonnes had been the property of the Master JRRT. -- The Ents not having as much funding decide to also bid on one tonne but only have funds to bid at approximately the spot price, and therefore place their bid at $262.60 -- However, the Orcs, a year ago, having been talked into a "sure thing deal" by a bullion bank, took out a loan of ten tonnes of paper Gold, and sold naked shorts months ago and then squanded the funds on misguided adventures. -- The Orcs must now repay that amount of Gold they sold short and have now been given notice that the bullion bank expects that the loan be repaid at the end of year loan period in July and will not "rollover" the loan. -- The Orcs have been looking to see where they can get the necessary Gold as their guaranteed producer, a Gold mining firm known as Royal Oak Mines, went bankrupt a number of months ago, and they can not find any others to supply them. -- Therefore the Orcs must bid to get the required Gold from the BoE Auction. They bid for 10 tonnes at $262.50 to (they think) assure the success of getting the required loan repayment.
The BoE "Tea" time is over and the Bid results are announced:
Bids are shown in Highest Dollar and quantity bid.

Hobbits $275. 1 tonne
House of S $267. 7 tonnes
Rothchilds $266. 5 tonne
Gold Lovers $264.70 1 tonne
Ents $262.60 1 tonne
Barclay $262.55 11 tonnes
Orcs $262.50 10 tonnes
Goldy Sacks $261. 25 tonnes
and a laundry list of others at less than $261.
----
The winners are those down to and including Barclay (but Barclay only gets 10 of the 11 tonnes they bid upon). The price that all pay is that of the lowest winning Barclay bid of $262.55 --
To bad Orcs, you will have to try to cover your shorts on the open market and you better have a lot more money to do that as the game is coming to an end sooner than everyone belives. -- Are you watching all this fun with the Hobbits, FOA and ANOTHER ?
<;-)

"TOCOM PRECIOUS METALS REVIEW: GOLD FIRMS ON STRONG DOLLAR
Tokyo--Jul 5--Tokyo Commodity Exchange gold futures were firmer from Friday, supported by the stronger US dlr/yen."

What? Maybe I am missing something or just stupid but why would gold firm on massive surge in the $ produced by massive intervention by BOJ? $ is struggling to maintain it's contract highs. What happens when it falls out of bed?
Gold is going to go down with it?

http://members.aol.com/XianAnarch/95theses/thesis.htm#23
THESIS 23: PATRIARCHY, PRECIOUS METALS, AND MONEY

Gold and other precious commodities were placed in The Garden of Eden.[77] After the Fall, they
functioned as the Biblically preferred medium of exchange.[78] Debasement of precious
commodity-monies with baser substances is an abomination to God.[79] Inflationary money
transfers wealth from the weak and struggling to the debt-ridden polis and its minions.[80] A
debased currency can exist only under an Imperial monopoly: a Central Bank.[81] A debased
currency is the machinery of revolution: the institutionalization of a debased heart.[82]

____________________

77. Heaven: Ezekiel 1:22:26-27; 10:9; 2 Corinthians 12:2,4 + verses below; The Eden-Model of
Heaven: Ezekiel 28:13-16; cf. Genesis 2:11-12; The Temple-Model of Heaven: Exodus 25:3-8 et
passim; 28:8-9,12,17-20; 39 passim; 1 Kings 6 passim; The New Jerusalem/New Earth: Isaiah
54:11-12; 60:5-6,9,11; Revelation 21:11,18-21, Malachi 3:17; 1 Corinthians 3:11-15.

78. Genesis 23:16; 43:21 + Leviticus 19:35-37; Genesis 44:1,8; Ezra 8:25-30; 11:2-3 + 12:35-36
+ Psalm 105:37; Ezekiel 7:19; 28:4; 1 Chronicles 21:24-25; Job 28:12-20; Jeremiah 32:9-10; 1
Peter 1:18. Cf. Job 31:24; Psalm 19:10; 119:72; Proverbs 8:10-11,19; 16:16; Isaiah 60:17; 2
Timothy 2:20. Cp. Matthew 10:9; Acts 3:6.

79. Leviticus 19:35-37; Deuteronomy 25:13-16; Proverbs 11:1; 16:11; 20:10,23; Amos 8:5-6;
Micah 6:10-12; Zechariah 11:12; cf. Psalm 119:119; Proverbs 25:4; 26:23.

80. Isaiah 1:23; Amos 8:6; Micah 6:10; James 5:1-6.

81. Genesis 10:7-12; cf. ##15-16; Revelation 13:16-17.

82. Jeremiah 6:28-30; Ezekiel 22:18-20; Isaiah 1:25; Proverbs 17:3; 27:21; Zechariah 13:9;
Malachi 3:3.

http://www.usatoday.com/money/charts.htm$8358.69! Say what...double...take....

Check out above link.

THAT IS Aragorn III's "Thunder in the Night!"
I told you that the Orc's were in trouble.
Love it !! -- Thanks Steve, you made my day.
<;-)

It has finally occurred to me the last post of mine was referring to the $ from the Japanese viewpoint!! (Japnese commodity exchange)Denominated in yen. So, you see, from the Japanese, Germans, Swiss and rest of world gold was at least firm. Everthing has it's perspective.

http://members.aol.com/VFTINC/frn/unabomb6.htm

http://members.aol.com/VFTINC/frn/unabomb6.htm

LAWFUL TRADE -- IT WORKS!

by Harold Christopher [1]

In his regular JUBILEE column (pg. 20), [2] Bruce McCarthy [3] stresses the
necessity of beginning to practically apply "lawful trade" as per
the Scriptures, in our everyday lives. I wish to offer a "second
witness" in this regard.

Recently my wife, my five children, and myself [4] had the opportunity to
take a 4,300 mile round trip from central Texas to an area in Northern
Oregon, where we attended a Feast of Passover gathering.

Inasmuch as we had previously taken two or three shorter trips using only
silver, we decided to see if we could make the journey without any checks,
credit cards, or federal reserve notes. I left Texas without any of the
aforementioned credit instruments, [5] and we found that we were able to
acquire all needful products and services using only lawful money. We were
able to negotiate for gasoline at over 20 stops as well as one motel, 3 or 4
grocery stores, and 2 restaurants. We averaged over 500 miles per day travel.

We relied on listings for "Room and Board" in the Pipeline directory [6] and
are very appreciative of hospitality received. With the exception of a "dry
spell" of non-acceptance on one stretch of interstate, we were generally able
to make purchases of required products and services at about one-half of the
stops we made. I feel that much of this was attributable to the Father
preparing hearts along the way and guiding us along. [7]

I would encourage people to begin to utilize some lawful money for everyday
living. It's not as hard as you may think, and some day, you just might be
glad you got some early practice. [8] Try a few local merchants, then spread
out and "paint yourself into a corner" by taking a weekend trip with a friend
or your spouse, taking no credit instruments [9] along. Next time you go out
to eat, look for a restaurant which will trade in silver with you. If you are
on the go a lot, when you stop at a cafe for orange juice, milk or coffee, in
a friendly manner [10] ask to see the owner or manager, and see if you can
buy the drink for a silver mercury dime. I find about 75 percent of them say
"OK," [11] and you have now opened the door for a future visit. [12]

A few hints might be of some practical use at this point:

1. When possible, stop at privately-owned mom and papa establishments, as large
franchise/corporate-type establishments and convenience stores with 19-year-old clerks,
most often have trouble dealing with such a thing. [13]

2. Try and see the owner or manager (be courteous), or get to an interested party who
has the power to make a decision.

3. Allow yourself a little leeway; start looking for gasoline or the needed service
while you still have several gallons, or otherwise are not in dire need.

4. Have a variety of silver pieces to deal with. The most popular items seem to be:

a) One oz. silver rounds.
b) 90% silver halves (particularly the old walking-liberty type with an eagle on the back).
c) New U.S. Treasury pieces � one troy-oz. "Silver Eagles."
d) Old U.S. 90% silver dollars (commonly called cart-wheels).
e) Mercury dimes -- 90% silver.

5. Be positive, upbeat, and courteous. Most of us have sold something before. You are
just trying to sell a couple of oz. of silver and be paid in 10-15 gallons of gasoline. [14]

6. Be a good witness [15];
pass out some literature on lawful trade, and if someone is willing to listen, know enough
about the subject of lawful money and U.S. credit/debt instruments to help them begin to
think about the subject. [16]

7. Be generous in your dealing, [17]
be willing to negotiate on the worth of your silver as the value you place on the item or
service you require. Also, have a few suggestions on what a person can do with the lawful
money he has acquired, such as:

a) Wedding, holiday, graduation gift. b) Trading at flea markets.
c) Bonus or performance recognition gifts for good employees.
d) Save it for the kids or grandkids.
e) Introduce them to the concept of spending it back into circulation with another
local merchant or via the Pipeline directory.

8. When possible, cultivate the relationship by returning again, or dropping the
merchant a "thank you" note. [18]

I believe that as Babylon tightens her noose, you will be glad you began to
place some of the Father's Law into practice in this manner.

There are people who already are trying to purge their lives of abominable
practices. When we try to follow God's Law, we will be amazed at the
unanticipated advantages. We will gain the character of Christ.

I want to try to do this. I am at this point quite alone in this desire. If
you find something interesting about this booklet, I would love to hear from
you. I need a few encouraging words.

If you find something off-the-wall and offensive in this booklet, I would
like to hear that too. It's more encouraging to have someone take an interest
in you than to be ignored. I would really love to hear your comments. Please
write to me:

Kevin Craig
Orange Co. Catholic Worker
316 Cypress
Santa Ana, CA 92701

........... see source URL for the notes...........

Silver has rallied to about $U.S. 5.37. Kaplan states that the open interest increased Friday (which is bullish). However, the Comex warehouse reserves have been increasing for the past 7-10 days, indicating that one of the pillars of the rally may be weakening. For Canadians, I note that there is a .999 one-ounce silver bullion $5 Cdn. coin, which may be an supplement or possible alternative to one's Maple Leaf holdings, especially for those short of cash (ipse dixit). I picked up a $5 silver coin from a dealer for $Cdn. 13.95 (may be cheaper from a chartered bank), which is cheaper than the 1/20 ounce Maple Leaf (I believe about $Cdn. 39.95 last time I checked).

I totally enjoyed your post (Usul (7/5/99; 1:48:58MDT - Msg ID:8396 Fall of the moneylenders, Part 3know) and believe you could direct me to parts 1 & 2 faster than I could search the archives. Post info on 1 & 2 please? I'm going to email part 3 to my accountant nephew and glean his thoughts.

$263.20 with large bids and asks.

canamami,

monex sells two lots of 200 one-ounce silver Maples ($5.00) for under $7.40 US. www.monex.com. Takes two weeks for delivery.

http://www.kitco.com/gold.graph.htmlHistorically, that kind of graph read is electronic fantasy but at this point in time -- ????

There is precedent for such a chart move. In the late fifties, Playboy magazine published a chart showing the popularity of sex subsequent to it's discovery: It was an identical pattern!

Looks like it was a glike or spitch. I can't confirm it elsewhere yet.


I am showing $$263.20 still.

Gold will probably go lower (shhhh...had to say it so it could go up. Expect nothing, hope for upswing) tomorrow.

I posted this as I felt it was germaine. I believe they don't factor in nor credit any 'oil for gold' scenario in their analysis. Perhaps some of us should enlighten them or ask them to comment anyway. You can subscribe to their newsletter at:

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STRATFOR's
Global Intelligence Update
Weekly Analysis July 6, 1999


Rising Oil Prices: Less There than Meets the Eye

Summary:

Oil prices have gone up 80 percent in a couple of months. Twenty
years ago, the world would have been riveted. Today, the world's
equity and money markets remain indifferent and even soar in
tandem. The doubling of the price of oil does not mean what it
once did. Is the calm justified? To get at that question, we have
to figure out why prices rose in the first place. We do not think
that production cuts were the sole cause of the rise. Expectations
of Asia's economic recovery and a growing feeling that Central
Asia's oil may not make it to market were critical in driving
prices up. Since we do not think that Asia's recovery will be all
that dramatic and since Central Asian oil is a long-term issue, we
do not think that prices will continue to surge, particularly since
other mineral commodity prices have not kept pace with oil.

Analysis:

The world has seen a dramatic increase in the price of oil during
the last few months. From a low point in February of under $10 a
barrel, the price of North Sea Brent has risen to just over $18 a
barrel at the close of trading in London. This is the highest
price for oil since December 1997. That means that oil prices have
risen by about 80 percent in about four months, with most of the
gains in the last two months. This ought to be important and even
startling news, yet it seems that both the media and the markets
have taken the news in stride. American markets, which a
generation ago lived in dread of high oil prices, hit new highs
along with oil, rather than moving in the other direction. In many
ways, that news is more interesting than the rising oil prices.

The collapse of oil prices, along with other commodity prices in
the early 1980s was, in our view, the trigger behind the boom of
the 1980s and the long-term surge in U.S. stock prices. We say
"trigger" rather than "cause" because there were several important
causes, ranging from demographics to the business cycle.
Nevertheless, the decline in the cost of commodities decreased the
cost of production and the cost of living in the industrialized
countries, facilitating capital formation while easing pressure
caused by consumer demand. The decline in commodity prices also
exacted a toll, ushering in an intense third-world debt crisis. Low
commodity prices, of which oil prices are the most important,
propelled the American economy upward while cushioning the decline
in Asia. These low prices also had the inevitable counter-action
of severely harming commodity-exporting countries. From Venezuela
to Saudi Arabia to Indonesia, the effect of low oil prices on
national economies was becoming catastrophic by the beginning of
1999.

Suddenly, oil prices have nearly doubled. It is important to try
to understand the causes leading up to this extraordinary event, in
order to gage first its permanence, and second its consequences.
The fact that the global economy has not yet reacted to rising oil
prices can mean one of three things. First, the global markets may
not be convinced that the rise is sustainable. Second, oil is not
as important as it once was. Third, the markets have not fully
absorbed the meaning of the shift. The reason matters a great deal.

The obvious cause of the rise in oil prices has to do with
agreements reached by oil producers earlier this year. As oil
prices collapsed last year, OPEC members, particularly major
producers Saudi Arabia and Venezuela which had long worked at
cross-purposes to each other, began to collaborate in getting oil
producers not only to promise to cut production, but actually to
enforce the cuts. This was difficult for two reasons. First, some
of the most important producers in 1999, unlike in 1973, were not
members of OPEC. Second, and more important, most oil-producing
countries, particularly those that were heavily dependent on oil
revenues for a large measure of their income, could not absorb the
costs of cutting production. Quite the contrary, each agreement
to cut oil production led to market openings for oil producers. In
spite of promises, economic pressures caused producers to sell
secretly into the market openings.

It was extremely difficult to create a cartel-like solution in a
situation of oversupply, during a period when producers were unable
to absorb the short-term loss of income needed to constrain supply
and force up prices. Further complicating the problem was that the
oil quotas, essential to constraining production, reflected
outmoded realities by not taking into account the needs of OPEC
members like Venezuela and completely ignoring the reality that key
producers, like Mexico, were not in OPEC at all.

As a result, every agreement to cut production fell apart almost as
quickly as it was reached. The standard explanation for the price
surge during the last two months is that a successful agreement was
finally put into place. Certainly, some things had changed since
the end of last year. The most important change took place in
Venezuela, where a new, radical government under Hugo Chavez was
clearly more committed to working with Saudi Arabia to raise oil
prices. The Saudis also had an internal financial crisis toward
the end of the year that convinced them that it was time to be
serious. So, an argument could be made that this time, the
producers were simply more serious about things.

Perhaps. But some things had not changed. Many of the producers
were in urgent need of cash. It is hard to imagine that all of
them had the self-restraint and foresight to cut current income
despite this need, not knowing whether someone else was going to be
taking advantage of the situation. Systems of verification in
place in spring 1999 were not really better than verification
systems before. Whatever the intentions of the producers, it
remains extremely difficult to believe that a cartel could get the
traction it needed to raise a commodity price during a period of
excess oil availability (stores and production) and financial
dislocation. We believed that the cartel could halt the decline in
the price of oil. Claims not withstanding, it strikes us as hard to
believe that they could actually trigger an 80 percent rise.

Rises of that magnitude are normally triggered by politico-military
crises, particularly those that affect significant oil producers,
such as those in the Persian Gulf. Since there has been no crisis
that would justify a price rise (and we include Kosovo in this),
that is not the likely explanation. Since we regard the cartel
explanation is only part of the story, we need to consider what
other forces are pushing up the price of oil. There seem to be
two, one on the demand side, the other on the supply side.

On the demand side, there is a growing expectation that the worst
is over for Asia and that with Asian recovery underway, the surge
in demand for oil that had been expected for 1998 will finally
materialize. On the supply side, there is the recognition that
long-term fears of Central Asian oil flooding the world markets may
have been premature. With political instability throughout the
region, oil exports materializing in the next few years has turned
from a certainty into only a possibility. With that, current oil
reserves become more valuable. In our view, OPEC's ability to
construct a framework for controlling oil production was a factor
in propelling prices upward, but did not stand alone. Expectations
about Asian recoveries and Central Asian oil further affected the
markets. Therefore, we need to examine whether the market is being
realistic.

Asia is certainly doing better. After all, it could hardly be
doing worse. However, in our view, we are experiencing two
phenomena. First, we are seeing a cyclical upturn in a secular
down turn. Nothing moves in a straight line and an upturn in
Asia's general depression was inevitable, just as there were
several upturns in the U.S. depression of the 1930s. However, key
Asian nations like Japan and China have failed to solve their deep
structural problems during the past year. Those structural
problems severely limit their capital formation capabilities, in
that each upturn creates money that is used for alleviating
short-term debt problems, without creating long-term capital.

The second phenomenon we are seeing in Asia is a differentiation
between countries. It is no longer reasonable to think of Asia as
a single entity when discussing economics. It was once reasonable,
at least in the sense that almost all Asian nations were heading in
the same direction upward. Today, they do not even share a general
direction. Some seem to be truly recovering, like South Korea.
Others are moving sideways. Some are still slumping. But most
important is that, in our opinion, the two engines of Asia, Japan
and China, despite recent stock market rallies and promising
economic numbers, will not move forward without massive internal
restructuring which is not under way. They are still trapped in the
structural problems that caused the problem in the first place and
because they are the powerhouses of Asia, the general trend will
follow them in spite of divergences by individual countries. In
our view, that trend remains downward. Thus, Asian demand will
increase, but it is not clear that it will increase dramatically or
that it will increase permanently.

There is no question but that instability in Central Asia and the
Caucasus is bullish for oil prices. Not only is production over
the next decade is at risk, but the transport mechanisms pipelines
that pass through some of the most fractious areas of the earth are
exposed to political shifts in an area known for upheaval. Hopes
for the stability of the region are certainly on the decline and
with it optimism about the ultimate return on billions in
investment. But increased concern does not mean certainty. The
oil may flow and, either way, the impact on world oil prices,
positive or negative, won't be felt for years. Thus, while the
situation in the region might account for some upward pressure, it
is difficult to imagine that very much of the 80 percent price rise
in a few months can be attributed to it.

Part of the explanation is cyclical. There is no doubt that oil,
at below $10 a barrel, was oversold. In real terms, adjusted for
inflation, it was at the lowest level since the 1930s. That was
unreasonable. OPEC, Asia and Central Asia notwithstanding, those
prices were clearly too low. But the important question is whether
the rising prices represent a fundamental shift in the economic
geometry of the globe. It is interesting to us that the increase in
prices has been confined to the oil patch, at least as a matter of
magnitude. That indicates to us that the long-term collapse in
commodity prices a dominant factor in the global economy for a
generation is not yet over.

Oil prices have risen less because of OPEC's behavior, in our
opinion, than because of expectations in the short run about Asia's
recovery and a long-run concern about Central Asia's oil ever
coming to market. In our view, since Asia's recovery, taken as a
whole, is more apparent than real, the great expectations held by
the market will be disappointed. The American stock markets have
simply ignored the rise in oil prices. So have Asian and European
markets. Whatever drives them, the markets are saying that the
rise in oil prices is either unsustainable or can be absorbed by
the advanced industrial countries. In our view, the stock markets
are acting appropriately. A dramatic return to the 1970s is not
likely. Oil is still cheap and, we believe, will remain cheap. If
other mineral commodities started to seriously surge, we might have
to reevaluate our views.

In the meantime, it seems to us that oil traders are once again
betting on an Asian recovery to generate demand for oil. After
having their expectations shattered in 1997, these perennial
optimists are betting once again that Asian demand will overcome
the fractious appetites of the oil producers, who may again break
ranks to take advantage of market openings and solve pressing
financial problems. Our view is that, except for a few bright
spots, Asia has not even come close to turning the corner. That
said, we do not see this oil price rise as the harbinger of the bad
old days.

http://www.jasonhommel.com/aristotle.htm( the above link) and then read Ron Brown's words again.

Ron Brown: // Seeking Truth In A World Of Lies and Deception //

by Ron Brown

We live in a world of confusion and contradiction. Though we seem to be
living in a period of unequaled and unending prosperity, it somehow seems
hollow and artificial, as if it could all end tomorrow. The booming stock

market has gone beyond insanity yet people still think it will never end.

Whenever I have trouble making sense of the distorted and obviously
conflicting information presented to us daily by government and the media,
I remember what President Roosevelt said...nothing in politics happens by
accident. I believe that is true today. In fact, I believe every report
or statement from the government is measured and designed to forward some
orchestrated agenda.

Recently, two topics in particular seem to be the source of more than
usual confusion, lies, and deceptions...

// Y2k and the Gold Market //

There has been an obviously orchestrated propaganda blitz since March 1999
regarding Y2k and the gold market. Below I offer nine observations and
some conclusions on this most intriguing situation.

OBSERVATION #1: Y2k has become a Propaganda War.

Jim Lord is one of the more respected Y2k experts in the world. In a
recent issue of his Y2K REALITY WATCH newsletter, Jim Lord identifies two
of the most important points I believe are missed in the Y2k debate.

First, the battleground of Y2k is not about solving the problem, but about
winning the propaganda war for public opinion. Second, Mr. Lord correctly
points out that the greatest threat of Y2k is the impact it will have on
the banking system.

Both points recognize it's not the "problem" but the "perception of the
problem" that creates the crisis and thus it's own reality. Y2k or not,
the financial system of the world is a gigantic bubble looking for a pin.
The only thing holding it together is consumer confidence. Regardless of
its magnitude, Y2k is a sharp pin that threatens to prick that veil of
confidence.

OBSERVATION #2: The gold market appears to be a rigged game.

In a news release dated 4/22/99, the GOLD ANTI-TRUST ACTION COMMITTEE
( GATA ) , announced that noted anti-trust and securities law firm
specialist, Berger & Montague of Philadelphia has been retained to
assist in its investigation into the alleged manipulation of the gold
market. GATA states "the price and supply of gold are being controlled by
a cartel of Wall Street investment houses and bullion banks with the
possible encouragement of the Federal Reserve and the US Treasury." This
confirms what many of us have suspected for years.

Anyone who has reviewed some of the EXECUTIVE ORDERS inacted by current
and past Presidents of the United States of America should be aware that
the events of today are really part of a much bigger plan. The crisis we
are headed for is not the result of bumbling idiots in high places. These
executive orders did not get on the law books by accident. They represent
a highly organized agenda to undermine our freedoms and national
sovereignty. Any plan of action must not ignore this frightening but
stark reality.

OBSERVATION #3: The world economy is collapsing.

Actually, the system began to unravel two years ago in the Pacific Rim
where the combination of stock market collapse and currency devaluation
destroyed as much as 80% of the wealth in Korea, Indonesia, Thailand, etc.
Despite IMF efforts to defuse the problem, the crisis quickly spread to
Russia--which is an economic basket case--slowing the economies of Europe.
The "Asian Flu" then proceeded on to South America where Brazil now
teeters on the brink of disaster. If Brazil goes, all of South America
goes.

I could elaborate, but I think you get the picture. The world financial
boom of the last 18 years is trying to collapse while the international
bankers who created this Ponzi scheme are trying desperately to hold it
together...at least until they can blame it on Y2k.

OBSERVATION #4: The United States is the "Buyer of Last Resort."

When you analyze it, the only thriving economy in the world is the United
States. Furthermore, I am convinced monetary authorities are using the US
to prop up the whole world. Think about it. The dollar is strong not
from it's own strength, but because the currencies of other nations are
weaker. Flight capital from failing economies throughout the world,
seeking refuge in the US, continues to fuel our financial markets. The
rich get richer.

In our prosperity, the United States has gone on a buying binge, importing
goods from all over the globe at distressed prices. Our trade deficit now
exceeds a record $20 billion per month and grows larger every month.

It's our imports that keep the world economy afloat, so the United States
economy must be kept strong, at least until the world recovers.
Unfortunately, distressed prices from abroad have deluded most Americans
into thinking there is no inflation. So, before we go further, let's
briefly discuss the subject of inflation, because it's our
misunderstanding of inflation that is at the root of our looming financial
crisis.

OBSERVATION #5: Most people don't really understand inflation.

We are programmed daily to believe inflation is "rising prices." It is
critical to understand that "rising prices" are *not* what inflation
*really* is. Inflation is the increase in the supply of money and
credit--period. Since everything we call money is really debt, inflation
is the increase in credit.

While it is true that the normal result of expanding credit is a rise in
prices, it is incorrect to equate the two. It's kind of like analyzing
rain. If you start with the assumption that wet streets cause rain, you'll
never come to a logical conclusion. In the same way, if you assume
inflation is higher prices, you'll never understand the true cause of it.

Politicians and bankers will continue to point their fingers and blame
everyone and everything for inflation except the true culprit--themselves.
It is the unconstitutional Federal Reserve System and fractional reserve
banking that magically creates credit, also known as debt, out of thin
air. The problem is that a system built on a foundation of debt can only
exist as long as the people maintain confidence. If confidence waivers the
debt bubble collapses causing the opposite condition--deflation.

By understanding what inflation *really* is we see that inflation has
never slowed down in spite of the spin promoted by the mainstream media.
The enormous growth in our debt structure and the value of equity markets
is proof that the supply of "money" has expanded dramatically. The only
thing that has been contained is the perception of inflation.

Secondly, because of the massive debt structure in the world, deflation
must be avoided at all cost. Remember that in a monetary system based on
debt, everyone's assets are really someone else's IOUs. In a depression no
one can pay off his IOUs. But, deflation is exactly what's happening as
world markets decline! To offset the deflation overseas the US markets
are being inflated massively to keep the world solvent.

OBSERVATION #6: The FED is continually avoiding near disaster.

In July-September of 1998, the US stock market almost fell off its
pedestal as stocks dropped 25 to 30 percent across the board. To prevent
a further panic the FED and its "plunge protection team" rushed in. They
opened the money spigot full blast to prop up failing markets. Of course
after the recovery the media establishment bragged about how resilient the
markets are, further entrenching the arrogance and complacency of a market
frothing with greed. It's as if nothing has changed. But something has
changed!

OBSERVATION #7: You eventually have to pay the piper!

Inflation fear is once again rearing its ugly head. The bankers cannot
run the printing presses nonstop without rekindling the perception of
inflation. As we discussed earlier, perception creates it's own reality.
Once the fear of inflation is ignited the whole credit bubble comes under
attack and confidence is undermined.

OBSERVATION #8: Inflation fear drives interest rates up, bond prices down.


The natural result of rising inflationary fear is higher interest rates
and thus lower bond values. Let me explain. Who's going to lend money at
5 percent if they perceive price inflation is 8 percent? Likewise, if
long-term rates rise to 8 percent, who's going to buy your bond paying 6
percent--unless you sell it at a discount. In other words, if long-term
interest rates rise from 5 to 6 percent, that's an increase of 20 percent
which would have a corresponding drop in the value of bonds. To
summarize, as interest rates rise the bond market comes under extreme
pressure.

OBSERVATION #9: Bonds are the foundation for our house of cards.

Finally, the point I want to make is our entire monetary and financial
system is built on a foundation of debt. The world debt structure has
grown well in excess of $100 trillion, and that doesn't even include
derivatives.

All debt instruments have a maturity date in which they must either be
repaid or renewed. Literally trillions of dollars of debt instruments
mature each year and must be rolled over. As interest rates rise and bond
values decline this becomes more and more difficult. The foundation for
our gigantic house of cards begins to crumble. If not stopped immediately
the process will quickly veer out of control; thus, shutting down economic
growth, collapsing the stock market bubble, and triggering a panic
stampede out of all paper assets. Obviously, an UNACCEPTABLE CONCLUSION.

CONCLUSIONS:

Make no mistake; the unraveling process has already begun in earnest.
Inflationary fears have driven long-term rates above 6 percent and the
bond price index has dropped to the lowest level since Oct 97. Monetary
authorities are now faced with the challenge of restoring confidence
before it wrecks the whole system. Inflationary fears must be calmed
immediately! Anything that undermines confidence must be attacked, and it
must be attacked immediately and with a vengeance. That is the answer to
our initial questions and explains the propaganda blitz to calm Y2k fears
and depress gold prices. They both represent an immediate threat to
confidence and therefore had to be dealt with severely.

// Y2K A Threat To Bank Solvency //

As Jim Lord explains, banks have only $3 for every $250 on deposit. Cash
withdrawals in preparation for a possible Y2k meltdown pose an immediate
threat to bank solvency. So in typical bureaucratic fashion, the truth has
to be compromised to protect people from themselves. So, the lies and
cover-ups spew forth as the establishment media acts to convince people
that Y2k is no longer a threat. My advice--don't buy into it.

If anything, the problem is greater than most people think simply because,
regardless of the magnitude of the problem technically, Y2k is a very
sharp pin that will prick the veil of confidence that holds a fragile
banking system together.

// Gold Is A Threat to the Financial System //

While a bank run on cash threatens solvency in the banking system, gold
threatens the system itself. Remember, gold is the only "real money" that
historically has provided the backing for all legitimate currencies. It
was only in the last 75 years or so that international bankers, led by the
Rothschilds, infiltrated western governments to remove the gold backing to
all currencies.

Despite all attempts to eradicate gold as the monetary standard, gold is
and always will be the money of last resort. Whenever confidence waivers
people will stampede out of paper assets and seek the refuge of gold,
silver and other tangible assets.

// The War On Gold Accelerates //

Because gold tends to rise as monetary fears increase, the perpetrators of
this fraudulent system are very sensitive to the price of gold. They will
do whatever is necessary to artificially hold the price down. The larger
the credit system gets the more critical the problem, since it takes a
smaller and smaller fraction of flight to cripple the system and trigger a
panic.

For example, in today's world if just 1 percent of the money in the system
tried to run for the exits, it would translate into well over a trillion
dollars. Do you think there is a trillion dollars worth of gold anywhere
in the world to meet such a potential demand? Well, there isn't!

In fact, one man by the name of Warren Buffett purchased 20 percent of the
world's annual silver production with less than $1 billion, and drove the
price of silver from $4.60/oz to over $7/oz in the process. What would
happen if a $1000 billion...a trillion...tried to enter the tangible asset
market? I think you see their predicament. They must do whatever is
necessary to make sure gold never gains any upward momentum.

// The Gold Lease Time Bomb //

International bankers have been struggling for years to hold gold & silver

prices down and have created their own monster in the process. Years ago,
in the early 80's, the central banks initiated a program where they leased
gold to large institutions who in turn sold it into the open market to
raise capital.

Mining companies used this technique to sell forward future productions,
but the greatest abuse of this practice was by giant mutual funds that
would use the proceeds to invest in financial markets. Do you see the
problem? The sale of borrowed gold has suppressed gold prices
temporarily, but it has created a short position that eventually must be
repaid.

It is now estimated the short position may exceed 14 thousand tons - over
5 years annual production! This amount of gold is not available. I hope
you can see that the bankers must manipulate the price of gold in every
conceivable way to put off the day of reckoning. Any rise in gold prices
will trigger a massive short squeeze!

// Gold Auctions--an Act of Desperation //

You've no doubt heard of the threatened gold sales by the IMF and the Bank
of Switzerland ( possibly 1300 tons ) plus auctions by the Bank of England
( 415 tons ) . The last time this happened was Nov 78 when Jimmy Carter
announced gold auctions just prior to gold prices exploding to over
$870/oz. The threat of auctions was mostly hype then, and it's mostly hype
now. It didn't stop the panic then and it certainly won't stop it now.

[Editor Note: One house of the Swiss government recently voted NOT to
sell their central bank gold which reduced this concern temporarily.]

My Advice: Don't let the hype intimidate you. That's exactly what they
are trying to do. Continue to accumulate the position you need during
this lull while prices are low and metals are readily available. When the
monetary meltdown accelerates, prices will expand and supply will dry up
overnight.

// THE BIGGER PICTURE //

The international bankers who created the Ponzi scheme we call a monetary
system know better than you and I that it's about to collapse. In fact,
it's part of their long-term plan to force the world to accept a "World
Central Bank." As David Rockefeller said, "given the right crisis the
world will accept our New World Order." But the timing must be right.

Rising interest rates or a panic flight out of paper cannot be allowed to
be the perceived cause of the crisis. That would expose their fraud. I
believe the "right crisis" they need is Y2k. What a perfect cover for
their coup! After all, they can exclaim, "Every thing was wonderful until
the awful Y2k crisis came along."

// A FINAL THOUGHT //

The deeper you explore the coming crisis the more overwhelming it seems.
The natural tendency is to stick your head in the sand and pretend the
problem will go away. That's why so many people believe the propaganda.
It's the old "tickle my ears" syndrome. As good stewards we are called to
seek the truth and do our best to prepare for ourselves and for our
families.

As we attempt to do so, we eventually come to a very important
conclusion: We can't do this in our own understanding. Our only hope is
to turn to the "saving grace" of Jesus Christ and in doing that we will
find the peace we are searching for.

If I can be of any assistance, or answer any questions, please feel free
to call.

May God Bless You,

Ron Brown



Patterns anybody?

Aragorn III, your questions followed by my thoughts:

"Pete, I will have words for you, perhaps later as time will allow. But for now, in regard to your proposition, ask why should the oil producers pay for this gold twice, and also ask why would they choose to become gold producers too? The goal is not to "corner" all gold, but to secure real money
for past and present efforts."

First question: " ask why should the oil producers pay for this gold twice,"

Why would they have to pay twice if this sale was to cover by subterfuge, contracts that oil did not want to roll over? We have to make several assumptions:

1) Physical gold is not available for delivery on contracts due.

2) If BOE was guarantor on contracts, what would be ramifications of declaring a default and resultant payment by guarantor on gold? Would the powers that be want to be transparent in this situation?

3) Could the owners of contracts use them as chits for payment? I believe they could if this is an end run by both parties to satisfy claims and hide a bad situation.


The next thing we have to ask ourselves; Why is the gold not available and why would they not roll over contracts? Although there have been wild fluctuations in POO and production or market share for the past 30+/- years, OPEC members are currently furnishing 28MBLPD +/-, or 40% +/- of world demand. If I'm mistaken on these figures, I apologize, for my analysis will be for naught. The following figures are approximate and not intended to be exact and used to give one a general over all view.

1) 1980 OPEC production = 20MBLPD, current production = 28MBLPD. Average production since 1980 to present = (20+28)/2 = 24 MBLPD x 365 days/yr. x median average POO of $15/BL = $131 billion dollars in sales/yr.

2) Our next venture will be the yearly gold production since 1980. Assume an average of 2,500 tonnes/yr. x 32,150 troy oz/tonne x $400/oz(hedged POG) = 32 billion dollars.

When you take into consideration income generated by cash heavy oil investments on top of oil production sales as Aristotle pointed out, would it be a stretch to see that yearly gold production could be gobbled up by oil if they wanted? 2,500 tonnes would not be available to oil in total when you take normal usage and demand by small investors, jewelers and others probably taking 50% of yearly production off the market. I'm not sure of this figure, but I am sure someone will point out the errors of my ways.

Since paper gold was initiated to satisfy oil producers, any discretionary paper money(I would think at the least 32 billion dollars/yr.) was probably used to purchase future gold hedges(real money in lieu of paper) for the past 20 yrs. +/-. When you look at it in this light, is it hard to imagine that in essence they have cornered the gold market for many years into the future, probably inadvertently?

This conundrum probably has CBs and oil producers in a snit. How do they work their way out? The global economy needs cheap oil to prosper and the oil producers need gold to satisfy their desire for payment for their assets(IOW's they both want their cake and eat it too). It would seem to me that both parties want the party to continue. Oil
needs a vibrant global economy to continue purchasing their asset(oil) and feeding their gold chest. If in effect oil has put strains on the gold market, then they have to compromise and adjust their gold demands unless they want a global financial disaster to occur.

As ANOTHER and FOA have been alerting us that CB's have been losing control, I believe they meant that once shorters of gold discovered a money machine and pushed the POG so low that many unhedged mines and marginal producers would curtail production or go under. This would put further strains on availability of gold for oil exacerbating a bad condition even with normal production of gold. Example: A snippet from Goldteck, Kitco, 7/05/99 15:23 - "Canadian major Placer Dome's response to falling prices was to announce a big cut in exploration spending, and said that
even the Las Cristinas mine in Venezuela, one of its biggest developments, was under review."


The solution would be to bring the POG back to $360 to $400/oz, a price where most miners could at the least break even or prosper. The next step would be for oil to cut back their demand for gold before national gold reserves are completely depleted. For oil to corner the market in gold would IMHO, be self defeating and against the best interests of both parties. I believe they are working out a solution to their problems and will succeed in their efforts. For them to fail would be the death knell for both of them.

When I suggested that oil take over gold producers, it was that thought that took me to the above hypothesis. It was a silly thought upon contemplation, for why would they bother when they could shove it onto the shoulders of the guarantors.

I know that the above sounds simplistic, but I am a simple person and have tried to posit my thoughts simply. Everyone's comments would be appreciated, and hopefully I won't have to bury my head in the sand. Won't be the 1st time and probably not the last. IOW's, please take it easy on me. ;)

Thank you for listening,

Pete

PS: I believe the recent run up in the POO was a warning to CB's to gain back control of the gold market before the SHTF.

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=0012ft
I'm swiping Dave's post and sticking it in here because I believe it is an excellent analysis of human nature. It says much about how we view the world about us. Hope you enjoy it.

ET

Post follows;

The post that follows this preface was completed by me at the end of April. Since I
wrote that article I have had responses to "the Y2K problem" from both my wife's
family and my own.

In addition to reposting my previous article (nothing more than my personal
opinions/observations really) I thought you might find it of interest that most members of
both my, and my wife's families, have now decided to engage in varying degrees of
reparations. Perhaps the brief information leading to their awareness and focus will be
useful to you on a personal level.

Our families Y2K awareness began with me, as I initially articulated my own awareness
and my growing concerns. When I brought up the subject with them, I focused on the
lack of clarity that surrounds all aspects of the problem - except the admitted "clarity"
that there is indeed a problem. I then appealed to the general conservatism that resides
within both of our families. Using the idea that "insurance" can be a prudent precaution
when soundly based on a wise risk/loss/reward analysis, I suggested that most of that
which they might invest in a "precautionary Y2K insurance plan," could then be
reclaimed for use if the insurance proves to be uneeded.

With the exception of my wife's brother, all of my suggestions were initially rebuffed,
rejected, or repelled - depending on your definition of each term. That was in
January/February of 1999. It was at this point that I decided I would not mention the
subject to them again. I would only repsond if they initiated the inquiry.

Several months passed during which I remained conspicuously silent. Questions were
occasionally asked by various people and to which I responded. I should point out that
my responses were always in a manner in which I consciously made it a point not to be
thought of as trying to "sell them something." Apparently the seeds that I planted,
together with whatever outside "nutrients" were being brought to bear, have now
sprouted.

All of the family members on my side of the family will now be preparing - certainly in
only a modest fashion when compared to those that I and my wife have made, but
preparing nonetheless.

On my wife's side, her brother has made considerable preparations and has now been
joined - at least spiritually, by her mother and father. Her sister and family remain
apparently "unprepared" although the sister knows of the preparedness of her brother.
Being less than a tank of gas away perhaps she feels she will have an option if the
"unexpected" unfolds.

I fully expect that as the remaining 6 months passes, my wife's sister will too join the
ranks of the prepared. Essentially that was the argument I made in the article that
follows. I repost it now. I remain convinced of its validity.

With respect,

Dave Walden ----------------------------------------------------------------------

THE NEXT 8 MONTHS

The next 8 months harbors the potential to be unprecedented in the history of our
country (with appropriate implications for the rest of the world). I have just finished
reading the comments on a previous thread initiated be "Robert," I believe. Its initial
subject was "human nature." Many thoughtful questions and responses to consider.
Many people on this forum are truly insightful and articulate.

It caused me to reflect on my own views of human nature. That, however, is a
discussion for another thread. It has also caused me to think about Y2K, and my own
views on what I believe will unfold over the next 8 months. This indeed is predicated on
what I believe to be true with respect to, among other things, human nature.

Certainty is an elusive gem. It adorns its wearer with peace while they stand at the edge
of the abyss. It is therefore, the wise among us who hedge their bets��.

Most of us to varying degrees practice the above approach to life. Using my own life as
an example, I would argue that the probability of doing so however, increases only with
age. "Knowing everything" is a hallmark of the young. Yes there are "absolutes." To
argue there are not is a contradiction. However, to arrive at one, and to proclaim it as
such, can be reserved for only the most rational, the most disciplined, and only the most
wise among us.

Using the vernacular of this forum, both the "Polys" and the "Doomers" would lead you
to believe that they glow with the luster of certainty. Perhaps they do. However,
Aristotelian logic mandates that while they both may glow with the luster, either one
group or the other (or both) is/are merely radiating a reflection - one that does not
come from a mirror. Perhaps they may be properly called "Zirconium's in the rough."

For most of them however, in whatever camp to which they swear allegiance, I submit
in at least one respect they are not unlike you or I. Under the intense light of
magnification, their gems of certainty invariably become clouded by opaque spots of
doubt. Deep within the gemstone that is their mind, they are reminded of one of the
certainties to which we are all subject, the certainty of potential error. The unassailable
fact that in the past, on a subject of which our certainty was secure, we subsequently
were to discover that we had in fact been wrong. This invariably leads to the constant
reminder that we may now be so as well.

Hopefully the effects of being wrong are not harsh but only "lessons learned." If so the
recipient of the lesson grows wiser. Unfortunately, the harsher lessons though
potentially the most instructive, are not for the faint of heart. In my judgment such is the
potential of Y2K.

It is here, using the context I have painted above, that I base my opinion on what the
next 8 months will bring. I do so because though we each may be different, we are
ultimately, at the most fundamental level, the same. That is not to say that some of us
are not better able to search out and find those elusive absolutes than are others. It is
obvious that some of us are. It is to say however, that we each share in the knowledge
that error is always a possibility.

In my opinion the unalterable absolute that each of us may in fact "be wrong" will
increasingly influence our society in the coming 8 months. Because of the nature of
Y2K and the fact that "certainty" is particularly elusive in this case, and because of the
fact that the values at stake are such, these circumstances will combine to cause us, no
matter where our stance on the issue, to collectively, "hedge our bets."

As the months unfold, more and more of us will begin to take steps to prepare. Some
of us at one end of the bell curve will be doing so in order to complete their previously
and repeatedly updated plans. Those at the other end of the curve will be doing so "just
in case." It is important to remember that the "Y2K problem" is just a technical problem
requiring solution. Whatever can/will be fixed, will. What can't/doesn't, won't.
However, our collective response in anticipation of the problem is a totally separate
issue.

The demand for "supplies" will increase at an ever-accelerating pace. At some point in
this rise it will be pronounced as a potentially serious national problem ("it" being the
preparations - not Y2K). Depending upon the "trigger" for the pronouncement when it
is made, it is likely that the President, together with the support of the Congress, will
declare some sort of a state of emergency. Edicts, laws, mandates, appeals, and all
manner of "pronouncements" with appropriate responsible and irresponsible behaviors
defined, will follow. It is at this point that the real rush to prepare for Y2K will likely
begin���.

I say this because of the state and stature of our present leadership. In any crisis in
which we are called upon to unite and act together toward a common purpose, if
success is to be achieved there must be trust and confidence in the leadership. The
present state of our leadership and the general level of cynicism in our country assures
that virtually any pronouncement by our politicians will likely result in further distrust
and cynicism. In this environment, a call to collective action, with the justification being
given as unwarranted panic - caused by those that are needlessly and irresponsibly
preparing, brought about by irrational fear, will motivate those that have thus far
remained on the sidelines, to act. Having scoffed at those who were preparing for
Y2K, the unprepared (emotionally unprepared as well) will begin to feel uncertainty
and doubt where before there had been only the daily pursuits of life. They will begin to
see the need to hedge themselves���.

I do not pretend to know where this will lead. Quite the contrary, I heed the words
with which I began this ramble, I know I could be wrong. However, I do know this: As
the year 2000 unfolds, whatever technical problems surface, they will be what they will
be. Their effects will be constrained by the capabilities of those among us that are the
most able and remain willing to exercise those capabilities. I cannot help but recall the
hero in Ayn Rand's epic novel "Atlas Shrugged" and it stirs a distant foreboding.

Should it occur, the justification for the national emergency would initially be the worn,
tired, historically repetitive refrain, of saving people from themselves, pronounced by
people who claim to know better. How long this justification will serve to renew itself
will depend on how well those among us who, being the most able, continue to display
their respective skills at their respective work. Sometime in 2000 I believe that
whatever the stated basis for the "emergency," whether it be "irrational exuberance" on
the part of those that had remained unprepared, who when finally in response to the
"fear-mongering prophets of doom," had begun to act; or it be the passing of the
economic consequences of the disruptions caused by the Y2K problem itself, the
emergency will likely be over. The remaining emergency however, will be the one that
history should have taught us all to fear. It is the one that our founding fathers so
eloquently tried to prevent, the one that invariably arises when instead of taking
responsibility for that which properly resides with each of us, we instead ask that the
rest of us assume it for us.

Using the vernacular of this post I believe that during the coming 8 months we will all be
hedging our respective bets. Those that have prepared will wonder if they haven't
wasted much time, effort, resources, and emotional energy. Those who have not
prepared will wonder of they should not now be doing so. My view of human nature
leads me to conclude that most people will, prior to the end of 1999, have attempted to
do so.

I have stated my reasons why I believe this to be the case. For the record I should
make my position clear. I have prepared for periods of modest disruption. Having done
so I calmly and with peace of mind continue to pursue those values that make my life a
joy. I do so knowing that I have prepared for what I have reasonably determined to be
coming. In response to that which I am unable or unwilling to influence, I simply try to
arrive at a state of awareness that allows me to discover that realization.

While I could certainly be wrong in my speculations, they are mine to make. I accept
the consequences for whatever penalties reality subsequently extracts from me for my
errors, just as I will accept the rewards for the reverse. One of the rewards I currently
enjoy is the satisfaction of knowing I have acted upon my own judgment.

We shall all shortly discover to what degree our initial bets were wise, and
consequently the prudence of whatever "hedging" of our bets we choose to make�..

Dave Walden

Re "Fall of the moneylenders"
Part 1: (06/29/99; 01:32:05MDT - Msg ID:8179)
Part 2: (06/30/99; 01:52:47MDT - Msg ID:8225)
Part 3: (7/5/99; 1:48:58MDT - Msg ID:8396)
Constructive criticisms are welcome.

I must admit that I eagerly await the Bank of England auction results, preparing for my own surprise at one of three possibilities: a higher exchange for gold, a lower exchange, or no change.

Ask yourself, what business interest would the U.S. government save before all others with special efforts as necessary? You must know that it is the banking institutions above all else. So, too, in the UK, and the prospect of a failure within the LBMA would bring to bear great political pressures (perhaps as no other institution could) upon HM Treasury to offer up such gold as we see via the BoE auctions. For any gold loans facilitated (arranged) through the London Bullion Marketing Association, the default of gold borrowers would put LBMA members as next in line to cover the repayment terms ahead of the ultimate obligation of the CB. Such a gesture by HM Treasury is easily interpreted as resignation that the ultimate obligation was indeed inevitable, and therefore pre-emptive action will at least save the a priori failure within LBMA.

The rising spot exchange rate for gold prior to the auction announcement may have concluded the experiments testing the price-sensitivity of the spot market to attempts to purchase modest volume of gold metal. The sale was announced in advance because the price of gold is of lesser concern than the message of reassurance that a source of gold would be available to honor the guaranteed gold loan repayment. The media has given coverage confirming that the motives of the gold sale were political, not financial, in nature. Truly, for a nation to give up gold for paper currency through a sale, it might as well take in one dollar as one-thousand dollars...the damage is done when the gold leaves the vault, and this damage is not mitigated by the receipt of paper numbers.

A higher bid price reveals competition within the LBMA for this important source wtih which to cover gold loans in potential default. It would be a signal of both desperation and danger, as the spot price would adjust, with the rising prices generating additional "investment demand among the masses" and further making the spot market too sensitive for future purchase operations of any size. Orchestrating a lower bid price would seem to be in their best interest, yet as the spot price would adjust, giving a better "bargain of a lifetime", the effect on the spot market from additional demand of bargain hunters and the expected fallout from overstressed producers would lead to similar difficulties in future follow-through of spot market purchase operations of any size. Perhaps we see clearly now why the auctions are small and scheduled over a long-term of regular intervals...adequate to meet the repayment shedules on selected non-performing gold loans, independent of the need for spot market operations.

Despite the problems mentioned above, a higher bid would be more likely than a lower bid. Such a lower bid would have but a temporary (and meaningless to the LBMA) effect on spot prices, and would do more harm as an embarrassment to the BoE through public sentiment. Because the LBMA participates in the daily price fixing, it is reasonable to expect coordination rather than competition, and due to the problems mentioned above, a price near spot up to the pre-announcement price of $290 could be expected, with their resolve to let the market sort itself out. The spot price would not be pressured, and future auctions would be anticipated to be carried off at near spot exchange rates. Perhaps I shall feel least surprised by this third outcome.

The IMF sales, if they are allowed to occur, are altogether a different creature, as I've hinted in other posts.

-------

Usul, I have enjoyed your "Moneylenders" story. Please continue!

Pete, thank you for working through your thoughts. They are a good addition to our discussions. As you mention " why would they not roll over contracts?" (are these futures contracts you mean?), then please consider gold the money, not gold the commodity in your thoughts. The five part work of Aristotle showed how petrodollars were recycled as loans, and "rolled over" as necessary throughout the 1970s to a very bad end at the conclusion of that decade. Similar lenient arrangements with "petro-gold" would indeed lead us quickly to the foregone conclusion--as Jelle Zijlstra suggested "...to the moon?"

Off-topic to Aristotle, I was sorry to see the distress Miss Graf brought to your favored Mr. McEnroe by withdrawl from semifinals. I am hopeful that Mr. McEnroe may find for her a measure of forgiveness, and also comfort and consolation in the knowledge that his return, and this partnership, at Wimbledon was the "hottest ticket in town", bringing great enjoyment to tennis fans worldwide. Yes, they would have likely won it all...(or am I now guilty of wishful thinking, also?) Back on topic...

Quite to the contrary of "barbarous relic", gold is truly a sophisticated asset for sophisticated and sovereign persons.

got gold?

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=blk&bt=blk&s=18b849b0904433b50d67d909ee0f164e$20/bbl.

Aug. gold now...$263.20, having just firmed from lowerv o'night prices.

from bloomberg:


Crude Oil Hits $20 a Barrel on Optimism OPEC Cuts are Reducing World Glut
By Lim Le Min

Crude Oil Hits $20 Barrel on Signs OPEC Cut Output (Update1)
(Rewrites first two paragraphs, adds details on refineries
and inventories)

Singapore, July 6 (Bloomberg) -- New York crude oil touched
a 19-month high of $20 in Asia trading boosted by signs oil
producers complied with production cuts in June.

The price surge was fueled by indications the Organization
of Petroleum Exporting Countries, which supplies one-third of the
world's crude oil demand, made 94 percent of its promised oil
output reductions in June.
``This round of OPEC cuts has given the market the
confidence it needs to push prices higher,'' said Anthony Poon,
crude oil trading manager at Caltex Corp. Caltex is an equal
joint venture between Texaco Inc. and Chevron Corp. which refines
and markets products in Asia, Africa and the Middle East.

Prices will likely be trading in the $19 and $21 range for
the rest of the year because of falling inventories in the U.S.
and higher year-end demand, he said. U.S. crude oil stocks fell
3.1 percent on year, 0.1 percent on week, to 329.9 million
barrels on June 25, according to the American Petroleum
Institute.

Crude oil for August delivery rose as much as 31 cents, or
1.57 percent to $20 a barrel in Asia trading of the New York
Mercantile Exchange contract, the highest price since November
1997 and the fourth straight daily increase. The contract
recently traded at $19.98 a barrel, up 1.47 percent.

Oil producers agreed late March to cut global oil supply by
2.1 million barrels, or 2.7 percent. The cuts are aimed at ending
a glut which pushed Brent crude oil prices traded in London to a
12-year low of $9.55 a barrel in December.

In London on Monday, Brent crude oil for August delivery
rose 2.94 percent, or 52 cents, to $18.18 a barrel.

Higher crude oil prices will bring much-needed relief to oil
producers across the U.S., many of whom teetered on the brink of
collapse when prices slumped in 1998 through early 1999.

Oil refiners, though, could see thin profits eroded further
as oil prices continue to rise, while escalating competition caps
rises in product prices.
``Refiners in the U.S. will not see margins improve by much
this year,'' Poon said

www.kitco.comfrom kitco above:

Date: Tue Jul 06 1999 04:49
claudeke (Josef) ID#330349:
Big players took there position last week.
There is no volume in South-Africa today.
Waiting for the auction.
AU$ and Rand very strong!!
Broker just confirmed the auction will be at 275 or higher!!
Buyer: Central Bank!!!

http://news.bbc.co.uk/hi/english/business/the_economy/newsid_387000/387099.stmArticles on gold now mixed: positive/negative instead of just negative/negative.

http://biz.yahoo.com/rf/990706/f0.htmlTuesday July 6, 6:51 am Eastern Time
Bidding closes in Bank of England gold auction
LONDON, July 6 (Reuters) - Bidding closed for the Bank of England first gold auction of 25 tonnes of reserves with the market anxiously awaiting the outcome on Tuesday.

``I am just putting in my last bid,'' a flustered London bullion trader told Reuters outside the Bank.

Although the Bank of England yesterday, had expected most bids to be made electronically, some traders handed in the bids by hand waiting until the last minute.

Bidding closed at 1130 London time with the result expected 40 minutes later.

Traders said in addition to the price set at the auction, the market would also look at the number of bids received.

``The total bids received could be interesting it will tell you whether the auction was over or under subscribed,'' the trader said.

At 11:15 am GMT, the BBC World Service Radio Newsdesk programme was discussing gold, but did NOT give the auctioned price.

Why is that? Was the price not revealed at 11:10 am?

12:15 is announcement supposedly. That would be 7:15 EST, I think.

Should know soon enough.

http://biz.yahoo.com/n/z/z0006.html(all times are Eastern)
Tuesday July 6, 1999

FX IN EUROPE-Euro/dollar off life lows, still soft - Reuters Securities - 7:08 am
Bidding closes in Bank of England gold auction - Reuters Securities - 6:51 am
FOCUS- Gold firms as bidding closes for UK auction - Reuters Securities - 6:44 am
Japan extends hand to Malaysia with $2.5 bln fund - Reuters Securities - 5:58 am

$261.20. I guess he or she means that was the BOE auction price (or spot?).

This is from GOLD-EAGLE
Called the Bank of England...�
(out_of_money) Jul 06, 07:22
auction was more than 5 times oversubscribed. Auction price was
261.something...


This was confirmed by the BBC World Service Newsdesk programme at 11:29 am

Tuesday July 6, 7:24 am Eastern Time
Britain sells 25 tonnes gold at $261.20 per ounce
LONDON, July 6 (Reuters) - The Bank of England said on Tuesday it sold 25 tonnes of gold at $261.20 per ounce.

The auction, the first in a series intended to cut reserves from 715 tonnes to 300 tonnes in the next few years, attracted bids for 4,174,400 ounces, 5.2 times the amount on offer.

All bids above $261.20 were accepted in full, while those at $261.20 were allotted at 91.8295 percent, rounded up to the nearest 400 ounces. Thus, the BoE said, 804,000 ounces were allotted to bidders, some 400 ounces above the 803,600 ounces on offer.

Successful applicants will be notified by the close of business on Tuesday of the exact weight of the gold bars allotted to them, the BoE said.

What a crock. Five times over-subscribed and they go at spot essentially. Just doesn't make sense.

$263.60 (a spike). Asking $263.90.

Off to do other things...go figure.

http://biz.yahoo.com/rf/990706/gx.htmlTuesday July 6, 7:31 am Eastern Time
(Note: this article is ``in progress''; there will likely be an update soon.)

INSTANT VIEW - Bank of England gold auction
LONDON, July 6 (Reuters) - The Bank of England launched its gold sale programme on Tuesday with the sale of the first 25-tonne tranche of a 415-tonne programme to cut its reserves to 300 tonnes in the next couple of years.

The gold was allotted in full at a price of $261.20, and bids exceeded the amount of gold on offer by 5.2 times the amount of gold on offer, the Bank of England said.

Britain announced five auctions, each for 25 tonnes, in early May, and sent gold tumbling to a 20-year low London fix of $258.35 a troy ounce. It rebounded in the run-up to the auction to trade above $260. At 1100 GMT, it was trading at $261.60/2.10. Immediately following the auction result, it was trading at $261.30/1.80.

Following are analysts' comments on the sales results:

RHONA O'CONNELL, ANALYST AT T. HOARE CANACCORD, RTV:

``It will probably be a couple of dollars on the price now, and settle back. Probably another couple of dollars (up) when New York comes in. We will probably close (the day) around where we started.''

LAWRENCE EAGLES, ANALYST AT GNI RESEARCH

``Overall it is a very good application. It has been oversubscribed five times but the actual price is not that fantastic. I don't think the market will do that much from this,'' he said.

``There was good demand but people were not prepared to bid the price up on the back of it in order to get the metal....I think it is a case of 25 tonnes down 390 to go,'' he added.

ANDY SMITH, COMMODITIES ANALYST MITSUI GOBAL PRECIOUS METALS, RTV

"We still have three years to go of these auctions but that is a good start.

"Five to one, (it is) maybe at the upper end of market expectations. One wonders how many of those bids were near the money and how many of the bids were way below the price.

``That on the face of it, would cause some short-covering... for how long I am not sure,'' Smith said.

MARTIN FRAENKEL, CHASE MANHATTAN BANK, RTV

``It is very much as expected, really. The actual auction was a bit of a non-event. We were expecting a price close to the last traded spot price and we were expecting over-subscription. I think (it was) nothing of any significance really.''

(Note: this article is ``in progress''; there will likely be an update soon.)

The yahoo story posted below:

"NICK MOORE, DIRECTOR AT FLEMINGS GLOBAL MINING RESEARCH

"The level of oversubscription is encouraging, but clearly this is going to be a long process. As each successive auction comes hopefully it will become less of an event.

``More importantly, people will start to move away from the auctions and more towards the gold market. At these prices, mines are still closing, demand will blossom. In fact the market will have to recognize that the 'gold gap', which we estimate this year will be in excess of 600 tonnes, will have to met by increasing levels of central bank sales.''


He could have said, "The price will have to rise to bring more gold into production to meet the demand." Why is it he assumes the banks will have to sell more gold. What does he know about gold that he isn't telling?

This morning a letter was printed in the Daily Telegraph which the Kitco crowd believes came from Farfel. Farfel, if it is, and you're reading this message, GOOD WORK! (See Kitco's 3:29 A.M. entry from SlangKing.)

My crude looks great but my gold looks some kind of sick.
For me, I am shifting from gold to silver. Gold is too complex for me. Any thoughts?

Technician,

Gold will turn, only question is when. When it does if you ain't on board, you might just miss out. Patience and dollar cost averaging are the mantra.

Steve, I have my coins and drooy (droopy?) and yes I can $ average them but not August gold contracts. Wound up down $2
contract but I had my chance. Frankly, with the CRB so weak recently it was matter time before everthing got sold off. Even oil is coming into some pressure today. Yes, I will wait and make another entry but very carefully. I think we need to watch CRB carefully.

MARKET REPORT (7/6/99): In one of the strangest market reactions I have seen in my
26 years in the gold business, gold took a hit today after the Bank of England auction was
oversubscribed 5.2 times and Japanese banks refused to buy U.S. Treasuries because of
impending potential Y2K problems. Now normally those of us of sound mind and
temperament -- possessed of a rational approach to life -- would have been led to believe
that two such seminal events would turn the market decidedly higher, but not in this
topsy-turvy world of Alice-in-Wonderland finance. Instead we are led to believe that this
extraodinary demand for gold is a bearish development destined to drive the gold market
lower.

The B0E gold went out at $261.20 per ounce -- a price that would not send gold owners
running for their safety deposit boxes to make sure their gold is still there; but enough to
make most rational individuals think that the auction bidders were somewhat determined to
obtain yellow metal. Helen McCaffrey at N.M. Rothschild & Sons (before New York
opened) called it a "fairly good result." "The fact that it was 5.2 times oversubscribed," she
went on, "indicates that there is appetite at these levels and below."

As we are all finding out, Ms. McCaffrey, no one should under-estimate the wherewithal of
an institution(s) or fund(s) short the market and fearing for their financial survival ( e.g.,the
Nick Lesson Effect). How else do you explain someone shorting the market under these
circumstances? It certainly does not have to do with substantial downside when you are
bumping against (a) the cost of production in 75% of the world's gold mines; (b) the
International Monetary Fund sales likely being stymied in Congress; (c) world wide
consumption at record levels; and, last but not least, (d) a lack of mobilizations of gold
reserves at the central banks (despite what we are being told by the mainstream media nearly
every day). It is totally irrational and irrationality is usually associated with its close cousin
-- desperation. I return to an earlier thesis that those shorting this market might not be
interested in profiting from the short positions they assume. Instead, they could very well
be protecting another aspect of their gold trading book -- the carry trade business.

So, the only way to get the price down is to get it down with paper -- through the
derivatives' market and that is what happened this morning. And the only sensible reason I
can come up with for driving it lower is to acquire physical metal as cheaply as possible. In
this way, the BOE is either being played for a dupe by the gold buyers, deliberately
destroying the pound, or bailing out some institution for reasons we don't know at this
time. It's going to be fun to watch the shorts and the mainstream media try to explain
today's gold market action as criticism and the questioning of today's events rises to a
crescendo levelon both sides of the Atlantic.

The obvious question is: With the auction being over-subsribed by five times, why
wouldn't the over-subscription now overflow into the free gold market -- if that's what we
can call it -- and initiate a price run-up? We'll watch to see if the buyers don't come in as
today's trading session moves forward. If you were short, I should think that you might
have some concerns in that regard. If you wanted to buy, I would think that this $6 drop
would be an incentive.

Hey Tech - sorry about your gold trade. You had the big move part right, just the direction wrong. I don't think this gold thing is all that complex. The powers-that-be cannot allow the price to rise under any circumstances. It 'is' the last thing they have to hang their hat on. This whole thing smacks of desperation. If gold were to rise in dollar terms it would indicate to the world that no currency is safe and investment would flow away from dollar denominated assets. This absolutely cannot be allowed to happen. The US stock market must be kept afloat or the whole monetary system will tank with it. Gold is a relatively thin market compared to bonds and other debt instruments and therefore can be more easily manipulated. They haven't had the same success with debt instruments as they have with gold. As far as I'm concerned, gold will have it's day, but trading the paper side will unlikely net you any profit because a sudden rise in price would indicate a massive failure in the monetary system and your contracts would be difficult to honor. This is the main reason I stopped trading a year or so ago. Buying physical gold is probably the better trade today, in my opinion. Time will tell.

I've saw you mention that you didn't believe in conspiracies, etc., concerning the commodities. I don't think this is the proper context. It is more a consensus. Many more have a vested interest in the monetary system as it operates today than don't. When this feature turns around, as we are starting to see in oil and interest rates, is when the system will shift to a new method of payments. This does seem to be a currency war, similar to the situation back in the 60's before the US dumped the gold standard. I don't think it will be resolved the same way however. It appears to me the days of the dollar as the reserve currency are coming to an end and we are seeing the last desperate steps at hanging on. I wouldn't be surprised if Ron Brown's assertion that the US is attempting to hang on until the end of the year might be correct. Affixing blame on y2k for any sudden change would certainly fill the bill in political terms. I'm sure nobody wants to take the blame for an economic collapse. Just my 2 cents for whatever you think it's worth. Good luck.

ET

ET, u rascal, Yea sometimes I lose in futures but keep losses small. In this case $2 not so much. Two different things, futures and physical. I try to ride winners like my crude and be a little jumpy with positions that are going against me. Nothing to do with gold's ultimate place in history. By the way, I left silver alone (lucky stars) and bought copper. Interesting how strong copper and crude are with a collapsing CRB. Why can I not learn to short.:(

http://biz.yahoo.com/rf/990706/tf.htmlPrevailing belief is that the sales were timed to help out the speculative short sellers in the gold market.

http://cnniw.newsreal.com/osform/NewsService?osform_template=pages/cnniwStory&ID=cnniw&storypath=News/Story_1999_07_06.NRdb@2@11@3@1166&path=News/Category.NRdb@2@12@2@4Some first-rate carping that is bound to manifest itself in a deeper interest in gold as a financial asset.

http://biz.yahoo.com/rf/990706/r4.htmlGold hits 20 year low, government bonds and euro both weak.

http://biz.yahoo.com/rf/990706/r4.htmlThis one might be worth your time.

http://biz.yahoo.com/rf/990706/p7.html"There certainly has been a naivety in their handling of the method of the sale and we hope that they will be a government of sufficient integrity to look at the damage that has been done to the gold market"

This morning the BoE sold 3.5% of Britain's gold reserves. Unfortunately, the sale was done at a price 9% below that which prevailed at the time of the announcement. And, because the sale did not go as well as hoped, the price is now down a further 2%.

Surely, in the days and weeks to come, any officials who subscribe to this new math will have some tough explaining to do. Britons are not fools. They will not stand idly by as the wealth of their nation and respect for their currency are so foolishly disregarded.

Not long ago, Euroland's Central Bank Chairman, Wim Duisenberg said, "Gold is to have and to hold. If you need money, just print it."

Too bad, Gordon Brown. You didn't listen. England would be a wealthier nation today if you had. The question now is, how much longer will this folly continue before an angry populace wakes up and calls for your head. Not long, I should think.

Soon, even you will wonder, if you wanted more Euros or t-bonds, why you didn't just pull out your magic checkbook and buy them.

http://biz.yahoo.com/rf/990706/q5.html...the one that I said might be worth your time because it was thorough.

Oil is trading above $20 today. That is pretty close to a 100% rise in about 5 months.

http://biz.yahoo.com/rf/990706/wn.html"They say Argentina could dollarize simply by swapping all pesos in circulation for its foreign reserves of more than $30 billion, but prefers to negotiate with Washington to try to get compensation for loss of interest from foreign reserves."

Read and learn, folks. It seems that CASH doesn't pay interest all by itself, either. So why is gold always singled out and cited as unacceptable for this very reason? Seems that in all fairness, cash should receive the same disparagement, but to a much GREATER degree due to its inherent losses from inflation.

http://biz.yahoo.com/rf/990706/w7.htmlThat headline should energize every contrarian bone in your body. Personally, I feel like running a marathon. Yippeee!

Just in case anyone is feeling a little down today, may I remind you of FOA's thrilling words in his message "The Two Months of Opportunity to Buy Gold is Ending!" He says, "....This gold sale (IMF) will, like the BOE sale, also be used to balance a very chosen few of the 'out of balance books!' All of this is done prior to a major shift in gold valuations...." OK, so what happened today is a bookkeeping thing among the banks! FOA and Another have been unwavering in their message that things are going to change in a big way regarding gold, and they are telling us it is going to happen soon. It's hard to have faith when things look so dark, but let's trust our distinguished mentors, look on the shiny side, and KEEP BUYING!

Don't be to surprised to find out that the big buyer
of gold at todays auction was BOE!!!!

Has it occurred to you that England would be wealthier today had you simply thrown your 25 tons in the ocean? Think about it, Mr. Brown. Maybe then you will understand the public outcry you are about to face.

http://news.bbc.co.uk/hi/english/business/the_economy/newsid_387000/387328.stmGreat picture and light article. The great UK gold rush has begun, with the government selling off 25 tonnes from its reserves. BBC News Online answers your questions about gold.

http://news.bbc.co.uk/hi/english/business/the_economy/newsid_386000/386479.stmShameless anti-gold propaganda from the BBC. As MK recently asked, with articles like these, why do they bother with an opinion page?

http://news.bbc.co.uk/hi/english/business/the_economy/newsid_387000/387099.stmAfter the-fact figures and news

http://news.bbc.co.uk/hi/english/business/the_economy/newsid_387000/387543.stmA must read.
"Oil is fundamental to the running of the civilised world. The plastics and petrochemical industries rely on oil, as does the farming industry.
We may not realise it, but everyone is affected by oil prices."

After the piddling 25 ton BoE auction of gold, while being 520% oversubscribed (probably only a fraction of the recent oversubscriptions of .com's, though in fractural currency)and the ensuing 7$ fall of POG, I feel there is real blood on the gold short "street" (no .com!)and probably the last chance to run for cover.
Desperation seems to creep into the money(currency) and carry games as the final bullets of paper-(dollar)ization only backfire and manifest the deepening quagmire of not so derivative hedged & proof bubble markets,economies and currencies - go find your own hedge says the hog to the hedge(hog- pop goes the weasel!).
The evident gold bug depression, including myself, is finally reaching unbearable proportions to the brink of becoming a renegade, which in my book is the most solid sign of an imminent reversal. Keep the faith friends - we're getting there - and we'll have the (unwarranted) help from the first renegades of the gold short-carry traders camp losing their grip, because they may feel to be inconsequential to the overall game. This may become particularily true, if they were trying to bid in todays farce auction, uncsucessfully, but eye-opening? we'll never know!
Happy to hear John Willson of Placer Dome sent a letter to Tony Blair on behalf of 6 major gold mines (HM,NEM,ABX, PDG, Anglo, Ashanti and Goldfields)asking to investgate rumours of bailing out short pos. of LBMA (or other) members. - Any answer will be interesting, no answer will be as conclusive.
As a final remark, nobody's happy with the US$ as sole resereve currency - the problem has become how to get out from under (US$)whithout major disruptions in global terms?
@ Stranger _ besser ein Ende mit Schrecken, als ein Schrecken ohne Ende! IMVHO...

http://biz.yahoo.com/rf/990706/0g.htmlThe pound sterling gets spanked badly. Any surprise in light of UK's gold management?

Freudian slip - sorry - PM's are great P. Munks are sk...?

By Melanie Lovatt, Bridge News
New York--Jul 6--COMEX Aug gold futures settled down $6.80 at $257.80
per ounce after plunging to a fresh 20-year low on aggressive selling
after the Bank of England's first gold auction this morning. Funds
hammered gold, triggering sell-stops, in a disappointed reaction to the
low gold auction sale price, said traders, noting that the move was
further exacerbated as sell stops were triggered.

"We elected all kinds of stops," said one trader. "Many had been
expecting a short-covering rally and so far this has not been realized--it
looks very negative right now," he said.
While a few players said that the fact that the BOE's sale of 804,000
ounces of gold was oversubscribed 5.2 times was positive, most said that
this did not matter, given the low prices. "If the gold sale price was $45
it could have been hundreds of times oversubscribed, but that doesn't
really make a difference," a trader said.

Some players said that while rumors circulating last week had
suggested central banks might try and take the whole allocation, talk
today that central banks were not involved had spurred fears that the gold
would be rapidly re-sold.
Gold prices initially drifted lower after the 0715 ET auction results,
but then got "crushed" on rumors that the gold might be returned to the
market, commented one trader.

The BOE sold gold at $261.20, which was close to the spot gold price
when the sale results were announced at 0715 ET. Bids were received for
4.174 million ounces of gold, which is 5.2 times the 804,000 ounces which
were sold.

High court action in a bid to stop the sale was taken by Kim Rose of
Eclipse Jewelers in Southampton, who argued that the sales would further
depress the price of the metal.

The UK sale, which had been credited by some for gold's slump to
20-year lows, attracted further criticism today from South Africa's
Anglogold, the world's biggest gold producer. Anglo said the "naive"
method the UK Treasury used to sell over half its reserve gold was
damaging to the precious metals market both in its transparency and in the
long time-frame of the sale period.

Kelvin Williams, executive director at South Africa's Anglogold said
it was therefore the most damaging and inappropriate choice the government
could have made. He said that the pre-announced auction favored shorts
giving them a chance to sell in front of the auction. He questioned why
the UK made this move in gold, given that it would never pre-announce a
sale of Japanese yen or Swiss francs.

The sale has also spurred US mining houses into action. US gold mining
giant Newmont Mining Corp. confirmed that it signed a letter asking UK
Prime Minister Tony Blair to investigate gold market conspiracy rumors.
The letter, a cooperative effort by several mining compan ies, including
Anglogold asks Blair to respond to talk that today's UK gold auction was
timed to help out speculative short sellers. While Newmont does not
necessarily believe there is a conspiracy, it feels the matter is "worth
looking into," a company spokesman said.

Meanwhile, James Steel at Refco Steel noted that there was "an equal
follow through" in other markets, with silver, platinum and palladium all
down on gold's dip. "The other markets simply can't resist that pull ," he
said.

--Aug gold (GCQ9) at $257.8, dn $6.8; RANGE: $263.6-256.5

(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

...another sign for change and imminent (looming) reversal of sentiment!
Just a thought - gold is so much out of favor that even the CB's, which have leeased and lost the yellow can openly admit to have being smart in monetizing, i.e. leasing, i.e. selling the (next to worthless) stuff long ago.
In this case you wouldn't even need catastrophic Y2K for scape goats - you'd be shining (... as in Stephen King)to have avoided any potential bubble horrors and explain the dynamics of new paradigms of exponential growth. Who, ever needs PE, PB, D/Y or any other (barbaric?) valuation for stocks, the economy and currency, when you are in the new era of valuing the "dynamics" of earnings growth -EPS vs DEPS (does somehow not sound barbaric, only scary?). No, since we've sold all our reserve gold assets - who can blame us - we've done it to save you some more taxes and losses, but we didn't want to worry you beforehand. Just trust our wise and conservative handling of your affair's, which will make you and your's lives secure, economically, socially and, of course, forever! Trust our paper - it is the best fiat paper ever con(niv)cei-ved- ... and it failed to make you rich and INDEPENDENT (free)? - well, in this case just think back to the 70's, when a bunch of Sheiks had you lined up at the gas station. I tell you we've taught them a lesson - at least up to a couple of month ago, well another des(s)ert storm will serve 'em their deserved desserts-. "Mean"-time those scorpions doubled their price and may or may not want to barter their goods for our pulp , forever.
Get u some reality...


we have to go back to the medieval doctrines of religious and other purges!- are you meant to be free?









Fiat - believe in fiat and not in the golden calf at times of the 10 commandments (Moses).

Well, I thought FOA might have an inside track on this market but, I guess, no-one has the inside track. He said the window was closing on low prices but it has reopened again with a vengeance. I have noticed how many of the calls on POG on this and other boards have been wrong. Several people have posted that the shorts have run out of supply but then what happens? The shorts control the market and probably will for some time to come. Long enough at least to run many mining companies and third world countries into the ground. If gold has a future, it would sure be nice to know when that might be. I guess that, eventually, the gold supply will dry up - it will all be in private hands - and then the price can run.

Sorry to sound extremely negative but I, as I am sure others
lost my shirt today. POG -$6; stock and funds surely to take
it harder. More of these lovely auctions to come, alot more
if Swiss and IMF join in, alot more if other CB's join the parade. How long can these jokers keep this up, 1 year, 2
years, 5 years, longer?? I'm beginning to think the
manipulation game in now in the favor of the anti-bugs.
Gold dead???

You said '... maybe the last chance to cover...'. I thought
this is a 'supply and demand game'. If these jokers provide
a nice controlled source of 'supply', and the 'shorts'
quietly 'cover', does this not provide the means to very
carefully, very manipulatively, 'unwind' the very short
positions in gold??

http://csf.colorado.edu/mail/longwaves/jul99/msg00340.htmlCheck this comment. This a comment from Dr. Thomas Drake re manipulation in the gold market. It sounds like a damning confirmation from the source. I don't know if one is allowed to post the text directly so I include the URL only.

http://biz.yahoo.com/n/z/z0006.htmlAustralia Gold Council sees closures post-BOE sale - Reuters Securities - 8:13 pm
Sakakibara to give 'farewell briefing' on Thursday - Reuters Securities - 8:10 pm
U.S. stocks, bonds end lower, dollar soars vs euro - Reuters Securities - 7:45 pm
BOJ's Yamaguchi says zero rates to stay--paper - Reuters Securities - 7:35 pm
IMF says has no date yet for new Ecuador talks - Reuters Securities - 5:54 pm
Dollar retreats some at US close after strong advance - Reuters Securities - 5:34 pm
Alert: Brazil Govt "Categorically" Denies Changes in Economic Team - Spokesman - Reuters Securities - 4:55 pm
Most U.S. Treasuries end down but off lows - Reuters Securities - 4:54 pm
Canada bonds end softer, bracing for new issues - Reuters Securities - 4:51 pm
Over 5 mln U.S. corporate layoffs since '89-report - Reuters Securities - 4:45 pm

http://www.labyrinth.net.au/~gjackson/econ126us.htmlUS Headed same way?????

http://www.usagold.com/wgc.htmlIn this Weekly Gold Market Commentary (June28-July2) provided by the World Gold Counceil, you will read about the events that shaped last week's gold markets. Featured among other news, South African President Thabo Mbeki strongly criticised the UK's decision to sell off part of its gold reserves, saying that the move has threatened the viability of various gold mines in South Africa.

Ich habe an das auch gedacht, aber es tut mir immer noch argerlich. (Bitte, nicht lachen uber meine Deutsch. Ich habe genug Schwierigkeit mit Wirtschaften auf English). Jedenfalls, hoffen wir einmal das diese Schrechen, in der Tat, die Ende ist.

Haben Gold?

http://biz.yahoo.com/rf/990706/bax.htmlThe Australian Gold Council said that Bank of England gold sales could have a positive impact for the precious metal, accelerating the closure of weaker, high-cost mines around the world.

Very positive comments by Robert Champion de Crespigny, executive chairman of Normandy Mining Ltd, including: "We need time to get used to this bidding type process which I think it is not a bad way to go because it is exactly the same (way) as the government sells treasury bonds."

$$257.60

repost

LONDON, July 6 (Reuters) - Executives from some of the world's leading gold miners demanded on Tuesday that British Prime Minister Tony Blair answer rumours that UK gold sales were timed to help out speculative short sellers in the market.
The letter arrived as Britain sold 25 tonnes of gold, the start of a programme intended to cut reserves from 715 tonnes to 300 tonnes during the next few years.
Chairman and chief executives at Canada's Placer Dome, U.S. miners Newmont Gold and Homestake Mining, South Africans Anglogold and Gold Fields and Ghana's Ashanti Goldfields, sought Blair's response to rumours that reserve sales were to bale out firms running short positions in gold.
The letter, a copy of which was faxed to Reuters, quoted parliamentary remarks made by British opposition MPs on June 16 suggesting Britain's announcement of reserve sales had been to "save the bacon of those firms running short positions".
"We believe it would be helpful for you to make a public denial of these rumours or investigate them publicly," said the letter, signed on behalf of all the companies by Placer Dome President and CEO John Willson.

http://biz.yahoo.com/rf/990706/9u.htmlThe $1.3 billion payment will be the first time that LTCM is returning money to banks and investors since it was given a lifeline after massive losses from investments in stocks and bonds made with borrowed money.

You can see how banks (or funds) must put money (even paper) at risk in order to yield a return. And as we see in this case, the fund's huge losses last fall posed further danger to financial markets, prompting the Federal Reserve Bank of New York to orchestrate a capital infusion from 14 of the world's largest banks last September to keep the music playing.

http://biz.yahoo.com/apf/990706/goodbye_go_2.htmlSome clown from PaineWebber said "Gold pays no return at a time when real returns are moving higher and inflation still doesn't pose a threat." Is there no end to this tripe?

Meanwhile, Kelvin Williams, executive director of South Africa's Anglogold, said "This is an inappropriate way to sell monetary assets in any shape or form." Sounds like he and Mr. de Crespigny of Normandy Mining would have an interesting debate on this matter.

This was forwarded to me by Bashfull Bob, the economic wunderkind who evidently picked it up at another forum. While much of it jibes with my understanding, I cannot speak to the accuracy of its entirety.

"Gandy4, thanks for noticing...
by: stockveteran (41/M/Chicago Suburbs) 6351 of 6352
that the CPI is a weighted index. Actually, I have studied the CPI over the
years. It is published by the Bureau of Labor Statistics, (BLS) on a monthly
basis. There are many conmponents that go into the report. I have seen the
complete reports in DePaul University's Library in the downtown Chicago
campus in the past. I cannot tell you how it is weighted precisely, as I do
not have access to a report right now. You can call them to see a fax of a
recent report, I think.

However, as a student of the CPI reports, I can tell you that the way they
measure things has changed over the last several years. For instance, as I
recall, the cost of a house was replaced several years ago with the cost of
renting an apartment. This tempers the cost of rising real estate values.
Another for instance, which occurred about 1 year ago was that if a certain
item became too expensive, it could be substituted with a "like" item. For
instance, if the price of sirloin became "too expensive", then it could be
subbed with "ground chuck steak". Thus, the volatility of the CPI is much
tamer today than it was back, say 20 years ago, when we had $800/oz. gold.
The first of these changes occurred under the Reagan Administration. When no
one questioned these changes, the Bush and Clinton Administrations decided
to keep making further changes to the CPI calculation. Our government, has
indeed, tamed the CPI report over the last several years.

I beleive this is one reason that Greenspan is not as focused on the CPI,
but rather on other measures, such as the ECI (Employment Cost Index), the
Unemployment Rate and the GDP numbers. He knows that the composite CPI is
"tamed down". However, the components that make up CPI are clearly showing
some strong increases. Look at medical inflation, running around 7% to 9%
annualized, and especially Prescription Drugs, running at about 16% annual
increase. Look at energy costs, at 20% greater costs than a year ago. How
can we say that inflation is not in our economy?"

The US and world community must be worried about the destabilizing effect on South Africe and other third world communities caused by these low gold prices. I think they will rethink their position on further gold sales by IMF and central banks and may jawbone the price back up to the an acceptable price.

The very very strong dollar and the very very low crb would portend a low gold price all things being equal. If you did not know the price of gold, but only knew the dollar strength and the crb - what would you guess the price of gold to be? I think like others that the dollar is the first thing that has to fall, but I also think gold will shine (over the longer term) because of great demand in asia. Germany did not forget hyperinflation during the weimer republic for 80 years; and it is not likely asia will forget the debacle they just went through. The ONLY thing they can buy to protect themselves from currency debasement again is PM's. I think they are going to buy and buy and buy.

Comex silver stocks are once again down to a little over 74 million oz. I would think the silver users are getting nervous. They will probably do a lot to keep people from knowing just how low the stocks are to prevent speculation. If they drop any further at all, and especially if we go under 70 million oz we should see a good rise in price. There some who follow silver closely who are saying there are subtleties today, which show indications of the shortness in stocks. Despite the weakness in PM's many junior silver and zinc companies did very well today (none of the majors though). The AAA grade silver and zinc stocks are seemingly being accumulated by people with little attention being given to day to day price fluctuations. Very interesting.

The price of oil is the one commodity which has nothing to do with supply and demand. One country, Saudi Arabia, can determine price by itself, if it wanted, because it has so much cheap oil..The Saudies could easily pump 30 or 40 million barrels a day if they wished and destroy the oil mkt. So that is why oil is out of wack with the rest of the crb. The oil cartel just finally got it together. I am amazed it took so long - it was really a no brainer.

Re. British sale: How much is 25 tonnes of gold?Is this tonnes as in One million grams or tons as in
2,000 U.S.A. Pounds? I'm assuming it's the former.

Just on a lark, I decided to calculate how big this pile
of gold would be. 25 million grams would be 1,294,891
cubic centimeters of gold. That would form a cube
of just under 43 inches per side -or for those of us
who visualize in normal units - 109 cm per side.

I could fit that in my car, but I don't think the
springs could take it!!

JA- please tell us if you are out there somewhere. You don't want us thinking you sold your gold, do you?

First point: Two common and related themes on this Forum hold (a) the Comex gold price is manipulated downward by those with an alterior agenda and (b) the method is by shorting Comex gold contracts, said paper gold contracts having no or little nexus to the underlying physical reality.

Presumably there are those who would benefit from a higher POG. My question: Why would those who would benefit from a higher POG simply not engage in counter manipulation by soaking up all the chimerical "paper gold short contracts"? It may be easier to write a short contract than to buy up all such contracts, but if there is truly a physical shortage, the demands for delivery by the longs would eventually turn out to be profitable, and break the game open once and for all.

Second point: Gold is not merely a "political" metal, it is also a "psychological" metal. It does not possess that many intrinsic or industrial uses, but its relative rarity, beauty, malleability and indestructibility have traditionally made it useful as money, particularly as an extra-governmental store of value. However, this is still a "psychological" value, and if the CB's and their cohorts in the gold carry trade can beat it down enough, could they not eventually destroy gold by undermining the psychological value attributed to gold by the world's economic actors? Would this not indicate that counter-strokes are called for now if gold is to survive (and these may be finally occurring, as per the letter by the gold producers to the British government).

July 6, 1999 - Spot Gold $257.10 down $6.90 - Spot Silver $5.19 down 15 cents

Technicals

The bear is roaring in New York, but he is about to be sent back to the hinterlands of Maine and Canada. The gold market crashed today and closed in new 20 year low ground. Sellers were everywhere and buyers were few and far between. The ploy by the collusion crowd to create very negative sentiment worked. Not much else can be said here that is worth a tinkers darn. The technicals mean very little in a market that is manipulated.

Silver got caught up in the gold market bear mauling and was sent South searching for support. It found some around Georgia and the silver bull might be headed back to New York faster than one might think. That support in Georgia was someone who took 600,000 ounces of silver out of the Comex warehouses after the close. They now stand at a very low 74 million oz. $5.18 support held on a closing basis. Our long standing bullish silver outlook remains in tact.

Fundamentals

On Friday in an email to the caf�, I made the following comment after referring to the fact that Anglogold commented about the market being oversubscribed by some 300% to 400% ( what we had told you earlier in the week ) and that it was disconcerting to see the bullion dealer banks offering huge size once again to short covering specs:

"Something does not sit right again here. Why are the bullion banks offering size going into an auction that is oversubscribed 3 or 4 times? What oversold market, like gold, produces such feeble rallies with such strong demand? If Goldman Sach IS such a big buyer - who are they buying for? I have a sickening feeling that the manipulation of the gold market is intensifying�."

Unfortunately, it is clearly escalating as the "manipulating crowd" is pulling out all stops to crush the gold market and its followers. The results of the BOE auction were as follows:

25 metric tonnes ( 803,600 ounces ) was sold at $261.20 per troy ounce. A total of 4,174,000 ounces was bid for which meant the auction was covered 5.2 times in terms of the number of bids made.

This is how I analyze what just occurred in the gold market and is right in line with the email that I sent you. The BOE sale is one of the very last supply shock events that our "officialdom" and the "Hannibal Lechter" bullion dealers can use to manipulate the gold price lower. Ironically, their situation is actually getting more desperate. The supply/demand deficit at about 150 tonnes or more per month ( a Veneroso Associates calculation ) is greater than the bullion dealers ever dreamed it would be and it now appears that the IMF gold sale will not get through the U.S. Congress. That is why they had to call on the British to bomb the market - not so much with physical gold, but bomb the market psychologically with that announcement. I suspect our officialdom ( via the N.Y. Fed ) and the bullion dealers have been doing the rest of the gold selling damage in some coordinated fashion.

Look at the sequence of events that just transpired. Through our sources, we hear at the beginning of last week that the auction is 400% oversubscribed. Goldman Sachs is visibly seen buying 265 and 270 August calls. That is well reported to the marketplace and they know it will be. And sure enough at the end of the week, Kelvin Williams of Anglogold confirms our initial reports to Reuters that the market is 400% oversubscribed and that one of his counterparty banks is expected to take down the entire 25 tonne amount. This created bullish expectations around the world that the carnage in the gold market might finally abate.

But when I found out the bullion banks, led by Chase, were offering all the gold in size to any buyer who showed up, it become apparent they knew something that I, and most gold market participants, did not - until I saw what was happening once more. The fix was in again. That simple.

Look at the record. The gold market went straight down after the BOE announcement on May 7. The selling was led every day by Goldman Sachs. The specs started to pile in again. That went on until we reached $257- $260. The market went sideways and then drifted up a few dollars. The rally attempts were feeble. During this whole time, the price of gold never closed more than $2 higher on the day. Never was there any type of gold market excitement "allowed" to build.

The bullion dealers ( and possibly our N.Y. Fed ) cannot afford to let any serious excitement build for this is their last shot to hold the price down. So very cleverly, they allowed certain information to circulate to build up some hopes and cause some of the shorts to cover. That was accomplished to some degree, so now those hopes had to be quickly dashed and thus they bashed the market today. They have also subtly reflected to the market: we have another auction coming in September; do you want to buy ahead of that one too?

Well, the world is slowly waking up to what is going on here and our day is not as far away as you might think on this dismal day. Reuters -July 6- London: Major gold miners seek Blair statement on UK sales

Executives from some of the world's leading gold miners demanded on Tuesday that British Prime Minister Tony Blair answer rumours that UK gold sales were timed to help out speculative short sellers in the market.

The letter arrived as Britain sold 25 tonnes of gold, the start of a programme intended to cut reserves from 715 tonnes to 300 tonnes during the next few years.

Chairman and chief executives at Canada's Placer Dome , U.S. Miners Newmont Gold and Homestake Mining , South Africans Anglogold and Gold Fields and Ghana's Ashanti Goldfields , sought Blair's response to rumours that reserve sales were to bale out firms running short positions in gold.

The letter, a copy of which was faxed to Reuters, quoted parliamentary remarks made by British opposition MPs on June 16 suggesting Britain's announcement of reserve sales had been to "save the bacon of those firms running short positions".

"We believe it would be helpful for you to make a public denial of these rumours or investigate them publicly, " said the letter, signed on behalf of all the companies by Place Dome President and CEO John Willson. End

Now where have you heard that sort of commentary before. If that letter by many of the leading gold companies in the world does not have GATA's stamp all over it, nothing ever would!

I also suggest that the "cartel" has overplayed its hand - such as the cries of the IMF and our administration for Congressional approval of the sale of IMF gold to help the poor. Today, South African President Thabo Mbeki hit out at the BOE decision, saying its negative impact on prices threatened the country's embattled mines which employed around 300,000 people.

Maybe Treasury Secretary Summers will suggest to the Black Caucus in Congress to ignore Mbeki and this Reuters press release that hit the tape today:

The Johannesburg Stock Exchange said on Tuesday it had suspended East Rand Proprietary Mines Ltd shares at the request of the directors. The struggling gold miner is to apply for liquidation in the face of falling earnings due to a depressed gold price.

ERPM managing director Ivan Vidulic said the mine was forced to apply for liquidation after the government-- its largest shareholder--refused to give it 18 million rand in bridging finance.

Closure of the mine, which funded the British war effort in the second World War, would cost 5,000 jobs, a prospect which has angered the country's powerful National Union of Mineworkers. End

And finally from South Africa- Finance Minister Trevor Manuel said this sale and others endangered jobs and investment in South Africa and other African gold producers like Tanzania, Ghana, Mali, Burkino, Faso, and Zimbabwe. Manuel blasted the IMF gold sale proposal, "It doesn't make sense to tell countries we will weaken your economies and then give you a little debt relief". Presidential hopeful, Al Gore, take note.

Kelvin Williams of Anglogold echoed the negative sentiment about the BOE sale saying the British sale was na�ve and would contribute to the collapse of several marginal South African mines. "The BOE has chosen what we believe is a remarkably inappropriate method. The trouble with announcing a public auction in advance in a non-transparent market is that it gives speculators an opportunity to sell in advance of the sale." Williams went on to say that short sellers had moved into the market and are now heavily short. Then he suggested that the BOE gold sales be reconsidered.

The World Gold Council did not pull any punches either. According to a Dow Jones release today, they said the First Bank of England gold sale was a disaster for the gold market and for all gold producing countries.

" At this price the people of Britain are being short-changed by the Chancellor ( of the Exchequer Gordon Brown ) by a staggering GBP 450 million ( $600 million ), the World Gold Council said. And in one of the great gold market quotes of all time, "This is the economics of the Mad House" The WGC went on to say that any interest earned over the next two years would be dwarfed by the scale of the losses already incurred on the value of gold in the reserves.

This is stunning, right on commentary by those in the gold industry that are being devastated by the obvious orchestration of lower gold prices. But low and behold, look who comes all bright and cheery today about how all is wonderful in the gold market; the "Hannibal Lechter", bullion dealer crowd in all their deceitful, hypocritical glory.

From Kevin Crisp, head of precious metal strategy at J.P. Morgan, bullion dealer and Counterparty Risk Management Group leader: - on the sale price: It's towards the upper end of most people's expectations. The allotment price is pretty much where the market has been trading, or maybe slightly under, so no nasty surprises��"The auction has gone pretty smoothly, it shows the bank can sell gold in a reasonable fashion in fairly large tranches and get pretty close to the market place. Five times the cover ratio is an encouraging first auction."

From Charles Von Arentschildt, chief bullion trader at Deutsche Bank in New York: "The price right before the auction was $262 an ounce. Eighty cents for 800,000 ounces of gold is a small price to pay. I think it shows the tremendous depth and liquidity in the market. I think the auction went very well."'

So, the only two positive comments all day came from the leaders of the "cartel" that is driving down the price of gold and making a fortune off of their gold loans. How obvious can it get about what has been going on here? It is ludicrous how "transparent" this collusion crowd really is and just maybe they have gone too far. After all, many of their biggest gold producing clients are now calling for an investigation into what, and who, may have been behind the BOE sales. Deutsche Bank, J.P. Morgan - perhaps it is time you call up Goldman Sachs and schedule a get together. The world is wising up to what you and certain "officialdoms" are up to.

Potpourri and the Gold Shares

The XAU was hit hard today too closing at 62.95, down 4.12, but it is well above its major 60 support and still represents a significant diversion to the bullion price.

I was informed today about a Bank of Nova Scotia conference call today about the BOE sale so I called up just to listen in and introduced myself. The operator said, " is that G A T A ?". I responded yes. One moment please was her response. She then came back and informed me that the operators were told that "under no circumstances" would I, or any representative of GATA be allowed to have access to the call. Needless to say, this Bank is a bullion dealer.

Here is a good one: Kim Rose, the owner of Eclipse jewelers is taking Britain to court over the BOE gold sales, saying it "would cost jobs and devalue gold". Ross has vowed to file an injunction against the government "within the next few days". "These sales could have catastrophic effects on the ( jewelry ) market," Ross said. "To the average man on the street gold is a tangible asset".

According to a Reuters report, Rose said Britains's Independence Party would fund legal cost arising from the injunction. "I have the full support of the Independence Party. They will finance it and are behind me".

The lease rates inverted today. Someone wants to borrow gold very badly to dump into the market. Hmmmm. The one month rate flew to 2.28 % up 60 basis points, while the six month traded at 1.99% which was almost flat. This would indicate to some degree that it was not producers that were doing the selling today.

Hearings were recently held in Congress by a Finance Committee to review the nomination for Assistant Secretary off the Treasury for Financial Markets. His name: Lewis Andre Sachs. How quaint!

The rap up here is the good stuff and, in all sincerity, very bullish news for the intermediate term. The letter that the gold companies sent today is a big deal for GATA and will be a big deal for the gold market. It is not an idle letter. I will explain now. Had I done so before, we would have been thrown too much in the nutcase camp and our revealing certain privileged information might have mucked up the works.

First, GATA has operatives that have accessed the British government at the highest levels. You are already aware of our connections that primed Sir Peter Tapsell, a member of the oppposition Tory Party . His presentation before the House of Commons has been read all over the world. It was easy for Tony Blair and the Labour Party to call it a partisan maneuver. Regardless, it was very effective.

But the real, new news that we can now tell you now is information from another GATA operative - the discovery of the gold short position on the books of Goldman Sachs was by a member of Tony Blair's own Labour Party. In addition, I was told months ago by a third GATA operative that one of the major gold producers "knows much of what GATA knows" and intends to do something about it. Thus, it is no real surprise to GATA that the gold producers have finally sent Tony Blair this letter. The producers that wrote the letter today have some juicy goods in their back pocket and they have inside knowledge that Tony Blair cannot just sluff this off. A member of his own political party has the goods on the colluding bullion dealer shorts and, for reasons we cannot disclose at this time, believes something must be done about it. There may be some posturing here or there, but it is GATA's opinion, that the producers have the goods on the shorts and they are "mad as hell" and "are not going to take it any more". In effect, the guantlett has been thrown to the bullion dealers and unless Tony Blair does something about the " gold problem", he could face a political scandal that could effect his role as the English leader.

So take heart on this brutal day. The beginning of the end for the "heartless" bullion dealers and certain, "calculating", boorish politicians is not that far off. The letter to Tony Blair by these 6, very important gold producers is a significant event - make no mistake about it. An incredible move up in the gold market is coming and our patience in putting up with this "rigged" market will pay off in a very big way.

Midas

PS - Does it strike you that one major gold producer is conspicuously missing from this group?

Here is a good reason to get a free Statfor subscription. This is a snippet of their latest email, this time on SA and UAE (see yesterday's post on how to get on their list). I am not promoting them, I just don't want to post all their emails here as that defeats their purpose and keeps me hopping.

"There is, however, another option. A struggle is currently
underway for succession to the Saudi throne, and Prince Sultan
may have come out more aggressive than Prince Abdullah to bolster
his bid for the throne. By being more pro-Iranian, or at least
more anti-UAE, Sultan may have been hoping to demonstrate his
independence from Washington. Whatever his motivation, Prince
Sultan has apparently been chastised for his aggressiveness and
dispatched on a tour of four Gulf states -- including the UAE,
Qatar, Bahrain, and Kuwait -- to consolidate bilateral ties and
consult on a variety of issues. Meanwhile, in a keynote speech
at the opening of the Shura advisory council on July 5, Saudi
King Fahd reiterated Riyadh's position that improvement in Saudi-
Iranian relations is in the benefit of both sides, the entire
region, and the Arab and Islamic community.

Whether or not the U.S. is on board, Saudi Arabia appears back on
course toward reconciliation with Iran. It has blunted the UAE's
opposition, in the very least postponing the issue until next
May. And one way or the other, the pro-American faction of the
royal family appears to support the rapprochement. With so much
that should be standing between Saudi Arabia and Iran, their
rapidly improving relations can only raise the question, who is
guaranteeing the stability and security of this unlikely match?"

SteveH,

I've read some of their stuff, and it's excellent - a continuing-ed course in international relations. Would it be possible for you to repost how to join their site or receive e-mailings? I've looked through the last couple of days' posts, and I can't find the directions. Thx.

$257.20.

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You know it wouldn't hurt if we wrote them and explained to them what we feel is going on with gold and all. Their recent exposee on oil showed that they are missing some of the information discussed here.

www.kitco.comDate: 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!

You asked:

"Why would those who would benefit from a higher POG simply not engage in counter manipulation by soaking up all the chimerical "paper gold short contracts"? It may be easier to write a short contract than to buy up all such contracts, but if there is truly a physical shortage, the demands for delivery by the longs would eventually turn out to be profitable, and break the game open once and for all."

First of all, the "market manipulators" are either friends with, or are the same people who are the ones who create money out of thin air. They need to hold down the price of gold (pog) to hold onto their power to counterfeit money. As long as the pog stays low, the perception is low inflation, and thus, valuable new pieces of paper. How can you fight people who have the power to create new money? How can anyone outspend them? It's folly. Furthermore, options and calls that go unexercised because of the pog going down further simply enrich the other side. Taking physical delivery is the only way.

As I've said before, the entire purpose of paper money is to steal physical gold out of the hands of the people. The only way to fight it is to take back possession.

And because people ARE doing this, 4000 tonnes taken, 2500 tonnes added, each year, the game will end--eventually.

Second, the people who would benefit from a rise in the price of gold are the very people who are being robbed--or have already been robbed of common gold & silver coinage--the little guy who knows no better--and he has little to spend.

Next, you asked:

could they not eventually destroy gold by undermining the
psychological value attributed to gold by the world's economic actors?

"undermining the psychological value" -- you mean, "reduce demand?" But, demand and annual consumption has been going up, as it has ever year, up now to 4000 tonnes. In fact, they are completely failing to undermine gold's psychological value overall, based on overall world demand-- except among people in rich countries, where their propaganda war is being waged and won.

Mongolia spent 10% of it's GNP on gold in 1998--about $30 per person in an economy where the average income is $300 per year! Imagine if America spent 700 Billion on gold, in ONE YEAR! 8-)

But think about it... do you think that a people who scrimped and saved in the third world will toss their savings into the wind, simply because a money magazine article says gold is dead? And why would they wage a propaganda war in Mongolia, even if they win the war there, we're only talking about 10 tonnes or less. Why worry about 10 tonnes in a market that demands 4000 per year?

To permanantly depress the price of gold, they have to increase supply permanantly--above and beyond the demand--and then, they would be the ones who would have to be buying the excess--to fund the increase in supply from the mines, instead of dumping!

And so, as long as the price continues to go down, less will be pulled out of the ground, and thus, supply will decrease from its current 2500 annual tonnes. Central bank sales can only increase supply temporarily.

A propaganda war will not be won by merely dropping the price of gold--although it worked today on my buddy who works as a currency trader, who chided me for being a goldbug when it dropped to $257 today. But who cares if the price of gold drops to $150 an ounce! It will just make the reverse pop that much higher. At that price, and no gold mines in the world in profitable operation, and no new supply, gold would be an asset you could truly count on to maintain or increase in value.

The only way gold will ever die is if people are demanding less gold than is being pulled up out of the ground each year. So, you really have to have a situation where there is a thriving gold industry, but no investors. Hmm... Is that possible? Or, I guess you could either find a way to turn lead into gold. Or perhaps you could find king midas. Or perhaps several geese that will lay golden eggs at the rate of 11 tonnes a day. HA HA!

If you think about it, the propaganda war against gold began the first time a government put it's stamp, or mark on it. They get people to trust and rely on their "stamp of authenticity" more than the actual metal itself. Then, it's merely a process of issuing new coins with less and less gold.

Who cares if gold is at a 20 or 27 year low? Who cares if it goes lower? In the long run, of 6000 years, gold has won every propaganda war ever waged, and it's still here.

For more on how the government has tried to destroy currencies through the ages, and where it's heading today, with scriptural references, see

http://www.jasonhommel.com/devilmoney.txt

--Perhaps the best summary of the whole money/mark topic I've ever read!!!

As an aside, I want to mention that when I cornered my friend by presenting to him the facts of the supply/demand deficit in silver and what that means, he finally shrugged and said, "I don't care if silver goes up--sometimes you miss a few opportunities, but there will always be others" --which is why I like him, he's a true capitalist, even though he doesn't see the light, neither in metals, nor in scripture.

$257.40.

MARKET REPORT (7/7/99): The siege continued this morning in the gold market with
the market price shedding another 50� in the early going. Rumors seemed to dominate
discussion among traders with few facts available from the Bank of England as to who bid
for the yellow metal on Tuesday and what their plans were for the metal.

A letter sent to British Prime Minister Tony Blair by the heads of the world's largest gold
mining companies expressed the frustrations of many. The CEO's of Placer Dome,
Newmont, Homestake Anglo-gold, Gold Fields and Ashanti demanded that Blair answer
rumors that the BOE sales "were timed to help out speculative short sellers in the market,"
according to Reuters release yesterday afternoon. "We believe it would be helpful," said the
letter, "for to make a public denial of the rumors or investigate them publicly." Needless to
say, we applaud the mining execs and lend our support to their demand.

The letter came after the market crumbled an additional $7 in New York after the sale. The
auction was over-subscribed by 520%. In addition lease rates broke through the 2% barrier
in England overnight indicating that this metal has not come back onto the market per the
rumor that was circulating in gold circles yesterday -- the same rumor that analysts claim
broke the market to the downside. The disinformation is so thick in this supposedly
transparent gambit by the Bank of England, you could stack gold coins on it. No
announcement was made as to the details of yesterday's auction and no attempt has been
made by the Blair administration or the Bank of England to explain why the Bank of
England did everything they could to get the lowest price possible for their gold. Put it all
together and it would be miraculous if responsible people in Britain and elsewhere failed to
question whether or not any common sense was applied to the sale.

So far the British treasury has lost nearly $1 billion on their gold holdings since the
announcement was made on May 7, and the British pound has plummeted in a manner
reminiscent of the currency plunges in East Asia last year that nearly put the world economy
over the edge. In today's trading, the pound sterling continued its descent into oblivion.
Will Britain become the first G-7 victim of the Asian contagion?

Our advice to gold buyers remains what it has been since the May 7 announcement.
Purchase on an averaging system until we get a clear read that we have found a bottom. It is
obvious that there are forces out there who want a lower gold price for whatever reason, but
what they want is not necessarily what they are going to get. We believe that that the gold
shortage is real -- as indicated by rising lease rates. Don't be fooled with anti-gold
propaganda in the mainstream press. Everything that has gone on behind the scenes in the
gold market in recent months points to somebody accumulating the metal for their own
purposes. Yesterday, it was rumored that JAron, the commodity arm of Goldman Sachs,
was the biggest buyer. Also, the after-shocks from yesterday's BOE sale could very well
have sabotaged both the IMF and Swiss gold sale plans. We believe that the overall gold
demand is being masked by various activities to restrain the price including the BOE auction
and the constant reference, even as late as this morning, to these sales that are unlikely to
occur. If you buy on an averaging system, you might not catch the low, but you won't pay
the high either. By the time the truth in today's gold market is evident, the profits could be
substantial. At the same time, we cannot lose sight of our primary objective:

To accumulate gold as a hedge (insurance) against the various problems festering in the
world economy --

the overvalued stock market,

the consequences of the Y2K rollover,

higher oil prices,

currency problems in third world (and the British) economies,

and the introduction of a single European currency to compete with the
dollar.

None of this has changed. As Barton Biggs, the well known portfolio strategist for Morgan
Stanley, said last week: "The world is still vulnerable to some kind of negative
surprise....In this climate, the Standard & Poors 500 and Dow Jones could be the worst
performing major indexes in the world." There is still ample incentive to own gold and all
that gone has dampened demand among investors only on the margin. Most gold investors
are simply waiting to see where the price is going to bottom which might not be the best
strategy. The price could bolt up at any time.

Our strongest advice to all gold owners is to consider averaging down. Strategically, it
makes a great deal of sense especially as we near the cost of production in many of the
world producing companies. If you were to double up at these levels, it would take half the
move for you to recover your initial investment -- something worth considering. If you
have made paper profits in the stock market, now would be a good time to convert some of
those paper profits to real money.

That's it for today, fellow goldmeisters.

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.

Much as I hope Gambler is right (I am a goldbug), I do not hold out much hope. There was a comment on Kitco that Gambler had called a gold move earlier which did not materialize. We are witnessing some powerful forces here. Eventually they will achieve their goal (see
http://csf.colorado.edu/mail/longwaves/jul99/msg00340.html)
or will fail and take us all down with them. In either case I suspect gold will then see its day. The only question is when. The only prospect I see of an early end to manipulation is if control is seized from the Fed by the Japanese who hold so much power over the US economy through their US debt holdings. They could burst the bubble easily but why would they want to? It is their biggest export market and jobs would disappear in Japan if they did so. I do not understand why they want all this printed paper money though. They just reinvest it back in the US, pumping up the bubble and making Americans ever richer at their expense.
However, that said, I think the bubble will have to burst eventually. There are just too many parallels with the period preceeding 1929 and we never seem to learn from history.

Or just ANOTHER CONSPIRACY THEORY?

Talk about not seeing the forest for the trees, or could something this simple be the reason for golds so called demise? The Shadow knows! ;-)

Has any one else noticed the similarity between the strategy Nathan Rothschild used during the Napoleanic war with England and the present war on gold? Use an advanced or superior intelligence agency combined with huge financial resources, then sell into the market and when market is at
bottom, buy back for pennies on the dollar.

This strategy is as old as the hills, but it takes immense wealth, power, patience and time to pull it off. Does the NWO have the wherewithal to pull it off? Do birds fly?

Once everyone(and I mean everyone literally) is so discouraged with gold, throws in the towel and
dumps a valuable asset, mines go bankrupt, and are purchased for practically nothing, who will own the gold? [He that owns the gold rules!] The harbinger of the establishment of a one world currency?

Will they stop before they own ALL? NO WAY, NO HOW! Sound farfetched? Think again!

PS: Talk about paranoia!

http://biz.yahoo.com/rf/990707/ub.htmlThis one is for you technical traders out there.

http://biz.yahoo.com/rf/990707/vf.htmlGold and other global financial news.

I am net short gold today (futures, I would buy bulllion coins) just because it looks so weak. Same reason I bought copper cause it looks so strong.

http://cnniw.newsreal.com/osform/NewsService?osform_template=pages/cnniwStory&ID=cnniw&storypath=News/Story_1999_07_07.NRdb@2@1@3@153&path=News/Category.NRdb@2@12@2@4As far as anti-gold propaganda goes, at least this one is interesting to read.

human sufferingwe only think of our own profits or losses, but what concerning the mineworkers in for example south africa
http://news.24.com/English/Business/Companies/ENG_77265_494934_SEO.asp

much thanks to Aristotle for relating the words of Aragorn III spoken at your meeting. nie met uva ella en arda. (please excuse my accent) sadly, my typical sallies represent the other end of the spectrum. those who frequent the same pubs i do, although not all stupid, or out of touch in general, are surprisingly ignorant when it comes to precious metals and money. recently i brought up the subject of gold and asked the question "how much is gold worth?" here are some of the replies i got;

- "i don't know, $50.00 an ounce?" (this was actually the mode of the prices guessed)

- "quite a bit more, if it's from the black hills."

- "it depends on how many people are bidding for it."

- "ten times as much as silver." (from an old dungeons and dragons player)

- "48 karat gold is worth the most."

- "$2.85 an ounce." (i think weight was at issue here, upon further questioning this person guessed that a dime weighed about ten ounces)

the per ounce prices guessed were all low, but when confronted with an actual coin the prices guessed were usually too high. i must admit having taken advantage of these people at times, selling silver dollars i had purchased at around $8 for up to $20 when pressed to name my price. originally of course, i was guilty of metal ignorance myself, having a generally backward view of things. thanks to this forum, and it's knowledgeable posters, i am learning much about metal as well as money.

keep it coming!

As I try to make some "conventional sense" of the BoE sale and the continued drop in the POG, I am more inclined to drop my own bias for gold and look at the numbers and facts in a more objective manner.

The actions of the BoE reflect the actions of an entity coerced by forces unknown. The "sale" was forced and all the publicity engineered to drop the POG. This action was taken in the face of a majority of Brits opposing the sale. It doesn't appear that any of this gold made it to the market; witness higher lease rates. The Rothschilds and their LBMA must be laughing. Talk about theft without consequences!

The USTreasury hasn't sold any gold (that we know of). Maybe there isn't enough left to sell?? See James Turks' Copyright 1994, 1999 by Freemarket Gold & Money Report. All Rights Reserved. First published on April 25, 1994 in FGMR Letter #143--LBJ lost it in 1968.

Pete's post earlier today about the Rothschilds an their multi-generational manipulation of the markets rings true as to perhaps one of the big players behind the scenes. They are precisely the kind of long-term players that would manipulate the markets in order to control the bulk of mined and unmined gold in the world.

If these things make sense, then I believe the game is far from over. I believe that the fatal blow will be the fallout from y2k. That should cut the power long enough to ruin all markets and the suppliers of the traded commodities--farmer, miners, etc. Then the "Cabal" can buy up the means of production at fire-sale prices and they will own the world. They will then create a new global currency and force all to use it. I fear that part of the agenda will be to outlaw private ownership of gold and silver. I do not know how we (the people) would overcome that hurdle.

I think then, that gold will stay manipulated until after 1/1/00. To that end, any prices we see here are worth buying at. To ensure against a prohibition against private gold ownership, a foriegn trust and corporate account might do the trick. The individual could sell or transfer their gold to the trust or corporation and still have some control over it. This is the method that the big money players have used to hide and protect their own money for generations, so I think these structures will not be attacked to much. It all will depend on situs of the trust/corporation.

I do not hold happy picture of the next 10-20 years for the real people of the world. Only the lords of these times will be fat and happy - the rest of us will be serfs.

http://www.fresnobee.com/business/story/0,1224,89536,00.htmlThere are lots of potentially troublesome dates, not just Dec.31st/Jan.1st. Some may pass without a hitch, some may wreck your day. No one can say with certainty.

http://www.amcity.com/denver/stories/1999/07/05/smallb4.html?h=y2k"Some of this sounds really paranoid, but given all the hype on this issue, if it is not too difficult to safeguard yourself, why not do it? ... One of the things I am most concerned about is the impact on my investments due to everyone's paranoia. I don't know what will happen with the stock market, but I know if a bunch of people pull their money out, it will negatively impact my investments even if Y2K is not the culprit."

This author gives simple, straightforward, common-sense advice, that if heeded by everyone, would be more demand for money and goods than the system could easily accommodate. We're in trouble. Cheap gold is a fleeting thing, I'm afraid to say...

http://www.newszap.com/070699a.htmlThis is a good one to help you think about the future with a measure of common-sense and self-reliance.
-------------
The problem for business is that so much of it is tied together. If a phone carrier goes down, it affects everyone else. The same goes for a power provider.

"They can't guarantee power this afternoon. How can they guarantee it on January 1st?" asked Ms. O'Connell.

She's right - they can't.

I am less interested in why the BOE sold some of its 715 tons than in how it came to have only 715. If anyone has longterm figures I would greatly appreciate seeing them. Perhaps I simply haven't looked in the right place. Buckminster Fuller made some tantalizing remarks on the transfer of gold brought about by WWI in an obscure little book titled Education Automation, but didn't provide specifics.
Intriguing coincidence: I happened to open a Bible at random today and read "The weight of gold that Solomon received yearly was 666 talents". The footnote says "That is, about 25 tons". The passage is Second Chronicles 9/13 and the translation is the New International Version.
Goldsun

As a follow up on my post: Pete (7/5/99; 23:11:55MDT - Msg ID:8425), a calculation based on following assumptions:

1) That oil would convert as many petro dollars as possible into physical and paper gold without pushing up POG.

2) That $32 billion would be available each yr. since inception of paper gold(1980).

3) That after allowing for physical demand by consumers, they keep supply and demand in balance in order to keep POG stable.

4) That the average hedged POG = $400/oz..

5) That average production of gold annually = 2,500 tonnes.

6) That there has been an average 3,500 tonnes demand yearly or a shortfall of 1,000 tonnes/yr..

7) That because of 6), no physical gold of any consequence has been available to oil since 1980, ergo all monies($32 billion/yr.) has been going into futures contracts less any contracts that were filled(9 yrs.).

8) That all futures held by oil have been rolled over for a period of 10 yrs into future, leaving 9 yrs of physical gold delivered or stored by hedge miners for oil.

9) That 50% of all gold production is hedged = 1,250 tonnes/yr. and delivered to oil for the 9 yrs..

10) That CB's furnished shortfall based upon above assumptions.

A) The shortfall had to be furnished by CB's and BB's, or 19 yrs. at 1,000 tonnes/yr. plus 9 yrs. accumulation by oil of 1,250 tonnes/yr = 19yr's x 1,000T/yr.(19,000 tonnes) + 9 yrs. x 1,250T's(11,250T's) = 20,250 tonnes over the past 19 yrs. If I'm not mistaken this amounts to approximately half of their total reserves.

B) Oil has bought futures on gold at the rate of $32 billion for 19 yrs = $32 billion x 19 yrs. / $400/oz = 1,520,000,000 oz's of gold / 32,150 oz's/tonne = 47,278 tonnes less gold delivered to oil(20,250 tonnes) = 27,000 tonnes +/- that is due them in the future.

If(?) the above calculations and assumptions are close, then the CB's and BB's do not have enough in reserves to cover what is owing and due to oil. In ANOTHER 19 yrs. at the same rate of depletion of CB's and BB's reserves, reserves will be completely gone and probably sooner if gold production falls for obvious reasons.

IOW's, in 19 yrs. or less, oil will be holding many undeliverable contracts. I can't make any more sense or elaborate further whereas I know you can. Your comments would be appreciated.

Thank you,

Pete

http://asia.yahoo.com/headlines/070799/technology/931281120-132976.htmlThis is about the grimmest forecast I have seen lately.

"Almost one third of Britain's top 1,000 companies are failing in their battle with the Y2K issue on their information technology (IT) systems. As a result, many of them will face the ultimate punishment, bankruptcy." Got Stocks?

http://asia.yahoo.com/headlines/070799/technology/931291260-132997.htmlPossibly the greatest Y2K danger still government does not come from embedded chips and non-compliant systems, but rather from the potential panic that could accompany the date rollover.
Sorry to tell you guys, but you can't stop the herd. You CAN, however, anticipate and act in advance. That's what the smart money is doing.

By Melanie Lovatt, Bridge News
New York--Jul 7--COMEX Aug gold futures settled little changed, up 20c
at $258 per ounce, after plunging Tuesday to a fresh 20-year low on
aggressive selling after the Bank of England's first gold auction. Aug had
hovered near --and then briefly touched--Tuesday's lows early this
morning, but then made a tentative move back into positive territory on a
smattering of short-covering.

COMEX gold open interest for Tuesday was reported up 15,108 contracts
to 218,365 earlier today, suggesting that new short positions were added
during Tuesday's hefty price fall.
"Funds who covered shorts Thursday and Friday ahead of the UK auction
got back in on the short side," said Tony Caen, senior precious metals
dealer at Credit Lyonnais Rouse.
He noted that today there was a little bit of short-covering as Aug
broke above the $259.20 per ounce level, which represents a previous
double bottom, to a session high of $259.60.

Gold's steady performance today was more due to the fact that the
selling dried up. However, while gold ended in positive territory, it was
finding it heavy going at the highs, said Caen, noting that the session
was quiet. "It's a slow recovery and nothing to get excited about," he
said, suggesting that gold will take a while to digest Tuesday's UK
auction news.

Traders said that on Tuesday gold prices initially drifted lower after
the 0715 ET auction results, but then got slammed down on rumors that the
gold might be returned to the market. There was also talk of panicked
producer selling, especially overnight from the Australians when gold fell
to the Aus $385 level, he said.

The BOE sold gold at $261.20, which was close to the spot gold price
when the sale results were announced at 0715 ET. Bids were received for
4.174 million ounces of gold, which is 5.2 times the 804,000 ounces which
were sold.

Today gold might have seen some support from "Far East offtake," Caen
remarked. Gold's reaction to the UK auction, however, "really send a bad
signal" he said.
Meanwhile, the UK government today dismissed rumors that it was timing
the sale to help speculative short sellers as "wild fantasy." Some of the
world's largest gold producers wrote to UK Prime Minister Tony Blair this
week asking him to investigate these conspiracy theories. A
UK Treasury spokesman said that while it would answer the letters, there
would be no investigation.

Canada's Placer Dome, one of the signatories to the letter, today
urged the UK to change its gold auction method. Placer's CEO John Willson
told Bridge that the next UK gold auction, set to take place in September
this year, could push embattled gold prices even lower. He said that the
transparency of the UK sales are hurting what is essentially an opaque
market.

--Aug gold (GCQ9) at $258, up 20c; RANGE: $259.6-256.5

(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

By Hilton Shone, I-Net Bridge
Pretoria--Jul 7--The South African cabinet today said
it was "formally reversing" its position over the sale of
gold by the International Monetary Fund (IMF). Previously,
South Africa had reluctantly supported the sale of 5 million
ounces of gold by the IMF to fund debt relief for poor
countries. South Africa is the largest producer of gold in
the world and has suffered from the lower gold price
prompted by talk of gold sales by the IMF and the UK
Treasury.

The IMF now intends to sell 10 million ounces.

The South African cabinet issued a statement after its
meeting in Pretoria today saying it would "formally reverse
its position regarding the sale of gold by the IMF."

The cabinet called on the South African Chamber of
Mines, an association of employers, and labor to liaise with
their counterparts in other countries to formulate a united
stance against further gold sales by central banks and
multilateral organizations.
The cabinet said President Thabo Mbeki will follow up
his discussions with the leaders of industrialized nations.
Plans have been set up to visit soon the UK and other major
countries which hold large gold reserves--the US, Germany
and France--in order to take this issue forward.

After the cabinet meeting the recently-installed
minister for minerals and energy, Phumzile Mlambo-Ngcuka,
said the UK had failed to meet an assurance given to Mbeki
that it would be notified before any gold sales.
"Despite earlier talks between the President and the
British Prime Minister, during which an undertaking was
given that the UK would again communicate with South Africa
before implementing its intended gold sales, these sales
went ahead yesterday with a further marked drop in the gold
price," said the minister for minerals and energy, Phumzile
Mhlambo-Ngcuka in a statement.

The cabinet was even more accusatory.
"The South African government finds both
incomprehensible and unacceptable the insensitivity of the
British government and its monetary authorities towards the
pleas of gold producing countries on the handling of the
matter of gold sales. This behavior and the decisions of
other industrialized countries and the IMF on the public
handling of gold sales is having the effect of defeating the
very objectives that they profess to pursue," said the
cabinet.

This is the strongest official criticism yet by South
Africa of the UK's gold sales.
On Tuesday the Bank of England conducted an auction for
the UK Treasury of 25 tons of gold. The price was set at US
$261.20 per ounce, but once the price was revealed gold
plunged to a 20-year low of $256.10.

(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

VENEZUELA'S RODRIGUEZ SAYS OPEC OIL CUT COMPLIANCE AT 95%
Caracas--Jul 7--1355 ET--Venezuelan Energy and Mines Minister Ali
Rodriguez said that the OPEC and non-OPEC oil-producing countries have
come to 95% compliance with the 5 million barrels per day of oil cuts they
have pledged this year and last year to boost oil prices. He reiterated
that Venezuela is complying 100% with its output cut pledge of 650,000
bpd.

OPEC MARKET MONITORING COMMITTEE TO MEET JULY 30 IN VIENNA
London--Jul 7--0605 ET--OPEC's ministerial monitoring committee (MMC)
is scheduled to meet July 30 in Vienna, an OPEC spokesman confirmed today.
The MMC is made up of representatives from Nigeria, Iran and Kuwait and
will be attended by the OPEC President, the Algerian oil minister Youcef
Yousfi. The next full OPEC conference is scheduled to be held Sep 22 in
Vienna.

(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://prudentbear.com/bbs/index.cgi?read=54202another interesting prubear board posting...

Most interesting post by Tommy Bear. He is a good writer and gets right to the point, eh?

My question regarding his conclusion, which was when 'checkmate' occurs between world governments and deflation, he said having cash would sit the holder on the throne. Does he refer to gold as cash, US$ as cash, Euro as cash?

What would be the likely outcome for gold under his scenario. Thoughts?

Steve

Again, I am miffed as to purpose of shorts hammering gold. My only conclusion appears to be to buy time. I further presume it is to buy time to unravel positions. We know hedge funds are unravelling positions now or so we have read. We can see that the lower gold is going the more verbose the pro-gold camp becomes, so much so now that gold is starting to get positive coverage with some to little negative overtones. I conclude by that that as it goes lower yet the verbosity will actually turn into some sort of front pro-gold assault to curb any further slides.

One such outcry of course was todays below posted reversal by South Africa towards the IMF sale of what was 5 million ounces (now 10 million -- when did that happen?). I actually chuckled when I read that. Diplomacy is out and outcrying is in.

I further said and "Oh s....!" when I saw the amount by which the OI (open interest) gold contracts increased by what I thought was 18,000. That caught my eye. Then I read where a Tony Blair spokesperson said we will reply but will not investigate. So much for English independent council.

Judging by the speed of today's events I believe the news stories just weeks from now will read differently regarding gold. Shame on world financial leaders for getting us to this point, shame on you. We deserved and expected better.

So if by buying time we can make all right, fine. But if by buying time the culprits and instigators are let off the hook for the likes of you and I to carry their problems that they leave behind then shame on all of them.

My take was that "Tommy Bear" was referring to U.S. bucks.

Fact; The BOE sold 804,000 ounces of Gold(25 Tonnes) yesterday for $261.20 per ounce.

First blank---How was this Gold paid for?
List of possible answers:
1. Cash-Any convertible currency?
2. Promise to pay-in any convertible currency?
3. Trade for tangible assets-Oil or other commodities?
4. Trade for paper assets, backed by tangible assets?
5. Trade for Real Estate or other REAL assets?
6. Good will?
7. All of the above?
8. None of the above?

Second fact; Bids came in from only accepted bidders for 4.174 million ounces of Gold, 5.2 times the amount of Gold Sold.

Second blank---If this was an open auction(open to 160 Central Banks, open to all jewelers,all mints,all speculators, all tycoons, and many more), What would be the total ounces bidded for?

1. 4.174 million ounces?
2. You fill in the blank?

Third fact; Gold made a nosedive from bidding price of $261.20 in London, to $256.10 in New York, the same day.

Third blank---If there were buyers(bidders) for 4.174 million ounces of physical Gold, and only 804,000 ounces were sold, wouldn't that leave a shortfall of 3,370,000 million ounces of physical Gold that buyers/bidders wanted?
Why did the New York spot price of Gold drop $6.00 an ounce???
List of possible answers:
1. All owners of physical Gold tried to sell at any price?
2. Paper Gold contracts were created to flood the market with promises of physical Gold delivery, sometime in the future?
3. There were more sellers of Gold than buyers at a price that was the lowest it had been in over 20 years?
4. Scientists discovered a way to create physical Gold out of thin air?
5. Price fixing?
6. None of the above?
7. All of the above?
8. You fill in the blank!
......beesting

Truly it is discouraging to keep hoping that we've finally reached the gold bottom...while still bleeding and bleeding and bleeding with the money that has been put into gold stocks. While I'm no longer buying any new gold stocks, there is no way that I'll sell my current stocks even if they all go down to a penny each, because SOMEDAY they will soar to the stars. However, I'm certainly beginnning to wonder whether that will happen in my lifetime, as almost every investment decision I've made during the last 15 years has backfired on me. Some of the gold stocks that I bought have fallen to less than 5% of what I paid for them; and almost all have gone down by over half.

In retrospect, I wish to God that I had stayed in the stock market and ridden this riciculous and ludicrous bull to its absurd tulip-mania heights and stayed out of gold until now. Had I done so, I could retire now instead of working two jobs. Looking at it from another point of view, we can certainly empathize with what the stock market bulls will go through when their tulip-mania fields are overgrown with weeds of despair as the fields of gold have been.

How long can it go on? Every time I see a CONVINCING reason for gold to finally turn around, more bad news (such as the BOE announcement) kills my hopes and spawns more and more deep discouragement. Let's pray that GATA gets results, for the long-term sake of the world.

--Skip

Skip; don't despair we're all in the same boat.The chess match is nearly over. Many lunatics throughout history had delusions about paper money and attempted to 'out-think' reality. Greenspan and Rubin and Brown et al are merely the latest in this myopic group. Remember, the markets are analogous to a star. Externally you see very little change,but inside the star is burning through different layers of elements exponentially until it reaches iron. At this point no amount of energy can sustain the mass and it collapses. Ironically this is when gold is created. These people are gov't employees Skip, nothing more. When we hit 'iron' gold is going to be some thing you'll be glad you hung on to.

Skip; don't despair we're all in the same boat.The chess match is nearly over. Many lunatics throughout history had delusions about paper money and attempted to 'out-think' reality. Greenspan and Rubin and Brown et al are merely the latest in this myopic group. Remember, the markets are analogous to a star. Externally you see very little change,but inside the star is burning through different layers of elements exponentially until it reaches iron. At this point no amount of energy can sustain the mass and it collapses. Ironically this is when gold is created. These people are gov't employees Skip, nothing more. When we hit 'iron' gold is going to be some thing you'll be glad you hung on to.

Skip; don't despair we're all in the same boat.The chess match is nearly over. Many lunatics throughout history had delusions about paper money and attempted to 'out-think' reality. Greenspan and Rubin and Brown et al are merely the latest in this myopic group. Remember, the markets are analogous to a star. Externally you see very little change,but inside the star is burning through different layers of elements exponentially until it reaches iron. At this point no amount of energy can sustain the mass and it collapses. Ironically this is when gold is created. These people are gov't employees Skip, nothing more. When we hit 'iron' gold is going to be some thing you'll be glad you hung on to.

http://biz.yahoo.com/rf/990707/bgb.htmlReferring to recent currency market intervention by the Bank of Japan, Summers said Tokyo should focus on fundamentals rather than currency levels.

You heard it here, folks. American officials are committed to a strong dollar with no concern for currency levels. Click the link, and you do the math!

ALL:
I hope to offer our first chapter on Saturday, July 10. In it we will begin to see some answers to hard questions. Truly, the price of gold is plunging because the governments are running out of unsecured bars to offer. Physical will become more expensive than paper, very soon. As they run
out, did you think the London gold market would just sit there and allow the paper price to soar and wipe them out? No, the world gold market as we know it will be completely dishonored from inability to deliver. But only after they have flooded the system with worthless short securities.
Forget the options, futures, otc paper and the mining industry, as they will all burn. Just as Another has warned for some time. The chess game continues and we wait the next move.
FOA

Skip, Hang in there! The blood is in the streets with a little more to be let, and then to the moon(Hopefully).

Good luck,

Pete

$258.00

FOA,

Why the need for the shorts to play the game through when they know the outcome or do they?

Is there not something to do or be done to prevent the paper burning?

http://news.bbc.co.uk/hi/english/events/the_launch_of_emu/euro_latest/newsid_388000/388814.stmeom

http://biz.yahoo.com/rf/990707/2l.htmlWednesday July 7, 3:16 pm Eastern Time
IMF to mull gold sales plan as opposition mounts
By Mark Egan

WASHINGTON, July 7 (Reuters) - The International Monetary Fund's board will meet on Friday to discuss how to sell part of its gold reserves without the bruising affect on prices seen after the Bank of England sold 25 tonnes of gold bullion on Tuesday.

``The board will be discussing these issues on Friday,'' IMF spokesman Graham Newman said.

The IMF plans to sell up to 10 million ounces of a total gold reserve of 104 million ounces over several years to help relieve the debt of 41 of the world's poorest countries.

The hotly debated plan, which needs approval from the U.S. Congress, met with increased opposition following Tuesday's sales by the Bank of England which drove gold down to a 20-year low of $256.80 a troy ounce.

South African Finance Minister Trevor Manuel was among those claiming IMF gold sales would harm the struggling economies it aimed to help.

``It doesn't make sense to tell countries we will weaken your economies and then give you a little debt relief,'' he said after the Bank of England sales.

IMF Managing Director Michel Camdessus continued to defend the plan.

``We will not sell this gold in a disorderly or rash way which would depress an already depressed market,'' Camdessus said on Monday before the Bank of England's sales.

Gold experts and aid organizations said it was not gold sales that were pounding gold prices lower but the attitudes of gold-producing nations.

Jeffrey Christian, an analyst at CPM Group in New York, said gold prices have dropped in recent months because gold-producing nations have created a sense of panic by objecting to the gold sales rather than downplaying their significance.

``Instead of saying this amount of gold sales can be easily absorbed by the market, the gold producers have contributed to the negative atmosphere in the market by objecting,'' Christian said, noting that Tuesday's Bank of England sales only amounted to 3 percent of London's daily bullion market turnover.

Tuesday's sales by the Bank of England were the first step in a plan to cut its reserves to 300 tonnes from 715 tonnes.

``You can expect the bears to use the IMF gold sales issue to drive the price of gold down further,'' he said.

Veena Siddharth of aid organization Oxfam International in Washington disagreed with the idea that gold prices were being driven lower by Bank of England sales or by the prospect of the IMF putting some of its gold on the market.

``There is an element of denial among the gold-producing countries,'' she said. ``The price of gold is going to go down, that's inevitable, whether the IMF sells gold or not.''

Opponents of the IMF gold sales plan contend sales would hurt the price of gold and offset much of the benefit given by debt relief since 36 of the 41 poor countries are gold producers.

Gold has slumped from $291 an ounce at the beginning of the year, losing around $35, or more than 10 percent, since the Bank of England gold sale plan was announced in early May.

Switzerland intends to sell 1,300 tonnes of excess gold reserves and transfer the funds to a foundation to help victims of poverty, human rights abuses and catastrophes.

Siddharth said she expects the IMF gold sales to generate renewed opposition in Congress, particularly among politicians from the western U.S. gold-producing states, when lawmakers return to Washington next week.

Among those opposing the plan are House Republican Leader Dick Armey, who has urged fellow lawmakers to oppose the plan. The plan needs the approval of 85 percent of the IMF's board. Since the United States has a 17-percent vote at the fund, Congress could effectively veto it.

Armey and Joint Economic Committee Vice Chairman Jim Saxton of New Jersey introduced a bill last week which would block the sale of IMF gold unless proceeds were returned to the U.S. and other IMF donor nations.

http://biz.yahoo.com/n/z/z0006.htmlGeorgia minister sees strong growth, IMF cash soon - Reuters Securities - 9:24 pm
CORRECTED-IMF says Mexico economy vulnerable - Reuters Securities - 7:27 pm
IMF says Mexico economy vulnerable, banks fragile - Reuters Securities - 6:57 pm
Economists, markets see UK interest rates on hold - Reuters Securities - 6:54 pm
Alert: Imf-mexico Should Not Draw on New Loan If International Environment Improves - Reuters Securities - 6:52 pm
Alert: Imf Sees Mexico Gdp Falling 3 Pct in 1999, Rising 5 Pct in 2000 - Reuters Securities - 6:50 pm
Alert: Imf Says Mexico Economy Still Vulnerable, Warns of 'Fragility' of Banking System - Reuters Securities - 6:50 pm
REUTERS MONEYGRAPH-IMF SDR rates-July 7 US 1.32842 - Reuters Securities - 5:31 pm
Dollar pauses for breath, closes US off vs Europeans - Reuters Securities - 5:08 pm
Canada bonds end softer in light trade, await data - Reuters Securities - 5:04 pm
Most U.S. Treasuries moderately lower late day - Reuters Securities - 5:01 pm
Brazil cenbank suggests revamping payments system - Reuters Securities - 4:45 pm
Chile needs fiscal monetary policy tools - Massad - Reuters Securities - 4:05 pm
IMM currency futures end mostly weaker, trade slow - Reuters Securities - 3:57 pm
U.S. June layoffs rise 15 pct to 63,397-Challenger - Reuters Securities - 3:57 pm
IMF approves $4.12 billion loan for Mexico - Reuters Securities - 3:44 pm
Greenspan testimony to House panel set for July 22 - Reuters Securities - 3:17 pm
IMF to mull gold sales plan as opposition mounts - Reuters Securities - 3:16 pm
Net $1.974 bln U.S. securities stripped in June - Reuters Securities - 3:07 pm
Brazil sells dollar-pegged notes at higher yields - Reuters Securities - 2:54 pm
Peru vulnerable, should strengthen economy - IMF - Reuters Securities - 2:38 pm
Gold up from 20-year lows in late European trade - Reuters Securities - 1:36 pm
Dollar shuns extremes, clings to ranges at US noon - Reuters Securities - 1:18 pm
FX IN EUROPE - Euro yet to win market confidence - Reuters Securities - 12:59 pm
WRAPUP-Gold down after UK auctions, outlook bleak - Reuters Securities - 12:39 pm
Chile's updated comparative trade data - Reuters Securities - 11:50 am
Gold options likely to feature in next UK auction - Reuters Securities - 11:32 am
Oil, peso, U.S. Fed push Mexico rates to year-low - Reuters Securities - 11:27 am
Alert: Fed Says Added $951 Mln of Reserves Via Wednesday's Coupon Pass - Reuters Securities - 10:57 am
Chile's M1A money supply rises 2.4 pct in June - Reuters Securities - 10:54 am
Fed buys coupons from 08/15/99 to 02/29/00 - Reuters Securities - 10:27 am
Canada bonds open weaker on U.S. supply concerns - Reuters Securities - 10:19 am
Dollar opens US firmer within ranges vs euro, yen - Reuters Securities - 10:05 am
IMM currency futures mostly weaker in early trade - Reuters Securities - 10:01 am
Alert: Fed Says Added $5.671 Bln Reserves Via Wednesday's Overnight System Repos - Reuters Securities - 9:49 am
Fed adds temporary reserves via overnight systems - Reuters Securities - 9:44 am
Chile's foreign reserves slump $1.576 bln in June - Reuters Securities - 9:27 am
Alert: Chile Posts $198 Mln Trade Surplus First Half June - Central Bank - Reuters Securities - 9:07 am
FX IN EUROPE-Hobbled euro/dollar struggles to rise - Reuters Securities - 7:24 am
British interest rates seen holding fast at 5 pct - Reuters Securities - 6:50 am
S'pore says studying proposals for G7 finance meet - Reuters Securities - 6:12 am
CORRECTED - CORRECTED - CORRECTED-FOCUS-Papua PM quits as govt crumbles - Reuters Securities - 5:16 am
FX IN EUROPE-Dollar bolstered, holds firm vs pound - Reuters Securities - 5:02 am

To: canamami re: msgs 8491 & 8492
Excellent commentary, you seem to be close to first-hand
knowledge, please keep us informed.

Question: Are the manipulators going to win or lose??
Obviously we can't hold you to your opinion.
Please respond to Jason H.'s msg. 8499
To: Towncrier re: 8517 Where is your smart money?

To: Skip re: 8526

Relax, all my money is very liquid, poised for the attack.
When you begin to see steep upward curves, jump on the
wave, it will carry you. When, soon, Dow, Nasdaq, S&P,
still have to sell, sell, sell Y2K fixes and then they are
done.(Market curves stop) Then Y2K takes over with a
vengence. Ask 'Towncrier'.

Disclaimer: I have lost every nickel ever invested, don't
listen to me.

Townie...My take on Summers' remarks is that he is AGAINST other countries seeking to improve their economies by pushing up the dollar. Clearly, this is precisely what the Japanese, for example, have been doing. Such practice robs America of valuable manufacturing jobs. It also reduces the comparative attractiveness of gold and exacerbates the U.S. trade imbalance.

The result of such short-sighted policy, of course, is an increase in the overhang of dollars throughout the world, which will ultimately bring our currency down anyway.

Summers didn't say all of this, of course, but I believe it is what he is thinking. If so, I think he is right!

Thanks again for all of the news references you post, Townie. You do us all a big favor.

We have had considerable news coverage on BOE Gold sales, and much speculation on, why the BOE is selling Gold. For all other major events of this magnitude the buyer/buyers would be asked for their perspective on their recent acquisition of Gold.

THIS IS A CHALLANGE TO THE NEWS MEDIA TO DO YOUR JOB!!!

Find out who bought the Gold at the BOE Gold sale?

Ask them their reasons for buying Gold at this time?

Was it Central Banks?

Was it bullion banks?

Lets put some intrigue into this, was it a royal family or well known financial figure?

In My Humble Opinion until we the Goldhearts(and the public) can get verification of who is buying Gold and the WHY THEY'RE BUYING GOLD, made public, speculation and innuendos are the name of the game, on the Gold forums, and all across the internet!!

If anyone is successful in this quest, please post results on this forum........beesting

Pierre Lassonde president of Franco-Neveda Mining and Euro-Nevada Mining wrote a commentary called "Who Killed the Golden Goose." In short he said: "As to the golden goose, there's even less mystery as to who, and yet the why is just as enigmatic. The single greatest damage caused to the gold price has been indiscriminate leasing by central banks of their gold reserves at give away prices." He also blamed gold companies hedging policies and overproducing through high grading.

$256.90

http://www.jasonhommel.com/Thanks for the insight regarding the 666 talents being "about" 25 tonnes. I did some checking, and here's some details:

[1Kgs 10:14] "Now the weight of gold that came to Solomon in
one year was six hundred and sixty-six talents of gold." From http://www.templemount.org/TMTRS.html, 100 talents of gold = 3.75 tonnes. To find the weight, in tonnes of 666 talents, we multiply by 3.75/100, and get 24.975 tonnes. Aproximately the weight of the sale of gold in the Bank of England Gold sale.

So, is God "off" or only "sort of accurate" IF this is a prediction/prophesy/fulfillment? Does the inaccuracy invalidate things, and am I "reaching" thinking there might
be a connection between the two? I decided to check how "off" this was, so I divided 24.975 by 25, and got .999 -- the exact number of purity of pure gold, which is also an inverted 666, and a 'clue' of 1999 if you want it. Divide 25 by 24.975 and you get 1.001001001001001001001001001001--which alludes to computer code of 1's and 0's, which I believe will be used as the ultimate replacement of gold as money in fulfillment of the the mark of the beast 666 prophesy in Revelation 13.

A modern transliteration is
Rev. 13: [16] He [the second beast] caused everyone, small and great, rich and poor, free and slave, to receive a mark (an etching of servitude) (made with a sharp point) in their right hand, or in their foreheads; [17] so that no one could buy or sell unless they had the etching of servitude, or the authority of the beast, or the number of his name. [18] Here is wisdom. Let him that has understanding count the pebbles as the number of the beast, for it is an individual's [identification] number. His number is incised with a pricking action - willingly - by one claiming to possess the Godhead... (or his number is 666.)

And in original KJV:
[Rev 13:16] And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads: [17] And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name. [18] Here is wisdom. Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is Six hundred threescore and six. (666)

The context of Solomon is...

[1Kgs 10:23] Thus King Solomon excelled all the kings of the earth in riches and in wisdom.
[1Kgs 10:24] And the whole earth sought the presence of Solomon to hear his wisdom, which God had put into his mind.

Which is a view of a kingdom above all others... like the AntiChrist / NWO will try to claim.

Normally, I do not get all wierded out by doing math in connection with Bible prophesy, in fact, I've never done "Bible prophesy" math like this before. And I always take other people's math prophesies with a grain of salt. But this one seemed pretty fear inspiring to me. Frankly, it freaked me out when I did the math.

[Rev 3:18] I counsel thee to buy of me gold tried in the fire, that thou mayest be rich..." --Jesus Christ

In my continuing journey thru life, I've learned not to mistake a bakery as a substitute for my daily bread. The same holds true for mining stocks vs. the real Money they extract from Earth. I hope many others learn that lesson in some degree before it is too late. Even during past "good times" for Gold, can you recall a shared its real Gold with its shareholders? More than likely, any "profit" a person may have receieved was likely in the form of paper currency from the sale of their metal to people that wanted to rid themselves of paper, or the paper profit came from the sale of the mining stock to somebody else who thought it prudent to get in while you felt compelled to get out. Moreover, this paper currency was likely losing its value as Gold rose in price which gave rise to the "good times" for the miners in the first place. In the never ending pursuit for the quick buck through leverage, some people manage to outwit themselves by trying to use derivatives of Money to make currency, or other investments to make currency, but seldom reacting in time to obtain plain ol' sophisticated Money(Gold) before the derivatives, investments, or currency itself goes south on them. If you are holding Gold today, you are to be congratulated for your sophistication and will-power in the face of our generation's greatest mania.

The award for the best quote of the day goes to Jason Hommel, who said, "If you think about it, the propaganda war against gold began the first time a government put it's stamp, or mark on it. They get people to trust and rely on their "stamp of authenticity" more than the actual metal itself. Then, it's merely a process of issuing new coins with less and less gold." Bravo! While Money might in fact be found in coin form, that shouldn't lead one to mistake Money for shape rather than Substance. Bravo, again!

Thanks, Aragorn, for fielding some of the questions raised by my recent commentary while I was busy burning burgers over charcoal in an attempt to celebrate a bold move in 1776 by a bunch of visionary, conspiring rapscallions. "When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station..." and all that. Good stuff! I'm pleased, though not overly surprised, to see your prevailing hunch hours before the sale was the correct one--that the BoE auction price would likely come in near spot value. Perhaps next time you would favor us by indicating, in advance, the fallout immediately following the sale? Ok, Ok...that would be like pulling a rabbit out of a hat.

FOA, thanks for the very kind words in regard to my history essay. I am humbled that you "stopped the presses" on your own commentary during the duration of mine. I'm sure that revelation earned me more animosity than friends among our many visitors. I know that I, for one, am intently eager for your forthcoming chapters. Any additional input is welcome in regard to my history lesson. Aragorn likened this challenge to that of the Prince in the tale of Cinderella--armed with concrete evidence with which to find the owner of the foot that fit the shoe.

Pete, thanks for the efforts at number crunching. There are many assumptions to be made, but your values seem to be good ballpark figures and are helpful food for thought.

canamami, you said quite rightly:
"Two common and related themes on this Forum hold (a) the Comex gold price is manipulated downward by those with an alterior agenda and (b) the method is by shorting Comex gold contracts, said paper gold contracts having no or little nexus to the underlying physical reality."

Please don't forget that there are some of us that see COMEX as nothing more than a hedging counter for producers and fabricators at which speculators may also place their bets, so to speak. The metal from producers has its specific destinations, and the COMEX warehouse is not a stopping point in its journey. Hedges of producers and fabricators, and the raft of speculators have their futures contracts settled with cash. That's what hedging is all about (Yes, I know that YOU know this, but I say it for the benefit of the timid lurkers). In that regard, these contracts truly have little connection to the physical market. And as MK has suggested in the recent past, it is very likely that to the extent that options can be utilized to influence the price of metal, we can expect this activity to be undertaken by those whose financial positions benefit by or depend upon lower Gold prices.

You also ask, "Why would those who would benefit from a higher POG simply not engage in counter manipulation by soaking up all the chimerical "paper gold short contracts"? It may be easier to write a short contract than to buy up all such contracts, but if there is truly a physical shortage, the demands for delivery by the longs would eventually turn out to be profitable, and break the game open once and for all."

If delivery is what it takes to break the market open (true!), wouldn't it be far more expedient to make these metal purchases on the spot market? When I buy my Gold from MK, I never say, "Hey Mike, whaddaya say I pay you today for delivery in August?" Futures contracts are a substitute for Monte Carlo for the specualtors, and they are also a device for stability in financial planning for Gold producers and fabricators. Generally, those who truly buy Gold want it shipped post-haste. People don't generally shop at COMEX, as has been previously discussed at this Round table. The exception to the rule about buying Gold for immediate delivery was explained in painful detail in that epic I wrote not long ago. The consequence of this alterior method of Gold acquisition for the Big Purchaser has been to remove the pricing pressure over the medium-term from the metal (spot) market. Gold loan repayments for certain, and to an extent the long/buy/receipt side of hedges have been purchased when offered by qualified parties (i.e., having guaranteed delivery.)

I'm no expert in this, but perhaps this is why the price of Gold is dropping so much lately...our Big Purchaser is no longer supporting even the long side of hedges of ANY futures contracts. This may be due to the realization that future delivery of metal upon maturity of these contracts is simply not going to happen because the market is doomed to seize up entirely very soon (caused by insufficient supply.) Remember, paper profits are not the objective for this Big Purchaser, so why take a futures position that is reasonably suspected will NOT be able to be honored with metal?

In recent history, all of the big action in the Gold market has been on the paper side via Loans and Hedges, with the Big Purchaser letting the sellers set the pace for the action. (If the buyer dictates the pace, then the price rises! Let the sellers approach YOU.) It seems fairly clear that the spot market has taken its cue from the much larger paper action, the Groundhog Day-esque pronunciations of the London price fixes, and the sideshow at COMEX. It would seem that the marketers of these paper contracts for future delivery have so damaged their own integrity that the Big Purchaser will no longer participate on the buy side for the reason stated above. As a result, the paper sellers are finding no willing buyers, and the price falls. Further, the BoE sales became necessary as a show of good faith that metal would be available to keep the London paper trade honorable. This further explains why it has been the BoE that has championed the IMF sales above all other nations. Since when have the Brits been so charitable and concerned for HIPC's? This drastic falloff in price likely marks the end of the big action on the paper side, and all eyes will turn to focus on the daily metal (spot) market. Welcome to Rotterdam.

OK, back to you, Canamami...you said, "if the CB's and their cohorts in the gold carry trade can beat it down enough, could they not eventually destroy gold by undermining the psychological value attributed to gold by the world's economic actors?"
Fortunately, the world is huge, and they can't fool all of the people all of the time. It will be interesting to see how quickly the beguiled masses become reacquainted with the finer points of Gold and real Money.

Gold. Get you some. ---Aristotle

You wrote,"the market is doomed to seize up entirely very soon (caused by insufficient supply.)"

Please reference canamami msg:8491, my (Canuck) msg:8474
and Cobra msg:8467.

Please excuse my limited knowledge in this arena, I truely
fall into the 'timid lurker' category.

ET explained to me a couple months ago that one must
follow and understand first, the laws of supply and demand
in order to educate oneself with this ever so complicated
gold business.

My question is, and please advise me in 'timid lurker' protocol, if supply seems to be coming available via
BOE auctions, and possibly more upcoming vendors, why
do many feel the price to go up and why do you feel the
market to seize?

Follow up to last post. If BOE can sell 400 of 715 mt.
can/will others follow suit? Imagine, dare I say, if
the USA dumped 1% of reserves, 80 mt. on the market.
If the 'fiat generators' really want POG to stay down,
can/would the US enter this game, say hypothetically,
dump 25 mt. every 2 months for 5 years; that's 750 mt.,
a measly 9% of reserve. The manipulators can keep this
going a long time, don't you think???

Somebody has a vendetta against gold (nothing get's by me) but silver does not lok so bad. Even after the last debacle with gold. My long copper and crude positions look good but I am going to be more comfortable with my short gold if I buy silver. Can't find anything wrong with silver chartwise. Besides the spread has been working very well for sometime. Any ideas? Think I will use any money I might make with the spread to buy bullion coins.

MARKET REPORT (7/8/99): Gold managed to eke out a small gain in today's early
trading even as the dollar gained against most currencies and political pressure mounted
against International Monetary Fund and Swiss gold sales. Standard Bank of London
reports "excellent physical support" at this price level. South Africa's Gold Crisis
Committee -- a consortium of public and private sector organizations -- called for a
moratorium on central bank and IMF gold sales.

The South African economy has been racked by the anti-gold actions of the British
government and the IMF. Yesterday, 1000 angry South African miners from the the failed
mining company, East Rand Proprietary Mines, staged demonstrations at the British High
Commission in Pretoria. `It appears odd that (Britain) ... should sell gold'' in a manner that
was ``so disruptive,'' said Mzolisi Diliza, chief executive of the Chamber of Mines. 5000
miners were laid off the direct result of the BOE gold sale. The South African government
also charged the British government with breaking a promise to consult with South Africa
"before they embark on any sales, " according to a Reuters report this morning. Between
250,000 and 300,000 people are employed by S. Africa's gold industry.

The Tony Blair government rejected market rumors that the BOE sales were a thinly
disguised bailout of "speculative short sellers" saying it would answer inquiries from the
world's largest mining companies on the subject, but would not conduct an investigation.
The rumors were dismissed as a "wild fantasy."

If they are so "wild", why not have an investigation and dismiss the allegations post-haste
without a cloud handing over the denial? And why denigrate the likes of the CEO's of the
world's top mining companies as deluded? To my knowledge these are good men of
impeccable credentials and standing in the business community. The Blair administration
needs to be reined in by somebody in Britain as they lash out half-cocked against anybody
who questions their activities. In the words of the bard, it is "a very ancient and fishlike
smell" that permeates the intrigue in the present gold market.

We refer our readers back to yesterday's comments which can be found in the 7/7/99
Forum archives to learn the strategy we feel should be employed by gold investors in this
situation. In essence, we feel that an averaging strategy should be employed to reduce your
average acquisition price. We do not like options, commodities contracts or other forms of
leverage because we see these as nothing more than fodder for the shorts. Acquire the
physical and hold onto it -- that, my friends, is their Achilles Heel.

That's it for today, fellow goldmeisters.

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.

Of the posts you mentioned, it appears that CoBra(too) holds the same notion I conveyed that real metal reaching the real market is not as sure a thing as it might appear on the surface. However, please note that in the passage you quoted--which makes it sound like a certainty out of context like that--there was a good-sized "perhaps" and "may" leading up to that potential scenario as a conclusion. Having my finger in the wind, my own take on this is that the metal shortfall will be far more severe than can be resolved by the token elements you've suggested (BoE, US, etc) as an official, concerted effort to assuage the metal market demands. Granted, they contain a lot of assumptions, but take a look at Pete's recent efforts at running the numbers. There is a lot of metal already spoken for out of future production that will never pass through the spot market in route to its first owner. Precious little "fresh" Gold remains to hit the streets. Further, it seems very unlikely that CB's will part with their one-of-a-kind and ultimate monetary asset in a vain attempt to stem the tide in a no-win battle. They simply don't have enough Gold.

Like the many swollen streams that join to become a flooded river, so too is the demand for Gold flooding the metal market. Gold loan repayments come straight out of new production from the miners, or is competed for on the metal market by the hedge funds that must purchase it outright. Some producer forward sales via the hedging counter are settled outright with delivery of metal. That cuts into new supply reaching the metal market also. And of these forward sales that the miner has opted to close out with cash, the long side (in those cases where the metal was desired) must take the cash value of the settled contract straight to the metal market to receive their desired Gold. Additionally, figures from the U.S. Mint, and annecdotal evidence from bullion dealers confirm that individual investor demand for Gold is unprecedented.

Lower prices jeopardize the new supply from unhedged miners. Higher prices jeopardize the available supply as the hedge funds rush to cover while still in the money, but find instead that the price runs away from them. You've got to admit, cheap Gold brings a lot of individual buyers to the table to buy a lot, but rocketing prices bring everyone to the table in a rush to get in on the investment action, or ultimately as a panicky flight to quality.

The last figures I saw were that the LBMA trades about 1,000 tonnes of metal (on paper) each day. As these various demand streams combine in the big flood, I'm sure you might agree that the paltry official offerings of 25 tonnes every other month from the UK, and 80 tonnes here and there from the US will have little meaningful impact to stem the rising tide of demand for metal delivery.

Gold. Possession is nine-tenths of reality. Get you some. ---Aristotle

this day, July 8, 1999. This contest will be of great import and consequence. Please gather at this Table Round to deliver a message to the Old Lady of Threadneedle Street, the Bank of England, the once and great purveyor of the gold standard now reduced to the distribution of the metal that made it great.

So what is it you would like to say to the Bank of England and/or the Blair government?

Your entry must be in the form of a letter that begins for easy identification in the Subject Box with:

Dear "Old Lady of Threadneedle Street":

Let this contest become your opportunity. No, these letters will not be forwarded to this once and future friend of gold but who is to say that they will not be read? Have not the ideas that have been generated around this table appeared in the Halls of Congress and entered the debate at the distinguished British Parliament? I say "once and future" because I believe that even the anti-gold British government will someday find a friend in hard yellow metal.

So let it be known that:

A .2354 ounce pre-1933 British Sovereign (of course) will be the golden prize in what will become our best contest in FORUM history that begins now and reaches to midnight in the mountains July 11, 1999.

And....a one tenth ounce gold Austrian Philaharmonic will go the closest guess for the gold price on the COMEX close Friday, July 15th. The post accompanying that guess must comprise your appraisal of what the tone, tenor and complexion of the gold market will be six months from this date in light of all that has happened in recent months including the illusive political economy hovering over today's gold market. That date, by the way, will be January 1, 2000. A silver USE will be the reward for the best composition accompanying your price guess. These entries must be marked with stars ********* around the price guessed.

And two silver USE....Will go the runners-up in the letter writing contest.

First Time Posters: Here's a chance to rewarded with silver for your long maturing words of wisdom -- a one ounce silver Eagle to all first time posters. We will take new registrations only through Friday, July 9, 1999 so if you have an interest you must register quickly. All first time posters must be on subject in either contest category to get the silver. To qualify for the prize you must also e-mail us as well that you are a first time poster. We thank you in advance for helping us out on this.

Keep in mind that all FORUM rules of conduct are in place and will be strictly enforced. Let the "Old Lady of Threadneedle Street" be granted a Guest Seat at this Table Round. Though you may disagree with Her, She must be treated with the respect, cordiality and good humor you would accord any poster, fellow knight or lady.

Let the Contest Begin!!

http://biz.yahoo.com/rf/990708/ob.htmlHeadline says about as much as the tiny article.

All first time posters must have their registration into us by Friday July 9, 1999 5pm Mountain Time. Those who are already registered but haven't posted as of this date are eligible. We will back check and we still require an e mail giving us a heads up that this is your first post.

Let's make that price guess on the

Closing price, August contract on the COMEX

since August is the active month.

Michael, is there a 1 post limit (per subject) this time ??

http://biz.yahoo.com/rf/990708/wc.htmlA ho-hum report from Europe.

http://dailynews.yahoo.com/headlines/ap/international/story.html?s=v/ap/19990707/wl/safrica_miners_1.htmlGold accounts for one-fifth of South Africa's export earnings.These people are not happy campers.

Yes...One post per subject to be designated with:

Dear Old Lady of Threadneedle Street:

or Stars *********

However, if you would like to make additional comments on the same subject, they are welcome but not as contest entries.

http://biz.yahoo.com/rf/990708/1h.htmlRumors the Bundesbank had asked commercial banks to remain on standby after hours for possible euro action were shrugged off by those involved in the rumors.

On the eve of the gold auction, once again, Americans wish to thank you for dumping your gold reserves and replacing most of them with US Dollars.

Although Britain will likely suffer no less than a ONE BILLION DOLLAR LOSS on its gold sales owing to the absurd manner in which they are being effected, nevertheless, the most important thing is that you have succeeded in making many Wall Street investment firms very happy!

That's all that really matters!

Those Wall Street firms and hedge funds that hold huge gold short positions are indebted to you forever. Your gold sales are getting them out of a huge predicament. To show their appreciation, no doubt the various American investment firms and hedge funds benefiting from the great British gold dump will mail you nice Christmas cards from their enormous Greewich, Connecticut estates.

Now that makes the great British gold give-away all worthwhile, right?

The main thing is this: Britain is finally coming to grips with the inevitable, imminent surrender of its national sovereignty. It will surely not be long before both Britain and America are united as one.

That's how it should be: ONE president (Clinton)...ONE currency (the US DOLLAR)...ONE national anthem (The Star Spangled Banner)...and ONE national sport (Baseball).

And THAT'S just the beginning!

Finally, Americans cannot help but be impressed that the first British gold auction took place almost immediately after July the Fourth, America's Day of Independence. The symbolism of such a move by the Blair government is certainly not lost on Americans.

Anyway, let's get the British gold auctions over with ASAP!!

After all, Americans look forward to welcoming the 51st state (England) into the Union with great, indescribable anticipation...the sooner the better.

Thank you very, very, very much.


Farfel

http://news.bbc.co.uk/hi/english/uk/newsid_389000/389053.stmRothschilds: Riches to rags? Auctions of precious art started today. Will they use the profits to buy gold?
See next link for details of the auction.

http://news.bbc.co.uk/hi/english/uk/newsid_388000/388906.stmArt auction details.

http://news.bbc.co.uk/hi/english/world/south_asia/newsid_389000/389122.stmThe BBC's Sanjeev Srivastava on why there is little possibility of gold demand coming down in India despite the crash in gold prices worldwide.
Each generation thinks it is their responsibility - both to their children as well as ancestors - to add to the family gold reserves rather than exhaust it.

Great photos, too!

http://news.bbc.co.uk/hi/english/business/the_economy/newsid_388000/388230.stmAs currencies continue to tumble, the dollar goes from strength to strength. BBC News Online asks when the bubble might burst.

By Hilton Shone, I-Net Bridge
Johannesburg--Jul 8--South Africa's Gold Crisis
Committee (GCC)--a forum of government, the Chamber of
Mines, which represents the gold mining companies, and
labor--today called for a total moratorium on gold sales by
central banks and the International Monetary Fund (IMF). The
GCC was set up last year to address the implications of the
low gold price on the mining industry and wider
communities.

Minister Phumzile Mlambo-Ngcuka today announced that
all parties concerned would send a joint delegation to
London to lobby in this regard.
On Wednesday, after a meeting of the cabinet, the South
African government said it was officially changing its
stance on IMF gold sales and would oppose any further moves
to sell gold by central banks and multilateral
institutions.

The joint delegation would lobby under the slogan "Not
an ounce."

It leaves for London and then Europe on Jul 11.
"This is a spirit and voice of the new democracy in
South Africa," said Chamber of Mines president and Anglogold
chief executive Bobby Godsell.

"Our chief argument is the force of reason," said
Godsell. "There is no argument that the gold sales have
proved disruptive. If you look at the chart of the spot gold
price it fell US $5 at the minute the UK announced its gold
sales."
He added that the IMF proposal to sell gold was a debt
relief measure, but the fall in the gold price following the
sale of gold by the UK Treasury had patently disproved
this.
Minister Mlambo-Ngucka said today that while the short-
term strategy was a moratorium on gold sales, a longer-term
strategy was also necessary.
This included repositioning the gold mining industry
and cleaning up inefficiencies in it.

"This a sunrise industry not a sunset one," she
said.

Issues that needed to be dealt with in this regard
included improved management, higher productivity, better
use of technology and better relations between the mines and
workers.

(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

Hate to show my ignorance publicly like this, but would one of you kind folks please inform this poor ol' country boy what the approximate price per ounce is to produce gold. Thanks

9911A7C94D"Every woman, man, and child in the country is responsible for hoarding up to 426 pennies each," said Michael White, a spokesman for the U.S. Mint in Washington.

Maybe it's time to polish up the ol' War Powers Act.

http://www.garynorth.com/y2k/detail_.cfm/5334Sorry! Hope I got it right now.

By Tina Petersen, Bridge News
Washington--Jul 8--Aug gold and Sep silver both were rangebound, settling
marginally changed.

Aug gold consolidated in sideways trading, settling down 30 cents at
$257.7 per ounce on a mix of selling. David Meger, senior metals analyst
at Alaron Trading said that he is "not too bullish at this point" on gold as
possible IMF gold sales linger. However, he noted that as opposition grows,
"it definitely becomes a question of whether it will happen of not."

LFG Bullion's Leonard Kaplan said that for the first time in quite a while,
"we're bullish on gold for the short term" as new shorts enter the market.
Traders said realistic pricing levels for gold in light of the further
upcoming sales is at $250-255. Kaplan said that gold must cross the $260
area to begin to scare the shorts to cover their positions.

Kaplan said that, excluding gold, the precious metals markets saw a
nice rally today "in the face of a contrary market environment." He noted
that the metals were higher despite a stronger dollar and stock market.
"The markets were significantly oversold and now we're seeing some upward
movement," he said.

--Aug gold (GCQ9) at $257.7, down 30c; RANGE: $259.0-256.9

(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.

reaction on BOEsalesThe south african reaction http://news.24.com/English/Business/Economy/ENG_78055_497282_SEO.asp

www.kitco.comDate: Thu Jul 08 1999 16:08
Goldteck (Placer Dome's Willson on Gold Market) ID#431200:
Copyright � 1999 Goldteck/Kitco Inc. All rights reserved
Placer Dome's Willson on Gold Market, Sales: Company Comment
Bloomberg NewsJuly 7, 1999, 1:04 p.m. PT Vancouver, July 7 ( Bloomberg ) -- Comment from Placer Dome Inc. Chief Executive John Willson about the Bank of England's decision to sell gold and the impact on the market.``The manner in which ( the Bank of England ) announced and conducted the auction, in a totally transparent manner, is less than commercially clever in the sense of getting them the best gold price.''``The Bank of England has been transparent in a very opaque market and it has cost it a hell of a lot of money. Somebody calculated that the bank lost more than what the Kosovo war cost the U.K. They've also devalued everybody else's reserves, for example the 10 million ounces held by the IMF. So one could not say that that auction was a success.''``Given the circumstances that the gold market is opaque,they should have made an opaque sale as others have done. They would have had to announce they'd done it, but they wouldn't have announced ahead of time and dropped the price on themselves.'' ``Now, you keep the focus on the Bank of England continuing to sell every two months and it makes a wonderful opportunity for speculators to short gold and drive the price down. The Bank of England announcement fueled that whole business wonderfully.''``Every company that is seriously in the gold business and intends to be seriously in the gold business for many years to come is now looking at everything it's doing. We will continue to find ways to reduce any kind of discretionary expenditure. The gold cost now is way below the real long-term cost of production. Those of us who are able and who have assets to make us able will continue to look at everything to maintain margins, cash flow and profit through this period.''``We do believe ultimately the gold price must track to someextent the full cost of production -- the cash costs, the investment costs, the acquisition or exploration costs, overhead costs and a return for shareholders. And I'm sure that number is well over US$300 ( an ounce ) and if we're now selling at US$256 that's not something that can go on indefinitely.''

http://www.washingtonpost.com/wp-srv/WPlate/1999-07/08/219l-070899-idx.htmlAn example of businesses taking this very seriously. So why do some have the wherewithal to say "All is well"?

@canuck - what I've tried to express is that a chain is as strong only, as its weakest link.
I do feel there will be the renegades of short physical (whatever their motive originally was- m a k i n g a PROFIT in terms of interest differential), succumbing to the fact that the physical is unobtainable in quantity to cover all outstanding obligations to deliver (by contract)the bullion they borrowed via Bullion Bank's, which have sold the metal to the markets, and still have to return it (IN KIND)to the lend/leasors - the CB's.
Due to the fact that (physical) demand outstripped supply for years, now reaching probably 1.500 tons deficit annually. For a while it could be argued that the gap may have been filled (barely) by dishoarding (of disgruntled investors)'scrap and CB-sales. Only barely more than 300 tons p/a on average for 20 y's have been BC supply.
It seems to become more than evident that the physical gold, originally leased (or borrowed) by or from CB's for scratch (interest), has physically evaporated and can't be returned (even if still held in the CB vault's)"in kind". (It has been 3 y's`ago when I've first heard of gold shorts of more than 8.000 tons!}.
Given above facts, we have to conclude that there are two divergent markets in gold. The phyical, as you (Canuck) correctly state should be governed by supply/demand equilibrium, which may enhance the gold price (as a commodity, and I don't object) to probably $ 450'oz.
But then there is the paper - gold - market,i.e. LBMA, OTC and any other derivatives-like in any other market today zillion times larger than the underlying "cash" market and that is what makes it totally vulnerable, scary and potentially explosive (better implosive), given the leveraged risk the major int'l. (bullion) banks are facing today. (I've probably already said that Orange County, Barings and LTCM only have been the 'pic 'iceberg'- watch for the Titanic!

The fact that POG is now finally trading below 75% of real
production cost of, or probably above "replacement" cost, if you calculate exploration (a game for the not so meek, where 95% of cap. costs are written off before spent! staggering? -true), plus all the rest - including ever more required reclamation, the game for the carry traders should have ended(!), where it not for political - after all GOLD is an eminently political and now political reserve currency more than ever before - reasons.
@Aristotle - Sir, I am leaning towards your visions and again thank you for your insights along with Aragorn.
@Stranger - your second language is more understandable than mine - Ende gut alles gut - mein Freund - Es gibt Gold in den Tauern (13g/t haben wir "assayed").!
unrevised....
All - pls lecture me tomorrow - I'm hitting the sack-OK!

... about 75% of production on global basis - total and real cost of production (TPC-as stated as industry regulation-will post terms later)) may(well)be below todays spot price for POG.
Even some of the majors excel on "high-grading" today - to shareholders detriment tomorrow.
... no incentive to bail out of shorts, yet? ... no ...then go on and digest the rest of your hedge book! - and join the club of Pegasus, Peggy W. & ERPM, amongst other contenders ... Your's ever Mr. PM - of Antique Barbaric eXchecquer...

Was? Haben Sie ein osterreichisher Goldbergwerk? 13g/t, ist das viel? Ich weiss nicht. Sind Sie der Besitzer, und ist es eingeschaltet?

Bitte, entschuldigen Sie, CoBra, wenn ich neugierig bin.

It seems to me we are putting an awful lot of faith in something unknowable. Okay, the shorts have overreached. There simply won't be enough hard metal to go around when the music stops.

We confidently repeat these words to one another all the time, but does anybody really know? We know there are over 100 thousand tonnes of investment gold in the world. Do we really have any idea how many tonnes are short? We say the shorts are near the breaking point. But are they really? And what will happen to us if the breaking point is still three years away?

I have thought, since last year, that gold would be lowest when the threat of deflation was greatest (1998). Now we have the phenomenon of inscipient price recovery, and so far, it only seems to apply to everything but gold.

This is pretty damned frustrating (if you will forgive my French). Nonetheless, like most of the knights assembled here, I believe our time is coming. It is just that, if we have already accepted this theory as fact, that desperate shorts are near the breaking point, I, for one, would appreciate somebody walking me through how we got here.

Abby Cohen was on MoneyLine. Per Abby, there isn't inflation in the US and certainly not overseas. Many sectors have room for growth. She has been taking the longterm approach to investing since 1991 and ignoring the noise. I guess all is well (not!).

Incredibly, Abby didn't' talk of the risk of deflation nor of technical indicators that blow the socks off of 1929 in so far as warning bells and whistles. We found out she has an MS in Economy from Cornell and used to work for the Fed as an analyst. GS-FED-GS-FED-GS-FED...hmmm?!?!

Since she is viewed as the Bull Mistress of the 1990's, I am sure all of her followers will expect that she will let them know when things aren't looking rosy anymore. After all, it is one thing to yell all is well every four bells but another to ignore a fire alarm and actually pull the plug on it.

Interestingly, the World Gold Council aired a commercial about gold as a part of one's portfolio during Moneyline. It featured Ponce de Leon in quest of gold to fill what they said was an important part of a portfolio today, with Y2K and all. It struck me that they were looking for gold to fill portfolios and not going to a warehouse to fill orders for gold. (Where is Chris with her analysis of hidden meanings and agendas when you need her). Then surprisingly, QVC had an add about gold chain jewelry in the next segment.

NASDAQ discovered record territory today (Ponce de Leon night). Technical stocks seemed to be enjoying a rejuvenation of earnings in the teens and higher and thus the rise at the fountain of NASDAQ.

Bonds had gained a little ground breaking below 6.00% yield taking a little pressure off. Ford finds itself with lots of cash and strong financials, which is good because they may need it in the future. My wife tells me they hired the Volkswagen employee who designed the VW Beatle (does that mean Fords will be more buggy?).

I noted during the Moneyline show that lots of stocks were touted as risers or gainers. I heard no mention in the entire show of commodities or gold (other than the two commercials).

Change of subject. Sometimes I read an analysis or article and I scratch my head and say, now that person knows something I wasn't aware of. But when I see article written about gold or the economy, now I say, "You know, those people obviously haven't learned of A/FOA or USAGOLD or KITCO or GOLD-EAGLE or Stockhouse Forums or Stockman Forums or all the other sources of information we frequent as ardent internet browsers. Then I ask myself, "Why is that analysis missing the whole oil for gold thing like the Stratfor article the other day?" OR, "why is that analysis making that argument, don't they know about this or that?" Then I ask myself why is that? What makes these well-written articles lacking in full substance? I conclude that the Internet, especially the above forums, provide a real-time synergy not present anywhere else: not at a University, not at an Economic Club, nor a TV or radio talk show. Here is what we have in the above internet forums.

We have real-time discovery of information shared amongst several thousand people from all perspectives that is then picked apart or added to or discussed, analyzed and re-disseminated (when it is good) to another forum where the same thread leads off to other threads that find there way back as a new leap of knowledge or insight. This is an absolutely incredible way of gather information and foresight, perhaps even wisdom.

For the above reasons, that is why I sometime have discussions with friends or relatives and they ask, "where did you get that from?" Or, "I haven't read about that...."

Of course (and we have discussed this) there is the danger of partial information or partial truth or small lies working themselves into the fabric of internet information but ultimately patterns and answers emerge that, once having worked their way through the web of internet thinkers, wind up as new discoveries of thought.

What I do find wanting is the empowerment -- other than writing just such a note -- to break out of the internet circle of information into the more traditional channels of dissemination, TV, radio, newspaper, magazine, etc. As a case in point, below is a quote from a local on-line newspaper that is also a local in-print newspaper. I sent them some length information in a personal note about gold manipulation. Here is there response to me:

"Please remove this address from your mailing list. This is a business account, and you are cluttering this box."

My feelings were hurt and I blasted back the following:

"To whom it may concern,

What I sent you was a one time personal note that I would have hoped you would have read and passed on to your news department. Instead, you insult me by treating my note as some sort of mailing-list letter, which it wasn't. I'm sorry if you don't have the time to review the recent events in the gold market that could very well topple our financial future and one that will likely force you to review later when it is too late. I was doing my duty as a citizen and tipping off the press as to a problem in the financial arena and now I find I am cluttering your box.

Your due diligence could have discovered the outright manipulation by hedge funds of the gold market and its affect on the world economy, but instead you want a clear email box and obviously a clear conscience too."

I can't tell you how many times I have sent my Congressman a letter about similar subject and all I ever get back are canned internet letters saying how I need to put my name (which I did) and my address (which I did) and that if I am a constituent (as they can't write to anybody except constituents) they will respond to me.

So the empowerment that I speak of brings a vision of a website or perhaps many websites that are set up to automate or trigger a gathering of opinions on any issue, any side and allow people to vote their voice. When sufficient people have spoken on an issue, a form letter addressing those opinions is auto-generated from each person to a comprehensive list of influential people such that they know clearly, succinctly where I stand and others stand on issues that I (and they) cared to address. You know, this would be better than any polling system. A site like that could replace polls and remove polling from any political agenda, which I sometimes feel are just that: political agendas with a voice that is only a plus or minus three percent error.

Ah�what a dream that is. Clearly, though, we have the web as our extensions of our brains, our tools of wisdom and knowledge to grow and share our growth with and through others without any notice of skin tones, accents or differences. In fact, I am surprised how similarly folks think on any issue I have seen discussed.

Finally, we live at the start of an unbridled free-exchange of information called the Internet that empowers us with information that sometimes borders on wisdom. It is up to each of us to use that acumen as we see fit. Just recognizing information that turns to knowledge�that transforms to wisdom is an awe-inspiring experience for which I am grateful. Thank you all.

http://biz.yahoo.com/rf/990708/wq.html
WASHINGTON, July 8 (Reuters) - New U.S. Treasury Secretary Lawrence Summers said on Thursday the economy was strong and signaled a steady course for economic policies.

``I feel good about where the economy is,'' Summers said on NBC's ``Today'' show. ``We're on the right path... The right course has been set. Our challenge is to carry on,'' he said.

Asked about inflation, Summers gave no indication of any worries and he noted that healthy productivity gains meant there was room for worker wages to rise without putting upward pressure on prices.

``If we can keep our fundamentals strong... I think we've got room to give people wage increases that run ahead of price increases,'' he said.

On June 30, seeking to head off inflationary pressures, the Federal Reserve lifted the federal funds rate by a quarter percentage point to 5 percent, the first rate rise in more than two years.

Indicating the U.S. economy remains strong, the U.S. Labor Department on Thursday said the nation's initial jobless claims fell to 294,000 during the first week of July from 300,000 in the last week of June.

A Reuters survey of economists expected initial jobless claims in the first few days of the month to rise to 305,000.

In addition, Summers said he supports President Bill Clinton's efforts to use the projected federal budget surplus to reduce the government's debt, invest more in the nation's poorest communities, strengthen the Medicare retirement health insurance program and encourage Americans to save more of their paychecks.

The Clinton administration will continue efforts to help strengthen the economies of Asia and Europe to ensure future demand for U.S. exports, Summers said.

``Our prosperity is so closely linked these days to what happens in the global economy,'' he said.

Summers, who took the reins of the Treasury Department from former Secretary Robert Rubin earlier this month, told CNBC in an interview on Wednesday that he will maintain Rubin's strong-dollar, free-trade policies.

``I feel good. I think we're well-positioned for the future,'' as long as those economic policies are maintained, he said.

``We can't become complacent or overconfident because that's how mistakes are made,'' Summers said....

Jason - Thank you so much for this post (Jason Hommel 7/8/99; 3:47:08MDT - Msg ID:8542 666 talents / 25 tonnes). I have read your others but have never taken the time to respond, till now. I did not want this one to go by without a "well done" from myself. God is still on the throne and His majesty and wisdom never stops amazing me. I have grown to see Him in all the world. Thank you!

The two-market theory has again been expounded on this Forum - i.e., that a "surreal" paper market (COMEX, even spot) exists which is unrelated to the real, physical gold market. Is it being seriously posited that gold never gets delivered pursuant to the futures contracts on the COMEX, or contracts made on the spot market? I repeat a question I put on the Forum previously: Has any poster had a COMEX futures contract for delivery of gold dishonoured, or a spot market contract dishonoured? If such contracts are being dishonoured generally, where are the lawsuits concerning these dishonoured contracts? How would the COMEX and the spot market continue to exist if, at root, they did not result in the delivery of the contracted-for commodity, when delivery is demanded? It's one thing to assert that the market is being manipulated (which I believe) by official and producer sales and leasing (or, more accurately, fear and threats of future sales), but another to argue that the quoted prices are some sort of elaborate charade. One poster argued that the paper market dwarfed the physical to such a degree that paper determined the physical price, but that the amount to be sold by the BOE was sufficient that physical would assert itself, and drive up the price. That does not appear to have been an accurate prediction, at least up to this point.

If there is a shortage of physical (and that's a big "if"), then purchasing and demanding delivery of COMEX gold would be a means of breaking the paper shorts' game. If this cannot happen because all the "big people" are anti-gold, while all the goldbugs are "little people", then what chance do the goldbugs have of winning? On this Forum, however, it has been noted that some "big people" - oil, the Arab world, the ECB and some Euro bankers, the Chinese, the Japanese, big Asian money generally, etc. - are pro-gold. Why then are these actors not calling the shorts' bluff by demanding delivery of physical gold pursuant to the futures contracts? If a decision has been made by the pro-gold "big people" to allow the POG to descend so low, who made it, when was the decision made, and why was it made? The alternative scenario is that there is not presently a physical shortage, and that the COMEX is an accurate reflection of the current physical market price, albeit a manipulated price.

I apologize for not developing my thoughts more fully in this post (as I had hoped to do in replying to various posts), but my "day job" takes up about 60-odd hours a week, so sadly I'm short of time right now. However, to reply to Canuck, I'm not well-connected, nor do I have "insider" information - in other words, I'm one of the "little people".

Here is a most informative post from kitco from Nick Beams, the author:

Date: Thu Jul 08 1999 17:29
OLD GOLD (Debt Bombs Set to Explode?) ID#249187:
Copyright � 1999 OLD GOLD/Kitco Inc. All rights reserved

When will the US "debt bomb" explode?

By Nick Beams
8 July 1999

Use this version to print

While the continued escalation of share values on Wall Street has prompted claims that the
growth of information technology has transformed the US into a "new economy", there are
growing concerns that the share market boom is being funded by rising indebtedness which,
sooner, rather than later, could spark a major financial crisis, leading to a severe recession.

In recent weeks reports from US private economic think tanks such as the Levy Institute and
the Federal Markets Center as well as the London-based Lombard Street Research group
have all highlighted the unsustainable nature of the boom, pointing to the growth of
international debt and the ever-widening US balance of payments deficits.

This week the Economic Policy Institute published a major report by economist Robert
Blecker under the title "The Ticking Debt Bomb" which set out to demonstrate why the US
financial position was unsustainable.

Blecker pointed out that while increasing numbers of observers were hailing the "new
economy" there were a number of indicators which "regularly cast a pall over these otherwise
sunny times."

"Month after month, year after year, the US trade deficit sets new records. And as the United
States borrows to cover the excess of its imports over its exports, the US position as the
world's largest debtor grows by leaps and bounds. Closely related to both of these trends is
the drop in the US private savings rate, which forces the country to continue borrowing from
abroad in spite of the shift from a deficit to a surplus in the federal budget balance.

"In fact, the US economy's current prosperity rests on the fragile foundations of a consumer
spending boom based on a domestic stock market bubble, combined with foreign bankrolling
of the US trade deficit. If present trends continue, the growth in the US international debt
will not be sustainable in the long run. No country can continue to borrow so much from
abroad without eventually triggering a depreciation of its currency and a contraction of its
economy. The rising trade deficit and mushrooming foreign debt are thus warning signals of
underlying problems that�if not corrected�could bring the US economic boom crashing to
a halt in the not-too-distant future."

Blecker's report draws out the steady growth of US indebtedness over the past 15 years and
the rapid worsening of its financial position since the end of 1997. From a position of
balance in 1983, continued borrowing to cover chronic balance of payments deficits in the
1980s transformed the US from the world's largest creditor into its biggest debtor. At the
end of 1997 total US debt stood at $1.22 trillion. But after the exclusion of gold reserves
held by the US Treasury and the direct foreign investment of multinational corporations, both
of which are non-liquid assets, the net financial debt, comprising the difference between the
value of US liquid financial assets ( such as corporate stock, government securities and other
bonds ) owned by foreigners and the value of similar foreign assets held by Americans, the
net financial debt of the US was $1.57 trillion.

While the US became an overall net debtor in the mid-1980s, total investment income still
remained positive into the 1990s because the rate of return on direct investment ( in which the
US is a net creditor ) exceeded the rate of return on financial investments ( in which the US is
a net debtor ) .

"However, in the last few years the sheer volume of the net financial debt has begun to
overwhelm the difference in rates of return, and the net investment income balance has been
negative since 1997."

According to Blecker's predictions net financial debt will rise to just over $2 trillion in 1999,
to $2.34 trillion in 2000, expanding to a "mammoth $4.36 trillion by 2005 ( or an estimated
36.4 percent of gross domestic product at that time ) ."

Under what he calls a "worsening trade deficit scenario" in which the underlying trade deficit
rises to 4 percent of GDP in 2000 and thereafter rises slowly to 5 percent in 2005, Blecker
warns that the net financial debt would explode to $5.45 trillion or 45.5 percent of GDP
while the current account deficit would blow out to $750 billion or 6.3 percent of GDP,
levels of debt that would "almost guarantee the outbreak of a financial panic."

Blecker points out that while the notion of an eventual US financial crisis "may seem
far-fetched at a time when the US economy is the envy of most of the world" recent
economic history is "full of episodes in which confidence in a particular economy has
changed dramatically and quickly�witness the 1994-95 crash in Mexico, which followed
the pre-NAFTA euphoria about the booming Mexican economy, or the rash of crises in East
and Southeast Asia in 1997-98, which followed many years of touting Asia's 'miracle'
economies and emerging financial markets."

"These experiences show that spending booms fueled by overly optimistic expectations can
lead to the creation of unsustainable financial positions, including speculative bubbles in
asset markets and real overvaluation of exchange rates, eventually leading to a revision of
expectations and an inevitable crash."

And, as he goes on to note, the US has not been immune to crises of confidence in the past.
In 1978-79, the US financial system was hit by a rapid loss of confidence in the US dollar,
which led to an intervention by the then Federal Reserve chairman Paul Volcker who rewrote
the Carter administration's budget, hiked interest rates to 20 percent and brought on the
deepest recession in the US in the post-war period.

The financial crisis of the late 1970s flowed from the collapse of the Bretton Woods fixed
exchange rate system in 1971-73 after Nixon removed the gold backing from the US dollar,
and the subsequent decision to allow the dollar to depreciate in order to improve the US trade
position. The high-interest rate regime initiated by Volcker restored confidence in the dollar,
but led to a widening trade gap ( as US exports become more expensive and imports cheaper )
and growing international indebtedness.

Now the crisis of confidence in the US dollar which erupted 20 years ago threatens to
re-emerge in an even more explosive form because of the far more extensive holdings of US
debt internationally. Whereas the problems in the late 1960s, which led to the scrapping of
the Bretton Woods fixed exchange rate system, were caused by the large holdings of US
dollars by foreign central banks, "the problem in the late 1990s is an accumulation of large
amounts of US financial assets of all kinds�including private holdings of stocks and bonds
as well as official central bank reserves ( which are largely held in the form of US Treasury
securities ) . This situation runs the risk of creating a fear of dollar depreciation that could
again become a self-fulfilling prophecy, only this time not so much through the actions of
foreign central banks but through those of private international investors and banks ( both
domestic and foreign ) ."

The extent of the potential crisis can be seen from the dramatic increase in foreign holdings of
US securities since the end of 1995. In the past three years, the value of foreign holdings of
non-Treasury securities has escalated from around $900 billion to around $2 trillion while
foreign holdings of the nearly $1.3 worth of US Treasury securities at the end of 1998
accounted for almost 35 percent of all Treasury obligations at that time, about double the
percentage in the early 1990s.

Blecker warns that if a crisis of the dollar develops and the Federal Reserve Board seeks to
counter it by raising interest rates this could have devastating economic consequences.

"With consumer debts rising to record levels in relation to household income, a rise in
interest rates would increase household debt service burdens and could push financially
strapped families over the edge into bankruptcy ( especially if unemployment begins to rise as
a result of higher interest rates ) . The same is true for corporations that have become highly
leveraged�regardless of whether they borrowed for productive investments or for mergers,
acquisitions and buyouts. If interest rates spike upward while sales growth slackens and cash
flow shrinks, highly indebted firms could become illiquid and the risk of corporate
bankruptcy would increase. And if personal and business bankruptcies rise, banks that have
lent heavily to consumers and corporations could be in serious trouble�as they were in the
Asian crisis countries. Furthermore, the existence of complex derivative contracts and
unregulated hedge funds has allowed investors to create highly leveraged financial positions
that could be difficult to unwind without significant losses in the event of a general financial
panic in the US."

Making an estimate of the effect on the US of a dollar crisis, Blecker points out that "some
simple calculations reveal that a serious economic depression could easily result."

Assuming that the current account deficit was $270 billion and that half of this gap was
eliminated by the fall in the dollar's value ( by cutting imports and boosting exports ) , it would
require a 6 percent decline in real national income to close the rest of the payments deficit.
"This would be an adjustment on the order of magnitude of what has been felt in the crisis
countries such as Brazil, Mexico, Korea and Thailand in recent years, and much larger than
the drop in any recent US recession."

Of course, the impact on the global economy would be far more severe than even these
figures indicate because of the role played by the US economy in recent years as the so-called
"consumer of last resort." It estimated that with growth in Japan virtually stagnant and
European growth averaging around 2 percent per annum, the US economy has accounted for
between one third and one half of the increase in world demand in the recent period.

Warnings of a major financial crisis as a result of increased debt are also set out in an article
by the Massachusetts Institute of Technology economist Rudi Dornbusch published in the
July 2 edition of the Australian Financial Review.

Dornbusch notes that value of Wall Street stocks is almost twice gross domestic product, far
more than ever in history, and at least 25 percent higher than at the peak of the Japanese
financial bubble in 1989.

While holding out the prospect for a so-called "soft landing"�a slowdown rather than a
recession�Dornbusch poses the question of what will happen if interest rate rises fail to halt
the rise in the stock market.

"Then the going will be much rougher: first interest rates will rise a lot and then, on top, the
stock market will tumble. High rates and a deep fall of stocks�20 or 30 percent�will surely
put the US economy close to zero growth or worse."

In an article published in May he pointed to the escalation of debt in Japan. The Japanese
public debt is now 130 percent of GDP and the value of pension liabilities is calculated to be
107 percent of GDP, combining to make the largest public debt liability in the world, both in
relation to the size of the Japanese economy, and absolutely.

In the past weeks, financial institutions such as the International Monetary Fund and the
Federal Reserve Board have pronounced the Asian financial crisis as over. But according to
Dornbusch: "The financial crisis of the past two years was merely a manoeuvre for the big
one that is now coming�US adjustment to slower growth and more reasonable asset prices
and then, later, the Japanese debt crisis."

I could have read the same from Steve's repost for the last forty years. You can grow old and die waiting for that which, correctly, will have to happen. Steve, we know the ultimate finale but it's the timing not the prophecy that determines our financial future. Good luck in all your financial endeavors, Steve.

Thank you Canamami for a piercing post. Your point is well taken by me. Exactly.

Hey Tech - keep up the analysis. It's great.

I don't know about your silver/gold spread, but it's interesting from a technical view. Silver is the best looking chart and gold is not showing signs of moving. How have you weighted this trade?

I don't know if you've spent any time with candlesticks but I find them interesting. One of the more reliable sticks is the 'dark-cloud cover'. It is the high opening price at the top of a rally which closes at the bottom of the trading range. Both oil and copper exhibited this today. I wouldn't be surprised if we haven't seen the short term top's in these markets. We'll see.

What do you think about bonds? They aren't showing any great strength but may be bottoming here for a bit. We might see a bit of a rally but this is probably the most sure fire short on the board.

ET

Hey Steve - I gotta agree with Tech, your analysis is spot on. But like he says, timing is everything. History is on your side. Stocks and bonds are ridiculously overvalued while hard assets are equally undervalued. We'll see a correction for the exact reasons you state, the debt has run it's course. I personally don't see how this system will survive y2k so my time frame has been shortened to the next six months. It seems to me at this time that paper asset valuations are at great risk while hard assets present nearly zero risk. It's an easy trade, and I plan on doing well with it. Hang in there, it'll happen before you know it.

Thanks for all your efforts on the forum. You and Townie are in stiff competition for the 'most useful posts' award and particularly thanks for that Ron Brown piece.

ET

Thanks.

reposts aren't mine just saves all time looking for the good ones.

August gold a disgusting...$$257.50.

I hear (haven't read it) Murphy's got his best one at his site. Word is CBC (Canadian Broadcast Company) called him.

Losers, you BOE chaps are a bunch of losers. I may not be that sharp, but even I can see your losses. You lost on the mere announcement of the sale some $689617500 US. You have lost an amount that my feeble mind cannot calculate by weakening your currency on exchange rate issues alone. Ah, you are looking for a return, so you want to hold American T-bills. Another bright maneuver on your part as interest rates are sure to rise and you will get creamed again as bond prices fall. Besides that folly, those American ink notes are at an all time high and are soon to be weakened, but I forgot you guys are the buy high and sell at rock bottom boys. You know, I am an ignorant fool, but do you guys have a deficit and debt like us dumb Americans? If you do, and interest rates rise you will lose again, because as you refinance your smart money (instead of paying off the debt with those gold sales) you will pay more interest and at higher rates.

Let me tell you that if you were on my credit card account, I would hunt you down and cut up your card. You can't manage money, only print it, starve innocent people (in RSA). Heaven help you if you blow this dishonest deal and end up hurting the people in your own country, maybe even your own flesh and blood.

PS: Thanks for the golden handout BOE.

PPS: Good stuff Farfel.

The coffee house stood near the main road that opened
out into the heart of the busy village, where a visitor could
soon find the central market, most of the shops, and a
hubbub of people throughout the day.

It served coffee and tea of many varieties, but its speciality
was strong Turkish Coffee. Often times in the coffee house
there would be seen a small group of Sufi mystics, who had
formed a little community in the village. They believed that
coffee gave them a higher level of consciousness, with
which to stay awake for prayer and get closer to God-
much to the annoyance of the regular Moslems, who
tended to congregate in the next village and shunned
the coffee house as a sinful place.

The wise old gentleman partook of a Turkish coffee; a rich,
shimmering ebony liquid, with a thick mud of grounds at the
bottom of the flask, crushed cardomom seeds, and a little
sugar as was his taste. He sat down on the pillows and
thought hard about what he would offer the people.

He knew, with a deep conviction, that gold and silver were
the only real money that counted. He had long formed his
view that, for a trading society to have a long-term stable
and prosperous outlook, goods and money must have
intrinsic value. Anything that was really worth what it was
tendered for could serve as money, but only gold could be
relied upon to stay uncorrupted over centuries, and most
other things of value that had been used as money
would break a man's back in weight to conduct trade in
serious business.

He knew also that when people contracted a debt with a
moneylender, and that moneylender required interest to be
repaid, the consequences over much time would be an
ever increasing amount of debt which would eventually
overwhelm the community and cause the money system to
collapse, as the fall of the moneylenders had shown. But a
bank based on gold and silver, and avoiding interest,
would be very much like the religious banks in the other
village, and the old man knew that they were not to
everyone's taste. He thought of the Sufis, and how they
had reconciled their religion with the coffee-house
and thought further on his money-bank plan.

Without interest demanded for loans, it would have to look
for other sources of income. It would have to have merit to
bring the people's funds without paying merely for the
privilige of holding the money. And he was determined
that the bank would be run strictly as a business, neither
especially favouring or offending any particular group,
religious or secular.

http://www.mises.org/fullstory.asp?FS=A+Real+Civics+LessonWhile recent lows have busted out many here, I cant help but think that we're going about this all wrong.

Why expect government to EVER go back to a gold standard? They're corrupt right? They'll NEVEr go back. We will use the free market against them. No free market? We will liberate ourselves.

Therefore it is time to create our OWN mutual fund. It's purpose is to OWN THE GOLD. We will buy depressed mining shares not with the intent of reaping the profit but with the intent of OWNING THE MINE.

That's right, who cares if the mine goes belly up, we will own the property. Gold in the ground or in the vault same deal either way. If that means taking a controlling interest so be it.

No derivatives, no futures. We will only enter into contracts to be held to expiration (ie delivery or sale.)

Our fund will pay no dividends.

Gold does not pay dividends. You may convert your shares into funny money if you choose. Or you may "spend" your shares if any will accept them.

(gee, does that make it a gold backed currency? The wonders of the free market...)

Model portfolio:

10% Cash (funny money)
10% Energy sector, or utilities (to earn funny money for storage fees... etc)
40% PM's (Mostly Gold some Silver, Platinum)
40% Mining equities.

As long as we can get a substantial interest in particular mines, even mine bankruptcy wont deter us (WE'LL OWN THE MINE PROPERTY). It doesn't matter if we cant afford to dig out the stuff, WE OWN IT.

We will form a mutualfund/corporation with votes. One share one vote, except no individual may have more than 10% of the vote. The investment guidelines will be set forth in the charter. The Purpose will be to OWN THE GOLD. And of course to leverage the buying clout of the thousands of goldbugs out there.

No more getting pushed around.

Let Rothchilds.inc find their match in the buying power of a billion chinese dirt farmers, minimum wage security guards and dishwash boys.

It's time we create our OWN currency, with worldwide reach, democratic control and so on.

Incorporation to be done in South Africa

The .gov will loose this round (until they day they corrupt our charter from within)

We will set up a stumbling block for the paper nations against which they shall break and shatter.

A great big block of SOLID GOLD.

"If ye love wealth greater than liberty, the tranquility of servitude greater than the animating contest for freedom, go home from us in peace,"
said Samuel Adams of Boston. "We seek not your counsel, nor your arms. Crouch and lick the hand that feeds you; and may posterity forget that
ye were our countrymen."

Having reread Another's thoughts yesterday, I wonder whether it would not be possible that once the US dollar and the euro achieve parity (at the beginning of next week? - Gambler having said June 07 on Kitco, reposted here this week, that July 12 would be the day), one of them rehabilitates the gold standard and becomes the reserve currency.

Any thoughts to offer to my simple mind?

GC9Q = $260.00

The price of gold on the COMEX Friday Closing Settlement will be $260.00 BECAUSE the same ol'e, same ol'e "Bad Boyz"
will still be dumping "shorts" into any rally to maintain their carry trade. ALSO the Market Makers that maintain the "unmanipulated" PUT/CALL market will see that the majority of the large outstanding contracts less than 260 will expire worthless and be a "push" on the others.
<;-)

MARKET REPORT (7/9/99): Gold gained slightly in the early going today. Generally,
the market was quiet overseas with the political atmosphere around gold charged with
recriminations against Britain from gold producing countries, like South Africa, who see
the Bank of England gold sales the near-equivalent of an act of war. The market has gotten
very short with gold lease rates on the rise. It appears that a shortage of metal is developing
at these prices. Asian traders were saying that Asia is beginning "to regain its appetite for
gold" according to a Reuters report this morning.

James Turk, noted gold analysts, said in his latest Freemarket Gold & Money report that

"Gold today is very cheap...to compensate for its adjusted loss of purchasing power, an
ounce of Gold today would have to be $416.56 just to equal the $35 price in terms of
1934-Dollars. But this price must also be increased to adjust for the debasement of the
Dollar in terms of Gold that has occurred since 1934.

We can adjust for this debasement with a very simple and straightforward calculation. The
Fear Index today is 1.16% compared to 14.66% in January 1934. Therefore, Gold and its
use as money was effectively 12.6 times more important back then than it is today. So to
reflect this relative importance today in terms of dollars multiply $416.56 times 12.6. The
result is $5,248.66. In other words, if Gold today were to have the same relative
importance within the monetary system as it did in 1934...Ever hear the stories from the
elderly family or friends who explained how they lived through the Depression on $300 per
year? In 1999 Dollars, that's approximately equal to $45,000."

For an explanation of the Fear Index we suggest you contact Freemarket Gold and Money
for subscription information.

Bridge News reports Ted Arnold, the perennial gold bear now at Prudential Bache, as
saying that the rise in gold lease rate rise points to an official sale. Our sources tell us that
this is not the case -- that if somebody wanted to forward gold all they would have to do is
pick up the phone and sell forward. You do not need to borrow the gold to forward it. It is
an unnecessary and costly step. The rising lease rates, in this source's opinion, are the
direct result of a developing shortage of the metal. This is another indicator that the Bank of
England gold is in fact not reaching the market -- not even as a forward sale. And if that is
the case the shorts are left with no ammunition save jaw-boning the market.

That's it for today, fellow goldmeisters.

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.

Your post #8586 breaks Rule #1:

1. Personal attacks; slanderous or derogatory remarks; off-color jokes; lewd and/or lascivious comments; ethnic, religious and racial slurs

It will be eliminated from the board at first opportunity and your code has been deleted.

Centennial Precious Metals serves many clients of Asian descent. We all come to gold for the same reasons and creed, color, nationality, sex, or religion have nothing to do with our affinity for yellow metal.

Let the contest and discussion proceed, and my apologies for the interruption.

Madam, Thank You! Your recent sale of gold has awoken the common man world-wide and he is now seriously questioning the sanity of the dear Old Lady of Threadneedle Street. Your motives, method, and outcomes force a revaluation of what had to be seen (despite many misgivings over the last 50 years) as a cradle of common sense and leadership ... England and the dear Old Lady of Threadneedle Street. It is now obvious your current actions fly in the face of that perspective, but in all likelihood are but an aberration... conforming to those now in power driven by their need to compensate for errors on other fronts, not yet obvious to the English people or the world.

The common man sees common sense as his or her guiding principle. Common sense tells one not to debase its own assets, values or worth, or turn it over to those who want to value it the least while at the same time coveting its use for their own satisfaction. My dear Old Lady of Threadneedle Street; the common man calls this prostitution. To achieve that one must lie to oneself and to the outside world.

The lies are covering up something immense. The Old Lady of Threadneedle Street has devalued not only the assets of the British people, but also their ability to utilize their own earnings in the world and while doing that, also devalued to the tune of another 10%, the assets of the common man around the world, their governments gold holdings,.. no, the common man's gold entrusted to their governments. What pray tell would motivate that kind of behaviour?

And what about those people now struggling to maintain their own values ... those in the gold industry? This lie (against the very values your Socialist government supposedly serving its people spews out... 'yes! We are for the People') prompts actions that take away the ability for those it supposedly wants to help by perpetrating this lie and at the same time is pushing for more of the same... 'lets sell the IMF Gold and help those poor people'. But first, we will make sure they really need it by putting some 5,000 or 10,000 more of them out of work! That will ensure that they really appreciate our help!

My dear Old Lady of Threadneedle Street! This is a lie, and is meant to cover up another lie, and perhaps another lie. My Mother, my Father and COMMON SENSE taught me that a lie cannot cover up another lie. This will only gets worse before it gets better. Common sense, the guide for the common man, will teach you that.

We in Canada have given (the Government says we sold it) our gold away. Our money is worth 65% of what it was 25 years ago when we had the gold. Now we are discussing giving up the Cdn dollar and giving in to use of the US currency. When they have it all (The US that is), we will be able to see in full force... that power corrupts but absolute power corrupts absolutely! My British friends.. you the common man; that is exactly what your Government and your dear Old Lady of Threadneedle Street is doing to you now. It is giving you up to the absolute power broker, and you too will soon have nothing but fish and chips (even if it's just McDonald's style) to identify yourselves. And Oh! by the way, you may even have to change the side of the road on which you drive.

My dear Old Lady of Threadneedle Street. How about some common sense here.

http://www.murabitun.org/WITO/intro.htmlThis is a very interesting site to read about real money and how the islamic world has used it in the past. Their gold coin-the Dinar-and their silver coin-the Dirham-are explained in good detail along with a real money banking system. Sunnil Madhok has also written a good article over at Gold Eagle on the rebirth of the Dinar. Much food for thought for goldbugs.

We all know that there is a huge volume of trades in the LBMA. Somewhere in the order of 2 1/2 times daily the yearly production of gold. Someone has to buy with a corresponding sale.

My question, who do you think is on the buy side and why?

DEAR OLD LADY OF THREADNEEDLE STREETEngland! What ever happened to Great Britain? The empire that the sun never set upon, now rises and sets at the same time. Thus leaving you in the darkness of your faith in paper and Clinton, Blair, and Schroeder.

While you national wealth is being sold down the river, I hope you get an answer to the question:

WHERE DID YOUR GOLD GO????

P.S. Thank you for all the British Sovereigns I own. Lastly, how can I become a bidder for your future
Auctions / Giveaways. Will pay in US cash. Bottom Dollar.

Pete: The high volume of daily trades should not be taken to mean that 2 1/2 times daily the yearly production of gold is being bought (or sold) by any single entity.

My impression is that this (seemingly large) quantity of gold is being traded as paper backup to currency denominated trade in normal commerce to protect against currency fluctuations during the time that the trade is taking place. There is almost always a period of time in international commerce during which the agreement has been made but the actual payment not finalized. Placing a paper hedge in gold protects both parties against currency fluctuations.

This is my understanding of the LBMA's volume. Most of this gold stays sitting in the vaults with nothing more than paper (and/or? electronic) chits changing hands. The point is, that the gold must actually be there and be available should the trade go bad and delivery be specified.

Please feel free to correct or add to this interpretation, anyone with a better understanding of this.

--Rep. Frank to amend gold-sale bill to give support to miners
--Clinton administration to continue push for IMF gold sale

By Blair Pethel, Bridge News
Washington--Jul 9--The proposed gold sales by the
International Monetary Fund to help fund poor-country debt
relief is unlikely to be approved by the US Congress,
thereby nullifying the IMF's plan to fund its portion of
debt relief, lawmakers and congressional staff told Bridge
News.

Congressional opposition to the sale has become so vocal
that US Treasury officials privately concede they will have
an uphill battle in their lobbying effort to convince
lawmakers to support the proposal, which is part of the
fiscal 2000 US budget proposal.

Because of the opposition, Rep. Barney Frank, D-Mass.,
told Bridge News he planned to introduce an amendment to the
legislation that would allow the sale to proceed, but would
require 10% of the proceeds to be set aside for unemployment
insurance for miners in poor gold-producing countries that
could lose their jobs because of further gold-price
declines.
The IMF is seeking to sell up to 10% of its gold
reserves--about 10 million ounces--invest the proceeds in US
Treasuries or comparable interest-bearing securities, and
use the income generated to fund debt relief for heavily
indebted poor countries--known as HIPC.

The US Treasury Department estimates that income of
around $2.5 billion to $2.8 billion would be generated by
this investment over the next 15 years.
But the IMF and central bank sales are pressuring gold
prices to a 20-year low. The price decline is hurting gold-
producing countries--many of which are HIPC.
Several gold-producing nations have in recent weeks
publicly opposed the IMF proposal, most notably Ghana, one
of the world's largest producers.

Even though Ghana would be helped under the HIPC
initiative approved last month by the Group of 8 leaders at
the Cologne Summit, Ghana has said the IMF should stop its
gold-sale plans. Ghana's Minister of Mines and Energy Fred
Ohene Kena told Bridge News the IMF plan would be
counterproductive, and falling gold prices would paralyze
the economies of gold-producing countries.
"The IMF must find other ways of supporting countries in
distress which rely heavily on gold, especially when its
price is so low," he said.

This plea, together with other notable opposition, most
recently from South African President Thabo Mbeki, has
resonated among US lawmakers and helped to galvanize
opposition to the proposal, congressional staff and
lawmakers said.
Legislation has already been introduced by New Jersey
Republican Rep. Jim Saxton--and co-sponsored by House
Majority Leader Dick Armey of Texas--to block the sale of
IMF gold unless the proceeds are returned to the nations
that contributed the gold to the IMF's reserves initially.

Opposition is bipartisan in both the House and Senate
because:
--It would hurt US gold producers and cost mining jobs;
--It would hurt poor gold-producing countries overseas
more than the debt relief would help, and
--It would provide the IMF with additional resources not
subject to extra-institutional oversight.

"I don't know of anyone who has explicitly identified
with this approach," a senior House staffer said. "While
there is a majority of lawmakers who support financing debt
relief, none of them support this particular mechanism."

The staffer conceded that "there are probably a large
number of members who are open-minded" on the issue, but he
noted that "there is some high-level opposition, and it's by
no means clear to most members that this is the best or only
means to finance IMF debt relief."
He stressed that the link between the IMF sale and its
Enhanced Structural Adjustment Facility is "quite
controversial." ESAF is the IMF's concessional lending
window, through which it makes interest-free loans to its
poorest members. It is also the mechanism the IMF would use
to fund debt relief, the procedure working as follows:

--When a country qualifies for debt relief, the IMF
would make an interest-free loan to it from ESAF;
--The country would then use that interest-free money to
make interest and principal payments on its existing stock
of IMF debt, ultimately paying it down.
--The ESAF loan would then be repayable--principal only
--over an extended maturity, giving the HIPC country in
effect zero-interest refinancing of its IMF debt.

However, to qualify for an ESAF loan, an HIPC country
must meet IMF conditions, which include economic and
structural reforms that many lawmakers believe hit the
poorest disproportionately hard. Rep. Frank told Bridge News
that "I'm for selling gold, but not for the ESAF. It causes
problem by forcing adjustment measures which make the poor
worse off."
"The bottom line is that the reason we're going through
all these circuitous financing techniques with the IMF--and
to a certain extent the World Bank--is because the two
institutions are unwilling to write down loans. We go
through this fiction so it will appear that they are being
repaid by their borrowers," a Senate staffer pointed out.

While that assertion is certainly true, it is also a
fact of life: the IMF has not and will not write off debts.
So if IMF debt relief is to be funded, it will have to be
funded through ESAF, US administration officials assert.

The US Treasury Department also recognizes and hopes to
capitalize on what many on lawmakers concede: There is broad
support among lawmakers for the HIPC initiative as a
concept; the difference lies in the funding. But Treasury
believes its efforts will ultimately convince lawmakers that
the widespread and long-term benefits of debt relief will
far outweigh any losses to an individual country's gold
sector.

However, administration officials realize that they need
urgently to start marshalling their arguments and getting
them out to congressmen. Treasury sees 2 types of opposition
in Congress--that from gold-state lawmakers and that from
lawmakers opposed in principle to the IMF.
Those from gold-producing states should be convinced by
arguments that the IMF is designing the proposed sale in
such a way as to have little or no impact on the market
price.
Former Treasury Secretary Robert Rubin said 2 weeks ago
that the sale is being designed in such a way as to have no
market impact.

However, Treasury is also critical of lawmakers who
support the concept of debt relief yet remain opposed to
gold sales to fund the proposal. Officials believe opponents
of gold sales should make fresh proposals to fund the
initiative if they don't support the gold sales.
Rep. Frank said he would support a purely budgetary
allocation to fund IMF debt relief. But he recognized he
probably stands in a small camp on that issue. Thus he
proposed setting aside 10% of the sales proceeds to create
an additional social safety net for those hit hardest by
both the sales and the adjustment required by the IMF under
ESAF conditions. But he recognizes that even that is going
to be something of a long shot.
"My sense is that now that some of the African producers
have come out against it, it's going to be hard to get it
across the Hill," Frank concluded.

(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

By Melanie Lovatt, Bridge News
New York--Jul 9--COMEX Aug gold futures continued their consolidation
at lower levels today after falling Tuesday to a fresh 20-year low of
$256.50 per ounce following the UK gold auction. Aug settled up 40c at
$258.10, while Sep silver settled down 0.7c at $5.263 per ounce.

Traders said that gold had managed to see a limited amount of
short-covering after Tuesday's fall, but they said that options activity
was also responsible for keeping it closeted near its recent range.
"We saw some short-covering in London, but the big dealers came in as
sellers to protect their options positions," noted Leonard Kaplan, chief
bullion dealer at LFG Bullion Services.

Large dealers had granted $260 calls and it was "important to them
that they expire worthless," he said. At the same time, some players who
were holding the $260 calls were "trying for $260," he noted.
He said that gold is seeing some support from news that the
International Monetary Fund is facing increased Congressional opposition
to its plan to sell up to 10 million ounces of gold.
The proposed IMF sale is unlikely to be approved by the US Congress,
lawmakers and congressional staff told Bridge News. If the
sale does not go through, this is likely to be worth only $6-10 on the
upside rather than $30, he said. When the UK announced its planned gold
auction in May, the gold price fell over $20 and then had a further dip
just after the sale took place on Tuesday this week.

Kaplan noted that gold would need to climb over $265 before large
amounts of short-covering would be triggered. He pointed out that 1-month
lease rates were remaining high, at 2.25%. Rather than a result of
physical tightness, this is a symptom of players borrowing it just to
sell, he said.

However, Kaplan said that he had recently started to see strong demand
for gold coins. "We've seen a rise in premium due to excellent grass roots
demand for coins," he said. He said that physical investors probably
consider gold to be a bargain at 20-year lows.

--Aug gold (GCQ9) at $258.1, up 40c; RANGE: $259.9-257.0

(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

Hello dear long lost friend,

Thank you for your reply. How have you been? Been out sailing the blue seas lately? I have ANOTHER question for you. Why the ever increasing volume for currency fluctuation protection in PM's in a decreasing price environment?

Speaking of ANOTHER, a person I dearly miss as I do you, here is a post of his that is very apropos at this time. I thought you might find it revealing.

Posted on the Internet October 25, 1997 by "ANOTHER" THOUGHTS!

Why do the Swiss want to sell gold over many years when they could sell the entire lot in a week? Yes, the worldwide trading volume in gold could take the whole load and not drop the price below Fridays close! The reason for the "many long term selling announcements" is to keep the price down over time. The CBs would have you think that their selling
would "crush the price"! The real effect would be exactly the opposite. The major world buyers would line up at the door to buy "the last sale of the century! Have you heard any CBs putting out "Proposals to Sell" for their entire stock of gold? Of course not, the response to buy would give
off the absolute wrong signal and cause a revaluation of gold.

It is a far better use of a public asset when they use a small anount of it over time to ensure a reasonable price for OIL! If all gold was sold quickly, there would be no trading medium for deals! How far do you think an IOU would go if it didn't have gold in the background worth perhaps a
1,000 times it's current commodity price?

So what good is this information to the small investor? Not much if you run out and buy gold options, gold stocks, gold futures, etc.! Did you think the following quotes were good for those assets:

"That is why some "Big Traders" are holding ONLY gold as events unfold."

" One last note: No form of paper wealth will survive the financial crush once the CBs stop selling! NOTHING! "

"The market is changing now,,, it will go up but you will not be happy with the outcome."

"What is happening now is far, far larger than the interest of a few traders or mining companies. They will be stepped on!"

Gold bullion is being accumulated and cornered on a worldwide scale not seen before! UNDERSTAND THIS: The people who are buying do not expect the price to rise until the CBs slow their selling. They do expect the value of gold to increase in the future even as the banks sell into a rising market. This will happen as the sheer volume of trading completely overwhelms the entire worldwide market! The big buyers fully well expect gold to stop all trading as the governments enact DRACONIAN MEASURES to deal with a worldwide currency problem. The public in general will ask for these measures and to that effect, all paper connected to bullion will become "fair game"!

My projections and -----: The gold market is not the same as it was in the past, so throw your charts and TA away! Nor will the gold market be the same in the future as it is today, so don't use paper substitutes! Today, gold is much more valuable than it has ever been! During your time a
straight forward investment in "bullion only ' will far surpass any other asset you could hold!



With the recent sales by BOE and IMF in the future, a little at a time, this game of cat and mouse will go on for a few more months, if not years. IMHO.

I would like your opinion on how the ever increasing volume at LBMA and the recent increase in the POO might tie into current events?

Thank you,

Pete

http://biz.yahoo.com/apf/990709/world_oil_1.html"It's not all blue sky for OPEC. There are dangers in allowing the price to go too high," Varzi said.

It seems that suggestions have been offered at this forum that avoid that particular difficulty.

http://biz.yahoo.com/rf/990709/7x.htmlMore coverage of the uphill battle...

http://biz.yahoo.com/rf/990709/3e.htmlIMM currency futures end mostly weaker, yen gains

http://biz.yahoo.com/rf/990709/zv.htmlThis is what happens when you lose grips on true wealth; your credit among the world goes south. If you don't believe me, check this out--it's not a coincidence...

HEADLINE: Sterling falls below key $1.55 level to new 33-month lows

http://biz.yahoo.com/rf/990709/0v.htmlEven after factoring in the sucre devaluation a few months ago, it is clear that "their wealth is not what their currency says it is" to paraphrase ANOTHER.

"We have removed Ecuador from our model portfolio," said Paul Dickson, emerging markets strategist at Lehman Brothers.

http://biz.yahoo.com/rf/990709/yv.htmlOne London analyst, who asked not to be named, pointed to the danger of preventing the International Monetary Fund's planned sale of up to 311 tonnes from its holdings of 3,217 tonnes.

"If the IMF sale does not go ahead with the sales it will probably be the worst day in gold's history," the analyst said. "If they can't use it they will give it back to members, and what will all those countries do with it?" he asked. Fund members included countries which had sold substantial amounts of reserve gold in the past, and which would probably do so again.

That comes at the tail-end of a typical piece of propaganda. Read for the the good practice of spotting the common elements of drivel.

WELL DONE !
<;-)

I'm curious about the reported increased demand for gold. Is it coming from individual investors looking for gold coins? Are they worried about Y2K or a market downturn? Has it really increased significantly this week? Is anyone having trouble buying gold?

I've seen a couple of references in past posts to author Taylor Caldwell, one of my all-time favorites. I'm re-reading The Listener right now and am awed at how Ms. Caldwell, almost 40 years ago, espoused the same thoughts we see on the gold forums. If anyone's looking for a good read, look into Ms. Caldwell's books! They're awesome!

Though I'm not political - GOLD was, is and ever will be politcal- it is now starting to recapture its eminently political stature -you could say the barbaric relic is coming back with a vengeance to haunt the paper currency (supply side) fiat, fractional reserve money brokers and believers.

I am also not hoping for financial armageddon as the only solution for gold appreciating from unduly manipulated (and maybe politically -in-correct) status, in terms of avoiding a premature meltdown of an historically unprecedented credit and paper asset bubble.
We've been arguing on this great site (TKU MK- 600k/pm - don't get us to 6 bn.- after all, we DO feel contrary to the main stream indoctrination - CNBC, for one)as to the almost unbearable 'nonchalance' of the machinations of the paper priests, which still fight for supremacy at a stage, which is looking more than ludicrous by defying any valuation standards the global economic community would willingly accept. New paradigm or not, This Is Not The Question - The "IT" - Revolution (sorry - as T.A. Edison has forseen) it is the same aspect of the individual "WHO" will focus on "THE" information, required to enhance his W-isdom, W-ealth and W-ell- being as an individual, free human being.
Total and instant "live" information for all, is just substituting the same old problems of elites: "who will ever be able to deduct the right to the "right" information - and at the right time ? (Rothschilds barbaric, archaiic? not gold!- carrier pigeons? - like a Steven Spielberg -Jurassic Classic!!! - and epic script, worthy of starring AG, RR, TB as the messengers of the past millenium, pl(h)edging the future and accumulated deficits - financially, environmentally and humanitarian - to future generations, who may not be (too)inclined to this claim to fame! i.e. paying the sins of their forbears - for (-ever), never, would you ?!!!

@ Stranger: Tauerngold wurde bereits in vor-roemischen Zeiten abgebaut. Wenige Goldbergbaue waren bis vor 1900 aktiv. Meine Gruppe versucht u.a. dieses Defizit an AU- Bergbau wett-zumachen.(e-mail:frram@netway.at) - es war einmal ... ein treuer Husar ... Servus (- at your service - ich bin dein Diener) mein Freund "Fremder"?

The following was received by E-mail, author wishes name to be with held:

As Comptroller for an international financial firm, I am compelled to offer these remarks, concerning your recent sale of 25 Tonnes of Gold;
Our company(name with held) owns,many forms of physical Gold, and paper Gold assets.
Your "AUCTION" on June 6,1999,and the unwarranted publicity leading up to the,"AUCTION", has significantly lowered the Worldwide" SPOT" price of Gold and Gold related assets by over 10 percent up to this point in time, directly affecting the value of Gold assets held by our firm, thereby lowering the total value of our firm.
I will refer to Websters Dictionary to the accepted meaning of the word,"AUCTION".
Auction: A public sale of property to the" HIGHEST" bidder!

It is very obvious the selling price of, $261.20 per ounce of Gold was far below the, $291 +/- spot price of Gold, before the "AUCTION" was announced, and since the "AUCTION" has dropped another 5 per cent.

Our firm feels if this was a ligitmate,"AUCTION," bidding prices would have escalated upward from the price of the first bid for your property (25 tonnes of Gold) upward until no more bids were received. Than the property(Gold) delivered to the highest bidder upon receipt of proper remuneration.
This did not happen!!!

Our firm has no Qualms with your disposal of property you own, as long as it doesn't adversely affect the value of property our firm owns... Unfortunately it has!!!

Dear Old Lady of Threadneedle Street, this letter is to inform you that our firms legal department is throughly researching all existing international trade laws, anti-dumping laws,price fixing laws, and other pertinent international laws that may have been violated by your actions.
We are also working closely with Governments around the world(most notably South Africa, the worlds largest producer of Gold).
Your actions, we feel artificially lowered the value of 137,000 tonnes of Gold worldwide(total amount of Gold in the world--from the World Gold Council) therefore directly affecting the wealth of the holders of this Gold.
Are you,Dear Old Lady of Threadneedle Street, prepared to reimburse the owners of 137,000 tonnes of Gold the value(10 to 15 percent of 137,000 tonnes) loss you have caused by your actions?

A public reply would be appreciated.
Sincerely,

Name withheld by request!

.........beesting

Usul....I must say that I enjoy your literary style. Your allusion to Turkish coffee brought to mind the Turkish currency which I happened to encounter while perusing the most recent World Gold Council Gold Demand Trends. Did you know that in 1993 it took roughly 2000 Turkish Lire to buy an ounce of gold? It now takes 100,000. So that Turkish coffee might be a bargain at the village coffee shop putting a higher level of consciousness within a Sufi's reach, but in Turkey that cup of coffee could very well take that Sufi's life savings. Such are the dangers of currency devaluation to savers. I look forward to what this thick coffee brings our "wise old gentleman." P.S.......What are cardamom seeds? I'm still stuck on Folger's -- hot, fast and with the morning paper.
----------------

The Invisible Hand......I am still wondering if an improvement in the euro's prospects would improve the prospects for gold. Robert Rubin's parting shot was that the trade deficit could cause major problems for the U.S. He said the United States could not continue to be the dumping ground for the world's production. Larry Summers opened with the same refrain. If we have a weakening of the dollar, will the euro automatically pull up gold with it??
-----------------

Gandalf.....You need to say something about what the atmosphere will be like surrounding gold January 1, 2000 to perhaps win a silver. I was listening to a report about these new milers in track the other day. They said that in Europe the winner of a series of races (using a point system) would get $1,000,000 in gold. I don't if it was British gold or not. I did note that pound sterling was not offered. Made me consider taking up track even at my tender age. Did you know that they are running the mile now below 3:45?
------------------

Orca....Very much liked your entry. Did you know that the British seek to replace gold with one currency that is down 15% on they year, a second belonging to the world's greatest debtor nation, and a third wherein the stated policy of the national government that issues it is to devalue it against the dollar. And all of this was done supposedly as means to properly and sensibly allocate Britain's assets.
------------------------

Jinx....I would like to see the Dinar move out of the talking stage and into reality. It would change the face of international finance.
------------------------

Pete....Options represent the right BUT NOT THE OBLIGATION to buy or sell a quantity of metal. Paper. Just paper.
-------------------------

PH in LA.....Good to know you are still in the neighborhood.
---------------
Lenny Kaplan....Question: If "players" borrow gold just to sell it, then how can lease rates be considered a reliable indicator of higher prices in the future? Just askin�.
--------------------
Townie.......Wait until the British people realize that the gold sale tanked their currency, drove up the inflation rate and undermined their savings and equities markets. If Tony Blair thinks he has problems now, wait until the rubber meets the road in foggy Londontown.
--------------------
Leigh....Count me in the Taylor Caldwell fan club. I agree with the "awesome" review. Yes, the increase is from the public. I have an interesting stat for you though that puts a another spin on central bank sales: The World Gold Council reports that official holdings of gold including multilateral institutions has gone from 1114.2 million ounces in 1995 to 1075.1 million ounces in December, 1998. That amounts to about 300 tons per year that has left the central banks and gone to private hands. Industrialized countries have actually added to their holdings which might come as a suprise to many given the hype surrounding sales. Annual gold demand is running in the 3500 tons per year range and mine production is now in the 2600 ton range assuming we have any mines in operation by the end of the year. As you can see, central bank gold sales are much sound and fury signifying nothing.
----------
CoBra (too).........I must say that though I don't hope for financial Armageddon, I prepare for it nevertheless, as I know you do as well. To you other descriptions of the paper priests I will add another -- arrogance. What information do you need in a market that goes up without the benefit of anything close to fundamental impetus? One does not need a great deal of information, or skill before casting the dice on the table. Not even the information age will save this crowd once the rabbit starts heading in the other direction. I met some New Paradigmers golfing recently and they were telling me that one fund manager they knew was having a bad year with a 50% return on his fund while a well known competitor had a 71% return. I can remember when a stock broker was considered to be miracle worker if he pulled a 10% apr out of the market. The thought occurred to me that no skill was involved...One manager was simply luckier than the other. The question is should someone be rewarded on a multimillion dollar scale simply because he's luckier than the next guy.

Just curious. Does anyone else see the POG going through the roof in the last month or so? I feel so confident in that, I have to wonder if it's just ignorance. Am I the only one with this confidence?

http:\\www.usagold.comI agree with your thoughts. The sellers of gold have been almost too obvious and clumsy. Except for the public, which accumulates gold coinage under the cover of Y2K, buyers have been invisible and not even a matter of discussion. With each passing day, economic imbalances grow and the ultimate unravelling promises to be messier and more disruptive. Thanks for pointing out that Another has been commenting since 1997, a long time but not a very long time.

http://biz.yahoo.com/rf/990709/9g.htmlComment: Seems the timing on the release of this article(Friday,after the close of all markets) sure takes the focus off of Gold......beesting

Auction took place July 6, 1999 not June 6---Sorry!..beesting

Thanks MK ! --- far too many GREAT posts to remember you changed the format. -- I believe that the "tone, tenor and complexion of the Gold market on 1 Jan 00 will be as follows: There will NOT be a Gold market as we now know it beyond 1/1/00 !!! --- My crystal ball shows nothing where the COMEX is shown now. -- Zero, ZIP, Notta, the paper has gone up in smoke !!! The only Gold Market after 1/1/00 will be the offer of Governments to there peoples to do as the Korean Gov. did, please help out your Gov. by giving the Gov. your gold in exchange for promisary notes. -- OR the Roosevelt trick, -- EVERYONE turn in your Gold !
--- ONLY one problem, I have not yet figured out what to do AFTER 1/1/00 !!
<;-)

Please excuse the spelling errors ! -- I hate the There for Their usage. GUILTY again.
<;-)

Sicherlich begegnet Mann faszinierend Volk im Internet. Ich wunsche Ihnen vielen Erfolg mit Alles mein Freund.

http://www.gold-eagle.com/gold_digest_99/kutyn071099.htmlPeter, Gandalf, all...Will his concept of notes work?

kutyn--

"Moreover, it must be recognized that the manipulation of the gold markets through the gold lending
activities of the central banks has allowed the ownership of both gold and gold companies to be
concentrated in a few powerful hands. Furthermore, the creation of a gold standard would give these
people tremendous power and wealth. It must be stressed that the central banks have manipulated the
gold price downward, not by selling their gold, but by lending it. Had they sold their gold, their future
influence on the price of gold would be greatly reduced. However, by lending their gold, they are able to
cause a substantial future increase simply by having these gold loans repaid (called in).

In recent years large quantities of leased gold have been absorbed by the market, indicating that
demand for gold is much greater than generally acknowledged. When bankers ask for the repayment of
their gold loans, and the short sellers that have been supplying the market also become buyers to
cover short positions, we will see a substantial price increase. As it is not apparent where the supply of
gold will come from to meet both the normal demand for gold, as well as to cover repayment of gold
loans, this rise could be very substantial. Should these events occur at a time of severe stock and bond
market weakness, we could see other investors move into the gold market, further fueling the price
rise."

WOW --- Sorry, Steve, I am afraid that I got lost before I got to the NEW paper replacing the OLD paper that the banks created. -- There must be a little moneys on deposit to allow the banks to make loans ! This was never stated, ONLY that the banks made entries to create new Dollars. -- The only thing of importance was the two paragraphs in RED type. -- I shall await someone that is far more of an Economist that this ol'e engineer, for a review of this theory.
<;-)

This is the first reference I have seen to the tremendous LBMA Gold volume being primarily involved with currency hedges. If this is the case, it is a key in understanding what is really going on in the Gold market. Please elaborate more on this or post your references on the subject. Thanks in advance.

Pete (and Michael):
Thanks for the warm welcome. In truth, I have never been far away; lurking daily but holding myself above the fray in hopes that the situation will clarify itself without input from me.

At the same time, I find myself surprised by the near-complete agreement that it was the BOE's chicanery that caused the collapse in the POG. To me, this is nothing but rationalizing on the part of the mainstream commentators, looking desperately for reasons and explanations. It was not a sale! Very early on, the BOE announced that only certain members of the LBMA would be invited to participate. I read that to mean that only those owing a sufficiently large amount of metal would be allowed out of their debt by participating in the charade. It is an act of desperation, not a sale to raise currency reserves. Any more than an IMF sale would be to benefit poor nations. How absurd! The IMF, who has condemned countless human souls, indeed whole nations to poverty and unthinkable suffering with their austerity measures and demands for payment of interest on mountains of continually rolled-over debt, suddenly selling its gold so that the proceeds can pay off a few loans? The very idea is laughable!

No, I prefer to see the cause of the decline in the POG to be concerted short selling that drives the price ever lower with or without CB sales and/or political announcements, with or without poverty reduction, etc. The trading houses and bullion banks that are short must prevent a breakout at all costs. They obviously cannot cover their positions even at the present low valuation of gold. We saw it happen several times around $300. Whenever the price began to rise, they jumped in with concerted selling. This time, they have outdone themselves, achieving record low prices. It will be ever more and more difficult for them to keep the price in freefall. At some point they must cover. There does not exist enough available metal for them to do this. Therefore, I wait. How much longer can they hold out?

As for the LBMA "riddle within a conundrum wrapped in an enigma". I recall the stunned reaction when they announced their monthly volumes. At that time, there was much discussion as to what their figures meant. And they did little or nothing to explain themselves. It was noted that such volumes had undoubtedly been going on for some time. Many asked (and few answered) why the disclosure came out at that time. No convincing answer was ever postulated to that question.

It was further discused at rather great length (and again without convincing answers) just what it was that was being traded. I seem to recall Aragorn commenting that it had to mean another example of the old fractional reserve technique...that gold was being pledged far in excess of its actual physical availability. I also seem to recall that Another commented on this, too. It was widely speculated that the figures actually (in the complete absense of explanations from the LBMA) reflected derivative-like transactions. A conclusion that makes sense to me. This is where the concept of currency hedges fits in. Since no explanation was ever offered by the LBMA itself, we were forced to conclude that if their numbers were to be given any credence they must refer to some other type of transaction than actual physical gold sales/purchases.

As far as increasing volume in a falling price environment is concerned, Pete: Are you sure that this is actually happening? Michael posted for a time the daily volumes and I distinctly recall that these numbers fluctuated wildly. There was no trend at that time. Is there now? and Since when?

In any case, the actual present price of gold might have little or nothing to do with anything if these transactions are indeed hedges. After all, even though the dollar price has fallen, in other currencies it has risen dramatically, the exact purpose of hedging a transaction in the first place. International commercial transactions must be converted to dollars for settlement. It is these transactions, during the time between agreement of terms and actual consumation, where the uncertainty of currency fluctuations would benefit from hedging in gold.

I'm afraid I can offer little more than these general comments, Ray. I am not really a scholar of these matters. Aragorn and/or FOA and Another could offer much better explanations, I'm sure. It would be very interesting to me, also, if they could be persuaded to comment on these matters.

http://www.jasonhommel.comDear Old Lady of Threadneedle Street:

Two nights ago, after I calculated the value of your recent sale as being 666 talents of gold (25 tonnes), I hoped and prayed that God might grant me prophetic understanding.

Congradulations on dropping the value of gold 12% in just over a month... at this rate, perhaps through your lies and manipulations, you will be able to cause approximately a 50% drop by years end? I wonder how far you will go? I wonder how far God will let you go? If God has been able to finger your actions as being the mark of the antichrist with writings that are over 2000 years old, perhaps He will also show how far you will go with this?
-----
To USA gold forum members; we who know the facts of supply and demand fundamentals, know that their effort is doomed to fail in the long run, which is confirmed by the encouraging words, [Rev 3:18] "I counsel thee to buy of me gold tried in the fire, that thou mayest be rich..."

So, if God's word can confirm modern day events, and what we know about gold in our gut, and it counsels us to buy gold, perhaps God's word can give a sign as to how low gold will go? God should also tell people when and at what price the market will bottom out, right?! Or at least, that's what I'm assuming... Pretty wild assumption, I know, but based on that, and the request of a prediction of the price of gold in 2000, here goes...

I'm thinking that IF my assumption is correct, there would be a number, or verse showing us where the bottom of the gold market will be. And it should be relatively simple, but perhaps using symbols.

I've read several low estimates for gold as bottoming out at $150 at the worst. On another gold forum yesterday, someone mentioned that New Hampton.NHG mining company "Could stay in bussiness for years at POG $140" Several goldbugs who know and believe in the intrinsic value of gold have also realized that we are in a fixed market, and hence, have decided to ride the wave down, and short gold like the rest.

Then it hit me. The number 153. Woah! I don't know if this number came in response to prayer, or if I just pulled it out of my head, but I decided to search the scriptures for further understanding. Here is the main text:

[John 21:3] Simon Peter saith unto them, I go a fishing. They say unto him, We also go with thee. They went forth, and entered into a ship immediately; and that night they caught nothing.
[John 21:4] But when the morning was now come, Jesus stood on the shore: but the disciples knew not that it was Jesus.
[John 21:5] Then Jesus saith unto them, Children, have ye any meat? They answered him, No.
[John 21:6] And he said unto them, Cast the net on the right side of the ship, and ye shall find. They cast therefore, and now they were not able to draw it for the multitude of fishes.
[John 21:7] Therefore that disciple whom Jesus loved saith unto Peter, It is the Lord. Now when Simon Peter heard that it was the Lord, he girt his fisher's coat unto him, (for he was naked,) and did cast himself into the sea.
[John 21:8] And the other disciples came in a little ship; (for they were not far from land, but as it were two hundred cubits,) dragging the net with fishes.
[John 21:9] As soon then as they were come to land, they saw a fire of coals there, and fish laid thereon, and bread.
[John 21:10] Jesus saith unto them, Bring of the fish which ye have now caught.
[John 21:11] Simon Peter went up, and drew the net to land full of great fishes, an hundred and fifty and three: and for all there were so many, yet was not the net broken.
[John 21:12] Jesus saith unto them, Come and dine. And none of the disciples durst ask him, Who art thou? knowing that it was the Lord.
[John 21:13] Jesus then cometh, and taketh bread, and giveth them, and fish likewise.
[John 21:14] This is now the third time that Jesus shewed himself to his disciples, after that he was risen from the dead.
[John 21:15] So when they had dined, Jesus saith to Simon Peter, Simon, son of Jonas, lovest thou me more than these? He saith unto him, Yea, Lord; thou knowest that I love thee. He saith unto him, Feed my lambs.
[John 21:16] He saith to him again the second time, Simon, son of Jonas, lovest thou me? He saith unto him, Yea, Lord; thou knowest that I love thee. He saith unto him, Feed my sheep.
[John 21:17] He saith unto him the third time, Simon, son of Jonas, lovest thou me? Peter was grieved because he said unto him the third time, Lovest thou me? And he said unto him, Lord, thou knowest all things; thou knowest that I love thee. Jesus saith unto him, Feed my sheep.

I have always wondered about the verse in Revelation; [Rev 12:6] "And the woman fled into the wilderness, where she hath a place prepared of God, that they should feed her there a thousand two hundred and threescore days."

That is; who is the "they" doing the feeding of the woman (God's people), and how do "they" get rich enough to feed God's people in the last days? Obviously God will see to it that his people will be rich enough to accomplish his will in the last days, but I always like to know more. And the way God tells us to be literally rich in the last days is [Rev 3:18] "I counsel thee to buy of me gold tried in the fire, that thou mayest be rich..." maybe the mechanism is gold investment?

So here are the results of my investigation of 153...

1. Gold's lowest inflation-adjusted price in the last 100 years: $150 an ounce average in 1970. ($35.94 actual)
from
http://www.kitco.com/gold.londonfix2.html and --historical charts
http://www.jsc.nasa.gov/bu2/inflateCPI.html --online inflation index calculator

2. The story in John 21 is that Jesus followers were fishing all night getting nothing. Then, after following instructions and a miracle, they became wealthy with 153 fish. 153 fish; the symbol of their miraculous wealth. The fish were caught by a miracle of God, and God wanted that specific number to be recorded. After following instructions, wealthy with 153 fish, and were told to feed Jesus' flock.

3. Money is associated with another miraculous fish catch in another story in the New Testament; [Mat 17:27] "Notwithstanding, lest we should offend them, go thou to the sea, and cast an hook, and take up the fish that first cometh up; and when thou hast opened his mouth, thou shalt find a piece of money: that take, and give unto them for me and thee."

4. Another miracle of multiplying the loaves & fishes to feed the flock is mentioned in Matthew 14, 15, Mark 6, Luke 9, and John 6. Thus, miraculous multiplying wealth is associated with fish (and by extension, 153) in two other cases in the New Testament.

5. All "fisherman" for gold, in the last 19 years of generally falling gold prices, like Jesus' diciples in John 21, have been casting their nets and finding nothing. Perhaps after the price falls to 153, goldbugs who have kept their faith in honest money will "cast their nets" and find an abundance of wealth with which to feed God's people?

6. In James 5:3, (5-3!) there is an incredibly strong condemnation of gold: [Jas 5:3] "Your gold and silver is cankered; and the rust of them shall be a witness against you, and shall eat your flesh as
it were fire. Ye have heaped treasure together for the last days." As those who have heaps of gold as treasure short it or lease it, their piles of gold become cankered and rusted. If gold drops further, (to $153 per ounce?), the condemnation, (short selling = rust & canker), will be stronger.

7. There are two times where the words, "hundred" "fifty" and "three" all appear together in one place regarding Noah. Since the Bible is supposed to define its own symbols, this should be no coincidence. In fact, since we are told that the happenings of Noah are specifically related to the end times, in Matthew 24:37 "But as the days of Noe [Noah] were, so shall also the coming of the Son of man be." --these Noah references deserve a close look for parallels.

First, (Gen 6:15) the ark's dimenstions: 300 x 50 x 30 cubits. The ark is the thing that carries the people through God's wrath at that time. The words "hundred fifty three" are a mark/dimention of the literal thing that carried people through the rough time of God's wrath. Woah! Will 153 be a mark on gold for the end times?

Also, the population of the earth before and after this time is at a low point. Large population, then a great reduction in number, then growth again. If people represent value, then "hundred fifty three" is associated with a fulcrum point of low value in this first example.

Third, the ark is the literal thing that saved the animals. It was at God's direction and Noah's faithfulness that made the ark. At God's direction (Rev. 3:18) and our faithfulness, Gold may help us, too, during turbulent end time events and fiat money crashes.

The other mention of the words "hundred fifty three" occur in reference to Noah living three hundred and fifty years after the flood. (Gen 9:28). Again, this suggests these numbers (and gold if 153 is associated with gold) are associated with the concept of "surviving disaster".

8. This page, http://www.seanet.com/~ksbrown/kmath463.htm says that all numbers divisible by 3 can be "reduced" to 153 through some formula. "Moreover, if you take ANY integer divisible by 3 and add up the cubes of its digits, then take the result and sum the cubes of its digits, and so on, you invariably end up at 153." That website also lists 153 as the "catch of the day". I list this to show that 153 is associated mathmatically with the concept of "reduction". When fiat money collapses, throughout history, it always comes back to gold.

9. One of the traditional interpretations of the 153 fishes is that the fish represent nations. And I think I remember reading an old Jewish prophesy that says that the nations of the world will be reduced in number to 153 as a signal of the start of the time of the end. Perhaps not reduced to 153 nations, but reduced to trading their gold at $153 an ounce?

10. The 153 fish is also a connected with a low point in considering Peter's love and faithfulness. Earlier, Peter had denied Jesus at his death three times before the cock crowed. In John 21, they go back to being fisherman, instead of fishers of men. It is a low point for them spiritually. Jesus comes back from the dead, and after they catch 153 fish, He gives Peter a chance to affirm his love three more times, which is like a restoration of Peter's love and value.

11. The context is also that of loyalty and faithfulness. The exact words: "lovest thou me more than these?" Or, Do you love me more than these people love me? When Gold (or any commodity) drops to a world low point, only those with true faithfulness in what God gave mankind to represent honest value will be the ones holding on to it at that point. [Hag 2:8] "The silver is mine, and the gold is mine, saith the LORD of hosts."

12. 153 is the number of fish caught in the NET, which did not break. Gold is also a trap. A manipulated gold price is a trap that world bankers and governments are setting up that will spring upon themselves. The largest and most dangerous trap (NET) ever created and conceived of by Satan is the one that will engulf all of mankind, which is the "mark of the beast" of Revelation 13. The 153 fish are said to be representitive of all of mankind that the gospel is taken to. This idea of a trap for all of mankind fits right in with a low price of gold, which is a key part of the trick to get people to forsake the mony that was given to us by God, namely gold.

13. Two websites claim that 153 is the "number of the elect", that is, the number that symbolizes Christians. Christians=fish. 153 fish... http://asis.com/~stag/numbtabl.html#table says 153=the elect, god's people. As we know, 666 is the numeric symbol of the antichrist. As antichrist is antigold, Christ's people are pro gold. If 666 is associated with those who sell gold and who are AntiChrist, perhaps 153 will be associated with those who buy gold and are waiting and hoping for Christ's return?

14. http://www.primenet.com/~chungwu/Theomatics.html says that 153 is a symbol of "the way to salvation" and that multiples of 153 are found in many phrases found throughout the passage of John 21:9-10. My philosophy of the events that happen in scripture is that much is prophetic... [1Cor 10:11] "Now all these things happened unto them for ensamples: and they are written for our admonition,
upon whom the ends of the world are come."

15. After the examples of Noah, the next case of the words "hundred fifty three" occurs in Exodus 38:26, regarding being numbered, as in a census, as the Isrealites brought their wealth together to create the materials for the ARK of the covanant--God's first earthly home, covered inside and out with gold. A census, a numbering of the people, was expressly forbidden and contrary to the laws of God. And this is symbolic and prophetic of the mark of the beast & 666, a system of numbering people.

16. The next several times the words, "hundred fifty three" occur is in Numbers, where those words are associated with numbering people in the tribes of Isreal, which is somewhat of a foreshadow of the "mark of the beast" money tracking system.

17. Next, the words "hundred fifty three" are associated with a census Solomon took of strangers. To me, this seems significant because Solomon is specifically associated with 666 & gold talents, and the census is associated with a "mark of the beast style" numbering system for people. And the context of this particular census is when building the Temple of God, which is inlaid with gold. [2 Chr 2:17]

18. The final, and only time the actual number 153 occurs in the Bible is in John 21, the number of fish taken out of the sea. It's instant miraculus wealth after an unsucessful night fishing. A very strange occurance in scripture. There were no multitudes of people nearby to feed. No seemingly immediate practical purpose to the miracle. Completely a symbolic miracle. Both unnecessary and unexplained. The number 153 just left hanging there.

19. Now, if 153 is a mark of "miraculous wealth" (point 18), the "time of the end" (according to associations with Noah & Matthew, and Solomon & Revelation tying together gold, 666, and a world-money system, and one of the last miracles Jesus performed), AND if 153 is a mark of "low value", (according to point 8 with the cubes of math reduction, the population of the world being wiped out in the Noah story, and Peter's love at a low point in John 21) and 153 is associated with "gold and money" (with the 153 fish, coin pulled from the fish, the ark of the covenant and temple of God, see #14,16) and 153 is associated with a "Net and money-trap", (153 fish in the net) and "God's people", (point 13) and with "salvation" (point 13) then perhaps it also will be a mark of the low price of gold at the time of the end? That is, when the governments, bankers and market makers can no longer manipulate the price of gold further downward, the gold market manipulators and current world superpowers will have lost their power, and their demise will be a signal of the rise of the AntiChrist world government.

153 = miraculous wealth, time of the end, low value, gold and money, net and money trap, god's people, salvation. Well, 153, perhaps not equal to, but is certainly "associated with" these concepts...

I believe that God deceives those who refuse to love him. A "manipulated" gold price is a lie, one of the biggest world-encompasing lies of the people who are trying to rule the world--one that many people today believe and trust as being the truth. (Other lies, of course, are evolution, & whatever.)

[2Thess 2:10] And with all deceivableness of unrighteousness in them that perish; because they received not the love of the truth, that they might be saved.
[2Thess 2:11] And for this cause God shall send them strong delusion, that they should believe a lie:
[2Thess 2:12] That they all might be damned who believed not the truth, but had pleasure in unrighteousness.

If you have not followed the "suppositions" I've made, or seen the connections I've presented, that's ok. I'm not proving anything here, just supposing and wondering out loud. That's what these forums are for, right? Opinions?

Now, if 153 represents the price, what indicates the time? Hey, I'm not even sure I have the first part right!! Argh! So far, the only indicator that I can see is the only other repeated number in the context of two passages, 200:

[John 21:8] "And the other disciples came in a little ship; (for they were not far from land, but as it were two hundred cubits,) dragging the net with fishes."
&
[1Kgs 10:16] King Solomon made two hundred large shields of beaten gold; six hundred shekels of gold went into each shield.

Well, I don't know what 200 shields and cubits could stand for, unless it's a decade?!, and thus, the year 2000?! But this seems to me to be really reaching for a double meaning here, really stretching it. Object/weight and length units (shield/shekel & cubit) as being symbols for time? Come on!, specifically decades?, and off by a order of 10? I don't know.

So, my best guess is that the price of gold will drop to $153 per ounce by/in the year 2000, before it takes off like a rocket to the moon--benefiting only people who hold the physical stuff, not paper contracts. But, you know, I don't know what I'm talking about... 153 hit me in the gut and I looked at scriptural symbols in the references to that number, and I saw some interesting parallels. I can't predict the future like this!

There's not a single verse in the Bible that says that "the price of gold will drop to $153/oz. in the end times," and I'm not claiming that it does. I'm not twisting the bible, and "Making it say" anything. The fact is, it's difficult to explain 666 and it's antichrist connection, and nobody knows the connection or significance of the number 153. It's still a mystery, and the antichrist is yet to be revealed to the world.

I know many people have tried to use the Bible to predict things in the future, and that just about nobody ever succeeds. Most Bible prophesy is seen more clearly in hindsight. And I'm not sure if I'm ready to put my money where my mouth is, and start shorting gold down to $153 an ounce. I'd kind of like the testimony of 2-3 witnesses to establish this matter, although I seem to have covered more than 3 scriptures and parallels looking at this idea. But what real world evidence is there for a support around $150? Past valuations? Price to dig it out of the ground? I don't know about $153... I'm really slow to make up my mind about speculative stuff; I like truth.

If the price of gold does drop to $153, will we be able to say the Bible predicted it? I don't know... Maybe? I think it would definitely be another sign, somewhat like Isreal becoming a nation in 1948, sprouting leaves in 1967, red heifers being born in the last few years, global power being consolidated, technology being able to fulfill the mark of the beast prophesy, etc.

I do know that Jesus is my rock, and that the antichrist is coming. And I know that [1Pet 1:18] "Forasmuch as ye know that ye were not redeemed with corruptible things, as silver and gold, from your vain conversation received by tradition from your fathers;" and I know that [Zeph 1:18] "Neither their silver nor their gold shall be able to deliver them in the day of the LORD's wrath; but the whole land shall be devoured by the fire of his jealousy: for he shall make even a speedy riddance of all them that dwell in the land." and I know that [Mat 6:24.35] "No man can serve two masters: for either he will hate the one, and love the other; or else he will hold to the one, and despise the other. Ye cannot serve God and mammon."

Consider this my entry into the contest to predict the price of gold in the future. We'll see. To the shorters, the world bankers, and the governments who have benefited from the lies and trickery and fraud surrounding fiat money, your day will end! Soon! It'll certainly be an interesting next 6-12 months!

http://www.bayarea.net/~emerald/caravan/cardamom.html"Cardamom is considered the queen of spices, with black pepper the king."

"Because of its high cost it is also highly valued. In the Middle East,
it is used in coffee and other dishes, and extensive use of it is
considered to be a compliment to guests..."

Perhaps one of the "precious metals" of spices?

The above link also has a recipe for Cardamom coffee
according to a traditional Egyptian recipe.

Here is a Middle Eastern Recipes site with one for
Arabic Coffee (Qahwa Arabeya):
http://www.ummah.net/family/recipes/qahwa.html

Turkey's economy suffers from political turmoil...
According to the World Gold Council, Turkey has 119 Tonnes
of gold, at 4.9% of all holdings.

"To Stop Inflation: Return to Gold" is an article that
examines the relationship between gold and inflation in
detail:
http://www.fame.org/research/library/hh-001.htm

Inflation in Turkey is still 50%, there seems to be
improvement on the horizon, but the suicide of the
economic minister does not bode well:

Turk Econ Minister Stable After Suicide Bid
Wednesday July 7 2:58 AM ET
http://dailynews.yahoo.com/headlines/wl/story.html?s=v/nm/19990707/wl/turkey_minister_1.html
"Ulugbay, previously deputy prime minister in Ecevit's former cabinet and
education minister in Yilmaz's government, is leading efforts to draw up
an economic program to reduce Turkey's chronic inflation to single digit
level from around 50 percent now."

Turkey Economy
Inflation rate- consumer price index: 99% (1997)
http://www.emulateme.com/economy/turkeco.htm

Bill it looks like just you and me. We may be the only ones who are confident that the POG in Dec.99 will be the highest in History (not adjusting for inflation). I May be the only one on this forum that has never bought a stock. I know nothing about stocks, margins, shorts, longs, hedges and all the other manipulations of paper numbers. I have been around for over 60 years and I know something about people. If they do anything really well, it is overreacting to "fear of the unknown." I really believe in November and December of this year we will see the largest exodus from the stock market in 70 years. They will cash in their stock, take their money out of the banks but will not feel comfortable with a shoebox full of $100.00 bills. They will want recognizeable, tradeable gold coins. They will have one problem. By then gold will probably cost them $1,000.00 per ounce. I will have a terrible delima...do I sell it or save it. I don't know what I will do. Honestly, The Scot

http://biz.yahoo.com/rf/990709/yv.htmlAs the opposition to the proposed International Monetary Fund gold sales progresses in the U.S. Congress and legislative halls around the world; and as the international criticism to the Bank of England gold policy rises to crescendo level, this blatant warning is issued by the liberal British political establishment through Reuters' Patrick Chalmers who comes down decidedly on the side of the anti-gold crowd. Here is what he says in a piece labeled "Analysis" (We will patiently await the story from the other side of this issue, Mr. Chalmers.):

"Britain's plan to sell more than half its gold reserves is no policy aberration but the product of sound finance, and withering criticism may only make things worse for gold prices, economists and analysts said on Friday." The article goes on to quote Roger Alford of the leftist London School of Economics saying "This represents the growing influence of economists in the Bank of England and indeed at the International Monetary Fund and elsewhere. They tend to look at the rates of return on assets and to ask whether asset allocation is right or not.''

Other than the fact that the trend in world economic affairs appears to be precisely the opposite of what Alford claims (the influence of BOE and IMF economists is in fact "withering" not the opposition), we finally get an admission that the BOE and IMF are somehow tied together in this constant attack on gold. Though you might have a group of anti-gold academics and their trained minions at BOE and the IMF, this certainly is the not the situation with the general public where gold reserves at the central bank level are considered sacrosanct. Beyond that, there is considerable reason to question the assertion made further in the Chalmers "Analysis" by Gold Fields Mineral Services' Phillip Klapwijk: "I do think it's (the BOE sale's) concentrated the minds of a lot of other central banks." Yes, it has Mr. Klapwijk, but not perhaps in the way you might have hoped.

I would say that the the BOE sale has virtually killed the IMF sale in the U.S. Congress, undermined the Swiss sale with the Swiss electorate (which happens to collectively own a large private hoard of gold) and caused central bankers around the world (including in Europe and the United States) to set their position on gold sales in concrete, i.e., they are uniformly opposed and now publicly on the record stating such.

No. Britain increasingly looks to be alone on this, and analysts, commentators and political figures will continue to wonder why the steady anti-gold cacophony continues emanating from foggy London-town. British policy makers also increasingly look to be the source of all the difficulty at IMF. Our representatives in Congress need to look at the undue British influence in that organization.

These warnings to gold advocates (and the growing public outcry to British gold policy)-- this "calling us out"-- will only serve to make us more adamant in our view that these sales need to be investigated by the British people to see what's behind them. I can think of no other instance in my long study of international economic events where a government and central bank has acted so willfully against the interests of its own people. Unfortunately, the fallout is raining down on smaller economies all over the world and a number of British and American mining companies who find themselves caught in the swirl. I'm sure this was not intended but it is nevertheless real.

To hear the claim that the money can be better rings hollow to anyone who has even the slightest knowledge of international finance and takes an objective view:

The return on the Japanese yen is zero, or near zero. In addition the stated policy of the Japanese government is to debase its currency -- sacrifice it -- to a export driven currency policy.

The euro has depreciated by 15% over the last six months -- not what I would call a solid investment.

The dollar, though it has provided a good return in recent months when compared to other currencies, offers a hazy future when you consider that the United States is the largest debtor nation on earth and its own Secretary of the Treasury has issued ominous warnings in so many words that the strong dollar policy cannot go on forever.

I could go on with this, but the bottom line is this: Central banks are not mutual funds. The goal is not to make the best return. It is to defend the nation's currency.

The BOE and Blair administration have done a shabby job of it and though the British press and academia might issue a warning on the "withering criticism" and (they) making things worse for gold, let me just say that the free market is issuing a warning of its own in the form of the collapse of the British pound since the May 7 announcement. Not all the press propaganda, academic clap-trap, and dissembling (with respect to others' economic policies) in the world is going to change that.

You must now answer to the British saver and British equities investor who, if history is a teacher, is likely to suffer greatly the effects of British economic policy.

Great reference Rev 3:18. I believe that it is possible that Rev 18 could be Y2K although who knows. But the Bible saying that Gold is the only true wealth is interesting because God has not been wrong so far. Thanks again great post.

Has Aristotle's five-part Hall of Fame series been organized to form one continuous post?

Thank You.

A shortage of messages for a contest weekend. I thought something might not be working.

Through Michael's coordination, I am putting together the file for that new page. I have received Aristotle's edited version by e-mail and will have the file sent back to Michael's shop later today. Good stuff! Volunteering has its own rewards!
T.C.

More on the relation between 153 and a low gold price...

17 x 9 = 153

In 1970, gold was $35 per one oz.

The digits of the first equation need to be moved around
just one place to make numbers similar to the second equation.

197 = 35 1

Is this a foreshadow of $153?

And how and why should the BoE say, in effect, "Don't criticize us, or we might drop the price of gold lower?"

"LONDON, July 9 (Reuters) - Britain's plan to sell more than half its gold reserves is no policy aberration but the product of sound finance, and withering criticism may only make things worse for gold prices, economists and analysts said on Friday."

I thought that market forces determine the price of gold, not the BoE? Well, I'm glad they set us straight, and informed us that THEY fix the price of gold! Next, an unnamed London source says that if they are not allowed to depress the price of gold with IMF sales, they will threaten to lower the price of gold even further!!!

``If the IMF sale does not go ahead with the sales it will probably be the worst day in gold's history,'' the analyst said.

Really? If this were a science fiction book, I'd stop reading because the comments from the characters were just too unrealistic. But this is real life!

Gold: Saving Real Money In A Time Of Transition

Introduction

------ A gentleman leans over the fence and tells his neighbor that gold is going to rise in price from it's current $300. As the person on the other side of the fence thinks differently, they both agree to a binding bet. In three months, we will settle up with a payment of the change in the price of one hundred ounces of gold. Whatever it rises, the "bull" collects that amount. Likewise,whatever it falls, the "bear" collects from the bull. Each puts a $1500 payment guarantee into a common shoe box and gives it to another neighbor for safekeeping. ---------

As an observer of the above, we have just witnessed the creation of a wager not unlike a comex futures contract. On each side of the fence stands a long and a short, that together create an open interest of one contract. Neither has any intention of buying gold, nor do they expect
physical gold to be a part of this bet. Yet, at cocktail parties and on public internet forums, one claims to have "brought gold" and the other states that he "sold gold".

To build a further understanding of this transaction: Both of these gentlemen, probably don't have the $30,000+/- to buy or deliver 100 ounces of gold. Human nature being as it is, if they did have that much, they would most likely increase the bet to ten or twenty contracts. Clearly, the
intent of this paper market, is to bet on the price of gold as it is determined by the buying and selling of other physical traders. The western public should take these trades for the concept they truly represent. ""I (the long side) bet on the "price" of gold not because we need or want the physical metal. Rather, my wager is that others will need real gold to protect themselves from bad monetary systems. In fulfilling that "need to own", these others will drive up the dollar price and I will make money while working within the confines of our good monetary system.""" The shorts make the opposite bet, in that they think the world monetary system will work itself out and induce "the others" to sell all their gold. That is, gold they brought in the first place, because they did not know that our money managers could repair the world financial system.

Yes, today Western longs and shorts are playing out these two views of the gold market. Yet, both sides are using paper gold bets to represent their beliefs. Truly, the major majority of this market does not buy or sell physical gold to represent their investment concepts. There are a few that buy coins and bullion, but, even in their large amounts, it is only a drop in the paper gold bucket.

This, my friends, is the very nature of western trading of gold. The mindset is to treat it as aconcept for making currency, not protecting existing wealth. The exact same mentality exists when one invests in the gold mining industry. Even when these players see the faults in the dollar, and loudly proclaim it's inflationary downfall, the largest part of their assets go into the business of
producing real gold in exchange for more of the same paper currency. It is a means to build wealth through paper asset appreciation, using the very financial system the "concept" says will fail without physical gold.

There are many mental angles and philosophical side steps one can take when understanding the above. But, in this concept lies the very basis of the flaw in the current gold market. A paper market, built upon world misconceptions of currency values and the historical reasons for owning gold. The present deployment of world assets into a paper system of valuations is liken to traveling a trail of no return. History has shown that the assets accumulated in this way will never be transformed into "the things of life"! The paper wealth you currently own is no where near the real value your currency says it is. With the above introduction, we have begun close to the end of this journey. In the upcoming chapter one, we return several miles to walk ground already well traveled. We will observe concepts on the right and the left, not discussed by other guides. The very sights that make such a trip, "worth wile".

" You will see this trail thru the eyes of history and feel old ways as new Thoughts!" Another

FOA


(( 1. )) Thinking Gold: A montage of views


-------- Pioneers:
"the first step is taken and thus defines the trail, a second step brings others and upon this journey we do now make sail"
"pioneers bring light, for directions long unknown, new spirits shine like stars, so bright the seeds are now all grown"
"quickly to the heights we climb, even the top of the mast,
for there I see the the end of knowledge, as it was written in the past"----------


To fully understand the past and present concepts of gold as money, we are going to have to use logic and common sense. In addition to these attributes, the ability to place oneself into the context of the moment of history will also be helpful. For people who demand solid facts and figures to make investment decisions, I submit; we are not trying to create reasons to invest, rather our purpose is to build a background for the understanding of these Thoughts.

In this light, all that read this will become the pioneers of new insights. Travelers in search of new vistas that best present the lost concepts of money. The real money that this generation has never known.

In our introduction, we witnessed two friends with a fence between them. Neighbors, betting on the "price direction" of gold. Not it's future impact on their daily lives or the use of gold as money, but rather how much currency would other people use to buy gold at any given time. Contrast that perspective to our concept of gold and you will see that a wide gulf of understanding stands between our "minds from different worlds".

-------- "They never said it wasn't money! Only, that they could no longer use it as money for their purposes" ------

The author of that statement is unknown, but it was spoken sometime after the "Smithsonian Agreement" of the early 70s finally closed the door on using gold as part of the world monetary system. The old Bretton Woods articles were then officially dead and the dollar would no longer
be a "contract currency" for the delivery of gold. Shortly after this event, banks, governments and large investment entities still agreed that gold was real money, but it should be held only in reserve. So, instead of using the dollar as a contract for gold, the world would substitute it as real gold in the currency system and thus sent it down the road of being "demoneyized".

From the 1920s to the 1970s (with striking similarities to today), gold loans between private and official sectors had periodically become so great that they simply couldn't be paid. The world economy was being built upon a debt of gold that no one could pay off.

Early on, it was agreed that because the repayment of loans in real money would break the banks, payments in newly created real money substitutes would suffice as gold. Over time, the reaction to this concept was easy to understand. Every thinking person knew that creating more (inflating) paper currency to cover existing debts would lead to devaluation's of such fiat currency. Therefore, we will all hold gold in reserve, while these bankrupt deals are worked out with fraudulent money payments. Money that was no longer "contract currency". Later, gold will be revalued upward to balance these newly created money substitutes. In time, all world currencies would finally be officially devalued against gold. That, my friends is why so many investors
continued to buy and hold gold as a long term savings asset throughout the 1970s. It was perceived that the world would eventually return to using gold as the money for payment of debt, instead of using paper money substitutes.

This perception was extremely prudent because history had proven, through the actions of countless generations that creating paper money to save governments and banks from bankruptcy eventually destroys the "concept" of using created money for currency. No one ever expected the general populous to continue using and saving "non contract dollars" for any extended period of time. Mostly, everyone expected the citizens to patriotically continue to use the "new inflated paper legal tender" as asset savings until price inflation exposed that they were sharing their life savings with the state. A process that would require five years at most. Never the ten to fifteen years that have passed. In the end, it made little difference how long it took, as the
adjustment in value always compensated for the inflation plus interest. The only investors that didn't think gold would outlast this new system, were the ones with a "short life of little history experience".

Again, from the failure of Bretton Woods to this present day, there is an ongoing event being further played out from the early twenties. By now (2000) the world can no longer use gold as money because to do so would require virtually every debt to fail. But, what is never considered is that a fiat currency system always "fails" the debts anyway. When the price inflation begins, old currency debts lose value at the same rate as the inflation. A history lesson soon to be performed today right before our eyes. We have but to watch and learn!

But, why do we nowhere read that it would be OK for these banks and businesses to fail, thereby allowing others to buy them up for pennies and save the system? Truly, this was the same real problem with the use of honest gold money as it forces "the important" people to fail. People of influence and prestige. Persons that will not allow their debt assets to fail, even if they gain only a few years. For them the world cannot function without an "expandable monetary system"! An ages old scam that is presented to each new generation as a new and improved currency system.
Custom tailored for their own technological advances and special time in world History. A special system that wil force the average worker to "share" in the loses but still retain this new generations wealth! With this system, any government can then borrow or print money to inflate (expand) the money system so as to bail out failing businesses and foreign entities. Does this sound like the
present IMF?

Yes, gold was our money back then (pre- 1920s). But, the bad business debts and wars of the world had "used up" much of those gold savings. Over time, the savings stock of much of the gold that every citizen, business, government and bank had, was borrowed to finance expenditures. It is imperative to understand that using the expression "gold used up" meant that it was "lent out"!

Of course, back then, even if gold is "lent out" it went somewhere, and from that new savings account (somewhere)it can be borrowed again. However, if the world financial strains become great enough, failing governments and businesses could not borrow gold at all. Therein lies the solid law of real money that scares governments today. We must totally fail and start again.

"It is to say, the gold you thought be in your bank, was not. In your account, the real money was lent and the credit claim represents your wealth" Another

It was here, in the 20s 30s 40s, in that context of time, that we witness the harsh reality that wars and governments are financed by borrowing real savings assets and spending them. When gold is used as money, it effectively demonstrates the real risks in lending ones life savings. That being: you may not get your money back. Is it any wonder that many families decide not to lend their savings? A compelling truth, that allows one to separate their money from the state and not share in the loses of others. In this light we confront the real issue of why so many governments always move from using gold as money, to using fiat currencies as money. It enables them to force you to lend!

During the time (1930s) that the American government called in gold from it's citizens, it would have been very simple for the US treasury to revalue gold upwards into the $300 +/- range (from the low twenties). Yes, many major financial players would have fallen from this dollar
devaluation. In addition, America would have lost much international prestige. However, the real productive assets of this great country would have been kept, "intact"! Those assets were much of the private savings of working people, and most of it was in gold, in their hands. Again, in that
time, it was the only money not lent out. This unprecedented action of devaluing the dollar would have clearly identified the loses from wars and poor lending decisions. It would have forced the large wealth holders and governments to lose assets in proportion to their size. As it was, the small citizens were forced to share in balancing the destroyed assets by turning in unlent gold.

History has shown that "some great leaders" have taken the honest gold "deflation" route when they are not under the influence of "money lenders". In these situations, the context of deflation is not the destruction of the money supply, which was gold, rather it was the destruction of the debt securities held as assets. Assets, due to be paid in gold, and cannot! Deflation, in these terms is a far different animal than what is discussed today! In our time, all currency assets are debt securities. That is why any form of price deflation or price inflation, today, will destroy the entire world monetary system. Forcing people back into using real gold, the only money that cannot be
deflated!

"It is the clear view for an honest eye, yes?" Another

The Bretton Woods system was bound to fail because the world governments continued to pursue a a strategy of saving the integrity of all debts. Even while holding an international pledge to use the dollar as a "contract currency" for gold as money. After the US had robbed it's citizens in the 1930s (of gold money) to help balance the books, the stage was clearly set to proceed into currency inflation. They continued to print "dollar currency contracts" as the dollar was a legal contract to deliver 1/35 of an ounce of gold. They did this knowing full well that this process would further demoneyize the dollar. The final destruction of Bretton Woods was but a further step to no longer using gold as money: not using gold because it's use required debts to fail. If the debts are "to never" go away, the currency substitutes must be continuously nflated. Thus, the savings of workers must be diluted in order to always save the system from default. As long as the next generation believes that their money assets are growing, they will accept the currency and the fraud it represents. The price inflation (that history shows will always follow this process), is totally dependent on how many currency units the citizens will hold without spending them! If the
world population can hold one trillion dollar debt units, and ten years later hold ten trillion without spending them, then no price inflation will show. However, even though each person thinks they have ten times more assets ( and are as much more wealthy), that wealth is quickly degraded if and when such currency savings are exchanged for real goods. Again, history shows that only the spending of a small percent of such highly inflated currency holdings will quickly jump the price of things to such a level as to revalue the remaining existing currency. It then becomes equal to real world buying power, not the fiction in your savings account. This, my friends is the realm of price
inflation and currency destruction! No currency has survived even a short time, once this spending process begins from the money inflation levels that exist today.


Now you have read some many views of the old dollar and gold. We will discuss these much further in other chapters. So, how do we (myself and Another) view gold?

I want to openly state that we have absolutely "NO" faith in gold! None! We do have "absolute", "unending" and "complete" faith in the judgment of our fellow humans. Because we travel this life journey as a society of like kind, our success over time depends on the ability of
people to deal fairly with each other. There is nothing to gain in this life but the honest productive efforts we bestow upon each other. These are represented as the goods and services each of our special talents can produce. We also believe that no one, in this life, should be cheated out of any portion of their savings and will act to protect themselves from loses. This act of protection can and does take many forms as the "lessons of a long life" become the "tools of a families defense". For most of us, indeed, money is "the" lifelong lesson.

I believe, that in the time just ahead, most people will use their natural good judgment and leave the "world monetary system". Mostly because they will begin to lose savings from price inflation. If the history of human kind is any guide, they will return to the safety of the past. They will use the only "conservative money" the world has ever known that cannot be deflated or inflated They will do this until the currencies are correctly revalued against gold. Gold will then become the de facto world money as currency will be used only for commerce and trade. It's
value in trade closely governed by it's exchange rate into gold.

To this end, we do not hold gold for any currency return. We hold it as money. No return of any kind is expected because it is not lent or invested. What is expected is a continuation of an open world market for the purchase of gold at lower paper substitute exchange rates. These values of world currencies, as expressed in gold will be governed by the "tolerance" of world savers to hold ever increasing amounts of paper currency as savings. In addition, the ability of governments to keep the market open with physical gold at lower prices are necessary for the
continued use of the present currency system.

It is our current perception that the performance of both of these functions is coming to an end as the dollar currency creation process has ended. As this progresses, the value of gold will be best judged by it's ability to purchase real things. Out of necessity, the failing paper market place presently called the "gold market", will price gold at ever lower values even as their ability to deliver gold is failing. This situation is not unlike the massive gold loans of years past. Using dollar "contract currency" as a proxy for gold, the world found out that the promise to pay at even $41=/- per ounce was a fraud! We shall see.


In chapter ((2)) we will build upon the workings of the gold market as it represents oil, the most strategic world commodity. Thank You FOA and Another

Sir, it has been a long time since we have had a conversation of importance. I welcome you back to USAGOLD Forum, as do many of your colleagues, fellow participants at this table and friends. Though much has changed in recent months; much remains the same. If I might be so bold, I would say "the sands shift but the desert remains the same."

Gold acquisitions by the public are at all time highs; there is no lack of interest in gold among the people of the world. Yet the price remains stagnated in terms of dollars.
The anti-gold contingent in the world money system remains firmly in control and the gold bear market in dollar terms has deepened considerably. But in many of the other currencies of the world, gold has shown phenomenal gains as you have so accurately predicted by your overall analysis of fiat money. We await the outcome of gold versus the dollar and perhaps that day nears. I have no concern about the gold I own. It is there for a specific purpose, I continue to acquire and life goes on.

Intellectually though, this situation with England continues to intrigue me and many of the members of this table. Why is it that I think England remains at the center of this international dispute revolving around gold? You said over a year ago that England is a "lost land" caught essentially between two worlds. Your assessment turned out to be totally accurate and foresaw much more than what was said in simple words.

So now:

How does a "lost land" exercise so much power over yellow metal? How do you see Britain now? And how do you read the BOE gold sales?

Though I appreciate the words of FOA, and he knows that I am his "friend" as well, I would ask to hear this assessment from Another who's words I continue to accord the utmost respect.

I have other questions but if you are of a mind to do so, let us start here.

You nailed it. My thoughts exactly. I know you've seen more human nature in 60 years than I have.
I'm about to turn 30 and have been investing in commodities now for a little over a year. Some wins, some losses. Mostly losses, so I don't claim to be an expert. I consider my father to be a pretty average baby boomer in respects to investments. He and my mother have worked hard over the years to accumilate their nest egg and planning to retire in a couple of years. Most of their savings have been going into mutual funds for a few years now. I asked my father about a year ago what he planned on doing with it until the Y2K thing was over. He told me then, he didn't have any intention of pulling any of it out. Six months or so, he told me he may pull a little out. A couple of weeks ago he said he'd probably take out most of it and wait to see what happens. As soon as it looks unstable, I'm sure he'll remove it.
Again, I think his situation is pretty common. As soon as we start to see some rough spots.... we'll see a mass amount pulling out of funds. The question is when? I thought it would be in June or July. Maybe it won't even happen until Dec. But I honestly believe it WILL happen and POG will be higher than we've ever seen it. Your right, people, for the most part won't want all of their cash under the mattress(not that there is that much cash anyway). What better place to put it than into a commodity thats been around for thousands of years, does well in financially hard times and is at EXTREME lows.
I don't think Y2K is going to be the end of the world, civilization or even a loss of major utilities. But because of human nature, it is surely going to be a financial nightmare to some and a winfall to others. I hope to be in the later.
I'd really encourage you to pick up a few options that expire after Jan 1st. They are rid. cheap right now. They may go down in value over the next few months.... who cares. It's the market value on Jan 1st were concerned with.
Good luck,
Bill

If this post needs a nomination or second to be included, along with Sir Aristotles, into the "Hall of Records" of special posts consider it done!!

I beesting, nominate post#8633 to be included into the hall of records!

My personal favorite line in the post: "As long as the next generation BELIEVES that their money assets are growing, they will accept the currency and fraud it represents."

ANOTHER and FOA looking forward to your next chapter. Again THANK YOU.......beesting

http://www.egroups.com/group/gata/158.html?And Black Caucus opposes IMF sales.

http://www.usagold.com/halloffame.htmlThe Forum Hall of Fame has been created as special place among the Forum Archives in which we, the Forum participants, shall recongnize those special contibutions by our knights and ladies dedicated to the cause of higher gold education. Because these posts are deemed to be notable in their service to the common good, their expected wide appeal warrants an easier system of retrieval from our impressive and expansive archives. Grab a torch, and wander down the hall to this new room. The tables are big, the drinks are at hand, and the chairs are comfortable. Enjoy your review of this very special room!

TC,--- the Hobbits wish to see the full picture of the chest inside the door of the "Hall of Fame" !! --- Tis a tease to only show the top portion of the chest. I also suggest that a guard be placed at the door, as who knows if the BoE or IMF may attempt to "borrow" some of the MONEY.
<;-)
PS: Once inside

As I was saying, Once inside, the works of GREAT minds are available to allow learning by the ones that desire to learn real truths. I look forward to seeing the newly started SERIAL by ANOTHER hanging next to the work by Aristotle. -- Thank you MK for building all of us this new "Hall of Fame"!!
<;-)
PS: I still think that Goldfly's song "I got Au, BABE" should be there too, but I may be a LITTLE biased!!

It seems to work fine for me...try hitting your reload button? Should be about 2" by 2.5" in size if it is all there.

NOW THAT is a chest of MONEY!
BTW, could you please pickup those poor coins that dropped out of the chest? --- They might be accidently swept away.
<;-)

Many have expressed the thought that Y2K or some other financial uncertainty may start a run on the banks, where people draw all or much of their savings out of local banks and convert it into cash. In the U.S. the Government has stated, it has printed up billions of paper dollars in preperation, for this event.

I would like to share something I received in the mail today from my brokerage account:

"This is to tell you about a fee our firm will implement next month.
Beginning Aug 1, we'll charge $15 for physical delivery of certificates.
MOST of our clients have opted for safekeeping services at the brokerage.
Just give us a call to change the standing instructions on your account and elect safekeeping instead of physical delivery."

My comments; Peter Asher and I discussed the possibilty that brokerage firms are using collateral(paper assets; stocks,bonds,mutual funds maybe even money market funds,etc.)held in safekeeping in clients brokerage accounts, similar to a bank using customers loans or savings deposits to boost total assets(on paper) of the bank.The bank can then use these paper assets to back their own---simple terminology--checking account!
If indeed the brokerage firms are reinvesting(especially on margin) clients money it could account for stock prices continuously rising.
Now,it was published yesterday(sorry don't have the URL) that a brokerage firm called,"Goldmen" (NOT GOLDMAN SACHS)was indicted for securties violations.

IMHO what will burst the stock market bubble is; Investors worldwide that lose confidence in their brokerage houses and demand delivery of certificates(or physical paper)assets.When this happens(can't predict a timeline)the, "LIGHTNING IN THE NIGHT," will occur because I don't think the brokerage houses can cover all the assets that are intrusted to them.Hence, what used to be called"A RUN ON THE BANK". There is much more invested(paper)than exists!

I don't know when or if this will happen, but Monday I'm asking for physical delivery of all my paper assets,and I would suggest anyone out there that owns stock or deliverable paper assets to think about what I have just posted. Comments welcome........beesting

Thank you so much for chapter one. Especially thank you for the simple expression of opaque complicated events. It is so clearly written......It is truly a joy to read your THOUGHTS and understand as you uncover the "Big Picture."

I am especially encouraged by your last THOUGHTS:
"So, how do we (myself and Another) view
gold?

I want to openly state that we have absolutely "NO" faith in gold! None! We do have
"absolute", "unending" and "complete" faith in the judgment of our fellow humans.
Because we travel this life journey as a society of like kind, our success over time
depends on the ability of
people to deal fairly with each other. There is nothing to gain in this life but the
honest productive efforts we bestow upon each other. These are represented as the
goods and services each of our special talents can produce. We also believe that no
one, in this life, should be cheated out of any portion of their savings and will act to
protect themselves from loses. This act of protection can and does take many forms
as the "lessons of a long life" become the "tools of a families defense". For most of us,
indeed, money is "the" lifelong lesson."

Within your statement, my friends, I find peace. You have "voiced" "purity of purpose." I feel that same way but could never have expressed it in the same way you have so eloquently written. Your THOUGHTS have defined the unexplainable peace that I feel when I buy gold even as I experience a drop in the dollar price of gold. I truly thank you for sharing your THOUGHTS with us. I so look forward to Chapter 2 and our continued journey together.

But I have also realized that I feel a great unexplainable sadness too. It isn't fear. It is sadness.

Your Friend,
Julia