USAGOLD Discussion - September 1999

All times are U.S. Mountain Time

Junior
(09/01/1999; 04:50:00 MDT - Msg ID: 12543)
Test
@ TestBoo - No Gremlins
SteveH
(09/01/1999; 05:16:27 MDT - Msg ID: 12544)
Rhody
www.kitco.comDate: Wed Sep 01 1999 06:35
rhody (@ Nick: Do you mean that China has already bought the) ID#410367:
Copyright � 1999 rhody/Kitco Inc. All rights reserved
600 tonnes or so of gold they needed to bring their gold reserves
up to 1000 tonnes? This amount of gold is one and a half times
the total annual CB sales, and the same factor of magnitude
larger than the BOE sale. They did all that without moving
the spot price????? If they can do that, then GS should
hire these guys to orchestrate the covering of Goldman's short
position in gold.
Several posters have pointed to the fall in the USD as
bullish for gold. True, in a normal market. This whole
gold bear is about protecting the status of the USD as a
world reserve currency. I will make a prediction. As the
USD comes under pressure, the POG will also. You will see
lease rates climb, but not POG. FWIW. I'm no expert, but
this pattern has been in place since July 1.
SteveH
(09/01/1999; 05:53:22 MDT - Msg ID: 12545)
MIDAS
www.lemetropolecafe.comAugust 31, 1999 - Spot Gold $255. 40 up $1.70 - Spot Silver $5.15 up 6 cents

Technicals

The "Rinky Dink Express" eases on up the road and is on track. Gold has now closed higher 4 days in a row, just as I anticipated. The volume is very light and there is little interest in participating in this rally by the public. The "Hannibal" press and "gold cartel" have done their job well and continue to control the price of gold so that it has become one of the most boring markets in history - at least, for the time being, that is.

But not so fast "Hannibal." Your leash ( lease ) is growing shorter and the obvious nature of what you are doing grows by the day. You are an open book now. It will not be long before the book cover is slammed down on your exposed fingers.

When you read this, Midas Caf� members, I would like to make one thing clear. I am not bitter, I am very angry. There is a big difference. The manipulation of the gold market is an outrage and many innocent people are being ruined to accommodate the big money crowd in New York. It is a scandal of deeply disturbing proportions that not only is ruining many gold industry participants and unknowing, innocent shareholders, but also threatens the free market financial system when all is said and done. This manipulation is criminal in nature and the " gold cartel orchestrators" are no better than street thugs.

No sense talking about the bullish consensus, open interest, chart patterns, etc., today. The only technical market observation that is worth noting is that the $2 rule was put in place once again. Doesn't anybody wonder why the price of gold is NEVER allowed to go up more than $2 in any given day? Curiosity only kills cats!

The $5.05 support area for silver is solid as the "Rock of Gibraltor." Midas' long standing very bullish outlook for silver remains in place. One of these trading sessions, we are due for a 50 cent up day.

Fundamentals

Bridge News - GOLD BUREAU OFFICIAL SAYS CHINA'S GOLD RESERVES ARE TOO LOW - Shenzhen--Aug 31--China's gold reserves are too low in relation to its population of approximately 1.3 billion and its forex reserves of US $146 billion, deputy director of the Gold Bureau under the State Economic and Trade Commission, Ai Da Cheng, says. Ai told Bridge News that China's gold reserves of 394 tonnes could rise to at least 1,000 tonnes. Gold currently accounts for just 2.3% of the country's total reserves, he said.

This may be an important comment. All we hear about from the bullion dealers is that phantom central banks are selling gold. The problem is the dealers never say who "it" is. Now we have talk about central bank buying. In the past we have monitored World Gold Council comments about potential Chinese central bank buying, but this is the first mention I have seen on the subject from a Chinese government official.

Why don't the bullion dealers spread central bank buying rumors?

Maybe some important silver news out of this Shenzen conference. Bloomberg: "The government is also considering how we can push the reform process. I think the first step is to deregulate our silver industry, to allow manufacturers and users of the metal to purchase directly from the producers."

This may be an important development, according to the Caf�'s John Brimelow, as he notes the Chinese have historically been big silver consumers. Perhaps this tidbit of news buoyed the silver price today.

The dollar was shellacked right from the git go: the yen closed at 109.55 ( breaking the key 110 resistance level ) , the euro at 105.70, the swiss franc at 151.40 and the pound at 160.50. The dollar index has technical support at 99.75 and 99.30 and closed today right below 100. A break below both technical support points would be very bearish from a technical perspective.

The yen is filled with intrigue. There is daily talk about more yen intervention, but $30 billion of yen intervention has already failed to do the trick. Treasury Secretary Summers has berated the Japanese for intervening while the Japanese themselves are calling for some kind of concerted intervention. A move below 105 in the yen would be a "signal" failure and dangerously bearish for the dollar. The commercials are mega short the yen while the specs are long. A move below 105, a peak for the yen earlier this year and a major yen resistance point, will blow the commercials out of the water and cause a yen buying panic according to some highly regarded technical analysts.

Technically and fundamentally, the dollar has put in a major league top. That can only be bullish for gold demand as gold becomes relatively cheaper around the world when the dollar slips against foreign currencies
........ ( more )

Potpourri and the Gold Shares

The XAU clawed its way up again, finishing nicely at 67.34 up 2.09.

The six month lease rate remains very firm at 3.42% and tells us that gold lease supply is still very tight.

From Caf� member ERLE: "I posted on Kitco the nub of the conversation that I had with a bullion/coin dealer. He used to be a big enough dealer that Credit Suisse entertained him and gave him the grand tour of the vault. He said that they had 50,000 bags of sovereigns @1000 pc./bag. All of that is gone, as are the 20 Franc coins. They have no more. Try to get Austrian 100 Corona now."

Bill King of M. Ramsey King Securities, Inc. reports this morning in his Market Comment: "Today's Dallas Morning News says the U.S. Attorney in Waco has documents that detail FBI use of military gas at Waco; with hand-written notations that question if the details should be revealed. The US Attorney wrote Reno on Monday, "individuals or components with the Department of Justice" may have perpetrated a cover-up on Waco.

I spoke with Marty Zimmerman, Business Editor of the Dallas Morning News, awhile back and he told me "they did not believe in conspiracies around there." Have to call him again - maybe he will reconsider talking to me now.

Why is it that Lewinsky and Paula Jones matters can be covered up, Waco can be covered up, Watergate was covered up, but a cover up of a gold market manipulation is too far fetched to be discussed or looked into by the mainstream press? Who are the real wackos here? It is a shame that we do not have an inquisitive and free mainstream press in the United States. Only when the cat is let out of the bag on some scandalous story do they run like sheep to hop on a sensational bandwagon. Then, they can't wait to point fingers and howl moral disgust.

The National Purchasing Managers Survey, scheduled for tomorrow, was released today by mistake on a government web site. The index, a measure of economic strength, increased from 53.4 to 54.2. The real surprise was the prices paid component which increased 5.1%. In laymen's terms, it means there is a good deal of inflation in the economic pipeline.

Since it was a surprise announcement, it caught the market manipulation crowd by surprise. They were not ready to tell the troops what to do. Thus, the stock market cratered fast, the bond swooned and the price of gold exceeded its $2 rule boundary by 40 cents. The "squad" regained their composure later and calmed things down a bit.

The central banks want to sell all their gold according the bullion dealers and their apologists. With what we reported about today's market action, does that make any sense to you? Are these bankers really selling? Is Hannibal just making it up? Or are the central bankers that stupid to sell gold no matter what the circumstances?

Take the Bank of England. Truly a sad sack situation. Either The Bank of England are a bunch of dummies or. as is the most likely case, the British politcos forced them to announce the gold sales in response to a request from the likes of former Treasury Secretary, Robert Rubin, President Clinton, Alan Greenspan and some desperate bullion dealers.

On May 6th, the price of gold was headed towards around $320, breaking through $290 resistance. In unprecedented fashion for recent times, the Bank of England makes this devastating announcement that knocks down the gold price $29 to $261 before they sell any gold. Had they waited and decided to sell gold like any other normal central bank, they might have received $60 more per ounce on the first 25 tonnes of gold they sold. In addition, they reported that they took a good amount of the proceeds and invested them in U.S. bonds. The bonds are tanking and the dollar is swooning lower too. How good a trade is that turning out to be for the British?

Commodity markets are flying, the dollar is in trouble with its burgeoning trade deficit, bonds are hurting as yields rise, the U.S. stock market is way over valued and there is record demand for gold while future gold supply will sink below trend.

Central banks, like the Chinese, should be lining up to BUY GOLD not sell it - if in fact the phantom central banks are doing so.

One way or another, the gold market fraud will be exposed and so will some of the participants in this scandal. In the meantime, the shorts are getting more behind the 8 ball every day that goes by. Five tonnes of gold shortage "8 balls" every day; that is what the daily supply/demand deficit is - every single day at these low gold prices.

That is why I say buying gold, silver and the precious metals shares now is the best risk reward trade I have ever seen. The longer the "Hannibal" crowd fights on in their desperate gamble to hold down the price of gold, the bigger will be the eventual move ( remember the "sling shot" ) They are fighting a desperate battle that they will eventually lose.

The price of gold and silver will soar.

When that happens, we will all make fortunes.

Midas
Junior
(09/01/1999; 05:56:11 MDT - Msg ID: 12546)
Another, FOA & All Members Here
Gentlemen, Thank you for your "Thoughts" it was/is kind of you to share your knowledge and insights of this troubled and confusing precious metals, currencies and equities markets. Many posters here and at other forums are increasingly expressing their frustrations, axieties and despair. It appears that many thought that inside information would be revealed, dates given, and action plans would be clearly stated by Another & FOA.

I for one am pleased to have listened and learned from you Gentlemen. I have concluded that swift action is required:
I have sold the aircraft, and I am selling the Mercedes. We are buying a herd of Camels, Mountains of fresh water, and bags of precious metals including gold and platinum. We must cash-up with Au & Pt, sit on our hands and wait for the storm to pass.
Another & FOA, I invite you to sit and wait with me and my camels in the Great unspoiled North/West Region of Australia, where we can gaze at the Indian Ocean near the town of Broome. From Paradise Found, Cheers and Good night, JR.
FOA
(09/01/1999; 06:11:11 MDT - Msg ID: 12547)
(No Subject)
Peter, Tom, Junior and others,
Thanks for your ideas, comments and support. For anyone that is contrary to my thinking, feel free to jump on it (hopefully in a constructive / conclusive way). Rest assured, someone a lot stronger than you is poised to cut me off if I spout off again! I will be back a little later today with some replies and more discussion. I think the markets are starting the long awaited "final convulsion"! I'll try to point out what my side of the river sees as significant to watch (if only Jeff/Usagold can remember to change the oil and check the radiator on schedule, smile). FOA
FOA
(09/01/1999; 06:14:01 MDT - Msg ID: 12548)
News
http://www.iht.com/IHT/TODAY/WED/FPAGE/fecon.2.htmlParis, Wednesday, September 1, 1999

As Europe Grows, France's Jobless Rate Falls to 6-Year Low

------The latest data underscore recent signs of stronger growth throughout Europe. France's main trading partners - Germany, Britain, Spain and Italy - are all undergoing economic revivals. Indeed, Italy and Spain reported separately Tuesday that factory prices jumped by a greater than expected 0.6 percent in July.--------

-------Based on the improvement in industrial output and continuing high consumer confidence, the government predicts that economic growth will accelerate next year to between 2.6 percent and 3 percent, up from estimated growth of 2.5 percent this year.-----


-----Although the latest economic data raised fears that the ECB might increase interest rates, inflation seems firmly under control in the EU. Consumer prices in the single currency zone rose at an annualized rate of 1.1 percent in July, well below the 2 percent limit for countries that have adopted the euro.-------


The Scot
(09/01/1999; 06:18:01 MDT - Msg ID: 12549)
FIAT GOLD
Knights & Ladies.. A thought comes to mind. Is the trading of Gold derivatives not unlike the practice of banks loaning out paper dollars, many times more in quantity than actually exists. Is this not the creation of Fiat Gold?
The Scot
tom fumich
(09/01/1999; 06:42:56 MDT - Msg ID: 12550)
when i went to western....
i did go to western....played football in case you degenerates did not make it....sounds like crap it is crap....won it all ...beat toronto in toronto ...at the CNE...that's how old this story really is....
TownCrier
(09/01/1999; 07:39:06 MDT - Msg ID: 12551)
Monday (August 30th) posts have been restored.
http://www.usagold.com/cpmforum/archives/3019998/default.htmlIf you missed the posts from midnight to 17:14 Mountain Daylight Time on Monday before they were unceremoniously wiped out, you can now read them in the archives at the link above. Some REAL good stuff was in there!
The Stranger
(09/01/1999; 08:00:27 MDT - Msg ID: 12552)
AREM
Hi, AREM....

Somehow, despite all the downtime, I managed to read your impressive post. I wanted to comment before this, but the site kept going down. I guess you just picked a bad time to make your debut.

Wow, what a great opener. How did you hold all of that in for so long? Anyway, I will check out libertarianism, per your suggestion, and hope to see more from you as time goes by. Thanks!
ET
(09/01/1999; 08:04:57 MDT - Msg ID: 12553)
Russia - Anne Williamson
http://www.worldnetdaily.com/bluesky_williamson/19990901_xcawi_an_inconve.shtml
Ha! - and you wonder why free markets have taken so long to emerge in Russia. The fleecing of the West. Great story!

From World Net Daily;


An inconvenient history


By Anne Williamson
� 1999 WorldNetDaily.com

As newspapers blast details regarding what will
prove to be the tip of a Russian money laundering
pyramid, U.S. policymakers and the West's
Russian advisers are tap-dancing madly across
America's editorial pages in order to stay one step
ahead of public accountability. Professing to be as
shocked as Claude Raines ever was by the goings
on in the Russian casino that their careerism,
opportunism and criminal stupidity built with
taxpayers' billions, this crowd is simultaneously
adopting a world weary and sophisticated
attitude.

After all, everybody knew, or so they imply, that
corruption is rampant in contemporary Russia.
What could self-advertised market wizards or
earnest public servants possibly do to restrain the
Russians' destructive behavior? Conveniently --
just days before the revelations of Aug. 19 -- a
profusion of well-tailored journalistic memoirs
recalling seven years of Russian reform inspired by
the anniversary of Russia's Aug. 17, 1998,
meltdown appeared. All the big papers ran major
articles. Two of these efforts in particular deserve
a close look.

The Washington Post trotted out eminence grise,
Robert Kaiser, the Post's Moscow bureau chief in
the early 1970s, whose piece did get its headline
right, "Pumping Up The Problem." The New York
Times shrewdly hired the job out and imported a
Brit for their write up. John Lloyd, who was the
Financial Times' Moscow bureau chief from
1991-1994, delivered a drab story with no new
information, a real disappointment coming as it
did from one of journalism's most astute observers
of Yeltsin's Russia.

Worse, the Time's story showed just how clever
Western handlers were to keep their "eager young
reformers" available to potentates of the
self-reverential "quality press." Ironically, the one
Lloyd selected for his story's bittersweet coda
turned out to be none other than Konstantin
Kagalovsky, a well-known opportunist and
Russia's first representative to the IMF, whose
connection to the $15 billion Bank of New York
money laundering operation the Times was
compelled to report on its front page just four days
later.

Kaiser, however, being an eminence grise, did
contact two now retired State Department
officials, E. Wayne Merry and Thomas Graham,
who reported sordid details regarding U.S.
policymakers' ends over means approach to
Russia. They told how cables filled with
information of what was really going on in
Moscow were blocked by higher-ups at the
Moscow embassy and by emissaries from
Washington. Lloyd reminded the public of Albert
Gore's nixing of CIA reports detailing Russian
corruption involving his best Russian pal, Viktor
Chernomyrdin, and that Sweetheart of Harvard
Yard, Anatole Chubais. Thomas Graham told
Kaiser that the Gore-Chernomyrdin Commission
was "Sovietized" immediately, meaning its success
was declared mandatory. Diplomats,
policymakers, pundits, aid consultants and
contractors were told to put a happy face on all
aspects of U.S. policy.

Western journalists in Moscow played along,
using the government's basic methodology; any
information that questioned the success of the
reform effort was squelched, ignored or
downplayed. Any alarming developments were
massaged away by members of the "aid
community" in Moscow, and by
assistance/policy/government retreads stashed at
various think tanks in Washington and Moscow.
Journalists built their stories based on quotes and
information from these active players and shapers,
from whom their editors, in turn, sought their
views in published editorials. Russian dissenters
were tagged with the "Communist" label and
dismissed. In these ways, the party line was
woven into a web of almost seamless propaganda
despite none of Russia's complicated reality
actually corresponding to the parallel universe
U.S. policymakers, Washington pundits and
collaborating journalists inhabit.

But the Post's and the Times' stories were
important as signals; it is now permissible to
discuss U.S. failure and the collapse of the
"Washington Consensus." About bloody time.
Having been given many billions and years of
freedom to pursue their ideas without scrutiny or
accountability, Clinton's foreign policy apparat
has delivered the world a debacle. But citizens
should be cautious in evaluating today's
increasingly unavoidable revelations; many shoes
are left to drop. As one CIA man put it, "Clinton
made sure they all got something and then they all
stole something more, so nobody wants to get to
the bottom of what really happened."

The current spin is to fob blame onto the banking
oligarchy whose members the "reformers" in the
Kremlin selected and whose development Western
lending fed and nurtured. It's helpful too to hurry
past the crime of voucher privatization, which
Harvard economist Jeffrey Sachs and his team
designed in cahoots with Anatole Chubais in
1992. Better to focus on the secondary stage of
privatization, the loan-for-shares scheme, an
insiders' feast of Russia's juiciest assets, which was
cooked up mostly by the Russians themselves.
Most especially, a wise memoirist skips any
discussion of Russia's market in short-term
government bonds, GKO instruments.

The improbable yields (290 percent on
three-month paper at one point) on Russian GKOs
were paid with U.S. taxpayers' money via IMF
loans. Guess where all investment went? By
yielding those kind of non-market returns, the
bond market insured that all the country's
resources and all that it was capable of attracting
went to the support of the state, just as Czarism
and Communism had done previously.

So lush were the bond market's rewards that
dubious market participants included the Russian
Central Bank itself through an off-shore firm
known as Fimaco. The involvement of the
Harvard Institute of International Development's
(HIID) honchos in the same conflict-of-interest
activities has already been admitted publicly and
remains the object of a Boston grand jury's
scrutiny. The Harvard Management Corporation,
which invests the university's endowment, was
also an avid purchaser of Russian bonds, a
dubious and unsettling history since there is no
legal separation of HMC and the university itself.
According to the Russian Interior Ministry's
Department of Organized Crime, Western
employees of Russian banks, Western bankers and
consultants, Russian bankers and anecdotal
evidence, other likely participants include certain
employees of the U.S. Treasury, of the multilateral
agencies (most especially the World Bank's
Moscow offices), of bilateral aid agencies, and
policy and program consultants acting through
accounts established in their wives' maiden names
with non-U.S. reporting brokerages in Moscow.
Even the Ford Foundation's Moscow office
sponsored its own internal Russian bond shop for
which the unthinking Russian managers once
asked this reporter to drum up U.S. investors.

But Russia needed direct investment, not
speculative debt traders. Why then did
international lending and bilateral aid programs
work overwhelmingly to the international debt
merchants' benefit? Actually, all aid programs are
meant first to advance globally the Fed's money
monopoly through IMF lending and the private
banking sector and secondarily, the subsidized
expansion of U.S. firms into foreign markets.

Unsurprisingly, it was George Bush who got the
money monopoly's ball rolling in Moscow. In early
1992, the "Bankers Forum" project was wheeled
into place by a former New York Fed chief, Gerald
Corrigan, who at George Bush's direction sent in a
group of experts from the Fed, commercial banks
and the Volunteer Corps on an off-the-books
mission to teach the Russians at the Central Bank
the bond game. The Western banker who
explained the project's background remarked,
"Basically, when Corrigan asks, I guess no one
turns him down, because people reacted
instantaneously. It was done by private investors,
who were doing a public service, who were asked
by a person you can't say no to" (my emphases).

But from the first day of Clinton's presidency, the
new president's administration worked
aggressively to capture the political support of the
financial sector, offering up heretofore unseen
gobs of government favor. (A disproportionate
number of firms receiving Overseas Private
Investment Corporation guarantees,
Export-Import bank lending, and participation
from International Finance Corporation and
Russian Enterprise Fund were high-dollar
contributors to both Clinton campaign coffers and
the DNC.) The basic formula was simple, it's not
rocket science as Russia's Harvard advisers would
like the public to believe: The bread and butter of
all equity markets are bonds. Wall Street wanted a
debt market. You build it and we'll come, they
said.

The aid program delivered best it could what was
in reality a flimsy contrivance, which -- in turn --
was really only an exotic venue through which to
pass public funds to select Russians of the
Clintons' and HIID's choosing and to Wall Street
investment banks the Clintons hoped to entice
permanently into their orbit of supporters and
contributors. In short, the Russian bond market
was influence peddling at the highest levels, not
unlike the Arkansas Development Finance
Authority, a public fleecing machine the Clintons
built to benefit their political supporters and
contributors years ago in their home state.

The Clintonites' new spin admits that many
Russians have the idea their current misfortunes
are the intentional work of the U.S. Allowing that
the Russians' theory "is built on a certain logic,"
Kaiser still managed to conclude that the
"catastrophe was probably made inevitable by the
policies adopted by the last Soviet government, but
Russians rarely grasp the subtle points of
economics."

Say what? Subtle points of economics? Looting
and political racketeering are hardly subtleties apt
to confuse any Russian, though American
taxpayers were certainly misled successfully.

The Clinton apparat is quick to whine that
somebody had to keep the communists at bay. But
there were no communists in Russia by late 1991,
only nascent investment bankers looking to nail
down a stake any which way. Communism had
evaporated by late 1987, the year in which the
Russian people were allowed to hold convertible
foreign currencies. Overnight, the power of money
displaced the power of ideology.

Bill Clinton's foreign policy is best understood not
as a collection of new era efforts at "nation
building," but instead as an utterly irresponsible
form of colonialism. It's mind-boggling just how
opportunistic U.S. economic policies were in
Russia.

What a free lancing Harvard economics professor,
Jeffrey Sachs, and his team of flying graduate
students managed to set in motion in 1992 insured
that absolutely nothing was ever going to work to
the Russians' benefit no matter what they tried.
The possibly intentional sabotage of Russian
reform was the result of three egregiously
wrong-headed policies; a forced inflation, tariff
reductions and voucher privatization.

In late 1991, vast amounts of gaseous blathering
were published regarding something called "the
ruble overhang," describing the burden of it and
the urgent necessity of doing something about it.
This was all nonsense, of course, since the dreaded
ruble overhang was nothing more insidious than
the collective national savings held by Russian
households. The Soviet economy focused almost
entirely on the defense sector, leaving nothing for
the people to buy. Therefore, the Russian people
had accumulated a large stock of savings.

In July 1991, the Supreme Soviet passed legislation
mandating the privatization of the Russians'
national legacy. Despite that, the
Harvard-connected advisers reasoned just months
later that since there was nothing to buy
immediately, the national savings -- that pesky
"ruble overhang" -- would have to be eliminated.
Free market types went blue in the face pointing to
the national property fated for the auction block
as the most useful and appropriate sponge for the
people's savings, but to no avail.

Hang on, free market economics Harvard-style
gets even nuttier.

Yegor Gaidar insists to this day, John Lloyd was
good enough to remind us, that "he had no choice
but to let prices rise to increase supply and to
scrap trade barriers so that foreign commodities
could begin to fill store shelves."

Say, huh? The Soviet Union was economically
self-sufficient except for bananas, coffee and
coconuts. Foreign commodities weren't required to
fill Soviet shops. And even though the ruble was
not convertible, that characteristic had nothing to
do with the sudden shortages in late autumn
1991, which were only slightly worse than those
normally encountered in the last sputtering years
of Gorbachev's perestroika.

No one had stopped producing, so why were
shops suddenly nearly empty? Producers had
begun hoarding, as had fearful consumers, but
why? Yeltsin did announce in November 1991
that the government intended to free prices, but he
also announced the exact date on which prices
would be freed. Predictably, producers withheld
their product from market and rubbed their hands
together like flies awaiting the coming feast which
Yeltsin's newly announced policy guaranteed.
Within a week of the ill-considered speech,
Muscovites' needs were being rationed.

However, Gaidar really was under pressure, but
the pressure was coming from the West to open
Russia to unrestricted imports in return for
multilateral lending. Gaidar soon delivered a trade
policy that was 100 percent back-to-front,
accommodating as it did the self-serving demands
of both the West and Russia's nascent banking
oligarchy; Russian manufacturing was to take the
brunt of unrestricted foreign competition, but
domestic banking was to be protected from
competition! Even Russian Central Bank
Chairman Viktor Gerashchenko protested, but
Yeltsin's boys got what they wanted and the IMF
continued lending. So much for the "leverage"
foreign policy elites claim foreign assistance
programs provide the U.S.

In 1991, there was no hope whatsoever that
wheezebag Soviet industries could compete with
the West's shiny, alluringly-packaged and, to
Russians, exotic products. For decades, prices
were set by Gosplan (State Ministry of Central
Planning), any enterprise profits were claimed as
Soviet tax revenues, all customer bases were
guaranteed and therefore no enterprise had a
financial incentive to compete. Without
competition, there was never any need to improve
quality.

How could freeing prices alone change this
equation? Free prices only work to the benefit of
consumers when producers compete with one
another in the marketplace to satisfy customers'
demands, leaving consumers positioned to reap
the most benefit at the lowest price. Clearly, an
equitable and transparent privatization that
would have delivered property widely to Russia's
many eager hands should have preceded the
freeing of prices. And during privatization, native
producers should have enjoyed some
protectionism at least, as did developing American
industry and manufacture in the 19th century.

But why was banking alone protected from
foreign competition? Could it have been because
the former Communist Youth League or
"Komsomol" leaders who'd been selected to
become the captains of Russian banking were the
private-sector allies and beneficiaries of Yeltsin's
"eager young reformers" and their HIID advisers?

Competent advisers would have known Russia
never did develop an effective banking sector and
system of credit in 1000 years of her history. The
story of Russian banking -- ancient and modern --
always has the same plot, only the names and the
dates change. S.Y. Borovoi's easily obtained history
of 18th century banking outlines a typical episode
involving a certain "Suterland, who received 2
million pounds for transfer to London, but instead
ET
(09/01/1999; 08:08:27 MDT - Msg ID: 12554)
Russia - sorry about the length

... the rest of the story;

Competent advisers would have known Russia
never did develop an effective banking sector and
system of credit in 1000 years of her history. The
story of Russian banking -- ancient and modern --
always has the same plot, only the names and the
dates change. S.Y. Borovoi's easily obtained history
of 18th century banking outlines a typical episode
involving a certain "Suterland, who received 2
million pounds for transfer to London, but instead
lent the sums to Prince Potyomkin (800,000),
Finance Minister Vyazemsky, Foreign Minister
Bezborodko and even to the future emperor Pavel.
The debt of these honorable people was, according
to the custom, forgiven and paid by the state."

Certainly eager Western banks should have been
given admission to Russia. By working initially
with more developed and well-capitalized
Western banks and later by competing with them,
Russian banks could have developed quickly and
today be mediating capital responsibly and
profitably. No good economic purpose was
achieved by foisting subsidized billion dollar loans
onto Russia for the purchase of Western consumer
goods and the sustenance of Yeltsin's Komsomol
pirates and parasites.

When Chubais and his Harvard pals belatedly
turned their attention to privatization, no one
asked how it would be possible to privatize
property in a country without property rights. (A
similar error was once made by the Soviet aid
establishment, which trained railroad engineers
for Laos, a country with no railroads.) In fact, it
wasn't possible.

There was no privatization, but instead a very
expensive, exhausting and destructive program of
paper title transfers. At best, a manager could gain
personal control of an income stream, but he could
not function as a responsible proprietor.
Consequently, asset-stripping was and is rampant.
And Yeltsin, a Soviet usurper masquerading as a
democrat, saw to it that the paper property titles
were transferred to key citizens, institutions and
long-term cronies so they would have a vested
interest in sustaining his power.

But what about that troublesome "ruble
overhang"? Jeff Sachs let the cat out of the bag on
a spring night in 1991 when he told a colleague
from the Hoover Institution and his wife that it
was his and Yegor Gaidar's intention to remove
from the market all "competing claims," meaning
the people's savings. How then to do it?

Easy. In the Soviet Union's monopolistic economy,
freeing prices guaranteed that state monopolists
would raise prices without restraint. On Jan. 2,
1992, Yeltsin freed prices throughout all of Russia.
Poof! The subsequent 2,500 percent inflation
Russians suffered in 1992 dissipated those noisome
"competing claims" with an efficiency that the
Russians hadn't seen since Adolf Hitler's blitzkrieg
50 years earlier. Tellingly, property auctions
gained steam only in 1993.

The only investment capital of which any country
can be certain is the national savings. Why then
did Harvard-connected advisers set about building
a market economy by first removing the only
money Russians had to participate, thereby
leaving foreign and Russian criminal wealth to
command the new market? And why was the
follow-on to put the Russian Federation's
property, the legacy of the long-suffering Russian
people, up for sale to a population made
kopeckless by the four-digit annual inflation the
Harvard advisers' first reform initiated?

Imagining the consequences isn't necessary;
impoverished Russia is reeling still.

Yabloko leader Gregory Yavlinsky once mused
aloud, "Any child could see what would happen.
Why then didn't the Harvard professor?" Good
question.

Rocket science, anyone?


Anne Williamson has written for the Wall Street
Journal, The New York Times, Spy magazine, Film
Comment and Premiere. An expert on Soviet-Russian
affairs, she is currently working on a book,
"Contagion: How America Betrayed Russia."
tom fumich
(09/01/1999; 08:47:12 MDT - Msg ID: 12555)
let's have some fun.
Fun that's all we want...
TownCrier
(09/01/1999; 08:54:32 MDT - Msg ID: 12556)
Fed expected to add reserves via o/n system repos
http://biz.yahoo.com/rf/990901/lx.htmlAverage DAILY add need for the banking system's current 2-week reserve period has been estimated to be $8.7 billion.
--------------
The Federal Reserve subsequently reported that Wednesday's overnight system repurchase agreements totaled $6.078 billion.
TownCrier
(09/01/1999; 09:00:29 MDT - Msg ID: 12557)
Russian Gov't Knocks Western Media
http://biz.yahoo.com/apf/990901/russia_ban_1.html"There are plenty of tricksters in the United States who are ready to push their own financial scandal onto our side." --former Prime Minister Viktor Chernomyrdin
TownCrier
(09/01/1999; 09:04:42 MDT - Msg ID: 12558)
Leading Economic Indicators Rise
http://biz.yahoo.com/apf/990901/economy_2.htmlIndex of Leading Economic Indicators has gained in nine of the last 10 months.
TownCrier
(09/01/1999; 09:10:09 MDT - Msg ID: 12559)
Gold sales would harm poor countries - IMF documents
http://biz.yahoo.com/rf/990831/82.htmlFeel free to poke this one all you want.
USAGOLD
(09/01/1999; 09:29:05 MDT - Msg ID: 12560)
Today's Gold Market Report: IMF Internal Documents Reveal Gold Rift
MARKET REPORT (9/1/99): Gold retraced a little of yesterday's gains in the early
going. Yesterday's action was a reflection of the strong physical demand for gold and some
short covering. A Chinese government official reiterated the developing Chinese position
that its gold reserves are too low relative to its population and that there reserves could rise
from 394 tons to about 1000 tons. Gold physical demand is being helped as reported
yesterday by the Greenspan speech last week indicating that the bubble stock market will
begin affecting monetary policy in the United States. Translation: Be on the lookout for a
series of interest rate increases in the months ahead.

Reuters published a summary of International Monetary Fund internal documents that
concluded agency gold sales would greatly harm fifteen poor countries and cost them nearly
half a billion dollars in lost gold export earnings. This study had to be available before the
United States and Britain publicly backed gold sales from that agency. One has to wonder
what motivated the Clinton and Blair administrations to be so adamant about the sales even
in the face of obvious opposition within the IMF -- sales which have been blocked by a
disagreeable U.S. Congress. Reuters points out that: "The IMF's plan to sell 10 million
ounces of gold on the open market to fund debt relief for the world's poorest nations was
slammed by U.S. lawmakers and gold lobbyists who said the sales would harm those
countries it aimed to help.The plan came under more criticism after gold hit a 20-year low in
July when the Bank of England sold 25 tonnes of gold as part of its plan to cut its reserves
by 415 tonnes. The IMF and U.S. Treasury have been considering alternatives to open
market sales in recent weeks, effectively acknowledging that open market gold sales were
no longer being considered." We have maintained all along that the BOE and potential IMF
sales are tied together and that what could be involved is a bailout of British counterparties
who owe gold to some lender. This would explain the consistent push on the part of the
British government for gold sales from any party. The gold market supply situation remains
very tight. Lease rates jumped dramatically again today up .25% reflecting the tight lending
market. By the way, the gold lobbyists mentioned to a large extent were U.S. citizens irate
at the Clinton administrations gold policies.

We would like to apologize for the recurrent problems at the USAGOLD Forum. Our
technical people are working on the problem and we hope to trace down this infernal bug
and squash it. Please be patient with us. We are dealing with new technologies here and in a
sense pioneers. Hopefully, our problems are behind us but we won't know until the Forum
runs for awhile.

That's it for today, fellow goldmeisters. We will update if something major happens.

The October edition of News & Views is a major you-don't-want-to-miss-it, highly
informative, and slightly irreverent blockbuster. We revisit our Five Horsemen of the
New Apocalypse -- the euro challenge, Y2K, the Asian contagion, the bubble stock
market and rising oil -- none of which have taken the summer off. We also preview the
Ten Reasons Why Main Street Worldwide Is Returning to Gold and Short &
Sweet (as is our custom) rambles with a hint of cynicism through a litany of world
political and economic events. You won't want to miss our look at the world of gold to kick
off the Fall investment season. The Season of the Yellow Metal? Just might be so...........

Please call 800-869-5115 (Ask for Mary Conway) if you have an interest in receiving
a trial subscription to our widely read newsletter, News & Views: Forecasts,
Commentary and Analysis on the Economy and Precious Metals. Or you can
go to our ORDER FORM and submit your request by E-Mail. You will also receive our
introductory packet on investing in gold.
USAGOLD
(09/01/1999; 09:39:31 MDT - Msg ID: 12561)
Junior Deleted
Nice knowing you Junior...The kids congregate over at AOL somewhere. Why don't you have a look?
ET
(09/01/1999; 10:07:17 MDT - Msg ID: 12562)
Great analysis from one Gordon Gecko, et al

This is from Yourdon's forum from one 'Gordon Gecko'. He posts there on occasion and his analysis is always fun to read. He touches on many subjects that have been mentioned here.

Post follows;

Rising Sun Rises On Y2K, Yen Goes Home, Part Deux

greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread


Lets play connect the dots shall we. When last we left off, the Japanese government was
facing a liquidity crisis with two many JGB's comming to market, and bunch of buyers
who were scared off thei ass regarding JGB end of year liquidity. Everyone was afraid
that this auction would be a disaster. I posited that the Govt of Jap. would step in and NO
MATTER WHAT this auction would go smoothly. Guess what? It did. 2.93 bidders per
bond according to one report. However,traders did report that it wasn't stellar and that
the only reason that it came off at all was the strong rumor that the govt would be taking
extraordinary measures at year end to make this thing OK for all. Fast forward to the
currency markets where the dollar is experiencing a record slide. I mean this thing can't
eve SEE the floor right now. The herd generally believed that the Govt. of Jap. would
step in once it got below say 110 to 113. But guess what, those stops came and went just
like all those boys yucking it up out at Jackson Hole with big Al over the weekend. In his
market wrap segment today, Bill Fleckenstein had an excellent section on the Yen/Dollar
situation. Here it is for fair use research and educational purposes only:

SNIP August 31, 1999 Market Rap with Bill Fleckenstein www.stocksite.com (go to this
site and learn something) The big news last night was the fact that the dollar-yen broke
pretty hard through the 1.10 level. It traded down to just about 1.09 even, nearly a 2
percent move. Asian markets didn't like it, with Japan leading the decline, down about 2
3/4 percent. This is a big deal, and a story on one of Japanese news services stated that
Japan was prepared to see it go to 1.05 and lower.

Colin's dollar-yen commentary... My friend Colin Negrych had some comments
specifically about the dollar and the yen that I'd like to share with you. I think they are
pretty on the mark and worth reading.

"People keep telling me the Treasury...the G-3...somebody is just going to have to do
something to prevent the dollar and U.S. asset prices from falling...to avoid a global
recession. Complete crap. (1) The dollar was abandoned by the U.S. last summer and
global investors now see this. (2) The best way to avoid a global recession or lessen its
severity...is to deflate the U.S. asset bubble...in particular by raising U.S. rates. The
more the Fed raises rates...the more "monetary capacity" it will have to offset the
balance sheet damage which will result from the U.S. stock market "normalizing"...and
by raising rates N-O-W the Fed can "cap" the balance sheet damage at the current
embedded... inevitable...level...and obtain maximum wherewithal to counter the
"economic" consequences it will produce.

"Folks still do N-O-T understand the Japanese wanted the yen to strengthen...(it
did)...and they want it to strengthen more...(it will). I have heard private estimates from
Japanese officials W-E-L-L U-N-D-E-R 100. These folks view the U.S. asset markets
as I-D-E-N-T-I-C-A-L to their own in 1989...and, consequently, they do not want their
asset managers to invest here, particularly in stocks. Also...these same officials are
determined to impede offshore investment, in general, in favor of encouraging domestic
investment...particularly in the JGB market. Most "Americentric" analysts simply refuse
to accept the idea Japanese investors could prefer to own historically low yielding JGBs
rather than U.S. bonds...which offer the highest real yields in the G-7.

SNIP

Fleck and Colin think that the Japs(not meant as a slur)have figured out that we are in a
bubbl economy which is certain to burst soon. They have part of the puzzle in place, let
me give you some other pieces to complete the mosaic. There's a thing called the real
price of crude. Although most all crude oil transactions are transacted in dollars, currency
rates do play a rather large role in the global oil markets. Platt's publishes a nifty little
document which lays it out quite nicely I think. Check it out, the Japs are buying bonny
light at TEN BUCKS A BARREL currency adjusted. Yeehaaaa! Did I mention that they
are a net importer of approximately 5.4 million bbls per day? Did I mention that they will
probably try to add to their already hefty reserve balance (currently 3 months of supply in
tank at this time)ahead of Y2K? Did I mention that if they hadn't allowed the currency
slide to occur, they would have faced higher oil prices to the tune of $2.268 billion yen in
only a month? (yen slid from 122 to 108? by tommorrow = 14 X 5.4 milln bbs per day X
30 days.) If the yen fits, you must acquit.

For educational and research purposes only: SNIP

45--Real crude price -- USD vs international currencies New York
(Platt's)--30Aug1999/517 pm EDT/2117 GMT BONNY INDEX REAL DUBAI INDEX
REAL BRENT INDEX REAL LIGHT PRICE PRICE PRICE DMK 21.22 110.9 19.14
20.44 110.9 18.44 21.46 110.9 19.36 YEN 21.22 212.3 10.00 20.44 212.3 9.63 21.46
212.3 10.11 STG 21.22 103.8 20.45 20.44 103.8 19.69 21.46 103.8 20.68

(PRICES USD) INDEX -- SHOWS THE DAILY FLUCTUATION OF EACH
FOREIGN CURRENCY AGAINST THE USD. IF INDEX > 100, CURRENCY IS
STRONG AGAINST THE USD AND REAL PRICE PAID FOR CRUDE IS LESS
THAN ACTUAL USD PRICE. IF INDEX < 100, CURRENCY IS WEAK AGAINST
THE USD AND REAL PRICE PAID IS HIGHER THAN ACTUAL USD PRICE.
--Platt's Global Alert-- [0045] [GE] [C] [GU] [GF] SNIP (PS anyone who wants to
know what's up in oil should read Platt's Crude Oil Marketwire daily)

And here's the market assuming no intervention.

PLATT'S: Financial News: Dollar lower against yen and euro - PGA046 New York
(AFP)--31Aug1999/1203 pm EDT/1603 GMT The US dollar was lower against the yen
and losing ground against the euro in New York by mid-morning Tuesday. Traders
expected the greenback to continue to fall against the Japanese currency as the Bank of
Japan stuck to its policy of non- intervention. The dollar dropped to Yen 109.56 by 1400
GMT compared to Yen 110.60 late Monday, while the euro rose to $1.0572 against
$1.0471. The yen was expected to keep gaining against the dollar as markets no longer
expect the BOJ to intervene, said Dennis Heidt, a trader for Paribas in New York. The
dollar also lost ground against other major European currencies, trading at SFr1.5127
compared to SFr1.5292 late Monday, while sterling was at $1.6062 against $1.5894.

[PGA] [NSAM] [JP] [ASIA] [EEC] [PLTN] [LEN]

And last but certainly not least, the JAPS are picking up the freight market for VLCC's
themselves. Yeeehaaaa! You now should have all the pieces. Do you see the pattern?

139--Dirty tankers: VLCCs continue to climb London--27Aug99/1151 am EDT/1551
GMT The improved demand for VLCCs reported this continued to boost the AG market,
brokers said. Rates for AG-Japan cargoes were talked up to w50-52.5 as supplies of
modern units, especially for 1H Sep loadings, was described as "tight." One broker added
that owners were taking a "tough" position on levels, and were now looking to push rates
towards w60. However, the low w50s were seen as a more realistic level for the next
fixture. Aframaxes remained firm, with both the AG and Indo markets talked around the
w100-105 level, depending on timing and approval status. But there was little such
encouraging news for the Suezmax market. Both WAf-USG rates and cross-Med levels
struggled to attract more than w52.5, as owners continued to suffer from a heavy
oversupply of tonnage. --Platt's Global Alert-- [0139] [C] [GS] [GE] [GF] [GM] [T]

This is the begining. Watch the freights, they're always 2 weeks ahead of physical
tightening. Freight rates, going up. Crude oil, going up. IT HAS OFFICIALLY BEGUN.
THE SIGNS ARE EVERYWHERE.

Now if I was really devious and suspicous like, I might expect Slick Meister and his oil
friends (if he has any) to roll out some physical bbls. about now in some way. For
example, if they had possibly encouraged some friends in OPEC to store physicals ahead
of 2kay then as our old CRB starts to overheat the US markets and inflation, I'd be telling
them to "Roll out the barrels". Or maybe fudge up the stats a little and show some
phantom build etc. We'll see.

-- Gordon (g_gecko_69@hotmail.com), August 31, 1999
ET
(09/01/1999; 10:07:38 MDT - Msg ID: 12563)
Great analysis from one Gordon Gecko, et al

This is from Yourdon's forum from one 'Gordon Gecko'. He posts there on occasion and his analysis is always fun to read. He touches on many subjects that have been mentioned here.

Post follows;

Rising Sun Rises On Y2K, Yen Goes Home, Part Deux

greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread


Lets play connect the dots shall we. When last we left off, the Japanese government was
facing a liquidity crisis with two many JGB's comming to market, and bunch of buyers
who were scared off thei ass regarding JGB end of year liquidity. Everyone was afraid
that this auction would be a disaster. I posited that the Govt of Jap. would step in and NO
MATTER WHAT this auction would go smoothly. Guess what? It did. 2.93 bidders per
bond according to one report. However,traders did report that it wasn't stellar and that
the only reason that it came off at all was the strong rumor that the govt would be taking
extraordinary measures at year end to make this thing OK for all. Fast forward to the
currency markets where the dollar is experiencing a record slide. I mean this thing can't
eve SEE the floor right now. The herd generally believed that the Govt. of Jap. would
step in once it got below say 110 to 113. But guess what, those stops came and went just
like all those boys yucking it up out at Jackson Hole with big Al over the weekend. In his
market wrap segment today, Bill Fleckenstein had an excellent section on the Yen/Dollar
situation. Here it is for fair use research and educational purposes only:

SNIP August 31, 1999 Market Rap with Bill Fleckenstein www.stocksite.com (go to this
site and learn something) The big news last night was the fact that the dollar-yen broke
pretty hard through the 1.10 level. It traded down to just about 1.09 even, nearly a 2
percent move. Asian markets didn't like it, with Japan leading the decline, down about 2
3/4 percent. This is a big deal, and a story on one of Japanese news services stated that
Japan was prepared to see it go to 1.05 and lower.

Colin's dollar-yen commentary... My friend Colin Negrych had some comments
specifically about the dollar and the yen that I'd like to share with you. I think they are
pretty on the mark and worth reading.

"People keep telling me the Treasury...the G-3...somebody is just going to have to do
something to prevent the dollar and U.S. asset prices from falling...to avoid a global
recession. Complete crap. (1) The dollar was abandoned by the U.S. last summer and
global investors now see this. (2) The best way to avoid a global recession or lessen its
severity...is to deflate the U.S. asset bubble...in particular by raising U.S. rates. The
more the Fed raises rates...the more "monetary capacity" it will have to offset the
balance sheet damage which will result from the U.S. stock market "normalizing"...and
by raising rates N-O-W the Fed can "cap" the balance sheet damage at the current
embedded... inevitable...level...and obtain maximum wherewithal to counter the
"economic" consequences it will produce.

"Folks still do N-O-T understand the Japanese wanted the yen to strengthen...(it
did)...and they want it to strengthen more...(it will). I have heard private estimates from
Japanese officials W-E-L-L U-N-D-E-R 100. These folks view the U.S. asset markets
as I-D-E-N-T-I-C-A-L to their own in 1989...and, consequently, they do not want their
asset managers to invest here, particularly in stocks. Also...these same officials are
determined to impede offshore investment, in general, in favor of encouraging domestic
investment...particularly in the JGB market. Most "Americentric" analysts simply refuse
to accept the idea Japanese investors could prefer to own historically low yielding JGBs
rather than U.S. bonds...which offer the highest real yields in the G-7.

SNIP

Fleck and Colin think that the Japs(not meant as a slur)have figured out that we are in a
bubbl economy which is certain to burst soon. They have part of the puzzle in place, let
me give you some other pieces to complete the mosaic. There's a thing called the real
price of crude. Although most all crude oil transactions are transacted in dollars, currency
rates do play a rather large role in the global oil markets. Platt's publishes a nifty little
document which lays it out quite nicely I think. Check it out, the Japs are buying bonny
light at TEN BUCKS A BARREL currency adjusted. Yeehaaaa! Did I mention that they
are a net importer of approximately 5.4 million bbls per day? Did I mention that they will
probably try to add to their already hefty reserve balance (currently 3 months of supply in
tank at this time)ahead of Y2K? Did I mention that if they hadn't allowed the currency
slide to occur, they would have faced higher oil prices to the tune of $2.268 billion yen in
only a month? (yen slid from 122 to 108? by tommorrow = 14 X 5.4 milln bbs per day X
30 days.) If the yen fits, you must acquit.

For educational and research purposes only: SNIP

45--Real crude price -- USD vs international currencies New York
(Platt's)--30Aug1999/517 pm EDT/2117 GMT BONNY INDEX REAL DUBAI INDEX
REAL BRENT INDEX REAL LIGHT PRICE PRICE PRICE DMK 21.22 110.9 19.14
20.44 110.9 18.44 21.46 110.9 19.36 YEN 21.22 212.3 10.00 20.44 212.3 9.63 21.46
212.3 10.11 STG 21.22 103.8 20.45 20.44 103.8 19.69 21.46 103.8 20.68

(PRICES USD) INDEX -- SHOWS THE DAILY FLUCTUATION OF EACH
FOREIGN CURRENCY AGAINST THE USD. IF INDEX > 100, CURRENCY IS
STRONG AGAINST THE USD AND REAL PRICE PAID FOR CRUDE IS LESS
THAN ACTUAL USD PRICE. IF INDEX < 100, CURRENCY IS WEAK AGAINST
THE USD AND REAL PRICE PAID IS HIGHER THAN ACTUAL USD PRICE.
--Platt's Global Alert-- [0045] [GE] [C] [GU] [GF] SNIP (PS anyone who wants to
know what's up in oil should read Platt's Crude Oil Marketwire daily)

And here's the market assuming no intervention.

PLATT'S: Financial News: Dollar lower against yen and euro - PGA046 New York
(AFP)--31Aug1999/1203 pm EDT/1603 GMT The US dollar was lower against the yen
and losing ground against the euro in New York by mid-morning Tuesday. Traders
expected the greenback to continue to fall against the Japanese currency as the Bank of
Japan stuck to its policy of non- intervention. The dollar dropped to Yen 109.56 by 1400
GMT compared to Yen 110.60 late Monday, while the euro rose to $1.0572 against
$1.0471. The yen was expected to keep gaining against the dollar as markets no longer
expect the BOJ to intervene, said Dennis Heidt, a trader for Paribas in New York. The
dollar also lost ground against other major European currencies, trading at SFr1.5127
compared to SFr1.5292 late Monday, while sterling was at $1.6062 against $1.5894.

[PGA] [NSAM] [JP] [ASIA] [EEC] [PLTN] [LEN]

And last but certainly not least, the JAPS are picking up the freight market for VLCC's
themselves. Yeeehaaaa! You now should have all the pieces. Do you see the pattern?

139--Dirty tankers: VLCCs continue to climb London--27Aug99/1151 am EDT/1551
GMT The improved demand for VLCCs reported this continued to boost the AG market,
brokers said. Rates for AG-Japan cargoes were talked up to w50-52.5 as supplies of
modern units, especially for 1H Sep loadings, was described as "tight." One broker added
that owners were taking a "tough" position on levels, and were now looking to push rates
towards w60. However, the low w50s were seen as a more realistic level for the next
fixture. Aframaxes remained firm, with both the AG and Indo markets talked around the
w100-105 level, depending on timing and approval status. But there was little such
encouraging news for the Suezmax market. Both WAf-USG rates and cross-Med levels
struggled to attract more than w52.5, as owners continued to suffer from a heavy
oversupply of tonnage. --Platt's Global Alert-- [0139] [C] [GS] [GE] [GF] [GM] [T]

This is the begining. Watch the freights, they're always 2 weeks ahead of physical
tightening. Freight rates, going up. Crude oil, going up. IT HAS OFFICIALLY BEGUN.
THE SIGNS ARE EVERYWHERE.

Now if I was really devious and suspicous like, I might expect Slick Meister and his oil
friends (if he has any) to roll out some physical bbls. about now in some way. For
example, if they had possibly encouraged some friends in OPEC to store physicals ahead
of 2kay then as our old CRB starts to overheat the US markets and inflation, I'd be telling
them to "Roll out the barrels". Or maybe fudge up the stats a little and show some
phantom build etc. We'll see.

-- Gordon (g_gecko_69@hotmail.com), August 31, 1999
TownCrier
(09/01/1999; 10:09:56 MDT - Msg ID: 12564)
U.S. August jobs data seen adding to Fed's worries
http://biz.yahoo.com/rf/990901/sq.htmlFriday's Labor Department employment report is expected to show no signs of a slowdown, adding substance to fears of further Fed rate hikes.

Ya gotta love that alliteration!
ET
(09/01/1999; 10:15:47 MDT - Msg ID: 12565)
Great analysis from one Gordon Gecko, et al

This is from Yourdon's forum from one 'Gordon Gecko'. He posts there on occasion and his analysis is always fun to read. He touches on many subjects that have been mentioned here.

Post follows;

Rising Sun Rises On Y2K, Yen Goes Home, Part Deux

greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread


Lets play connect the dots shall we. When last we left off, the Japanese government was
facing a liquidity crisis with two many JGB's comming to market, and bunch of buyers
who were scared off thei ass regarding JGB end of year liquidity. Everyone was afraid
that this auction would be a disaster. I posited that the Govt of Jap. would step in and NO
MATTER WHAT this auction would go smoothly. Guess what? It did. 2.93 bidders per
bond according to one report. However,traders did report that it wasn't stellar and that
the only reason that it came off at all was the strong rumor that the govt would be taking
extraordinary measures at year end to make this thing OK for all. Fast forward to the
currency markets where the dollar is experiencing a record slide. I mean this thing can't
eve SEE the floor right now. The herd generally believed that the Govt. of Jap. would
step in once it got below say 110 to 113. But guess what, those stops came and went just
like all those boys yucking it up out at Jackson Hole with big Al over the weekend. In his
market wrap segment today, Bill Fleckenstein had an excellent section on the Yen/Dollar
situation. Here it is for fair use research and educational purposes only:

SNIP August 31, 1999 Market Rap with Bill Fleckenstein www.stocksite.com (go to this
site and learn something) The big news last night was the fact that the dollar-yen broke
pretty hard through the 1.10 level. It traded down to just about 1.09 even, nearly a 2
percent move. Asian markets didn't like it, with Japan leading the decline, down about 2
3/4 percent. This is a big deal, and a story on one of Japanese news services stated that
Japan was prepared to see it go to 1.05 and lower.

Colin's dollar-yen commentary... My friend Colin Negrych had some comments
specifically about the dollar and the yen that I'd like to share with you. I think they are
pretty on the mark and worth reading.

"People keep telling me the Treasury...the G-3...somebody is just going to have to do
something to prevent the dollar and U.S. asset prices from falling...to avoid a global
recession. Complete crap. (1) The dollar was abandoned by the U.S. last summer and
global investors now see this. (2) The best way to avoid a global recession or lessen its
severity...is to deflate the U.S. asset bubble...in particular by raising U.S. rates. The
more the Fed raises rates...the more "monetary capacity" it will have to offset the
balance sheet damage which will result from the U.S. stock market "normalizing"...and
by raising rates N-O-W the Fed can "cap" the balance sheet damage at the current
embedded... inevitable...level...and obtain maximum wherewithal to counter the
"economic" consequences it will produce.

"Folks still do N-O-T understand the Japanese wanted the yen to strengthen...(it
did)...and they want it to strengthen more...(it will). I have heard private estimates from
Japanese officials W-E-L-L U-N-D-E-R 100. These folks view the U.S. asset markets
as I-D-E-N-T-I-C-A-L to their own in 1989...and, consequently, they do not want their
asset managers to invest here, particularly in stocks. Also...these same officials are
determined to impede offshore investment, in general, in favor of encouraging domestic
investment...particularly in the JGB market. Most "Americentric" analysts simply refuse
to accept the idea Japanese investors could prefer to own historically low yielding JGBs
rather than U.S. bonds...which offer the highest real yields in the G-7.

SNIP

Fleck and Colin think that the Japs(not meant as a slur)have figured out that we are in a
bubbl economy which is certain to burst soon. They have part of the puzzle in place, let
me give you some other pieces to complete the mosaic. There's a thing called the real
price of crude. Although most all crude oil transactions are transacted in dollars, currency
rates do play a rather large role in the global oil markets. Platt's publishes a nifty little
document which lays it out quite nicely I think. Check it out, the Japs are buying bonny
light at TEN BUCKS A BARREL currency adjusted. Yeehaaaa! Did I mention that they
are a net importer of approximately 5.4 million bbls per day? Did I mention that they will
probably try to add to their already hefty reserve balance (currently 3 months of supply in
tank at this time)ahead of Y2K? Did I mention that if they hadn't allowed the currency
slide to occur, they would have faced higher oil prices to the tune of $2.268 billion yen in
only a month? (yen slid from 122 to 108? by tommorrow = 14 X 5.4 milln bbs per day X
30 days.) If the yen fits, you must acquit.

For educational and research purposes only: SNIP

45--Real crude price -- USD vs international currencies New York
(Platt's)--30Aug1999/517 pm EDT/2117 GMT BONNY INDEX REAL DUBAI INDEX
REAL BRENT INDEX REAL LIGHT PRICE PRICE PRICE DMK 21.22 110.9 19.14
20.44 110.9 18.44 21.46 110.9 19.36 YEN 21.22 212.3 10.00 20.44 212.3 9.63 21.46
212.3 10.11 STG 21.22 103.8 20.45 20.44 103.8 19.69 21.46 103.8 20.68

(PRICES USD) INDEX -- SHOWS THE DAILY FLUCTUATION OF EACH
FOREIGN CURRENCY AGAINST THE USD. IF INDEX > 100, CURRENCY IS
STRONG AGAINST THE USD AND REAL PRICE PAID FOR CRUDE IS LESS
THAN ACTUAL USD PRICE. IF INDEX < 100, CURRENCY IS WEAK AGAINST
THE USD AND REAL PRICE PAID IS HIGHER THAN ACTUAL USD PRICE.
--Platt's Global Alert-- [0045] [GE] [C] [GU] [GF] SNIP (PS anyone who wants to
know what's up in oil should read Platt's Crude Oil Marketwire daily)

And here's the market assuming no intervention.

PLATT'S: Financial News: Dollar lower against yen and euro - PGA046 New York
(AFP)--31Aug1999/1203 pm EDT/1603 GMT The US dollar was lower against the yen
and losing ground against the euro in New York by mid-morning Tuesday. Traders
expected the greenback to continue to fall against the Japanese currency as the Bank of
Japan stuck to its policy of non- intervention. The dollar dropped to Yen 109.56 by 1400
GMT compared to Yen 110.60 late Monday, while the euro rose to $1.0572 against
$1.0471. The yen was expected to keep gaining against the dollar as markets no longer
expect the BOJ to intervene, said Dennis Heidt, a trader for Paribas in New York. The
dollar also lost ground against other major European currencies, trading at SFr1.5127
compared to SFr1.5292 late Monday, while sterling was at $1.6062 against $1.5894.

[PGA] [NSAM] [JP] [ASIA] [EEC] [PLTN] [LEN]

And last but certainly not least, the JAPS are picking up the freight market for VLCC's
themselves. Yeeehaaaa! You now should have all the pieces. Do you see the pattern?

139--Dirty tankers: VLCCs continue to climb London--27Aug99/1151 am EDT/1551
GMT The improved demand for VLCCs reported this continued to boost the AG market,
brokers said. Rates for AG-Japan cargoes were talked up to w50-52.5 as supplies of
modern units, especially for 1H Sep loadings, was described as "tight." One broker added
that owners were taking a "tough" position on levels, and were now looking to push rates
towards w60. However, the low w50s were seen as a more realistic level for the next
fixture. Aframaxes remained firm, with both the AG and Indo markets talked around the
w100-105 level, depending on timing and approval status. But there was little such
encouraging news for the Suezmax market. Both WAf-USG rates and cross-Med levels
struggled to attract more than w52.5, as owners continued to suffer from a heavy
oversupply of tonnage. --Platt's Global Alert-- [0139] [C] [GS] [GE] [GF] [GM] [T]

This is the begining. Watch the freights, they're always 2 weeks ahead of physical
tightening. Freight rates, going up. Crude oil, going up. IT HAS OFFICIALLY BEGUN.
THE SIGNS ARE EVERYWHERE.

Now if I was really devious and suspicous like, I might expect Slick Meister and his oil
friends (if he has any) to roll out some physical bbls. about now in some way. For
example, if they had possibly encouraged some friends in OPEC to store physicals ahead
of 2kay then as our old CRB starts to overheat the US markets and inflation, I'd be telling
them to "Roll out the barrels". Or maybe fudge up the stats a little and show some
phantom build etc. We'll see.

-- Gordon (g_gecko_69@hotmail.com), August 31, 1999
TownCrier
(09/01/1999; 10:22:00 MDT - Msg ID: 12566)
Am I Dante?
http://www.usagold.com/Because this is surely an Inferno.
TownCrier
(09/01/1999; 10:27:35 MDT - Msg ID: 12567)
Sorry...That last post was a test
I thought the system was down again. After posting I got this message followed by a empty forum page:
We're So Sorry!
Please tell the webmaster that Frontier couldn't process the request because:
The file "day1.dataf" is not open.

Oddly enough, the "August jobs" post that gave me the above message went through. Maybe this means something to Jeff. I'm stumped.
ET
(09/01/1999; 10:41:17 MDT - Msg ID: 12568)
Great analysis from one Gordon Gecko, et al

This is from Yourdon's forum from one 'Gordon Gecko'. He posts there on occasion and his analysis is always fun to read. He touches on many subjects that have been mentioned here.

Post follows;

Rising Sun Rises On Y2K, Yen Goes Home, Part Deux

greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread


Lets play connect the dots shall we. When last we left off, the Japanese government was
facing a liquidity crisis with two many JGB's comming to market, and bunch of buyers
who were scared off thei ass regarding JGB end of year liquidity. Everyone was afraid
that this auction would be a disaster. I posited that the Govt of Jap. would step in and NO
MATTER WHAT this auction would go smoothly. Guess what? It did. 2.93 bidders per
bond according to one report. However,traders did report that it wasn't stellar and that
the only reason that it came off at all was the strong rumor that the govt would be taking
extraordinary measures at year end to make this thing OK for all. Fast forward to the
currency markets where the dollar is experiencing a record slide. I mean this thing can't
eve SEE the floor right now. The herd generally believed that the Govt. of Jap. would
step in once it got below say 110 to 113. But guess what, those stops came and went just
like all those boys yucking it up out at Jackson Hole with big Al over the weekend. In his
market wrap segment today, Bill Fleckenstein had an excellent section on the Yen/Dollar
situation. Here it is for fair use research and educational purposes only:

SNIP August 31, 1999 Market Rap with Bill Fleckenstein www.stocksite.com (go to this
site and learn something) The big news last night was the fact that the dollar-yen broke
pretty hard through the 1.10 level. It traded down to just about 1.09 even, nearly a 2
percent move. Asian markets didn't like it, with Japan leading the decline, down about 2
3/4 percent. This is a big deal, and a story on one of Japanese news services stated that
Japan was prepared to see it go to 1.05 and lower.

Colin's dollar-yen commentary... My friend Colin Negrych had some comments
specifically about the dollar and the yen that I'd like to share with you. I think they are
pretty on the mark and worth reading.

"People keep telling me the Treasury...the G-3...somebody is just going to have to do
something to prevent the dollar and U.S. asset prices from falling...to avoid a global
recession. Complete crap. (1) The dollar was abandoned by the U.S. last summer and
global investors now see this. (2) The best way to avoid a global recession or lessen its
severity...is to deflate the U.S. asset bubble...in particular by raising U.S. rates. The
more the Fed raises rates...the more "monetary capacity" it will have to offset the
balance sheet damage which will result from the U.S. stock market "normalizing"...and
by raising rates N-O-W the Fed can "cap" the balance sheet damage at the current
embedded... inevitable...level...and obtain maximum wherewithal to counter the
"economic" consequences it will produce.

"Folks still do N-O-T understand the Japanese wanted the yen to strengthen...(it
did)...and they want it to strengthen more...(it will). I have heard private estimates from
Japanese officials W-E-L-L U-N-D-E-R 100. These folks view the U.S. asset markets
as I-D-E-N-T-I-C-A-L to their own in 1989...and, consequently, they do not want their
asset managers to invest here, particularly in stocks. Also...these same officials are
determined to impede offshore investment, in general, in favor of encouraging domestic
investment...particularly in the JGB market. Most "Americentric" analysts simply refuse
to accept the idea Japanese investors could prefer to own historically low yielding JGBs
rather than U.S. bonds...which offer the highest real yields in the G-7.

SNIP

Fleck and Colin think that the Japs(not meant as a slur)have figured out that we are in a
bubbl economy which is certain to burst soon. They have part of the puzzle in place, let
me give you some other pieces to complete the mosaic. There's a thing called the real
price of crude. Although most all crude oil transactions are transacted in dollars, currency
rates do play a rather large role in the global oil markets. Platt's publishes a nifty little
document which lays it out quite nicely I think. Check it out, the Japs are buying bonny
light at TEN BUCKS A BARREL currency adjusted. Yeehaaaa! Did I mention that they
are a net importer of approximately 5.4 million bbls per day? Did I mention that they will
probably try to add to their already hefty reserve balance (currently 3 months of supply in
tank at this time)ahead of Y2K? Did I mention that if they hadn't allowed the currency
slide to occur, they would have faced higher oil prices to the tune of $2.268 billion yen in
only a month? (yen slid from 122 to 108? by tommorrow = 14 X 5.4 milln bbs per day X
30 days.) If the yen fits, you must acquit.

For educational and research purposes only: SNIP

45--Real crude price -- USD vs international currencies New York
(Platt's)--30Aug1999/517 pm EDT/2117 GMT BONNY INDEX REAL DUBAI INDEX
REAL BRENT INDEX REAL LIGHT PRICE PRICE PRICE DMK 21.22 110.9 19.14
20.44 110.9 18.44 21.46 110.9 19.36 YEN 21.22 212.3 10.00 20.44 212.3 9.63 21.46
212.3 10.11 STG 21.22 103.8 20.45 20.44 103.8 19.69 21.46 103.8 20.68

(PRICES USD) INDEX -- SHOWS THE DAILY FLUCTUATION OF EACH
FOREIGN CURRENCY AGAINST THE USD. IF INDEX > 100, CURRENCY IS
STRONG AGAINST THE USD AND REAL PRICE PAID FOR CRUDE IS LESS
THAN ACTUAL USD PRICE. IF INDEX < 100, CURRENCY IS WEAK AGAINST
THE USD AND REAL PRICE PAID IS HIGHER THAN ACTUAL USD PRICE.
--Platt's Global Alert-- [0045] [GE] [C] [GU] [GF] SNIP (PS anyone who wants to
know what's up in oil should read Platt's Crude Oil Marketwire daily)

And here's the market assuming no intervention.

PLATT'S: Financial News: Dollar lower against yen and euro - PGA046 New York
(AFP)--31Aug1999/1203 pm EDT/1603 GMT The US dollar was lower against the yen
and losing ground against the euro in New York by mid-morning Tuesday. Traders
expected the greenback to continue to fall against the Japanese currency as the Bank of
Japan stuck to its policy of non- intervention. The dollar dropped to Yen 109.56 by 1400
GMT compared to Yen 110.60 late Monday, while the euro rose to $1.0572 against
$1.0471. The yen was expected to keep gaining against the dollar as markets no longer
expect the BOJ to intervene, said Dennis Heidt, a trader for Paribas in New York. The
dollar also lost ground against other major European currencies, trading at SFr1.5127
compared to SFr1.5292 late Monday, while sterling was at $1.6062 against $1.5894.

[PGA] [NSAM] [JP] [ASIA] [EEC] [PLTN] [LEN]

And last but certainly not least, the JAPS are picking up the freight market for VLCC's
themselves. Yeeehaaaa! You now should have all the pieces. Do you see the pattern?

139--Dirty tankers: VLCCs continue to climb London--27Aug99/1151 am EDT/1551
GMT The improved demand for VLCCs reported this continued to boost the AG market,
brokers said. Rates for AG-Japan cargoes were talked up to w50-52.5 as supplies of
modern units, especially for 1H Sep loadings, was described as "tight." One broker added
that owners were taking a "tough" position on levels, and were now looking to push rates
towards w60. However, the low w50s were seen as a more realistic level for the next
fixture. Aframaxes remained firm, with both the AG and Indo markets talked around the
w100-105 level, depending on timing and approval status. But there was little such
encouraging news for the Suezmax market. Both WAf-USG rates and cross-Med levels
struggled to attract more than w52.5, as owners continued to suffer from a heavy
oversupply of tonnage. --Platt's Global Alert-- [0139] [C] [GS] [GE] [GF] [GM] [T]

This is the begining. Watch the freights, they're always 2 weeks ahead of physical
tightening. Freight rates, going up. Crude oil, going up. IT HAS OFFICIALLY BEGUN.
THE SIGNS ARE EVERYWHERE.

Now if I was really devious and suspicous like, I might expect Slick Meister and his oil
friends (if he has any) to roll out some physical bbls. about now in some way. For
example, if they had possibly encouraged some friends in OPEC to store physicals ahead
of 2kay then as our old CRB starts to overheat the US markets and inflation, I'd be telling
them to "Roll out the barrels". Or maybe fudge up the stats a little and show some
phantom build etc. We'll see.

-- Gordon (g_gecko_69@hotmail.com), August 31, 1999
ET
(09/01/1999; 10:44:27 MDT - Msg ID: 12569)
Forum

Heh - heh. Well, posting to this forum has me stumped. I'm getting screwy messages telling me I can't post for some reason and then the posts show up after all. Please delete if you can my multiple posts.

ET
Goldspoon
(09/01/1999; 11:15:57 MDT - Msg ID: 12570)
Time runnig out... WAR of many fronts on its way.!!!!!! RED ALERT!!!!
http://www.worldnetdaily.com/bluesky_btl/19990901_xcbtl_is_russia_.shtmlPlease read and heed... Make preperations quickly, This confirms what i have been saying lately in (lost post land). The West Bank deal will be settled this month as i have said. Look for the antichrist to have a part in approval. (Biblical ya know). The number of the antichrist is 666, an upsidedown cross is a sign of Satan.... the date 9/99 is the month we will find out who he/she is....by this approval.....(un approval??) (date upside down is 6/66...)
Russia will help Saddam attack Isreal, while China attacks Tiwan and North Korea has said yesterday they are prepared to contest coastal waters... This WAR of many fronts is too much for our forces to handle and protect the home front. Our missels are depleted from Kosovo. The plot was sealed up in the Summit that Russia, China had.
i live in the Bible Belt..so i've been keepin up with this..The tribulation is about to start.. the Bible talks about this currency collapse we are about to witness... it says that in the tribulation their Gold and Silver will be cankered (Our Fiat Money) and will become worthless, the rich will howell and throw it into the streets... Got Physical Gold??? The 3/12 years of the Tribulation begins this month..... The WAR will take out 2 billion+... Chernoble is (WORMWOOD) in Russian... The Bibles star that falls to earth and posins 1/3 of the earths water is nuecular fallout when the war of many fronts spins out of control.

Alot of you don't live in the Bible belt (blessing/curse) i thought i'd share what the whispers in the wind that are from my lookout posts advantage....

i'm not Bible thumppin hear,,, i'm just reportin what's up from hear.....
If some of yall show some interest in me keepin ya posted as this develops please let me know... otherwise silence is Golden...

Get some real money, food, water, etc... just incase...

Please read the intelegence posts on China/Tiwan at Strafor.com They are an independant spy agency of great note.

Things are not Good......Oh what a world...what a world...
Goldspoon
(09/01/1999; 11:16:19 MDT - Msg ID: 12571)
Time runnig out... WAR of many fronts on its way.!!!!!! RED ALERT!!!!
http://www.worldnetdaily.com/bluesky_btl/19990901_xcbtl_is_russia_.shtmlPlease read and heed... Make preperations quickly, This confirms what i have been saying lately in (lost post land). The West Bank deal will be settled this month as i have said. Look for the antichrist to have a part in approval. (Biblical ya know). The number of the antichrist is 666, an upsidedown cross is a sign of Satan.... the date 9/99 is the month we will find out who he/she is....by this approval.....(un approval??) (date upside down is 6/66...)
Russia will help Saddam attack Isreal, while China attacks Tiwan and North Korea has said yesterday they are prepared to contest coastal waters... This WAR of many fronts is too much for our forces to handle and protect the home front. Our missels are depleted from Kosovo. The plot was sealed up in the Summit that Russia, China had.
i live in the Bible Belt..so i've been keepin up with this..The tribulation is about to start.. the Bible talks about this currency collapse we are about to witness... it says that in the tribulation their Gold and Silver will be cankered (Our Fiat Money) and will become worthless, the rich will howell and throw it into the streets... Got Physical Gold??? The 3/12 years of the Tribulation begins this month..... The WAR will take out 2 billion+... Chernoble is (WORMWOOD) in Russian... The Bibles star that falls to earth and posins 1/3 of the earths water is nuecular fallout when the war of many fronts spins out of control.

Alot of you don't live in the Bible belt (blessing/curse) i thought i'd share what the whispers in the wind that are from my lookout posts advantage....

i'm not Bible thumppin hear,,, i'm just reportin what's up from hear.....
If some of yall show some interest in me keepin ya posted as this develops please let me know... otherwise silence is Golden...

Get some real money, food, water, etc... just incase...

Please read the intelegence posts on China/Tiwan at Strafor.com They are an independant spy agency of great note.

Things are not Good......Oh what a world...what a world...
Goldspoon
(09/01/1999; 11:17:52 MDT - Msg ID: 12572)
Time runnig out... WAR of many fronts on its way.!!!!!! RED ALERT!!!!
http://www.worldnetdaily.com/bluesky_btl/19990901_xcbtl_is_russia_.shtmlPlease read and heed... Make preperations quickly, This confirms what i have been saying lately in (lost post land). The West Bank deal will be settled this month as i have said. Look for the antichrist to have a part in approval. (Biblical ya know). The number of the antichrist is 666, an upsidedown cross is a sign of Satan.... the date 9/99 is the month we will find out who he/she is....by this approval.....(un approval??) (date upside down is 6/66...)
Russia will help Saddam attack Isreal, while China attacks Tiwan and North Korea has said yesterday they are prepared to contest coastal waters... This WAR of many fronts is too much for our forces to handle and protect the home front. Our missels are depleted from Kosovo. The plot was sealed up in the Summit that Russia, China had.
i live in the Bible Belt..so i've been keepin up with this..The tribulation is about to start.. the Bible talks about this currency collapse we are about to witness... it says that in the tribulation their Gold and Silver will be cankered (Our Fiat Money) and will become worthless, the rich will howell and throw it into the streets... Got Physical Gold??? The 3/12 years of the Tribulation begins this month..... The WAR will take out 2 billion+... Chernoble is (WORMWOOD) in Russian... The Bibles star that falls to earth and posins 1/3 of the earths water is nuecular fallout when the war of many fronts spins out of control.

Alot of you don't live in the Bible belt (blessing/curse) i thought i'd share what the whispers in the wind that are from my lookout posts advantage....

i'm not Bible thumppin hear,,, i'm just reportin what's up from hear.....
If some of yall show some interest in me keepin ya posted as this develops please let me know... otherwise silence is Golden...

Get some real money, food, water, etc... just incase...

Please read the intelegence posts on China/Tiwan at Strafor.com They are an independant spy agency of great note.

Things are not Good......Oh what a world...what a world...
Goldspoon
(09/01/1999; 11:18:29 MDT - Msg ID: 12573)
Time runnig out... WAR of many fronts on its way.!!!!!! RED ALERT!!!!
http://www.worldnetdaily.com/bluesky_btl/19990901_xcbtl_is_russia_.shtmlPlease read and heed... Make preperations quickly, This confirms what i have been saying lately in (lost post land). The West Bank deal will be settled this month as i have said. Look for the antichrist to have a part in approval. (Biblical ya know). The number of the antichrist is 666, an upsidedown cross is a sign of Satan.... the date 9/99 is the month we will find out who he/she is....by this approval.....(un approval??) (date upside down is 6/66...)
Russia will help Saddam attack Isreal, while China attacks Tiwan and North Korea has said yesterday they are prepared to contest coastal waters... This WAR of many fronts is too much for our forces to handle and protect the home front. Our missels are depleted from Kosovo. The plot was sealed up in the Summit that Russia, China had.
i live in the Bible Belt..so i've been keepin up with this..The tribulation is about to start.. the Bible talks about this currency collapse we are about to witness... it says that in the tribulation their Gold and Silver will be cankered (Our Fiat Money) and will become worthless, the rich will howell and throw it into the streets... Got Physical Gold??? The 3/12 years of the Tribulation begins this month..... The WAR will take out 2 billion+... Chernoble is (WORMWOOD) in Russian... The Bibles star that falls to earth and posins 1/3 of the earths water is nuecular fallout when the war of many fronts spins out of control.

Alot of you don't live in the Bible belt (blessing/curse) i thought i'd share what the whispers in the wind that are from my lookout posts advantage....

i'm not Bible thumppin hear,,, i'm just reportin what's up from hear.....
If some of yall show some interest in me keepin ya posted as this develops please let me know... otherwise silence is Golden...

Get some real money, food, water, etc... just incase...

Please read the intelegence posts on China/Tiwan at Strafor.com They are an independant spy agency of great note.

Things are not Good......Oh what a world...what a world...
Goldspoon
(09/01/1999; 11:21:01 MDT - Msg ID: 12574)
Time runnig out... WAR of many fronts on its way.!!!!!! RED ALERT!!!!
http://www.worldnetdaily.com/bluesky_btl/19990901_xcbtl_is_russia_.shtmlPlease read and heed... Make preperations quickly, This confirms what i have been saying lately in (lost post land). The West Bank deal will be settled this month as i have said. Look for the antichrist to have a part in approval. (Biblical ya know). The number of the antichrist is 666, an upsidedown cross is a sign of Satan.... the date 9/99 is the month we will find out who he/she is....by this approval.....(un approval??) (date upside down is 6/66...)
Russia will help Saddam attack Isreal, while China attacks Tiwan and North Korea has said yesterday they are prepared to contest coastal waters... This WAR of many fronts is too much for our forces to handle and protect the home front. Our missels are depleted from Kosovo. The plot was sealed up in the Summit that Russia, China had.
i live in the Bible Belt..so i've been keepin up with this..The tribulation is about to start.. the Bible talks about this currency collapse we are about to witness... it says that in the tribulation their Gold and Silver will be cankered (Our Fiat Money) and will become worthless, the rich will howell and throw it into the streets... Got Physical Gold??? The 3/12 years of the Tribulation begins this month..... The WAR will take out 2 billion+... Chernoble is (WORMWOOD) in Russian... The Bibles star that falls to earth and posins 1/3 of the earths water is nuecular fallout when the war of many fronts spins out of control.

Alot of you don't live in the Bible belt (blessing/curse) i thought i'd share what the whispers in the wind that are from my lookout posts advantage....

i'm not Bible thumppin hear,,, i'm just reportin what's up from hear.....
If some of yall show some interest in me keepin ya posted as this develops please let me know... otherwise silence is Golden...

Get some real money, food, water, etc... just incase...

Please read the intelegence posts on China/Tiwan at Strafor.com They are an independant spy agency of great note.

Things are not Good......Oh what a world...what a world...
USAGOLD
(09/01/1999; 11:23:57 MDT - Msg ID: 12575)
Test
TEst
Goldspoon
(09/01/1999; 11:25:31 MDT - Msg ID: 12576)
Time runnig out... WAR of many fronts on its way.!!!!!! RED ALERT!!!!
http://www.worldnetdaily.com/bluesky_btl/19990901_xcbtl_is_russia_.shtmlPlease read and heed... Make preperations quickly, This confirms what i have been saying lately in (lost post land). The West Bank deal will be settled this month as i have said. Look for the antichrist to have a part in approval. (Biblical ya know). The number of the antichrist is 666, an upsidedown cross is a sign of Satan.... the date 9/99 is the month we will find out who he/she is....by this approval.....(un approval??) (date upside down is 6/66...)
Russia will help Saddam attack Isreal, while China attacks Tiwan and North Korea has said yesterday they are prepared to contest coastal waters... This WAR of many fronts is too much for our forces to handle and protect the home front. Our missels are depleted from Kosovo. The plot was sealed up in the Summit that Russia, China had.
i live in the Bible Belt..so i've been keepin up with this..The tribulation is about to start.. the Bible talks about this currency collapse we are about to witness... it says that in the tribulation their Gold and Silver will be cankered (Our Fiat Money) and will become worthless, the rich will howell and throw it into the streets... Got Physical Gold??? The 3/12 years of the Tribulation begins this month..... The WAR will take out 2 billion+... Chernoble is (WORMWOOD) in Russian... The Bibles star that falls to earth and posins 1/3 of the earths water is nuecular fallout when the war of many fronts spins out of control.

Alot of you don't live in the Bible belt (blessing/curse) i thought i'd share what the whispers in the wind that are from my lookout posts advantage....

i'm not Bible thumppin hear,,, i'm just reportin what's up from hear.....
If some of yall show some interest in me keepin ya posted as this develops please let me know... otherwise silence is Golden...

Get some real money, food, water, etc... just incase...

Please read the intelegence posts on China/Tiwan at Strafor.com They are an independant spy agency of great note.

Things are not Good......Oh what a world...what a world...
Jeff
(09/01/1999; 12:11:12 MDT - Msg ID: 12581)
Found the Bug!!!!!!!!!!!!!!!!!!!!
Was able to find the bug causing the problems. Don't know what caused it..... but I found a way to hack around it.

-Jeff
Goldspoon
(09/01/1999; 12:44:00 MDT - Msg ID: 12582)
Time runnig out... WAR of many fronts on its way.!!!!!! RED ALERT!!!!
http://www.worldnetdaily.com/bluesky_btl/19990901_xcbtl_is_russia_.shtmlPlease read and heed... Make preperations quickly, This confirms what i have been saying lately in (lost post land). The West Bank deal will be settled this month as i have said. Look for the antichrist to have a part in approval. (Biblical ya know). The number of the antichrist is 666, an upsidedown cross is a sign of Satan.... the date 9/99 is the month we will find out who he/she is....by this approval.....(un approval??) (date upside down is 6/66...)
Russia will help Saddam attack Isreal, while China attacks Tiwan and North Korea has said yesterday they are prepared to contest coastal waters... This WAR of many fronts is too much for our forces to handle and protect the home front. Our missels are depleted from Kosovo. The plot was sealed up in the Summit that Russia, China had.
i live in the Bible Belt..so i've been keepin up with this..The tribulation is about to start.. the Bible talks about this currency collapse we are about to witness... it says that in the tribulation their Gold and Silver will be cankered (Our Fiat Money) and will become worthless, the rich will howell and throw it into the streets... Got Physical Gold??? The 3/12 years of the Tribulation begins this month..... The WAR will take out 2 billion+... Chernoble is (WORMWOOD) in Russian... The Bibles star that falls to earth and posins 1/3 of the earths water is nuecular fallout when the war of many fronts spins out of control.

Alot of you don't live in the Bible belt (blessing/curse) i thought i'd share what the whispers in the wind that are from my lookout posts advantage....

i'm not Bible thumppin hear,,, i'm just reportin what's up from hear.....
If some of yall show some interest in me keepin ya posted as this develops please let me know... otherwise silence is Golden...

Get some real money, food, water, etc... just incase...

Please read the intelegence posts on China/Tiwan at Strafor.com They are an independant spy agency of great note.

Things are not Good......Oh what a world...what a world...
PH in LA
(09/01/1999; 12:45:07 MDT - Msg ID: 12583)
Normal view from "this side of the river"
"I think the markets are starting the long awaited "final convulsion"!" FOA (9/1/99; 6:11:11MDT - Msg ID:12547)

Thanks, FOA, for continueing to give us "what (your) side of the river sees as significant to watch".

These last months have been difficult for those who watch from this side of the river the slow-motion playing out of macro forces that seem so much clearer from over there on your side. It all appears so much more dramatic and dynamic from over there. From here, in a desperate attempt at perspective, I sometimes wonder how dramatic it all really is.

Remember 1971?

The US unilaterally renounces its Breton-Woods obligation to exchange (foreign-held) dollars for gold. Sounds pretty dramatic. I remember when it happened. What happened over here on this side?

Well, it did make the nightly news!

Oh yeah, we had some inflation, too. That is, prices started climbing at the supermarket. They kept climbing for years. During that time, we all had to think a little differently. Whenever we decided that a new stereo, or a new toaster, or new car was in order, we hurried out to buy it because waiting even another month or two meant that it would just cost more. At the same time, after we bought it, we still thought of it as having value. Sure! If we wanted to, we could always sell it for a good price (maybe almost as much as we had paid for it) because the price of the same item now cost more than when we bought it. Anyone would be glad to buy it from us for the same price (or maybe more) because their only alternative was to pay even more for it at the store.

As time passed, and gold and silver soared, violin strings (which are wrapped in silver) became expensive. In fact, they added a "silver surcharge" onto the price of strings, based on the spot price of silver. Was it an annoyance? Yes! Did life go on? Yes! Did we stop buying violin strings? Hardly. It all seemed quite normal at the time.

Yes, things change. For example, what do we do nowdays when it's time to upgrade a computer? We start the process by throwing the old one in the trash. Would that ever have seemed strange back then! But the new ones now cost less than when we bought ours, and they are far better, faster, etc. Who would pay us even a fraction of what we paid for the old one?

So, was 1971 a cataclismic event? Maybe for some it was. But over here, on this side of the river, it was hardly noticable. It seemed pretty normal. Although come to think of it, it did make the nightly news.


Remember when Peter Jennings was reporting night after night about the Asian crisis? Now they say it's over. The tidal wave never reached our shores...we dodged the bullet. Things are normal, now. Sure, they ARE a bit different. But they're still normal, aren't they?

They say that bankrupted stock speculators were jumping out of windows in 1929. Yet life did go on. Our parents did live through the great depression. Things were bad, they say. Yet they didn't jump out any windows. Life did go on. And it still goes on today. It's even more "normal" than ever. In fact!

What about the cataclismic event of the Russian default? Did that bring the world financial system crashing down around our ears? Yeah, we heard about LTCM. They had to lower interest rates .75% for a whole year. Now they're raising them again! Well, that seems pretty normal.

What about the recent bond default in Equador? Not yet, you say?

Then when? And in what sense?

Now it seems normal to expect the price of gold and sliver to sink under the weight of selling on the established markets such as LBMA and Comex before the physicals will be allowed to find a realistic value, "within hours or days" of the collapse of the Comex. This sounds dramatic. Will it really happen that way? Or will such a cataclism be just another facet of "normality"?

Will they stretch it out? Keep up the illusion that things are "normal"? Will the "crash" of the dollar, in the weightlessness they call "normality", seem no more than material for Fleckenstein's daily column? Something we will hardly notice, unless we look it up on the internet, or in the financial pages of the newspaper.

Maybe we will all just "adjust" our thinking again. Let "normality" redefine itself. Maybe most of us won't even notice the change. Maybe life will just keep going on being normal, just as it has done since the beginning of time.

Normal. That's what it is! Just normal. Nothing dramatic about. It's just what is!

Maybe that's what the "final convulsion" will be. Just another "normal" convulsion.

Over here! From this side of the river!
Goldspoon
(09/01/1999; 12:47:38 MDT - Msg ID: 12584)
SORRY!!!!!!!! FOR THE EXTRA POSTS!!!!
BUG WAS CAUSING PROBLEMS WHEN i TRIED TO POST!!!!!
phaedrus
(09/01/1999; 12:59:00 MDT - Msg ID: 12585)
hello?
hello hello? More technical problems or what?
TownCrier
(09/01/1999; 13:19:17 MDT - Msg ID: 12586)
Lots of lolly for Millennium
http://news.bbc.co.uk/hi/english/uk/newsid_435000/435444.stmNot only has the Bank of England raised its production levels of �10 and �20 notes, it also stopped taking old �20 out of circulation at the beginning of this year in an effort to meet the millennium demand. There's more at hand than people simply stocking up for the long holiday weekend as implied by the banks. You don't have to alter your old-bill shredding program for that.

The big question is: Will all banks have enough cash, or will customer confidence crash and burn when they do run out?
Goldspoon
(09/01/1999; 13:23:18 MDT - Msg ID: 12587)
Great posts!!!
WoW!! Great post on OiL ET!! Good Work!! I've got my own reserves, been building them for a while... time to by more.... 2kay is not Ok.....

Goldspoon
(09/01/1999; 13:42:40 MDT - Msg ID: 12588)
PH in LA
Great Post...i agree with your observations, many of us are like the animals in that when rain comes they know not about fronts or cloud formations... only that it is raining with nary a thought about from whence it came or when it shall go..... To them change is normal, they have no understanding of the mechanisims that support their suroundings.... therefore they have no clue if something is abnormal...Higher brains with reason and memory know the difference if it is on their radar scope and are willing to dig deep enough to learn.... i guess CARE is the key word here.... if one cares deeply enough to dig out the hidden mechanisims...these are the ones who know the normal difference....

A lot of the generation now do not know hard times i.e. a time without jobs, money, food, tv, heat, water, transportation. When the T.V. goes off.... everyone will scratch their colective heads and say "ya know this just ain't normal..."
Goldspoon
(09/01/1999; 13:58:56 MDT - Msg ID: 12589)
Jeff...WAY TO GO!!!
Good job on finding the BUG... i once programed the computers that control the actual process of a major chemical company. It was a thankless job... no one knew you were there and all of the great things and inovations that you accomplished every day.. unless you made any small error that shut the process down and WOW!! suddenly everyone knew your name (MUD)...

Imagine how the programers will feel and how long it will take when they try to sort out if its a 2kay bug or is it a virus when the millinium comes.....Power UP...Power down..Power UP.... Power down....Water On... Water off...
CoBra(too)
(09/01/1999; 13:59:43 MDT - Msg ID: 12590)
@ Jeff, who has found the bug, congratulations! -mean ! it too!
We, goldbugs, as yet have not found what's really bugging the POG, though we do have a pretty fair idea, as to who, what and why our favourite metal(real money)is being suppressed for so long, against all fundamental evidence, which would indicate .
Otherwise, while watching the PPT, also known as "Plunge Protection Team", which was allegedly started as a governmental answer to the Oct. 1987 debacle in order to uphild a semblance of orderly markets, this entity now seems to have been amalgamated into the "Counterparty Risk Control" unit of the NY FRB.
As avid market watchers may agree the PPT are rapidly transforming into "Pragmatic Practioners of Travesty" as they patheticly seem to lose control of the credit, currency and paper asset bubble.
All rallies on the bond and equity markets have self-aborted lately, the US$ is tanking rapidly and the only thing left to bash is the POG, again only in form of the paper promise to deliver physical, which seems to be short some 4-5 y's of production.
In the alledged non-inflationary environment - notwith- standing the aforementioned bubbles of money and credit creation-, the CRB Index is making new highs by the day, the oil price more than doubled, and even AG (being in a hole named Jackson) warning of (paper)asset inflation, vs goods and services AGreed to put 'em on the watch list.

In conclusion the PPT is rapidly deteriorating into a gang of "Permanently ('hopefully') Prohibited (FTC?) Terrorists" of the free market system, IMHO for all to see?.

CB2 - don't ya bug me Jeff, no more, eh!
CoBra(too)
(09/01/1999; 14:18:13 MDT - Msg ID: 12591)
Should revise my posts - before doing so- concluded...
... lot's of un-concluded conclusions collusively included.

New day - new try - CB2 - "AU" (short for 'it hurts' in my lingo) - NOW, let's hurt the shorts in au's lingo!
TownCrier
(09/01/1999; 14:37:40 MDT - Msg ID: 12592)
Ecuador default triggers change * * * A must read * * *
http://news.bbc.co.uk/hi/english/business/the_economy/newsid_435000/435667.stmEcuador's debt default is set to change the way investors view emerging markets -- forcing them to take some of the costs of bailing out weak economies. Ecuador gained the dubious distinction of being the first country in the history of the world to default on its Brady debt.

This is a departure from the past mentality of restructure, refinance, and roll over. A change in the wind of world finance?
Peter Asher
(09/01/1999; 14:50:23 MDT - Msg ID: 12593)
PH in LA
great essay with a superb punch line!
Goldspoon
(09/01/1999; 15:01:01 MDT - Msg ID: 12594)
FBI 2kay fringe group worries
http://www.y2ktoday.com/modules/home/default.asp?id=2018Question: do any of you think this group would fit into their profile of groups that the government is worried about? i know from this end that i'm no threat to them, they are their own worst enemy through fiat currency policys.... BUT from THEIR VIEW... what do they see....
Responces to this would be appreciated...inquiring mind wants to know your view....
Goldspoon
(09/01/1999; 15:16:18 MDT - Msg ID: 12595)
Talk about too late to act...........
http://www.gmt-2000.com/news/press/pr23081999.htmMust read article on Japans PC's.... Why is all of the forign money buying Japaneese YEN??? They risk ever seeing their money again as it may be lost to the 2kay bottomless money pit...... Looks like Japans banks are too late....
Broken Tee
(09/01/1999; 16:17:36 MDT - Msg ID: 12596)
(No Subject)
Oh wise members of the forum. Has anyone heard when the BOE will have is next gold sale? Will it follow the same date convention as the July sale and be on the sixth of Sept or has the public out cry caused its cancelation.
CoBra(too)
(09/01/1999; 16:27:36 MDT - Msg ID: 12597)
@Broken Tee....
Hello golfer _ BoE auction for another measly 25 ton(ne)s should be on Sept. 21-, but don't worry it's sold (maybe forwarded already)and shouldn't hit any (physical) market.
Put(t) yourself at ease-please - welcome to the forum CB2

CoBra(too)
(09/01/1999; 16:28:02 MDT - Msg ID: 12598)
@Broken Tee....
Hello golfer _ BoE auction for another measly 25 ton(ne)s should be on Sept. 21-, but don't worry it's sold (maybe forwarded already)and shouldn't hit any (physical) market.
Put(t) yourself at ease-please - welcome to the forum CB2

CoBra(too)
(09/01/1999; 16:31:33 MDT - Msg ID: 12599)
@Broken Tee....
Hello golfer _ BoE auction for another measly 25 ton(ne)s should be on Sept. 21-, but don't worry it's sold (maybe forwarded already)and shouldn't hit any (physical) market.
Put(t) yourself at ease-please - some of the more knowledgeable goldbugs still feel, that a change in the BOE gold sale "ploy" is imminent.
welcome to the forum CB2

CoBra(too)
(09/01/1999; 16:33:21 MDT - Msg ID: 12600)
@Broken Tee....
Hello golfer _ BoE auction for another measly 25 ton(ne)s should be on Sept. 21-, but don't worry it's sold (maybe forwarded already)and shouldn't hit any (physical) market.
Put(t) yourself at ease-please - some of the more knowledgeable goldbugs still feel, that a change in the BOE gold sale "ploy" is imminent.
welcome to the forum CB2

Jeff
(09/01/1999; 16:34:07 MDT - Msg ID: 12601)
test
test
CoBra(too)
(09/01/1999; 16:34:14 MDT - Msg ID: 12602)
@Broken Tee....
Hello golfer _ BoE auction for another measly 25 ton(ne)s should be on Sept. 21-, but don't worry it's sold (maybe forwarded already)and shouldn't hit any (physical) market.
Put(t) yourself at ease-please - some of the more knowledgeable goldbugs still feel, that a change in the BOE gold sale "ploy" is imminent.
welcome to the forum CB2

CoBra(too)
(09/01/1999; 16:34:17 MDT - Msg ID: 12603)
@Broken Tee....
Hello golfer _ BoE auction for another measly 25 ton(ne)s should be on Sept. 21-, but don't worry it's sold (maybe forwarded already)and shouldn't hit any (physical) market.
Put(t) yourself at ease-please - some of the more knowledgeable goldbugs still feel, that a change in the BOE gold sale "ploy" is imminent.
welcome to the forum CB2

TownCrier
(09/01/1999; 16:59:07 MDT - Msg ID: 12610)
After the Close...the GOLDEN VIEW from the Tower
Today's action among the futures traders erased yesterday's price gains on the December gold contract (GCZ9), with that paper's negotiated price ending the day at $255.60 per ounce of the 100-ounce contract. NY spot price took its cue and was quoted at $253.70 to end the day.

Bearish sentiment was fostered by rumblings comming out of the International Monetary Fund board meeting which was recently held. IMF Managing Director Michel Camdessus stressed in the board meeting Monday the need for bilateral contributions from IMF members now, so that plans for debt relief can move forward. In that same vein, IMF spokesman William Murray said Tuesday the IMF is continuing to look at ways to sell some gold reserves in an effort to fund this debt relief. Many traders and dealers, such as Leonard Kaplan who is chief bullion dealer at LFG Bullion Services, have already dismissed this likelihood on the basis of US Congressional opposition. "There's no way they're going to sell any gold -- Congress will not let them sell one ounce," said Kaplan as quoted by Bridge News.

Traders indicated that some Asian demand is on hold, hoping that the yen strengthening against the dollar will give them better buy opportunities in terms of yen. The latest Gold Demand Trend report of the World Gold Council shows, however, that Asian demand for the yellow metal is way up. When you get burnt by your paper currency, you tend to learn a quick lesson. And rather than being "burned" by the currency crisis, those who held their savings in gold actually prospered during this time by spending their gold on such things as ag land and equipment. Now that recovery is underway, these same people are rolling their earnings right back into gold.

All was quiet today in the COMEX gold warehouse as we start a new month in the wake of August's flurry. To help you better appreciate the magnitude of what went down in August, here's a quick review and comparison. First and foremost, futures traders typically settle for cash...take note of July. In July, only 250 contracts (3/4 of a tonne) were held by traders that announced intentions for delivery. In August, an eye-popping 8,500 contracts (over 26 tonnes) were held for delivery intentions...much of that by Goldman Sachs, as we've reported. All gold currently held within COMEX's official depostories total 37 tonnes following the additional gold received to settle the August contracts. What excitement will September bring? We shall watch and see what the future holds...

The 30-year bond continued downward today, losing 1/4 in price to raise the yield to 6.08%. Traders seem to be hanging back with trepidation in advance of the Friday employment report for August. On the NYMEX, October crude settled marginally down today at $21.99 after setting a new contract high in intraday trade.

Economic troubles in Ecuador, notably the first ever default on a nation's Brady debt, looks like it could usher in a new era in international response to debt default. You'll want to read about the faceoff between public and private lenders in the BBC article that was posted earlier today. This could spark a domino reaction with many so stuggling nation states deciding to shrug off their debt burdens.

And finally we have this comforting thought from John Koskinen, chairman of the President's Council on Year 2000 Conversion. After the pat reassurances (which it is his job to deliver time and time again), he said the biggest Y2K vulnerability lies with an estimated 800,000 small businesses, health care systems and units of government that have taken no action. But "we don't see a cascading effect," he said. "Small organizations will fail on their own. They won't bring everyone down."

Thanks for that ray of sunshine, John.

And that's the view from here...after the close.
seeker
(09/01/1999; 16:59:45 MDT - Msg ID: 12611)
thinking aloud
The USA will fail. Right now in 1999 Sept. the economy is in such an uproar, that it is setting
records almost daily.. record low gold price in the last 20 uyears, all time record high on the
Dow J, record low prices in most commodities, monsterous national debts. In the end this country
will tank.

The world does not live in records, not highs nor lows..we live in average numbers some where in
between the highs and the lows.. all the markets that are presently at one extreme or the other
will corect themselves sooner or later.

So where does this leave us?? We know what the past shows us ..(dismall failure of every govt.
known to mankind...remember how the communists were going to take over the world? How we needed to
fight the good fight in Veitnam so we would'nt have the domino effect??) we know where we are at
presently, ((on the verge of monumental collaspe, but at an all time high in stocks, national debt,
people employed, US$ in circulation) sounds like the 1930's ..yes??)
Lets look at where we will be in the future. Many prophets speak of gold and silver. In the Bible
they tell of the countries of this world coming to Isreal after the great last war, and bringing
Her ...what else, gold and silver, both of which still HOLD MUCH valuve.. in fact they are the
chief gifts from nation to nation, THE BEST THEY GOT. Nastradomus perhaps speaks of a golden
future when he said



The great credit of gold and abundance of silver
will cause honor to be blinded by lust;
the offense of the adulterer will become known,
which will occur to his great dishonor.



The copies of gold and silver inflated,
which after the theft were thrown into the lake,
at the discovery that all is exhausted and dissipated by the debt.
All scrips and bonds will be wiped out.

So, who steals what??? Gold perhaps? Who seals it? who is in the position to steal??
Many unanswered questions. I find it comforting at least that we will find out the offense of the
adulterer, and who he is should Nastro prove to be correct.

AG spoke of some interesting things the other day. The over-all tone, I took to mean that our
bubble economy was based on imagined wealth, not ture wealth. That maybe we should look
to sound investments such as "riskless bonds" and companies that had staying power to survive d
own the road. Of course he never uses the G word, but down deep, and maybe not so deep I think
there lurks a gold bug. I think now AG is in denial, or at the very least AG is a gold bug in
drag.

It sounds like ole' Nastro may have had it right about the gold and silver inflation so possibily
he might be right about the worthless scripts and bonds (fiat money, and bonds). Now if Nastro is
right about scripts and bonds, but AG on the other hand is saying bonds are riskless, what is a
person to do??? Better question would be, " Where do I put my assets so as to preserve my wealth
in times of transition??"

While an inteligent person might contenplate these things, along comes y2k. AG spoke of attention
that must be given to markets. Sooooo, if we gather from this that the Fed is now involved in
market manipulation, which I believe they are, then they can control any market as long as they
want to, because the have the keys to the printing press in the back room, and they can print
money whenever they want to. Since money controls the price of ALL commodities and stock markets,
they can control this economy as long as they wish. The only thing that could stop them is if
people lose confidence in America's primary export...US$'s.

Now all of a sudden (or at least since they saw the euro coming) they see something on the
horizan that tells them that the people are going to lose confidence in the dollar. Now there is
a choice to be made. This y2k thing can be anything that the holder of the backroom keys want it
to be. They knew long ago about the Euro. I belive that they knew a long time ago about how they
were going to drive the pog down. Drive it down so low as to force most mines (or at least their
output for the next ten years) to become their's, by again visiting the back room (via the
revolving door recently installed) they either force them to sell, or force them to forward sell
their gold. Either way, they end up with all the gold. ...well thought and executed in deed.

AG also said that "claims on far distant future values are discounted to insignificance." Now I
don't know exactly what distant means, but I don't think that Dec. is far distance, but Jan. might
be. So with all of these clues to digest,.. what should we think?? Maybe this era is at an end.
Maybe all of their preparation has been done and its time to get while the gettin is good. Maybe 8
years ago they all got together and decided that y2k would be a great time to hide many errors of
the past, and then put a spin on the whole thing as only the can do, to blame the computers for
all of their games of folly. If you were them would you pass up such an opportunity of a lifetime.
I can here them now, "it wasn't me, its that darn y2k thing".

What can we do??? What do the big boy's in the know do?? What is GS doing? I say take gold, hide
it away. Be thoughful not to fight the last fight.

FOA, Another, I subscribe to your way of thinking, and value your thoughts. comments????

please forgive the typo's

tom fumich
(09/01/1999; 17:06:49 MDT - Msg ID: 12612)
communists.
they are a big threat to the price of gold...yea!!!!latin america is tanking ...thats the problem.... IMF is broke...think about it...
THX-1138
(09/01/1999; 17:47:47 MDT - Msg ID: 12614)
Question about COMEX
I have been seeing rumours posted at Kitco & Gold-Eagle that the COMEX warehouse is out of gold. Is there any truth to this? Can someone supply a link to where it shows how much gold is in the warehouse?

Thanks,
THX-1138
Phos
(09/01/1999; 17:51:54 MDT - Msg ID: 12618)
What have we here?
??????????
Jeff
(09/01/1999; 19:52:46 MDT - Msg ID: 12631)
test
Test-Jeff
beesting
(09/01/1999; 20:04:23 MDT - Msg ID: 12632)
To THX-1138 COMEX Gold inventory
See Towncriers superlative after the close summery's for the last 2 weeks. He has given an on going daily Gold count at COMEX...Many Thank You's, Townie!!.....beesting
Jeff
(09/01/1999; 20:29:35 MDT - Msg ID: 12633)
test
test
Jeff
(09/01/1999; 20:30:04 MDT - Msg ID: 12634)
test
test
Jeff
(09/01/1999; 20:39:14 MDT - Msg ID: 12635)
test post
test post
NORTH OF 49
(09/01/1999; 20:39:44 MDT - Msg ID: 12636)
Jeff
Hang in there kid---when the goin gets tough---well, the tough just ignore it!!!

No49
TownCrier
(09/01/1999; 20:54:01 MDT - Msg ID: 12637)
Thanks, Sir beesting. The GOLDEN VIEW has never gotten a review before. Glad you like it!
This from yesterday's GOLDEN VIEW, when coupled with the COMEX depository commentary from today's report, pretty much gives the whole story. This might save THX-1138 a little time and effort searching.

"A relatively quite day in the COMEX gold vaults, 289 ounces left the Scotia
Mocatta depository today. Assuming that all August contracts had to be
settled with cash or physical delivery within the month of August, we can
try to evaluate where Goldman Sach's request for delivery of approximately
20 tonnes of gold came from. COMEX depositories started the month with about
27 tonnes of Registered gold and 3 tonnes in the Eligible category for a
total of approximately 30 tonnes. Through the month we tracked the departure
of 4-1/2 tonnes and the arrival of 12-1/2 tonnes for a net increase of 8 tonnes.

For whatever its worth, we can assume that this visible gold movement was
for other accounts, and Goldman simply received Registered title to 20 of
the original 27 tonnes of Registered gold. Or we can assume that of the 12.5
that arrived, the 4.5 tonnes that left were for another account, and Goldman
received these newly arrived 8 tonnes in addition to 12 tonnes of original
Registered inventory. Obviously, a number of other combinations and
assumptions is possible, but our primary interest was to see if 20 new
tonnes would arrive on the scene, and what we witnessed was only half of that.

Here's the situation. While delivery on contracts is often not sought, if a
panicked herd would be calmed by gold, we put the odds well below a
snowball's chance in hell. There are currently 129,224 open interest gold
contracts total for October and December of 1999. Any percentage of these
could result in positive delivery intentions (each contract being 100
ounces.) This represents up to 402 tonnes of gold. We'll leave it to you to
ponder the rest in light of the source of half of Goldman's puny request."
THX-1138
(09/01/1999; 20:58:41 MDT - Msg ID: 12638)
re: beesting, Towncrier
Whoops, I missed that.
With the system going down so much, I forgot what I had read.
Thank you for the reminder.
FOA
(09/01/1999; 21:12:43 MDT - Msg ID: 12639)
Reply
Peter Asher (8/31/99; 22:35:25MDT - Msg ID:12542)
Peter,
Thanks for not only reading my post, but for understanding some of it. It's interesting how well we comprehend our own thinking, yet never really know if anyone else is following the same trend. That's why I'm happy to see others offering their viewpoints. It broadens the conversations and allows everyone, in their own way get something from of it. Right or wrong, at least we pick up the drift of all the many discussions that occur here.

Your comments about my #12506: I'll rearrange your words a little.

Does your (statement) describe the same phenomena and event as my #8841 of 7/13.

FOA said: ----Just as most men will not hang themselves with a rope, the shorts that actually create the quoted price of gold today, will not trade it higher. In fact, I believe they are trying to gather physical gold (taking delivery everywhere) while it still trades in relation to the low derivatives price.-----

Peter said: ------I believe they will continue this control of the POG with impunity, until their cohorts have completed the trading activities necessary to protect their positions. They do not have to buy physical gold to do this. As negative sentiment holds the price of gold down and leaves all rallies suspect, larger quantities of long future contracts can be purchased without pulling up the price of physical. The same leverage that created massive short positions will also serve to acquire the longs. It is the writer of those long contracts that is caught short by the breakout. The purchaser has locked in his cover price for a small fraction of the funds that would be necessary to buy the physical. Squaring off the short sales then becomes merely a technical financial matter. Provided, of course, that the 'System' is still in place.-------

Peter, I went back and read your post to better understand it's direction. First, let me further expand on the thought I presented.

The understanding I'm presenting here, is offered to explain why so many are off base and confused about the current gold price. Because I too am "Western" my thinking was also skewed towards a big short covering blow-out, where all "paper would burn". It seemed the only outcome, the markets would lock up and close down as the price of bullion went sky high. That was how Another offered the original thoughts, as he tried to get everyone to see how out of whack the real market was. What would have been required to set off such a run back then? Anyone large enough to buy spot physical gold as an "open order" on the world dealer market. Perhaps, several oil states working with several CBs could have offered, say, a 10 billion book priced above the
London fix. It would have been all over with, as anyone with short exposure would be shut down from margin calls as gold zoomed in price. That didn't happen, probably because the market was in the process of entraping itself with false perceptions. Most of the real gold was corrnered anyway,
so let the world have it's way!

As time has passed, our gold pricing has seemed to become more irrational. Other important analyst are starting to look for different explanations also. Today, Another is no longer "on the fringe of reality". However, there was always more to it than just politically manipulated markets.
The lower we go the more questions crop up. Why does gold still continue to drop in the face of statistics that show massive demand and ongoing supply deficits? Why does it hold here at $250 when this range will obviously destroy most supply from the mines? How in the world can it go even lower when everyone is buying it?

The answer lies in our perception of the modern gold markets. Back in the late 70s and early 80s, anyone "big" that wanted gold simply brought it "spot physical" in "allocated" form in London. The gold was there for delivery if wanted. Others brought through large world class dealers.
Further out on the limb, one could buy Comex "spot month" or "near by" and take delivery of a warehouse receipt later. When large orders went into the paper market, it had a major impact on the price because the price was tied to a "good probability" that real gold may be called for. Paper
buying, back then scared shorts because the longs that brought for hedging and investment purposes, really did take delivery quite often.

Time has gone by and things have changed. I won't get into the political why and what for because that's Another story. The gold market evolved as needs and perceptions changed. Through out the late 80s and early 90s the "need" to use gold as a "security" hedge expanded tremendously. Far more players entered the market to secure a "gold hedge" than physical off take statistics indicated. The physical side of the market was becoming less and less important as
players became satisfied to hold the promise to supply gold from someone else, instead of the actual bullion. Mine supply and scrap was becoming more a product for the jewellery trade and bullion coins. The market then evolved further as large gains from booming world security markets
pressed portfolio hedgers to commit less money for gold hedges. Even though the demand for paper gold was exploding, derivatives were allowing investors to tie up the same exposure with less cash. If they could go a little further out on the limb, away from "deliver ability probability", they could still hold gold using less working money. After all, the world was doing fine as even the worst of problems seemed to be handled by the IMF team. The real need for physical gold was always in the "total currency default / inflation" arena and that seemed light years away. So, over time, the gold market matured into it's present state. Today, by far, most of the holdings of gold are
represented in derivative form. Little more than a bet with someone else about where the price of gold is going. You put up cash, someone else puts up cash and both of you watch the exchange price indicate how you will settle up later. Settle up in cash, that is! The "good probability" of someone wanting delivery was fading away.

What is the problem with all of this, you ask? It's the trading of real bullion that still must set the price of all of these outstanding derivative bets, yes? Well, not really.

The end work of this process has found the 3,000 or 5,000 ton per year real bullion market, is little more that a sea shell on a fifty mile beach. Everyone on the "gold net" already knows how much LBMA trades and that is small stuff compared to the other unseen world markets. The debth
and liquidity of the paper market moved the bullion trade into the "pink sheets". Needless to say, today, the famed "closing bullion price" is set by the cash commitments that bid for derivatives, not the cash that bids for bullion. In the old days, really big traders would arbitrage any such paper overhang against bullion by calling for delivery. Today, with the paper market so large, any such power play would find most traders taking delivery of gold as the market is sold out from under him. Besides, this new market perspective works against any long traders because none of the present "derivative gold demand" wants delivery! They only want to settle in cash, because taking delivery would require selling their other "better performing" investments. The mindset today is that gold is only an insurance hedge, as such "an increase in it's price will settle up in a cash delivery to me, to offset my other risk of cash impairment to my portfolio"! To further develop: "I don't need
physical gold, I only need to participate in it's price movements"!

In complete satisfaction of the current trend, derivatives fill the bill for this current gold market. Clearly, we can see that this new market is not "fraudulent". There is nothing wrong with players pouring margin money into the short side to create a demanded product! It's has evolved into a cash game. This is where GATA is fighting a war they cannot win. Gold bugs (of the last few years) were viewing the present market using 70s eyes. Indeed, they were investing in an industry that was losing primary demand for it's product, even as "the need" for that product was exploding. This new gold market found a way to channel the "modern need" for gold's attributes away from physical demand and into paper supply. You simply can't create a short covering run if none of the current (insurance) longs want to take delivery. Even worse, as this trend was further developed, more and more old private physical holders were selling their gold and holding paper instead. Add to that Western dollar supporters wanting their currency to look good, and we have paper gold supply that's also used as a form of positive currency intervention. Anyone investing in the gold industry, expecting bullion to explode from all the new demand was truly disappointed. For every new Western gold bug that wanted gold for insurance, there were five paper sellers to supply him with all the gold insurance he needed, at a fraction of the cash commitment.

Peter, (if you are still with me) this is only the end of this act, not the end of the play. We have been standing on the trail and looking at where we have just travelled. Now, let's turn around and look forward.

Everything we just discussed was what "Western Gold Bug Eyes" didn't see! Most have read my other posts and have seen how Another has cleared the path without pointing the way. My above is a broad overview without describing the full political involvement. Just as everything is in
constant movement and change, so too is the gold market. The recent evolution in the world currency scene has set in motion a new sea change of events. The same dollar/IMF world that created the seemingly endless wealth for American investors is now entering the end of it's historical
timeline. The tremendous debt that purchased our lifestyle, is slowly being revalued world-wide. Every tick against the dollar currency is translated into more sales by foreign holders of that debt. Soon, the par value of that debt will begin to fade as the negative trade deficit of the US works it's evil ways. At the same time, for the first time sense the dollar overruled the Pound, another currency has been created that is equal to the task. The dynamic of changing world reserve currencies is also going to change the dynamic of the gold market. Once again, the needs of investors will redirect the method of using gold. As the wealth effect of the Dollar/IMF system goes into reverse, the process of receiving your gold hedge insurance in dollars will be perceived as a risk. At this stage, all of the past demand for gold that was channelled into cash settled paper
derivatives will suddenly reverse it's trend. Slowly, more and more of a percentage of settlement will be asked for in real gold. As delivery fails from increased demand, existing derivatives will be dumped upon the market place in an attempt to cash out. This very process will: First dry up all gold supply and lock down any existing private stocks. Second, cash biding on the dealer market will become convoluted and reflect only gold's currency value. It's economic / industrial use will be priced totally out of the market. Third, what was once the world price making market for gold, will become useless for delivery as it's contracts are defaulted on and discounted in price. What price could the world gold price be set at, using these defaulted, bond like securities? How low does russian debt trade?

Peter, using your analogy about how the traders may be buying gold paper long, could be correct for this moment in time. But, as you can see, if the above plays out, they will be in the same boat holding nothing but a ticket for court. I bet, most of the smart ones are slowly looking for available gold, not more derivatives. I believe that in fits and starts, all paper gold (any comex paper outside of spot month) will be sold down. Driving the perceived physical price lower until no more can be delivered. Then, a general default will begin, destroying the entire gold industry as we know it.

As in conclusion to my earlier post, I hope to later describe the trouble this will visit upon the mining industry.
Thank you for considering this, FOA

PH in LA, some post! We will talk here later, across this USAGOLD forum river, that is.

Dave
(09/01/1999; 22:36:45 MDT - Msg ID: 12640)
To Goldspoon re: Msg ID:12571
http://www.oism.org/nwss/

I share some of your ideas about the coming crisis being a combination of religious, political, economical and military events. Suggest you read: http://www.oism.org/nwss/ Chapter 13

You should consider adding Potassium Iodide (KI) to your precious metal portfolio.

For those who survive the initial event of a nuclear incident (bomb explosion, reactor melt-down, contaminated environment), the next biggest threat to avoid is poisoning from radioactive Iodine.

Consider the following:

Several hundred reactors in the US, and probably 10 times that world wide.
Terrorist attacks on nuclear plants
Missing Soviet munitions.
China with their recent White House MERV technology gift.
Global jet stream.
Three-mile Island, Chernobyl, Bhopal, India
Embedded chips in complex plant systems.

In other words: "Murphy's Law: Any system that fails will do so in the worst possible way and at the most inopportune time."

Potassium Iodide is cheep, easy to get, follow Chapter 13 instructions. About $20 for 125 gm, 1,000 doses, non-prescription from any chemical supply company in the Yellow Pages.

Got KI?
Peter Asher
(09/01/1999; 22:56:08 MDT - Msg ID: 12641)
FOA #12639
Thank you for devoting so much writing time to your response. I understood all of it quite clearly. I realize that the operational words are "Cash settlement."

One question, regarding your <<< I believe that in fits and starts, all paper gold (any comex paper outside of spot month) will be sold down. Driving the perceived physical price lower until no more can be delivered. >>> That event would show up as "backwardation" which is regarded as an extremely bullish factor. Would that not trigger a definitive reversal, giving birth to a runaway upward movement in the spot market?

One thought I am still wondering about, was my conjecture that the apparent motives of Gold carry profits, politically driven debt bubble controls, Central Bank cash needs and collusion driven short sale profits, while all true, could be lesser activities behind a plan to corner most above ground gold and to acquire the ownership of many of the mines.

If it is known to the real 'Masters' that the currencies of the world will implode, then it would be axiomatic that they would want their wealth stored in Gold. So, the big question, that others here have also raised is: Just what physical gold is being bought and claimed, and by whom? I am not suggesting that you know the answer to this, but I would be interested to hear your speculations.

At your leisure, please, good friend! ---- Peter A.
Peter Asher
(09/01/1999; 23:03:55 MDT - Msg ID: 12642)
Dave, thank you for the data.
BTW there is a lesser known "O'Malley's Law" Which states, "Murphy is an optimist"!
Aristotle
(09/01/1999; 23:43:59 MDT - Msg ID: 12643)
Gold
GoldGold
Aristotle
(09/01/1999; 23:44:23 MDT - Msg ID: 12644)
Gold
GoldGold
Aristotle
(09/02/1999; 01:02:57 MDT - Msg ID: 12645)
FOA and your Msg 12639
http://www.usagold.com/cpmforum/archives/119999/default.htmlSimply outstanding piece of work!
I wish I could offer you some additional thoughts on that whole business because I know you take great interest in other's perspectives, but I can't say anything at the moment. On my first read-through, I find myself to be in total comprehension and agreement with the view you've presented. I'll go to sleep with a smile, and maybe the new day will bring up an extra thought or two.

Nice show!

On a technical note, is anyone else having problems bringing up the screen with all the posts? Only by making my previous "Gold" post was I able to see the day's messages.

Hey seeker, I really enjoyed your post, too. Keep 'em coming, and I'll keep reading!

Gold. GET YOU SOME! ---Aristotle
Goldspoon
(09/02/1999; 03:37:05 MDT - Msg ID: 12646)
DAVE, SEEKER, FOA, PETER
Thanks Dave, Great info i added it to my favorites list..
(ki) could become more valuable than gold when the nukes of Bin Laden are used. (i think this is first) Look for the FBI to make a pre-emptive raid on fringe group malitas and all hell will break loose in the midwest.

Seeker Great post!! it's errie how Nostro, the Bible, and the current situation are lining up.. its like watching a movie after having read the book....

FOA,PETER...enlightning..... thanks for the conversation, i could see the end result. You guys gave an explaination of the mechanism thanks.... Question: How will this play in fast foward if a REAL war breaks out??? will sheepols first reaction be to buy Dollars..take it from there please,,,Thanks....
Hipplebeck
(09/02/1999; 06:07:45 MDT - Msg ID: 12647)
question
Could someone enlighten me?
I am trying to figure out what this gold leasing thing is all about.
When someone leases gold from a central bank, do they take possession of it or is it all just on paper?
What are their rights that come with the lease?
Can they lease gold and then sell it?
When you lease gold, you don't own it do you? What do you do with leased gold? What happens when the lease is up?
I would appreciate any help on this subject
Thank you
Michael Hipple
Leigh
(09/02/1999; 06:14:28 MDT - Msg ID: 12648)
Hillary Clinton, FOA
Hi, everyone! Just been looking over the Kitco offerings from last night and this morning.

Has everyone seen this:

Le Metropole members and internet,

A highly sophisticated source has informed me that he understands that a blind trust set up for Hillary Clinton, shorted gold financial instruments just before the Bank of England gold sale announcement on May 7, 1999.

If true, it is an outrage and is further anecdotal evidence of the conspiratorial nature of the Bank of England gold sales and of the high level nature of the manipulation of the gold market. Nobody could be so lucky as to have made $100,000 on a $1,000 investment in cattle futures and then have someone else just happen to SHORT gold for them immediately prior to that extraordinary gold sale announcement.

The trading activity in a blind trust of a major public figure such as Hillary Clinton must be a matter of public record. It would be of help to the Gold Anti-Trust Action Committee if someone on the internet could help me access these records.

A matter of such sensitivity ought to warrant a statement by the Trustees and its auditors.

All the best,

Bill Murphy
Chairman, Gold Anti-Trust Action Committee


FOA, this was written about you:
Date: Thu Sep 02 1999 01:18
surfer (FOA) ID#289292
Usually there is a secret message that will make you rich if you can decipher it though.
Phos
(09/02/1999; 06:24:00 MDT - Msg ID: 12649)
Michael - your 12647
There are others here far more competent than I to answer your question but I will throw in my 2 cents worth. Gold is leased by CBs and private hands. I think that leased gold may come from the CBs vaults or vaults in the UK or US where some CBs and others store their gold. I also think that not all the gold is physically delivered but, certainly, a lot of it is. Those leasing the gold sell it, otherwise they would realize no benefit from the lease. They use the proceeds to invest in other instruments such as bonds, etc. In all cases, the gold has gone, i.e. been sold, even though the CB, in theory, still owns it. Those leasing expect to be able to buy some back later should the owner demand repayment of the gold. I would love to know how much has been leased this way. I have seen figures of from 10,000 to 14,000 tonnes or more. I suspect a fair bit of it has physically gone into jewellery, etc. and left the vaults forever.

I would be interested in knowing more about this subject too but I think it is mostly hidden and we are unlikely to here much.
TownCrier
(09/02/1999; 07:39:26 MDT - Msg ID: 12652)
US investors pan Ecuador debt trial balloons
http://biz.yahoo.com/rf/990902/lw.htmlCalling the tune and paying the piper: Life with bad money.
TownCrier
(09/02/1999; 07:53:04 MDT - Msg ID: 12653)
ECB's Padoa-Schioppa sees no move to variable refis
http://biz.yahoo.com/rf/990902/5.htmlLearn a little more about euro mechanics here.
Volume of bank bids on ECB's weekly allotment of funds is so high only five percent are filled each week.
TownCrier
(09/02/1999; 07:58:00 MDT - Msg ID: 12654)
Millton Friedman warns U.S. stock prices may be in bubble
http://biz.yahoo.com/rf/990902/b4.htmlIf truly a bubble, Mr. Friedman says there will be a "deep collapse of the stock market" and that it poses a grave danger to the U.S. economy.

The horses are on the track...
TownCrier
(09/02/1999; 08:03:00 MDT - Msg ID: 12655)
Euro M3 growth gained to an annualized rate of 5.6% in July
http://biz.yahoo.com/rf/990902/0.htmlEuropean Central Bank Directorate Member Tommaso Padoa-Schioppa comments on ECB interest rates and credit supply.
phaedrus
(09/02/1999; 08:15:25 MDT - Msg ID: 12656)
on the ropes
As of this writing, S&P futures less than five points away from being locked limit down. Apparently a recent comment by a Fed Governor was not well received.

Stock bulls on the ropes, baby...
TownCrier
(09/02/1999; 08:19:32 MDT - Msg ID: 12657)
Fed adds reserves to the banking system
http://biz.yahoo.com/rf/990902/n4.html"Liquidity might be a problem tomorrow," was the comment of one interviewed economist.
-------------------
Subsequent article: Fed says overnight system RPs totaled $4.985 bln

http://biz.yahoo.com/rf/990902/rh.html
USAGOLD
(09/02/1999; 08:38:25 MDT - Msg ID: 12658)
Today's Market Report: Much Ado About Something
MARKET REPORT (9/2/99): Gold was sideways this morning amidst a maelstrom of
bad news for the equities markets and the dollar. One would have thought that the yellow
would be trading higher with the Dow down 150 in the early going; the long bond market
down almost a half the dollar taking sound thrashing on international currency markets. But
this is the era of the paper tail wagging the physical dog and gold investors are offered as a
result the opportunity of picking up history's best known hedge against financial disaster at
bargain basement prices.

In Asia -- where the effects of the various failures that have come to be known as the Asian
contagion wiped out millions -- a whole new generation of gold investors, burned
previously by their lack of diversification, won't be caught a second time around. In the
United States -- where investors with bloated equities portfolios -- investors are finding that
hedging with gold provides a certain amount of comfort when "bubble" seems to be the
word of the day and the Fed chairman warns that he's searching around the kitchen drawer
for that big pin he's warned about using so many times in the past.

If the general atmosphere for equities was not bad enough, the markets braced for a plethora
of reports today (including jobless claims, factory orders and money supply) most of which
are sure to reveal an economy trending towards boiling point. This could be a day when we
see statistical fuel thrown on the interest rate hike fire. Beyond these domestic concerns the
market also needs to worry about trouble brewing in Latin America where Ecuador has
already defaulted on its Brady bond interest obligation and in Europe where the growing
sentiment is that Europe won't respond to Fed interest rate increases with increases of their
-- a prospect likely to be seen as the key reason for the dollar's fall this morning.

That's it for today, fellow goldmeisters. We will update if something major happens.

The October edition of News & Views is a major you-don't-want-to-miss-it, highly
informative, and slightly irreverent blockbuster. We revisit our Five Horsemen of the
New Apocalypse -- the euro challenge, Y2K, the Asian contagion, the bubble stock
market and rising oil -- none of which have taken the summer off. We also preview the
Ten Reasons Why Main Street Worldwide Is Returning to Gold and Short &
Sweet (as is our custom) rambles with a hint of cynicism through a litany of world
political and economic events. You won't want to miss our look at the world of gold to kick
off the Fall investment season. The Season of the Yellow Metal? Just might be so...........

Please call 800-869-5115 (Ask for Mary Conway) if you have an interest in receiving
a trial subscription to our widely read newsletter, News & Views: Forecasts,
Commentary and Analysis on the Economy and Precious Metals. Or you can
go to our ORDER FORM and submit your request by E-Mail. You will also receive our
introductory packet on investing in gold.
Clint H
(09/02/1999; 08:49:11 MDT - Msg ID: 12659)
What was said a year ago by ANOTHER and FOA.
I thought some might like to reread what was said over one year ago. Is it close? I copied these to my personal files and did not save the post #. I could not look it up because the archives only go back to Sept22, 98. Sorry. Enjoy.

8/10/98 Friend of ANOTHER

(Editor's Note: Please read what's below carefully. This is an extraordinary analysis from the Friend of ANOTHER at a time of much confusion and uncertaintly in investment/currency markets. We are told at the outset that the largest pro-gold groups -- the Europeans and the
Gulf states -- want a world currency "not subject to the performance of the American economy." In other words, a currency not tied to American treasury obligations, or the percpicacity of any other nation for that matter. That currency for those of us who have reached for the deeper
truths of economy is called gold. As an American, I must say that I have never seen the concept of American hegemony explained in quite the same way before. Perhaps, my eyes were closed. I keep getting this feeling that Americans must necessarily begin to understand a new role for this
country in a rapidly changing international political and economic environment -- a role for which our political and economic institutions appear ill-prepared. I will not be so presumptuous as to explain what the Friend of ANOTHER is saying, I will let you read for yourself. I do not think it could be said any better than Friend of ANOTHER says it.
The fact that his analysis implies how one should design one's portfolio is a happy side benefit.)

Michael Kosares,

It has taken some time to send this, but now I can also offer my thoughts to your questions.

Your statement: "As a matter of long term policy, do you believe that ECB will "sell" gold to defend the Euro or "buy" gold to defend the Euro? Each of course would entail a different course of action with respect to reserves of the new national bank. Along these lines,will ECB buy gold from its member treasuries, or will it simply force them to
transfer it to ECB coffers if needed to defend the Euro? I am prompted to ask this question in view of your assertion that there will be much selling of Euros to defend the dollar. If the Euro, as you suggested, is being printed to buy dollars isn't this just another manifestation of the U.S. exporting its inflation? It appears to me that the Euro will need to be defended -- and not with dollars -- but with gold! "

Michael, I believe the most difficult part in understanding the modern gold market is overcome by seeing all the various political factions involved. Essentially and basically, the largest pro gold groups are those who want a world currency that is not subject to the performance of the American economy. At this moment and in this period of economic
history, all currency reserves held by foreigners (non-Americans) is a debt of the US Government and by extenuation through tax collection, a debt based on the ability of the American economy to function profitability!

In essence, America has told the world that as long as the business of this country is functioning, your wealth, as represented in Marks, Yen, Pesos, etc. is backed with performing US debt. It's like saying, "as long as your neighbor, next door, does not loses his job, you will not
lose all your money! Most people would be surprised at how clear this is, outside the USA sphere of influence. This, the largest of the pro gold group, is largely made up of countries with economies that have no need to sell most of their production to the US. The business of these
communities would not totally fail without the American engine. Yes, they would slow down, but not collapse, as trade with other countries would continue. To add what was said before: If your neighbor loses his job, you can still trade with the other people in the town, as long as
the currency system is not based on your neighbors debts!

This group, made up of much of Europe and the Middle East, is not looking for a return to the old Gold Standard, but perhaps something far better. They do not see any advantage in holding the currency bonds of one country, as a reserve asset of future payment, over holding physical gold as a reserve asset in full payment. The fact that the debt reserve asset pays interest is little more than a joke in these banking circles.
Any paper currency, the dollar included, can fall in exchange value against your local currency far more than the interest received! In today's paper markets, the only true value in exchange reserves, held by a government as currency backing, is found in it's effectiveness for defending the local currency from falling against other currencies. In
other words, use the reserves to buy your countries money. But, this is a self defeating action as sooner or later the reserves are used up!
This fact is not lost on many, many countries around the world, as they watch their currencies plunge, lacking reserves as defense. Ask them how important the factor of earning interest on reserves is under these conditions.

On the other hand, buying gold on the open market, using your local currency, works as a far different dynamic from selling foreign bond\reserves. This action takes physical gold off the market, and in doing so increases it's value in dollar terms. Gold is and always has been the chief competitor with the dollar for exchange reserve status.
The advantage here comes from the fact that governments do not run out of local currencies to use in buying gold, as opposed to selling foreign currency reserves to buy the local currency on the open market. Of course, the local price of gold goes sky high, however, in this action
you are seen as taking in reserves, not selling them off.

Also, as gold begins to rise against the dollar, the local gold reserves are seen as assets of increasing value, backing the local currency. Under these conditions, with a stable currency, citizens will purchase more gold as it is seen as a positive asset. Not unlike a rising stock,
everyone wants an increasing investment. Contrast this action against that in Korea, where everyone sold gold as it increased in an unstable currency!

Basically, this is the direction the Euro group is taking us. This concept was born with little regard for the economic health of Europe.
In the future, any countries money or economy can totally fail and the world currency operation will continue. What is being built is a new currency system, built on a world market price for gold. Michael, you are absolutely correct in that the USA will see a hyper inflation of it's currency and a gold price in dollars that reflects it.
Unfortunately, for most investors, the gold price rise will be sudden and also hyper fast. as it will occur just after a rapid plunge in dollar based assets including, stocks, debt and the entire banking system. This action will destroy virtually all gold based paper assets as they are also dependent on a functioning economic system. A local
gold mine, in any country, must sell production to realize a profit. The contract system they deal with will not be functioning during this time.
Contrary to many hopeful investor, local treasury officials will not allow miners to pay employees or buy equipment with physical gold. When the dust does clear for mining to continue, gold will be recognized worldwide as real money, and the mining of money will, no doubt, carry Extreme taxation. Stock prices of these operations, after being priced to zero, will then double or triple in price. Zero times three equals?

Back to your original question. The Euro will not replace gold, it will evolve into a gold transactional currency. It will also price Euro gold very high, perhaps $6,000 in current dollar terms buying power. However, in actual dollar terms of the future, $30,000 US will reflect the American debt as the negative reserve asset it truly is. The ECB will
have an easy time issuing Euros to buy gold from the member banks. The real political warfare will be in trying to force them to sell the gold at all, once this ball starts rolling. The Euro has, in effect already been dispersed in the form of Gold Leases not gold sales. One has only to look at the official gold holdings of most central banks to see that
physical gold sales are little more than the average, with a good amount of that coming from nonEuro countries. Gold is a funny thing, it can be sold many times and pass through many countries and still remain in a CB vault. Truth Be told, some 14,000 metric/ton have been sold this way.
Far more than the street thinks. Using this amount it's easy to see how certain entities have moved off the dollar standard in the last few years. If we use a future price of $6,000+US, the move is about complete.

The process: An oil country (or others) goes to London and purchases one tonn of gold from a Bullion Bank. The BB borrowed this gold from the CB (leased). The one tonn gold certificate is transferred to the new owner.
The gold stays in the CB vault and the owner goes home. The CB leased this gold to the BB and expects it to be returned plus interest. The BB financed the Actual Purchase of this gold mortgaging assets of the buyer. The BB, who created the loan, then uses the cash arranged in this venture to contract with a mining company (or anyone wanting a
gold/cross financing deal) to purchase production gold, using this cash to pay for it. In the eyes of the mining company, the BB just sold gold on the open market, for cash, and will purchase future production at the contracted price. The mine does not know where the gold came from, only
that it was sold and a fixed cash price is waiting. Of course, most of this made more sense when gold was higher. There were thousands of these deals, structured in every possible fashion. Look to the volume on LBMA and you see where the future reserve currency is traded today!

Now when we look at this picture, who is at risk here? The Euro CB Group still holds the physical gold and will buy it back from the new owners, if asked, using printed Euros. The new gold owner has just replaced his dollar reserves with either bargain priced gold, or Euros at an exchange rate never to be seen again! Some of this was done to buy the pricing of oil in Euros. The BB owe the CBs 14,000 tons of gold that they must collect inthe future from producers or currency speculators. And they must collect it by paying what will be a, then, ridiculous price of $300/$400US, while the world market price will be, well, a little higher.

With Canada, Australia, and perhaps England having sold much gold to hold US$, much of the English speaking, IMF/dollar world is about to change. Any country, Japan, Mexico, etc., that has locked their future by selling most of their production to the American economy , is headed for a depression. Another is answering some of your mail questions and is also sending a letter. Will send it on arrival.

Thanks Michael,

FOA


8/19/98 ANOTHER (THOUGHTS!)

Supply And Demand for Gold; Does this change the value of this "Metal Currency"?

I ask, why do many look to the "commodity" supply and demand of this element for direction of price? The use of gold for jewelry and other fabricated forms is but a small amount of the buying and the selling. The mines do produce perhaps 2,500 tonnes a year, and "fabrication demand" does use perhaps 3,000 tonnes. Yet, all look closely to see if the usage does change and move the price up or down. However, the "fabrication demand" has been much greater of the mine supply for many years and the dollar price still falls!

Truly, the selling of 3,000+ tonnes of gold, for the making of things, does not influence the dollar price of an item of that trades 13,000 tonnes a year at LBMA alone! And the gold does trade much greater amounts in the small places of which you have little knowledge. Perhaps this "metal currency" is used for "the money transactions" as 20,000+ tonnes per year? The Central Banks still hold a billion ounces of gold:

Does your broker of "leverage gold" tell you these banks watch the "jewelry production" for the intent to value gold reserves in vault? Do the other holders of perhaps, two billion ounces of gold, held worldwide, also look for "fabrication demand" to raise the price? Do the billions and billions of currency/gold/swap transactions all see value only if "jewelry" is selling well?

My friends, events will change your thoughts. Often you are sold gold that is called "deliverable", yet the broker does lend you much percentage cash to buy. Perhaps this transaction is "deliverable after full payment" and as such the broker doer deliver "little real gold", yes? Much of the western world does "attach" to gold in this form. This metal is sold with the "modern concept" of "gold is the commodity for fabrication" and "is dead as money" in "this new era". This "concept" say that only "leverage" and "trading" does add to your estate. In this fashion, many have lost the long term benefits this "world class money" will soon bring. These persons wait for the event that does not come. In the future, many "salesmen of leverage" will tell stories of the fact that could not be. "The demand for gold "the element" will vanish, as the dollar price for "gold the money" does soar". What chart will be used to view this new high gold price, that will remain, for many years, "unaffordable" as a commodity, yet all bid for daily as the right to buy "money"? In this future time noone will deliver a leveraged commodity that has become, "leveraged money", no? The physical gold, it will trade by the dealer that has seen the Euro as the gold and oil settlement currency of worldwide use. Many will learn the price of gold in Euros,
as even the American Eagle will be quoted as such!

Canada does continue to sell, however they lust not for the Euro! Perhaps the American dollar will change this thinking! Poland, the BIS did deliver them more gold for the future of their children. We watch, as the BIS does continue to buy gold under $360, for it's account, as they fill Central Banks with a new world currency reserve. Countries that now begin to think in Euro terms, find the dollar gold as "the good exchange rate" for joining the Euro Group in future! From spring of this year, this demand, makes gold be above $280? The ECB says, "this gold has been sold in dollar terms but has yet to replace the dollar reserves."

I think, now it comes time to sell the dollar. As the Belgian gold was purchased to replace dollars, it did announced the end of EMCB leases. Now the BIS transactions do create a gold market that is "not as before"!

We watch this new gold market together, yes?

Thank You

Another
FOA
(09/02/1999; 09:31:55 MDT - Msg ID: 12660)
Comment
PH in LA (09/01/99; 12:45:07MDT - Msg ID:12583)
Normal view from "this side of the river"
"I think the markets are starting the long awaited "final convulsion"!" FOA (9/1/99; 6:11:11MDT - Msg ID:12547)
These last months have been difficult for those who watch from this side of the river the slow-motion playing out of macro forces that seem so much clearer from over there on your side. It all appears so much more dramatic and dynamic from over there. From here, in a desperate attempt at perspective, I sometimes wonder how dramatic it all really is.

Hello PH,
The drama in any play is only as real as it's impact upon your perception. In real life, and in a similar view, economic events are only an "observation" unless they manifest themselves into a forced change of your life style.

For most people, the wealth they carry is the determining factor in how much they are "free to chose" their living conditions. Further, your freedom to move about in a social standard is governed by how others that network (trade) with you and the world in general value the form of wealth you choose to hold.

Your post is so very "on point", in that it defines how the last twenty years (+/-) have not seen the American Dream altered with some "Historical Event". Even though all the items you described were predicted to cause major problems, none of them destroyed the system. Lives were impacted somewhat and plans redirected, but, all in all our social order continued with the perception is that our wealth has grown a great deal. Yet, there in lies the residue that "1971 was a cataclysmic Historical event"! It did not affect our life style, so much, but it did change our "perception of how we value wealth ". The use and acceptance of a world reserve fiat currency has altered the concept of how much wealth we really own. Many Westerners and Americans feel rich and act out that perception by living life in an "unaltered way". It has worked this long because all of us and the rest of the world "carry our note" in the form of US debt denominated in dollars. As long as we "put on a convincing act" the play continues because others think we are "good for payment"!

In a sense, America is like a stock that has been traded up to par, say $100 a share. Yet, all of the companies capitol was borrowed from creditor banks and spent on a lavish lifestyle. The perception is that: "this stock called America, it's going higher as long as everyone keeps trading it". Yet, if the bankers call the loans, this dollar concept (the above stock) will prove to truly hold nothing more than "the American Dream"!

Here is where we have walked in the misconception that "everything is normal" and "nothing has changed, that much". The truth is that none of these past problems have washed onto our shores because our debt has purchased these years of a "normal lifestyle". Prior to the event of 1971, a
nations "lifestyle" was brought on a cash basis, using a neutral or positive trade balance. Today, practically all of our wealth and economic strength is an illusion hidden in the dollars debts. Without a competitor, the dollar was accepted without recourse. 1971 was a highjack on a world
wide basis. In like form, when a person is robbed of all of their reserves, human logic dictates that they will go to work for the thief (that now has the money) in a effort to stay alive. Needless to say, this working arrangement will change as soon as the victim has saved some money again.

The arrival of the Euro will precipitate our first "historic event" that does wash onto our shores. It will arrive as a failed dollar gold market, rising US interest rates, a falling stock market, spiking oil prices and inflation on a major scale.

Holdings of US debt, world-wide, are now reversing and that trend will only escalate. One has but to review the recent thoughts of "contraryinvestor.com,,,,,,,,,,The Dollar and the "New Era": Are the Rules Changing?

-------The linkage hinges directly on the stock market. Lower dollar equals lower demand equals potentially lower asset prices. If the declining dollar ultimately causes a lower stock market, consumption declines and lower U.S. economic growth results. A lower market and economy would depress tax inflows possibly causing the government to get into the "crowding out" borrowing act again. A lower dollar also creates the unintended consequence of importing
inflation. Another interest rate no-no. Do all of these linkages work perfectly and in a linear manner? Of course not, but one can see that the virtuous circle of dollar upside can quickly turn into a dollar whirlpool to the downside with reinforcing mechanisms that cut in a negative direction. A true and sustained change in the dollar and inflows of global capital to the U.S. would seriously
challenge the "new era" thesis. We're not completely there yet. Like any market, the conclusion for the topping process of the dollar is anyone's guess. We'll gamble that the process is at least officially underway.-----------

Also read: Mr.Richebacher

-----The dismal science will never be the same if Dr. Kurt Richebacher's dire predictions for the global economy should come to pass.

The former chief economist and managing partner at Germany's Dresdner Bank says a deflationary collapse lies ahead that will ravage the world's bourses and usher in a dark period of austerity and financial discipline.

Probably not one economist in fifty shares his views, at least not publicly. Richebacher, now living in France, says many of his American colleagues have been seduced into ignorance and complicity by Wall Street's billions as well as by their love affair with mathematical models that shun fundamental laws of economics. --------------

------* Derivatives can insure individual market participants against risk, but not system as a whole. Ultimately they have spurred higher risk-taking through leverage, exposing the global financial system to the prospect of devastating failure.

Richebacher, who counts former Fed chairman Paul Volcker among his close friends, says U.S. economists of the 1960s would more readily have recognized these problems and acted stridently to counteract them.

Public discussion was still influenced back then by staid economists who represented the banks and who knew their theory. The current crop, however, is "really a part of Wall Street's sales force to sell shares."

In contrast with European economists, their theoretical thinking is "not too deep," and in recent years has been completely eclipsed by mathematical models that fail miserably in reckoning with the crucial variable of human behavior.

The current level of thinking is "unbelievable," he says. "How can you simply overlook a negative savings rate and mountainous trade deficit" in saying the economy is healthy and robust?

"There is almost no one left in America to pose critical questions about economic fundamentals," he laments. "The only miracle about the American economy is the consumer's amazing propensity to borrow" -- a fact which Richebacher says has delayed a day of reckoning. -------------

And finally see: The Magic of Credit & Financial Engineering by David W. Tice

------ This, like most derivatives that have come to so dominate our financial system, works well during bull markets. We, however, see these derivatives much a ticking time bomb. One of these days, we will have a bear market and First Security Capital and other writers of derivative
insurance protection will be forced to sell securities to hedge their exposure. And if enough buyers do not come forward willing to part with their cash in the midst of a sinking market to take the other side of these trades, markets will suffer a liquidity crisis. And we, unfortunately, see no way around such an occurrence as our over-zealous financial system has created truly unfathomable
"perceived wealth" throughout our economy that is supported mainly by overvalued securities and unprecedented credit excesses.----------------

PH, your last item: ------ Maybe that's what the "final convulsion" will be. Just another "normal" convulsion. Over here! From this side of the river!--------

Take your vitamins, sleep well and get plenty of exercise. With a little luck we will live long enough to watch this drama to it's final conclusion.
Thank You FOA


TownCrier
(09/02/1999; 09:38:56 MDT - Msg ID: 12661)
9/9/99: Bracing for little-known `Nine Problems'
http://cnnfntech.newsreal.com/story/19990901/07/58/5640254_st.htmlSept. 9th a "dry run" for Y2K? Just one week away.
TownCrier
(09/02/1999; 09:55:49 MDT - Msg ID: 12662)
Sept. 9 Will Test Y2K Contingency
http://dailynews.yahoo.com/h/ap/19990901/tc/early_y2k_1.htmlThe approach of a minor hurdle for some digital systems...
TownCrier
(09/02/1999; 10:14:40 MDT - Msg ID: 12663)
Rates Rise With Y2K Awareness: Companies, Countries Scrambling for Emergency Cash
http://www.washingtonpost.com/wp-srv/WPlate/1999-09/02/243l-090299-idx.htmlI highly recommend this article from the Washington Post. Take a cue from the big boys.
The Invisible Hand
(09/02/1999; 10:23:30 MDT - Msg ID: 12664)
London Gold Fix

Before I heard about the gold shorts, I read somewhere that the twice daily London gold fixing was done by an exclusive clique of gentlemen meeting (around a cup of tea ... to which Another would add that they would meet on a fence).

Are they then meeting only to fix the price of (derivative) paper gold?

Gold will never cease to be money (I don't know whether paper gold will ever be money), but can it be said that bad gold (paper gold) drives out good gold (gold)?

If so, what happens to the law of supply and demand in determining gold(which in my hypothesis is not money)'s price?

This Forum seems to be arguing that the price of bad gold determines the price of all gold. I don't understand the mechanism. Can anybody explain? The IVH.

Crossroads
(09/02/1999; 10:25:11 MDT - Msg ID: 12665)
FOA
There are a number of comments that have been posted here since I posted the following repost back in May, which refer to perception. I just want you to know that your insights have been some of the most helpful to me of any posted here. I value your opinion as much as anyone here and I hope that the run-in you had a few weeks back won't cause you to continue to perceive that everyone here is hostile to your opinion, I also hope you don't feel the need to continue prefacing everything you say. One who posts with integrity should not have to qualify himself on �going. I noticed in your post yesterday that you had concern for being perceived the way you mean to be and I couldn't help but think of my take on perception way back in May, when two individuals were having this same problem. Please don't think that I'm singling you out by posting this in conjunction with your post, on the contrary it's an opportunity for us all to look at how we react. There is always interpretation and no doubt the motive behind this post will suffer its share of scrutiny as well. But I'm counting on the integrity you've consistently demonstrated all the way back to this forums earliest days.

I'm sure that we have all been in a situation where we became zealous about an idea or product, or in Mellow 88's case another individual. His enthusiasm for his mentors opinions were based on his emotional reaction to the one who first enlightened him to the topics we read here. Whether TZ has insight or not, Mellow was defensive and handled his enthusiasm without maturity. On the other hand you had your own enthusiasm for Another.

Through the years I have been a zealot for my many causes and it has made me appreciative of the nature of the ones who are highly respected here at this forum. I'm guessing that your reaction to Mellow 88 was one of frustration with his immaturity. I have to laugh, because not too long ago that could have been this ex-zealot.


Regarding FOA Msg ID:12639 Thanks for not only reading my post, but for understanding some of it. It's interesting how well we comprehend our own thinking, yet never really know if anyone else is following the same trend.



Previous post (05/25/99; 14:19:38MDT - Msg ID:6727)Perception Is Everything"
I deal with numerous people throughout the course of each day, as I'm sure many of you do also. For the most part the situations that I get in on are either technical in nature regarding a product we've sold or a disgruntled customer or even a discouraged employee. I have become a student of "excellence" in customer service. When I am faced with situations that involve a persons feelings it is imperative that I take those feelings into consideration. It seems that it has become typical for the human race to react out of emotional responses and it makes me wonder. Have we gone to an extreme or am I overreacting?

I think about the pace that information travels and how available it has become, also, how many times I have found myself in the way of those who are now called "rage drivers" and I see how fast we track getting from place to place. I watch people drive by me on the way to work and it seems they have hollow empty stares in their eyes as they move on to tailgate the next available driver. I feel like a bug as I look in the rear view mirror about to be squashed by one who is obviously in a much greater hurry than I am. I notice that people are quick to rationalize or justify what is said, and we suddenly accuse others of that which we thought he or she did to wrong or shame each of us. We seldom give a thought to the fact that each one of us is a contributor to the outcome of everything that we're involved in. We have become obsessed with our immediate surroundings and the area that we are occupying at this very moment.

I wonder, does the more information we have at our disposal, cause us to begin a process of inward focus, concentrating more on ourselves hoping to bring some order to something that seems so vast and chaotic. The bigger "it" gets the more inward we think. Almost like self-preservation if you will. Could it be that the results of this sort of action causes us to react emotional, irrational and less mature, almost to the point of barbaric? Think about it. How confusing has it all become? How can we keep it all together? The here and now, the future, now get out there and get rich, only to be blinded by the lust patterns so that we can no longer see the effect we might have on other individuals.

It seems the more we try to bring around the perfect environment, the more chaotic things get. The thought process of those that seem to believe that we can obtain higher level thinking as they have on the make believe world of Star Trek, obviously lacks understanding of the individualism that still exists in this world, as evidenced here.

We have millions of external inputs stimulating our thought processes today. Is it any wonder that we have serious misfires and mental overloads that are taking place all around? These massive amounts of inputs may be the result of technology and progress or it may be that there is an attack on the system we've all become accustomed to and grown so comfortable with, but for whatever reason, it's a phenomenon that appears to have gripped the whole world.

I have come to the conclusion that, in general, we as a people of this world, not just the US, have become the products of shock treatment and it has caused us to be emotional reactionaries as opposed to logical thinkers. Obviously some are not affected at all and some are less affected than others, but there are many out there who are affected to the extreme. I call it hyper-sensitivity. The mettle that keeps our integrity intact has eroded and given way to hysteria, as Aragorn III cautioned earlier at this site, to not become too paranoid. These are not his exact words but that was my take on the subject. However, I can see, at least from my perspective, how easy it is to lose site of anything to hope in when so much confusion abounds. Consequently that seems to be the very reason we are all here, at least when we talk about the hope in the economic world, gold does offer a stand in one area of so many great odds.

Which brings me to the whole jest of this long-winded dissertation. I tell my employees that "Perception is everything!" As you have read this story, you have formed a perception of me. Likewise I have a perception of what I've written, as do you. Then there is my perception of how you will perceive what I've said�confused yet? Precisely the point! We not only need to have a grasp of the language being used along with all of its slang, but we have to have an even greater understanding of the logic that the writer is implying. Along with every written text goes some application of logic. If the writer incorporates it but the reader doesn't process it and he reacts because it felt like a personal attack, well, I think we can all assume what will happen next.

As I do with my own family, I do here, demonstrate objectivity by separating the comments made by the individual saying them, from what may or may not be their emotional reaction and then display integrity by not reacting with hyper-sensitivity. This forum has grown from diverse personalities and social environments. Some of us know a lot about gold and economies while others absorb their thinking, however, others know about other things and we process the two worlds of information and hopefully everyone can come away wiser for the sharing of this information. As it continues to grow ever wider, I encourage everyone, including myself, to spend more time processing than we do reacting. Have a perspective that offers objective thinking as opposed to subjectivity. It seems that there is a lot of quick jot type communication that goes on here and that often times leaves gaps in what is actually meant. So a greater amount of thought is required when interpreting or more description of what is meant must be written. Especially when communicating in the arena that involves the personal side of issues.

I will preface this�neither person nor article written at this post is under scrutiny or personal attack in this document. As so many of you bring expertise to this site with the knowledge you have of the world currencies and economies, I just wanted to emphasize what it is that keeps a good discussion going�.Objectivity!

Objectivity�..we all need it.
TownCrier
(09/02/1999; 10:30:28 MDT - Msg ID: 12666)
U.S. Workers' Productivity Slows
http://biz.yahoo.com/apf/990902/economy_4.htmlYou may recall that it has been the expectation and realization of increasing worker-productivity that Fed Chairman Greenspan has said allows for economic boomtime without price inflation. Say goodbye to good times.
TownCrier
(09/02/1999; 10:42:35 MDT - Msg ID: 12667)
Answers for The Invisible Hand
http://www.usagold.com/HathawayPyramid.htmlYou will be a master of your universe if you read the link above which is the latest addition to the USAGOLD GILDED OPINION. I also recommend you read Sir FOA's post yesterday evening (the one directed to Sir Peter Asher.)

If those still don't completely answer your questions, try also reading the Hall of Fame page posts of Sirs Ari and A-III. To get there, click the link atop this Forum page.

I think this small collection of posts could be packaged and marketed as "The Economic World of Gold in a Can."

Enjoy your homework. You'll be the king of your neighborhood in the end.
TownCrier
(09/02/1999; 10:45:33 MDT - Msg ID: 12668)
More economic data for the day: August Retail Sales Near Forecasts
http://biz.yahoo.com/apf/990902/retail_sal_3.htmlThe U.S. year-long shopping spree continues as expected.
TownCrier
(09/02/1999; 10:55:03 MDT - Msg ID: 12669)
Euro zooms to three-week highs versus dollar
http://biz.yahoo.com/rf/990902/tg.htmlRemember what I said in the earlier US Worker's Productivity report?
Here's a direct consequence--a rising euro:
"According to this data you and I are costing more money to do less work -- (Federal Reserve Chairman Alan) Greenspan's worst nightmare." This was said by a currency strategist in regard to further fears that the Fed would be inspired to move rates higher.
TownCrier
(09/02/1999; 10:59:37 MDT - Msg ID: 12670)
Tea leaves
http://biz.yahoo.com/rf/990902/wl.htmlRead this to see why "IMM currency futures mostly higher early" as the headline so claims.
Tomcat
(09/02/1999; 11:22:58 MDT - Msg ID: 12671)
Peter Asher, FOA

Peter, in you post #12641 you inquired about the paper price of gold going below the spot price. This of course would cause backwardation which is defined by the forward price of gold being lower than the spot price. I think the problem with using backwardation as a signal is that the spot POG is determined from paper gold transactions (thanks for this reminder, FOA). As FOA has also pointed out, the very people who set the spot prices are closely connected to the shorters or are short paper gold themselves and that they are not inclined to "hang themselves" with a paper rope that they fabricate in their own paper factories.

So, how is this going to unfold and how will we know it is happening? What will be good signals.

Often, we have heard it said that the high lease rate is the thing to watch. I would modify that slightly by saying watch for a PROLONGED high lease rate that is going to make the short rollovers painful or impossible. If lease rates stay high for six to eight weeks then that won't be long enough. they won't catch enough of the short rollovers. But after three months, or longer, many rollovers will be affected by high lease rates.

Also, if the lease rates stay high and you see a steady rise in the POG or a rapid and large spike in the POG then I would imagine that such a combination would be very painful one-two punch shorters to the shorter under-belly.

Probably, someone more astute that I could also comment on watching the forward rates and LIBOR. Certain combinations of these two numbers with the lease rate might be more painful to the shorters. Unfortunately these combinations are out of my narrow region of familiarity.

When the stock market fell in 87, it is my understanding that gold stocks fell with the market and only later rose. Apparently funds, that held gold stocks as a hedge, sold them early to increase their liquidity as the market dropped. A flight to gold quality occurred later. If this repeats in the coming market correction then we could see the paper POG drop early on and this could help the shorters cover provided they can find the physical they need or do some fancy cash settlements.

My take on this is that if you are long on physical, like I am, you have to be prepared for the emotional battering you might take when the price of paper gold plummets. I say I can handle it and I talk big now but I don't look forward to it. I am in this for the long haul so I will grin and bear it but that does not mean it will be easy.

I am grateful to FOA, Aristotle, Aragorn, SteveH, The Stranger, and so many others who are in a perpetual quest for understanding rather then making a quit profit.
The Stranger
(09/02/1999; 11:34:38 MDT - Msg ID: 12672)
Productivity and Wages
Today's report pretty much ices the cake as far as inflation is concerned. For months, the disinflationists argued that productivity growth would continue to offset wage growth. Now, they have proven to be just as wrong as I have said they would be. Second quarter productivity up .6%, wages up 4.5%.

So far, the frustration for gold investors has been that the media may have turned away from deflation stories, but they now talk about the threat of higher rates while seldom mentioning the reason for the higher rates - INFLATION. This will change VERY soon now, thank goodness. After all, telling Joe Blow we are headed for higher rates without explaining why is hardly conducive to precious metals demand.

As to the U.S. economy, don't make the oft-repeated mistake of expecting a meltdown here. Further increases in commodity prices and better relative performance by cyclical stocks is telling you that things are picking up, not slowing down. The cheaper dollar and an improving world economy are now combining to give American exports a kick in the butt. Labor shortages and higher wages lie dead ahead. So do higher import prices.

Unfortunatly (or fortunately for gold bugs) higher bond yields are dead ahead also. No sane person is going to buy a 6% 30yr. bond if inflation is running at 5%. This plus the rejuggling of markets formerly priced for deflation plus y2k nervousness is our ace in the hole.
Goldspoon
(09/02/1999; 12:05:26 MDT - Msg ID: 12673)
Japan's Yen worse shape than dollar.....
http://www.garynorth.com/y2k/detail_.cfm/5971The worlds currencys are in sad shape with this article from the New York Times wondering if debt default is iminent in Japan? i had no idea of the magnitude of Japan's debt until i read this article..... Soon some of the worlds wealthy will see Presious Meatals as haven of last resort they may also realise that it can't be just on paper....
Goldspoon
(09/02/1999; 12:10:09 MDT - Msg ID: 12674)
Townie
Have i told you today how much i like your posts......sooo profesional..lots of info from so many places...Thanks..
The Stranger
(09/02/1999; 12:15:29 MDT - Msg ID: 12675)
Goldspoon

Sometimes I think it is hard enough trying to figure out U.S. markets
without having to understand what is going on in Japan. But here is my
attempt to address the concerns raised by the NY Times:

Barring something unforseen occurring (or some better opportunity
arising) I am inclined to hold Japan for awhile. The only thing that really
scares me at the moment is Y2K. I don't know how well they are prepared
over there, so I wonder. But, so far, I have seen no stories about Japanese
insider stock sales, which would be a warning sign, so I am having faith
that there is no shock approaching.
Yes, Japan's public debt is scary. But, it was just as scary last
Winter when I bought into their market. Their stocks are number one in
performance among the Big Seven so far in 1999. The government made the
mistake of trying to spend their way back to prosperity all through the 90s.
Robert Rubin and Alan Greenspan both warned them repeatedly that it would
not work. After all, isn't deficit spending exactly the weapon America tried and
failed with under Roosevelt when circumstances were similar here? But, no,
the Japanese wouldn't listen, largely because the alternative was corporate
restructuring (means laying people off - a no-no in Japanese society) and
rapid monetary expansion, which was deemed too inflationary (remember, Japan
had just been through an inflation bubble in the 80s).
But this year things are different. Japan's stock market is now strong
because they are finally biting the bullet. Unemployment is growing, yes,
but it is precisely because corporations are restructuring. This creates
economic dislocation in the short run, just as it did in 1980s America.
But, in the long run, it is absolutely essential and highly beneficial.
Furthermore, while public spending is still at very high levels, the Bank of
Japan is now printing the money to pay for much of it. Such action may not
sound kosher, but, remember, they have been fighting deflation over there. Flooding the banks with cash, providing it is done responsibly, is
actually a good idea. You may recall we have been doing the same thing in
the U.S. lately. If we weren't, I am sure the dollar wouldn't be so weak
against the yen.
Long rates in Japan are at about 2%. Short rates are almost zero.
That is where the N.Y. Times gets their 60 times figure. There is nothing
unsavory about this. Actually, I pine for higher long rates in Japan,
because when we see them happening, we will have our first clear indication
that the deflation threat is over. As far as the Moody's rating....I
bought Japan BECAUSE they are having tough times. As long as they continue
to take the appropriate actions, I see no reason to sell.
So, you see, Goldspoon, I still feel pretty good about the Land of the
Rising Sun.
Thanks for bringing this up. I hope my response is helpful.
Chicken man
(09/02/1999; 12:17:39 MDT - Msg ID: 12676)
Martin Armstong makes the "news"
Poor MA...
Republic New York Unit Probed

NEW YORK (AP) _ Republic New York Corp.'s securities
unit is being investigated by federal prosecutors and bank
regulators for allegedly inflating the value of assets of
an investment fund that catered to Japanese investors.
The banking and financial services business has
suspended James E. Sweeney, chief executive of Republic New
York Securities Corp., and replaced the management of its
futures trading division.
Worried investors sent shares of Republic New York
down $7, or 10 percent, to $62.37{ in midday trading today
on the New York Stock Exchange.
``Republic has advised the relevant U.S. regulatory
and law enforcement authorities and ... is working in full
cooperation with them,'' the bank said in a statement late
Wednesday.
State banking regulators declined to comment. A call
to the U.S. Attorney's office was not immediately returned.
Republic New York is in the process of being
acquired by HSBC Holdings PLC of London for $10.3 billion.
The investigation could, at the very least, delay the
closing of the deal, according to executives.
While Republic New York would not name the client
involved in the investigation, a person familiar with the
investigation confirmed it is Princeton Global Management
Co., a Princeton, N.J., investment fund popular with some
large institutional investors in Japan.
Japanese investors may have placed as much as $1
billion in Princeton Global Management, according to a
report today in The Wall Street Journal.
The firm's phone number is unlisted, and executives
could not immediately be reached for comment.
The alleged errors were discovered in May by Japan's
Financial Supervisory Agency, which searched the offices of
a company called Cresvale International Ltd., which is an
affiliate of Princeton Global Management, according to the
person familiar with the investigation.
The Financial Supervisory Agency then contacted
Republic New York and asked for information about the
business between Princeton Global Management and Republic
New York Securities. Republic said that led it to
investigate and to contact U.S. authorities.




What's this going to do to the markets...?
TownCrier
(09/02/1999; 12:34:03 MDT - Msg ID: 12677)
Japan is the Biggest Y2K Risk in the World Today (Year 2000 Wire)
http://cnnfntech.newsreal.com/story/19990831/16/05/5629915_st.htmlFor The Stranger and others wondering about Japan..."Japan's lack of Y2K readiness poses a serious threat to the stability of the world economy."
Goldspoon
(09/02/1999; 12:42:39 MDT - Msg ID: 12678)
The Stranger
http://www.gmt-2000.com/news/press/pr23081999.htmThanks for the insight on Japan, it's always good to hear from those who have money invested and done their homework.
i found this post yesterday on Japan and 2kay, this article is being picked up today by some of the major press.
One reason the Yen has stalled today???
turbohawg
(09/02/1999; 12:54:18 MDT - Msg ID: 12679)
while on the subject ...
http://www.pei-intl.com/SEMINARS/0899int.htm... of Martin Armstrong, here's a recent interview with the man everyone *looooves* so much.

Kinda long, but innersting, Larry.

Apologies if this link has already been posted.
Goldspoon
(09/02/1999; 12:58:04 MDT - Msg ID: 12680)
Chicken Man
With the article you published, LTCM, Russian money laundering and South American defaults it sure shakes one's confidence in financial instiutions...
i'm afraid when the digging is done on the Russian money laundering it will be like a crack in a windsheild....it starts out small and then turns into the energiser rabbit...
The Stranger
(09/02/1999; 13:01:38 MDT - Msg ID: 12681)
Town Crier and Goldspoon
Thanks for the link. I hadn't seen this article, yet, so both of you get brownie points for being so well informed.

Seeing how they are going to address problems of this magnitude in so little time should be interesting.
turbohawg
(09/02/1999; 13:03:09 MDT - Msg ID: 12682)
Death of a Republic ...
http://www.worldnetdaily.com/bluesky_nyquist/19990902_xcjny_death_repu.shtml... by J.R. Nyquist, from over at WorldNetDaily.

Spooky parallels.
TownCrier
(09/02/1999; 13:16:22 MDT - Msg ID: 12683)
Gold unshaken by IMF talk, analysts seek details
http://biz.yahoo.com/rf/990902/0t.htmlThis is odd. Despite the clearest writing on the wall of the U.S. Congress, the IMF is counting its chickens before they hatch, still wrangling over the details of how to go about selling gold in a fashion that won't disrupt the market price. We all know well enough by now how gold is priced. This concern is little more than posturing because the maarket could absorb it within three heartbeats. The element of this story that is so telling is the sheer desperation that is apparent at the IMF. Essentially they are broadcating, "This gold must move in a certain direction or else we are in for stormy weather."

Note the standard negative rhetoric by the professional Swiss bullion trader at the end... What a clueless wonderchild.
Goldspoon
(09/02/1999; 13:17:40 MDT - Msg ID: 12684)
Turbohawg
Thanks! A note worthy comment from the article...
MA: And that's the real reason why this thing is just dragging on. I am seriously afraid that we are looking at a major financial debacle, particularly next year in Japan. The postal savings fund�I've said this many times�it is insolvent. The western press still hasn't picked up on this. The Finance Minister testified before the Diet in February. I was there. This fund is insolvent. It is the largest fund in the world�some 10 trillion dollars�and it's broke. The redemptions start next year. Obviously they don't appreciate me going around saying this.

BS: There's too much advertising in the western press for them to say anything. Advertisers decide what the press is going to report�I don't care if it's the New York Times, LA Times, Washington Post�it doesn't matter. The big advertisers decide what's going to go in the paper. I found that out myself.

MA: Japan will have no choice but to monetize to get out of this depression�the same thing that Roosevelt did. Roosevelt devalued the dollar by 69% and there is no other way out of this without doing that.

BS: How are they going to do it? Only because they aren't doing it now. I mean the yen is getting even stronger. It went from 115 to 114.

MA: The yen could get stronger. I think the worst volatility since the 1931 problem. When I first started doing research I read Herbert Hoover's memoirs and he was talking about capital rushing from one currency to another so fast it was like a loose cannon on the deck of a ship in the middle of a torrent.

BS: Boy if he were only alive today
GFD
(09/02/1999; 13:21:27 MDT - Msg ID: 12685)
Re: Martin Armstong makes the "news"
BWAHAHAHAHA!

(I know, I know... Unwarranted, premature, ungentlemanly, juvenile, fit for Kitco, completely unworthy of a follwer of Another - but man that felt good to get off my chest!)

It remains to be seen what if anything transpires from this news item. However I _suspect_ it _might_ become the prototype for many more similar news items in due time. The structure _could_ be something like this...

1.) Discovery by some far away regulatory agency of "irregularities". Yes it is true that said regulatory agency is widely known for hiring only the blind and deaf. However, after loosing too many personell down some bottomless pit decides to act.

2.)Local regulatory agencies dragged in screaming and kicking by financial institutions mortified by possibilities of financial collapse and resulting lawsuits against directors.

3.)Discovery of massively failed investments in various commodities.

4.)Revelation that investments were based on irrefutable evidence that said commodities were fundamentally over valued, being "anachronisms" that were in their final death spiral.

5.)Further revelations that supplies of said "anachronistic" commodities had dissappeared and that consumers of the "anachronisms" now discover that they are in a massive supply crunch, resulting in default, bankruptcy and other assorted unpleasantness.

6.)The US Fed intervenes frantically to prevent contagion and to stablise the system.

7.)The Dow has another record day moving up 500 points at the close.

Peter Asher
(09/02/1999; 13:30:16 MDT - Msg ID: 12686)
Turbo, good find!
Awhile back, someone published a commentary decrying the state of the youth of today. It was a spot on accurate description. The punch line also was that it was a quotation from old Rome.

Regarding the article you posted, do you suppose that, to 9/9/99 and 1/1/00 (oops, 1/1/2000), we should add 3/15/2000
Peter Asher
(09/02/1999; 13:32:55 MDT - Msg ID: 12687)
GFD
Sounds plausible, Sell on good news, buy on bad,right?
Goldspoon
(09/02/1999; 13:53:04 MDT - Msg ID: 12688)
Peter Asher
With Howlloween treats already in the store i couldn't resist....Boo!!!
GFD
(09/02/1999; 14:02:59 MDT - Msg ID: 12689)
Peter Asher - New Economy, New Rules
It's the new paradigm, Peter. ;)
Leigh
(09/02/1999; 14:17:16 MDT - Msg ID: 12690)
FOA
Dear FOA: This morning I printed out your Comment on PH's post of yesterday. It took 2-1/2 pages single spaced. Yesterday you wrote how many, two? long posts to us. You must spend many hours each day writing these notes for us, with no compensation and no real recognition. I want to thank you for your hard work and let you know that everything you write is read and studied by many, many people (probably thousands). Some of us may be slow studies, but the frequency of your letters to us and the way you cover topics over and over in the light of current events and new ideas is definitely having an impact. Thank you, FOA!

P.S. I imagine the "secret message that will make us rich" is: BUY PHYSICAL and STAY AWAY FROM PAPER, right?

TownCrier
(09/02/1999; 14:33:28 MDT - Msg ID: 12691)
Sir Turbohawg: "Death of a Republic"
When you post an article as GOOD as that one was, it is recommended that you accompany the info with the simple phrase "Must Read."

Now you know, and so do the others. Check it out.
Goldspoon
(09/02/1999; 14:40:15 MDT - Msg ID: 12692)
China buys nuecular subs with war heads from Russians
http://www.sunday-times.co.uk/news/pages/tim/99/09/02/timfgnfar01003.html?1996766Ready to threaten us to stay out of comming war.....
Hipplebeck
(09/02/1999; 14:53:11 MDT - Msg ID: 12693)
repost of a question
I posted this question earlier. Is this subject so shrouded in mystery? Could someone enlighten me?
I am trying to figure out what this gold leasing thing is all about.
When someone leases gold from a central bank, do they take possession of it or is it all just on paper?
What are their rights that come with the lease?
Can they lease gold and then sell it?
When you lease gold, you don't own it do you? What do you do with leased gold? What happens when the lease is up?
I would appreciate any help on this subject
Thank you
Michael Hipple
Jon
(09/02/1999; 15:05:02 MDT - Msg ID: 12694)
Gold Lease, question by Hipplebeck
Don't know very much about this. My understanding from what I've read onthis site is that physical gold can be borrowed at a cost of so much interest a month. Yes, it can be, and is, sold. This is somthing I never could understand. How can you give good title to something you don't own. Yet this is indeed the practice. At the end of the lease period, the physical must be returned. In the interim, the borrowed gold is sold and the sale proceeds are reinvested i Treasury obligations or other debt instruments that yield a return higher than what borrower must pay for the lease of the gold.
PH in LA
(09/02/1999; 15:12:58 MDT - Msg ID: 12695)
Hipplebeck's $64,000 Question!!!
Dear Hipplebeck:

Your question is an important one that has been analyzed and commented upon since before this site was born. Even so, many of us do not pretend to understand all the implications and ramifications of it.

In any case, you will find all you are looking for in the archives. There is also a wealth of information over at Gold Eagle (if you can find your way through the poorly-organized labrinth over there.)

Good luck! The answers to your questions will illuminate the whole subject of gold.
Goldspoon
(09/02/1999; 15:44:09 MDT - Msg ID: 12696)
The Long and Short of it.....
As of August 24, 1999, released at 3:30 p.m. on August 27, 1999, the commitments for COMEX gold futures showed commercial insiders long 124,090, short 68,671; speculators long 16,211, short 75,298. Small traders were long 36,478, short 32,810. The average historic ratio for commercials is 2:3 long to short; for speculators, 2:1 long to short. Commercials were thus net long 55,419 while speculators were net short 59,087, which represents a modest improvement from two weeks earlier. This indicator remains STRONGLY BULLISH.

This info is best used by buying gold when the insiders are long and speculators are short..........and vise versa...
Litespeed
(09/02/1999; 15:50:22 MDT - Msg ID: 12697)
Hillary
In follow up to Hillary's shorting gold just before BOE sale in her "blind Trust" ..did anyone catch the Bloomberg story on the "5 people assested in Croatia for telling the press about Hillar's offshore bank accounts" ..where do you think the money is comming from to purchase a 1.7 million dollar home in NY..furthermore the hollywood croud is shorting gold
and feeding it back to the Clintons legal defense etc..
Hipplebeck
(09/02/1999; 16:02:44 MDT - Msg ID: 12698)
Jon and Ph
Thank you, gentlemen,
It seems there is some mystery here.
I am going to study more ( gold-eagle and the archives)
I have a feeling that this is very important
Michael Hipple
Hipplebeck@aol.com
FOA
(09/02/1999; 16:15:22 MDT - Msg ID: 12699)
Reply
Peter Asher (9/1/99; 22:56:08MDT - Msg ID:12641)
FOA #12639
Thank you for devoting so much writing time to your response. I understood all of it quite clearly. I realize that the operational words are "Cash settlement."

Peter, we talk again! Your comment:

-----One question, regarding your <<< I believe that in fits and starts, all paper gold (any comex paper outside of spot month) will be sold down. Driving the perceived physical price lower until no more can be delivered. >>> That event would show up as "backwardation" which is regarded as an extremely bullish factor. Would that not trigger a definitive reversal, giving birth to a runaway upward movement in the spot market?--------

You are right, if we use our past gold trading history as a guide. The problem is that there have been only a few full cycles in the gold market. And, just as I offered before, the market has "evolved" after each go around. It's not the same animal most gold bugs started out with. Using the past "probable reactions" of traders to what were bullish signs on established markets then, could send one into trouble today. Look at how many positions were established these past few years, only to see traders reverse and pull out over and over again.

I think, the first time that Comex can't deliver, all future months will be called into question. Most likely, the officials will "Bunker Hunt" the exchange long before anyone knows what's happening. Let's face it, no one has ever seen Comex react when there were almost 500,000 OI contracts on
their option side? Not to mention a world full of derivative contracts looking for relief!

Your call my friend! I'll be watching if you (or anyone else here) want's to try and ride it. I agree with Leigh's take on this (hello and thank you Leigh) , " stay with physical"! It will pay off more than you could spend anyway!

------One thought I am still wondering about, was my conjecture that the apparent motives of Gold carry profits, politically driven debt bubble controls, Central Bank cash needs and collusion driven short sale profits, while all true, could be lesser activities behind a plan to corner most above ground gold and to acquire the ownership of many of the mines.-------

I'm not going to head into the political issue until finished building the basic mechanics of this. It's too confusing not to have a springboard of thought to jump from. I need that background so as to dodge the bullets. I'm smiling as I write this because some out there put an extra shell in their gun every time I write this analysis of Another. Crossroads #12665 wrote a good piece about how we
all see things (hello CR and thanks for the repost). One of the reasons I write the way I do is because I am "born in the USA" and still retain a true "Western view" of things. In other words, I know how some of these conceptions came about and how people will mentally fight to retain that
view. In essence, Another sees that sometimes it's better if hard riding hombres don't fully understand your concept as your words relate it. In the end it still aggravates them enough that they study it hard to find every flaw to throw back at you! Welcome to the new age school of advanced education or is it "if you build it they will come to destroy" (smile)! Just shows you how different worlds think. Oh well, I don't intentionally try to be vague, as it's a very complicated subject.

Peter I'm saving this and will get back into the oil gold politics later.

I may be here over the next few days? Or may not? Thank everyone for contributing (TownCrier, you're the best) FOA
Peter Asher
(09/02/1999; 17:16:25 MDT - Msg ID: 12700)
BioShield sues over 'defamatory' chat-room talk
http://news.excite.com/news/r/990902/19/health-bioshieldI believe we should keep an eye on this.

cananami! any comment?
TownCrier
(09/02/1999; 17:22:25 MDT - Msg ID: 12701)
After the Close...the GOLDEN VIEW from the Tower
There was lively action to report on all fronts, and amid tearing out hair to report on it all, we'll hit the high points and let you fill in the details reading the assortment of news and financial articles posted throughout the day.

The biggest and best news would be that the Round Table itself seems to be glitch-free and sailing along smoothly. This is a trend we hope continues!

Wall Street got off to an ugly start with big losses posted at the opening bell. Big losses were slowly trimmed to moderate losses on the market indices. Weighing on the markets were comments by Fed Governor Edward Kelley in an interview with Market News International in which he said we shouldn't rule out an increase in interest rates again this year by the Fed. The Labor Department's report on productivity (defined as the amount of output for each hour of work) increased at an annual rate of 0.6 percent in the second quarter (April-June). This was well below the 3.6 percent rate in the first quarter. Hmmmmm...must be a growing batch of day-traders out there. Anyway, employers are apparently paying more for less work. Unit labor costs rose at an annual rate of 4.5 percent during this same second quarter. This development will surely give the Fed Chairman a fitful night's sleep.

As said, the stock indices suffered moderate losses after gaining back much of the initial morning plunge, but the market internal stats were ugly. In all stocks, decliners lead advancers by a 2-to-1 margin, and on the NYSE 115 issues set new 52-week lows with only 23 reaching new highs.

In the wake of Mr. Kelley's statement, the 30-year bond lost 20/32 in price, pushing the yield up to 6.141%.

After a level performance overnight, gold hit the New York streets running. It knew only one direction all day, and that was up. Interest in gold contracts pushed the December gold futures (GCZ9) through the range $255.30-$257.00, ending off the high at $256.7, up $1.10 on the day. NY spot took the cue and was quoted at $255.20, up $1.50. At some point, spot gold will no longer be the passive dance partner in this blissful carnival of dreams (Blissful, that is, to all of us aggressive physical gold buyers.) The day will come when Spot will lead the dancing, but will also call the tune. We might be starting to see the first signs of this now...check this out. We haven't paid too much attention to the gold lease rates in these closing reports, but smoke signals from The Castle got our attention. "Horses...approaching... ...bring... ice-cream..." No, wait, my smoke-signal deciphering is a little rusty.

If I read my signs right, it would appear that there is an increasing demand on gold, pressuring the "here-and-now" moreso than the "sometime-around-the-bend." Gold lease rates increased across the span of time, with the biggest move for the one-month lease rate...over .55%! That's big. Expressed as an annual percentage rate, the one month lease rate is at 3.878%. Further out in time the annualized rates diminish, a condition we are quick to note is not present in the other metals. This is indicative of strong short term needs...it would seem that someone can't wait for the September 21st UK auction.

Looming in the gold market future is the jewelry manufacturers buying season which typically starts after the US Labor day holiday and lasts through mid-December. Coupled with increasing U.S.-led Y2K demand, and growing concern over bursting bubbles...

What's that you say? You don't believe in bubbles? Give this Reuters report serious consideration where they interviewed Nobel Prize winning economist Milton Friedman. "The U.S. stock market exhibits some of the characteristics of a bubble. If this turns out to be true, then the United States will experience a deep collapse of the stock market. That would be a true danger for the continuation of the unusual economic expansion of the past nine years." Friedman said that the current U.S. stock market exhibited uncanny parallels to the U.S. market of the 1920s preceding the great crash in 1929, and to the Japanese market in the 1980s before their collapse.

The horses are on the track...

Gold's strong performance today tossed aside the desperate bleatings of the IMF in regard to their *need* to sell some gold. IMF spokesman Thomas Dawson told a news briefing that the IMF hopes to have a board level resolution on how to conduct this gold sale operation without disrupting the gold market at some point prior to the annual meeting of the IMF in late September. He said because of the initial oposition, the IMF was "looking at a wide range of options including what are termed off-market transactions" which would most likely result in the IMF selling its gold in private transactions to central banks. All of that planning and deliberation is a wasted effort if the U.S. Congress holds firmly to their prevailing oposition. I guess this is another sign of the falling productivity as reported by the Labor Department!

Busy day at COMEX depositories, particularly at Republic National, where 3/4 of their entire Eligible gold inventory was wheeled under armed guard right outta there. Destination unknown. This was no small operation; the departing gold tipped the scales at over 2-1/4 tonnes. When you add in the Eligible inventory at Scotia Mocatta, the day started with only 5 Eligible tonnes in COMEX possession. We'll wait and see if this Republic gold resurfaces at Scotia tomorrow. (It's happened before.) Or maybe it's gone for good.

And that's the view from here...after the close.
GFD
(09/02/1999; 18:47:43 MDT - Msg ID: 12702)
Hipplebeck - Gold Leasing at 100,000 feet
I will attempt to summarize and perhaps bring out a few points that are not generally discussed. Please bear in mind that I am just a long time observer and certainly do not have any inside knowledge or connections.

Firstly, most gold leasing is alleged to be done by bullion banks. No mystery about this, at the end of the day they are just like the bank down at the end of the street.

Bullion banks take deposits and can lend out the gold. USUALLY this gold is sold for cash and then later a truck shows up with a pile of the physical to pay the loan off. This has become popular, allegedly, because of very low interest rates 1-3% annually. Basically peanuts. The fees probably cost more.

In recent years, it has been alleged, the bullion banks have got a large infusion from central bank leasing. At the end of the day, the end result has been the same as it would be for the bank down the street - currency devaluation. If a central bank dumps a load of new money into the bank down the street interest rates drop (large inventory to move) followed at some point by inflation (currency depreciation due to more dollars chasing the same swimming pool). And so it is for gold. Low interest rates (1% per year at times) and a depressed price.

Now it gets a *little* murky at this point. There are a number of *wrinkles* that have to be considered.

1.)Where does the bullion actually go? Since the intent of most, if not all, gold leasing is to convert the borrowed gold for cash, the actual bullion does not have to leave the premises of the bullion bank, theoretically. That is, the borrower simply sells the bullion back to the bank and walks out with a cheque and a low interest rate. However, the bullion bank has to come up with the money somewhere and it makes no sense to borrow cash at 6% (say) to lend it out at 1%. Especially to dubious credit risks like mining companies on the verge of bankruptcy or high flying hedge funds.

Because of this, it is *assumed* that the bullion actually does leave the premises to be sold to third parties that eventually send it off to coin collectors and farmers in asia - never to be seen again.

2.)How will the loans be paid back? With more gold being consumed every year than what is mined, and with the miners slowly but surely going broke, it is widely assumed that every ounce sent out by the central banks will never ever return.

What does this mean? It is widely assumed that the central banks will have to write these loans off. It will be hard for the Brazilians, for instance, to confiscate gold held by indonesian farmers. If it is not politic (being *very* droll here) for the central bank to announce that they lost all their gold through bad loans and general incompetence, then it is widely assumed that the central banks will paper over these bad loans by calling them "sales".

3.)Who are the major borrowers? It is generally said that the major borrowers are miners and hedge funds. As long as the miners can stay in business (big if here) it is felt that they will pay off their loans. There is no way the hedge funds can pay back their loans unless they buy gold held by the Indonesians, etc. It is generally assumed this will only happen by a huge rise in price, causing hedge funds great losses. It may be that the hedge funds are waiting for the day that the central banks capitulate and will accept cash rather than bullion.

One could chose to see the leasing game as kind of a game of chicken where the hedge funds and central bankers are waiting to see who will blink first. It is widely assumed that they central bankers will blink first.

4.)Does all of this mean that gold will go up? Not necessarily. At least not right away.

Firstly, sharply rising gold prices in a currency is a widely acknowledged sign of a failing currency. Because central bankers are supposed to be the custodians of the currency they will try to avoid this. In this sense they are in the same boat as the hedge funds. They both have an interest at this stage of the game to keep the price down. Firstly, it will justify the central bank "selling" a useless, depreciating asset. Secondly, the hedge funds will be able to cover their loans and stay in business rather than dragging down several banks in an ugly bankruptcy or bailout.

Unless something changes, all the gold miners will go broke and the farmers in indonesia will start bidding up the price to get it from the coin collectors in the western world and vice versa. Likewise for jewellery.

5.)Does this mean that I should avoid gold and gold mining stocks? You probably should avoid the stocks for the time being. Gold is locked into a death spiral not of its own making. The mining companies are on the short end of the stick and that is that.

Depending on your time frame and your general market outlook you may want to buy physical gold at these levels if you think that some day you will be able to sell it to that indonesian farmer for a lot more than what you paid for it.

6.)Excuse me, but why do I get the sense that it is more complicated than this?

Probably because it is. Based on what I have written so far, one would be lead to believe that the only people in the world who are interested in owning physical bullion are people who like jewellery, farmers in asia and a few *cough* eccentric small investors and survivalists.

I would say that certainly is the official view taken from the pages of the Pravda's of the world. However, there *may* be a few others.

6a.)Big Asian money. If a little guy in indonesia can make a fortune on his gold and buy more rice paddies and cattle, what about the big guys?? It is inconvenient to buy a chip fab with bullion. A cheque is much, much more easy. Also, you get less sniggering from all those western bankers you have to do business with. No one wants to be seen as a nut, even if you think you *are* fabulously wealthy.

6b.)The Asian Financial Establishment. Woa! Didn't you just imply that these guys might think that gold is "quaint" like everyone else. Yes, I guess I did. I don't know for a fact but I would guess that they would laugh at holding this stuff just as much as any other Harvard graduate.

However, they have another problem. Right now they hold a lot of american dollars as reserves that are supposed to be a foundation for their economies. This means they are loosing control of their economies to the US Fed. Aside from nationalistic feelings it is alleged that the asian establishment does not like this because they do not necessarily, ahem, with american policies. With distinguished retired politicians stating that that the american markets are in the hands of "psychopaths" the previous sentence is probably understated at this point in time.

There are three alternatives to the US dollar for widely held currencies: the yen, the euro, and gold. The problem with the yen and the euro is that they are the currencies of former colonial powers in those parts who actually *were* psychopaths in many instances. Some choice.

Gold is the only standard that is politically neutral that has any credibility.

The reality is that they are currently too intertwined economically with the US to make major changes at this time. If the americans really are psychopaths and their bubble pops, then there may be a case to be made. Please note that this does not prevent asian central banks from accumulating the stuff in anticipation of that fine day. The chinese central are alleged to be major buyers.

6c.)The European Financial Establishment. On the one hand they are very much in the same boat as the asians. No one likes seeing their economies being dollarized at a time of an all time historic market bubble in american financial assets. On the other hand they have their own "psychopaths" to worry about: the LBMA, bullion banks, hedge funds, etc.

It is alleged that the french and germans are very attached to their gold and will not part with it. However, we have recently witnessed the Swiss approve dumping some of their stuff in a national referendum and so I think this point of view has to be really questioned. I would not be shocked if the bullion desks of their central banks already have.

6d.)Others. In the early days of Kitco there were allegations of big Chinese money playing with gold in a huge hidden international market. At the end of the day there is no way to validate the existence or size of this market.

The famous Another and others have postulated that some oil producing nations are accumulating a small portion of bullion as part of their oil sales. Again there is no way of confirming this or what may have happened with any gold they may have accumulated.

canamami
(09/02/1999; 19:46:04 MDT - Msg ID: 12703)
Reply to Peter Asher, post# 12700
Peter,

I did some defamation law in law school, and a little bit in private practice, but I haven't touched the field in ages. I know there are some differences between Canada and the U.S.. Generally speaking, Canada is more plaintiff-friendly than the U.S. when it comes to defamation law - i.e., it's easier to sue people, though the level of damages probably won't be as high. At a site called stockhouse.com, some posters to a stock board are being sued for negative comments. Some other posters claim it's a way for the company (a junior on the VSE) to raise money. We watch together as internet law evolves, and is defined.
GFD
(09/02/1999; 20:00:44 MDT - Msg ID: 12704)
Editorial Corrections
A couple of editorial corrections for my previous post.

"because they do not necessarily, ahem, with american policies" should read "because they do not necessarily, ahem, agree with american policies"

The last paragraph: "The famous Another and others have postulated that some oil producing nations are accumulating a small portion of bullion as part of their oil sales"

should read: "The famous Another and others have postulated that some oil producing nations are accumulating bullion as a small portion of their oil sales (which could amount to a large portion of bullion by now)."

Sorry Another.
TownCrier
(09/02/1999; 20:42:57 MDT - Msg ID: 12705)
Background to Sir Chicken man's (Msg ID:12676), "Republic New York Corp.'s securities unit is being investigated..."
Republic National Bank of New York is one of the highest rated commercial banks in the U.S. Its wholly-owned Republic Mase Division provides corporate and project loan facilities and metal trading facilities to North American and foreign mining companies. Republic Mase provides a broad range of loan facilities from corporate revolvers with the largest North American producers to working capital loans for emerging producers. Banking staff is located in New York, Denver, Sydney, and Perth; and projects being financed by the group extend beyond North America and Australia to the CIS, Africa and the southwest Pacific.
Republic maintains one of the largest precious metals trading desks in New York and historically has been a major counterparty with central banks. fabricators, and commodity funds. In addition to New York, trading operations are conducted in Hong Kong and in London, where Republic is one of the five fixing members of the LBMA. Republic is a market-maker for a full range of gold and silver trades, from spot and in-process sales to forwards and options.
GFD
(09/02/1999; 20:54:00 MDT - Msg ID: 12706)
Editorial Corrections II
Sorry about this.

"Low interest rates (1% per year at times) and a depressed price." should read "Low interest rates (1% per year at times) followed by a depressed price."
Richard, Oregon
(09/02/1999; 21:00:45 MDT - Msg ID: 12707)
For Some Reason . . .
For some reason, I'm sadden today with what I hear our (US) government MAY have done. THIS government in particular, THIS president specifically, gives me latitude to question the words in that song that came out during the Vietnam War, 'proud to be an American'. I'm not sure any more. I suspect this president may bring shame to the US up until the day he leaves office.

A friend of ours left the USA years ago to live on Grand Cayman. They've wanted us to move there. With this administrations track record, my mind is again questioning their offer. Probably would never do it, I love Oregon too much. But, I'm glad I have gold and I suspect it with spend on Grand Cayman. Anyone else not necessarily 'proud to be an American' in light of today's news??
Farfel
(09/02/1999; 21:38:58 MDT - Msg ID: 12708)
Vindication: Marty Armstrong Sucks!
Read all about the Princeton Economics mess. Is it any surprise?

http://biz.yahoo.com/rf/990902/baz.html

For those who may not remember, my fall-out with GATA stemmed from Chris Powell's insistance upon posting Marty's constant lies about gold and silver. I repeat. LIES. (P.S. Hey, Marty, are you gonnna threaten to sue me again, fartbrain? Please do, I'm sure you probably could use the extra publicity hehehehe)

I asked Chris and Bill Murphy several salient questions: is it not enough that gold investors have had to endure daily anti-gold media attacks/canards this past year without adding fuel to the fire by printing Marty's egregious lies about gold and silver on the GATA/Kitco/USA Gold websites? Why would GATA wish to shoot itself in the foot by aiding, abetting, and publicizing Marty's maniacal, distortions about precious metals?

Still, Chris insisted upon posting Marty's BS. That was the last straw for me. So, I wished them the best (I really do) and we parted company.

As I have said countless times in the past, goldbugs are often their own worst enemies. They desperately need to form a united, effective, group strategy (a la OPEC) and STOP SHOOTING THEMSELVES IN THEIR COLLECTIVE FEET TIME AND TIME AGAIN!

Until I see such unity, unfortunately, I remain bearish upon gold's prospects.

Until I see a World Gold Council that effectively sells the value of gold to the world central banks, then I remain bearish upon gold's prospects.

Until I see the CFTC properly discipline Barrick, I remain bearish upon gold's prospects.

Until I see true unity of purpose and compelling polemic from all major goldbugs worldwide, then I remain bearish upon gold's prospects.

For those who have enquired, sorry, I've been busy with other exigencies of life. As you know, I am banned from Kitco (I understand it may be renamed, Squirrelco, in honor of its most prolific poster and guard dog from Dipsville, CO and so I do not check in with the forum as often as I did in the past. Does Mozel no longer post? No doubt he failed the Squirrel test of merit too).

Good luck to all.

Thanks

F*

Canuck
(09/02/1999; 21:49:09 MDT - Msg ID: 12709)
Towncrier "After the close"
Excellent commentary today, Sir Town Crier; the 'pace' of your report was exciting.

One week ago I sold all stock, zero paper, 100% cash, and am waiting for a clear sign.

November 25 is golden day.

Canuck.
elevator guy
(09/02/1999; 21:53:34 MDT - Msg ID: 12710)
Futures, options on futures, XAU, or physical?
Good evening gentlemen. First I would like to thank our gracious host, Mr. Michael Kosares, for this Forum where the great and small can gather. I would like to thank all posters, both learned, and unlearned, for sharing their insights, observations, and questions.
Everyone here I'm sure thinks and/or knows there seems to be a coming short squeeze, unless there is some hoarded gold, or unless the shorts can hold some country's citizens up by their heels, and shake them upside down vigorously, until all their gold suddenly gets auctioned off by their central bank, to protect the shorts.
It appears that their is a control play starting, with certain parties who depress the price, then let mines fold up, and then take the deed, which strengthens their monopoly. Trash the paper, and buy up that yucky, obsolete, archaic yellow stuff, while its cheap.
Assuming that our system of paper selling doesn't totally collapse, and assuming that our paper money doesn't totally collapse, there doesn't seem to be enough gold to cover all the contracts written.
And now looking to the fall, we see seasonal gold consumption historically rising after Labor Day, and continuing until Christmas, lease rates going up, A.G. throwing out bear signals on stocks, strong demand in India and Asia, mine(s) closing, Y2K fear approaching, possible Y2K reality approaching, high employment, high oil prices.
So it seems like the shorts are shoveling s**t (can you say s**t on this site?) against the tide, trying to keep the prices down, as we head into the fall. Could it be that they have played their hand as far as possible, and now they are getting set up to control as many mines as possible, hoard as much of that cheap superstitious yucky stuff as possible, and take their mits off the price, and let it soar?
My big question is, what is best to put ones hard earned value in? If I had a ton of cash, I'd buy physical. Well, actually, I may buy physical in dribs and drabs, anyway. But what about the XAU? Which gold stocks wont go up because of forward selling by the mine? Which are positioned to climb? What about options? Is the paper system still gonna be around when the s**t (I use that word too much) hits the fan?
If I have made mistakes in this post, please excuse them, because I'm new at this, but please point them out if you have time, so I can learn. If there is any thing truthful here, it is certainly not my own thoughts or research, but only a re-assembling of others work, to whom I am grateful.
-elevator guy
Farfel
(09/02/1999; 21:53:52 MDT - Msg ID: 12711)
One Other Note: How Goldbugs Can Win.
Yes, it really is a war. Nothing less. It ceased being a mere dialectic when Bank of England set about to destroy gold's value even in the face of suffering a huge loss on their preposterous gold sale.

The Clinton government is patently, virulently anti-gold. They are not trying to suppress gold, they are trying to destroy it as a viable investment class. It's a war.

For that reason, our media presents an endless torrent of anti-gold rhetoric. It is a war.

Goldbugs will only win this war by taking their message outside the cozy confines of thier three or four prominent gold chat forums and actively introducing their concepts into the mainstream of America (Yahoo Chat forums, Silicon Investor, Motley Fool, etc.). It's a war.

For every news article that states gold is headed for the dumpster of history, every goldbug should post at least four posts on mainstream forums explaining why today gold investment makes maximum sense and conversely, why overvalued bond/stock investments pose significant risk. It's a war.

Take the goldbug message forcefully "into the streets." Or else, face the facts...gold will lose and die. It is a war.

Thanks

F*
Hill Billy Mitchell
(09/02/1999; 22:12:27 MDT - Msg ID: 12712)
FED CASH SUPPLY
Help! I am confused. I thought that when a demand deposit was removed from the banking system through an unspent cash withdrawal that a reverse action in the fractional banking system would cause a proportionate reduction in the money supply.

I also thought that when a bank borrowed money from the FED at the discount window that the money borrowed created an asset and a liability of equal value on the borrowing banks books and that the bank could not loan out the borrowed money multiple times as is allowed when a demand deposit is created.

If the above premises were accurate then would it not be true that

1) banks could not loan out moneys borrowed from the FED in multiples as they do demand deposits
2) although the cash becomes available to the bank to cover withdrawals it does not have the type of demand deposit liability to cover multiple loans outstanding
3) banks would have to call in demand loans to relieve the reserve problem that cannot be solved simply by borrowing money from the FED at the discount window
4) no matter how much paper the FED prints to stem the tide from Y2K withdrawals it will not make the loan at the discount window if the borrowing bank in question does not have sufficient assets to support the loan
5) at the point that the FED refuses to loan the Federal Reserve Notes to the bank in need that bank will fail and the dominoes will fall if the controlled press cannot keep a lid on the news


One other question. Doesn't it seem a little strange that the FED announces that it will be making the loans available at the discount window to stem the tide and then follow up by raising the discount rate as it did just recently?

Could some one please respond to help clear up these questions?

HBM
Gandalf the White
(09/02/1999; 22:26:10 MDT - Msg ID: 12713)
Hill Billy Mitchell's QUESTION
I think that you answered your own question VERY well, HBM !-- The BANK will lose profits and not make the margins that was expected on longer termed loans. -- BUT I shall also bet that the next loan that the BANK makes, the interest rate will be increased to makeup for that loss !
<;-)
Peter Asher
(09/02/1999; 22:57:27 MDT - Msg ID: 12714)
FOA, TomCat, cananami, GDF, Crossroads
FOA thank you again for responding. I've downloaded your and Tom Cat's posts and will probably lie awake in contemplation. "There is an old joke of the "Twist of a famous quote" variety, "Work is the curse of the drinking class" Well work can also be the curse of the Forum poster, just enough time today and tomorrow for the reading. Hope to be up to speed by Saturday.

Canamami, thanks for answering. Freedom of speech versus freedom from slander, The Internet is the new arena.

GDF, a superb essay, welcome aboard!

Crossroads: Really well said commentary on posting ethics!

I'm burnt tonight, guys. I am going to take a dose of Robert Jordan, volume four and crash. ----P.
AREM
(09/02/1999; 22:57:33 MDT - Msg ID: 12715)
Criminals in our government
http://www.lp.org/
From Leigh (9/2/99; Msg ID:12648) Bill Murphy of GATA told about Hillary Clinton, shorted gold financial instruments just before the Bank of England gold sale announcement on May 7, 1999. There is apparently no shortage of insider trading by government officials and a large amount of criminal activity by members of congress as indicated in a Libertarian Party press release that follows:

- From wife-beaters to drunk drivers,
Congress is a crime wave, study says

WASHINGTON, DC -- A new investigation reveals an
astonishingly large number of wife-beaters, drunks, shoplifters,
check-bouncers, business failures, and drug abusers in the U.S. House
and Senate -- which ought to make Americans think carefully before
turning to Washington, DC for moral leadership, the Libertarian Party
said today.

"Mark Twain once said Congress may be America's only
'distinct criminal class' -- and this new study suggests he was
correct," said Steve Dasbach, the party's national director. "If even
half these charges are true, expecting Congress to serve as a moral
role model is like asking Bill Clinton to serve as a poster boy for
monogamy."

According to an investigation by Capitol Hill Blue, an online
publication that covers federal politics, a remarkable number of U.S.
Representatives and U.S. Senators may have spent as much time in a
jail cell as on Capitol Hill.

After researching public records, newspaper articles, civil
court transcripts, and criminal records, Capitol Hill Blue discovered
that:

* 29 members of Congress have been accused of spousal abuse.

* 7 have been arrested for fraud.

* 19 have been accused of writing bad checks.

* 117 have bankrupted at least two businesses.

* 3 have been arrested for assault.

* 71 have credit reports so bad they can't qualify for a
credit card.

* 14 have been arrested on drug-related charges.

* 8 have been arrested for shoplifting.

* 21 are current defendants in lawsuits.

* And in 1998 alone, 84 were stopped for drunk driving, but
released after they claimed Congressional immunity.

Capitol Hill Blue did not list the names of all the
individual members of Congress accused of the various crimes, but did
note that some were "serial offenders" with extensive tracks records
of fraud or violence.

For example, reported Capitol Hill Blue, Rep. Corrine Brown
(D-FL) has a "long, consistent record of deceit," including tens of
thousands of dollars in unpaid bills, allegations of bribery, and
numerous lawsuits against her. And Rep. Jim Moran (D-VA) faces
charges that he beat his wife, has a history of barroom brawls while
mayor of Alexandria, and has publicly stated that he likes "to hit
people."

"With a rap sheet like that, you have to wonder why Americans
expect Congress to solve the problem of crime -- since Congress seems
to be causing so much crime," said Dasbach. "In fact, if this study
is correct, the best way to cut crime may be to lock up Congress and
throw away the key."

And given the obvious economic incompetence of so many
Senators and Representatives, you have to wonder why voters trust
them with the federal budget, he said.

"Here are politicians who routinely bankrupt businesses,
write bad checks, engage in fraudulent practices, and have bad
credit," said Dasbach. "That could explain why the country is more
than $5 trillion in debt, why federal programs are so wasteful, and
why taxes are always going up. Are these really the kind of
economically illiterate people we want to trust with our money?"

If nothing else, said Dasbach, the Capitol Hill Blue
investigation may help puncture the myth that Senators and
Representatives are somehow superior to ordinary Americans, or better
equipped to solve the nation's problems.

"By its very nature, politics tends to attract venal people
who crave power, who want to control the lives of other people, and
who think they are above the law," he noted. "This study makes that
point clear -- and illustrates that when it comes to politicians, the
only thing worse than their voting records are their criminal
records."

AREM


TownCrier
(09/02/1999; 23:32:38 MDT - Msg ID: 12716)
Hear ye! Hear ye! An update is available at USAGOLD!
http://www.usagold.com/wgc.htmlTHIS WEEK IN GOLD features the weekly gold market commentary of the World Gold Council's global staff. Click the link above to read about the significant events that shaped the world gold market for the week August 23-27, 1999. Enjoy your research, and hurry back!
TownCrier
(09/03/1999; 00:23:53 MDT - Msg ID: 12717)
Us vs. them. Who's on whose side...
http://www.gold.org/Gra/Recent/IMF/IMF_1.htmFor anyone who feels at the mercy of "officialdom" and that their side is at an advantage because they employ all of the sharpest economic thinkers, think again--particularly where the IMF is concerned. Click this link to examine three letters of correspondence. The first is an appeal of the World Gold Council to the IMF to rethink their gold selling strategy. It's an adequate conveyance of the message. The second letter is the IMF's totally unoriginal and uninspired counterpoint response. With the third letter, a rebuttal of the WGC to the IMF letter, Miss Fukuda (WGC CEO) demonstrates that the WGC is not an organization to be dismissed lightly. It is the level of response in this third letter that reveals how weak the IMF letter was by comparison.

And lest you harbor any doubts as to the "official" position on gold, (a rather important one that counts) here's a refresher course on the straight scoop sans subterfuge. Bank for International Settlements general manager Andrew Crockett commented in June "I have the strong impression from conversations taking place at the BIS that gold will continue to play a major part in reserves, and that most of the major gold holders are not contemplating selling gold, so I do not expect there to be major changes in the role of gold."
Oregon Geezer
(09/03/1999; 02:18:50 MDT - Msg ID: 12718)
Time for a break
It's high time for this old geezer to take a break from the world and all its problems --- gold manipulation, Hillary, Waco, Y2K, Congressional crooks, high taxes, the China warmongers, Bill Gates, petty dictators, the Russian mess, people who bush a cart full of groceries through the express checkout, violence on TV and, God help me, the Internet.
Yup, it's time to hightail it to Yellowstone and chat with the bison, breathe air you cannot see and stare a geyser or two. I'll leave it to you experts to keep the world spinning in proper fashion in my absence.
I still don't get it. Why do we have an IMF whose only function is, as far as I can see, to shake down the American taxpayer and shell out gazillions of our dollars to the national crooks of the world? And, if the IMF can buy gold with my tax dollars, why can't I?
Cherrio.
WAC (Wide Awake Club)
(09/03/1999; 02:26:21 MDT - Msg ID: 12719)
IVH - London FIX
http://www.goldline.co.uk/London AM/PM fix site.
Hill Billy Mitchell
(09/03/1999; 05:19:23 MDT - Msg ID: 12720)
Need more help from G. the White and or anyone with light on this
Gandalf the White and anyone else with an answer regarding my MSG # 12712

Thanks Gandalf for the response and insight! It is much appreciated. I was driving at a question, which has been constantly gnawing at me--Is it not true that a local bank cannot loan out monies borrowed from the FED in multiples in the same manner that it can loan out demand deposits? If so wouldn't the following be true:

1) Even though the cash for panic withdrawals is made available through the discount window, the loan from the FED would not put the bank back in the same position as before the cash withdrawal, ie reduced demand deposits mean reduced capacity for the bank in question to make loans.
2) This reduction in demand deposits would in short order force the bank in question to call in customer loans, which are on demand.
3) Under this scenario the money supply would begin to implode
4) When a bank is in trouble the discount window privilege my be withdrawn
5) The fact that the FED has made grand assurance that it would be there when the cash is needed such grand assurance is merely a smoke screen to divert attention from the real issue of the deflationary effect of cash withdrawals from the banking system--the real problem.
6) If the FED does indiscriminately loan these Federal Reserve Notes to any and all banks as they need them and it does not stem the implosion of the money supply yet prices could explode even while the money supply is contracting. As strange as this phenomena may sound it is no stranger than the huge expansion of the money supply in the U. S. with low inflation in everything but financial paper assets.
7) The SMOKE SCREEN is to hide the TRUE FEAR of the FED--loss of control of the money supply.

I admit that using the word FEAR in connection with the FED may be a little na�ve since the FED is not only arrogantly all powerful in its own eyes but also may be orchestrating the whole scenario down to the GRAND FINALLE--the destruction of the U. S. dollar as a reserve currency.

HBM


Hipplebeck
(09/03/1999; 06:05:18 MDT - Msg ID: 12721)
to GFD and anyone else who reads this
Regarding gold leasing,
Thank you for responding to me.
I am still studying this subject. There are a few things I am struggling with. I haven't found out the volume of gold leasing yet. I am trying to picture the whole thing. If I lease out a ton of gold at 3% for 1 month, at the end of the month am I to recieve the 1 ton back+ 3% in gold, or does that 3% get paid back in cash or what? If the party that leased the gold from me sells it and invests it, then at the end of the month does he have to buy 1 ton + 3% of gold to repay me? If so, aren't I accumulating gold? Can a person lease gold and repay in cash? If so, aren't I , in reality, selling gold? Why would the lease rate be higher for 1 month than for 1 year? Has anyone out there in forum land ever seen and read a lease agreement?
Please be patient and forgiving of my ignorance, but right now I feel like Columbo.
I promise I am researching and not just asking, but I am so curious any help would be greatly appreciated.
Thank you,
Michael Hipple
phaedrus
(09/03/1999; 06:26:18 MDT - Msg ID: 12722)
CANADA SALES
In case you folks haven't heard yet it's out that Canada sold 170,000 oz. of reserves last month.

Is this good or bad? Bad they sold, or good that more damage was not done than we've seen?

~p
Clint H
(09/03/1999; 07:00:47 MDT - Msg ID: 12723)
Can't find post
Sometime in the last six weeks someone did an analysis of the gold accumulation of the oil countries in the last 20 years. I think it may have been Black Blade. The estimate of the total gold accumulation I think was 11,500 tons. Can anyone point me to the post number? I have not been able to locate it again. Thanks.
asniper
(09/03/1999; 07:35:45 MDT - Msg ID: 12724)
Lease rates
http://www.usagold.comOne month lease rate jumped to 3.94%, and shorts dipped spot by $2 at NY open???
http://infoseek.go.com/Content?arn=a0874LBY779reulb-19990903&qt=gold+silver+platinum+palladium+rhodium+-olympic+-olympics+-medal+-medals&sv=IS&lk=noframes&col=NX&kt=A&ak=news1486

????????????
canamami
(09/03/1999; 07:38:40 MDT - Msg ID: 12725)
Sudden Drop -Gold and Silver
It looks like somebody this morning just nailed the price of gold and silver - gold dropped more than $2.00 (it has since rallied a bit) and silver was dropped close to $10.00, both in no time at all. This is obviously manipulation, and it's grinding investors down.
Aristotle
(09/03/1999; 08:13:14 MDT - Msg ID: 12726)
Hipplebeck's question...(by the way,GFD, super post!)
Hipplebeck, your basic question revolves around this: "If I lease out a ton of gold at 3% for 1 month, at the end of the month am I to recieve the 1 ton back+ 3% in gold, or does that 3% get paid back in cash or what?"

First things first. The 3% would be an annualized rate, so divide it by 12 to get the interest amount owed for one month (3/12 = 0.25%). You get you started down the right track on the rest of your question, I'm going to employ a old trick--a tried and true method of discover (word replacement.) Let's look at an altered version of your question:

"If I lend out a million dollars at 12% for 1 month, at the end of the month am I to recieve the million dollars + 1% in dollars, or does that 1% get paid back in rubles or what?"

First, you'll see that I took care of the interest rate mathematics so we can focus on the core issue--what is borrowed and what is repaid. My guess is that you already have the answer you're looking for. [[This is partly why I believe GATA will fumble the ball...they know tons about mining for Gold, but apparently not so much about Gold itself. At the end of a long and valiant effort, GATA will have "discovered" two things that are hopefully already well known to everyone who frequents this Round Table. They will learn 1) that Gold is MONEY, and 2) that bankers have been granted the privilege of fractional reserve lending by the grace of their fellow man.]]

Back to your question, just in case the rewrite didn't make things abundantly clear. When someone lends money or currency such as a million dollars, they don't care whether they get back the exact same dollars that were lent. Dollars a fungible. One is as good as another. If you borrow dollars for a month, the lender wouldn't call you corrupt if you sold those dollars to a car dealer for a new car. At the end of the month, you aren't expected to reclaim those dollars from the car dealer (plus interest) in order to repay your loan. It is expected at the time of the loan that you will have access (earnings?) to additional dollars a month from now. The loan was to bridge the gap.

With Gold leasing to Gold miners, for example, this seems quite natural, just like lending dollars to an American with a job. The interest is not paid in rubles, or yen, or anything else. The interest by loose definition is a fraction of the loan principal. I don't care how thin you slice it, you'll never find that 3% or 0.25% of any bar of Gold is composed of dollars. A small percentage of any pure Gold bar is simply a smaller Gold bar. That's why the lease rates on Gold are so much smaller than typically found with currency loans such as dollars, pesos, or rubles.

Does the original Gold that's leased leave the possession of the lender? Maybe it does, maybe it doesn't. When a bank lends you money, do you leave with a check, or with paper cash? Similar deal. Hope this helps. The key to much of this is to understand the two elements in my earlier parenthetical statement.

Gold. Earn you some; it's REAL money. ---Aristotle
SteveH
(09/03/1999; 08:13:22 MDT - Msg ID: 12727)
things
Canamami,

Remember that 510 silver means $5.10 silver and your $10 means $.10. FYI.

This was written by a person whose net handle is RSA. He has given permission to reprint this. He posted this at the stockman@megahits.com net letter.

SteveH

In response to David Debertin's comments on gold, this is from a piece
I wrote in early March 1999 for RSA

*****************************************************

Through this severe bear market phase, the commentary about gold has
been pretty negative in the financial press, which is typical of bear
markets. Quite often we hear that gold has no monetary value as
currency, it has lost it's luster, a fad of the past, gold is dead,
gold is now just another commodity.

These people either do not have clue what they are talking about or
have sold gold short.

If these pundits were correct and gold is just another commodity we
would only have to look at supply and demand to determine it's price
direction it would be so much easier. We would just have to watch for
fundamentals that either increase or decreased inventories with the
resulting price movement. Not so easy with this 'just commodity' gold,
we have to consider many other things not present in your everyday
commodity such as central bank policy/leasing, politics, FED and
government policy, hedge funds activity and the carry trade.

If these pundits are correct, why is gold the only commodity Central
banks hold as a reserve.

If gold was just a commodity why is it's price among the data that
Alan Greenspan watches according to a past Rueters article "Among the
data he looks at, Greenspan said, are money supply, gold prices and
the Treasury's new index-linked debt."

If these pundits are correct, why do the Swiss have to hold a
referendum before they can sell their gold.

If gold was just a commodity, why to we baste ourselves in it's beauty
as jewelry or a coin to hold in ones hand. Why don't we just have a
brass or copper wedding band.

If these pundits are correct, why has so much gold been sold short in
the paper market than there is available in the physical market and
when the fundamentals are so bullish. Any other commodity would never
have this kind of short position with over whelming positive
fundamentals of supply and demand unless it was being manipulated.

If gold was just a commodity, why did Korea, ask it's people to turn
in their gold in time of crisis.

If gold was just a commodity, why the fascination, why am I writing
about it and countless others. You can find new articles on the web
about gold on a daily basis.

If these pundits are correct, why has it become so difficult to locate
and buy a gold coin.

If gold was just a commodity, why in times of war does the enemy walk
right past your banks vaults full of paper money and steal your gold.
No this isn't a thing of the past, it happened in the 1990s with Iraq
and Kuwait.

No, gold is a lot more than a commodity, it is in field of it's own,
it is an Institution, it is money, beauty, wealth and power, it is
durable and long lasting, it is sought after around the world and at
the same time it is feared by many bankers and politicians, it has a
much longer history as money than any paper currency. No other
commodity has a monetary value that can be used as world currency,
other than perhaps, silver, poor man's gold. At the same time, no
currency has the same unique qualities of gold.

When I hold a gold coin in my hand, I can feel it's weight and beauty,
I think of the long history of gold, the Spaniards and Incas. I know
people toiled to find the gold and mine it. I know it was weighed
carefully and the coin was minted with care and precision. Hand a gold
coin to anyone, they are in awe, they hold it, feel it and examine it
carefully.

Give them a $5, $10 or $20 dollar bill and they barely glance at it
before it is stuffed in a wallet or pocket and passed on to someone
else. When I think of paper money, I think of a press going Chunk,
Kchunk, Kchunk turning out millions of duplicates at a push of a
button. I see it's value continue to erode. I know that no paper
currency, in the history of earth has ever retained it's purchasing
power over time, because it is just to easy to make and exploit.

There is no doubt, gold is different and unique, it is not just
another commodity and it is no where near dead.

Inflation, Deflation and Gold

Unlike paper currency, gold has survived the test of time and is well
known and talked about as a good hedge against inflation. This is
true, but the problem with the price of gold lately is that there is
no inflation. In fact gold is a good leading indicator of inflation
and is one of the reasons the FED watches it's price. What the drop in
gold has been telling us in the past two years is inflation is heading
down which is a documented fact now. What many fail to recognize is
with golds drop down to $300 and less it has been screaming deflation.
The central bankers or generals are still worried about the last war
called inflation. They have been way too slow and have not acted
enough to easy monetary conditions, particularly the U.S., I have been
critical of this in the past and still remain so and is one of the
main reasons that I am bearish on the economy and markets. While the
U.S. economy has been doing well, the rest of the world is crying for
more dollar liquidity then the FED is supplying. This is very evident
with the plunge in commodity prices that you seen in last months
issue..............................................

******************************************************

I might also add

Gold remains the only objective money in the world Greenspan himself
believes gold is a currency and watches it closely. Last May his
comments were "Gold still represents the ultimate form of payment in
the world and is always accepted. Gold is perceived to be an element
of stability in the currency and the ultimate value of a currency".


The demand for gold is setting records. According to the world Gold
Council this past week, gold demand climbed 16% in the 2nd qtr., a
record for any three month qtr. ever.

The numbers are not in on whether or not central banks have been net
sellers of gold in 1999, the press is mainly feeding us the sell side
of the story only.

Whether or not the BOE sales were used to hold gold prices down, it
has now become very clear the BOE sales took place because the market
is running out of physical gold and these sales were a necessity to
provide liquidity. If the market understood this it would be a huge
plus and a bullish factor for gold, but instead the huge short players
and the gullable taking heads of the media put a negative spin on it as
CBs unloading unwanted gold when in fact they sold in a desperate act
to provide gold to a market that is in such huge demand there is
little gold left. The CB sales have been recieving huge negative
press this past year when in fact CB sales last year were lower than
as recently as 1996 when we seen the peak in the gold price at $420.
The press is only emphazing the sell side of the story and their is
little news on CB buying that has been obvious from public statements in
China and Japan and perhaps others that received no press at all.

Gold import statistics released for June show that South Korea's
imports of gold skyrocketed to 72 tons from 44 tons a year ago (that
is one month only, June). The January-to-June total for this year for
Korea gold imports is 264 tons, up 38% over the same period last year.

In Taiwan, June imports were 94 tons, twice that seen in May of this
year, and more than twice the previous year. Year-to-date, Taiwan's
gold imports are 368 tons, up from 155 tons at this time last year.
Imports are also up in India.

Gold may just be a commodity to many in the U.S. who have experienced
a strong $ in the last decade, but that is not the view in many other
parts of the world, especially in the 1997 currency crisis when those
with mighty US$, had those accounts frozen or their banks closed
in time of need.

RSA
Resource Stocks Advisory & Struther's Future Tech Report
4-1565, 16th St E, Suite #221 Owen Sound, Ont. Canada N4K 6X8
519-374-9332 Fax 519-372-9621 Editor: Ron Struthers
Email resource@bmts.com Web "http://www.sentex.net/~resource"
Investment Opportunities & Strategies in the Markets for Tomorrow


Peter Asher
(09/03/1999; 08:15:14 MDT - Msg ID: 12728)
canamami and All
It looks like gold was on a strong rally through the $256 barrier, powered by the news that the IMF was capitulating to pressure and agreed to sell their gold to the central banks rather than the open market. Then the unemployment report came out. The desperate traders of the world, sensing their impending doom, seem to have regarded this little payroll statistic as equivalent in magnitude to "The second coming." The Dow went up 170 in 20 minutes and the gold longs fled the Comex like a herd of spooked rabbits.

What I find most significant about this mornings Global market "Freak out", is that one single statistic report carries more momentum thrust than a MAJOR policy shift speech from AG. It appears that trying to apply any kind of logic to the probable direction of the markets at this moment in time is futile. Nevertheless the structure of it all becoming more like a house of cards than a brick --house, and when the big bad liquidity wolf huffs and puffs, those who built their house of Gold will live happily ever after!
CoBra(too)
(09/03/1999; 08:15:40 MDT - Msg ID: 12729)
More on "tail wags the dog" syndrome in todays
weaker than expected employment figures, tying the last 4,2%
multiyear low of unemployment rate and sends bonds and equities soaring.
PM's down, of course.
I'm getting a laugh out of the concept of watching single economic indicators, as TC's tea leaves, suggesting the future FED action in terms of contemplating the direction of interest rates. The dire outcome of the underlying facts of a debt induced bubble economy may probably not be resolved by a set of numbers, indicating a somewhat more benign pace of growth.
So let's be resolved to make the best use of the prolonged window of cheap gold.
BTW, the days after labor day are more significant towards the future direction of markets, according to Wall Street rules.
All US friends - have a great long weekend - CB2
TownCrier
(09/03/1999; 08:22:23 MDT - Msg ID: 12730)
Fed Says Added $4.500 Bln of Reserves to Banking System Via Six-day System Repurchase Agreements
http://biz.yahoo.com/rf/990903/ov.htmlThis one-way flow of money should come as no surprise by now.
SteveH
(09/03/1999; 08:22:25 MDT - Msg ID: 12731)
Phaedrus
It would seem the BOC can sell gold on the QT but England can't. I believe these are last ditch efforts or sales of last resort to cover all those contracts where they are the guarantor. Every ounce sold in this manner would appear to be less ammunition in the pouch for later.
SteveH
(09/03/1999; 08:23:34 MDT - Msg ID: 12732)
Question
Towncrier,

Can you tell us the significance of this in a few sentences? You probably already did but once more if you would, please.

Steve
canamami
(09/03/1999; 08:32:43 MDT - Msg ID: 12733)
Reply to SteveH
SteveH,

I already know and basically have always known that the silver ounce is circa $5.00. Just a brief cranial cramp induced by mrci's quoting the silver price in hundred ounce units, and my rushing to do something else. I don't believe anybody was misled.
TownCrier
(09/03/1999; 08:41:07 MDT - Msg ID: 12734)
U.S. jobs growth weaker than expected in August
http://biz.yahoo.com/rf/990903/jt.htmlNew job growth slower than expected, but unemployment fell in line with expectations. This might explain today's morning behavior of falling gold price and stocks and bonds rising sharply.

Investors seem to live each day independently of the surrounding weeks.
CoBra(too)
(09/03/1999; 08:44:32 MDT - Msg ID: 12735)
Charles Peabody at his best over at the cafe-
To whet your appetite just a quote: "... a credit derivative called CLOs (collateralized loan obligations)-soon to be renamed CLOWNs (collateralized loan obligations worth nothing)..." - sums up my thoughts nicely!
USAGOLD
(09/03/1999; 08:52:44 MDT - Msg ID: 12736)
Today's Gold Market Report: Weird Scenes Inside the Gold Market
MARKET REPORT (9/3/99): Gold was down this morning despite the big two day hike
in gold lease rates. Historically gold lease rates rarely get over 1% and when they do it
usually portends higher prices. The current trend of higher interest rates and a tight bullion
market began in July and corresponded with the announcement by the Bank of England that
they were going to sell off most of the British people's gold. All the strange machinations
surrounding the present gold market seem to find their way back to what is going on at
Threadneedle Street and a strategy that appears to be directed toward its getting gold to a
counterparty in trouble on a gold loan. Some central bank wants their gold back and it
appears that a bullion bank associated with Bank of England in some way needs gold --
desperately. I would not be surprised to discover that recent successful efforts by Goldman
Sachs to tie up a good portion of the COMEX warehouse stocks is meant to deal with the
same need. Yesterday, there was another huge reduction in eligible gold stocks -- 72,469
ounces -- a further indication of strange scenes inside the gold market. With rates now over
4% and curve inverted reflecting a strong current need for leased metal, the BOE has found
a competitor for the world's gold supply -- investors worldwide who find the metal
attractive at these prices. The 25 tons of gold to be auctioned later this month by BOE will
have little effect on the supply deficit, and the psychological hold that the sales have on gold
pricing in will erode in time. One wonders what the BOE has in mind for the future. I
would not be surprised to see the British throw in the towel on the sales. When they do,
buckle your seat belt. It could blow the lid off the gold market as the financial world
discovers that the short squeeze is a reality.

That's it for today, fellow goldmeisters. Have a nice weekend.

The September edition of News & Views is a major you-don't-want-to-miss-it, highly
informative, and slightly irreverent blockbuster. We revisit our Five Horsemen of the
New Apocalypse -- the euro challenge, Y2K, the Asian contagion, the bubble stock
market and rising oil -- none of which have taken the summer off. We also preview the
Ten Reasons Why Main Street Worldwide Is Returning to Gold and Short &
Sweet (as is our custom) rambles with a hint of cynicism through a litany of world
political and economic events. You won't want to miss our look at the world of gold to kick
off the Fall investment season. The Season of the Yellow Metal? Just might be so...........

Please call 800-869-5115 (Ask for Mary Conway) if you have an interest in receiving
a trial subscription to our widely read newsletter, News & Views: Forecasts,
Commentary and Analysis on the Economy and Precious Metals. Or you can
go to our ORDER FORM and submit your request by E-Mail. You will also receive our
introductory packet on investing in gold.
ss of nep
(09/03/1999; 09:00:22 MDT - Msg ID: 12737)
US Job Numbers
I have stolen tese two posts from one of those other forums.
----------------------

Date: Fri Sep 03 1999 09:00
glenn (FOX-MAN) ID#423288:
Copyright � 1999 glenn/Kitco Inc. All rights reserved
The secret is so straight forward and simple. If you know what the employment report will be strong or weak you can make a fortune in the bonds or S&P's as the report comes out. The s&p is up 20.00 the last I checked.
The employment report is not a monthly average as everyone thinks. They do NOT count the total number of people working each day and divide by the number of days in the month. What they do is look at the employment in the US on the 13th of each month. That exact day is critical. If the 13th is a monday then it will be stronger because people are hired on monday, and almost no-one is fired or laid off on a monday. But if the 13th was a friday then it will be weaker. People do not start a new job on fridays, but alot of people have last days as fridays. Tuesdays are the second strongest, followed by wednesday and then thursdays. Last month had the 13th as a friday. It is so simply. THis is the third or fourth time I am telling poeple this, perhaps we can remember it this time.........I wonder why others do not know. It really shocks people each time....cnbc says "Oh my gosh, noone expected THAT!" and I say it was so obvious how could you not expect that?
Date: Fri Sep 03 1999 09:38
glenn (Slang & Cage ) ID#423288:
And next month ( Which the 13th is a monday ) the report WILL come out stronger than expected and everyone will go "OH WE NEVER EXPECTED THAT!" and stocks and bonds will tank. Plus having a 13th monday following a 13th friday will also add straight to the report since this is a fluctuation and does not represent what is really going on. ie- this month is really strong than what they are telling us and it will show up next month.
CoBra(too)
(09/03/1999; 09:03:40 MDT - Msg ID: 12738)
@PA - some of our thougths seem to be in sync-
BTW-quite a coincidence -some of our leading papers actually printed the warning of an Austrian economist (Christian Helmenstein, IHS -Institute for (higher)Studies) on an impending Wall Street crash of up to (sorry - more like down to) 60%. a speech delivered last night at the Forum Alpbach, Tirol, which was contradicted right away by some of the leading bank analysts - calling for maybe a minor correction of max. 10%.
Coincidentally, I also found an invitation to a discussion from my main club in Vienna, "featuring" Marko Musulin, head of Investment banking at Credit Anstalt (formerly Austrias # 1 bank-taken over by Bank Austria) on the topic of "Aktiencrash 2000???" - Crash of equity markets 2000???
Coincidence?
SteveH
(09/03/1999; 09:12:14 MDT - Msg ID: 12739)
Lease-rates
www.kitco.comrepost. Important!

rhody (LEASE RATES: Disinflationary U.S. wage and employment) ID#410367:
Copyright � 1999 rhody/Kitco Inc. All rights reserved
figures for Aug. are sending stox to the moon and lease rates
up about .25% across the board according to preliminary figures
this morning. Shorts will sell gold a tonne today, and do
it into a thin, long weekend options expiry Friday. I cannot
imagine a more negative combination. People in China, watch
your feet, you could be struck by falling gold bars.
But. With one year lease rates at 3.70% and forward
rates down to 2.4% we are now in the territory where
Central Banks seem to loose control of POG. Unless short term
Treasuries yields rise, or lease rates come off again, the gold
carry is dead at these levels. I think I would just watch this
and see if the forward rates stay down here. As POG falls and
the shorts get overconfident, this gold market could really
start to boil. If you were a CB, would you lend gold into
this market, knowing that it would accelerate the decline of
your only real asset, and knowing that there is significant
risk of default? What these labour/wage figures have done is
drop the atmospheric pressure on a gold market which was already
close to a boil because of liquidity/risk concerns. FWIW
TownCrier
(09/03/1999; 09:26:40 MDT - Msg ID: 12740)
Tea leaves: IMM currency futures mostly lower in active trade
http://biz.yahoo.com/rf/990903/p1.htmlDollar getting a boost as fears ease of an October rate hike by the Fed.
TownCrier
(09/03/1999; 09:38:20 MDT - Msg ID: 12741)
German Mark To Be Kosovo Currency
http://biz.yahoo.com/apf/990903/kosovo_mon_1.htmlVeeeeeeerrry interesting...
SteveH
(09/03/1999; 09:38:36 MDT - Msg ID: 12742)
Armstrong
Does any of this Armstrong business tie into gold and silver and his relentless tirade against the heavy metals?

(someone asked me)
Desjardins
(09/03/1999; 09:41:37 MDT - Msg ID: 12743)
Forward Hedge Producer Prices
Can anyone provide a link to any site that would display what long term hedge contract prices are, ie. 2 - 5 years out for a company wanting to start up a mining project and wanting to hedge future production. Thanks in advance.
Aristotle
(09/03/1999; 09:43:07 MDT - Msg ID: 12744)
SteveH--I see you're wanting "to know the significance of this" from TownCrier
Allow me to take a stab at this big question--I've answered it before, and Townie always looks so busy. It depends on what the meaning of "this" is. (Just having fun...) I'll assume you mean the Fed adding reserves daily.

The banking system is a vast collection of independent banks networking to stay two steps ahead of the general fraud they foist upon the unsuspecting public. They are, however, expected to operated within established guidelines, even though these guidelines might seem quite favorable to them to begin with (I refer to fractional reserve lending reg's.)

On one side of their balance sheet are their liabilities--money belonging to the depositors generally in the form of checking or savings accounts.
On the other side of their balance sheet are their assets--money that "belongs" to the bank generally in the form of vault cash and outstanding loans to others.

These two sides of the ledger must balance, with the additional requirement that the bank must maintain at least ten percent of their total checking account deposit value on reserve as cash. Any reserves on hand beyond this requirement are often "invested" with the Federal Reserve System, exchanged for interest bearing notes. When the banking system is a net buyer of these notes, the Fed is said to be "draining reserves from the banking system." When the banking system needs their cash back, the Fed is said to be "adding reserves to the banking system" often done through the repurchase of the notes. With me so far?

Why does the banking system turn into net sellers of notes, causing the Fed to add reserves through these overnight repos of the same notes? Because the banks need the cash. If a person with a savings deposit walks in and withdraws their money, the bank reaches into their pile of vault cash to settle the withdrawal. While their ledger still balances (an equal number of dollars was removed from each side--asset and liability,) this cuts into the ten percent reserve requirement that they need for their total checking deposits. The natural thing to do is to have the Fed repurchase some of those extra interest bearing notes, turning them back into cash on hand.

What happens when all the bank's interest bearing notes have been exchanged, and the last bit of vault cash has been handed back to a depositor? You end up with a bank that only has outstanding loans (as assets) balancing the remaining deposts (as liabilities), and the bank would be in default of its reserve requirement. Any depositor seeking their cash couldn't get any. What's the bank to do? It must either call in some loans (never an easy thing to do) or seek a loan for themselves from the Fed or other banks.

You can see how the Fed truly is the lender of last resort. They will lend dollars (Federal Reserve Notes) to our governments in exchange for U.S. Treasuries (bills, notes, bonds) when no one else can be found willing to do so. They will also lend dollars to various banks during a quasi bank run. The rub in front of Y2K (other than the obvious profits distress to the lenders) is that there is simply not enough paper to go around, even though the Fed would be happy to credit the bank's accounts with digital money as needed.

Gold. If it's in your hand, it didn't come from thin air. ---Aristotle
TownCrier
(09/03/1999; 09:47:14 MDT - Msg ID: 12745)
Unemployment Drops to 4.2 Percent (matching a 29-year low)
http://biz.yahoo.com/apf/990903/economy_5.htmlThat's low!

This Associated Press article is full of data from today's Labor Department jobs report.
CoBra(too)
(09/03/1999; 10:05:05 MDT - Msg ID: 12746)
Observations of a (re-)tiring bull, or is it bear?
Climactic buying foreboding the last spike of the old bull or the last feeding frenzy before hibernating - of the bulls -, since Wall Street bears usually start roaming in October.
Late Summers, AG and his little "fed" indians are stampeding the remaining herds of sheepish buffalo to the Centennial Cliffs (Mitchener) in order to weather winter storms by scalping all for food and shelter. Don't get crushed in the rush.
TownCrier
(09/03/1999; 10:21:26 MDT - Msg ID: 12747)
Yeltsin Discusses Banking Scandal
http://biz.yahoo.com/apf/990903/russia_ban_2.html"What? You say we stole your dollars? What dollars? We don't have dollars. We don' need no steeeenkeen dollars!"

(Apologies to Humphrey Bogart and Co.)
Cassius
(09/03/1999; 10:51:32 MDT - Msg ID: 12748)
@SteveH Armstrong
If you read Midas'latest post at the Cafe, he addresses the issue of Armstrong's companies having their assets marked up by Republic Bank of NY. Apparently, his hedge fund is underwater and he is heavily short gold and silver. The manipulation was to make the situation to appear better than it really is. He manages $1B in Japanese money which was placed with him to hedge against Yen currency loss.
Personally, I know Bill has strong feelings against Armstrong because Armstrong has publically demeaned Bill's intelligence for pursuing GATA's objectives, because he and I have traded msgs about the man.
Bill's feelings about Martin baby is summarized in the last paragraph of his current post, "I'll send a stretcher over to Comex for Him."
SteveH
(09/03/1999; 10:54:07 MDT - Msg ID: 12749)
Dec. gold now...
$255.10.

Thanks Ari and Cassius.
TownCrier
(09/03/1999; 10:56:26 MDT - Msg ID: 12750)
Second sacking in Russia/IMF probe
http://news.bbc.co.uk/hi/english/world/europe/newsid_437000/437038.stmBank of New York sacks second employee, and Russian representative to the IMF, Mikhail Zadornov, announced his resignation.
Gandalf the White
(09/03/1999; 10:58:30 MDT - Msg ID: 12751)
Welcome "Lurkers"
Come on and join the discussion and let us know what is happening with GOLD in your part of this little world!!
<;-)
Aragorn III
(09/03/1999; 11:40:46 MDT - Msg ID: 12752)
When Gandalf the White says "Welcome" and says please step forward...
I must pay my respects and also say "Hello", old friend. I could scarcely be more pleased with gold these days, though some would surely say they see the work of Saruman or Sauron afoot. Use your enemies' own momentum to your advantage. When else in time has anyone been able to obtain purest money so easily through honest efforts?

got smiles?
GFD
(09/03/1999; 12:17:00 MDT - Msg ID: 12753)
Hipplebeck - More Leasing, More Pain
Just to add to Aristoles comments. If you borrow $100 at 10% for the year you have to show up at the bank a year later and pay them $110. It is the same for gold - borrow 100 oz at 3% you have to give back 103 oz. Gold has low interest rates because the loan is repayable in gold (totally) and theoretically does not have to take inflation, etc. into account.

Note that these are sophisticated players and so there can be any number of variations on this theme. But a simple gold loan lease is done in bullion and repayable in bullion. It is my understanding that if any fancy stuff is done, then it will be with additional derivatives to hedge the exposure of one or both parties. That is, in addition to the loan there may be puts or calls bought or written in some combination depending on what the innards of some poor chicken indicate on that day...

This is fine as far as it goes. But there does seem to be a major problem with the interest rates charged on these so called loans.

Woa! Didn't you just say you don't have to worry about inflation with a gold loan?

Yes, I did, but that is not the only factor to be considered when setting interest rates for a loan. There is one other important factor:

Credit Risk.

Until very recently the central banks and their partners in foolishness, the bullion banks, have deemed that extremely leveraged hedge funds and near bankrupt mining corporations (often residing in very impoverished nations) as being the finest credit risks on the planet (1%). Think about it. If you were willing to borrow gold, you were automatically given a higher credit rating than the US, Germany, Britain or Switzerland.

You can, if you quiet your mind and let this last thought flow through your mind and unfold in its full glory, realize why no one truly following gold over the last few years ever has needed hallucinogenics. (Alcohol, yes, but that is purely for medicinal purposes - pain management...)

Aristole, Peter Asher thanks for the kind comments!
phaedrus
(09/03/1999; 12:49:01 MDT - Msg ID: 12754)
blah blah blah
GFD, that's a heck of a good point in regards to the insanity of central banks' credit risk.

I can also relate to your note on alcohol even though I'm not much of a drinker- man oh man, it sucks bein' out in the cold, doesn't it? And believe you me- as a commodities broker, I can sympathize.

Anyway, I just wandered in here to note that somebody took out a little under a ton and a half from the COMEX stocks today. Not that the market gives a rip- after all, it's party time on Wall Street, baby.

You know, when it finally comes down, when the fit hits the shan and the bullion banks are bust and all the paper millionaire stockmarket geniuses are stumbling through the streets with dazed looks on their faces like shellshocked zombies, I'm going to have to figure out a way to keep my mirth in check. I mean, a guy can't just be walking around snickering at people, pointing and laughing all the time.

~p
GFD
(09/03/1999; 12:57:27 MDT - Msg ID: 12755)
The Great Balancing
There is a fundamental assumption among most goldphiles that the current market conditions are part of an extreme cycle and will come back to earth. Because the cycle has been so extended - according to this thinking - so too must be the retracement. An utterly earthshaking collapse that will be heard through history.

I tend to believe they are right. Particularly if the "New Economy"/"New Paradigm" people are correct about us entering a new world of bits instead of bolts. Students of market histories will know that any major shift like this results in enormous dislocations that express themselves economically as horrific depressions - with or without a hyperinflationary preamble.

How bad could it get? One example. People assume when they talk about the internet that means software, which means Microsoft and it's cronies. The market cap for Microsoft alone is about 800 Billion dollars.

However, this is an incorrect assumption, that shows how little people understand the powers unleashed by the internet. The internet is really about pervasive knowledge. This is expressed in software as "open software" such as Linux and it's cousins. The technical capabilities of this software is growing at an astonishing pace as more and more people contribute to it's capabilities. Within two years Linux will easily exceed even the most sophisticated capabilities of Windows. In other words you will be able to get a better windows than windows. If you are willing to download it off the net it will be absolutely free.

Free.

Unless Microsoft can reshape itself as an entertainment giant or a service company (a thought almost as bizarre as the current gold leasing scam) it's stock will be worth a infinitesimal fraction of what it is now.

At the turn of the century, brokers would put the holdings of widows and orphans into the stock of American Buggy Whip. "If American Buggy Whip is not safe then America is not safe". Amen.

Let us imagine, just for the sake of contemplation, that the markets will come back to earth and that Another's Thoughts do come to full realization.

A very interesting and wondrous thing occurs.

In a world of Dow 1700 and (say) 30,000 gold a great shift will take place on this planet. A phenomenon never before seen in the history of mankind. A Great Balancing.

If you look at the people who still seek gold for their savings they are often among the most poorest people on this planet. People like farmers in India or Indonesia.

When the Great Balancing happens many of the poorest will suddenly find themselves at a level of wealth comparable to, if not greater than, those of us in the so called "advanced nations".

An utterly breathtaking thought. And thank you, Another, for it.

Aristotle
(09/03/1999; 13:21:22 MDT - Msg ID: 12756)
GFD--12753
My hat is off to you! When I responded to Hipplebeck, I had a tiny window of time with which to sort through and organize a thousand thoughts. Upon a second reading, I'd have to say I failed miserably to convey the message with too many thoughts left unsaid, and loose ends left untied. It probably makes fine sense to everyone who already knew the answer, but I'm afraid it falls far short as an educational tool for a novice. But YOU, good sir...you've crafted another fine post and are surely a credit to this Round Table. I look forward to your future contributions and appreciate that you saw past my sloppy treatment of lease rates. I'll seek to improve, or at least stay out of your way.
"Squire! Bring this gentleman an ale, and let's hope he stays awhile."

Gold. Get you some. ---Aristotle
watcher
(09/03/1999; 13:27:05 MDT - Msg ID: 12757)
money shortage/ aristotle
Hi all,
Read your post aristotle and appreciate your thoughts

Their answer to the cash shortage may be in the future of the currency evolution and the perpetuating of the new cashless society.
They may issue cash cards instead of cash similar to the new phone cards. If you want to buy something or withdraw cash they may try to give you a cash card for the same amount. Not exactly as good as cash but given the choice of no withdrawal (no paper cash) or a card we all no what John Q public will choose. Get your cash and gold now while the choice is still there.
Goldspoon
(09/03/1999; 13:37:20 MDT - Msg ID: 12758)
GDF
Excellent posts GDF, one can see clearly the sea changes the internet will have on the very companys that helped to create the cobbeld monster that it is. Both software and hardware giants will change quickly, or die.... If i were playing the internet game FEDEX, UPS, etc. comes to mind. Replaceable only by a Startrek transporter.... and will reflect the growth of the internet with little risk after 2kay.
We can take our millions made on gold.. and rack up!!!

Take my advice..."Lets get Physical".....Gold...
megatron
(09/03/1999; 13:47:04 MDT - Msg ID: 12759)
like duh, gold!
Mom, Chelsea's mom said she could short all the gold contracts she wanted as long as she did her homework and said her prayers for the poor. How come I can't.
Honey I've told you a million times, when your father gets surgically connected to the Treasury, and I run for office then you can, but until then you'll have to be happy with these two-bit under the table derivative swaps.
WAAAAAA, I'm going to hold my breath. When gold crosses $300 and I'm gone you'll be sorry waaaaaaa....
CoBra(too)
(09/03/1999; 14:13:25 MDT - Msg ID: 12760)
I'm in a hurry - got to see my ophthalmic, or better oculist or is it -
OCULTIST to cure my myopic short sightedness on a scenario, proven since 1982. I must have had overlooked any potential clear day - seeing forever - back then. Calculating the lack of vision in terms of accrued losses since, I'm more than in a hurry to make up on lost opportunity on some paper gains, I've missed. Even, back in Oct. of 1987 my eye doctor, must have handed out microscopes instead of binoculars to curb my l.t(no, not tv.) view of the steep ascent dead ahead.
I, now do feel I've had all the short's'ighteness and it is time to get new glasses for the longer view. Far-sightedness escaped me , because of my myopic view of the scenic route to prosperity - then distant hills turned out (to build) mountains of wealth - as I tried to conquer these heights in the manner of Sisyphos - reaching for the top and finding to be on the verge of an avalanche ...the most lethal of avalanches, paper avalanches, as it turned out.
Rubbing my myopic eyes, after barely surviving I find myself blinded by totalitarian views, regaining my eyesight by looking into golden mirrors only. Others say, don't expose your tender sight to the stark and golden yellow, give yourself the chance to adjust your eyes - as Dr. AG prescribes - in a fashion of softer, even though, paper flashes, more accomodative to your vision(s).
I still feel in a hurry to see my oculist - evermore today, as more foggy numbers are numbing the l.t. vision of so many as they only see the end of the rainbow, promising a pot of true gold.... alas, in derivative contracts.
At the end of the rainbow - you'll find - that you'll never find the end of the rainbow!

...und das ist die Moral meiner Geschichte - mein Freund, Fremder/alias-Stranger!

watcher
(09/03/1999; 14:26:17 MDT - Msg ID: 12761)
thoughts continued
Just some more thoughts on this cash problem.
I'm not sure how universal this rumor was a few years ago about a new currency being printed and a recall on the old currencies. This was toughted by many coin dealers as a good reason to by coins(still is in my opinion). The scenerio being that much underground cash would have to find a place before the recall or be forced to explain all that cash.
Maybe these stinkers still have that card to play. After we are into or maybe thru most of Y2k they say that all this cash out in the streets is not good for many different reasons (increase in crime, conterfeiting ....)They then issue the new currency and issue a recall on all old currency and maybe some new regulations on how much cash can be held by individuals for their own good . All that crime and conterfeiting you know.This scenerio is just a maybe right now but another reason to buy gold and gold coins . Enjoying Participating with you all again. MK was not the only one to have problems with computers. Had to go out and buy new hard drive and work the bugs out .
Hipplebeck
(09/03/1999; 14:27:38 MDT - Msg ID: 12762)
to GFD, Aristotle, and anyone else who reads this
I just got home and found your postings! I am so excited!
If I have this right, the central banks are, in actuality, accumulating gold at the lease rate times the quantity they are leasing out. They are not buying but accumulating by leasing. Now if I can find out how much is being leased, I will have a better handle on this picture. If this business is truly done in gold, there should be a huge shuffle of gold, depending on the quantities that are being leased, and the length of the leases. Does anyone know where to find out what quantities are being leased?
What kind of collateral could possibly be accepted to cover the risks? I can't imagine these central bank people wouldn't cover their asses somehow. I would love to see one of these lease agreements.
Thank you,
Michael Hipple
TownCrier
(09/03/1999; 14:35:49 MDT - Msg ID: 12763)
The Bear Case: Wall Street's Latest Worry Is Elegantly Simple
http://www.thestreet.com/markets/marketfeatures/779696.htmlThis is a strongly recommended item to read.

Paul Krugman noted "Eventually the U.S. deficit and the rest-of-world surplus must be sharply reduced, perhaps even reversed, and while this adjustment could take place in other ways, it is likely that much of it will occur via a decline in the value of the dollar vis-a-vis the yen, the euro and so on."

Please do your best to get your mind around that idea. And read the article.
Hipplebeck
(09/03/1999; 14:51:57 MDT - Msg ID: 12764)
to GFD, Aristotle, and anyone else who reads this
My logical train of thought is that if the central banks are accepting mining stocks and hedge funds as collateral, then driving the price of gold down will work to their advantage in the long run if they are planning to corner the market.
Isn't it just a logical train of thought to conclude that these people are about to corner the gold market and own all existing stocks and stocks in reserve, leaving only what us people have in our physical possesion?
I'm probably missing something here, but I am sure learning a lot
Thank you all so much for your patience while I tread the learning curve.
Michael Hipple
USAGOLD
(09/03/1999; 15:13:20 MDT - Msg ID: 12765)
From Holtzman....
Tomcat said in (9/2/99; 11:22:58MDT - Msg ID:12671) that "the problem with using backwardation as a signal is that the spot POG is determined from paper gold transactions (thanks for this reminder, FOA)."

Holtzman here,

The measure you seek is not Spot, but Street.

You've correctly said that Spot is a creature of the Derivative world. It's the Paper price of a gold futures contract to be settled during the present month, and almost always to be settled for cash rather than for delivery.

As a result, it's no surprise that Spot POG is a better indicator of the Paper market since it is itself determined by constant repetitions of FOA's analogy of the two neighbours betting over the fence. Perhaps one in a thousand participants in the daily setting of Spot POG plans to buy physical gold or sell it. The other 999 participants are merely there to bet on it and claim their winnings in some other currency.

Put another way, how many people at a racetrack are attempting to buy a horse? If you want to know the going price of a physical horse, don't waste your attention on a racetrack.

If you want to know the going price of physical gold, don't waste your attention on the paper chase. And it's pretty obvious where we should look to find the going price of physical gold... I mean, after all, our very conversations here are being hosted by someone who spends his waking hours discovering that price.

The cash or Street price of gold is the number of dollars (or pounds, or euros) you take out of your wallet and hand to your friendly, neighbourhood coin dealer in return for a one-ounce Krugerrand.

Why a Krugerrand? Because it's the least numismatic, most commonly encountered, least lovely form of gold. It has no numismatic premium and no jewellery premium and no patriotic premium. It's even less attractive than a one-ounce 9999 ingot from JM or Credit Suisse.

That makes the Krugerrand the perfect unit of measure for Street POG. Its only special quality is that it contains exactly one ounce of gold (mixed with way too much copper).

The only thing which would disqualify the Krugerrand would be if suddenly coin dealers were willing to sell Maple Leaves or Eagles for less than Krugerrands. But to deal with that case, interpret Street POG as the price of the cheapest one-ounce coin available for sale at that moment.

The backwardation signal you seek will be when you see Quantity 100 Krugerrands selling on the street for significantly more dollars apiece than the Spot POG quoted by the paper markets that day.

A Krugerrand will always have a little premium built into its price (hi, I just bought these coins and I'd like to sell them to you without making any profit at all on the sale... my, that would be daft).

As things now stand, a month ago when Spot POG was quoted at $260, I bought a single Krugerrand for $268. That's within the range of normality. We're not in backwardation yet.

Let's say that Spot POG drops to $200 (easy, stomach, don't turn over now). What will a Krugerrand cost on the street then? If Spot POG drops no more abruptly than has been its wont in recent months, there's a decent chance Michael and his fellow coin dealers might then be able to profitably sell Krugerrands for $205 each. In that case, we're still not in backwardation and the shorts are still in control.

But if you see Spot POG drop to $200 while a Krugerrand selling on the street never falls below, say, $230-$240, hello new gold market. That's backwardation.

I think maybe the hardest mental hurdle for people to clear in understanding Another and FOA is this notion of two gold markets occurring simultaneously. There's an historical example (and it's Western :-) in which very much the same thing transpired...

In 1864, the USA and the CSA were reaching something of a stalemate in their war. Contrary to what most Americans learn today in (the winner's) school system, had but a very few decisions been made differently, the Confederacy would have won.

This, by the way, is why we see so many Americans (descended from both sides) re-enact Civil War battles over and over. How often (except on Monty Python) have you seen re-enactments of Pearl Harbour? The only battles worth replaying are the ones that could have gone either way.

In any event, to the average person living in Either the USA or CSA in 1864, the near term future was incredibly unclear and terrifying.

In the pre-war USA, national government funding was handled by the levying of import/export duties. The IRS was not yet a glimmer in politicians' eyes. For a nation at peace, duties provided sufficient income to run a minimalist national government.

In time of war, however, expenses magnify dramatically. Both the remnant USA and the new CSA needed to acquire vast funding very rapidly to raise an effective military. The both of them did so in the time honoured way: they borrowed the money. Have a peek at Lincoln greenbacks and Confederate paper money sometime. They are promises to pay the bearer with gold and/or silver at some significant time following the cessation of hostilities.

These documents were by no means the equivalent of today's Federal Reserve Notes (try redeeming a $20 FRN for a St. Gaudens sometime). No, Civil War paper banknotes were the equivalent of today's Gold Futures Contracts.

Oh, Lincoln greenbacks and Confederate dollars passed from wallet to wallet during the Civil War years as if they were currency, and in the first year or so they were regarded as 1-for-1 equivalents of coin. But as 1864 drew nearer, something odd began to happen.

"Howdy, I'd like to hand you this crisp $1 greenback in return for ten silver dimes change."

"I'll give you 8 dimes for a paper dollar, not a penny more."

Realise this happened in the North, in the remnant USA. It happened too in the Confederacy, but modern people remember it there only in association with the final default on paper which happened when the CSA government was extinguished.

But the sole difference between a Confederate dollar and a Lincoln greenback was that one paper issuer was still in existence in 1866 and one was not. In 1864, no one could confidently say that either government would still be there a mere two years hence.

Notice that, in this regard, not much has changed since then. In 1933 for US citizens, then in 1971 for the rest of us, the USA government voided its obligation to pay gold for paper dollars.

If you hand me silver or gold, I won't care whether the symbols impressed on it are from a reliable government, an unreliable one, or a defunct one. But if you hand me paper, I'd better be firmly assured the issuer will live long enough to pay off this debt to me.

Another and FOA, by saying wise people should avoid paper and only hold physical, are indicating that they expect the LBMA and Comex Gold Contract documents will go the way of the Confederate Dollar (or maybe more appropriately the pre-1933 paper dollar).

At the very least, they're saying the risk is so substantial that one should not be standing too near the fault line should the quake come sooner than predicted.

What the both of them are describing is an official Paper Spot POG (and its kindred future months' POGs) which may well plummet to $200 or even, as Another allowed some time ago, perhaps $10. Realise, though, that Another is by no means predicting that Michael will be able to profitably sell Krugerrands at $10 each. Far from it. What Another and FOA are anticipating is a situation much like the paper money situation in both the USA and the CSA in 1864: how likely is it that the paper contract you're handing me today will be redeemable for any amount of gold by this time next year? Tell you what, I've got a spare ten bob I feel no desperate attachment to. I'll buy your one-ounce IOU just for kicks. If LBMA completely expires, I'm out only a small amount. If LBMA unaccountably fails to expire, I've struck it rich.
Meanwhile, those of us with less of a gambling inclination will sleep more soundly holding physical. After all, a silver or gold coin remains silver or gold even after its issuer expires.

The one point of Another's and FOA's that I still don't entirely follow, however, is their contention that all mining stocks will go down to zero along with the Derivatives market. Certainly, any mining company which ties its future earnings to the paper market has also tied its future stock price to that teetering mass (Barrick, for example). And certainly, a low tide drops all ships, so that even those mining companies which are not involved in the paper chase will still suffer in the stock markets.

However, I have some difficulty seeing All mining stocks world-wide being extinguished utterly. Maimed, perhaps, but no matter how much trading turmoil occurs there will still be well-identified veins of gold ore sitting below ground, just waiting for someone to consider them valuable again. Yes, some of them may become nationalised. Yes, others will end up being sold at fire-sale prices. But I can't break myself from the notion that, much like the airline industry, the strong will survive and absorb the weak.

I'd dearly love to hear from either Another or FOA their thoughts on why they feel that not a single mining stock will survive. Or have I misunderstood you?

Yours,
I.V. Holtzman

Goldspoon
(09/03/1999; 15:18:12 MDT - Msg ID: 12766)
Fellow Knights....(and days too)
What stellar company you are... The quality of posts at this round table makes one humble....CB2 excellent and in focus too... When i started to first read and then post at this fine Oaken table i had only a hint of the members gathered here... The faces were in shadows hidden by your guilded armored helmets. As my eyes became adjusted to the golden glow here and my ears adjusted to the softspoken words of encouragement and of golden truth, i realized that i was in the company of bravehearts. Hearts tempered by battle and minds of refined wisdom..Unselfish souls willing to share the timeless knowledge of the true Golden Ages. A time stolen from us that i did not even know was missing.... i soon learned that even i had something to add (meeger as it may be) to this Golden Quest, almost as if i were drawn here of purpose... Excuse me for some of my past posts dear Knights of the round table... for i did not then realize how tall the trees in this forest were... nor how firmly rooted their convictions, nay even of the rich soil of truth and justice from which they feed.....makes one feel small... but proud of one's place....
beesting
(09/03/1999; 15:27:56 MDT - Msg ID: 12767)
Reference Points
Having spent 10 years in the optics field many years ago..(you know the instruments surveyor's use)..I thought this topic may help in our perception of the current "Spot" price of Gold.
The first day on the job you learn what a reference point is: A STARTING POINT!!
A few examples: Time!, needs the Sun(starting point) and rotation speed of the earth plus the earths revolution speed around the sun to be accurate.
Sea level!,anything above or below can be measured in feet inches or any other liner type of measurement.
These are examples of fixed and accepted(worldwide) Starting Points.

Lets move on to the "Spot" price of Gold.
The starting point for Gold is;The spot price of Gold worldwide, it's tracked by the minute and based on current prices paid in a very small(in area) segment of the worldwide Gold arena. London,New York,Hong Kong,Tokyo, and Sydney. These sales set the "Spot" price because they can be very large amounts of Gold. See: http://www.kitco.ca/image/gold.gif

Is this "Spot"price accurate?(like a calibrated timepiece)...NO!!...WHY!!! This is why:
90% of the transactions setting the"Spot" price of Gold are paper transactions(Derivatives) 10% is actual Gold metal changing hands.
Let me make a try at explaining derivatives:
From Websters Dictionary: A substance or thing that can be made from another substance or thing in one or more steps.
A relatively new term in the financial field.(15 years?)
Simple examples: I write a personal check and sign it but don't fill in; Pay to the order of......this check can be passed around until someone fills in on the line; Pay to the order of.... This could be called a derivative.
Another example: I buy a $125,000 home with $25,000 down and borrow $100,000 from a bank. The bank can create many more debt instruments(See Sir Aristotles works in the USAGOLD hall of Fame) or the bank can sell my debt instrument(mortgage)......This is also a form of derivative.

Now since these Gold derivatives(paper Gold) outnumber real Gold(physical) by 9 to 1 they dominate the pricing ranges.
Therefore, "Spot" Gold pricing, which was originally set by supply and demand of metal Gold is totally distorted.(For metal Gold)

What's going to happen in the future? I go along with ANOTHER/FOA's prediction that the derivatives market(which by the way covers most financial paper) is going to seperate from the metal Gold market. It's all just another form of fiat money,and as FOA has said many times,"history has shown fiat money has always collapsed over time.
If anyone can name one fiat money system that is still in existence worldwide from 100 years ago, please do it.
By the way,I have a 1999 world coins catalogue that can varify the claim.

The future---Physical metal Gold prices can be and will be set by supply and demand using cyberspace.
A person who has metal to sell will ask for a bid.
A person who wants metal to buy will make a bid.
Honesty and integrity would be insured by a middle man,for a fee. Similar to the way internet stock trading is done right now.
A record of prices can be recorded with much coordination among middle men over the internet worldwide,thereby creating a real "SPOT'S' (with an "S") price of Gold.The reason for the"S" is the many different forms and amounts of Gold in existence right now,would command different prices,for age and condition'similar to the present day coin market........Real supply and demand would once again rule--A free market system......FWIW.......beesting
Leigh
(09/03/1999; 15:34:15 MDT - Msg ID: 12768)
Mining Stocks
Dear Mr. Holtzman: I'm going to take a guess at answering your question about the mining stocks. The way I understand A/FOA's writings, (1) there is a strong possibility that governments may nationalize mines; and/or (2) the value of currencies will be so low that mining stock profits won't pay the rent. Am I correct, anyone?
TownCrier
(09/03/1999; 16:08:02 MDT - Msg ID: 12769)
After the Close...the GOLDEN VIEW from The Tower
Once again Wall St was dominated by a bout of panic buying as investors seemed certain that the supply of stocks and bonds would run out sometime over the long 3-day weekend. Don't worry folks...they can always make more where those came from. Now gold, on the other hand...

It never fails to amaze the various visitors who come by to chat and share this view from The Tower that the sea of humanity huddled before the marble doorways of Wall St has such a propensity to make such potentially consequential decisions on a whim, seeing only the current day's offering of data. Today was the Labor Department's report that showed unemployment in the US continues to fall, and new jobs continue to be created while wages rise. This would normally tend to give rise to inflation worries, but investors plowed ahead without a care in the world because the report was more benign than expectations. (KInda shows you how easy it is for Wall St to stack the deck...just provide some disingenuous "expectations.") While unemployment figures dropped to the lowest figure seen in 29 years (say...didn't something important happen back then in the gold market? 1971...anyone?), the creation of new jobs is moving at a slower rate than analysts had expected, and wages grew at a slower pace (0.2%) than had been expected (0.4%). Stocks and bonds both ZOOMED, and that's all I have to say about that, except...on the NYSE, 44 issues set new 52-week lows while 40 touched new highs. Go figure.

The question remains, what will the Federal Reserve do to interest rates at its next meeting on 5 October? Mr. Greenspan, with his "irrational exuberance" warning so long ago (December 1996!) tends to look at the larger picture. His comments one week ago in Jackson, Wyoming seem to have been disregarded already. You can't say you weren't warned...time and time again. Paul Krugman, an MIT economist, warned in a recent article, "Eventually the U.S. deficit and the rest-of-world surplus must be sharply reduced, perhaps even reversed, and while this adjustment could take place in other ways, it is likely that much of it will occur via a decline in the value of the dollar vis-a-vis the yen, the euro and so on." Foreign dollar holders worried about losses through weakening exchange rates will tend to shun dollar investments, which itself will reinforce the dollar's weakness. The Fed will most likely find the need to increase rates simply to maintain the foreign confidence that the dollar will not be allowed to erode through inflation...the same inflation demonstrated by their very same holdings of dollars. What a comedy! Like watching a magician pull an elephant out of a hat with amazement when all along you can clearly see the elepant standing there with the hat covering only part of its foot. Time to walk out of this one and find a new show...

The fate of gold today was caught up in the atmosphere of swirling confetti, and traders went home early on a short Friday before the Labor Day long weekend. The trading desks will remain empty until Tuesday, September 7th. Spot gold was being quoted in NY at $254.00 when the lights were turned out to end the day. Gold lease rates remain the big story, with the one-month rate now pushing well above 4% on an annualized basis. Check out these annualized rates for borrowing gold for one- and for two-month spans and draw your own conclusions.

1-month 4.1810% (change over yesterday +0.3030)
2-month 3.7460% (change over yesterday +0.1060)

Backwardation...seems that somebody is desperate for gold right now. Would YOU be tempted to risk your gold in the hands of a bullion bank for a 4.18% return? You would part with 100 ounces today with the earnings-expectation of one-and-a-half sovereigns next month. Hmmmmm...

They are rubbing their hands in Slovakia these days, and who can blame them? It seems that the Czech National Bank is considering the use of 4.5 tonnes of its gold reserves to cancel some of the unresolved claims to Slovakia which arose from the division of former federal property 6 years ago. As we are reminded today of Fed Chairman Alan Greenspan's words on gold, "Gold still represents the ultimate form of payment in the world and is always accepted. Gold is perceived to be an element of stability in the currency and the ultimate value of a currency," you just know Slovakia is licking its chops, NOT turning up its nose at this deal in the works.

We reported a mass exodus of 2.25 tonnes of Eligible gold from COMEX's depository at Republic National of New York. Today, and additional 1.4 tonnes of Registered gold left Republic for destinations unknown. These past two days have reduced the COMEX inventory by 10%, leaving 33-1/2 tonnes, mostly Registered...and mostly Goldman's(?).

Time for school. Some people still scratch their heads over derivatives. What are they? Many knights have tried to explain these esoteric investment devices, but this article we found will surely open some eyes. The knights have frequently called derivatives "bets" on price directions. Having a derivative is not the same as owning an asset such as gold, oil, grain, or even a share of ownership in AT&T. As you read the following article from Bridge News, picture yourself "owning" one of these described futures, and ask yourself, "What EXACTLY do I "own"?!!" This, my friends, is a derivative.
---------------------
HEADLINE: Fed funds futures see rate hike fears decline after jobs data
By Genevieve Sedlack, Bridge News

Chicago--Sep 3--Fed funds futures contracts at the Chicago Board of
Trade rose after supportive monthly jobs data, and the odds of another
rate hike in October slipped. This morning, the Oct contract showed a 28%
chance of such a move, the Dec a 52% chance and the Jan contact showed a
76% chance.

Fed fund futures contracts joined the floor-wide rally after
better-than-expected monthly US jobs data scrolled across the screens at
the CBT. Traders said that action lessened the likelihood
of the Federal Open Market Committee further tightening interest rates at
its meeting on Oct 5.

The Oct contract nears its high of 94.700, reflected a 28% chance of a
tightening, up from Thursday's expectation of 72%.
The Dec contract rose to a high of 94.630, reflecting a rate of 5.370%,
or a 52% chance of tightening in November compared to Thursday's 72%.
The Jan contact, which is being viewed as an indicator for what could
happen at the Fed's Dec meeting, rose to 94.560, or a rate of 5.44% and a
76% chance of tightening at the year's final meeting. On Thursday, Jan was
showing 92% chance.

One trader said the jobs data have "bought the Fed some time" on
further action, although officials will be watching domestic data closely
for ongoing signs of inflation.
"We still have PPI next week. We're not out of the wood yet, but we're
breathing easier," said one broker on the floor.***
(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
-------------------------

October crude rose 51c to close at $22.00. Traders are now looking ahead to the OPEC meeting in Vienna later this month.

And that's the view from here...after the close.
TownCrier
(09/03/1999; 16:19:22 MDT - Msg ID: 12770)
Bank of Canada takes Y2K measures * * * MUST READ * * * (educational)
http://www.globetechnology.com/archive/gam/Y2K/19990903/RBANK.htmlThis ties in well with some of today's discussion on the Fed and banking system reserves.

Sir Aristotle, I meant to say thanks earlier for fielding the inquiry of Sir SteveH. This article is my additional contribution to that matter.
CoBra(too)
(09/03/1999; 16:19:43 MDT - Msg ID: 12771)
@Leigh
Dear Leigh,
Please read Prof. von Braun's essay on "not all gold stocks are born equal" on either this site (excuse, I still can't paste) or at the metropole cafe.

While trying to cope with Prof. v. Braun's Scenario, where the message of default by overleveraging is more than clear. Meaning the bank will be able to "seize" the collateral or foreclose as in any other mortgage - the (unmined -and maybe pledged at 385$/oz as at ABX)gold reserve in the ground - may be at this risk, particularily if, even a low cost miner can't cope with the fallouts of prices, below real production (not cash costs- will gladly go into this discussion also) in the longer run.
Still, there are a lot of more or less unhedged entities out there, which as yet are not in the ultimate greenmailing claws of BB's. Most are operating on international concepts and go, where either the geology or the mining, tax and other laws are accomodative.
Finally, no government or their agencies ever,nor by the same token most major mining co's, have found a new gold deposit. Exploration is like new technology - (ad)venturous and (risk) capital intensive - so let the "cabal" seize assets of hedge fund "miners" as the likes of ABX- IMVHO the rest of the industry will prosper by weeding out the scam and scum artists, ultimately, proving (ABX being in the business by sheer and lucky chance anyway) some of the solid, if undercapitalised, but proven on geologist and other manpower, unshakeable convictions to find the bonanza, will survive - even while starving!

Sorry - dear Leigh - that's a view from the (gold) trenches..
Sorry for

SteveH
(09/03/1999; 16:24:15 MDT - Msg ID: 12772)
Holtzman
Bravo, sir. Well done.

I do detect a change of slight heart with your latest prose.
TownCrier
(09/03/1999; 16:30:29 MDT - Msg ID: 12773)
Goldspoon (09/03/99; - Msg ID:12766), you just landed yourself ...somewhere, I'll find a place...in the Hall of Fame, IF!
If I can find concurrance among this group. If not, your words will ring just as true and fine, but neatly shelved as a golden nugget in the archives...a pleasant discovery for any that should pass down this row with a torch from this day forward.

Well said, and I absolutely agree with you.
dracip
(09/03/1999; 16:34:53 MDT - Msg ID: 12774)
jobs report
http://www.usagold.comIknow three us cos as a consultant or board member.The first one,in the health sector,cannot find the professionals that it needs.of the other two,manufacturers in the midwest, one moved a thousand jobs to mexico because they could not find more workers necessary for their operations;the other,amidsized plant,needs 100 workers and does not even try to hire."there nobody around"I wa told.The job report should be read in this context.Dracip
Neo
(09/03/1999; 16:40:45 MDT - Msg ID: 12775)
Plan B : "Please Congress, don't be mean to us again!"
One of the latest scams, SORRY, I mean plans, put forward by the IMF is that they sell some of "their" gold to the central banks. The central banks will then return the gold at a later stage in lieu of subscription they pay for IMF membership. WHAT??? Is the IMF now leasing gold to the central banks?
The IMF were to sell at 46/oz, the value the fund imputes to its gold reserves, but will now sell at market value and hence, make a "profit", which can be invested in HIPC fund.
I have one question : When the central banks return the gold to IMF, " in lieu of subscription they pay for IMF membership " will they return it at market value, or 46$/oz.
Assume they return it to the IMF at market value, and assume that market value is STILL about $255, then the net is a transfer of dollars to the IMF. Either the central banks currently have no dollars to give to the IMF, mmm....., OR maybe the central banks see an improved gold/$ rate in the near future,mmm....., OR maybe the central banks would DESPERATELY like to add to their depleted gold coffers in the next month or so.
I have assumed in the above analysis that the central banks hold all the cards, and are in fact the ones exerting pressure on the IMF to reduce its gold holdings.
YES, the IMF puppet is having its strings yanked. "The next UK sale is due on September 21, only days before the IMF's annual meeting ; its self-imposed deadline to find a solution to the gold sales problem."
Leigh
(09/03/1999; 16:45:31 MDT - Msg ID: 12776)
Goldspoon Dittos
Dear TownCrier: If Goldspoon's complimentary work is placed in the Hall of Fame, whenever someone else wants to say something nice about the Forum, they can write, "Goldspoon Dittos!"
Goldspoon
(09/03/1999; 16:45:32 MDT - Msg ID: 12777)
"The abomination of desolation" (Biblical)
http://www.stratfor.com/hotspots/korea/default.htm?section=3.4MUST READ..(Thanks Townie).. The War of many fronts i've been predicting for this month may be started by North Korea..(Chinese guard dog) may be ready to take a bite out of South Korea and provide a diversion so the Chinese can then begin the raid on the Tiwan hen house......As every one knows the U.S. has made public "We are only ready to fight a war on two fronts"....Would we be willing to fight both of them in Asia... thus leaving ourselves exposed at home and in all of the rest of the Globe??? We might have tried to stop China if it were the first to start things... but it looks the Chinese are going to play the ole Korean gambit move...
Korea is ready to try the waters once more... (see link)...

Here is an update from my neck of the woods, don't know if this is a correct linkage of events to the scriptures but this is what some folks are saying around here... just info not trying to be preachey....just a report on possible development on wars from my war lookout post...
Nothing like Global War to shake the stability of currencies and the Gold markets...by the way gentile Knights, would some of you learned schollars please provide speculation as what would be the first kneejerk reaction....A flight first to Gold.... or the Dollar and why????
Update from the Bible Belt... sign of the times??



Israeli troops will hand over more of the West Bank to Palestinian control and the two sides will embark on so-called "final status negotiations", including talks on such deeply contentious issues as water, refugees, Jewish settlements and the future of Jerusalem.

Withdrawl from lands given to the Jews by God, spoken of in the Bible as "The abomination of desolation"

Palestinian negotiator Nabil Shaath had earlier announced that the two sides had reached an agreement."We hope this will usher in a new era of peace and real success in implementing all the agreements that have been signed so far and in moving ahead to resume permanent-status negotiations."

"When they cry peace and safety then sudden destruction"...GOD
Leigh
(09/03/1999; 16:48:20 MDT - Msg ID: 12778)
Goldspoon
Oh, Goldspoon, now the Forum's going to go down! You said the "W" word!
TownCrier
(09/03/1999; 17:00:01 MDT - Msg ID: 12779)
Leigh, that's a nice thought.
As a compliment to someone, you would verbally give them a gold spoon as a prize for a post well done. As in:
"You served that dish up on a golden spoon! Keep the spoon for your efforts, most worthy Knight!" or, "A gold spoon to you, Good Sir!" An evolving forum lexicon will surely take care of this matter without my help. I'll just sit back and watch. For example, they call me Townie. I don't know why, and I never said they could. But they all do.

And I like it.
GFD
(09/03/1999; 17:06:25 MDT - Msg ID: 12780)
Aristole
Thank you sir for your kind words! I have to say that I have enjoyed reading your posts. I had a bit more time to answer Mr. Hipplebeck and also to clarify my own thinking.
TownCrier
(09/03/1999; 17:12:24 MDT - Msg ID: 12781)
Floating a trial balloon
I ran this idea past those great guys in The Castle. Ok, it was just MK, but he runs the place and has the heart of ten men. Anyway, with the past system crashes, in addition to various requests that the archives be searchable by keywords, I asked whether he would consider making a CD-ROM available for purchase that would contain all of the archives. Imagine having that in the safety of your own Castle, come Y2K or gremlins that defy Jeff's best efforts. The real bonus is you could more easily search the vast amount of information for key words.

Any interest? It would be nice to have an idea whether to take the effort to put this together. Here's a chance for all you knights in the shadows to get your names on the screen...step forward with a yea or a nay. I imagine it could be done for a nominal fee, but that might depend on economies of scale. Feel free to weigh in on this now and any time throughout the following week.
Goldspoon
(09/03/1999; 17:32:47 MDT - Msg ID: 12782)
Townie....Leigh.....
First i want to say Thank You...My words were inspired by posts such as yours....And yes the W word did seem to bring out those who would like to supress such info "Jeff" may know for sure, but most probably my paranoia and coincidence.....
GFD
(09/03/1999; 17:39:46 MDT - Msg ID: 12783)
Hipplebeck
It is my impression that the whole gold banking scene is extremely secretive. As far as I know, no public commentator has ever seen any of these agreements. The agreements between the central banks and the bullion banks are probably considered state secrets.

If you look at the chain of liability, the bullion banks will theoretically be one of the many claimants for assets of defunct mines and hedge funds. Given the leverage of the hedge funds I seriously doubt anyone would get anything from a failure other than legal bills - if the bullion bank was lucky. Remember that the trend is to make the creditors of hedge funds "part of the solution" by making them all pony up more money to bail out the hedge funds. So the bullion banks may wind up with more liabilities than they started out with.

As far as mines go, the bullion bank would have to come up with some type of settlement with the rest of the creditors, bribe whatever dictators need re-bribing (er licensing) and get the beast going again. Possible.

As far as central banks go, I have not yet been successful in getting my head wrapped around what the central bank of Brazil would do with a bunch of bankrupt Rothchilds.
Leigh
(09/03/1999; 17:40:13 MDT - Msg ID: 12784)
Goldspoon
Goldspoon, I was just TEASING! I love your posts! Thanks for the link. I saw your message about the Chinese Christians and have worried about them ever since. The system seems to break for any and every reason - don't get paranoid here.

Thanks for your answers to my past questions and your kind comments.
Goldspoon
(09/03/1999; 18:03:58 MDT - Msg ID: 12785)
Townie...
Put me down for one of those disks, my son needs a good education and reading the "Hall of Fame Posts" are akin to reading one of the Great Classics.... Full of well crafted pieces from great minds who take a techinal subject and make it an entertaining, witty work of art. Reminds me of a dear departed writer of the same ilk and gift for turning the techinally complex into simple logic.... Isac Asimov (sp?)

I have amassed most of my Presious Metals before finding this city of Eldorado nesteld here in the tall forests of Camelot..... but, i'm sure everyone knows where my further acumulations will come from...providing it's avaliable...
"Goldspoon to you"
Canuck
(09/03/1999; 19:23:57 MDT - Msg ID: 12786)
Cobra
"cut and paste" Part 1
Please read Prof. von Braun's essay on "not all gold stocks are born equal" on either this site (excuse, I still can't paste) or at the metropole cafe.
--------------------------------------------------------

1) Click and hold left mouse button and move over desired
text, text is now shaded (possibly blue in colour)
2) Release left mouse button, click on edit, click on copy.
3) Go to desired position in same program or other program,
click on edit, click on paste.

When you have 'copied' the highlighted text, in resides in the computer's volatile memory, you can then 'paste' it wherever you want.
----------------------------------------------------------
To all:

Obviously not a gold topic, but soon Cobra will 'paste' us
golden topics.

Canuck
(09/03/1999; 19:32:38 MDT - Msg ID: 12787)
Leigh
http://www.gold-eagle.com/editorials.html
Cobra refers to "Not all stocks created equal- von Bron";
3rd or 4th editorial.
tom fumich
(09/03/1999; 21:26:57 MDT - Msg ID: 12788)
Check bollinger bands on PDG...
Take a look at these and see for yourself...
Richard, Oregon
(09/03/1999; 21:43:24 MDT - Msg ID: 12789)
RE: Aristotle (9/3/99; 8:13:14MDT - Msg ID:12726)
Aristotle - Read this post. Nice job! Couldn't do better myself, although I read it, understood it, and probably could give a similar dissertation, although never so eloquently. Studying under the 'masters' does have its' rewards. Thank you for your time, your thoughts, and your knowledge.
tom fumich
(09/03/1999; 21:52:11 MDT - Msg ID: 12790)
I shall be quiet...
What do these bands say....
Gandalf the White
(09/03/1999; 22:10:43 MDT - Msg ID: 12791)
Holtzman's Post #12765
I have the honor (or is that honour, Holtzie) to nominate the POST #12765 for the HALL of FAME.
<;-)
Tomcat
(09/03/1999; 22:41:44 MDT - Msg ID: 12792)
Acknowledgements

Mr. Holtzman, thanks for putting forth such a balanced perspective on the reality of the street POG. Hopefully, someday we will be able to tell our kids that spot stands for the Street Price Of Things.

TC, I'm all for that CD ROM. If that doesn't succeed I will chip in for a search function in the archives. Along with posts like yours the archives are golden assets to be mined for the riches of understanding. Lets keep the CD or search function idea alive!

Aristotle, your #12,726 did the trick again. BTW, would you like to lease those German Wilhelm...?

Canuck, nice to have you back.

Koan, where are you?

Peter Asher, looking forward to your reply.

Goldspoon, those were some words. It is great that you appreciate the integrity of this forum and can put you feelings into such prose that touches the heart with such emotion. I am told that knights of old took pride in expressing what was in their heart. You are keeping the tradition alive.

The Stranger, your post on inflation hit home with such truth and the market today betrayed your foresight. A little time and more Greenspan repos will prove your case.
elevator guy
(09/03/1999; 23:00:06 MDT - Msg ID: 12793)
Goldspoon, #12777
As far as I have heard, the conservative interpretation of the "abombination of desolation" or more accurately, "the abombination that causes desolation", is the act of the AntiChrist, three and one half years into the tribulation, when the Temple is re-built, and the AntiChrist sits on the throne in the Temple, and declares himself to be God, and causes the deceived to worship him. To interpret the abombination that causes desolation as the withdrawing of Jews from lands given to them by God, is more than a stretch, it is an exegetical error. FWIW
elevator guy
(09/03/1999; 23:03:52 MDT - Msg ID: 12794)
spelling correction: "a b o m i n a t i o n" no text
.
AEL
(09/03/1999; 23:10:06 MDT - Msg ID: 12795)
"Koan, where are you?"
Perhaps Koan is depressed over silver tanking, yet again. Koan: cheer up, my friend! Silver will have its day in the... er... moon, and it may just happen before goldrise.
Peter Asher
(09/04/1999; 00:02:15 MDT - Msg ID: 12796)
TomCat
I hand wrote it while setting fence posts today, Now I have to weave the Holtzman post into it. Tommorow I'll set Forum posts. ---P.
tom fumich
(09/04/1999; 03:06:38 MDT - Msg ID: 12797)
So you degenerates...
Know when i am around....tooooo bad...USAGOLD disregard this stuff...please....
tom fumich
(09/04/1999; 03:13:06 MDT - Msg ID: 12798)
I'm sorry all....
But these people know most everything...i'm sorry....i will be careful from now on....
tom fumich
(09/04/1999; 03:33:52 MDT - Msg ID: 12799)
Let me ask you a question....
Do people know when you are there?
Leigh
(09/04/1999; 04:33:19 MDT - Msg ID: 12800)
CoBra(too) and Canuck
Thanks for setting me straight. I don't know how I got the ideas I had; last night I looked in the Another(Thoughts) to see if I could find out and just couldn't find them there. A stainless steel spoon to Leigh!

May I come out of the dunce corner now?
Tomcat
(09/04/1999; 06:53:46 MDT - Msg ID: 12801)
GFD: Bullion Banking Secrecy

Hello GFD, nice to have you at this roundtable.I have benefited from you posts. Yesterday you said,

"It is my impression that the whole gold banking scene is extremely secretive. As far as I know, no public commentator has ever seen any of these agreements. The agreements between the central banks and the bullion banks are probably considered state secrets."

There is a broker who posts on the Kitgo site with the handle uptick. His name is Len Kaplan and he deals with bullion banks and is in the midst of these gold agreements.

I believe it was on Friday, Aug 27, that uptick posted quite a few of his viewpoints. I don't recall if he discussed agreements on that day but he has done so in the past.

He does not not see a problem with the supply of physical gold at this point but I do not know how large a quantity of gold he deals with. He posts there several times a week and you could investigate this secrecy area though him. He answers just about everyones questions rapidly and is well respected on the site.

For all I know, some of the area is secretive. However, many of these agreements are connected to paper gold that you or I or anyone could buy. I would imagine that the agreements could be read by the buyer of such paper. The thing to find out would be: are there agreements that only circulate within a closed set of participants? If so, why and what are they about?

GATA would be another source of information. If such secret agreements exist it would benefit their cause to find out about them.

One also has to distinguish between information that is prorietary to a corporation and information that is secretively withheld from public view. If a corporation is a public entity they are also restricted from withholding certain types of information from stockholders. However this is not my area of expertise. A bullion bank like Goldman Sachs is a public corporation is is open to investgation by agencies like the SEC or the agency that deals with commodities and whose name escapes me.

Perhaps FOA or Another might know something about this. MK do you know much about this area?

Investigating this area would be a valuable contribution and is an untouched area in the quest for the Grail of the Golden Truth.
Goldspoon
(09/04/1999; 08:07:50 MDT - Msg ID: 12802)
Thanks
Thank You, Sir Tomcat for your kind words about my prose..the pleasure was mine sir....

Elevator guy, i belive you are correct sir... after revisiting the text i concour with your acessment....
This is the way i love to learn....from such a diverse and learned court..."A Goldspoon to you sir"
Chris Powell
(09/04/1999; 09:52:29 MDT - Msg ID: 12803)
Gold lease rates wild, Armstrong firm in trouble
http://www.egroups.com/group/gata/193.html?Latest from GATA's Bill Murphy
Goldspoon
(09/04/1999; 10:07:14 MDT - Msg ID: 12804)
MUST READ..2kay ... (inside peek on 50,000 IBM mainframe disaster)
http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001JfzIBM keeps sending HYPER patches to programers on main frame computer programs "already deemed compliant". Lots of Geek Speek (programers talking back and forth about suddenly its too late to fix what they were assured was compliant.....
************************************************************
"The conveniences and comforts of humanity in general will be linked up by one mechanism, which will produce comforts and conveniences beyond human imagination. But the smallest mistake will bring the whole mechanism to a certain collapse. In this way the end of the world will be brought about."

Sufi Prophet Pir-o-Murshid Inayat Khan's prophecy (Complete Works, 1922 I, p. 158-9)
************************************************************
EXCERPTS FROM THE LINK:

If this is true, then we are in deep merde. I worked for Saudi arabian airlines for example in Jeddah, for three years - a totally IBM MVS/VM/TPF shop - no way did they ever keep up with the latest APAR's and OS releases...

Cory is right - these OS's are spread all around the world - quite simply many many shops just do not keep up with new developments - i.e. if it ain't broke don't fix it...

Then think of all the stolen s/w in for example Russia and China - no way will they have access to any new fixes...
-----------------------------------------------------------

pdf is a real pain..here is a small snipet.
IBM's Year 2000 Ready products are designed to function through the 1999 to 2000 transition without

interruption, but you should periodically check to determine whether service or maintenance should be applied

before the transition or whether there are any recommended, product-specific Rollover actions since some Ready

products may require user intervention. See Chapter 3, "Reviewing Vendor Support and Support Procedures" for

more details. See the Glossary at the end of this document for definitions for "Year 2000 Ready" and other terms.

1 There are other dates that may cause date-related problems, such as September 9, 1999, February 29, 2000, or

whenever an application starts to process year 2000 dates; while many of the issues and considerations are similar,

this document only addresses planning for the year end 1999 date transition.
------------------------------------------------------------
So, what is new here? Take a look at Microsoft's Win/NT. SP-3 was supposed to "fix" all the Y2K issues. But, guess what, it didn't. So, they came out with SP-4 (Y2K wasn't the only item addressed) that was the last word in "compliant." Well, there were so many problems with SP-4 that Microsoft announced a "service pack for service pack 4," the first time that they ever did such a thing. Once again, the "bug" was still alive, and we now have SP-5 out. Is it "ready" yet?
------------------------------------------------------------
ok guys........the game is up......with the IBM (PTFs) being used on a ad hoc basis in my area ....power generation utilities in the Australian power industry as luck ( bad luck ??) would have it I am stuck over here in the ole USA as a consultant for a local power comapany for y2k........and the news is all bad I'm afraid.......and oh just informed my CEO ....gave him the Zolt and Dans words in plainsspeak......ever seen a man blanch ?
------------------------------------------------------------
IBM itself on it's Y2K product compliance sites marked almost all of it's software as Compliant(yes) **.
The ** says "Yeah, it's compliant, but service is required"

They are leaving the door open to be able to cut a tape or warn you of a hiper on Dec 31st at 23:59. There are liability issues here, Y2K might enrich the legal community more than tobacco!

Any company that is not running a production image in an LPAR with the clock set ahead by now is in serious trouble...
------------------------------------------------------------
Guys...I work for a large multi-national, and our M.F. is crotchety of the BEST of days...I knew that we were in trouble when the remediation team all went in on tracts of land 'out there yonder' together. I goota bad feeling that the next few months are going to define that ancient Chinese curse "May you live in interesting times..."
------------------------------------------------------------
IBM's suggested reading for those planning the 1999 to 2000 rollover.
http://www.ibm.com/ibm/year2000/docs/rollover/rollover_english.pdf

Take your time and read the footnotes.

-- MoVe Immediate
------------------------------------------------------------
2. Of those entities, determine what non-applied HIPERs are in parts of the system that they do use
3. Determine what precisely will happen to those systems if the HIPERs are not applied
4. Determine if all those HIPERs in 1-3 will be applied in time
5. Determine if all those entities, (who are affected in 1-3 are aware of potential problems that might fail at step 4 by not getting them fixed in time), have completed workable contingency plans that address these potential failures
hyper viper, poison to the System
------------------------------------------------------------
Thanks, that was a good summary of the problems. But I must say, it sure does sound a lot like what Cory has been warning about for a long time now.
------------------------------------------------------------
You did not address the issue of Y2K HIPERs being issued at this late date. Wasn't that the main point of Cory's references?
------------------------------------------------------------
Some terminological comments: IBM uses the term PTF (program temporary fix) for their mainframe software patches. The term HIPER is used when the problem being fixed is one which may have seriously adverse effects. PTFs usually come on a tape that contains many PTFs, and there may be a new PTF tape roughly once each month.
Applying a tape of PTFs usually fixes some things and breaks some things, hopefully fixing more than it breaks. It is also a bunch of work. So, many sites wait a while to see what reports from other sites have to say about whether or not a given PTF tape has a bunch a bad fixes. They may wait several months before applying a tape, and when they do decide to apply, they may apply several tapes, up to and including a tape that fixes most of the buggy fixes in previous tapes, but which itself adds few new bugs and/or minor bugs.

So, if the HIPER bugs are within a set of tapes that has not yet been applied, they may be in good shape. Also, if the HIPER bugs are in parts of the operating system that they do not use, they may be in good shape. Otherwise, they may be in bad shape.

Hopefully, that was not too brief or too geeky.

------------------------------------------------------------
"Sorry for the long post.... hope this sheds some light on last minute fixes on fixes that were fixed when they were "compliant" after they were "Ready" to be ready already....

"Just keep on fixin' what you've already fixed boys..or we all will be in a fix... if these "last" fixes don't fix what you thought you've already fixed all "READY???" OH, and just for good measure one last one.....
------------------------------------------------------------I agree. How can I tell a customer that an IBM product is Y2K compliant, and then tell them that I have a couple of dozen YR2000 sourceid PTF's that need to be applied. Seems to me if a product is Y2K compliant, then there should be no new fixes, or perhaps the product is NOT really Y2K ready...

Got Gold Yet???
Take my advise..."Lets get Physical"....Gold...
Goldspoon
(09/04/1999; 10:21:08 MDT - Msg ID: 12805)
2kay .....Hacker Hell......
http://www.boston.com/dailynews/244/technology/NetTrends_The_Other_Y2K_Proble:.shtml2kay bugs, and Hackers.... double whammy....
NORTH OF 49
(09/04/1999; 10:44:05 MDT - Msg ID: 12806)
Goldspoon
Hi Goldspoon, enjoyed your recent post probing the tentative computer disasters that may gift themselves to us next year. In particular, (and I had almost forgot about them) your suggestion that all the stolen programs in Russia/China would not have access to upgrades.
During the early part of this year, I was assigned to a project in Russia where I was approached by one of my collegues (Russian) with a copy of Windows 98 for the equivalent price of $12US. Simply stunned, I asked how he could do that, as that version had not been out for that long. He wouldn't go into any explaination, however, he assured me that: #1, He had the program before it was released in America, and #2, He would have any upgrades required, before they were released in America.
These are pretty outlandish statements, but the underground (black) market over there rivals imagination. I have absolutly no knowledge contrary to your submission, however, witnessing what they were capable of surfacing with in relativelty little time, makes me wonder if, indeed, they will "no way" be able to get access to upgrades to their "hot" programs.
No49
GFD
(09/04/1999; 13:18:04 MDT - Msg ID: 12807)
Tomcat: Bullion Banking Secrets
Tomcat, thanks for your feedback. As I said, these are my impressions based following the scene over the last few years. I have been quite busy recently and have not been able to follow Kitco that closely so thanks for the tip about "uptick". Certainly the leases between bullion banks and publicaly traded mining companies are not going to be that secret. They have to be summarised for their quarterly reports, etc.

However, the agreements between bullion banks and hedge funds are would only be open to those who have access to "the books" of those funds. Does uptick have access to Mr Soro's books?? I suspect that if he did he would not necessarily be posting on kitco...

Likewise, the agreements between the bullion banks and the central banks are agreements between very private organizations, from what I understand.

I am _not_ an insider so I could be waaaaay out in left field on this. However, if these agreements were available for perusal, I would expect Armstrong or Veneroso to be citing chapter and verse from them. And they aren't.

Tomcat, this is what makes gold so much fun. On the one hand you have uptick saying that there really is not much of a supply problem and on the other you have Mr Veneroso claims a deficit of 150 tonnes A MONTH! Clearly one or both of these gentlement are a tad off, shall we say.



Tomcat
(09/04/1999; 14:10:24 MDT - Msg ID: 12808)
GFD

GFD, you stated that:

"On the one hand you have uptick saying that there really is not much of a supply problem and on the other you have Mr Veneroso claims a deficit of 150 tonnes A MONTH! Clearly one or both of these gentlement are a tad off, shall we say."

I don't think there is a conflict between those two facts. All it would take is enough owners of physical to allow to gold onto the market either by leasing or selling. It is believed by many that the CBs are leasing quite a bit, which gets sold by the shorters, and providing enough to fill the markets needs.

The secrecy issue leads to another question. What type of documents would be necessary to shed more light on the truth of what is happening?
PH in LA
(09/04/1999; 14:13:38 MDT - Msg ID: 12809)
What's wrong with Kitco?
Between 11:36 (when he got up?) and 15:07, today, the poster known as Tolerant posted 37 times. (56% of all posts during that time.)

Why such a compulsion to post so little, so often?
Leigh
(09/04/1999; 14:29:50 MDT - Msg ID: 12810)
PH in LA
Tolerant's the best! He's a true freedom-loving American. He comes up with the most enlightening articles about the Clintons, what the UN is really up to, and so on. I've learned a lot from following his links.
Peter Asher
(09/04/1999; 14:47:41 MDT - Msg ID: 12811)
Holtzman, Tomcat and FOA (and Phadreus)

First, to address Holtzman regarding "Backwardation" between the price of coins versus spot. The spot gold price certainly is affected by immediate paper trading, but there is a present time physical market involved there. We see here daily reports of the movements of various portions of the million or so ounces of real gold on the Comex. Describing "Spot" as the <<< It's the Paper price of a
gold futures contract to be settled during the present month, and almost always to be settled for
cash rather than for delivery. >>>> appears to conflict with the fact of there being an actual future contract of some sort coming due each month. (Some months are major and some minor, but even September, which is never reported, shows up as trading on Quote Com.) If that were the case then the "Spot"price in any month would be the same entity as that months' future contract. Certainly, when an active month is in its last thirty days, we still see two separate quotes between that future and spot, usually converging on a zero spread as the expiration date approaches. I am open to correction on this, maybe we have a poster that has empirical data on the exact mechanics of Comex and London as regards Paper and physical delivery. I mean if I win the Powerball, do I bring my Brinks truck up to the Comex freight elevator for my six tons, or do I go somewhere else. Phadreus can you answer this??

I see one bullion and coin dealer is posting the spot price as the median between the (daily) bid and ask that he is buying and selling bullion for. Simultaneously he quotes daily coin prices which are currently $13.00 - $$16.00 above spot, for Eagles, Krugers, CML's and Phillies. The coin market is the retail, and bullion the wholesale. The deferential is related to several factors. The most basic would be the 'service' of minting and selling piecemeal. Secondly is the divergence of supply and demand factors between a commodity bulk flow, and the production flow of a manufactured (minted) product. Take as an example for this, the effect of refinery fires. Gas at the pump goes up without any curtailment of crude, which could even, in theory, have a brief decline in its spot price as the need for it temporarily slacked off. Finally, there is the fact of the purchasers of coins being a different market segment than the purchasers of (large quantities) of bullion. Y2K and other bubble bursting concerns are increasing the demand for coins while the increase in the supply of metal needed to produce them has not yet affected the above ground inventory sufficiently to impact the overall physical gold market.

When that overall market is impacted by the coin demand, short delivery, storing of value by bullion purchasing, and possibly an increase of currency reserves by some central banks; sufficiently to 'tap out' the available above ground supply, no amount of paper trading will be able to negate the effects of supply and demand on the price of physical. The POG will rise to whatever amount necessary to shake loose more gold. That rise in turn will increase demand and also diminish the desire to sell in some gold holders, even as that desire will be triggered in others.

That is when the ability of paper contractors to make good on their promises will become suspect. The conformation of that suspicion will be the occurrence of 'Backwardation'. Backwardation is a differential related to TIME. The difference between Spot and/or Bullion on one hand and Coins on the other, exists in any given moment as a PREMIUM.

Tom, one important aspect of lease rates are that they are in the end, a policy decision, influenced by the free market, yes, but not an empirical result of cause and effect. Your <<< If lease rates stay high for six to eight weeks then that won't be long enough. they won't catch enough of the short rollovers. But after three months, or longer, many rollovers will be affected by high lease rates. >>> is most significant in that light. Will the high rate persist long enough to dry up the CB loan supply or is it already dried up and the lease rate a corroborating factor? For that matter, will the present dog and pony show even last three months?

So, I think backwardation will be the hard evidence of physical scarcity even in FOA's new paradigm. It's what happens next that will be the end game. When Warren Buffet's acquisition was running up the price of silver, I believe backwardation set in about midway in the big move. That however, although quite large, was nevertheless one man's financial gambit, and therefore relatively finite. When gold futures trade for less than spot, a very big genie will be out of the bottle, and the gold shorts are not going to have the magic words to put him back in.

FOA, the Bunker Hunt situation was also one man's game played against all the others. He had just one vote at the polls and just one man's markers to call in. Couldn't paper gold contracts crash as stocks do, selling for pennies on the dollar to speculators who will risk a wipe out for a major gain. As they approach expiration they would approach zero in value. The exchanges only broker the contracts, the individuals who write them and buy them are on their own, correct? If at some point they close down market place contracts can still trade. Thirty years ago, if you wanted to buy a put or call, you had to go through a private broker. In the late fifties, I heard a tale of a fellow, who in the post '29 crash era, papered the wall of his den with worthless bonds. The company somehow struggled back on it's feet and was eventually able to redeem them. They sent a guy out to his house with a cancellation stamp and inked them out in place.

What I'm saying to you and Tom, is that I don't see the end game being one of paper pulling down the price of physical, I see the upward move of physical as being the precursor of the paper collapse. The first phase of that would be a definitive, classic backwardation event, IMO, of course.


Peter Asher
(09/04/1999; 15:07:00 MDT - Msg ID: 12812)
They may be learning
Just received this from the bank that carries the truck loan.

"We have removed the automatic payment feature from your loan and ordered a coupon book. ----- ----- . If the reason for this request is for Y2K purposes. The bank will be printing out reports and ledgers on December 31 1999. If you like I will send you a printout then also."

I think I'll stop by and pick it up!
Peter Asher
(09/04/1999; 15:40:48 MDT - Msg ID: 12813)
Addendum to #12811
There is a more common scenario that will also be indicated by "Backwardation' That would be when unusually strong demand for a commodity is perceived to be short lived. While that could occur in a small scale short covering rally, or a singular effort to acquire a large position, it is hard to conceive of a major trend reversal in gold being a temporary condition that will be satiated in the near term by additional supply.
Tomcat
(09/04/1999; 18:05:31 MDT - Msg ID: 12814)
Peter A, FOA, Holtzman

Peter, you said:

"What I'm saying to you and Tom, is that I don't see the end game being one of paper pulling down the price of physical, I see the upward move of physical as being the precursor of the paper collapse. The first phase of that would be a definitive, classic backwardation event, IMO, of course."

Good point, Peter.

Perhaps the first sign will be a delay in the time it takes the dealer to get his gold delivered. The second sign might be an increase in the street premium. The third sign would be the dealer having a hard time finding all the gold that he needs to satisfy his customers demand. The fourth sign might be the dealer starting to ge amused at the ridiculously low price quoted for the paper spot and seeing that the paper spot settings don't correspond to the real, over the counter, world.
Tomcat
(09/04/1999; 18:46:07 MDT - Msg ID: 12815)
Peter A, regarding #12796

Peter, I find it amazing that you post your posts while posting fences. If you run into trouble posting then try saying this rapidly:

How many posts could a fence poster post if a fence poster could post fence posts.
Peter Asher
(09/04/1999; 19:48:32 MDT - Msg ID: 12816)
Tomcat
And the fifth stage would me the paramedics scraping short sellers of the Comex sidewalk.

And since it seems to just you and me tonight, how about ---

Peter posits posts while digging,
posts for cedar landscape fences.
How many daily Forum posts,
can he posit when he's quick.

I'll get serious again after sunset, we may have to carry the site for another two days.
Tomcat
(09/04/1999; 20:36:06 MDT - Msg ID: 12817)
Harry Schultz on the BIS and Y2k
http://www.gold-eagle.com/gold_digest_99/schultz090799.html
Harry is back and he makes Gary North look like a Pollyanna.
Tomcat
(09/04/1999; 20:44:09 MDT - Msg ID: 12818)
Peter A

Peter, I have figured it out. Someone yelled "FIRE!" and the place cleared out and we didn't hear anything. Guess were the only ones left. Got any marshmellows?

What do think of ole Shultzie. I figure he's gonna hole up in the alps when the digits hit the fan. Only about 16 more weekends left. I figure about 12 more weekends till the show starts.
GFD
(09/04/1999; 20:54:06 MDT - Msg ID: 12819)
Tomcat - Bridging the gap
"I don't think there is a conflict between those two facts. All it would take is enough owners of physical to allow to gold onto the market either by leasing or selling. It is believed by many that the CBs are leasing quite a bit, which gets sold by the shorters, and providing enough to fill the markets needs."

You have to look at this in context. Given the ongoing supply deficit that has been unfolding for years people are under the impression that a lot of cb reserves have already been trucked out. With the current deficit running at 1800-2000 tons per year it becomes questionable how much longer this process can actually continue. You have to bear in mind that not all central banks are part of this scam. Some are actually accumulating.

Because central banks have chosen to treat gold trucked out on a lease but due back (gold receivables) the same as gold in the vault it is very difficult to get a handle on when the music will end.

The music could be going for years to come, or it could coming to an end soon. Unfortunately, when it does come it will come with very little warning.

The real question is what symptoms will the gold markets display when the end is nigh. This _is_ the 64 billion dollar question.

It would not be surprising if the symptoms were similar to what is happening now.
ET
(09/04/1999; 21:08:33 MDT - Msg ID: 12820)
Tomcat, Peter

Hey Tomcat - how ya doing? We'll see now if after reading Harry's viewpoint the discussion here still focuses on paper and plastic. He certainly doesn't mince any words, eh?

Black markets and cash! What a thought! Maybe we'll hear some ideas as to how the governments will proceed given the possible loss of all of their holy trinity. What a scramble this is going to be.

Peter - I don't think you'll have to wait another 3 months to find out what is likely to happen to the monetary system. Everybody seems to be scrambling now! May only be another 3 weeks. I'll bet you by the end of the month gold is unavailable at any price in dollars.

ET
Peter Asher
(09/04/1999; 21:21:35 MDT - Msg ID: 12821)
GDF, welcome to the campfire.

Us country folk were having a little marshmallow roast while everyone else is feeding the OPEC economies at the gas pump for three days. Pop a few on a stick and have a seat.

In my third paragraph of post #12814 below, I am addressing the "critical mass" factor required to move Gold up and away from (IMO) this 20 year double bottom. I believe the key to the mystery lies in the actual reality behind AG's statement about CB's standing ready to lease gold as needed to contain the price. If that were the TRUTH, I doubt he would have announced it.

As a new and already powerful voice here, perhaps you could spin us a tale or two this evening about how you perceive this immediate future that is destined to become legendary.
Peter Asher
(09/04/1999; 21:25:07 MDT - Msg ID: 12822)
ET !! glad your here to
Hey guys I gotta stop talking for a bit and go over to the Coleman lantern and read that Schultz post. Don't eat all the marshmellows.
Tomcat
(09/04/1999; 21:46:15 MDT - Msg ID: 12823)
GFD

Glad to have you back. Peter and me were hoggin all the marshmellows so pull up a log and get warm by the fire.

I agree with your last post entirely.

Since its marshmellow time that gives me the right to opine a mite. I'm an ex-test engineer who believes the y2k thingy is what Harry Schultz and the BIS report say it is: trouble.

Therefore, within the next ten-twelve weeks or so this y2k thingy is going to undermine the good intentions of those that walk the Path of Pollyanna. In other words there are gonna be a lot of very surprised people out there as the herd of shorters rush to the exit. Ain't gonna be pretty.
Tomcat
(09/04/1999; 21:58:56 MDT - Msg ID: 12824)
ET

Hey ET, what a pleasant surprise.

You know, last time I remember talkin I think it was about two weeks ago on a Saturday night. Think we were talkin about confiscation or somethin. Anyway, about one in the morning, on Sunday, I post eight messages and the site goes down! Of course, I had only saved one of the messages. Anyway, the one to you went down with the ship. Been feelin like I crashed the site but never had the nerve to admit it. Well, there it is.

Yes, ole Schultz sure is saying it like it is. The world is about to collapse and he's right at home humming his tune; might have been Nero in past life! Trouble is I think he's right. Damn.

Say, ET, have some more of Peter's marshmellows and opine a bit on how you think the next 16 weeks are going to unfold.

Ya know ET, this is kinda comfee-like. Sittin around and taking it easy. Pass me over some of Pete's marshmellows, will ya.
Peter Asher
(09/04/1999; 22:31:21 MDT - Msg ID: 12825)
To continue
Well, well, well. That Schultz letter was almost identical to tonight's dinner table conversation, though we also had the pleasure of discussing the predictions of Sufi Prophet Pir-o-Murshid Inayat Khan's prophecy thanks to Goldspoons post #12804

The non-believers are blinded by the litany about the millennium bug. That is the fact behind Y2K, but it is not the point. All machines have a service life beyond which they wear out, break down or literally fall apart. Suppose you have a vehicle with a couple of hundred thousand miles on it and decide to drive cross country in it. There is a good chance that somewhere between Kansas City and nowhere, you going to be in a farm town for a week waiting for new engine bearings to arrive and be installed. Not only will your 4-day trip turn into 2 weeks, but you still have a clunker. Not only that, but you lost a week of work and you're probably tapped out, like most folks, so you've got some recovery and catching up to do (still having the clunker, of course). After that, you have to acquire the means to buy a new car.

That is the real situation with Y2K. This affluent, booming economy we live in at this moment is traveling on a machine that was never designed to operate beyond January 1st !!! It is a Clunker!!!

I see the breakdown occurring in three phases. I've named them Crises, Shut-down and and Phoenix. First will be the macro-version of a major storm-flood-blizzard event, exacerbated by the cash crunch and bank holiday phenomena. That will be the easiest to fix, analogous to changing the fuel filter, replacing the distributer cap and spark plugs, and flushing the radiator. But that's just a re- tuned clunker. It is Phase Two that will be the real disaster. The machine has to be rebuilt in some areas, replaced in others, and in many areas totally redesigned. That's a lot of downtime somewhere west of K.C. Eventually a new shiny economic juggernaut will rise from the ashes, but it will not be at all the same as last year's model.

Those that trust the clunker to get them where they're going are going to be stranded in the middle of nowhere. Those that have been saving up for a new car are going to travel in style.

Got Gold??
ET
(09/04/1999; 23:08:27 MDT - Msg ID: 12826)
Tomcat

Hey Tomcat - I remember the night! It's too bad the forum went down. I was telling Peter that I've spent the last couple of weeks finalizing our y2k preps so haven't been around much anyway. We're pretty much ready to go, whatever the future holds.

As to the next few weeks, I'm lousy at predictions. As you know I've followed this issue for several years as have you and only now am I able to draw any reasonable conclusions. It appears the PR scam is coming unraveled as more and more failures are admitted to. I watched Paula Gordon and Jim Lord on C-SPAN this morning and they pretty much have given up on government. Gordon is advocating people forget the federal government and take this problem on at the local level. Did you catch the 'compliant' Social Security Administration story about them mailing out letters to beneficiaries claiming their benefits were going to expire Jan 1, 1900? Pretty much sums up the situation, eh?

I suspect the monetary system is on the verge of collapse and the insiders know it. I don't know what this bunch intends to do other than to buy tangibles and try to recover after the rollover. I believe Schultz is right about the idea that most will be freer people in a few months. I've been trying to tell people that since I've been here. I think if you haven't already secured something other than paper you will likely have great difficulty from here on out doing so. My friends and I figured August 31 was the 'dropdead' date for y2k preps but we may yet have a bit more time. As Paul Milne over at csy2k says, 'it won't be long now'.

I'll have to admit I'm looking forward to the next year or so. Being an old 'laissez faire' type, I've watched the world head towards this global socialism and I sure didn't want this to be the legacy we leave our children. I always knew the money wouldn't last but I was never sure when it would collapse. I guess we know now when.

Two items I've decided to add to my preps; a bottle of Dom and a good cigar for New Year's! I better buy them next week while the dollar still buys something!

It was interesting to hear Harry Schultz quote you almost exactly with his point about inter-bank payments being the achilles heel of the whole thing. You are right of course and it was great that you were able to warn people about this quite some time ago. Kudos, Tomcat!

Good to chat with ya again.

ET
ET
(09/04/1999; 23:21:05 MDT - Msg ID: 12827)
Campfire

I hate to say it but I've got to go. A huge storm has come up and I've got to turn this machine off and unplug the phoneline. I've lost two modems this year already. Catch up with you all in the morning.

ET
Tomcat
(09/04/1999; 23:21:25 MDT - Msg ID: 12828)
Peter Asher

Interesting analogy. Gets one thinking. Tis debt that has weakened the vehicle and made it into a clunker.

I wonder what would happen to all the property if there were massive dominoe defaults. Would millions lose their homes? Who would own them. The banks would go under so that leaves the government. Do you think the government might take the ownership of most real estate and we would be paying rent?
Tomcat
(09/04/1999; 23:35:18 MDT - Msg ID: 12829)
ET

Yes, it's getting late and I must go also.

But before I go I want to acknowledge your progress on your preps. It is quite a big job isn't it. I will be through with mine in two to three weeks. Have a place in the Rockies with some sane neighbors.

I see the next few months pretty much as you have laid out. I have a sneaky suspicion that banking crowd up top really knows what is going on Y2k-wise. When you think about it, they have done a better job in getting ready than many industries but they can see the catastrophes about to occurs in dozens of countrie. And what if the banking interconnectivity doesn't hold. Wow.

Sounds like you were around on the forums in late 97 and 98 when many of us were speculating how it might unfold. My call 98 was that if 20% went down then that could trigger and non-liner cross default collapse. I believe now that 20% of the big boys could be in real trouble by March of 99. So it could happen.

Anyway, time for bed. Good talkin to ya again ET. Good night Peter. Good night GFD.
Peter Asher
(09/04/1999; 23:48:58 MDT - Msg ID: 12830)
TomCat
Ive got an extra hour on my side of the fire so I'll leave this for you to read in the morning.

Last year I suggested in a post, that a major difference between now and '29, was that a much larger percentage of the population owns there home I believe it is now 66% of all families.

As I said then, there are lot more mortgage holding voters, then there are Mortgage pament recievers. The politicians who pass a principle residence mortage moratorium measure, will be the survivors!
Peter Asher
(09/04/1999; 23:51:56 MDT - Msg ID: 12831)
Writing by firelight causes errors, this should be OK
Ive got an extra hour on my side of the fire so I'll leave this for you to read in the morning.

Last year I suggested in a post, that a major difference between now and '29, was that a much larger percentage of the population owns their home, I believe it is now 66% of all families.

As I said then, there are lot more mortgage holding voters, then there are Mortgage payment recievers. The politicians who pass a principle residence mortage moratorium measure, will be the survivors!
Goldspoon
(09/05/1999; 05:56:38 MDT - Msg ID: 12832)
North of 49
Thanks for the info about the Russian Black Market...very interesting!!! i remember in '72 when i could not buy gasoline at the pumps but i could go to the homeless section of town and buy gas from the hobos... they had it in one gallon milk jugs and used a funnel to pour it into your car. Made me real nervous about how much of it was really gasoline...i think that in a little while many people will be surprized how little there will be to buy in the stores and how much and what you can buy in the coming U.S. black market....
Thanks again for the post...
Goldspoon
(09/05/1999; 05:59:09 MDT - Msg ID: 12833)
North of 49
Thanks for the info about the Russian Black Market...very interesting!!! i remember in '72 when i could not buy gasoline at the pumps but i could go to the homeless section of town and buy gas from the hobos... they had it in one gallon milk jugs and used a funnel to pour it into your car. Made me real nervous about how much of it was really gasoline...i think that in a little while many people will be surprized how little there will be to buy in the stores and how much and what you can buy in the coming U.S. black market....
Thanks again for the post...
Tomcat
(09/05/1999; 06:17:42 MDT - Msg ID: 12834)
Peter Asher: Y2k, FED contingency plans, and gold

You said "The politicians who pass a principle residence mortage moratorium measure, will be the survivors!"

Good point. A mortgage moratorium combined with the need for banks to be liquid will also mean the FED will put bank liquidity ahead of solvency. The printing presses will role like there will be no tomorrow!

So in summary, it looks like firts their will be a illiquidity, default, deflation problem due to y2k and this will be quickly followed by a printing press solution providing an inflation similar to what happened in Germany between 1920 and 1920.

Because of digital money the inflationary ramp up might occur faster. How this plays out will also depend on how rapidly congress responds. If they pay things like a mortgage moratorium quickly it will play out much differently then if they wait a year or two to pass it.

I am sure the FED has its own contingency plans that include things like this. What you think?

Get more gold now before the rush!
Hipplebeck
(09/05/1999; 06:37:58 MDT - Msg ID: 12835)
gold leasing
I have read so many times here in the forum that central banks lease out gold and that gold is then sold by those who lease it. There is something wrong with this theory. If a lease is payable in gold, then the central banks are acquiring gold not losing it. They are acquiring gold at the lease rate. If a person leases gold and then has to pay back a higher amount of gold, where are they getting it?
Hipplebeck
(09/05/1999; 07:29:59 MDT - Msg ID: 12836)
gold leasing
Is it possible that these people leasing gold have to lease a little more each month to pay back what they have already leased? If so, isn't this wonderful! No way out in the end.
Hipplebeck
(09/05/1999; 07:40:27 MDT - Msg ID: 12837)
gold leasing
Do I finally "get it"?
Goldspoon
(09/05/1999; 07:58:57 MDT - Msg ID: 12838)
Connect the dots......
http://www.stratfor.com/hotspots/korea/default.htm?section=3.4Knights, lets play connect the dots.....

1. TAIWWAN DOES NOT BACK DOWN.........
During a two-day party meeting ending August 29, Taiwan's ruling Nationalist Party (KMT) adopted President Lee Teng-Hui's redefinition of cross Strait relations "as special state-to-state to embrace the new page of interaction between the two sides."

2.China begins making intrenal moves that would indicate they are serious this time....
China has not forgotten about Taiwan. It is merely securing control internally, focusing on border control, internal dissent and the Falun Gong, before attempting any external action......
On August 26 China signed a border agreement with Kyrgyzstan designed to fully settle all border issues......
China also began issuing arrest warrents for dissadents and Christians....

3.A please don't nuke us when we invade, keep this conventional if you will, notice......
The Chinese Foreign Ministry pledged September 2 not to use nuclear weapons against Taiwan in case of conflict. Foreign Ministry spokesman Sun Yuxi said, "We will not be the first to use nuclear weapons and will not use nuclear weapons against non-nuclear weapons countries and regions, let alone against our Taiwan compatriots."

4.China will inform Clinton privately that Korea is ready to open a second war front if U.S. interferes with China's plan to take some outlying islands to make Taiwan back down and begin serious reunification talks.....Will also black-mail Clinton and remind him of skeletons in his closet that China is ready to expose if U.S. interferes...(Check and Mate).... Taiwan is on the top of the agenda for the September 11 summit between Chinese President Jiang Zemin and U.S. President Bill Clinton, Chinese Foreign Ministry spokesman Sun Yuxi said September 2. Sun said U.S. commitment to Beijing's "one China" policy is important, and that China asks "the U.S. government to honor its commitment with concrete action."...(Read... STAY OUT OF IT!!)"There is but one China in the world and Taiwan is an inalienable part of Chinese territory," Chinese President Jiang Zemin said September 3 at the Thailand Cultural Center in Bangkok.

4. What will begin as exercises will turn into an invasion of some outlying islands..... China plans to stage land, air and sea military exercises near Taiwan in the southern part of the Zhoushan archipelago in the Zhejiang province, the Hong Kong-based newspaper Wen Wei Po reported September 4......

5. Mean while back at the farm.... North Korea will test fire new long range missle and raise tensions to a rolling boil to back up the threat of a second warfront......September 9th wake up call begins panic buying of supplies. The banking system and markets (already in trouble)... begin to crack under the stress.....

666. In the second half of September the exercizes begin and goes badly for the Chinese, events spin out of control.....China resorts to the use of a Neutron bomb to avoid disaster...exchange of Neutron bombs occur (got to protect the environment ya know)...World Markets tank....curriencies colapse...Gold is King once more,.. oh,what a world..oh,what a world.. . 2kay is a non event (it can't get much worse applies) and crumbles what infastructure is left.....NWO emerges.. the seven years of tribulation has started...but! there is hope!.. events may slip into October..... perhaps, even Holloween.........boo!.. <):~l}

i pray... i am totaly wrong.... and the computer is still up for (YOU) to tell me so....
Desjardins
(09/05/1999; 08:08:59 MDT - Msg ID: 12839)
Forward Hedge Prices
Sorry for the repeat post, but I got no answer the first time.

Can anyone provide a link to a site that displays forward sale prices for 2,3,4 to 5 years?

I would like to know what future production can be forward sold at, for a mining concern wanting to commit to starting up a new gold mining operation.

Thanks in advance.
Tomcat
(09/05/1999; 09:35:50 MDT - Msg ID: 12840)
Hipplebeck: gold leasing

Hello H,

Here is some data on gold leasing:

1. To my knowledge there are no CB published figures that state how much of CB's assets are physical vs receipts for leased gold.

2. Many on the internet have speculated that CBs hold much of their assets as leased gold receipts.

3.CBs lease this gold for 1, 3, 6 and 12 month periods. At the end of the lease period they have the right to get their physical back or extend the lease (called a rollover) at the new lease rate. The borrower would have to pay the new lease rate at the time of rollover. Many leases are rolled over.

4. Some leases have the interest paid in gold. Some pay in currency. All leases are not the same. Some leases are backed by a collateral.

5. It is possible that a CB could also lease gold.

6. It has been said on the internet gold forums that the US has not had an official inventory of US gold at Fort Knox for many years and has refused to have this done and that the amount of gold held by the US is in question. I do not know if this is true.

7. If the POG rises and the shorters can't find physical gold to cover their positions then many have said that the CBs will be stuck holding paper and will have to take the Bullion Banks to court.

8. Others believe that if the POG rises then physical gold will come out of the woodwork and borrowers/shorters will be able to pay the CBs back in physical but will take a loss in covering thier short position.

I hope this helps.





Tomcat
(09/05/1999; 09:49:08 MDT - Msg ID: 12841)
CBs and the Flight to Liquidity

A pattern that has started is that CBs all over the world are going to doing all they can to liquefy themselves and have as much cash available to support their member banks for possible Y2k bank runs.

This will require that they unload foreign currency reserves which will include the dollar. Despite the dollar's attractiveness to them they will need currency issued in the the denomination of their own country. Thus they will sell many US notes, bonds, etc.

Thus the inflation that the US has been exporting will be imported (repatriated). This will drive down the value of the dollar even more and the US will then be faced with the problem of keeping the POG down by selling or leasing Fort Knox reserves.

What is not clear to me is what the Flight to Liquidity and a weaker dollar will do to the value of paper gold. Will paper gold increase along with the desire for more physical or will the flight to quality help expose the fact that there is more paper gold than physical? It seems to me that the increased inflation would be a threat to the shorters.
Tomcat
(09/05/1999; 10:13:35 MDT - Msg ID: 12842)
Goldspoon, Connect the dots......

The China/Tiwan issue is too difficult for me to deal with. It is too horrible. This issue reminds me of Y2k. How silly it is to be worried.

Look, it will never happen. Experts behind the scenes are competent and will work things out. No need to worry. And if a conflict did start, the pros would be brought in and have it straightened out in a few days. This is America and we don't worry about things like that. If China was a problem it would be in the press.

Even our President says China is our ally. And he is the President. If fact, I can prove it. China will be in control of the Panama Canal soon. You know, that little thingy where all the ships go through. China would never be that close to the US if they weren't our allies. Right?

Besides, many who sell bomb shelters are going to profit from conflict-talk like this and make it seem worse than it is; just so they can make a buck. I hope you don't sell bomb shelters? They are such a waste of money.

Remember, people are very, very nice to oneanother.
Peter Asher
(09/05/1999; 10:44:01 MDT - Msg ID: 12843)
Tomcat (9/5/99; 6:17:42MDT - Msg ID:12834)
Your <<>> could be the title statement of the operation. The wild card is what happens between now and January. The "flow through" of Savings into spending via equities, that I keep harping on, is the lifeblood of this paradigm. The present mission of the FED has to be the near paradox of keeping the 401-k parade in lock step, without a further runaway Stock market.

They just might be able to keep the populace believing in "The bump in the road" right up to the moment they plunge over the brink of the washed out bridge. On the other hand that "Faith in the great Bull" revival meeting on Friday had a relatively low volume for the magnitude of price move. Watching the averages over the next few days might give everyone a case of whiplash.

**** ********** *******

When we had that chain of Forum crashes last week, I started re-filing my posts by subject category. The collection delving into the above subject is shaping up as a workable single essay. If the day stays quite, I might take advantage of the available page room and post the composite after I derive some kind of (hah) prediction out of it. ---P.
18KARAT
(09/05/1999; 10:59:29 MDT - Msg ID: 12844)
Taiwan-China
I read somewhere in cyberspace a few weeks ago (I don't remember where), that if US intervenes with some kind of naval blockade of the Straits of Taiwan then China intends to use a short range ballistic missile to nuke one of the US aircraft carriers as a demonstration of their seriousness. This is the ONLY way China could have a real chance of taking out a US carrier.

Unfortunately it would mean that some 5000 US service persons would go up in a big mushroom cloud. It's hard to see how war could be avoided in such a circumstance. The pressure on US to pre-emptively strike at Chinese nuclear sites and destroy all Chinese strike capability would become inexorable.

Jiang Ziemin, the Chinese leader is about to visit Australia and the press here has been reporting that the Australian Prime Minister John Howard is under heavy pressure to make it clear; that if China starts military action against Taiwan, it will lead to general war.

Australia has been told that if US takes heavy casualties, Australia will be expected to join war, because of Australia-USA mutual defense treaty obligations. The gossip here is that US government insiders are scared to death that war is very close.

Regards 18K
SteveH
(09/05/1999; 11:16:20 MDT - Msg ID: 12845)
Article
http://www.nationalpost.com/financialpost.asp?f=990904/71530&s2=investing"...Watch the greenback over the next month. Failure to heed its weakness could be dangerous to your financial health."

***

I talked with my friend the coin dealer again. He started reading FOA and other gold related material found only on the web. He suprised me. He said, "Within my circle, coins, suppliers, other dealers, trade rags, etc. it is obvious to me that JP Morgan and Goldman Sachs are closing out their positions as quickly as possible."

I said, "Whoooh! Are you saying their short positions?"

"I am saying their positions. The big boys are going going to get out of this unscathed and the dealers and small boys will be left standing," he said.

He also said that the premiums on US Gold and Silver Eagles were rising again. He said the gold premium had gone up 10% in the last week.

He also told me that he heard refineries were extremely busy melting CB gold bars.

***

To my mind there are three gold markets: LBMA and COMEX paper market, LBMA and COMEX physical market, and the gold and silver coin market. Most of us are involved in the third one.

Nightrider
(09/05/1999; 11:25:29 MDT - Msg ID: 12846)
Only 124,000 New Jobs But unemployeement falls to 4.2%?
The Markets surged on Friday after the release of the job growth report, "The economy is Cooling " The question is,is it realy? How can a small increase of only 124,000 New Jobs Decrease Total umemployment.

The Question might be better asked HOW Many Workers are still Available?
DD
(09/05/1999; 12:03:49 MDT - Msg ID: 12847)
camp fire
Hi Peter Asher, TomCat, ET & GFD, I read your Saturday camp fire posts and felt like I'd been presented with a sit'n log, too. I've been saying for a long time that Y2k is a bigger deal than the fragile financial systems. It can't be controlled or manipulated and it also can't be posponed. Yikes! Even the Big Boys could funnel down the drain as the best laid plans of mice and men implode in a black hole of mutant 1's & 0's. I still think that-a-way. However, if there's one thing I've learned, it's that people aren't going to take Y2k seriously until they're directly affected. We became sort'a outcasts trying to get our family, friends and community to prepare. I finally gave up, realizing that the barbarians would have to sack the town before people woke up. In any case, I sure enjoyed spend'n a little time by the fire with you yesterday, even though I was there in spirit rather than than cyber digits. Dear God, are the people on this forum great, or what? I feel like someone opened the doors and windows in a stuffy room every time I spend time here. The crisp air is fresh and clean with a hint of pine. Thanks all!! DD (David)
Tomcat
(09/05/1999; 12:20:57 MDT - Msg ID: 12848)
Peter Asher

Peter, thanks for your response. Could you expand on your statement: "The "flow through" of Savings into spending via equities, that I keep harping on, is the lifeblood of this paradigm." Apparently I have missed some of your harps and I would like to know more about this.

Yes, insolvent banks can remain open, especially with the governments help as we have seen in Japan. However, illiquidity in the face of a bank run leads to short life.

Peter, I believe the the populace may will follow the governments misdirection about Y2k. However, the smart money is already moving out as witnessed by the record issuance of corporate bonds in a desperate attempt to have have corporate liquidity in 2000. It the corporate world that counts and they know, they are acting, and the bond rate is on the rise.

The corporate run on digital money will spread to the currency run by business owners from their personal accounts. Several business owners have called me for advice (like I should know) on what percent of their millions should go to currency, treas. notes, bonds, gold, silver, etc. They said their financial advisors were clueless. Everyone one was a business owner who had earned every dime. They're smart, they take action, and they don't plan on losing everything because of a few percentage points. They don't don't need a course on paper money. Many have immigrant parents who have clued them in on banks.

Also, with every DOW rally, thousands of insiders are getting the chance to sell more of their shares which they will convert to currency and treasury bonds at the expense of the Lemmings.

So, look not to the populace response toward Y2k. The populace is unfortunately the supplier of the funds allowing that savvy to buy tickets for their flights to the islands of Liquidity and Safety.

The tragedy of y2k is not that of a government cover-up. The governments are trying in their own feeble way to do their best. Unfortunately the move with the agility of the retarded and should be pitied. The tragedy lies in the thousands of people in the know who are going to be ready, at least financially, at the expense of Joe Sixpack who, in his ignorance and greed, is reaching to the God DOW for financial salvation.
Tomcat
(09/05/1999; 12:29:16 MDT - Msg ID: 12849)
DD

Welcome DD, it is great that you arrived at a time when Labor Day has stolen much our roundatable. Gives us more time for easy goin chat. I will never forget your statement:

"Even the Big Boys could funnel down the drain as the best laid plans of mice and men implode in a black hole of mutant 1's & 0's."

Tell us more about yourself and tell us about how the glitter of gold brought you to our presence.
Leigh
(09/05/1999; 12:53:43 MDT - Msg ID: 12850)
Two Thoughts
What a dull day, everyone! Sorry I missed the campfire last night. I was in Providence yesterday and saw a billboard for the elegant new mall there. The sign went (something like) "Dispose of your disposable income properly." Huh? Are we talking about money or Kleenex here? Four months of following this Forum has taught me the importance of considering money as "a family's wealth," not something to dispose of or gamble with. Well, if we gold owners (and savvy landowners and possibly any farmers who haven't been driven out of business) are the only ones left standing after the meltdown, it will be because of that attitude - we held tightly onto what we had and didn't throw it after every breeze blowing past.

I was watching "The Sound of Music" with my eight-year-old son recently. He loved it - we watched it twice in an afternoon. We talked about the setting - World War II, Hitler, why the captain chose to leave his home rather than serve in the German Navy, etc. - and he really soaked it in. Afterwards, feeling very close to my son, I showed him a Philharmonic (from Austria, like the movie). He had never seen a gold coin before. I was going to give him the "gold is true money" talk, so I began, "What do you think of it?" He said, "It's the same color as Lindsey's (his beautiful little sister's) hair." Then he said, "Mom, I have a gold coin, too." He ran to his room and brought out a plastic gold-colored coin with Darth Vader on it and proudly displayed it. I said, "Well, honey, you know, you couldn't go into a store and buy anything with your coin." "That's OK, Mom, I still like it better. It says "STAR WARS" on it!" What do you call a little sheeple - a lamb? I wonder if he's ruined for life, or just immature? Oh, well, I was half afraid to show him the Philharmonic for fear he would tell the neighborhood kids and we would have a parade of children coming in the house to look at it. He obviously doesn't value it enough at this point to even listen to what I was going to say about it!

Hope everyone is having a nice holiday weekend.
Tomcat
(09/05/1999; 13:13:42 MDT - Msg ID: 12851)
Yikes. Typo alet on #12848
The third paragrap should read"

Peter, I believe the the populace may follow the governments misdirection about Y2k. However, the smart money is already moving out as witnessed by the record issuance of corporate
bonds in a desperate attempt to preserve corporate liquidity in 2000. It is the corporate world that counts and they know about y2k, they are acting, and the bond rate is on the rise.

God that is embarassing. Maybe its guilt over stealing Peter's marshmellows last night. Damn.
Tomcat
(09/05/1999; 13:30:10 MDT - Msg ID: 12852)
StevH

Great read on the National Post article. The pressure on the dollar is now coming from:

1. The flight to stronger markets.
2. US fear of an overheated economy.
3. US stock fear of rising interest rates.
4. Y2k flight to liquidity.
5. Rising oil.
6. Massive trade deficit.
7. Rising repos.

And, given this, Greenspan et al might have to raise interest rates again. Should be on heck of an open market meeting.

Steve, that was some really surprising information about JPM and GS. Could it be that the shorters are actually finding enough phyiscal to get out of their postions?

Also, the remark about the refineries melting down the CB gold is interesting. Could it be that more physical is showing up from the CBs? You know, the right person working in a foundry could be one heck of a source of informtion.

Perhaps, if you get a chance to speak to him again, he will offer up where he getting his information from. That kind of information is not light stuff. Thanks for the post.
Gandalf the White
(09/05/1999; 13:40:25 MDT - Msg ID: 12853)
18-Karat's Post #12844 (Taiwan-China)
PLEASE do not BELIEVE everything one sees on the WEB ! -- after all, I believe nothing bad that I hear about you. If you read the speech by the President of China given in Thailand as printed in the Sunday Bangkok Post, you can see how reporters distort the thoughts of what is said !!! MUST be that translation problem, and translation of Chinese to Angrit is even more difficult.
<;-)
Goldspoon
(09/05/1999; 14:09:34 MDT - Msg ID: 12854)
18karat..... here is the info to which you refer....
China raised the level of its threats toward Taiwan August 19, warning "At present, mainland China has already finished all preparations for any use of force against Taiwan. Military mobilization, troop movements, combat-readiness training, logistics support and other aspects are already arranged." The statement was made in an article entitled "USA, do not mix in" in the Global Times, a weekly magazine from the official Peoples� Daily. In the article, China threatened a military response to the perceived separatist statements of Taiwan President Lee Teng-Hui, saying, "if the Taiwan authorities think the mainland can only launch a propaganda or psychological war, they are mistaken." Along with re-emphasizing China's commitment to action, the article cautioned Taiwan not to rely on external support for help.

The article also cautioned the United States against trying to interfere with whatever action China takes. The article stated, "Although China has set a development strategy centered on economic construction and the United States the world's strongest military power, history will not forget that Chinese are never afraid of warfare ... or of difficult wars." More directly, in an obvious reference to the U.S. decision to send two carrier battle groups to the Taiwan Strait in 1996, the paper said, "China's neutron bombs are more than enough to handle aircraft carriers."

This is also a veiled reminder of their victorius (in their minds) involvement in Vietnam-Korea.
Goldspoon
(09/05/1999; 14:26:42 MDT - Msg ID: 12855)
Tomcat..world in total denial....
Thanks for the great analogy!!!! We can see in the public and press total denial of 2kay. It frustrates us who see a clear and present danger.....Also the clear and present danger of fiat currencies vs Gold..another frustration for those of us in the know....Add one more....China/Taiwan...
i am begining to sense that some of you are finally begining to connect the dots....and shake off the trap of being unwilling to face up to these disturbing developments... and thus go into total denial....
The Press has down played this because it would only add straw to the 2kay, currency camel....Developments in all three cases of denial will soon be a collective slap in the global face and panic will ensue....Welcome to the new millinium.....
Goldspoon
(09/05/1999; 14:37:44 MDT - Msg ID: 12856)
Leigh... a heart touching story...
An obvious attempt by your son to draw closer to you by finding something in common with you... Unfortunatley our over active male ego gets in our way..he really loves your coin and is happy you took quality time to share.. God bless and keep you, and yours...
Leigh
(09/05/1999; 14:52:01 MDT - Msg ID: 12857)
Goldspoon
That's a sweet way to look at it. Perhaps he will become a true goldbug in time.
Peter Asher
(09/05/1999; 15:15:31 MDT - Msg ID: 12858)
Tomcat (9/5/99; 12:20:57MDT - Msg ID:12848)
"Be careful what you ask for. You may get (all 12KB) of it."

All money must first lie in either a bank ledger, wallet, strong box or under a mattress. All of us here have agreed with the empirical fact that money does not lie in the stock market. Even the money spent on an IPO becomes someone else's working capital, residing in their bank account.

So where is all that money? Unless the money cycles back to the bank, reducing fractionalization, or passes on to the Fed as a repayment from the bank who originally borrowed it, it always represents somebody's spending power. Therefore, the question is: "Who has that spending power and what might they intend to do with it?"

A record breaking amount of discretionary income has detoured through the equity markets. Instead of saving it, spending it on consumption, or capitalizing production with it, the earners of that income have decided to reimburse an owner of shares in a company. It is now the seller of those shares who makes the decision to either consume, capitalize, or spend. (Tomcat: That's the "flow through.")

Let us assume for now the continuation of the present level of sales and employment and therefore the same level of discretionary income. If stock market sentiment were to decline, then the spending decisions would swing back to the income earners. In that environment, would there be more homes and new cars bought, more businesses started or expanded, or more money saved? (The latter allocation, of course, would result in the banks expanding the money supply and then issuing loans for consumption or capitalization.)

An expanded money supply, demanding more goods and services from a fixed quantity of production facility, (consumption) would be inflationary. On the other hand, if a lot of spending power were used to create more production facilities (capitalization), it would not. Finally, if there were an excess of production facilities created, there would be deflation. Recession or depression only occurs if the cycle of production and consumption breaks down, from whatever cause.

Envision the free market economy depicted in the way justice often is, by a sculpture of a blindfolded woman holding a scale. One side weighs production, the other consumption. It all comes down to a question of balance.

In a falling market, the *outstanding money supply is changing hands, not changing in size*. If the stock market declines, gradually or otherwise, those who get less for their stock than they paid for it have allowed some of their earnings permanently to remain in the hands of others.

I believe that last year I posted a concept that stock certificates were the fifth currency, after the dollar, yen, mark, and SF. Other than the right to take part in company affairs, the only difference is the form in which that (stock) currency is exchanged. That is why the wealth effect exists. People perceive their stock as a saved currency that will increase in value against the dollar. When less money cycles through the market, more spending will be decided by the original earners of income, and less by the sellers of stock.

It is not the inflated values considered to be the "Bubble" which I see as the danger. It is the magnitude of the dependency on the overall investment capital that is passing through the equity conversion machine and exiting as spending money.

The challenge to AG & Co. is to keep that flow-through steady without expanding the bubble or scaring investors out of it either. It would appear that the investors' fear of loss is becoming strongly counter-balanced by their fear of missing out on exorbitant capital gains. AG could be shrewdly playing this "like a violin."

One day, he makes an optimistic comment or an expected rate announcement. A few days later, a discouraging word. The market rallies; the market corrects. Investors are no longer 'making' their twenty percent. At some point, they are just breaking even. But they never know if next week everything will go roaring upward again. Damned if they sell, and damned if they don't.

I've stated that money is a form of bookkeeping and that a dollar is a "production chit." So, let's say a dollar is a note that says, "Pay to the bearer on demand one dollar worth of goods or services from the people of the USA." My point is that the government is not the writer of that note. The USA is the Title Company guaranteeing that note. The government doesn't really owe it; that note is based solely on the American people's ability and willingness to honor it.

As long as the citizens of this country are getting up and going to work and keeping the economic machine going, they are the underpinning of the US dollar. There is, of course, the secondary factor of how the trade value of the dollar floats in the currencies game. The massive debt that results from printed money represents goods and services consumed in return for goods and services not yet created. So, maybe there is a check and balance there. If global money games devalue the dollar, then the demand for American goods and services will rise, the trade balance improve, and the debt level decrease. The threat to the global economy comes from excesses. If default or devaluation of sufficient magnitude (Y2K Phase II, "Shut Down") occurs and the domino effect gets triggered, then there will be real trouble.

The gist of all this is that fiat money depends on maintaining the agreements behind it. (Dun and Bradstreet's motto is: "Credit: Man's Confidence in Man.") If the agreements can not be held in place, then a medium of exchange is necessary to hold onto value earned, and this is where GOLD has always functioned. What the central banks are wrestling with at this time is whether to continue to back their currencies with gold, or to purchase more national 'necessities' such as weapons, welfare or favors?

The money supply expands or contracts depending on the loaning or returning of funds (credits) out of or into the banking system. The effect of a market crash would certainly be, first and foremost, the devastation of "TheWealth Factor," which is nothing more than stockholders' expectations that future stock sales will be paid for by money 'saved' out of future earnings.

Years ago, people used to say, " I have some stock in AT&T," not, "My money is in AT&T." That's all people have, a share in a company. The only money that is actually IN the market, is whatever bid is on the floor of the exchange at that particular moment. If at noon tomorrow there are bids for 2000 shares of AMZN @ $50 per share, and nothing else, then in that moment in time, the total wealth factor of the company could be seen as $100,000. The first guy to sell his 2000 shares is the one who 'gets' (some of) his money out of the market.

If that flow-through of savings into stock sales were to diminish, spending would depend on what money people were earning, and whether they saved it or purchased consumer goods with it. If they saved it in banks, it would contract the money supply. If they kept it circulating, purchasing things, then price inflation or deflation would depend on the dynamic of the willing buyer and the willing seller, which is the heart and soul of economics. My definition of the cause of inflation is: "The power to command price." When Y2K empties the shelves, prices will probably go up. For deflation to occur, there would have to be enough goods eagerly seeking the small pool of buyers who still were willing to spend.

I would define a depression as a situation where people cannot find the opportunity to produce for and exchange with each other. The government can always print our way out of a depression. But then those who still have purchasing power would not have the opportunity to buy up the world for a pittance. So, the question then becomes: "For whom will the government be working?"

There is one cardinal difference between gold (and silver) and bank note currency. All bank notes are credits. They will purchase things from others, but only so long as their debt is honored by the society that uses them for rights of exchange. Gold or silver or precious stones are, in effect, credits transformed into ownership of portable value. That value may fluctuate, as it does for a currency, but it cannot be destroyed by default. I have defined Gold as 'asset' money and currency as 'credit' money. I keep coming back to that as the basic criteria for analyzing the relationship between gold and paper.

.The liquidity to be created by the extra billions in Y2K greenbacks can get into circulation by the withdrawal of deposits, or by the writing of loans. If loans are written, up goes the money supply. (Fractionalization is a decreed rule, not a law of physics, and therefore can be altered or repealed.) If people withdraw their demand deposits, all that has happened is that a ledger entry has been replaced by a receipt. That's really what a banknote is. It is not an IOU, but a UOI. You, the people of this country, owe me this numerical value of goods or services. So, when you take that currency out of the bank you are saying, in a sense, "Hey, tear me out that piece of the page where you have my deposit written down. I'd rather hold on to it myself."

So, FRN's are the last refuge of credit money. No matter what fails in the world of electronic or paper ledgers, holding your own "ledger-to-go" (as Aragorn has described it) is the safest solution for holding on to and using 'credit money', but only gold protects against lost value.

Well, that turned into a complex weave of edited posts and additional thoughts. But, as usual, all the threads lead to -- Gold.

FOA
(09/05/1999; 15:20:08 MDT - Msg ID: 12859)
Gold Mines!
When I read this letter from I.V. Holtzman (USAGOLD (09/03/99; 15:13:20MDT - Msg ID:12765)I really had to lean back and smile. That was good, very good. I looked up from the computer screen and gazed easily out the window. Out there, across the ocean, someone sailed the seas with very deep thoughts. Perhaps, what he once saw on the horizon as a mirage was now becoming a little more real.

Earlier I posted an introduction and chapter one (Msg ID:8633) of "Gold: Saving Real Money In A Time Of Transition". It concluded with: "In chapter ((2)) we will build upon the workings of the gold market as it represents oil, the most strategic world commodity.". In that framework, Another is editing each chapter. In as much as I would like to quickly proceed, the question of "Gold Mines" is becoming more urgent. Another sees no need to go into this as his world holds little purpose in these investments. Yet, in my world, "the Western view" these securities are widely held in place of gold. Perhaps it is time to "Stand the ground and do battle upon the enemy before it devours our private wealth."
Mr. Holtzman, FOA here, broadcast being prepared:

FOA speaking:

Mr. Holtzman,,,Over here!,,,,Are you out here?,,,, Can you hear me?,,,,,,Are you out there??

Oh well, Damn this fog. That man must have one good transmitter. Sending messages over such a great distance, yet his signal comes through clear as a bell. Amazing that even his thoughts are not garbled and nothing missing in the train of logic, either.

Mr. Holtzman,,,,,,,,,Over here!,,,,,,,,You out here??,,,,, Hope you can read me!

This fog has been hanging over these waters for as long as it has the recent gold market. Trouble is, as long as it continues, no one can find the right direction. Especially with these GPS units built during the early gold trade. Wish I had a communication system as good as his. Bet he was born
with that transmitter because money just will not buy a message maker that everyone can understand thru a fog.

Holtzman here,,,,,,Holtzman here!

FOA: There you are. Didn't hear me talking to myself on the mike did you? Good! Ok,, sorry about this old mental system, but my next transmission is in the works. Thanks for
listening.

ET
(09/05/1999; 15:23:41 MDT - Msg ID: 12860)
Tomcat
http://www.yourdon.com/articles/y2kendgame.html
Hey Tomcat - thanks for the response (my modem is still intact!). Speaking of the next few months, Ed Yourdon has published a new piece (at least I think it's new), concerning the y2k end game and how we might address it. It's a long but interesting read as he compares the game of chess to the options that remain. Thoroughly entertaining and eye opening.

Y2k is certainly a mixed bag of circumstances and I'm still unclear how it might play itself out in general. I agree with Schultz and DD however that the chances of those with paper fortunes coming out intact is likely zero. Confidence is the only thing that will allow that to happen and even the recent PR spin isn't lending a lot of confidence to the markets. I suspect soon one big player will make a quick dash for the exit and that will be it for positive market sentiment. Milne has always posited it would be Japan that would set this off and maybe we are seeing that now. It beats me; I've given up trying to figure out the paper flow.

Despite Friday's action, the charts all look bad for stocks, bonds and the dollar. You know, if Another is right and traders are backing away from the late 1999 contracts, we could see this start to play out in all the paper contracts with few wanting to take the buy side. That only leaves the central banks to take that side and provide any liquidity at all. It looks to me to be a race between loans melting down at any ever increasing rate as money is injected at an even faster rate to keep the markets open. I think I'll watch this from the sidelines. One of the old axioms of trading is that you can go long, go short, or go home. It's a probably a good time to sit around the house and reread some Mises or Hayek for some clues from the past how this might all work it's way out.

Be talking to ya.

ET
Peter Asher
(09/05/1999; 15:32:38 MDT - Msg ID: 12861)
Addendum to #12858
Continuing <<< If stock market sentiment were to decline, then the spending decisions would swing back to the income earners. In that environment, would there be more homes and new cars bought, more businesses started or expanded, or more money saved? (The latter allocation, of course, would result in the banks expanding the money supply and then issuing loans for consumption or capitalization.)>>>> However, if there wasn't a demand for new loans due to a crash in consumer confidence, then that money would exit the Money Supply.
Tomcat
(09/05/1999; 15:36:40 MDT - Msg ID: 12862)
Goldspoon
http://www.stratfor.com/SERVICES/GIU/082099.ASP
Goldspoon, you sure have a way with words. As you can see today, I have a way with typos.

I actually think that the members of this forum are quite aware of what is happening internationally but, like Y2k, many of us try not to bring it up unless it has a connection to precious metals or something that has an obvious connection to precious metals.

Personally, my vote is for you to keep posting in this area because if you see something that others miss then it could be of real value.

BTW, stratfor.com has some very interesting views on China. They recently said (see the about url) that internally China is in such a mess financially that it needs, and is using, the Tiawan situation to keep political control over a dissatisfied citizens. They said that China has unofficially devalued its currency thru subsidies and it needs a crisis to happen to help cover the bad news when they go public on their devaluation.

If China devalues its currency then the repercussions for the Asian sector are significant in that the compeition for labor will be affected.
Tomcat
(09/05/1999; 15:58:38 MDT - Msg ID: 12863)
Peter Asher: 12K of it.

Wow. I read it and got the idea of 'flow through'. You know, I used to do some sleight of hand magic for friends and business aquaintances. This forum sure beats that. All you do is ask and the forum genies produce it almost instantly.

I also agree with you point on the bubble and the fact that consumer dollars are supporting it. All dollars are not equal.

Peter, I will print this out and take the time necessary to absorb it. Thanks friend. I appreciated it greatly.
SteveH
(09/05/1999; 16:46:21 MDT - Msg ID: 12864)
Tomcat
www.gold-eagle.comTomcat,

My friend gets his info from a few trade rags, being a keen observer of life, reading a special disk of usagold, kitco, and gold-eagle stuff, plus Bill Murphy's stuff. Plus he was a coin dealer through the 1979-80 gold rush. He doesn't get on the Internet and knows FOA through the special disk. He has picked up and focused on posts and information that I missed or gleaned over. He is not a guru nor a gold-market pundit, just a smart coin dealer. I credit him with filtering through countless posts and deciphering information with the best of them. So his information is opinion with a twist.

Here is a little something from gold eagle. Notice the nature of gold in the 20th century has been to stair-step. It is as though it was a financial safety valve. It would seemt that the pressure builds, lets off in one-big wooosh, and then the process repeats, but always with gold at a higher plateau. There is much wisdom in this gold-eagle poster's observation, eh?


@Flambeur @Vronsky - Dow/POG = 2
(frank) Sep 05, 17:40

I was reading the Kaplan site at http://www.goldminingoutlook.com earlier. He also discusses the ratio of the Dow/POG.

He states on August 25, 1999 the Dow hit a intraday high of 11,334.59 and spot gold was quoted at $252.40/ troy oz giving a ratio of 44.9. In a severe bear market, the Dow's yield could touch 7.5% as has happened before. A 7.5% yield would equate to a Dow of 2100. Now, if you take the average POG for the years 1979-1983 and adjust it for inflation, you arrive at a POG of $1050. 2100/1050 = 2

Also the 1999 Franco-Nevada annual report page 5, viewed at http://www.franco-nevada.com, has a chart of Dow/POG going back 100 years. The Dow/POG ratio stood at 1.01 in approximately 1897 moved upwardly to 18.40 in the late 1920's. It then dropped a low of 2.01 in the 1930's and steadily moved upwards to 28.28 in the 1960's. The ratio then moved down to a low of 1.04 around 1982 or so (the start of the current US bull market). The report is dated May 1, 1999 and shows the current ratio had moved up to 36.0. Kaplan shows the ratio to be around 44 now.

I suspect that the Dow/POG ratio will soon start to move back towards its equilibrium point (whatever that may be) and then towards 2.
Have a golden weekend all.



Peter Asher
(09/05/1999; 17:40:51 MDT - Msg ID: 12865)
Only Comex is closed
+ .3 on the overseas opening; what will the London mice play, while the N.Y. cat's away??
Peter Asher
(09/05/1999; 17:44:11 MDT - Msg ID: 12866)
TomCat
Hey, Rocket Man! Thanks for all the boosts.

BTW did you ever see my request for a definition of "Delta V", I was using it for analogies.
Tomcat
(09/05/1999; 18:41:52 MDT - Msg ID: 12867)
All

I have to go now but hope to be back late this eve.

SteveH, I went over to gold-eagle and read some more posts on the DOW?POG ratio. I am trying to make sense of it. More to discuss.

Peter A, I look forward to continuing. Thanks for the boost acknowledgement. It was nice to hear after my typo disaster.

ET, I have a partial response to you that is not finished.

FOA, I have gone back to read that historical review. Looking forward to your reponse to Mr.H.

Goldspoon, great to have you here.
GFD
(09/05/1999; 20:21:02 MDT - Msg ID: 12868)
Hipplebeck
To the exent that anyone can "get" it in this business you have it.

A couple of caveats.

Firstly, the primary "debt holders" are the central banks. As I mentioned before they may not feel that skyrocketing bullion is in their best interest nor destroyed hedge funds. This means they may simply forgive their outstanding gold loans, possibly disguising this process as "sales".

This has implications for them politically in the sense that someone may have to explain to outraged voters why they "gave away" their national treasure, yada yada... This fact could be reinforcing the current practices in a perverse way because many may believe that when gold hits 200 (or whatever) that "no one will care" and the little episode can be swept under the carpet.

This still does not change the demand picture. As Another pointed out very early the asian mentality is a bit different than the western one. Simplistically, western investors walk away from a "looser" while asian investors flock to the "bargain". Given the fallout from asian contagion, gold purchases will be seen to be extremely wise. Particularly at these levels or lower.

This game will only end when the central banks vaults are empty or they decide that they have had enough.

GFD
(09/05/1999; 20:24:23 MDT - Msg ID: 12869)
Away for a while.
To all. Sorry I missed the camp fire last night. I will be away for a few weeks. Will check in when I can.

Good hunting!
chan
(09/05/1999; 20:34:30 MDT - Msg ID: 12870)
China
China will only attack Taiwan after it sparks off a war in the Korean Peninsula(art of war;distraction)......although they will suffer hugh casualties, the phychological impact far surpasses high casualties (1:4 - 2:4 deaths on a beach assualt if the attempt is made for the mainland). uniting a restless mainland(china) with patriotism and 'subtle hints' of force(for those with other ideas).

Taiwan is not as hapless as we all think...they have 'recruited' the restless mainland chinese population with thoughts of freedom and wealth over the years and created a 'disgrunted' society(with the help of inefficient and corrupted chinese infrastructure).

China is very unlikely attack USA at its backyard (but the aircraft carriers will bear the brunt)....they much rather the population work for them to presure the govt to mind it's own business and not send their son's to die for other peoples war then to antagonise them and allow the govt to whip up patriotism and support for more involvement.

the possibility remains high (50/50) as Taiwan plays a dangerous but timely game of cards when China appears to be having serious social/economic problems (art of war; distraction)

for the sake of human kind....I pray everything I enacted here is absolute rubbish...because that I can live with.

The Stranger
(09/05/1999; 20:47:21 MDT - Msg ID: 12871)
Friday's Employment Data
The following is paraphrased from the current "Barrons":

Friday's market excitement may not last. One reason is doubt concerning the accuracy of the August employment figures, which didn't entirely jibe with other recent statistics. For example, state unemployment insurance claims have been
under 300,000 for six weeks in a row, signaling a strong labor market. And the loss of 63,000 manufacturing jobs does not square with corporate reporting; the employment component of the national purchasing managers' survey is
at a new 11 year high, and personnel companies generally indicate increasing demand for jobs. Finally, how is it that manufacturing jobs plunged in a month that saw record automobile sales?

Probably the August figures were a statistical reckoning for outsized employment increases in June and July. The result may well be a rebound in September. The one number in Friday's report which did sound right was the national unemployment rate, which dropped to a 29-year low of 4.2% in August from 4.3%. This may alarm the Fed, since productivity growth increased at only a .6% annual rate in the April-June period while Labor costs rose at a 4.5% annual rate.

And what about the other recent indications of emerging inflation?. Commodity prices are the highest they have been in 10 months. Business and consumer confidence levels are unusually high. Stocks are breaking records. The dollar's decline threatens higher import prices and places greater demand on exports. Then there are the unions. After years
of capitulation and anemic wage boosts, some are achieving big pay raises, increasing the chance that currenttight labor conditions might finally cause wage inflation. In a major coup, machinists at Boeing recently won a 10% bonus and annual salary increases of 4% for two years and 3% in the third year. In another, Northwest Airlines offered flight attendants pay raises averaging 25% over five years and an average 80% boost in pension benefits.

Stranger's Comment: Thanks to Nightrider and Tomcat for keeping an eye on this important story. Thanks also to whoever it was who brought up the item about the 13th of the month falling on a Friday. I would credit you by name, but I am afraid that going back to look you up would cause me to lose this post. Anyway, I am intrigued by your theory and can't wait to test it out on next month's report.
Tomcat
(09/05/1999; 22:37:12 MDT - Msg ID: 12872)
ET

Hey ET, hope you are still around. I downloaded Yourdon's article and being an old chess player I liked the way he is using the end game analogy.

I agree that Y2k is certainly a mixed bag of circumstances but it is becoming clearer to me that there has been a pretty gross underestimation of effort to crack the problem. I also agree that the bottom line is confidence and a PR spin isn't what builds confidence. I believe that bank runs might start outside the US first and undermine confidence via the sensationalism on TV.

Milne and North no longer look like such a doomers. Amazing that Milne may be right about Japan.

You said that it is: "a race between loans melting down at any ever increasing rate as money is injected at an even faster rate to keep the markets open." That is a great summary.

Lets stay in touch. I always get a lot from your posts.
Tomcat
(09/05/1999; 22:56:37 MDT - Msg ID: 12873)
SteveH

That coin dealer sounds like a great contact. I know three coin dealers and not one of them is on the internet. The guys on the front lines often have some very valuable insight. That is which I put so much faith in MK and uptick(Len Kaplan). When they speak I really listen.

The Dow/POG ratio is interesting. If you pick a number where you feel the ratio will end up after the crash you get some interesting insight. Lets say that the ratio will end up at 6. If the Dow drops to 6000 then the POG would be end up at 1000. If the Dow drops to 1800 then the POG would be 300.

Lets say we had a repeat of the 29 crash where the ratio went to 2 and the DOW went down 90%. With those two numbers we would still get a POG above 500.

BTW, I tried that gold-eagle link to get the historical graph of the DOW/POG ratio but the link did not work.
Tomcat
(09/05/1999; 23:06:59 MDT - Msg ID: 12874)
The Stranger

Thanks for the Barron's paraphrase.

glenn over at kitgo has been reminding posters about how the day of the week affects the statistics. He has a track record of calling the market based on the markets over-reaction (up or down) to the stats. He predicted this month as well. I think he said Mondays and Fridays give the biggest swings. If I can find one of his posts I will let you know but I don't think their search function is working. He brings it up a lot and he brought it up over the last two days.

What is your take on the recent FED repo numbers? Do you know if there is a site that follows them or interprets them?
Desjardins
(09/06/1999; 07:16:34 MDT - Msg ID: 12875)
Last try gold long term gold hedge prices, PLEASE
Can anyone provide a link to a site that displays forward sale prices for gold for 2,3,4 to 5 years OR provide this data directly?

I would like to know what future production can be forward sold at, for a mining concern wanting to commit to starting up a new gold mining operation.

Thanks in advance.
SteveH
(09/06/1999; 07:24:55 MDT - Msg ID: 12876)
Desjardins
Call Goldman Sachs or JP Morgan.

Otherwise I don't know.
SteveH
(09/06/1999; 07:50:55 MDT - Msg ID: 12877)
reposted repost
www.kitco.comDate: Mon Sep 06 1999 09:19
jims (Reprint of Gambler's 00:26 - worth consideration) ID#252391:
Copyright � 1999 jims/Kitco Inc. All rights reserved
Date: Mon Sep 06 1999 00:26
Gambler ( Old Gold / Armstrong ) ID#434132:
Copyright � 1999 Gambler/Kitco Inc. All rights reserved
It is crystal clear that Armstrong IS short gold. He can deny buying it and then selling it, but he can't deny
borrowing it and selling it. He has used the "gold carry" just as he used the "yen carry," and this is one of the
reasons ( being short yen ) his firm is in big trouble now on their derivitive exposures. Armstrong NEEDS a
lower gold price to bail him out of his sour yen trade.

Some CB officials HAVE personally, greatly benefited from leasing to the bullion banks and/or mining
companies, hedge funds, etc. as they have in some cases been heavily invested ( directly or indirectly ) in the
very institutions they authorized loans to.

At this point in time, this practice is changing because of the concerns about the credit ratings of some of
those institutions. The ratings get worse by the day as interest rates continue to climb. With Y2K at hand, the
CBs are concerned about liquidity problems as corporations compete for cash to have on hand for payroll
and other budgeting matters. Bonds are being dumped for cash and foreign CBs are dumping US treasuries
and converting back into their domestic currencies. Bullion banks and hedge funds ( short gold ) are
vunerable to highly leveraged derivative positions in currencies, bonds, precious metals, commodities, etc.
Knowing this, CBs want their gold back before any defaults occur from rising interest rates.

If just a small number of these banks and hedge funds were to fail, a domino effect would ensue "bringing
down the house of cards" so to speak. Investigations would uncover the irresponsible, criminal nature of the
activities of some CB officers. CBs officials would be blamed for the loss of its gold reserves and in some
cases personally benefiting.

The sustained, rising gold lease rates reflect the current financial risks to the market. It signifies that the game
is up and the rules are changing. Besides, the CBs NEED their gold to keep control of the gold market.
They cannot afford to divest themselves of their fiat currency insurance, gold.

The CBs, bullion banks, Martin Armstrong, etc. would love it for all to sell their gold as they could unwind
their short positions. It would be foolish for Armstrong to take any other position than the one he has. He is
lying!

Someone needs to tell ol' Marty that it AINT GONNA HAPPEN! It's too late for some of you gold shorts!

BUY GOLD! BUY SHARES IN UNHEDGED MINING COMPANIES. DIVERSIFY - geographic
area, gold, platinum, silver, etc.
SteveH
(09/06/1999; 08:10:58 MDT - Msg ID: 12878)
A good day for information
www.kitco.comCheck this out and answer, why is the BOE telling us what they value their gold at?

Date: Mon Sep 06 1999 03:23
GO GOLD (BoE breaks its silence!!!) ID#428141:
Copyright � 1999 GO GOLD/Kitco Inc. All rights reserved
I guess what they are telling us is that they do not believe the price will fall below $210. Would love to know how they came to a figure of $209.59 though!!!
UK GOLD RESERVES VALUED AT $209.59/OUNCE IN FISCAL 1999-2000
London--Sep 3--The UK's gold reserves are valued at US $209.59 per troy
ounce in the current fiscal year, the Treasury confirmed today. The UK will
auction another 25 tonnes of gold on Sep 21 as part of its program to sell 125
tonnes in this financial year. The first auction on Jul 6 saw the full 25 tonnes
sold at $261.20 per ounce. ( Story .12938 )
Clint H
(09/06/1999; 08:23:04 MDT - Msg ID: 12879)
Tomcat (9/5/99; 22:56:37MDT - Msg ID:12873)
Tomcat, you said,
<<Lets say that the ratio will end up at 6. If the Dow drops to 6000 then the POG would be end up at 1000. If the Dow drops to 1800 then the POG would be 300.
Lets say we had a repeat of the 29 crash where the ratio went to 2 and the DOW went down 90%. With those two numbers we would still get a POG above 500.>>>

I noticed you stuck to only one comparison. I would be interested in your views on the price of gold when you factor in the 5 horsemen. I like your thought process.
ET
(09/06/1999; 08:38:20 MDT - Msg ID: 12880)
Commodities and y2k
I swiped this post from Robert Folsom at csy2k;

September 6, 1999
Dow Jones Newswires
Y2K Bug May Cause Glitches To Commodity Markets
By HAMISAH SAMAD

SYDNEY -- The Y2K computer bug could cause supply hiccups in a number of
commodity markets, particularly in the metals sector, at the start of 2000,
if systems collapse in countries such as China and Russia, analysts say.

Metals, such as zinc, aluminum, nickel and copper, are considered
especially
vulnerable, while there is less of a threat in the agricultural sector,
where there is a surplus, analysts and traders said.

A severe disruption in the supply chain could cause panic buying, placing
excessive upward pressure on prices, creating shortages and forcing some
operations, which rely on primary raw materials, to shut down.

The Y2K computer problem refers to old computer programming codes, which
read the 00 digits in the year 2000 as 1900.

In "certain sensitive parts of the globe, like the former Soviet Union,
China and Vietnam, Y2K adds another layer of unreliability," Lamon Rutten,
an officer with the United Nations Conference On Trade and Development in
Geneva, told Dow Jones Newswires.

Rutten is responsible for commodity marketing, risk management and finance
with Unctad's Commodities Branch.

China and Russia are Category Four countries - the ones worst-equipped to
meet the Y2K challenge - according to U.S.-based Gartner Group Inc., an
information technology consultancy company.

Both China and Russia are major producers of zinc, aluminum and nickel.
China is also a major producer of copper.

Andrew Smith, a London-based analyst with Mitsui Bussan Commodities Ltd.,
said the Y2K computer problems pose the highest supply risk for zinc,
followed by aluminum and nickel, because of the metals' risk exposure to
China and Russia. Supply risk is lowest in copper because the market is
expected to have a huge surplus at that time.

The world's zinc market is expected to be in a slight deficit in 1999,
while
aluminum and nickel are seen to be in a slight surplus.

Should customers start stockpiling, the surpluses could be wiped out.

Even copper is now at risk to the Y2K bug, Smith told Dow Jones Newswires.

"There has been more noise to (copper) supply cuts and more mergers. (The)
demand side has (also) improved," he said.

-
Y2K Increases Risks Of Contract Defaults
-
With the level of automation low in countries like China and Russia,
producers in these countries could switch to manual operations should their
computers fail.

"If the computer doesn't run, they can opt for manual production," Tim Tu,
president of United Metals Enterprise Co. Ltd., a trading house in Taipei,
said of his trading partners in China. But there would still be concerns
about transport and other infrastructure.

"I'm more concerned about shipping, the rail, and forwarding. A malfunction
of the railway computer or money transfer, these are likely," Tu said.

Taiwan buys some 65% of its 220,000 metric tons of zinc requirement from
China annually. It also buys about 60,000 tons of Chinese lead each year,
which accounts for about 60% of its requirement, said Tu.

Any hiccups arising from Y2K-related problems will cause his Chinese
trading
partners to default on contracts, Tu said.

"If prices are higher, Chinese traders would always try to find excuses not
to deliver the fixed-price contracts," he said.

Many primary metal end-users in Taiwan, exposed to contract risks with
China, will defer the start date of their annual long-term contracts in
2000
to February instead of the usual January. They will purchase their
requirements for January in the spot market, Tu said.

Tu said customers don't want to be hostage to their suppliers and be forced
to shut their plants should there be problems with the raw material supply
out of China.

On the London Metal Exchange, where the Dec. 15 contract is now the
three-month benchmark contract, traders are already buying up the date,
causing the market structure of most of the base metals from the
three-month
date onwards to revert into a backwardation.

In the zinc market, for instance, the spread between December and January
prices is now in a backwardation of around $24 a ton. It's expected to
widen
out to $30/ton by the time the December date becomes the cash date.

This wide backwardation between the two months contrasts with last year's
contango of $4-$5/ton.

A backwardation refers to the three-month prices trading higher compared
with the forward and the far month contracts. A contango is a more usual
pricing pattern, where the far prices are higher than the near prices.

"I've been tracking the forward markets. There's evidence that people are
taking positions on Y2K. Open interest is building in the options. In the
forward markets, there's more kink on the forward curves," Smith said.

-
International Trade Houses' Role Reduces Supply Risk
-
In developed countries, the inventory buildup among consumers has been
"phenomenal," said Unctad's Rutten.

"Everybody in the production chain has an extra week's cover of apparent
consumption," said Damien Hackett, Credit Suisse First Boston's director of
Commodities and Resources Strategy in Melbourne.

In May, the U.S. National Association of Purchasing Managers revealed that
35% of their members intended to build inventory ahead of possible Y2K
disruption. Of these, 57% aimed to add one to 20 days extra inventory, and
40% some 21-40 days of contingency stocks.

The degree of any potential disruption from Russia is less than that from
China, because Russian-produced base metals are distributed by
international
trading houses, believed to be better able to handle any Y2K contingencies,
Tu said.

Supplies of agricultural commodities, in particular soybeans and other
grains, are unlikely to be affected by the Y2K computer problems as trading
of such commodities in world markets are handled by large trading
companies,
Unctad's Rutten said.

AWB Ltd., Australia's monopoly grain marketing concern said its customers
across the Middle East, India, Indonesia, and to a lesser extent China, see
no potential disruption to wheat supplies.

Australia is the world's fourth largest wheat exporter.

In any case, with prices at 20-year lows and a market surplus, most wheat
buyers aren't rushing to stock up.

"Our customers contacted don't expect major problems. They don't see a huge
need to stockpile on wheat," Peter McBride, AWB Ltd.'s corporate
communications adviser, said.

AWB's McBride said the company is taking precautionary measures to avoid
any
slip-up in its delivery schedule to customers. The company, which usually
will have exported some 80% of its supply by December, is staggering
shipments to minimize any potential disruptions. There will be more
shipments just before and after the New Year, McBride said.

-By Hamisah Samad; 612-8235-2957; hsamad@ap.org
The Stranger
(09/06/1999; 08:48:04 MDT - Msg ID: 12881)
Tomcat
If I were the Fed, I would be trying to weaken the dollar still further by continuing the recent money supply expansion. Such a policy would improve America's balance of payments, make it easier for commodity-dependent third world countries to pay off their loans, bail out the American farmer, etc. In other words, it would help finish the job of keeping deflation away from the world's door.

At the same time, I might undertake the largely ceremonial act of raising interest rates a few basis points. This would send a message of caution to corporations and labor unions which might respectively be contemplating higher prices and wage demands. It would also serve as a warning to over- aggressive stock market speculators.

All of the Fed's recent behavior is consistent with a strategy of this kind.

The short to intermediate term investment implications of this are, among other things,further deterioration for bond prices, rising real estate prices and further gains for commodities (including precious metals, of course).

Thanks for asking.
Chris Powell
(09/06/1999; 09:18:34 MDT - Msg ID: 12882)
Another scandal brews for gold shorts
http://www.egroups.com/group/gata/194.html?GATA's Bill "Midas" Murphy
takes aim at Hillary Clinton
and Martin Armstrong.
Tomcat
(09/06/1999; 10:54:44 MDT - Msg ID: 12883)
Desjardins

You might try ORO over at kitgo. He follows similar numbers. The World Gold Council might know but I have no url. The LBMA might also have the numbers.
Richard, Oregon
(09/06/1999; 11:07:58 MDT - Msg ID: 12884)
Re: Tomcat (9/5/99; 10:13:35MDT - Msg ID:12842)
Tomcat - A spirited discussion on China and Taiwan.

Your comment: "The China/Taiwan issue is too difficult for me to deal with. It is too horrible. This issue reminds me of Y2k. How silly it is to be worried." I agree, worry is not good. Education and preparedness are keys to any situation. The problems won't go away just because we choose to ignore them. We've found through real experience that the more you know the better you handle things and less likely to be afraid.

Your comment: "Look, it will never happen. . . . . . .". And : "Even our President says China is our ally. . . . . . ." You're a better man than me. When it comes to this president, I can't get that wagging finger, with it's denial, out of my mind, or the comment about misleading his family and the public. I think it was lying, but I could be wrong.

I've read it somewhere that the best predictor of future performance is past performance. It's stuck with me many years. Your comment: " Remember, people are very, very nice to one another." Yes they are but, I am continually appalled with 'man's inhumanity to man' and the regards for human life overseas and here in the USA, etc., etc.

I enjoy your words and gain a little insight into your thoughts and beliefs. Isn't it great, we have freedom of speech. Only in America, God bless America. I'm with you and hope Y2K and the China/Taiwan issue don't happen and just go away. But past performance is telling me otherwise. (Coverups, greed, corruption, etc., etc., of the past don't point to a positive outcome and not, in your words "Look, it will never happen", but I pray I'm wrong!)

Gold will play a very important part for people in Taiwan. What they can purchase and hide may prove to be very beneficial to their future.
GD
(09/06/1999; 11:14:03 MDT - Msg ID: 12885)
strangers lates
GREETINGS ALL!
I HAVE BEEN A LURKER WORKING ON HIS MASTERS DEGREE AT THE UNIVERSITY OF USA GOLD. I HAVE BEEN STUDYING THE GREAT WORKDS OF ALL WHO HAVE POSTED HERE ISNCE MAY OF THIS YEAR. MOST OF MY TIME HAS BEEN SPENT TRYING TO CATICH UP WITH THE LATEST AND GREATEST WISDOMS THAT CROSS THIS TABLE ROUND. WITH THE HOLIDAY I CAN FINNALY TAKE TIME TO MAKE MY FIRST POST.
I FEEL THAT I AM BEGINNING TO GAIN AN UNDERSTANDING OF THE WORLD GOLD MARKET AND THE GENERAL ECONOMY AT HAND. TO THE EXTENT THAT I AM MORE RESOLVED THAN EVER TO HOLD ON TO THE YELLOW STUFF PURCHASE AT $390/OZ AND AVERAGED DOWN THRU $259. THANK YOU ALL FOR YOUR GREAT WIDSOMS!!!

STRANGER, IN YOU LAST POST YOU SAID"The short to intermediate term investment implications of this are, among other things,further deterioration for bond prices, rising real estate prices and further gains for commodities (including precious metals, of course)."

I AM INTERESTED IN THE PART ABOUT REAL ESTATE RISING IN THE NEAR TERM. YOU SEE MY WIFE AND I ARE WANTING TO PURCHASE A HOME SOON. I WOULD PREFER TO MINIMIZE OUR MORTGAGE EXPOSURE, AND HOPE THAT MY CASH AND METAL HOLDINGS WILL ALLOW ME TO PICK UP A HOME OR BUILD ONE AT BARGAIN BASMENT PRICES IF THE TIMING IS RIGHT. WHAT DO YOU THINK THE "INTERMEDIATE TERM" IS AND AM I SEEING THE NEXT YEAR IN THE CORRECT LIGHT ?
GD
(09/06/1999; 11:17:46 MDT - Msg ID: 12886)
CORRECTION: STRANGERS LATEST NOT LATES
BOY,
NOT A GOOD WAY TO MAKE A FIRST IMPRESSION. I THINK A SPELL CHECKER WOULD BE A WELCOME ADDITION TO THIS BULLETIN BOARD. THAT OR I NEED TO HAVE MY MOM PROOF READ MY POSTS!
Tomcat
(09/06/1999; 11:20:38 MDT - Msg ID: 12887)
The Stranger

Thanks for your reply. I hope that AG can do just that without bringing the stock market down too much.

Could I play Devil's Advocate; not to outright disagree but to learn.

It seems that if the Y2k scenario wasn't there there would be more of a chance for AG to be successful. However, in preparation for Y2k, corporations are selling bonds to raise cash and this us putting upward pressure on bond rates. Countries are selling Treasury instruments to raise cash for Y2k bank stability. In addition the FED has to keep liquefying to prepare for US Y2k. These three actions I have referred to as The Flight to Liquidity

Y2k aside, the Japanese are also selling Treasury stuff to invest in their recovering economy (Flight to Quality).

In summary, these Flights to Liquidity and Quality are putting upward pressure on bond rates. So if, in this environment, Mr.G and Mr.S continue to weaken the dollar, they will risk putting even more upward pressure on bond rates. If the bond rates do rise enough that could destabilize the stock market.
GD
(09/06/1999; 11:23:31 MDT - Msg ID: 12888)
MINING COSTS?
AS LONG AS I HAVE MY FOOT IN THE DOOR.....
THIS HAS BEEN GNAWING AT ME FOR A WHILE.
WHY IS IT THAT BACK WHEN GOLD WAS PEGGED AT $35/OZ THAT MINING COMPANIES COULD STAY IN BUSINESS, BUT TODAY AT 7 TIME HIGHER GOLD PRICE OR $250 ITS THE END OF THEM ALL. I DO NOT THINK THAT INFLATION ACCOUNTS FOR ALL OF THE EFFECT.


THOUGHT?
Peter Asher
(09/06/1999; 11:33:15 MDT - Msg ID: 12889)
Steve
>>>>>>why is the BOE telling us what they value their gold at? <<<<<

So their countrymen will see that they are selling it at a profit, of course. That "market price" they see at LBMA is some paper fantasy, right?

I knew the "Emperor had no clothes" but these guys are trying to parade him down the street, flayed to the bones!

BTW, I'm sure you noticed that the POG recovery stopped exactly at the point where gold would have traded higher then the price they gave it away at. The already aroused populace might have gotten real serious if the POG went higher than the auction figure

The Stranger
(09/06/1999; 11:51:13 MDT - Msg ID: 12890)
GD
Welcome, GD. I think right now would be an excellent time to lock in a mortgage(buy a house). In a few months a $100,000 mortgage will probably cost you $75/mo. more than it would today, and homes nationwide will cost 2 to 3% more than they do now.

I should caution you that many respected prognosticators are saying just the opposite. They believe the economy will cool, slowing the rise in home prices and taking mortgage rates back down to where they were last year. The bond rally on Friday occurred precisely because the employment report offerred a glimmer of hope to those who espouse that point of view. I wouldn't bet on it, though.

Until the Fed begins honestly restricting monetary growth, it will be full steam ahead for real estate and mortgage rates throughout most of the U.S. Under the circumstances (low commodity prices, struggling farmers, struggling third world countries, etc.), I wouldn't expect policy to change for awhile. In short, providing there are no other reasons not to, go buy yourself a house, but hurry!

I know what you mean about the spellchecker. I proof all my posts at least twice, and I still look like an idiot most of the time. This posting, if nothing else, will sure improve your writing skills, however. Once again, welcome. It is nice to have you here.

Note to Gandalf: Gandalf, don't you think it's time you filled us in on your Southeast Asian experience. I am really wondering about you, man.

Note to Chan: I live in Utah, USA, but I spent a week in Singapore last year. My wife and I stayed at the Raffles(Wow!), and I have never had a finer experience in my life. Marvelous country, marvelous people! So, it is good to see you here, too.
Peter Asher
(09/06/1999; 12:00:39 MDT - Msg ID: 12891)
ET (9/6/99; 8:38:20MDT - Msg ID:12880)
<<>>>

Money transfer makes the world go round. --- I'll bet even Goldfly can't rap that around a decent tune.

We not only have just in time inventory these days, we have just in time money. Not so long ago money took days or even weeks to cross oceans. In 1964 I was seeking work in Paris and needed a little help from home. Wire transfers between banks were taking over a week and were subject to temporary disappearance in the clerical chain. The by far the fastest way to move money was to buy an American Express money order and mail it to Amex Paris tourist mail pick up were I could also cash it. This took only two days. Now we assume instant fund transfer as the norm. When the pumps go down on the money pipeline, that cash lubricant will not be reaching the wheels of the global economy.

What do you suppose the carrying costs of a 5 to 10 day float on the Global money supply is?

Then there is the fact of suddenly needing to be credit worthy for the float, or having to wait for the shipment to be made.

Hey Goldfly! How about "For the times, they are a-chang-ing."
Tomcat
(09/06/1999; 12:01:54 MDT - Msg ID: 12892)
Richard, Oregon Re: The Taiwan Tragedy and #12,842

Dear Richard, I intended that piece to be a satire (a written work exposing human weakness and holding irresponsible people up to ridicule).

I am sorry. I obviously failed in my attempt.

I never intended that anyone would take it literally or seriously. I should have ended that post with a ; ) to acknowledge the non-serious nature of the post. I apologize and hope I did not lead you astray too much. Your sincerity is much welcomed, needed, and appreciated by me.

I consider the situation in Taiwan to be a tragedy. I fear the Taiwanese might get sold out just like the Panama Canal was sold out. Like Y2k, I don't feel many people care about the Taiwanese people who are our allies. The Chinese Government has a long history or repression and mass murder and I am against strengthening them the way our leadership has done.
The Stranger
(09/06/1999; 12:06:31 MDT - Msg ID: 12893)
Tomcat
You have a good understanding of what is going on. To respond to your posit about rising bond rates destabilizing the stock market, however, I would emphatically suggest they already have. Have you seen the NYSE advance/decline line lately. As of Thursday, at least, it was below even the lows of last September, when the Dow stood at only 7500!

One can get on thin ice trying to predict these things, but, under the circumstances, I would not expect a general decline in stocks so much as a continued shift towards cyclicals, which includes producers of basic materials(yes, gold too)and perhaps renewed strength in American exporters. These are, after all, the weak dollar beneficiaries.
GD
(09/06/1999; 12:10:48 MDT - Msg ID: 12894)
RE: STRANGER
DO YOU THINK THAT Y2K WILL CAUSE A RECESSION, IF SO, WON'T HOUSING PRICES REVERSE? I AM OF THE ILK THAT I WOULD RATHER SAVE 5%-10%($15000-$30000)ON THE SALES PRICE OF A $300K HOUSE THAN PAY +1-2% ($1500-3000/YR) IN INTEREST ON A $150K MORTGAGE.

ALSO, THE LATEST TALK IS THAT FOREIGN MONEY WILL BE HEADING TO OUR MARKET FOR PROTECTION AGAINST Y2K PROBLEMS IN THE HOME COUNTRY. THIS, SO THEY SAY WOULD CAUSE INTEREST RATES TO GO DOWN LATER IN THE YEAR.

THE WIFE IS KICKING ME OFF THE COMPUTER. I' CHECK BACK LATER

THANKS IN ADVANCE FOR YOUR RESPONSE.
Gandalf the White
(09/06/1999; 12:42:30 MDT - Msg ID: 12895)
Welcome "GD"
Please consider this advise, GD. -- Using ALL CAPS in most conversations is considered by most to be YELLING ! -- This has not yet been done at the TableRound as far as I can remember, but as the excessive trumpets blaring is known to have an adverse effect upon our Host MK, I am sure that others would appreciate your input in a more restrained and quiet format. --- Thanks.
<;-)
Tomcat
(09/06/1999; 12:43:01 MDT - Msg ID: 12896)
Clint H

Hi Clint, nice to have you back. Clint, I do not know how to interpret the DOW/POG ratio. I find it interesting, I plan to study it more, but it is not something I use as a tool. I was glad when SteveH posted about it but mainly becuase I am hoping to learn how to interpret it. I don't think that it is useful prior to the early 70s because the POG was fixed before than. If you have any insights about the ratio I would be all ears.

Tomcat
(09/06/1999; 13:08:36 MDT - Msg ID: 12897)
My Take on the Future of the POG
Clint H, thanks for the acknowledgement. Here is my view of the POG and a few of those horsemen you asked about.

I expect a strong recession or mid depression due to Y2k.I opine that Y2k will cause a brief deflationary problem followed by an inflationary response from the government. I expect gold/silver to go higher as we approach 2000 and then possibly drop in January when folks think Y2k is not too bad and then rise again when the printing presses get more active in the year 2000 problem phase (later in the year).

I expect a increase in world turmoil in 2000 which will stretch the weakened US forces thinner than they are now. I expect the US to be perceived weaker in a global sense. I believe that the POG is very dependent on the strength of the dollar combined with our perceived military streghth. Thus I expect this to have an upward pressure on the POG in the long run.

I am preparing for a bank run either in the US or elsewhere.

I believe that the market is going to correct in a downward fashion in the next ten weeks. I have no idea if this will be a large or small correction. I believe that the POG will be pressured downward with the falling market. If the dollar weakens enough then this could offset the pressure of a falling market re the POG.

I believe that oil producing nations are in trouble Y2k-wise and militarily. I opine that the POG will rise after oil goes into the 30s and higher. I do not believe Russia is as weak as they want us to believe and they are playing a covert game in the mid-east behind our back. This will help them financially. This will put an upward pressure on the POG.

I believe that a world wide flight to liquidity has already started leading to the repatriation of the dollar. This is inflationary and will weaken the dollar even more. This will put an upward pressure on the POG.

Toward the end of this year I expect tremendous pressure on the gold and silver shorters who I believe will have to settle in cash. I believe that the Another/FOA scenario of paper gold going down and physical getting scarce is very possible. That is why I hold physical and have bought at recent prices.

I am very conservative financially. I lean in the direction of Aragorn/Aristotle/FOA. I hold physical gold/silver/currency, and have a family retreat. I do not invest in gold/silver; I hold them for wealth preservation. I daily live the philosophy of "Prepare for the worst and create the best". I hope for nothing.

I have been self employed for 25 years and I feel that I am responsible for keeping myself marketable. Like Aristotle I like to see my profit in gold and as the POG drops I buy more. I am prepared psychologically to keep buying down to about 200 but don't expect a fall that big. I hold silver as a confiscation hedge.

I have a small amount cash that I invest with but that is gambling money and I do it to gamble and I seem to learn more about the economy when a play the market a little. I short the market a lot and have not lost anything yet. Haven't made much either. I find it fascinating that my personality is not investing or gambling oriented. I am very impressed with The Stranger's long term views of the market and envy his market maturity.

Clearly, this is only my take on the POG and those horesman that get under our skin. I would love to here someone elses take. Any takers?

elevator guy
(09/06/1999; 13:09:51 MDT - Msg ID: 12898)
Unhedged mining companies?
Greetings, Knights! May a traveler pose a question herein?
How does one find out if a mining company is "un-hedged", as it were? Can any one recommend a large cap mine that has not sold forward?
The Stranger
(09/06/1999; 13:32:05 MDT - Msg ID: 12899)
GD
I will likely draw some flak for this, but, no, I would not expect y2k to create a recession. No one has a better handle on how well prepared for this the world is than corporate insiders. Yet, corporate insiders continue to be net buyers of stocks.

There have been MANY tumultuous events in recent decades... Vietnam, the Kennedy assassination, hostages in Teheran, war against Israel, the invasion of Kuwait, the Clinton impeachment, etc. We survived most of them with little if any impact on the rate of economic growth. Yet, none of them were broadly predicted beforehand.

Now we approach the most widely advertised tumultuous event ever, and yet people expect the wheels to fall off of everything. Well, maybe they will, but I am not going to hold my breath.

Stranger's aside: I only state these views because I was asked for an opinion. Anybody who wants to debate, be my guest, but please leave me out. I have argued myself silly in here on this issue and do not wish to re-experience what I now call Peter Asher syndrome (ie. running around in decreasing circles until, etc., so-named because the phenomenon was first articulated at the Forum by one Peter Asher, Knight of the Round Table).
The Stranger
(09/06/1999; 13:37:37 MDT - Msg ID: 12900)
elevator guy
The closest thing to what you seek is probably Newmont Mining (NEM), which trades on the NYSE and is the largest gold mining operator in the United States. They have recently done some hedging (groan), but they have more gold price exposure than any other large operator I know of. Good luck!
tom fumich
(09/06/1999; 14:06:35 MDT - Msg ID: 12901)
One thing too all who wish POG to exist....
There are a few sites on this net catering to Gold...if we don't align in thought...we will find no more adds...no more trust...then no more sites...think about it...only a thought....
tom fumich
(09/06/1999; 14:08:28 MDT - Msg ID: 12902)
change exist ...
Tooo survive....that's all boys and girls...
Usul
(09/06/1999; 14:13:30 MDT - Msg ID: 12903)
My Take on the Future of the POG
We have, or have the illusion that we have, free will-
depending on your beliefs. Some believe in predestination.
Yet even so, we do not have foreknowledge. Therefore, to
all intents and purposes, life can take many paths. So,
this take on the POG I am proposing as a path that we may
take on the "balance of probability".

In any unstable system, the system can go from a steady state to a disrupted state, but there may be many alternative disrupted states which, by definition, are not well controlled. So, by this argument, I would suggest that it is possible for any bubble economy to go down the path of inflation or deflation at the turn of a switch. A different set of factors could lead to a different result. Yet, the Federal reserve has been pumping in liquidity while undertaking a minimal process of interest rate rises. This is one factor I believe will prime for inflation. Another factor is the declining trend of the dollar and the recovery of the Asian markets. There are inflationary pressures reappearing in labour markets while deflationary pressures from cheap imported goods will evaporate. Since gold is traditionally an inflation indicator, its price must rise- eventually.

The US stock markets will crash and the european markets will soon follow. The flood of investment money leaving the US will require interest rates to be raised to retain some of that investment. Hence related treasury yields will go up, by a lot, and the stock markets will tank. The market crash process will trigger waves of panic selling- the people who are selling to save their investments will be forced to sell everything available to gain liquidity. This will include gold stocks, which will fall with the rest of the markets. Every effort will be made by vested interests to keep the POG from rising- do not underestimate the determination of the powers that be to avoid the signal that a rapidly rising POG will inevitably send. Therefore, I expect the POG to remain mired under the artillery of the powers that be until they have used their last horn of powder. It will be a battle royal. However, if you haven't already staked your claim you may already be too late. Many people will lose out through the failure of the paper gold system. Those who have taken delivery will find that the laws of supply and demand have not been repealed as the supply of physical is revealed to be a very different beast to the supply of paper.

The supply of stocks, other paper investments, and dollars is so much larger than the volume of the PM markets that the collapse of the paper markets will give rise to an explosive rise in the POG. I look at the $850 POG of the '80s to consider the real possibility of the POG going to $1000 or more. But I ask, what would the value of these new dollars
or pounds be? What if the unthinkable happens, and the dollar devalues like certain Asian currencies did in their crisis? Then you might have POG at $30,000 but "New dollars" will be traded in at the rate of 1 for 100 "Old dollars". There still remain many uncertainties. What will the POG be in pounds/euros? Will investment switch to Euroland, or will Asia look like the bargain of the century?
Certainly the initial progress of the euro has left a lot to be desired. But whatever happens, physical gold will be the best way of preventing loss of value.

This site will surely come into its own when we join the debate about when the POG will start to fall!
Buttercup
(09/06/1999; 14:13:34 MDT - Msg ID: 12904)
Oil Imports
http://www.iea.org/ieay2k/newlinks/imports.htmUS Oil Imports Y2K Status. Here's a chart I came across, on the subject of oil imports from various countries. A good reference if you are trying to predict in that area.



Peter Asher
(09/06/1999; 14:17:48 MDT - Msg ID: 12905)
Tomcat (9/6/99; 13:08:36MDT - Msg ID:12897)
I see pretty much the same "movie that you do there, except as regards gold. After the Phase #1 "crises" has run it's course, the new financial paradigm will have arrived. Gold will have attained a higher price on much more than coin demand and other Y2K factors. It may back and fill in the eye of the storm that some will presume to be a return of calm weather, but the uncertainty of equities and currency will be firmly ensconced in the minds and souls of investors. Therefore gold will be playing it's historical role quite strongly.

As to the price direction at this time, I see a holding of this double bottom of $252, as each sell-off seems to abort swiftly and at a slightly higher level, and go up to a slightly higher peak. If lower prices were going to occur, I believe the last two downward thrusts would have continued. (I could have egg on my face in less than 24 hours, but if tomorrow's Comex closes up, I would feel very sure about this) The BOE needs to save some face, and some value, if they are, in fact, part of the price control Cabal, It behooves them to get a little more for their sale this time around. If they were to sell the next package at a lower price than the first one, they would be kicking an even bigger hornets nest.

My "take" on it, is that the game has moved from pushing the price down, to careful accumulation.

The potential to come out whole from any short sale play at this level is too low to warrant the gamble. Though 'They' may still use that gambit again at higher levels. Eventually the laws of physics will enforce what the anti-trust laws will not. It is said that "Time heals all wounds" and that quote has been cleverly altered to "Time wounds all heels"
tom fumich
(09/06/1999; 14:18:37 MDT - Msg ID: 12906)
Beating up on some who don't...
Think like all others ....welll you know what i mean...not this particular site by any means...but there are others....
Usul
(09/06/1999; 14:19:55 MDT - Msg ID: 12907)
@Tomcat
Great idea for debate!
TownCrier
(09/06/1999; 14:21:53 MDT - Msg ID: 12908)
Japan: MITI's Yosano says yen has risen too far
http://biz.yahoo.com/rf/990906/b.htmlHe is saying just about everything possible to help curb a would-be speculator's perception that the yen might strengthen further. Just talk, or is there substance behind these words?
tom fumich
(09/06/1999; 14:33:37 MDT - Msg ID: 12909)
I still say...
Coins will have a great life from here on in to year 2000....
tom fumich
(09/06/1999; 14:40:01 MDT - Msg ID: 12910)
PPI this friday...and retail sales followed by CPI....
the week after that...then there is the third friday of the month...who knows what could happen....
tom fumich
(09/06/1999; 14:53:26 MDT - Msg ID: 12911)
Gold will do what's going to do...
I know that sounds korny....but how true...we just have to wait...korny tooo....
tom fumich
(09/06/1999; 14:58:06 MDT - Msg ID: 12912)
All i know for sure is...
Check the chart of pdg...bollinger bands...one way or the other...if you believe gold has hit bottom....then do what your heart tells you...if not...welll the other thing...but it is there....ready for something...
koan
(09/06/1999; 15:30:54 MDT - Msg ID: 12913)
new paradigm? - molecular, biological quantum computers
Let me preface this by saying I like everyone on this thread a great deal, so these are just some thoughts, nothing personal: I think the stock market for the most part is just going to keep on trucking. I do not think many are calculating accurately the increasing productivity of modern technology, in general, and the dominant position the US has, which will be reflected in increasing production. The above subject (computors) is to point out how the speed of development and productivity is increasing and will continue to do so. There are many bright people on this thread that know the above computors have already been developed at a rudimentary level and what that will eventually mean in a few decades is artifical intelligence many times greater than our own; and in the meantime the US will just keep on producing more and more.
The internet has turned the world into one big interconected brain.
I do worry very much about China and Russia - they have primative political systems that are unstable and dangerous - and nuclear weapons - bad combination. Also, given the speed at which new technology is developing anything is possible from a pandemic disease to nuclear war to time travel - no one knows and I don't think anyone can even guess very well.
I also think we may lose control of technology as it becomes too complicted for our little primate brains. How will we control our nuclear arsenals when the defensive and offensive systems become too complex. In the next hundred years it is make or break for our grandchildren, I think, probably break I am sorry to say - let them eat strawberry's now!
One last point, the human species does not learn or adapt quickly. We hang on to old wornout ideas, bad ideas and prejudices like a life raft, and that may be our undoing.
By the end of this rambling I had realized that I was actually making a pretty good case for the doom and gloomers - buy gold. I think the young kids on this thread are going to witness a metamorphas and watershed of the human species that only the most far out science fiction can imagine. I have no idea what the point of this post is, just thought it needed to be said - something to think about; and I have no idea how it relates to gold, but it probably does in some way, so I thought it would be appropriate for a holiday. I stop by and read the posts most days. Stranger, I see you are still fighting the good fight; and Tomcat, Peter, and Cavan Man it is always comforting to see you still posting.
Buttercup
(09/06/1999; 15:44:10 MDT - Msg ID: 12914)
Leigh - Children's Concepts of Exchange
Leigh, Your story about your son and the Darth Vader coin has motivated me to tell a story from 1974. My oldest child was in the third grade, and I noticed that her friends seemed not to have a grasp on money or exchange. I volunteered to teach a class, during school hours, on Exchange. I engaged the eight-year-olds in games and demonstrations, plays and discussions, about goods and services, trading, and so forth.

But the pinnacle event was EXCHANGE DAY, the last day of the course. Everyone bring goods or services to trade. Temporary currency was issued. I warned them all to remember that the "money" was just for today, and it would not have any value tomorrow. They jumped in with enormous enthusiasm. Some kids brought their stuff and traded it around. Some provided services: piggyback rides, manicures, photography.

There was one little boy who was the most popular merchant of all. He had brought his baseball cards. He sat like a little Midas, raking in the currency, positively glowing with Pride of Ownership. Toward the end of the day, I went to him and reminded him to go and use some of his hard-earned money, to buy some of the goods and services all around him, but he was completely caught up in his success. And when the bell rung for the end of the game, I looked at him.

His face fell several stories in the span of a few seconds, as he realized - as it HIT him. The baseball cards now belonged many of his classmates, and he...well, he had a huge pile of worthless paper money.

I've often wondered what became of him, and whether he benefited from his hard-won lesson.
Goldspoon
(09/06/1999; 15:54:13 MDT - Msg ID: 12915)
Platinum will lead gold higher.....
Greetings all, be of good cheer.. welcome new posters.. i see the population grows...perhaps M.K. will contact the stone masons as the Castle is in need of expansion... while your at it a Pub would be nice... ummmm... golden colored brew..... Ahhhhhhh...
****************
Ah..Yes, when you see Platinum breakout on the upside and sustain the breakout, Gold will follow....but first Palladium will pass the price of platinum higher thus causing many industrial users to switch to Platinum usage then thusly..... in follow the leader fassion..Palladium(which is ready to assume this role)will lead the charge.. then Platinum will surge and help panic the shorts and then Gold..will breakout of jail!!!... and its off to the races!!!
Just picture in your mind a train... So step right up now!! no need to push Leigh!! watch your step Tomcat punch these peoples ticket Townie.. get your tickets, M.K. is blowing the whistle and this baby is about ready to leave the station and climb the hill.......Watchout!! engineer!! people are still on the tracks..uh, them's not people.. only shorts.. All Aboard!! and Full Steam Ahead!!!
*****
Little known fact about Platinum Eagles... to have enough platinum to coin them, the Pentagon had to lend the mint 20% of the stragic reserves this year, repayable in about 4 years.....Probably didn't want to push spot prices up by having to buy on the open market physical platinum thus spook the other metals. "Got to push them prices down"-the CABL.....
***********************************
Irwin Messer, of DPM Brokerage, was quoted in Reuters as saying "Base metals have rallied and some of the hedge funds have taken a good hard look at platinum and palladium, which can only be good for gold�The other thing is that as the economy picks up, demand is going to pick up for these things." Reuters also reported that Steve Kearney, chief executive officer of South Africa's Impala Platinum Holdings (Implats), forecast continued robust growth in jewelry demand from China, and that a strong year for demand should help push prices up to $370 to $380 an ounce.
******************************
BOE-$209.00 "Look citizens at the profit we made for you on the sale of your gold...... by selling it at $268.72...what good stewards we are"....

...An aside to the private shorts from BOE...."Hurry up and cover will ya?... can't keep this up much longer... they are begining to catch on"....
Aristotle
(09/06/1999; 16:02:14 MDT - Msg ID: 12916)
Buttercup (12914)
Superb! That's probably the best and most instructive story to be found on the internet today. How very appropriate that you chose Labor Day to share it! I hope a great many people have a chance to see it, because there's no one that will fail to grasp the meaning and the relevence to their own lives. Well done!

Gold is payment-in-full. Why settle for less when you don't HAVE to? ---Aristotle
TownCrier
(09/06/1999; 16:21:58 MDT - Msg ID: 12917)
ASIA MARKETS - Dow helps most, Indonesia flounders
http://biz.yahoo.com/rf/990906/ew.htmlTheir paper...our paper...it's ALL just paper.
The article includes a summary table of the effects of the past asian contagion crisis.
Canuck
(09/06/1999; 16:39:50 MDT - Msg ID: 12918)
Desardins msg. #12839
I am also interested with forward sales of mining companies.

I didn't follow your motive, please elaborate. A couple of posters have mentioned purchasing 'unhedged mining stock'. I am entertaining this option. There seems to be very high risk in purchasing 'forward sold' shares. The article at Gold-Eagle (Kaplan, I believes) alludes to this. It also seems to me that purchasing stock of unhedged companies is risky in that in POG decreases below cost of operation this may bankrupt the mine.

Access to forward sales seems to be difficult to obtain. My understanding so far is this:

Barrick - forward sold 3-6 years
Angogold- forward sold 1-4 years but 'unwinding'
Newmont- possibly only forward sold a year.
Gold Fields- no forward sales.

If anyone has further info., please post.

Thanks in advance.

P.S.: Read recently, when gold rises, gold mine shares rise at a rate of 3 to 5 times that of physical, dangerous game to play but possibly worth the risk??
DD
(09/06/1999; 16:45:40 MDT - Msg ID: 12919)
2 cents worth
Hi All - Well, here's my 2 cents worth which is probably about the right price before adjusting for inflation.

I'm pretty sure that perception and emotion is going to be the gating factor for what happens in the next 120 days. Fear and greed have always drivin the stock market, especially in times like today. If I were going to pick a single most important factor in how and when things will crash this year, I'd choose confidence. In particular, I'd focus on the confidence of the American "investor". When the confidence in the "new paradigm" fails, the party is over. Not just here, but globally. What could cause this loss of confidence? Who knows. But the list of potential pin pricks is long. I believe the confidence game is nearly over.

The joker in the woodpile is, I believe, Y2k. In the history of mankind, we've never had a situation like this before. There's no precident. But I've spent the better part of my working career as a CEO in high-tech and now as a CEO mentor and business "systems" consultant. By systems, I don't mean only computer systems, but business systems (how we work), too. I find it somewhat baffling that most businesses function at all. The amount of vision and real leadership in most businesses could be put in a tea cup along with our integrity and honor. But I digress.

If we believe that the geniuses running our businesses and governments are on top of Y2k, I think we're in for a rude awakening. Even the ones who are doing a good job will be dragged down by the ones who are not. The world, for the most part, is one massively interconnected system that cannot be made Y2k compliant. It simply cannot be fixed and it won't be fixed. It's terminally broken right along with our understanding of the connectivity of all people and systems.

When the systems break, the truth of our reliance on fragile technology will make itself known. Y2k will not be the pin that pricks the current financial bubble. More likely, it will be the eruption that covers the town with hot gas and ash. If the truth shall make us free, this is the time that we will learn the truth about technology, systems and the vested interests. When the smoke begins to clear later in 2001, gold will still be here. The question becomes, what won't be?? Here is where I go with the "got physical" group. Another/FOA and others believe that physical gold is the way to go. Me too. The POG? It's probably irrelevant. What is probably much more revelent is if you hold it in your hand. The old Irish ballad says, "Until we meet again, may God hold you in the hollow of his hand". And I might say to you, "Until we meet again, may there be a loving glow upon your face and golden ray in the hollow of your hand." The rambl'n man runs out of gas. Thanks for listening. Truthfully, you people on this forum are the best. DD (David)

Canuck
(09/06/1999; 16:51:14 MDT - Msg ID: 12920)
The Stranger msg: 12871
I watched that employment number last week very closely and the final outcome did turn my stomach. How many 'reputable' sources were quoted and how many analysists were wrong?? Too many for my liking. How does a drop in unemployment from
4.3% to 4.2% translate to a 4% increase in the Nasdaq??

This 13th business is scary. Sept. 13th is a Monday, let's see if we get a 180 degree reverse reaction this time.
TownCrier
(09/06/1999; 16:56:08 MDT - Msg ID: 12921)
Social Security catches Y2K bug, sends letters dated Jan. 1, 1900
http://www.seattletimes.com/news/technology/html98/glit_19990904.htmlThe Social Security Administration does the soft shoe around an admission that letters were sent last month to more than 32,000 people indicating that certain benefits would end on Jan. 1, 1900.

Yep. That's a r_e_a_l confidence builder!
Leigh
(09/06/1999; 17:03:59 MDT - Msg ID: 12922)
Buttercup
Hi, Buttercup! I was glad to hear from you! It's great to have another female on the Forum.

Your story was so cute. Well, I can tell you what happened to your little student. He now works for Goldman Sachs - he is the most ruthless gold shorter of them all. He is working furiously to get as much of the physical "good stuff" as possible, but he wants that worthless paper, too, and lots of it. He wants to make sure he is never, never broke again.

In fact, maybe he's lurking here RIGHT NOW! Your story about Exchange Day has just taken him down Bad Memory Lane, and tomorrow he's going to make someone pay!

(Just kidding!)
Buttercup
(09/06/1999; 17:05:14 MDT - Msg ID: 12923)
Aristotle-Thanks
A "well done" from you has much value, and is well worth the service of writing the story. As one of the leading voices on the Forum and having gained the respect of many readers, your opinions have exchange value. When people value what someone has to say, they listen, and answer. They GIVE their attention. When they don't value someone's opinion, they turn a deaf ear, and offer no attention or valuable comment of their own in exchange.
Buttercup
(09/06/1999; 17:12:48 MDT - Msg ID: 12924)
Leigh -Other Females?
Your concept of what happened to the young Midas is probably spot-on, and I am reminded of Donald Duck's (Scrooge McDuck?). The one with all the piles of money and gold.

Other females on the Forum - are you willing to be counted?
Canuck
(09/06/1999; 17:21:59 MDT - Msg ID: 12925)
Tomcat msg:12840
How are you Sir; read your 'leasing' posts.

I am just beginning to follow this 'leasing' thing, may I pose a couple questions?

The CB's are leasing out their gold at the current rate. Better to make a percent or 4 than have the physical gathering dust, yes? Apparently, the leasee then can do whatever they desire, sell it, re-lease it, melt it down and make coins(as a poster mentioned earlier), toss it into the Pacific Ocean, yes? The only obligation of the leasee is to return the gold plus X%(the value of the lease), whereby X is either gold or money depending on the details of the contract, at the end of the lease, yes?

I believe this to be the nature of leasing in its most rudimentary explanation.

As a citizen of my country, do I not have access to information regarding what reserves 'I have'. Do I not have the right to know exactly how 'reserve' my CB has? Apparently, amounts of foreign currency is known, but gold holdings, be it physical, stored, leased, whatever seems to be a mystery. Why is that?

Someone, a few months ago, posted that the USA has 8,000 tonnes of gold reserve, recently someone mentioned 2,000. Is this to imply 2,000 tonnes are stored and 6,000 leased.
I believe yesterday someone mentioned that none of the gold is presently held, Fort Knox is bone dry. Why are exact amounts not known?? CB holdings, whether physical or paper,(one would think physical?), stored versus leased would define CB 'overhang', would it not? Amount of CB gold holdings would begin to define 'shorts' a little clearer as well. 'Cabal crook A' had to lease 50 tonnes from CB Peter this month to pay CB Paul, meanwhile 'Cabal crooks B thru Z'
did the same thing. If CB leasing info. was readily available we would understand the 'short' position, no?

I don't understand this mess, please elaborate if you have the chance.

Thanks,

Canuck.
Canuck
(09/06/1999; 17:29:14 MDT - Msg ID: 12926)
Desjardins
Check Steve H.'s post 12877. Please ask 'Gambler'(I don't have access to Kitco forum), for info. re: forward sales of mining companies, please let me know.

Thanks in advance,

Canuck.
Tomcat
(09/06/1999; 17:31:40 MDT - Msg ID: 12927)
Koan

Koan! Pleasant suprise. Nice to have you back. Enjoyed your #12913 especially your time travel into tne next century. Rumors were being spread about your absence. I am still very long on silver and was looking at Hecla. Did you survive the this last silver run into the toilet?

Anyway, we need your sense of humor so next time don't go away for so long. ;)
watcher
(09/06/1999; 17:33:33 MDT - Msg ID: 12928)
stranger,
stranger,
On your comments in regards to no recession. I will offer no debate but maybe a qualifier on your comments.I believe that the coming disruptions whether large or small will have an effect (negative)on our economy.Having said this,whatever happens next year will be spun and lied about (same thing) to the degree that noone will quite know what is going on at any given time.
I think that next year will be written about in history quite differently than what many will seemingly experience.
We know that today we our experiencing a lot more inflation than what the man on the street might answer if asked.The perception created by the bogus inflation indexes in the minds of most in the USA is a good harbinger of what is coming. We know that those who are incharge of creating perception at the highest levels are fairly confident of the gullibility of the american people and after the acceptance of Clintons antics by the public with a no
outrage to almost anything that goes on, they are ripe for just about anything they will come up with next year.
This is not a prediction either way,just maybe a reason for caution.Those in charge may even believe that their power to control public opinion is close to omnipotent which sets them up also for a fall.
I do believe they will throw a lot of money(paper) at the problem (adding liqidity).The question marks come from without our country. We will be tested at a time that we our at our weakest militarily, and at a time when when for the first time our motives have been drawn into question in world politics not only by our enemies but by our friends as well.India and Taiwan, for example, have and are being forced to ally themselves with former enemies.We have a world created by the politics of the last 6 years that has made the world a time bomb waiting for a spark .
Y2k may or may not be that spark , but with all the problems in financial land , and with us at the mercy of the spinners, with a forseeable made to order crisis, we had all better find a safe harbor (as much as possible)and wait it out.
Most of the time, things are never as bad as one might think or as good as sometimes expected , but once in a while they are worse than expected and better than planned.What will happen will happen despite our pontificating . I have now learned to be patient and have found that the more that is known the less sure one becomes
You may be right , but by reading your posts your not betting on it, nor should anybody. Preservation of wealth should be utmost at this time as is the advice mostly of the good knights and Ladies of this forum.
I myself , have been educated to a new understanding of money and gold from those gathered hear and have joined in the line that now follow in "The Footsteps of Giants". I'll take a second to thank again those hear (I will not name names in fear of leaving someone out, you know who you are)
This education could not be found, in this manner and format,anywhere else I believe and have been forever changed by it. My thanks again to all and to MK for this roundtable of the most noblest of friends

Canuck
(09/06/1999; 17:44:46 MDT - Msg ID: 12929)
Dow-Gold ratio
The Dow-to-Gold ratio is a number 'derived' by dividing the DJIA by the POG. The ratio shows a 'spread'.

The only reason I point this out is someone mentioned that if the ratio went to X, then the POG would be Y. The ratio is a product, a comparison of the 2 numbers.

If I study my chicken to egg ratio, the ratio doesn't make eggs nor chickens, they make the ratio.

Which came first, the chicken or the ratio??
(Sorry, severe digression)
watcher
(09/06/1999; 17:50:05 MDT - Msg ID: 12930)
tomcat
Agree with all your thoughts . The only question is who will be the first to leave the short ship. I heard its the rats first.
Canuck
(09/06/1999; 18:01:03 MDT - Msg ID: 12931)
Welcome GD
ITS DIFFICULT TO READ YOUR POST IN CAPITALS.

Hope to hear from you again soon.
Chicken man
(09/06/1999; 18:01:56 MDT - Msg ID: 12932)
Canuck
Da chicken....!
Leigh
(09/06/1999; 18:10:52 MDT - Msg ID: 12933)
Buttercup
Buttercup, I wonder if I might ask you a couple of questions? Do you have a background in economics or banking? Just wondering how you come by your interest in "exchange." Also, when I first started lurking on the Forum months ago, I think I read something by your husband saying that you were the first one in the family to become interested in gold. How did that come about, and did you have any trouble persuading your husband?

I hope these questions aren't too personal. Please answer them at your leisure if at all.

I sure wish my son had a teacher like you!
Canuck
(09/06/1999; 18:12:15 MDT - Msg ID: 12934)
(No Subject)
Gandalf, sorry to repeat your response to GD, I has posted before I read yours.

Elevator Dude, please see my previous post, let's see if you, Desjardin and I can expand the list.
AEL
(09/06/1999; 18:27:11 MDT - Msg ID: 12935)
Y2K

"I would not expect y2k to create a recession. No one
has a better handle on how well prepared for this the world is than corporate insiders. Yet, corporate insiders continue to be net buyers of stocks."

... "Corporate insiders", yes. They are indeed inside. Do they ever get outside for long enough to see larger alternative pictures? Like everyone else, they've never had to encounter anything remotely like what is coming. They are, perhaps, like the insiders of the 19th century declaring the (then-new) telephone technology to be useless and, commercially, a "fraud" (verbatim quote). Or perhaps like economist Irving Fisher of Yale, who declared a scant few weeks before the crash of 1929 that stock prices had reached "a permanently high plateau". These men, these insiders -- very prominent figures in industry and finance, in their time -- were not capable of seeing outside of their respective boxes.

"There have been MANY tumultuous events in recent decades... Vietnam, the Kennedy assassination, hostages in Teheran, war against Israel, the invasion of Kuwait, the Clinton impeachment, etc. We survived most of them with little if any impact on the rate of economic growth."

... None of those events had even remotely the same potential to impact industry and finance in the way that Y2K clearly does, excepting the possibility of the wars escalating into strategic nuclear conflicts.

"Now we approach the most widely advertised tumultuous event ever, and yet people expect the wheels to fall off of everything."

... "Widely advertised"? Seems to me more like widely dismissed, discounted, disregarded and otherwise DISSed. Media coverage has been nearly uniformly of a "bump in the road... we're alright, Jack!" nature. Who are the people (aside from a handful of utterly marginalized characters like Gary North) who "expect the wheels to fall off everything"?

(BTW: I do not *expect* the wheels to fall off, but I think that there is an unacceptably high risk that they will. I do not either think that we are going to undergo strategic nuclear war... but I think that there is an unacceptably high risk that we will.)

PS: DD put it beautifully (09/06/99; 16:45:40MDT - Msg ID:12919): "The world, for the most part, is one massively interconnected system that cannot be made Y2k compliant. It simply cannot be fixed and it won't be fixed. It's terminally broken right along with our understanding of the connectivity of all people and systems."

bravo!

TownCrier
(09/06/1999; 18:52:04 MDT - Msg ID: 12936)
"After the Close"...the GOLDEN VIEW from The Tower
***An extra-light version with no U.S. market activity***

Reuters reported that the London bullion market was listless in the absence of U.S. traders due to the Labor Day holiday. The London PM gold fix was marinally up from Friday's $254.40, with London gold dealers recommending a price of $254.60 per oz. Spot gold was last quoted at $254.50/$254.90 a troy ounce as trading ended on the day.

However, despite the obvious lack of U.S. activity, some dealers suggested that the thin market reveals a growing concern over the effects of Y2K, manifested in "bigger illiquidity" towards the end of the year.

The Tower is quick to point out that they used the odd phrase of "BIGGER illiquidity", and not just plain ol' "illiquidity"...implying that illiquidity is already present in the gold market. A bullion dealer ellaborated: "People are very concerned that there will be a lot of liquidity problems over the year-end. A lot of people might want to allocate their metal, leaving it free and off balance. People are just getting nervous ahead of it." Gold lease rates eased a bit today, yet remain near the historically rare level of 4%, reflecting the difficulty of attracting willing bullion lenders under current conditions.

In currency news, the head of the Ministry of International Trade and Industry (MITI), Kaoru Yosano, expressed concern about the weakness in the dollar's value in the face of a rising yen. The Japanese Trade Minister said a high yen hurt Japanese exporters, while a weak dollar was troubling because "Japan holds huge amounts of overseas assets," as reported by Reuters. Yosano said the larger problem of the two right now is the dollar weakness because this affects countries worldwide that use dollars for trading purposes. In an obvious effort to talk talk down the yen in favor of the dollar to the world's taders and speculators, Yosano said the Bank of Japan needs to maintain its monetary policy of guiding overnight interest rates to zero. However, he disagreed with any further easing through a rise in money supply. "...There are many firms that are surviving largely because of low interest rates," he said. "So, the present zero interest rate policy needs to be maintained." On his stance against adding more money to the system, he said such a quantitative easing would be ineffective because "a situation of excess liquidity already exists," with banks unable to find borrowers. .....The ol' classic condition represented well by the phrase "pushing on a string."

And to wrap up with a quick Y2K note, U.S. commodity giant Cargill earlier confirmed it would avoid doing business in South Africa over the millennium period. In a letter to South Africa's Department of Agriculture in July, Cargill indicated, "We plan to avoid entering into or executing trades in maize, oil seed, wheat or any other commodity from December 15 to January 15," citing lack of confidence stemming from the risk the millennium bug posed to communications, bank settlement and other sectors.

If anyone has doubts as to whether Y2K concerns are well-founded, just look at the red faces over at U.S. Social Security Administration. It turns out that they mailed letters to over 32,000 people indicating that some of their benefits would be ending on January 1, 1900. OOOPS!! That's not the kind of thing you expect from the first federal agency that the president paraded about as attaining the holy grail of Y2K compliance. Let the bank runs begin...

And that's the view from here..."after the close"
Peter Asher
(09/06/1999; 19:19:43 MDT - Msg ID: 12937)
AEL
Well put.

Maybe those respective boxes were their offices and because they never looked outside they failed to realize they weren't in on the ground floor (double meaning intended) then when the exits got jammed they simply stepped out the window and------
Tomcat
(09/06/1999; 19:29:35 MDT - Msg ID: 12938)
Lease Rates and Forward Rates

Canuck and Desjardins, Here is a little more date that might help.

The formula for the lease rate is:

Lease Rate = LIBOR - Forward Rate

Here are two July 99 posts from Dabchick over as Kitco regarding the lease rates. Note that the title of the first post is: "Lease Rates are a deception"

Date: Wed Jul 14 1999 17:41
Dabchick (kiwi ...your 13:38 ...... .) ID#258195:
Copyright � 1999 Dabchick/Kitco Inc. All rights reserved

Right On !!

I can never understand why so many here get excited about trying to look for Black Magic in the entrails of the lease rate data. ( No doubt someone will enlighten me one day ) .

If only people would realise that the lease rates are no more than a different way of presenting the data from Comex futures market.

For example, here are today's closing data on the gold futures contracts going out to August 2000.

EXPIRATION TODAY'S
CONTRCT DATE SETTLE

GC 07 99 07/28/1999 255.00
GC 08 99 08/27/1999 255.00
GC 09 99 09/28/1999 255.50
GC 10 99 10/27/1999 256.10
GC 12 99 12/28/1999 257.40
GC 02 00 02/25/2000 258.80
GC 04 00 04/26/2000 260.60
GC 06 00 06/28/2000 262.40
GC 08 00 08/29/2000 264.30

If any one would care to calculate the annualised Forward rates from t he above ( Tonight's) closing figures on Comex, they would find:

the 1-month Forward Rate is approx 2.35%
the 3-month Forward Rate is approx 1.73%
the 6-month Forward Rate is approx 2.98%
the 12-month Forwrd Rate is approx 3.65%

The current LIBOR rates are:
1-month = 5.19%
3-month = 5.31%
6-month = 5.59%
12-mnth = 5.75%

Subtracting Forward Rates from LIBOR rates to get the Lease Rates:
1-month is 2.84%
3-month is 3.58%
6-month is 2.61%
12-mnth is 2.10%

BIG DEAL !!

PLEASE NOTE: The lease rate derives from the Forward Rate. The Forward Rate derives from the price of gold at a future date. So if the market thinks the POG is going to be no higher in the future than today, the Forward rate will be LOW. And as night follows day, if the Forward rate is LOW, then the LEASE rate will be HIGH. So when LEASE RATES ARE HIGH, IT IS SIMPLY THE MARKET'S WAY OF TELLING US THAT THE PRICE OF GOLD DOWN THE LINE IS EXPECTED TO BE ONLY A LITTLE HIGHER THAN TODAY'S SPOT.

Regards.............Dabchick


Date: Wed Jul 14 1999 18:42
Dabchick (kiwi .......lease rate calcs.) ID#258195:

There is only a minor difference between my calcs and kitco's on 6- and 12-month lease rates. The difference onb1-month rates is larger, but don't forget that when you calculate the 1-month lease rate, you have to multiply by 12 to annualise it. Any minor difference is therefore magnified 12-fold on the 1-month calc. Then, again, Kitco's lease rates give the Bid (as opposed to the Ask or Mid rate ) , so that is anothjer source of difference. In other words, I think its more a matter of simple arithmetic than market tightness.

Regards..........Dabchick
18KARAT
(09/06/1999; 19:37:43 MDT - Msg ID: 12939)
Gandalf the White, Goldspoon
Goldspoon, thanks for the reference. I think you have indeed found the original source for that information. I suspect I only read it on a secondary posting somewhere.

Gandalf, I never believe all I read on the net, but as a one-time student of hobbits myself, I have found that one should always believe wizards like you. (Wherever you find them). :)
Tomcat
(09/06/1999; 19:58:53 MDT - Msg ID: 12940)
Canuck: Lease Rates and CBs
Hello Canuck: Since you asked several questions I will put them in quotes and then follow with my reply:

"The CB's are leasing out their gold at the current rate. Better to make a percent or 4 than have the physical gathering dust, yes?"

C, I have been suspect of gold leasing for a long time. It has always been hard for me to believe that it is done for money only. Why does a BB get a lower rate than if they borrowed from the government. Uptick, a dealer, says it is pure money motivation. Still hard for me to believe.

"Apparently, the leasee then can do whatever they desire, sell it, re-lease it, melt it down and make coins(as a poster mentioned earlier), toss it into the Pacific
Ocean, yes?"

Perhaps but I think there are different arrangements and different terms. With some deals the gold never leaves the bank. In other deals the truck pulls up and hauls the stuff away.

"The only obligation of the leasee is to return the gold plus X%(the value of the lease), whereby X is either gold or money depending on the details of the contract, at the end of the lease, yes?"

I think there are collateral obligations but don't know the details.

"Do I not have the right to know exactly how 'reserve' my CB has?"

I don't know. Why not write your CB and see what they say and let us know.

"Apparently, amounts of foreign currency is known, but gold holdings, be it physical, stored, leased, whatever seems to be a mystery. Why is that?"

I have no data or opinion on this. Perhaps, for those in the US, we could use the Freedom of Information Act to find out.

"Someone, a few months ago, posted that the USA has 8,000 tonnes of gold reserve, recently someone mentioned 2,000. Is this to imply 2,000 tonnes are stored and 6,000 leased.
I believe yesterday someone mentioned that none of the gold is presently held, Fort Knox is bone dry. Why are exact amounts not known??"

Ditto last answer.

"CB holdings, whether physical or paper,(one would
think physical?), stored versus leased would define CB 'overhang', would it not?"

Overhang seems to be a term that refers to the amount of extra gold available to come on to the market. "Extra" has never been defined that I know of. Perhaps someone can come to the rescue on the definition of overhang.

"If CB leasing info. was readily available we would understand the 'short' position, no?"

I agree.
GD
(09/06/1999; 20:17:51 MDT - Msg ID: 12941)
Re: Gandalf and Canuck
Thanks for the etiquette lesson. I just hit the caps button because otherwise I would end up typing in small caps. Just trying to be effiecient with my keystrokes.
Tomcat
(09/06/1999; 20:21:06 MDT - Msg ID: 12942)
The Stranger

Thanks for your response #12,893. How simple, for much of the market has indeed already declined.

Of course. I was still caught up in focusing on the S&P and DOW. I forgot that a small percent of the S&P stock control it upward appearance. Frankly I am embarassed at missing something so basic but I learned a long time ago that one's learning rate is proportional to the exposure of one's ingnorance.

BTW, my view on Y2k is due to the fact that I feel that the Y2k correction paradigm is all wet. The focus is on internal remediation (which will look ok to insiders) rather than on external system to system testing like the banks are trying to due (to their credit). Being an old test engineer I am a bit biased. Of course, just being old makes me a bit biased. OK, I'll admit it. I am just biased. ;)
Tomcat
(09/06/1999; 20:28:09 MDT - Msg ID: 12943)
GD

Hey GD, welcome to the roundtable. Nice to see you were not offended at the correction. We are a bit formal here and follow rules not often seen on other forums. I know of now other forum where posters are treated with such repsect.

So, tell us little of your self and about some of the things you are trying to learn. Looking forward to having you around.
Tomcat
(09/06/1999; 20:47:27 MDT - Msg ID: 12944)
watcher

Thanks for your post #12928 and for your kind acknowledgement.

I am not sure what is was about your post but I read it twice and came away feeling better. Sometimes sentiments are expressed in a way that have a hard to explain but beneficial effect on the reader.

The thing I have enjoyed about all these horseman coming around to haunt us at the same time is that they have forced me to get off my lazy duff and DO something rather than philosophize.

Without these threats I would not have been so motivated. Without this forum and I would not have grown so.
Peter Asher
(09/06/1999; 20:55:51 MDT - Msg ID: 12945)
Leigh and CoBraTwo
Leigh (9/5/99;

First re 12:53:43MDT - Msg ID:12850) -- Your comments about the bill board, family wealth and who will be left standing; were pleasingly read.

I have a thought about your boy and "Sound of Music". Since he has a lot of awareness of the Trapp family's flight to safety, you might be able to describe their need to take their money with them to an unknown future. First, maybe we can prevail on CoBraTwo to tell us what the situation was between the Austrian Schilling and the Swiss Franc when the Anschluss occurred. Then you may be able to apply that data to how the Trap's would have needed Gold to take their money out of an enemy country.

If that doesn't work, maybe the scenes in the latest Star Wars movie, where the Heros' need to barter they're way out of trouble because they don't have the local currency, could serve as a teaching vehicle. --- If that doesn't work, then maybe you can get Buttercup to come to his school and teach that class.

BTW your comment on her post was one of the best satires we've ever had here. Great writing! ---- P.

FOA
(09/06/1999; 20:56:39 MDT - Msg ID: 12946)
Gold Mines: Little more than paper derivatives of gold!
From Mr. Holtzman #12765:

------Put another way, how many people at a racetrack are attempting to buy a horse? If you want to know the going price of a physical horse, don't waste your attention on a racetrack.----------

Thanks Holtzman,
To develop this further: -------------If you ever want to "use" the fine qualities of a "physical horse", don't plan on gaining those qualities by owning a "horse farm"! True, the best avenue to gain exposure to the "profits" (and loses) in the "horse producing industry" would be from the ownership in shares of said farm. However, any viable industry, incorporated into today's fiat currency inspired markets, depends entirely upon those markets to channel profits and increased equity values back to stake holders.-------- Even if the financial markets function, is it valid to compare the real wealth of owning a horse with the increased value that comes from the business of
producing such an animal?

From horse stables to automobiles to gold mines, it's important to understand that the ownership of any industry is not the same as owning it's end product. ---------Every industry's established "worth" is not only "just a derivative" of the value of it's end product, but is also a "derivative" of the "efficiency" and "continuation" of the world financial system that creates the marketplace for that
product.---- Better said: Your ownership in a company may be real, but for others to value your ownership realistically, it requires a functioning efficient medium of exchange. The beginnings of the first waves of currency inflation allows that function to upprice real producing companies. However,
historically, the end breakdowns in fiat money systems along with the rules / laws of the land, have always destroyed the efficiency of any industry to provide a product, no matter how valuable that item may be. Gold mines, like any other service, must operate within the official money system until
that system is completely destroyed. That includes abiding by all laws and official declarations the governing society may bring forth.

Preserving wealth during such times provides that the more clear and clean the ownership, the more likely one may control those assets. Again, even if the financial markets function, is it valid to compare the real wealth of owning gold with the increased value that comes from the business of producing gold?

We walk the trail of common logic:

If you needed a new car, would you buy General Motors stock instead ? Of course not! Why? Because the average citizen has first hand practical experience in the use and need of their car. The notion of owning the industry as a proxy for the car is quickly discarded as ridiculous. Still, some analyst would have you believe that one should hold gold mines as a proxy for gold.

I believe this flawed investment logic has become the "default" norm of most "western investors". While everyone understands the attributes for owning a car, few today have practical experience in the use of real gold as a money asset in their personal lives. For that matter, the analysts that promote this "proxy concept" are in the same boat. Let's face it, none here have never had to view gold as the "only savings to survive as a representative of their wealth"! Nor have we used it as "money in trade" on a regular basis. So, how could you, your broker or anyone else refute the proxy concept?

Heard this pitch before? Perhaps in a different format?: ------" The price of light trucks are going sky high due to world debt problems. So put most of your money into Ford stock and as little as possible in real trucks. Then, because of the way their production is leveraged to the "physical product", their stock will rise 100 times over the price increase of the "truck product"! After that we can sell some of the stock and buy hundreds of the trucks for later use when the money goes bad and times get tough. It's a unique concept inherent only in the automobile industry that few average "physical truck buyers" can grasp or understand. I have clients that have made millions doing this the last time light trucks rose in price. Ford is the best of the bunch because it has all the reserves already "in place" to supply "physical trucks" to a needing world. As such we can presume that those reserves constitute a value that will never be lost during hard times. -------- Compelling? Isn't it?
Of course we could be talking about the gold industry also.

Yes, it's a financially viable concept. Gold stocks "should?" rise as their product soars in price and brings currency profits to their bottom line. Because it's happened before in other industries and has repeated this cycle recently, mines must go up in the next bull market in gold, right? Well, maybe not!

We can see the long road behind us:

Read #12471, 12542, 12660. In those we find my reference to "physical gold advocates", "fiat money advocates" and "investors somewhere in the middle". The "in the middle" thinker looks back and sees a gold market that has responded to a kind of business cycle. To them, from the early 70s
onward, gold moved up from typical supply and demand issues created by the ebb and flow of our inflationary fiat system. The next cycle should take gold up to $400, $700 or even perhaps $1,000. The dollar will remain the worlds premier currency and the US fed will again raise rates to cool
things off. We create yet another cycle. Gold stocks will again be the prime beneficiary as "sophisticated" money moves from the world equity and currency markets into the shelter of "reserves in the ground".

Now, I would like to point out that this gold cycle has only been around, in this present form sense the dollar began it's withdrawal from being a gold loan. That's not very long in this gold world, when one considers how far back it has been in use. For us to draw conclusions that this dollar / gold cycle is of a lasting, repeating nature is stretching precedent to the limit!

Understand this: For countless years, mines have sold their product at established world gold prices. They may sell where and to whom they want, but the price was always a function of government currency valuations. The free markets that direct gold into jewellery and such have never set it's price. Rather they have always functioned under the currency / money use as the value creator. One way or another, the government sanctioned established marketplaces of gold have
always been under control and in evolution as the world currency structures have changed.

During this time the establishment gold price has not always benefited mine profits. During the 50s and late 60s gold was largely unprofitable to mine. Yet, we find no evidence of mines selling gold outside the "official" marketplace price in an effort to circumvent it's perceived obvious low price? I submit that in the past and in the future, they will always subject themselves to the
"established official" gold price, come what may. Any breakdown in the present dollar financial system that results in the failure of the "official established" derivative gold price will find every mining concern selling their production into that market price regardless of profit. To bypass that channel, the mines would separate themselves from the fiat banking establishment that they depend on to function in this world. Even though the "street price" (thanks Mr. H.) of gold soars within the small dealer network, it will be viewed as somewhat "Black-market". Mine selling into that arena would invite laws with "immediate" and total retroactive taxation of those profits. Or worse,
production limits could be fixed upon all mines as a means to prevent the same gross profit margins. Perhaps in the same way as the Texas Railroad Comm. controlled all US oil profits. Further, such a breaking away from supporting the official gold market by withdrawing physical supply could bring on the total closure of what established gold markets that exist. To that extent, mines could find themselves selling all gold production to the official CBs for who knows what price.

Can't happen, illegal, you say? When it comes to gold, nations, governments and Central Bankers change the rules quite often. One has but to look into the laws of every nation to find that " emergency currency flow controls" always include gold! You see, it's never considered money or a reserve until a crisis strikes. Some examples of past illegal actions:

1797 Napoleonic Wars. Bank of England suspends gold payments.
1917 US prohibits gold exports.
1919 UK prohibits gold exports without official permission. UK now off Gold Standard
1919 US gold exports permitted again.
1925 UK Gold Standard Act Currency convertible but only in amounts of 400 oz. Export of gold permitted again
1931 September UK abandons Gold Standard.
1933 US convertibility suspended ($20.67/oz). Export, all transactions and holding of gold forbidden.
1934 US Presidential Proclamation makes dollar again convertible to gold ($35/oz)
1939 London gold market closed on outbreak of war.
1954 London gold market re-opens after World War 2
1968 London market closed at request of US government.
1968 London market re-opens 1 April and now fixing in US$ for first time.
1971 US$ convertibility to gold suspended.
1973 US proposes further devaluation to $42.22/fine oz.
1975 US abolishes restrictions on citizens buying, selling or owning gold (formerly needed Treasury licence).

The above may not seem like much now, but it wrecked havoc upon many investors. Of special note: Was the gold market was closed between 1939 till 1954?

Onward:

Over the last few years, we have seen how the gold market is failing to act out it's past precedent. Many investors write this off to government gold policies that must soon end. Be that as it may, the process continues without regard to "past gold cycle logic". I point out that the lack of new mine supply did not prevent the low real prices prevalent during much of the 50s and 60s. Will the shutting down of most world mines prevent a low "official gold price" today as many think? Not in the broad political scheme of things.

But what are they thinking as this process is worked?

Would a dealer "street price" in the thousands change things? Not if the only recourse is for private money to move into Euros! The crisis policy will be to maintain the official gold market with low priced mine supply and allow the physical dealer market to run with whatever private stocks that arrive. Remember, the present financial system has a need for new mined gold to flow into derivatives at a low price to support the paper market. The same paper market that keeps oil behind the dollar also holds the dollar together. As of today; To further pull existing "old gold" from portfolios by forcing the street price down now invites a run from the dollar. A high physical "street price" will at least keep the dollar in play when price inflation begins.
If the paper gold price rises from it's present level, will gold stocks follow? Probably! But what if that rise ends quickly as the gold market begins it's next "official" failure run?


We make camp and rest here:

Looking outward:

The next money breakdown will not be a typical inflation cycle. The dollar has reached the end of it's "currency inflation" logistics as it's local debt load now only expands as foreign dollar debt is devalued from par. Yes, there will be "super inflation", but it won't be part of a "perceived" next cycle that extends from the lows of the last go around.

The ECB view:

Because gold continues to be the respected "currency of nations" in each currency block, our physical gold must be withdrawn from honouring the long standing dollar based "derivatives gold market". In fits and starts, the entire gold industry as they know it will fall away as the dollar is destroyed through local US inflation. Because history has never witnessed the destruction of a fiat world reserve currency, many world industries and businesses that grew up within this US system will suffer as investors shift holdings. Any industry that finds it's value from a dollar derivative marketplace will be in disarray. Therefore, we must allow the Euro to float on it's own and thus guard the Eurozone from the shattering effects of this.

To conclude:
Consider how you hold your gold as "we watch this new gold market together.

Thanks for reading, FOA


Desjardins
(09/06/1999; 21:00:29 MDT - Msg ID: 12947)
Canuck
My query about hedge prices 2 to 5 years down the road is related to understanding the economics of a decision by a mining company whether to start up a new mine or not. For example, Placer Dome recently announced that it was deferring development of Las Cristinas for up to 4 or 5 years for lack of current project economics. I was just curious to know what the current forward hedge prices are, had Placer Dome decided to sell forward its Las Cristinas production to project finance this mine.
TownCrier
(09/06/1999; 21:20:06 MDT - Msg ID: 12948)
Forcing Y2K Disclosure
http://currents.net/newstoday/99/09/07/news15.htmlThe Thai government is looking to issue an executive decree by month's end requiring companies to state whether or not they have acheived Y2K compliance. This is an opportunity for the company to say that all is not well (in which case customers may continue to do business with them at their own risk and discretion), and by doing so, after the announcement they will not be held liable to any civil lawsuits in the event of damages.

So, let's say that as a business you "announce" that everything is Y2K-Okay, and then something goes wrong. You are probably on the hook for lawsuits that would probably exceed any foregone business as a result of an "announcement" of noncompliance. What would you do? I'm expecting plenty of announcements of noncompliance, followed by further erosion of public confidence in the financial sector, even though the financial sector itself can be expected to hold to the line that they are themselves compliant. To say otherwise would mean instant failure. Agreed?
ET
(09/06/1999; 22:56:07 MDT - Msg ID: 12949)
Tomcat, AEL, DD
http://www.ieeeusa.org/FORUM/POLICY/99june09.html
Hey guys - just time for a quick post and then off to bed. Thanks for your thoughts today concerning y2k. I thought I would repost the above link to the IEEE letter to Congress regarding its views on y2k. This letter was submitted in favor of liability limits when Congress was debating the topic. For those not familiar with IEEE, they are the Institute of Electrical and Electronics Engineers. In other words, their members built and maintain the current system. Their view should be considered gospel when evaluating the y2k issue. I'll quote a few points from the letter;

"In addressing public policy issues we have no more expertise than the literate public. However, we do
possess expertise in the technical issues underlying the situation that should be considered as you
weigh the conflicting public policy goals in formulating appropriate Year 2000 Liability Legislation. In
particular, for your consideration we offer the following points pertaining to the technical realities of
Y2K.

1. PREVENTION OF ALL Y2K FAILURES WAS NEVER POSSIBLE: For many large and important
organizations, technical prevention of all Y2K failures has never been possible in any practical way for
these reasons:

1.1 "Y2K COMPLIANT" DOES NOT EQUAL "NO Y2K FAILURES." If an organization makes all of its
systems "Y2K compliant", it does not mean that that same organization will not experience Y2K
failures causing harm to itself and other organizations. In fact, efforts to become "Y2K compliant" in
one place could be the direct cause of such failures in others. If interconnected systems are made
compliant in different ways, they will be incompatible with each other. Many systems in government
and industry are mistakenly being treated as if they were independent and fixed in the most expedient
way for each of them. When this "Humpty Dumpty" is put back together again, it will not work as
expected without complete testing, which is unlikely (see COMPLEXITY KILLS below).

1.2 ALL PROBLEMS ARE NOT VISIBLE OR CONTROLLABLE. In the best case organizations can
only address those things they can see and those things they have control over. Given this reality,
many Y2K failures are inevitable because some technical problems will not be discernible prior to a
failure, and others, while discernible, may not be within an organizations� jurisdictional control to
correct. This is especially true in large complex organizations with large amounts of richly
interconnected software involved in long and complex information chains and in systems containing a
high degree of embedded devices or systems purchased in whole from external parties. (The
temporary lifting of certain copyright and reverse engineering restrictions for specific Y2K protection
efforts should also be considered as long as copyright holders are not unduly harmed.)

1.3 INCOMING DATA MAY BE BAD OR MISSING. To maintain their operations many organizations
require data imported from other organizations over which they have no control. Such data may have
unknowingly been corrupted, made incompatible by misguided compliance efforts or simply missing
due to the upstream organizations lawful business decisions.

1.4 COMPLEXITY KILLS. The internal complexity of large systems, the further complexity due to the
rich interconnections between systems, the diversity of the technical environments in type and vintage
of most large organizations and the need to make even small changes in most systems will
overwhelm the testing infrastructure that was never designed to test "everything at once." Hence,
much software will have to be put back into use without complete testing, a recipe, almost a
commandment, for widespread failures.

"4.1 Y2K IS A LONG TERM, NOT SHORT TERM, PROBLEM. Irrespective of the notion of Y2K being
about time, a point in time, or the fixation on the rollover event at midnight December 31, 1999, or even
the name 'Year 2000� itself, Y2K computer problems will be causing computer system malfunctions
and failures for years into the next decade. Y2K is much more about the dates that can span the
century boundary represented in data that must be processed by software than it is about any
calendar time or clock issues. Because of the vast amounts of these, the complex intertwining among
them and our less than complete understanding of the whole, it will take years for the infrastructure to
"calm down" after Y2K impacts themselves AND the impacts of the sometimes frantic and misguided
changes we have made to it. The current prevention phase is only the beginning."

I would suggest all with an interest in this issue take a look at the entire letter.

ET
AEL
(09/07/1999; 05:03:38 MDT - Msg ID: 12950)
PM sales
This from a Y2K board: sales to PM dealers require ID and SS number?! Is this correct?


http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001M1u

"Now, say you do convert everything into coins, and do a LOT of
gardening, and Y2K turns out to be less than 9 or 10 so that our fascist
governments are still operating. I can just see requirements that all
sales back to dealers be tracked. You can buy anonymously, at least from
dealers where it's cash and carry. But in the past, in the U.S., at
least, sales back to dealers required ID. So we're left with the black
market." I just sold $3k of silver to a dealer. Had to show ID, SOSEC
#, the works - or no deal... -- andy (2000EOD@prodigy.net), September
05, 1999.

AEL
(09/07/1999; 05:08:09 MDT - Msg ID: 12951)
confiscation or confiscatory taxation
A couple of interesting ideas from Kitco...


Date: Sat Sep 04 1999 21:15
strat (Squirrel) ID#93241: My plan for dealing with confiscatory gold
tax will be to melt down everything I got into jewelry. MC Hammer won't
have nothing on me. Got gold chains?

Date: Sat Sep 04 1999 20:55
Squirrel (My 20:08's concern about Goldbugs having a confiscatory
windfall tax) ID#280214: A way around that would be opening up a Gold
mine - perhaps here in the Colorado Mountains. I could "produce" an
ounce per year by melting a Gold Maple Leaf, mixing it with base metal,
then grinding it into dust. Of course I would have to *work* through
summer heat and winter cold just to strain ten grains per week out of
sand and mud.


SteveH
(09/07/1999; 06:04:41 MDT - Msg ID: 12952)
GATA

September 4, 1999

By BILL "MIDAS" MURPHY
www.lemetropolecafe.com

It is fascinating to me that much of what we have
covered at the Cafe over the past year is starting to
synchronize and boil over. So I thought I would put
some labor into this Labor Day weekend and examine what
is happening on the scandal front, as well as update
you on the peculiar nature of it all.

Much of the hubbub about the manipulation of the gold
market began early last fall. Then Long-Term Capital
Management was supposedly taken off the hook on a 300-
tonne "borrowed gold" short position by the financial
entities that bailed them out. Since I had heard as
early as May 1997 that LTCM might have this amount of
gold exposure, it was no surprise to me to hear so many
rumors floating around of this nature, and I did not
hesitate to publicly question the propriety of it all.

Our protests caught the attention of Long-Term Capital
Management and its attorney, James G. Rickards, who
sent us a letter, along with an affidavit from fund
principal Eric Rosenfeld. Rickards stated that Long-
Term Capital Management denied any involvement in the
manipulation of the gold market, and Rosenfeld said to
the Cafe, "None of LTCM, LTCP, nor their affiliates,
has ever entered into any transaction involving the
purchase or sale of gold, including without limitation,
spot, forwards, options, futures, loans, borrowings,
repurchases, coin or bullion, long or short, physical
or derivative, or in any other form whatsoever."

I responded to Rickards in a letter saying that the
Cafe never accused LTCM of manipulating the gold
market, nor did I ever say that that LTCM "traded"
gold. I strongly suggested that LTCM had "borrowed" 300
tonnes of gold and had gold exposure in a credit sense
with the bullion banks, and I asked him for a response.

Rickards never did respond to me, and the other day it
was announced that he has resigned from LTCM to join
another firm.

Then there is information we received from a very
sophisticated source that a blind trust for Hillary
Clinton "shorted" gold instruments just prior to the
Bank of England's announcement of its plan to sell
gold. Interestingly, it was reported yesterday that the
down payment for the Clintons' new home in Westchester
County, N.Y., came from her blind trust.

It was strongly suggested to me from a source that we
try to find out if Hillary Clinton has a blind trust at
Goldman Sachs. The Gold Anti-Trust Action Committee and
the Cafe now have allies looking into this matter. We
are trying to find out who is handling her blind trust
or any other accounts she might have and, once these
are identified, attempt to elicit a response about the
gold-shorting speculation.

Why would this be the H-bomb as far as we are
concerned? Simply put, I have set forth much commentary
linking the Clinton administration, the New York Fed,
Goldman Sachs, Long-Term Capital Management, the
British treasury, the Bank of England, and Prime
Minister Tony Blair. A revelation of this nature would
solidify the link. For example:

* Former Treasury Secretary Robert Rubin is a former
Goldman Sachs CEO.

* Former N.Y. Fed Governor Ed Corrigan is a senior
partner at Goldman Sachs.

* London-based senior partner Gavyn Davies is Goldman
Sach's international economist and has close ties to
Prime Minister Tony Blair. Davies' wife, Susan Nye, is
officer manager for the chancellor of the exchequer.

* Dr. Sushil Wadhwani, former director of equity
strategy at Goldman Sachs International (1991-95), sits
on the Bank of England's Monetary Policy Committee. The
committee's duties include determining the bank's
objectives and strategy.

* Jon Corzine, former Goldman Sachs CEO, has close ties
to John Meriwether, chairman of Long-Term Capital
Management.

* Former Fed Vice Chairman David Mullins was a partner
in Long-Term Capital Management, which, of course, was
bailed out in part by Goldman Sachs.

Exhibit 2 and further background information on the
significance of the Hillary Clinton gold shorting story
comes from this commentary about the Bank of England's
gold sale from the document I sent to Sen. Phil Gramm,
chairman of the Senate Banking Committee:

"Yet, the night before the BOE announcement (May 6,
1999), I feared duplicity and this is what I wrote in
my Midas du Metropole commentary entitled, `XAU surges
46 percent':

"We know `the squad' are all lining up, one more time,
to try to stifle a decent gold move to the upside.
Deutsche Bank, Chase, Swiss Bank, and Goldman Sachs
were all there selling gold during today's session and,
when they had to, even throwing the kitchen sink at the
bulls' attack. Deutsche Bank has been especially
aggressive and noticeable in its selling the past few
days. We got word late this afternoon that its bullion
desk is calling clients saying that the gold market is
stopping at $290. I don't think Midas followers will be
surprised when we tell you that big sellers late in the
day today and taking on all bids were `squad' honchos
Goldman Sachs and Deutsche Bank. The Battle for
Navarone is an important stand for them, for if $290 is
taken out to the upside, their longstanding bearish
position could begin to look a bit shaky."

The next morning I awoke to the Bank of England
announcement. Since then the price of gold has
collapsed more than $36 -- or almost 15 percent -- and
the sale has ignited a furor all over the world,
fostering talk of conspiracies, etc. Before I get into
the ramifications of the sale, I thought the following
utterances by some of England's most notable officials
might raise an eyebrow or two:

Wire service commentary July 14, 1999 (my comments in
parentheses): "Asked in Parliament if it was right to
sell off part of Britain's reserves, Prime Minister
Tony Blair replied, `The gold price has been falling
for two years, so in fact if it carried on falling and
we didn't sell we would lose money.'"

Blair then declined to say if he would meet with the
South African gold industry delegation, but said the
gold sale was justified, stating, "We did this on
technical advice from the Bank of England." (Haruko
Fakuda, CEO of the World Gold Council, was told that
the decision was a political one and made by the
British Treasury, not the bank.)

Blair went on to say, "It is only the Conservative
Party's utter obsession with the euro in some bizarre
way. Given that Argentina and Switzerland are also
selling gold, what it has to do with the euro I do not
know. It is only that which is making them raise this
issue. It was done, as I say, on technical advice. It
was carried through perfectly sensibly and we actually
got the best deal for the country."

How wrong can you get? The best deal the Bank of
England could have made would have been $30 to $40 more
per ounce by carrying out the sale as all the other
major countries have done for 20 years.

But the story now gets confounding. On Sunday, July 11,
the chancellor of the exchequer, Gordon Brown, said in
the London Times, "The proposal to sell the reserves
was put to ministers by officials and, say treasury
insiders, agreed to it with little discussion."

According to the London Times article, the chancellor
is said to have been surprised and mortified by the
reaction from Thabo Mbeki, the South African president,
who said the Bank of England's gold sales would have a
"potentially disastrous effect" on South Africa.

OK, so what gives here? Blair said it was a Bank of
England decision. The Bank of England says it was a
Treasury decision. The Treasury says it was only a
Treasury decision of sorts and agreed to with little
discussion.

Good grief. A decision that may have disastrous effects
on South Africa, a democracy the West is committed to,
was made with little discussion and no one will take
responsibility for it. Yet it is such an important
decision that Tony Blair will not reconsider it, even
though it appears he does not know who made the
decision in the first place.

Meanwhile, the mortified (but confused) chancellor of
the exchequer, Gordon Brown, just prior to the trip to
England by the African delegation, was all over the
wire services talking about the righteousness of his
decision on gold, while continuing to extol the virtues
of the proposed gold sales by the International
Monetary Fund. The headline on the Reuters dispatch
read: "U.K.'s Brown Sees Wide Support for IMF Gold
Sales."

But a Bloomberg audio report reveals that when the Bank
of England's Eddie George was asked whether the bank's
gold sale was 1) his decision, 2) whether he was
involved in it, or 3) whether he was consulted, his
response was that he was consulted, which is a
euphemism for being told. When asked who made the asset
allocation decisions on the "bank reserves," George
answered, "the government" -- that is, the politicians.

So what do we have here? The British now say their
decision to sell gold was planned for some time and
made the announcement, coincidentally, as the price of
gold was about to take off. They became the first
central bank in more than 20 years to make an
announcement of a gold sale in advance. They knew this
announcement would devastate the market from a
psychological perspective and send gold prices crashing
-- and, of course, it did. The price went straight down
more than $36 per ounce. This assured Britain the worst
price possible and cost the country hundreds of
millions of pounds. Now no one in the British
government will own up to making this mysterious
decision, which is devastating poor African countries,
among others.

Meanwhile, as my May 6 commentary indicated, somehow
the bullion dealers knew what was coming and told their
clients as much.

It does not take an Einstein to comprehend the
significance of determining if there is a financial
account of any kind someplace that shorted gold for
Hillary Clinton just prior to the Bank of England's
gold sale announcement. With the help of others, I am
trying to track down where her accounts are located,
and then we will start asking questions. It will be
interesting first to find out if Hillary Clinton has an
account at Goldman Sachs.

Now for the "scandale du jour." It revolves around GATA
protagonist Martin Armstrong and his firm, Princeton
Economics International. The latest from two wire
services:

"New York, Sept 2 (Bloomberg) -- Republic New York
Corp. said it suspended the head of its securities unit
after an investigation of a client's affiliate in
Japan. HSBC Holdings PLC said the probe may delay its
acquisition of Republic.

"The bank is under investigation by U.S. law
enforcement and regulatory authorities for inflating
the net asset value of an investment fund, the Wall
Street Journal reported. Republic said it is working
with U.S. and Japanese regulators on the probe.....

"Republic isn't the subject of its investigation, the
FSA said. The Japanese authorities are looking at
Crestvale International Ltd., an institutional
brokerage based in Hong Kong, with offices in London,
Tokyo, and New York, a person familiar with the matter
said. Princeton Economics International, a money
manager based in Princeton, N.J., owns Crestvale."

"New York, Sept 3 (Reuters) -- "Analysts and a Republic
shareholder told Reuters they thought the Republic unit
and the Princeton affiliates may have participated in
so-called 'tobashi' deals, in which Japanese
institutions hide losses through complex derivative
transactions. The probe is limited to Republic's
dealings with the Princeton affiliates and does not
extend to other client relationships, these sources
said.

"Analyst Gerard Cassidy of Tucker Anthony said, 'It
appears one of two things happened: Princeton told
Republic this is what (the investments) are worth and
Republic took it at face value, or Princeton, in
conjunction with Republic Securities, determined the
value, which was artificially inflated."

The Reuters story goes on to say, "The firm (Republic)
also hired Lee Hennessee, an adviser who helped clients
pick hedge funds, or unregulated investment funds for
wealthy investors that trade a variety of securities,
usually using borrowed money."

This begins to raise all sorts of issues on what we
have reported to you and one that we have not yet. We
understand that certain other bullion dealers have been
lending gold to Republic. That is very strange.

Republic is a bullion dealer. Why is it borrowing gold
from other bullion dealers? We have already reported to
you that one bullion dealer told us that he has turned
down at least one hedge fund that wanted to borrow gold
from his bank. (We are trying to find out if was
Armstrong.) All this is going on with the one-month
gold lease rate (borrowing rate) now skyrocketing to
4.2 percent, up from a normal 1 percent.

It is well known that Republic has done much of
Armstrong's silver and gold business on the Comex.
Sources told me Friday that Armstrong has not been seen
on the Comex lately and they had heard that his funds
were not doing very well. In addition we have reported
that sources tell us that four hedge funds (Soros,
Tiger, Moore Capital, and Martin Armstrong) are short
from 30 million to 50 million ounces of gold. The
number filtered back to us on Armstrong is that he is
short anywhere from 8 to 20 million ounces.

But how can this be? Armstrong has had correspondence
with the secretary of the Gold Anti-Trust Action
Committee, Chris Powell, denying he was short gold. I
am presenting excerpts from Armstrong's commentary. The
first two are to GATA in May 1999 and the next one was
sent to Armstrong's subscribers in June. The
investigation into his firm, Crestvale, began in May.
Note how his tone changes towards GATA from May to
June. The last piece is long, but well worth the read.

* * *

May 14, 1999

Dear Chris:

I understand your frustration that gold has been
perhaps the worst investment for the past 20 years. But
to argue that it is being manipulated due to large
short positions is not justified.

There is no interest in gold at this time and the
central banks are all sellers. After they sell their
gold, then we will see a bull market. Once those
supplies are gone, no one will be able to lean on that
supply and your bull market will begin.

I hate to tell you, but gold will drop to under $200
before it turns. I find it extremely one-sided how a
Buffet and company of tagalongs is not a manipulation
because they buy, while selling is a manipulation. The
very guys you argue are manipulating gold down were big
sellers of gold and buyers of silver during the Buffet
rally. GS or not, the economy simply does not support
your position. And I do not want to hear how I am short
or some nonsense to try to discredit my views, because
it is not true. PEI owns a 51 percent stake in a public
gold mine in Australia. That is my long-term view; it
does not change my short-term view.

You cannot make a case for gold manipulation when
central banks are willing sellers. They have
demonetized gold and that is a simple fact of life. If
you want a free market, then don't stand in the way of
this bear market. Let the central bankers sell
everything they have and then there will be no overhead
supply to worry about. You cannot argue manipulation
and take the position that these guys are not allowed
to sell what they have.

The banks know what is coming and if they sell ahead of
the central banks, so be it -- that's a free market.

MARTIN ARMSTRONG
Princeton Economics

* * *

Saturday, May 15, 1999

Dear Chris:

Your view of Long-Term Capital Management is slightly
distorted. The bailout was in fact for the financial
markets. The shareholders of LTCM were wiped out. The
banks were given the assets in return for an orderly
liquidation. The investors in LTCM did not receive a
bailout.

The IMF has its own agenda. The Republicans have
demanded access to the International Monetary Fund's
decision process and the IMF refuses. It has emerged as
its own authority. When the gold standard collapsed,
the IMF simply reinvented itself. I speak to many
people on Capitol Hill and they are not in bed with the
IMF. The debate behind closed doors has been how to
make the IMF at least accountable to someone. Its
policies imposed upon Third World nations are a
throwback to a fixed exchange rates system. They are
the ones who insisted upon fixed exchanges rates and
that they must hold at all costs -- a great policy, as
demonstrated by Korea and others.

I work in this field quite extensively. There is no
conspiracy. The problem is that the IMF and the Bank of
International Settlements along with the World Bank all
have their own agendas and they have been at odds with
the G7 nations on many issues. No government is in
charge of these guys and only now are some beginning to
understand that profound fact.

When the gold standard collapsed, nobody was there to
turn out the lights. If this were a true conspiracy,
then perhaps it would be better organized. As it is,
these institutions are like the Keystone Cops. They
know not what they do!

Gold will one day return to a bull market. Perhaps in
2000 or at the latest in 2002. The lack of a paper
currency (Euro) is still driving international capital
toward the dollar. This trend could last for a few more
years. The European politicians are trying to create a
currency that is not based upon economics at all. Hence
the swan dive since Jan. 1. I'd rather hold a dollar
than a euro right now.

By the way, William Jennings Bryan stood for inflation
-- not sound money. The great financial panics of the
last decade of the 19th century were largely caused by
the silver Democrats who took 72 cents worth of silver
and called it a dollar. People then began to hoard
gold, according to Gresham's Law. The U.S. Treasury
needed to be bailed out by J.P. Morgan, who lent it
$100 million in gold in order to make payments.
Otherwise, the United States would have been declared
bankrupt internationally -- and there was no IMF back
then.

Money is a difficult thing to define. It is, in its
purest form, whatever the majority believes it to be.
The Babylonians began with gold because it was abundant
in their region. The Greeks began with silver for the
same reason. The Romans had only bronze, as was the
case in Japan and China. The Japanese did not issue
gold coins until the 19th century in order to
facilitate trade with the West, just as Russian today
are adopting dollars on the street.

The Egyptians used both precious metals, by weight, and
wheat; they never minted coins. Only after the birth of
Imperial Rome, starting with Augustus, do we find gold
as a regular part of the monetary system in the west --
some 2,000 years ago. After the fall of Rome, gold
disappeared and the monetary system became the silver
penny of Europe. Gold began to reappear as money after
600 years during the reign of Henry III.

Those who like to claim that gold has been money for
6,000 years leave out that it too has not always
survived as money in the past. Perhaps one day gold
will re-emerge as the black market form of money if
government succeeds in moving to a pure electronic form
of cash. But given the history of gold, it could be in
our children's lifetime.

All the best. I leave for Euroland for two weeks
tonight.

MARTIN ARMSTRONG
Princeton Economics

* * *

Gold: Manipulation or Exaggeration?

By Martin A. Armstrong
Copyright 1999 / Princeton Economics International
June 10, 1999

A two-man army calling itself GATA has begun to
besiege the media attempting to gain a lot of press on
the platform that gold is being "manipulated" by a
cartel of investment banks. They constantly point to
what they call the huge "carry trade" in gold were
there is far more gold sold than exists. The tenets of
the commodity markets, be it cash or futures, is that
every position is offset by an equal and opposite
position. There cannot be more outstanding short
positions than long positions, yet the total number of
positions combined can far exceed the actual supply.
However, the same thing can happen in S&P 500 futures
or even U.S. 30-year bond futures. That is the nature
of the free markets. Those who own a commodity have the
right to sell it, lend it or hedge it to someone else
who is willing to take the other side, for whatever
reason, be it hedging a future use or betting on the
next bull market.

Above all, this single misconception has been man's
greatest downfall. For during almost every great
financial panic in history, government has launched
intrusive investigations seeking t�(@ h"��j�@�(`hn��HTTP/1.0 200 OK
Server: WebSTAR NetCloak
Date: Tue, 07 SEP 1999 12:04:40 GMT
Last-Modified: Wed, 19 MAY 1999 18:04:08 GMT
MIME-Version: 1.0
Content-type: text/html
Content-length: 19267

!doctype html public "-//w3c//dtd html 4.0 transitional//en">
SteveH
GATA 2

The gold supply/demand deficit is much greater than the
bullion dealers have told you. The gold loans are
double what the bullion dealers have told you. We think
that they exceed 10,000 tonnes right now. You say the
gold market is not being manipulated. I say the only
reason gold has not doubled in price is because the
market has been manipulated.

The manipulation of the gold market is one of the great
financial scandals in U.S. history. It sounds like you
have a few problems of your own to deal with right now.
Don't get caught up in this one too.

BILL MURPHY, Chairman
Gold Anti-Trust Action Committee
Le Patron, www.LeMetropoleCafe.com

-END-
SteveH
GATA (2 fixed)
Above all, this single misconception has been man's
greatest downfall. For during almost every great
financial panic in history, government has launched
intrusive investigations seeking to uncover that
horrible short position that has manipulated the entire
marketplace through its sheer ability to overpower it
with size. Every investigation to date has begun with
that misguided belief that a short position can be
larger than a long position, failing to understand in
the process that all positions must balance.

In the wake of the Panic of 1907, short selling was
declared a criminal act despite the fact that they
never found that horrible person who overpowered the
marketplace. Fortunately, the U.S. Supreme Court struck
down that law against short selling and the free market
went on. The true cause of the decline was only finally
revealed as a cash-flow problem, which in turn gave
birth to the Federal Reserve six years later.

An investigation was launched following the Crash of
1929, from which the Securities and Exchange Commission
was born. People from all over the country were
questioned by Congress and accused, without evidence,
of somehow being short behind the scenes. The mere
accusation made against people ruined their reputations
and provided the basis that launched a thousand
lawsuits. When the evidence was finally collected, all
the famous names were found to have been long � not
short. From Rockefeller on down, they all lost
staggering amounts of money. The multimillion-dollar
short position never surfaced once again.

The same was true following the Crash of 1987. Those
who should have been short as a hedge against their
stock portfolios were, in fact, found to have been
significantly under hedged. No massive short position
ever surfaced from the 1987 investigation and they
imposed circuit breakers that needed to be revised in
1997.

The "carry trade" in gold that has been the subject of
much discussion is seriously misunderstood. There are
those who would like to point to this position as the
cause for the decline in gold. They are dead wrong. The
"carry trade" in the OTC gold market has been around
for years. The Arabs have used gold as a means to earn
interest without calling it interest. Islam forbids the
lending of money for interest known as the sin of
usury. The Arabs have used the carry trade in gold
since the early 1980s. They buy spot and sell forward
and collect the "carry" or premium on a back month.
This premium is a reflection of the cost to "carry" a
gold position. If you buy the current spot and sell the
forward, you earn that net difference without being
exposed to the price fluctuation of gold itself. In
reality, the investment banks can book billions of
dollars of such transactions that have NO impact or
relevance to the gold market. Technically, the Arabs
are not receiving interest but instead they are buying
gold today and selling it for a few dollars more 3
months out. These profits are allowed under Islam,
whereas normal interest earnings are forbidden.

The Japanese are also involved in the "carry trade" in
gold. Public futures funds in Japan are still regulated
under the commodity acts even if they trade Nikkei or
S&P500 futures. Since the definition of ALL futures
funds remains that of a "commodity" fund according to
Japanese regulation, there is a strict investment
guideline. ALL futures funds must be invested 50
percent at all times in commodities. Hence, the
Japanese futures funds are also using the gold "carry
trade" in order to meet the crazy requirement that the
fund must be invested 50 percent in commodities at all
times.

Again, gold is purchased on the spot and sold forward
without risk. Again, this becomes a paper transaction
where a bank will certify that there is a trade on
their books thus allowing the fund to meet its
requirements for being invested 50 percent in
commodities at all times. The balance of the fund then
CANNOT be invested in commodities and off they go into
the financial futures world trading Nikkei, JGBs, S&P
500 and the like.

Of course, the last type of this "carry trade" involves
the mining companies. Here, gold is sold forward in
order for a company to plan its operating expenses. A
budget can be established only if there is some assured
return for their production. Others may borrow gold on
an interest rate differential. In this case, a gold
loan comes with a lower interest rate. The gold is sold
on the spot and the loan is repaid from future
production. It is a cheap means of acquiring financing.
Interest on gold loans tends to be lower because it is
a dead asset on the books of its owners since there is
no income and often there are storage and insurance
costs. Consumers of such loans are typically mining
companies or manufacturers. The granters of gold loans
are holders, including central banks. Holding gold
without lending can be very costly, but by lending the
gold, a holder retains ownership since the borrower is
committed to repay the loan in gold plus interest
thereby reducing the holding costs.

Gold is no more being manipulated today in some grand
conspiracy than it was going into the 1980 high. We
disagree that the Hunts were market manipulators in
silver back in 1980. Perhaps one could have argued that
the Hunts manipulated silver IF it was the only
commodity to have risen during the entire period.

However, the CPI was hitting 17 percent annually and
people were hoarding toilet paper. All commodities were
in a strong bull market -- not ONLY silver.

Likewise, we find it extremely difficult to also accept
that just because of the "carry trade" in gold that it
is being manipulated lower when all other commodities
are also in a bear market. To further argue that if
these massive short positions were forced out of the
marketplace gold prices would rise makes no sense. If
you chase the Japanese and the Arabs out of gold,
nothing will change. These types of transactions do NOT
impact prices, but they do have an impact by making
gold appear to be extremely liquid. If you outlaw gold
loans you destroy the free market and most likely cause
massive liquidations on the part of those who have such
hoards but need some kind of income.

Those who jump up on the soapboxes and cry foul about
sales of gold by the International Monetary Fund, Bank
of England and the rest of the central banks seem to
miss the point. The governments of the world DO NOT
share their belief that only gold is money and that a
return to the gold standard is inevitable. Such a step
back in time would require the complete abandonment of
virtually every social program introduced since World
War II -- a highly UNLIKELY political decision. The
governments of the world have a self interest in not
returning to the gold standard.

In 1985, we argued that governments must return to some
fixed exchange rate mechanism or that volatility would
escalate into 2003 disrupting the world economy as a
whole. The White House responded by stating that any
return to the fixed exchange rate system would mean
that "domestic policy objectives would be held hostage
to international policy objectives." This was a fancy
way of stating that such a system meant a return to a
balanced budget and, in turn, that meant that
politicians could NOT offer wonderful social programs
if they had to actually fund them long-term.

We do NOT disagree that the floating exchange rate
system has allowed national debts to explode and that
at some point in the future there must be
reconciliation with reality. However, such a collapse
in society is not likely to come before the 2012 time
period when the obligations of governments will be
unbearable. In effect, the formation of the European
Monetary Union this year is a step toward preparing for
these serious default problems in the future. In
France, there are plenty of guarantees by the
government for your pension but there is no money set
aside to support those guarantees. The French
population has no 401K or private system that they can
count on. This situation could spark the next French
revolution when the population faces the fact that
their pensions have only been political promises.

The same is true in many regions of Europe. By banding
together, Europe hopes to capture the capital that
moves between the cracks and thus increase their
revenues in an effort to reduce all future liabilities.
A Federal Europe will be far better equipped to deal
with the problems together rather than on a divided
basis. By allowing the euro to collapse, they are in
effect devaluing their future obligations, which is one
way of getting out of the mess. You meet your
obligations but you pay with a currency that is worth
far less than it was at the point the promise was made.
Then they manipulate CPI in an effort to reduce any
increase in liabilities by purporting that there is no
inflation.

There is a serious question that needs to be asked
based upon the events economically since World War II.
The gold standard gave way because governments
continued to increase their debts but never readjusted
the price of gold in proportion to the increase in
money supply. Instead of admitting that their
borrowings had created inflation, they chose to close
the gold window and end the gold standard. The rally in
gold during the 1970s was a natural response for any
and all commodities that had been artificially
restrained. Thus, if one wants to discuss
manipulations, the gold standard was the biggest
manipulation of all by keeping the value of gold fixed
while the supply of money increased. Gold was NOT
money; it was merely a store of wealth in which money
was expressed. This is why the gold standard collapsed.

The global economy is indeed showing signs of distress.
The IMF loan portfolio looks like a charity case with
assets that will never be repaid. Any normal bank would
be declared insolvent and closed with a portfolio of
this nature. The IMF has long past its expiration date.
The original intent behind the IMF was to be a lender
to nations who temporarily were unable to meet their
obligations under the gold standard. Hence, the IMF
became the largest holder of gold in order for it to
provide gold loans. Since there is a political agenda
that is intent upon never returning to a gold standard
due to its impact upon the social goals of the left
wing, it makes perfect sense that central banks and the
IMF should in fact liquidate their gold assets. While
this may be a major bearish factor short-term, it is
also most likely going to provide a true free market in
gold long-term.

Gold will also be capped as long as the bulk of its
supply remains in the vaults of the central banks. The
idea that they are trying to manipulate gold lower is
not well-founded. Australia sold its reserves when they
caught wind of the true agenda of liquidation. From the
Australian perspective, they sold about $100 higher
than the current price, saving considerable national
reserves. For these reasons, we do not see a conspiracy
to push gold lower just as an international policy that
has not been publicly expressed. We do not see this as
a manipulation, but as a change in monetary system
policy that is promoting the liquidation of gold assets
and its "official" demonetization.

We have been blamed and criticized intensely for our
view on gold. We warned six months before the
marketplace became aware that the central banks were
going to be net sellers and we received hate mail
claiming that we were making up the entire issue. We
warned about the silver squeeze and that there was no
true shortage, but that the metal was instead headed to
London where inventories are not disclosed.

We were attacked again claiming that we were making up
the entire affair, and companies like CPM claimed that
industrial consumption was the cause of the drain in
silver inventories. When the Bank of England suddenly
got involved, then Warren Buffett admitted that he
bought the silver and that it was in London where
several other parties were engaged in front-running
Buffett's order out of sight from the Commodities
Futures Trading Commission. We did warn that some of
the bullion dealers were selling gold aggressively and
buying silver to help push it up to the $7 level,
depressing gold in the process. Our sources on this
entire matter have always been reliable and they have
proven to be correct.

There is most likely the typical summer rally from a
June low that may yet develop. The public funds are all
quite aggressively short and a rally is starting to
appear overdue where a retest of $275-280 may be
likely. Nevertheless, the prospects for lower prices
into next year remain quite strong, where a drop to
just under $200 performs a retest of the 1974 high.

The bullion trade has tried to use Y2K as a reason to
rush out and buy gold. The central banks have been the
sellers into that retail consumer demand as well. Even
the British are now running advertisements offering new
gold coins struck for the millennium. Some of the
bankers have expressed a fear that the hype over Y2K
that has been used by some bullion dealers could prove
to be quite damaging to retail demand next year. The
concern remains that a sharp drop in demand could
unfold when the public sees that the banks have not
collapsed and that life goes on.

There is also a growing fear that perhaps net sales by
the public may also emerge causing prices to decline
even further. Those banks that are selling gold to the
public do NOT want to see a price collapse. They
naturally want to sell gold coins at the highest
possible price, as was the case with Australia.

We can entertain conspiracy theories and blame or
threaten everyone who has ever uttered a bearish word
about the precious metals, but this will not change a
thing. It is going to be a very difficult period ahead
for many involved in the precious metals and most other
commodities as well.

Nonetheless, the only hope will be new lows in 2000 and
a return to inflation perhaps due in part to Y2K. Any
disruption to supply will cause a shortage of goods and
that is price inflationary, as was the case during the
late 1970s. If there is no serious problem and the
stockpiling of goods and raw commodities by
manufacturers going into year-end results in excess
inventories, then there will be a risk of a further
deflationary trend into 2002- 2003. Such an outcome
would prompt further deflation and postpone any bull
market in commodities until the 2003-2007 time period.
These are major economic issues that will take time and
patience to resolve.

Short-term price manipulation by dealers who run after
the stops of fund managers are a commonplace event in
the OTC cash markets of gold and foreign exchange.
Nonetheless, this does not rise to the level of a grand
conspiracy of monumental proportions intent upon
forcing a particular long-term directional trend. If
the central banks sell everything, they will have
nothing left to prevent a bull market from unfolding.
It will take time before we can see the new light of
day and a shift in the economic prospects worldwide.

* * *

It is my turn to respond to Martin Armstrong:

September 5, 1999

Dear Martin:

If you are so on top of the Japanese markets and their
way of doing things, how come the Japanese are
investigating one of your firms to such a degree that
U.S. law enforcement authorities have been brought in
to investigate you too? That is highly unusual.

You said months ago that "all" commodities were in bear
markets and that gold should be too. But now oil is
trading at $22 per barrel, the CRB has cracked 200 to
the upside, and the base metals in London are flying.
You are known to be one of the world's big silver
bears, yet silver has not broken towards $2.78 as you
predicted. How come, and how short are you still?

You stated there was "no interest" in gold. But gold
demand in the second quarter was 4 percent higher than
any other quarter in history; it will be even greater
in the third quarter. Demand for gold in India and Asia
is booming, while demand for gold coins is soaring in
North America and elsewhere. The premiums on gold coins
are rising as they go out the door as fast as they are
minted.

No interest in gold? Then why is the one-month lease
rate 4.2 percent when the historical norm is about 1
percent? Gold lease rates have now remained at
abnormally high levels for longer than most can
remember.

Why was the August Comex gold contract almost squeezed?
Did you know that demand is now running about 160 to
180 tonnes per month greater than supply? That's just
PER MONTH. Perhaps you are caught short about this
fundamental piece of information?

Oh no, I forgot. You told GATA you were not short gold.
Something strikes me here. "Borrowing gold" for the
past few years has been one of the great windfalls of
all time and you are one of the big gold bears. Hedge
funds and many financial institutions (as stated above)
often borrow money to make investments. For some reason
your firm is being accused of overstated assets, etc.
Yet both you and Long Term Capital Management have told
GATA that you are not short gold. Very strange.

Somehow it does not make sense that one of the most
leveraged financial institutions known to mankind
(LTCM) and one of the most bearish institutions
regarding gold (PEI) both publicly denied that they are
"short gold."

That does not fly with me.

I suggest you both protest too much, especially to a
"two-man army" like us. (For the record, we are a
three-man army with many hundreds of great supporters.)
Something does not sit right here at all.

Yes, you are brilliant, but you have made your share of
bummer market calls too. As I recall, you have been one
of the great bears on the Japanese yen. Your prediction
for the yen, if my memory serves me correctly, was
about 278. Does that have anything to do with your
troubles with Crestvale? The way I see it, if your
short-term gold call is as on target as your yen call,
we gold bulls are in great shape.

You have offered your thoughts. I offer mine; maybe an
eye-opener would be good for you.

The gold supply/demand deficit is much greater than the
bullion dealers have told you. The gold loans are
double what the bullion dealers have told you. We think
that they exceed 10,000 tonnes right now. You say the
gold market is not being manipulated. I say the only
reason gold has not doubled in price is because the
market has been manipulated.

The manipulation of the gold market is one of the great
financial scandals in U.S. history. It sounds like you
have a few problems of your own to deal with right now.
Don't get caught up in this one too.

BILL MURPHY, Chairman
Gold Anti-Trust Action Committee
Le Patron, www.LeMetropoleCafe.com

-END-

TownCrier
Reeling rupiah causes some regional market ripples
http://biz.yahoo.com/rf/990907/de.htmlThe rupiah is weighing on Singapore, and could also put pressure on the Thai baht.
TownCrier
Tea leaves (your early morning currency report)
http://biz.yahoo.com/rf/990907/eg.htmlFX IN EUROPE - Yen bulls reeling from weak data
TownCrier
Bubble trouble: Should central banks ever try to prick asset-price bubbles? Not all central bankers agree
http://www.economist.com/editorial/freeforall/current/index_fn4916.htmlCB's weigh in on this question as we revisit Jackson Hole.
Goldspoon
Lookin good.......
All Aboard.. lets get on board the Gold Train.....my leading indicator Platinum is showing some strong buying...up $7-8... if it breaks out look for Gold to come right behind it....Blow the whistle Townie... them shorts better get off of the tracks or the cowcatcher will get 'em..
TownCrier
HEADLINE from India: Go for Gold
http://www.webpage.com/hindu/daily/990118/06/06180005.htmLet there be no doubt about where some people put their trust. The first few paragraphs of this article mention "spectacular increase in its imports," "runaway gold imports," and "huge domestic appetite."

Why do you think, then, that another sentiment exists as stated in the article, 'There is a need to bring the hitherto idle gold into the monetary economy.'? The article then goes on to explain a possible "solution" to this "problem" by separating honest people from their savings through a gold deposit scheme.

Read about it and gain some small insight into the larger LBMA.
USAGOLD
Today's Gold Market Update: Fall Investment Season Starts with Solid Gain
MARKET REPORT (9/7/99): Gold kicked off the fall investment season with a solid
gain attributed once again to the tight supply conditions in the physical market and growing
demand from investors concerned about the year 2000 transition, an overvalued stock
market and the declining dollar. There was light physical buying from Australia in the Asian
market overnight. London was quiet and waiting for the New York open for direction
according to this morning's London Reuters. Bridge News report that gold imports to
Taiwan more than doubled in August (over August last year) from 3.999 tons to 9.08 tons
-- a very strong indicator that gold demand has improved significantly in Asia since the
crisis of over a year ago. We have said repeatedly that when the Asian economies come
back on line -- a trend now in-process -- that gold demand will return with a vengeance. It
is well known in those economies that those who owned gold during the contagion did very
well while those who didn't suffered. In the western economies, this is the time of year that
the jewelry industry begins to purchase gold for the end of year festivals season worldwide.
Gold lease rates remained high despite the September 21 Bank of England auction. The 25
tons offered are not expected to have a major impact on the gold market one way or the
other and it seems those seeking leased gold do not feel their needs will be met by the small
BOE tranche.

Other news of interest to gold investors:

In a report that carries ominous devaluation overtones, Financial Times quoted Chinese
finance minister Xiang Huaicheng, China's finance minister, as saying that "despite extra
spending the government may not be able to stop deflation."

Venezuela's Ali Rodriguez, said he expects OPEC members to continue with the existing oil
output cuts until Apr 1, 2000. The remarks helped pushed crude higher today. According to
the Wall Street Journal this morning, the Department of Energy says higher crude and
natural gas prices, expectations of a colder winter and anxiety about Y2K problems are
expected to push heating bills at least 30% higher than last year.

As we go to fetch this over to the server, the dollar is mixed and the Dow is trying to make
up its mind on direction. That's it for today, fellow goldmeisters. We'll report if there's
more to this gold move than already reported above.

The September edition of News & Views is a major you-don't-want-to-miss-it, highly
informative, and slightly irreverent blockbuster. We revisit our Five Horsemen of the
New Apocalypse -- the euro challenge, Y2K, the Asian contagion, the bubble stock
market and rising oil -- none of which have taken the summer off. We also preview the
Ten Reasons Why Main Street Worldwide Is Returning to Gold and Short &
Sweet (as is our custom) rambles with a hint of cynicism through a litany of world
political and economic events. You won't want to miss our look at the world of gold to kick
off the Fall investment season. The Season of the Yellow Metal? Just might be so...........

Please call 800-869-5115 (Ask for Mary Conway) if you have an interest in receiving
a trial subscription to our widely read newsletter, News & Views: Forecasts,
Commentary and Analysis on the Economy and Precious Metals. Or you can
go to our ORDER FORM and submit your request by E-Mail. You will also receive our
introductory packet on investing in gold.
The Stranger
Not So Bad After All
I know it is early in the game, but I can't help noticing this morning that, in the past 52 weeks, the XAU index of precious metals stocks has risen 40%. My Newmont shares are up over 50%, actually beating the DJIA for the same period.
TownCrier
Fed says two-day system RPs totaled $6.0 bln
http://biz.yahoo.com/rf/990907/h9.htmlHeadline says it all. At this rate, it doesn't take long for the Fed to exhaust the extra $50 billion it is printing for Y2K.
beesting
IMF to revalue Gold!!!
Towncriers report to follow.......beesting
CoBra(too)
Sound of Music - a/o the sound of Philharmonic's
Sorry or not responding for several days - time seems to be as short as in the paper gold markets. Just skimmed through the last days of posts and would like to thank all for the great contributions, which I'm looking forward to digest tonight at a more leisurely pace.
Thanks to Canuck, for pasting instructions, Goldspoon's - great Fellow Knights -, Leigh's - Sound of Music, which was lovely - and Peter A's challenge to respond to Leigh's Trapp family Saga in the context of the fate of the Austrian Schilling vs. SFR imbedded in the turmoil of the "Anschluss" and WWII. I will do my best to comply Sir Peter as time permits.
Incidentally, I've been at the Trapp Family Lodge several times since 1972 and have met and chatted with the late Baronesse Maria and became friends with Johnny (Johannes), who is in charge of the place up on the High Road of Stowe, Vt. - and BTW had one of the great experiences with good old American hospitality in downtown Stowe (saved for another time).

Back to present, it seems to me major companies are rapidly divesting their paper $'s in ever increasing mega bullion buy out's or takeovers or share buy backs - another form of conserving (or is it dumping) assets?
Au + 2,20 - where's the limit up?
Be back later - hopefully - best CB2
TownCrier
IMF proposes revaluing some gold instead of sale
http://biz.yahoo.com/rf/990907/i2.htmlIMF considering the alternative of marking some of their gold reserves to market values.

This is stunning. You may recall in past days The Tower brought to your attention the correspondence between the World Gold Council and the International Monetary Fund on this matter.

Miss Haruko Fukuda, Chief Executive of the WGC, suggested as an alternative to gold sales "the possibility of revaluing the IMF's gold closer to market prices and using the book profits thus gained."

Stanley Fischer, First Deputy Managing Director of the IMF replied "A pure revaluation of the Fund's gold would result only in an accounting gain and would not provide the cash resources needed to fund the initiatives. Moreover, a revaluation of gold is inconsistent with the Fund's Articles of Agreement."

At the time, we said the WGC in their response appeared to clearly have the IMF out-classed. Let's hope the IMF keeps an open mind going forward, or else folds up shop as should have been done when Bretton Woods (their original lifeblood) failed.
TownCrier
Blair won't let UK lose out on euro benefits--Cook
http://biz.yahoo.com/rf/990906/gc.htmlGaining insight into which direction the UK will lean.
"She loves me...she loves me not...she loves me..."
TownCrier
REPEAT: in case this new IMF development inspires you to read what you may have skipped earlier
http://www.gold.org/Gra/Recent/IMF/IMF_1.htmTownCrier (9/3/99; 0:23:53MDT - Msg ID:12717)
Us vs. them. Who's on whose side...
http://www.gold.org/Gra/Recent/IMF/IMF_1.htm
For anyone who feels at the mercy of "officialdom" and that their side is at an advantage because they employ all of the sharpest economic thinkers, think again--particularly where the IMF is concerned. Click this link to examine three letters of correspondence. The first is an appeal of the World Gold Council to the IMF to rethink their gold selling strategy. It's an adequate conveyance of the message. The second letter is the IMF's totally unoriginal and uninspired counterpoint response. With the third letter, a rebuttal of the WGC to the IMF letter, Miss Fukuda (WGC CEO) demonstrates that the WGC is not an organization to be dismissed lightly. It is the level of response in this third letter that reveals how weak the IMF letter was by comparison.

And lest you harbor any doubts as to the "official" position on gold, (a rather important one that counts) here's a refresher course on the straight scoop sans subterfuge. Bank for International Settlements general manager Andrew Crockett commented in June "I have the strong impression from conversations taking place at the BIS that gold will continue to play a major part in reserves, and that most of the major gold holders are not contemplating selling gold, so I do not expect there to be major changes in the role of gold."
TownCrier
Last Friday at the Round Table was an exceptional day!
http://www.usagold.com/cpmforum/archives/319999/default.htmlBe sure to check it out if your holiday plans caused you to miss it.
TownCrier
Follow-up article on the IMF alternative to selling gold
http://biz.yahoo.com/rf/990907/ki.htmlRevaluing a portion of their gold sets a precedent to mark the whole inventory to market values.

Say goodbye to the IMF as we know it. (And a good riddance at that.)
TownCrier
IMF says timely US rate rises probably necessary
http://biz.yahoo.com/rf/990907/k0.htmlThis position is one that shouldn't be taken lightly, given the IMF's role in keeping the dollar "good as gold" on the international scene.
Goldspoon
IMF and Gold....
Oh learned Knights, would you interpret this change as a step in the direction of re-monitizing Gold?? i would think so..in effect this may be a trial ballon.. if it is received well.. look for all gold held by the IMF to float in value on the said side a of country's account and thus re-monitize Gold???
i think fear of bank runs on world currencys is a driving force for this..look for huge deposits to IMF in gold should this transpire.... and the price of Gold to the moon..
Richard, Oregon
Tomcat (9/6/99; 12:01:54MDT - Msg ID:12892) Taiwan Tragedy and #12,842
Tomcat - I missed the satire, sorry. Maybe the happy face would have tipped me off. I believe your post runs, sorry-to-say, to true to form for many. Far to many. You and I are in agreement. Our pastor developed a close relationship with a Taiwan pastor a number of years ago. I know our pastor is very concerned what will happen to his christen friends in Taiwan. We all wait and pray for peace and understanding for China and Taiwan.
TownCrier
U.S. independent oil producers appeal oil dumping case dismissal
http://biz.yahoo.com/rf/990907/k8.htmlA tiny chapter (practically a footnote) in the infamous oil-for-paper saga.
;-)

Of the four countries cited in the original dumping accusations, look which one officials actively sought to appease and reassure.
Aristotle
Two quotes to ponder from men who lived to the mid twentieth century
From J.M. Keynes: "The ideas of economists and political philosophers, both when they are right and when they are wrong are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler from a few years back."

From G.B. Shaw: "You have to choose (as a voter) between trusting to the natural stability of gold and the natural stability and intelligence of the government. And with due respect to these gentlemen, I advise you, as long as the capitalist system lasts, to vote for gold."

Gold. The clear choice. ---Aristotle
DD
ET (09/06/99; 22:56:07MDT - Msg ID:12949)
ET: Thanks. Great post. IEEE says that Y2k can't be fixed. If any group has an expert opinion, it's probably IEEE. The only thing I would add to this is that if you believe the IEEE, you begin to step back from the currently myopic debate that constantly asks, "is the (fill in the blank) going to be ready? You begin to see the interconnectivity of virtually all systems. The more one steps back in perspective, the more mind boggling and scary Y2k becomes. My mantra? Personal emergency preparedness and a few gold coins jingling in my jeans. Best, DD
TownCrier
Millennium bug: 'Last chance' warning
http://news.bbc.co.uk/hi/english/sci/tech/newsid_440000/440754.stmDespite repeated warnings over the last two years, a UK government task force estimates over 250,000 of Britain's 1.3 million small-to-medium sized firms remain unprepared for Y2K.
TownCrier
U.S. academics criticize Senate bankruptcy bill
http://biz.yahoo.com/rf/990907/pv.html"Despite the strong economy, personal bankruptcies have risen to record levels in the United States in recent years, putting pressure on Congress to act to reverse the trend."

As much of the rest of the world has already (recently and repeatedly) learned the hard way, the value of savings held in gold is not subject to the same destruction visited upon national currencies by such rampant bankrupties, debt default, official devaluations, etc.
TownCrier
HEADLINE: No need for Y2K panic on Wall Street, officials say
http://biz.yahoo.com/rf/990907/qi.htmlSEC chairman Grasso told investors "Please, do not, do not, subscribe to the theories some have espoused."

You just know he is doubly troubled by the obvious appearance of a market bubble to coincide with this time period. Either one alone is sufficient cause to sweat bullets.

The White House's Y2K chief, John Koskinen, said: "If people have hard, real information, they'll be able to respond appropriately to the challenges as we move to the end of this year."

TownCrier says, "If people have hard, real MONEY, they'll be able to respond appropriately to the challenges as we move THROUGH the end of this year to the freemarket-driven realm beyond."
TownCrier
Thailand does not favour strong baht-FinMin Tarrin says. (Please read this one!)
http://biz.yahoo.com/rf/990907/lx.htmlPlease read this and understand that in making a choice for a weaker currency, the government is blatantly favoring the concerns of exporting businesses over the concerns of the citizens...UNLESS those same citizens have become savvy enough to rely upon gold for their monetary wealth.

"BANGKOK, Sept 7 (Reuters) - Thai authorities are not in favour of a strong baht because a firmer currency could have a negative impact on exporters, Finance Minister Tarrin Nimmanahaeminda said on Tuesday.
'We will try to primarily keep the baht weaker in order to help exporters and as it could be a factor contributing to the (Thai) economic recovery.'"

What options does a person have except to take matters into his own hands and use gold? The World Gold Council reports in their "Gold Demand Trends":

As economic recovery continued in
Thailand, gold demand rose in Q2 for
the 6th successive quarter to 11.6 tonnes.
This was 22% higher than in Q1 and
nearly four times the level of Q2�98.
However, with household consumption
sluggish -- hampered by still high
unemployment and credit shortages -- demand
for jewellery has not yet returned
to pre-crisis levels.
In contrast investment demand -- spurred
by a cut in interest rates which prompted
some savers to switch to gold -- soared to
5.0 tonnes, the highest quarterly level
recorded since 1990. In the first half of
1999 investment demand, at 7.5 tonnes,
was higher than that recorded for the
whole of 1998. Recovery seems likely to
continue throughout the rest of the year.

From our vantage point here in The Tower, it sure looks like the good citizens are indeed taking monetary matters into their own hands. You can, too.
Clint H
Is there a problem?
http://year2000.dallasnews.com/0907mil1warroom.htm
Dallas Morning News
Millennium/Y2K

Government to test Y2K defenses
9-9-99 gives center a chance to check responses on computer glitches

09/07/99

By Jim Landers / The Dallas Morning News

WASHINGTON - White House officials are preparing a millennium war room to monitor possible disasters from around the country and the world stemming from the year 2000 computer glitch.

The $40 million Information Coordination Center will get started this week with limited tests built around possible computer malfunctions associated with the date 9-9-99 - Thursday, Sept. 9, 1999.

Few computer problems are expected, but officials at the center and at ancillary emergency data centers elsewhere in Washington plan to use the date for a millennium trial run.

The federal government is mobilizing what could be the largest peacetime emergency response effort in U.S. history to deal with the main event - Jan. 1, 2000.

From the moment the New Year begins at midnight in New Zealand (6 a.m. Friday, Dec. 31 in Dallas), a rolling wave of information will head toward the Information Coordination Center, on two floors of an old Secret Service office 1 1/2 blocks from the White House.

John Koskinen, President Clinton's Y2K czar, says the center will feed information to the president and two senior multiple agency working groups - one for domestic crises, and one for international problems.

"The critical infrastructure industries and the federal agencies have readied themselves for the Y2K problem," Mr. Koskinen said. "It's not at this point an emergency response mobilization, because we're not out dealing with emergencies. It will be the largest event-monitoring effort
in the history of the federal government."

State of readiness

The Information Coordination Center will have a staff of about 40 crisis management specialists led by retired Lt. Gen. Peter Kind, former director of the Army's information systems network.

The Y2K information center has its own electric generator and will be stocked with provisions for the New Year's weekend. If the center loses its communications links or otherwise goes down, responsibility will be transferred to the Federal Emergency Management Agency, or FEMA.

After further tests in October and November, the center will become fully operational Thursday, Dec. 30. It will remain in business until March, or after the leap year date of Feb. 29, 2000, to ensure federal readiness if other computer problems occur, Mr. Koskinen said.

FEMA normally handles the government's response to disasters such as hurricanes, tornadoes and floods.

But FEMA is subordinate in the Y2K response plan. Its responsibility will be to get status reports from state, municipal and tribal governments across the country to feed into the Y2K war room.

Industry emergency centers for electric power, oil and gas are being established in Washington, and more than a dozen other industry associations will set up emergency centers.

Federal emergency centers with the departments of energy, health and human services, justice and transportation will take reports about critical parts of the nation's infrastructure and feed them to the Y2K war room.

The FBI's National Infrastructure Protection Center and the federally sponsored Computer Emergency Response Team at Carnegie-Mellon University in Pittsburgh will file reports on any cyber attacks mounted by hackers or terrorists.

Crisis managers

The Y2K war room will be at the apex of a pyramid of hundreds of crisis managers from every state, city and town in the country. Rather than having every mayor or emergency coordinator phoning the Y2K war room to learn what's going on, information will move to ever-smaller groups of managers until it reaches the Information Coordination Center.

The State Department will collect reports from U.S. embassies across the globe, and the Defense Department will gather data from all its military posts overseas and at home.

"When you think about this, you're thinking about status reports from around the world and around the country arriving more or less all at once, so the art form from the start is to make sure you don't get swamped with information," Mr. Koskinen said.

Because the international dateline runs through the Pacific Ocean, the coordination center will be able to sift information about the impact of computers rolling over to the year 2000 for 17 hours before it reaches Washington.

Countries such as New Zealand and Britain plan to provide direct reports to the U.S. center.

Meanwhile, year 2000 coordinators in 195 countries expect to file reports of any computer failures with the U.N. International Y2K Cooperation Center, in Washington just two blocks from the U.S. Y2K war room.

The international center also will test its systems this week to see how well the format chosen for national responses works. Since 9-9-99 will reach New Zealand first, the center will begin its tests in Washington on Wednesday morning.

"It's just a trial run to try to see if the connections work and what not," said Bruce McConnell, director of the international center. "Hopefully about 20 countries will enter data and tell us how things are going. . . . I don't expect much of anything to happen."

Older software

The 9-9-99 problem involves some older software programs written so that a string of 9s triggers a "collate data" or "start over" command. Federal and private computer specialists minimize the likelihood of computer failures due to the 9-9-99 date; in most applications, the date will be entered as 090999 rather than 9999.

But the date presents both government and industry with a chance to test contingency plans for the calendar change to the year 2000 itself.

Nearly all computer applications written before the mid-1990s used just two digits to represent the year. Unless they are repaired or replaced, those applications will base their calculations of the new year - 00 - as though it were 1900 rather than 2000.

All sorts of computer errors could flow from such miscalculations, including system failures. Governments and companies have spent billions of dollars correcting the problem, and many now say the biggest risk may be public fear rather than computer meltdown.

Mr. Koskinen said he intends to show his confidence in Y2K repairs by flying to New York on New Year's Eve. The Federal Aviation Administration's air traffic control system operates on Universal or Greenwich Mean Time. That will enable Mr. Koskinen to catch a 6:30 p.m. flight in Washington, be in the air when the air traffic control date
rollover occurs at 7 p.m. and still have time to fly back from New York before midnight to be on hand in the Y2K war room.

He may have some high-ranking company.

"I am confident we will be in very close contact with the president and the vice president, particularly the vice president, during this period," he said.

Vice President Al Gore has closely followed the efforts to prepare for Y2K, Mr. Koskinen said. "I would not be surprised if he was with us at the center and the White House as this goes on." Cabinet secretaries and their deputies will also be close at hand to stay in touch with their department emergency centers, Mr. Koskinen said.

With the information it collects, the Y2K war room staff will be able to alert others of problems as they occur in other parts of the world. It will be able to initiate emergency response efforts, if needed - "blankets, traffic control, evacuating people from an area," Mr. Koskinen said.

But federal officials will not be charged with fixing computer failures or restoring power, water or other vital services if any fail.

Pentagon officials have said they would need legislation granting them liability protection before they could tackle such jobs.

Fear factor

In addition to providing warning and response, the center's other major function will be public information.

Leon Kappelman, a Y2K specialist who is an associate professor of business computer information systems at the University of North Texas, said the government is going overboard on the fear factor.

"Their bias is to make preventing panic the most important thing," he said. "I sure hope the media's not going to take the day off and rely only on that information center, because that information is going to be severely filtered. Every stop it makes, the story changes a little bit,
and the bias of the system will be to report happy things."

Mr. Koskinen disputed that judgment, saying crisis management specialists are trained to get critical information to the top as soon as possible.

"I love Leon, but I think he's dead wrong about this," Mr. Koskinen said. "People who need assistance will be very clear about it. If it's a functional problem, first, it's going to be very visible. And to the extent people need help, they're not going to be hiding it."


[ Year2000 | Science | Technology | Dallasnews.com ]
�1999 The Dallas Morning News


Tomcat, thanks for the responses. In fact I enjoyed your answers to others as well. You spent much time on the computer this weekend. I will respond in more detail later.
watcher
internet dependent
I have some concerns about how much we will be able to depend on the internet during a possible major dislocation in the economy . The disruption on this site has given me an indication on how much I know depend upon this mode of communication to keep up with what is really going on from day to day.
If we do enter a time of severity sometime in the future
it may be needed to have an alternate resource to be able to depend upon.For example, I read that if they had a problem with the banking system that they may consider borrowing the internet system temporarily seeing they are not based on old mainframe technology. If this did happen or a disruption in service either by accident or planned to stop the spread of panic (for our own good).
I E-mailed MK about the possibility of an emergency Fax service By him in the event of a disruption. The idea could be worked on and developed to make it plausible . I have subscribed to some fax services before and in a moving market timely information is invaluable .
This is just a thought I have been debating on recently.

If anyone else thinks this may be a good idea or maybe a better idea let MK know or post it on the forum.
Our best resource is ourselves.
Tomcat
All

wathcher: Sign me up for the fax service.

Clint H: Maybe the govt thinks that 9/9/99 is going to cause a little trouble.

ET: You know, that IEEE report was sure written well. Says it all.

Aristotle: I loved the Keynes quote. How bout some more!

Richard: Let send some e-mails to Congress on Taiwan and make Congress pray they'll get re-elected.

TC: Amazing how the IMF and the boys behind the scene won't give up on getting that old fashioned worthless metal.

Goldspoon: Tell us more about Platinum being a leading indicator.

SteveH: Perhaps Martin Armstrong could run for office. He is got the integrity for it. ;)
Broken Tee
Little Known Y2K adjustment
Something I was sent to check. I tested my computer and .... My computer had the same problem and was set this way....
You may think your PC is "Y2K" compliant, and some little tests may have actually affirmed that your hardware is
compliant, and you may even have a little company sticker
affixed to your system saying "Y2K Compliant"... but you'll
be surprised that Windows may still crash unless you do
this simple exercise below. Easy fix but something
Microsoft seems to have missed in certifying their software
as Y2K compliant.

This is simple to do, and but VERY important.
-----------------------------------------

1. Click on "START".

2. Click on "SETTINGS".

3. Click on "Control Panel".

4. Double click on "Regional settings" icon
(look for the little world globe).

5. Click on the "Date" tab at the top of the page.
(last tab on the top right)

6. Where it says, "Short Date Sample", look and see
if it shows a "two digit" year format ("YY"). Unless
you've previously changed it (and you probably haven't) -- it will be set incorrectly with just the two Y's.. it
needs to be four!

That's because Microsoft made the 2 digits setting the default setting for Windows 95, Windows 98 and NT.
This date format selected is the date that Windows feeds *ALL* application software and will not rollover into the year 2000. It will roll over to the year 00. (*)

7. Click on the button across from "Short Date Style"
and select the option that shows, "mm/dd/yyyy" or
"m/d/yyyy".
(Be sure your selection has four y's showing, not just
"mm/dd/yy).

8. Then click on "Apply".

9. Then click on "OK" at the button.

Easy enough to fix. However, every "as distributed" installation of Windows worldwide is defaulted to fail Y2K rollover... Pass this along to your PC buddies...
714
re: Little Known Y2K adjustment
This one's quickly becoming an urban legend. The setting you are describing only affects the the display of the date in Windows and does not address any compliance issues. You
will be doing just fine with "short settings". Sure, short setting will default to "00" year in Y2K rollover, however, this in NO failure, it's just correct representation of year 2000 in short setting. All your programs will continue to function correctly. E.g., roll over to year 2000, create the document under the short settings and it will show the date of creation as 07/31/00. Then go and change your settings to "long", look at the file directory, and it will show you that your document was created on 07/31/2000. Correct date - no failure!!
714
Y2k compliance issues re: Windows
http://www.microsoft.com/technet/year2k/There are issues with most Microsoft programs and Y2K. For a fuller description, browse through their website and check out what they're saying about your software. Beware, MS seems to be updating and modifying the Y2K patches for their programs on a regular basis. My unsolicited advise is to familiarize yourself with their site and then wait until November or December to update what you need to so as to have the latest software patches.
TownCrier
After the Close: the GOLDEN VIEW from The Tower
http://www.usatoday.com/money/charts.htmValidated by last Friday's irrational exuberance among stocks and bonds investors, Federal Reserve officials have been beating the drum ever more earnestly to sound warnings of the precarious state we are now in. In the latest example of this, Federal Reserve Bank of St. Louis economist William Emmons, a market expert who has authored a number of research papers on the relationship between the economy and the stock market, and was quoted by Reuters today as saying:
"Any objective measure -- the (U.S.) interest rate climate or the prospects for the dollar, U.S. economic growth and corporate earnings -- is not terribly bright and yet the stock market seems to have not taken much account of that."
"There is concern about some increase in inflation...but stocks seem to be immune to that."
"The party for stocks seems to be over but people won't go home because they just don't seem to know it's over yet."
Emmons concluded, "It is not reasonable to ignore the possibility of a correction in stock prices... 6.0-percent (total) return (on stocks) is the optimistic case. We are at a time where the risk-return trade-off has long passed."

So said, the Fed was likely relieved today to see the market indices settle slightly lower instead of extending Friday's gains. The 30-year bond was the biggest loser on the day, shedding 25/32 in price, which pushed the yield to 6.07%.

The derivative players pushed the December gold contract (GCZ9) up $1.80, with the buyers more aggressive than the sellers throughout the day; although trading was described as very thin through the afternoon. The December contract traded in the range $255.6-$257.9, closing at $257.30. Spot gold took the cue and was quoted at NY at $255.70. Bridge News reports that Asia and Australia were large buyers of gold today. "What we're seeing is bargain hunting by those 2 regions," said a trader. ... Speaking of bargain hunting, only when priced in dollars do you see gold at 20 year lows. If Asia and Australia are bargain hunting, then Americans should be bargain hunting--and how! Happily, statistics show that they are in fact taking advantage of these prices.

Recent news reveals that it isn't price acting as the prime motivator for purchases in such areas as Thailand. For insight into this phenomenon we reported this earlier from Reuters: "Thai authorities are not in favour of a strong baht because a firmer currency could have a negative impact on exporters..." The line is often drawn to favor companies over individuals (and the integrity of their savings accounts), so gold purchases are an important part of the Thai regimen, even as the currency devaluation has given them high gold prices. The World Gold Council statistics reveal that although demand for jewellery has not yet returned to pre-crisis levels, investment demand from savers switching to gold soared to the highest quarterly level recorded since 1990.

Bridge also reports on today's gold action:
Market players said sentiment is turning more bullish toward gold as
1-month lease rates have risen and as more bullish news surfaces about the
IMF gold sales. "The market has more confidence about not shorting it and
not being afraid to miss out," said a trader.
Another bullish factor for gold is that heavy selling in mid-morning
at $255-256 did not knock gold down, according to traders. "It simply
stopped the rally to some extent, but it did not push it down, which is
very encouraging. That suggests there is good buying demand."

Gold received and unexpected boost today from an IMF document mistakenly posted on the Dutch Finance Ministry's web site. A draft of the IMF's World Economic Outlook revealed that the IMF's governing Interim Committee will discuss a proposal to mark 10 million ounces of its gold reserves to market from its current book value of SDR 35 per ounce (about $47 per ounce.) at the September 26 meeting. This would generate about $1.1 billion that could be used to fund the IMF's contribution to debt relief for the heavily indebted poor countries.

Today shaped up to be yet another lively one at the COMEX depositories. Someone apparantly decided that the latest intrigue at Republic National Bank of New York is more stormy than they are willing to risk with their most precious real money. We can only guess at the actual cause, but today saw yet another One tonne (32,314 oz) of Registered gold stock leave, joining the 10% COMEX drawdown that occurred last week with the departure of 3.6 tonnes. Including the inventory at Scotia Mocatta, total COMEX Registered stock stands at 30 tonnes, and Eligible stock is under 3 tonnes (in total, enough to form a solid cube four feet on each side...for those that can't otherwise envision the amount in 32 tonnes.)

We scanned the horizon for a glimpse of the Fifth Horseman, and finally spotted him from the dust trail he was kicking up in his galloping fury. October crude futures surged 74c intraday to $22.74, (a level
last seen October 1997) and ended the day at $22.61 on supportive comments from OPEC members to uphold their oil output cuts. Bridge News reports that the market should not be too concerned about
Venezuela's Energy and Mines Minister Rodriguez's ongoing proposal for a price band, which had on-again off-again raised fears of a possible unraveling of the production agreement. Brokers said Venezuelan President Hugo Chavez would be in a predicament if the bull market were jeopardized because of words or actions coming out of Venezuela. "The OPEC deal could come tumbling down which would be foolhardy for Venezuela. If it seems that Chavez is the one who broke the deal, he will be vilified in his own country for the being the one to send prices tumbling," a broker said. Traders expect higher prices to follow, and focus is on the OPEC ministers' next meeting in Vienna September 22.

And that's the view from here...after the close.
Goldspoon
Tomcat..
By thinking of Platinum as a leading indicator... i think we can see the future direction of Gold. What makes Platinum a good weather vane is:
1.Its the least manipulated of the presious metals because of its low above ground supplies.
2.More of the metal purchasers intend to take delivery.
3.The comercial users buy and stockpile when they see a shortage developing (extra buying for investment purposes can cause said shortages.. when this is the cause for comercials to stockpile, it makes the metal a weather vane)..
4. Many investors like to diversify their holdings in a sector (myself included, i hold 1/3 platinum, 1/3 gold, 1/3 silver)
5. Increases in market moving large investors who deversify their exposure to PMs and who also take physical delivery for a long term investment can most easily be seen in the price of Platinum.
6.U.S. Platinum Eagles this year were minted of platinum borrowed from the pentagons strategic stockpile 20%. This was done so as not to be inflationary to the comercials.. Once this extra liquidity supply is tapped out.. price pressures will follow.. If investor demand is there.
7.Many of the comercial users of platinum can substitute palladium, and do when it is avaliable and is cheaper than platinum. This option is drying up as reflected in the price rises of palladium.. This makes it more important for the comercials to stockpile Platinum in the face of increased investment.
*********
Bottom Line....
Platinum should breakout first when the Bull returns..and when this happens it will be a sginal for the other Presious Metals that the band is begining to play and the party is ready to start,,Palladium may lead platinum at the begining...When Platinum breaks and holds $360 watch Gold...
Goldspoon
Speaking o f Palladium
I found this after my post on the Platinum indicator..What a plesant surprize... hope for the later to happen...

"Palladium overtook platinum in the nearby contracts, a price dynamic that usually ends with palladium stumbling or a ratcheting up of platinum prices."


Tomcat
Pressure on the shorters
http://www.canoe.ca/MoneyNews/sept7_goldshorts.html
Tight gold loan rates seen heartache for shorts

NEW YORK, Sept 7 ( Reuters ) - A spike in gold loan rates makes bets that the metal will continue depreciating costly, but many gold books can probably swallow big
funding losses without panicking the market into serious shortcovering, analysts said. �The bullion market was mulling the unexpected sharp tightening on Friday, which put
short-term gold lease rates at their highest since late 1995, when a massive producer hedge caused them to soar and gold prices to hit their highest levels of the 1990s in the
aftermath.�� Bullion prices have been wallowing near recently set 20-year lows and rates have slipped since Friday. But some dealers predict continued tightness will flush out some of the massive shorts put on to take advantage of what was a cheap way speculate on price weakness and fund investments in higher-yielding paper assets.
�� "One fear of the market for many years is that at some point with all this gold that's been borrowed and sold forward, that there could be a rush with everybody trying to
get out the door at the same time to cover those. That hasn't happened," said William O'Neill, director of futures research at Merrill Lynch. �� "Lease rates can be bullish
and can be bearish. We've recently had both sides of the equation," he said. �� Implied one-month gold lease rates hit 3.94 percent on Friday, jumping 73 basis points in a
day. This slashed the premium, or contango, speculators and hedgers earn to sell gold forward and place the receipts in intruments like U.S. Treasury securities. The rate rise
was less pronounced for longer loans. �� Short-term leases were under 1.0 percent early this year and have been rising steadily since Britain's May bombshell that it
would sell more than half of its 715-tonne gold reserves.
�� "The implications are somebody is going to lose a lot of money," said a chief dealer. "Under normal circumstances, you would have seen higher prices. But I think what happened is the whole fear of what central banks are going to do next is capping the market." �� Higher lease rates can lead to higher bullion prices if shorts find the
costs of rolling their positions month to month too penalizing. Producers also might take profits on forward sales of yet-to-be-mined metal. �� "When you close out a
hedge program you are buying forward, and higher lease rates mean lower contango rates and that means it's attractive for people to buy. That could create a little bit of
activity in the spot market," said James Verraster, head of mining finance at Standard New York. �� Analysts said the last time lease rates were this high was in in the wake
of a massive 227-tonne forward sale arranged in 1995 by South Africa's Western Areas Gold Mining Co. Ltd.
�� "I remember vividly how lease rates went to 6 percent and contango went to zero. We are down now at 1 percent contango in the one-month, which is very close to
where it was in November 1995," Verraster said. �� On the other hand, many of the current shorts were put on when prices were much higher and those positions may enjoy some profit cushion to offset funding losses, analysts said. �� Also, for central banks and bullion dealers -- which lubricated the skid by loaning gold that would otherwise sit in vaults earning no interest -- the rate rise can mean more income, at least until the collapsing contango eliminates incentives for sellers. �� Bullion price hit $417 an ounce in February 1996, the highest in six years, and have been in steady decline since. They have shed 13 percent since Britain's announcement, bottoming at $251.70 about two-weeks ago, their lowest since mid-May 1979. �� Bullion was around $255 an ounce early Monday. � "If you are asking me do I see anything out there that gives people a reason to buy gold in a big way? No," said Verraster. "The conditions now are different than they were ( in 1995 ) . There is just too much hanging over the market still for it to go back to $350 or $400." �� Tightness has been partly laid to central banks reluctance to lend because of Year 2000 uncertainty. Also record demand from foreign jewelry makers and hoarders as gold got cheaper, means there is less supply of idle metal to lend, hoisting loan costs and forcing bears into the costly financing trap. �� "Historically people would have held gold in say Loco London ( warehouse ) accounts and relent to the market," said Ian MacDonald, manager of precious metals trading at Commerzbank. "But that isn't happening anymore because you don't have western investors holding gold. It's all going under the mattresses in the Middle East, Far East and India."
Goldspoon
More on the metals...
Precious metals ended higher across the board. Gold gained $1.80 to $256.00 spot, silver added 5.2 cents, platinum surged $6.90, and palladium rallied $4.70. The spread between the XAU and spot gold edged up 0.4 to 188.9, and is very substantially below recent norms near 220.

The behavior of silver, platinum, and palladium can serve as an early signal for gold, since these metals often rally or decline first. As is typical, silver continues to be more volatile over the short run than gold. . Looking at NYMEX platinum futures, commercial insiders were long 6,365, short 5,671; with speculators long 3,136, short 5,550. These commitments were significantly bullish, a modest improvement from moderately bullish two weeks ago.On Tuesday, September 7, 1999, the XAU opened significantly higher at 66.59, its intraday bottom, then rallied to a late morning top of 68.11 before fading to close up 2.05% at 67.13. Since no key level was approached, this is NEUTRAL.

What is a bear market?
According to psychoanalyst John Schott the three stages of a bear markets are:
"The earliest stage is characterized by denial, increased anxiety and fear.
The second stage is panic. People suddenly say, 'I've got to sell.'
The third phase is despair, people stop buying stocks."
THX-1138
Hillary Clinton and her blind trust fund
http://www.accessone.com/~rivero/POLITICS/ARTICLES/TRUST.htmlGATA's post the other day got me curious this afternoon, so I did a search on Altavista on "Hillary Clinton"|"Insider Trading".

This was what I found. Makes you wonder and actually the puzzle pieces seems to be falling into place.
SteveH
FOA/Another had it right all along...
www.kitco.comNow confirmed by a 1999 book just published and thanks to the below kitco poster we know about it too!!!!!

Date: Tue Sep 07 1999 16:47
planner (cherokee...Subsidized Oil) ID#226265:
Copyright � 1999 planner/Kitco Inc. All rights reserved
Recently read a book which goes into great detail on the House of Saud and the deals that led to the establishment of Western oil interests in the Mid-East. Title of the book is "Oil, God, and Gold", written by Anthony Cave Brown, copyrighted 1999. It tells the story from the late 1800s to the present....and yes, it has several passages describing the gold-for-oil payments and valuation of gold by the Saudis versus the "market" price we are used to dealing with. Seems it has much to do with the sale of a depleting resource ( Saudi Arabia's oil/their wealth ) and what is an acceptable form of payment in replacement of that wealth for current and future generations.
THX-1138
Office of Personnal Management speech.
This was posted on our office electronic bulletin board today. Sounded ominous.


Quotable: Lachance on Future of Federal Work

"At OPM, we have been anticipating the specific nature of work and the work
force of the 21st century . . . We already see the trends for the next
millennium. And the theme is 'Adapt or Be Pushed Aside.' So organizations
will have to become more diverse and flexible -- they will no longer be able
to do everything themselves, but will distribute work across a group of
sources or a group of suppliers. Organizations will no longer have a
permanent work force, or even a temporary work force, instead they will have
what I call a "situational work force." Needed work will be done by a blend
of core employees in cross-functional teams and by temporary employees,
consultants, and contractors, as necessary. Full-time, lifelong jobs and job
descriptions are already disappearing, and instead, employees are
increasingly being called upon to be generalists -- omnivores in the new
world order, with the tools to survive and flourish at many different tasks
and in many different environments. Fewer jobs will fit into a neat job
description. And our core government employees will be called upon to
perform one role today and another tomorrow.

(From a recent speech by Office of Personnel Management director Janice
Lachance)
mike55
SteveH
A few excerpts from the book "Oil, God, and Gold" I posted on 8/17....enjoyed reading it.

mike55 (08/17/99; 20:18:33MDT - Msg ID:11379)
Oil, God, and Gold
A few nuggets from the book referenced in my post #11333 earlier today:

April 1933 -- "...President Roosevelt, during a panic over bank failures in the United States, prohibited the export of gold. This meant that, unless gold could be bought outside the United States, Standard Oil of California would not be able to pay [King] Ibn Saud in the golden sovereigns he required. It would have to pay in dollar paper currency, and Abdullah Suleiman would not countenance that on the grounds..."

July 1933 -- "...Standard Oil of California applied to the U.S. Treasury for a special permit to export the sum of $170,327.50 in gold...and at the same time negotiated by telegram to buy the gold in London...[later] the company received word that the undersecretary of the Treasury, Dean Acheson, had denied Standard Oil's request. The London gold, which was in sovereigns, was purchased and then shipped to Jidda on about August 25..."

June 1947 -- "Under the concession agreement of 1933, the company [Aramco] was required to pay Ibn Saud his royalties in gold. But during the war, the price of gold had become distorted and inflated, and therefore the company sought to pay Ibn Saud at the official rate of gold posted in New York City. The [Saudi] government countered with the claim that it must be paid at the exchange rate in Jidda, where the price was double the official rate in New York City...If Aramco had complied...starting with $1,000,000 and doubling its money on each transaction, it [Saudi government] would have $1,024,000,000 in ten transactions. In the 14th transaction it would be able to buy most of the gold reserve of the United States Government, and in the 15th would own the entire stock of monetary gold in the world..." "The settlement was this: the company would pay what was owed to the government at the rate of $12 per gold pound, not the $8.2397 at the present New York rate of exchange."

- Gold for oil, with gold valued more highly than its "price" in U.S.$, as described by Another.

- The dollar failures of 1933, 1971, and ____ due to too many claims issued on the available gold as described by Aragorn.

- The paper-gold and gold carry ongoing discussions here.

- The history of the LBMA and BOE.

- The debt and equity bubbles (the irrational exuberance driving both).

- Etc, etc, etc...

Hmmm...each additional piece of the puzzle brings the picture a bit more in focus.

Has anyone else read this book? If so, I'd like to hear your comments. Thanks.
SteveH
Mike55
Yes, I read your piece; I remember it. I didn't associate your words with a posting from that book. Can you further explain the piece about the exponential ownership of gold on the 14th iteration?

When you read the book did it track with Another?

Steve
Cmax
FOA
FOA (09/06/99; 20:56:39MDT - Msg ID:12946)
Gold Mines: Little more than paper derivatives of gold!
From Mr. Holtzman #12765:


Esteemed FOA,
I have really enjoyed your recent posts as to the real nature of "POG". Well over a year ago, I posted the following observation on KITCO, which was not particularly well received at the time:

"//It is interesting to watch all these various reasons for gold's fall�..but most are missing the REAL issue.

The fact is, that when we talk about the purchase of gold, we are really talking about two divergent things:
a. that of the physical metal���(money)
b. that of a paper derivative, an I.O.U., kind
of like a dollar bill��(currency)

What (and who) determines the price every day of the gold market?

Obviously, everyone looks first to COMEX as a reference before adjusting their prices.

What does COMEX use?

Supply and demand determined by it's participants, who trade in gold contracts (er ah, derivatives?), gold leases, and options and futures (er ah, derivatives of derivatives).

One point must be plainly put forward:
Gold contracts, no matter what they are printed on or HOW they are worded, they are merely DEBTS, nothing more than a simple I.O.U. There is nowhere near enough gold on the planet to satisfy all these I.O.U.'s (debts) that are outstanding��.. and they are the very antithesis of what acumulators (hoarders) of wealth find in the spirit of holding real gold (money).

I find it so wildly insane that holders of physical gold, (money), would allow their wealth to be sold (or valued) at a price that is established by the supply of FIAT gold. If this scenario was written into a novel, no one would believe it��. or one would read it only as a comedy.

ANOTHER said it quite well, in his comment that "there is no end to the amount of paper gold that can be created." All of this FIAT supply has overwhelmed the REAL demand for physical, and most people believe that they REALLY have purchased gold, when they buy these contracts. As long as the majority of gold purchasers believe that their paper is as "real" as physical, the COMEX paper gold value reference will continue to drop.

I for one, no longer accept established paper gold values for the real value of gold. Just try and buy a substantial quantity of the yellow��and what do you see? 6 months ago, you could buy at spot. Today, one ounce coins have a premium of $14 over spot�.and rising every day. Oh, and don't forget that even when paying the "premiums", one has to really work at finding the coins for delivery. Easier said, there is now a phenominal demand, but very little supply of physical. And yet we allow paper to determine gold prices. Gold has never had the brute demand as what we have today��yet we are told that prices are down due to lack of interest.

COMEX should now be looked upon as the animal that it really is��
A REFERENCE TO THE VALUE OF PAPER GOLD.
It has nothing to do with the price of physical beyond suckering in the few ignorant to sell there physical for the price of paper.\\"

It is a real pleasure to watch your decisive thrust against the dogma of the "status quo"�.. few take the courage to think. I do regret not having had the time over the last year to study more of your thoughts (and those of Another) as economic survival in Venezuela has consumed all available time, but please know that there are far more people than you may realize, who are studying your "thoughts", and do appreciate the time and effort you have invested, and the time of your benefactor Another.

Please permit me to repost a thought from Another, which rings with the clairvoyance of the sage that he is:
"//Sir, a day will come, when those who have sold gold they do not own, will be forced to buy it back. It is the nature of men, to once in life do a foolish deed for gain. Some walk away, with understanding. Some stay to long and are made to walk low without wealth. Today, our world is fat with stolen profits in a paper world, even as poor ones starve.
In that day, men such as I, will take from those
who make simple ones hide! You will find not
the lies of paper in my house.\\"

Best Regards,
Cmax

watcher
IMF Proposal

A call to all at the forum.

I believe I smell a rat and its coming from the direction of the IMF.

Why are they only marking 10,000 ounces to market (sounds like they are just putting a different wrapper on the same package.From what little I have picked up on their books is that they have no cash or currency at this time 'so came the proposed sale. Now if they don't have available cash in their books Marking the gold to market is only the first step in this process. Can they or are they then going to generate a gold loan of some kind or gold backed security to sell then into the open market to raise the monies needed or some variation of this in an off market deal to bail out a short. Input on this by all please
mike55
SteveH
Steve,

The book's content is heavily skewed toward the Oil part of the title, with the significant Gold parts limited to the three excerpts I posted. It seems the exponential value described in that passage was simple math, and the author didn't really go into details. What I found of interest was the further corroboration of the oil/gold relationship we have discussed in-depth at this Forum.

The points made regarding Oil-for-Gold definitely track with Another's teachings here and in "Footsteps".

The book is a good read, IMHO, in that it provides the background for the role that oil plays in this new gold market.

Thanks to all for the education this Forum provides!

Speaking of education, I'm getting booted off the computer by three sons who all need access for tonight's homework assignments. I'll be snoozin' long before it's open again tonight. Be back tomorrow (with any luck).
watcher
IMF Proposal

A call to all at the forum.

I believe I smell a rat and its coming from the direction of the IMF.

Why are they only marking 10,000 ounces to market (sounds like they are just putting a different wrapper on the same package.From what little I have picked up on their books is that they have no cash or currency at this time 'so came the proposed sale. Now if they don't have available cash in their books Marking the gold to market is only the first step in this process. Can they or are they then going to generate a gold loan of some kind or gold backed security to sell then into the open market to raise the monies needed or some variation of this in an off market deal to bail out a short. Input on this by all please
Aristotle
THX-1138 (Msg ID:12993)--Office of Personnal Management speech
You know, I can readily see how reading that tiny snippet of yours would come across as quite ominous without any supporting background or context. However, having read "The Sovereign Individual" by DDDavidson and LdWRees-Mogg I can see that this is little more than an innocent extension or recapitulation of their projections. I believe that turbohawg and/or beesting have also read this book--maybe I can entice one of them to confirm my hunch.

Basically, Davidson and Rees-Mogg make a reasonable case that governments will have to become smaller and start catering to the world's capable and productive citizens. It is too easy to relocate to a more favorable socio-political climate, so to attract these productive taxpaying citizens, small "off-shore type" governments will pave the way with new systems of government and taxation.

I meant to mention this in connection with the BBC article that got published here last week in regard to central banks becoming a dying breed. When the citizens call the tune (as it SHOULD be) they will insist on payment in gold, and governments role in manufacturing money will be a thing of the past. Their original role was to guarantee the weights and measures aspect of standardized coins to better facilitate trade, and the corruption evolved from there. There is nothing whatsoever *NATURAL* about a government issuing money. Check out the e-gold banking system sometime when you want a peek into the future of free banking. When ownership is tracked by a database among a fungible pool of Gold, you can easily see that the government no long needs to play a role to guarantee coin weights. The infinite divisibility of Gold will come into play, and the notion of a "dollar price of Gold" will be long gone. Instead, you will think only in terms of Gold's "value" (not "price") in its ability to purchase things. Obviously, you would probably keep much of your physical Gold secure and on hand outside of the free banking system, with just enough kept in account to meet your needs. That future is probably not too far distant. Our longtime fellow Knight Backlash (where is he?) would probably agree with me there. So, check out e-gold of the Gold & Silver Reserve, Inc. to get a glimpse of where we are heading, and contact Michael K. (right here of USAGOLD fame) for bargain prices on starting to shift your own monetary productivity into real money--Gold.

Gold. Stock up while it's cheap. ---Aristotle

PS. The legislators would never let supplies "run out" before changing the rules as they have in the past, so it is best to act now while conditions are merely threatening, yet before they become imminently dire.
THX-1138
Re: Aristotle
I will have to ask the person at work who posted the excerpt for the exact link. What I didn't like was the referance to the new world order.
I also didn't like the referance to employees becoming generalists. That is one reason I am trying to find a job outside of Government service. I am becoming a generalist and would rather become more trained and specialized in the field of engineering. As more and more employees become generalists the government/military loses the ability to fix it's own problems and ends up depending too much on outside contractors to fix things. I see this every day at my office.
Aristotle
Mike55--Thanks for your reply to SteveH regarding the book
http://www.usagold.com/halloffame.htmlI also saw your original posting of this material, and was very tempted to look into this book. I still might, however, your explanation that the primary Gold coverage is limited to the three excerpts you provided might be enough to satisfy my curiosity given my busy schedule these days.

I wanted to bring up an interesting point you cited, and show how it correlates with the material I developed in laying out Aragorn's tale that rests quite firmly upon the work of ANOTHER (new lurkers can see the above link if they haven't the foggiest idea what I'm talking about.) You said--

"...Standard Oil of California applied to the U.S. Treasury for a special permit to export the sum of $170,327.50 in gold...and at the same time negotiated by telegram to buy the gold in London...[later] the company received word that the undersecretary of the Treasury, Dean Acheson, had denied Standard Oil's request. The London gold, which was in sovereigns, was purchased and then shipped to Jidda on about August 25..."

Ok, now that was not so long ago, yet in terms of currency it has been several lifetimes. So long, in fact, that we have no concept as to how much money $170,327.50 really was at the time. Our dollar has died several deaths since then, and $170,327.50 really doesn't mean much anymore. Contrast that presentation of the information to the information presented in "my" (et al) long commentary, where I refer to the sheik counting the 35,000 Gold sovereigns himself. At the time of writing, I never bothered to do a conversion into a dollar "price." I'm quite familiar with a Gold sovereign (having many of my own obtained from the lower holds of this very castle!), so it was very meaningful in and of itself to picture 35,000 of them. Hopefully, I've already revealed that it is NOT meaningful to say "$170,327.50". (This is nothing against you, Mike. It's a slam on the dollar itself.) However, just to check the facts, before posting this message I did some quick math using some historical knowledge. A sovereign contains 0.2354 ounces of Gold, and at that time in history a dollar was defined by the fixed value of a $20 U.S. Gold coin contained 0.9675 ounces. Sure enough, 35,000 sovereigns would be the equivalent to the stated amount of Gold dollars. However, the passage of time clearly demonstrates that Gold has maintained value (35,000 sov's are STILL 35,000 sov's, and is STILL enough to make me blush like a schoolgirl) whereas $170,327.50 is pathetic by comparison in today's value. Behold the power of Gold!

Gold. When you care enough to be paid by the very best-- money, that is. ---Aristotle
Tomcat
FOA

Dear FOA, thanks for you post #12765. I was reading it with great interest and then hit a set of walls that stopped me cold. If you would allow, I would like to ask a few questions.

You said:

"Would a dealer "street price" in the thousands change things? Not if the only recourse is for private
money to move into Euros!"

I just don't see the connection to Euros. I mean I am really drawing a blank. You went on to say:

"To further pull existing "old gold" from portfolios by forcing the street price down now invites a run from the dollar. A high physical "street price" will at least keep the dollar in play when price inflation begins."

I don't see how a low "street price" could cause a run on the dollar. In fact, I thought a low paper or street price for gold would help prevent a depreciation of the dollar.

Also, why would a high street price keep the dollar in play? Perhaps I don't know what you mean "to keep the dollar in play".

And finally, a question about your last two words. What is an '"official"failure run'?

Again, I want to thank you very much for your evolutionary developments and your revolutionary conclusions.
Aristotle
THX-1138 and generalism
Looks like you're moving in the right direction. I'd the gist of "The Sovereign Individual" is that the internet will allow skilled people to be easily located when needed, and much of government's services will be eliminated as a government function and privatized or at least contracted out to those most capable. Rather than plugging in to an institution for life, each person will view himself as his very own corporation, pedaling his jack-of-all-trade skills or his very specialized skill wherever he may find a need for it. And of course, you would want to contract for your services in Gold, wouldn't you? I mean, if the Government of Indonesia were to contact you to provide some services, you wouldn't want to have them wire rupiahs into your account would you?

People are going to find out just how valuable Gold is. It's the only money for a free global economy--the one that mankind wants, banks and governments be damned. We've come too far as a civilized race to stop short of anything less. Think about it. The Soviet Union fell for precious little other reason than pursuit of this same end goal.

Gold. It can't be cheated, it WILL rule the markets. ---Aristotle
Tomcat
Cmax, watcher, Goldspoon

Cmax, it is such a shame that you have been so tied up. It is our loss. If you get the chance to post in the future please don't forget us. Your take from your side of the world would be most refreshing.

watcher, the first thing I thought when I heard about the IMF's desire to revalue their gold was the they are preparing to lease it. It is possible that their are no restrictions on them leasing the gold. The gold would then be sold short by a BB or hedge fund etc.

Goldspoon, boy you sure came through re Platinum. Thanks. I am impressed with your 1/3, 1/3, 1/3 distrubution. I think it is much better than my 1/2, 1/2 distribution of Ag and Au. The phrase "least manipulated" keeps repeating in my ear. Also, it might be the "least confiscated: as well.
PH in LA
Hate-Clinton mongering!
http://www.accessone.com/~rivero/

Dear THX-1138:

Re: (09/07/99; 19:22:02MDT - Msg ID:12991)

Before concluding that "the puzzle pieces seems to be falling into place" we might want to consider the source of some of those "puzzle pieces". The page you referred to seems to be part of a hate-Clinton, far-out-on-the-fringes collection of unsubstantiatable political smears, as the included URL (homepage to the one you included) suggests.
Golden Truth
TO CMAX
Hello Cmax i thought i'd chime back in to the forum by saying congratulations on your post. Msg- ID 12996.
I agree 100% with what you had to say and about F.O.A/Another. One thing for sure is that by F.O.A posting here he definitely gets every one of my 10-12 billion brain cells working O.T. Your right about the many eyes and minds that follow his thoughts. I for one think his posts actually take on a life form all of their own, seriously they actually start to live and breath. Powerful stuff as you do know! So i must go, for i to have a question to ask of F.O.A and would like to present it in the most coherent fashion suitable to his intellect and seemingly unlimitable knowlege on GOLD!and isn't that why we are all here?
G.T
tom fumich
We Gold Bugs had a great day...
Thank God for that....
tom fumich
Not that thanking God ...
Makes a religious sect...it's just something i believe in....
tom fumich
PM coins.
I still believe in them...any denomination...is good.....
Aristotle
A repost of some important points by FOA
Contained within this small collection of excerpts by FOA we see three very important elements that everyone should strive to understand: 1) COMEX is designed for hedging and speculating ("betting"), NOT for acquiring Gold. It has conveniently come to provided smoke and mirrors to the real spot market for Gold. 2) The "price" aspect of Gold going to the moon is as much about the currency losing value as it is about the Gold gaining additional value with its usage as currency/money. 3) The notion of a troublesome Gold overhang (in the CB vaults) should be dismissed out of hand. The REAL overhang of consequence is that of foreign dollar holdings...and you'll now know why this game continues for a while longer, despite the writing on the wall. Keep 'em coming, chief!

(Nice post, Cmax!)
Gold. Get you some. ---Aristotle
------------------------------
FOA (6/5/99; 10:45:10MDT - Msg ID:7188)
In much the same way the US stopped the function of the COMEX silver market (in the 80s), because of inability to deliver silver. So will it shut down the gold market. Let's face facts, it was never intended to deliver gold, rather it's purpose was to "bet" on and manage the direction of gold's price! It's an old function, of this short history of gold that worked well as long as investors wanted to expand holdings using paper. But, all eras come to an end and so does this one.
[...]
I ask, what comes first in creating dollar value, "confidence in the dollar" as many think or "confidence in the ability of the dollar to settle contracts"? The history of paper currencies shows that citizens will continue to use even worthless currencies as long as they will settle old contracts.
========================
FOA (8/24/99; 9:47:21MDT - Msg ID:11943)
There is no possible way that the CBs could ever sell or unload all of those dollars. Presently they are held in the form of US treasury debt. It's owned by the CBs not their public / private interest. So, the CBs would not be looking to "spend" these reserves in the usual sense. They obtained these reserves as their local economy generated excess sales to the US (for them a trade surplus) and their private citizens wanted to hold local currency assets, not dollars. The Cbs printed Marks (example) and traded with their citizens for these excess dollars. Then they traded these dollars for US debt so as to earn interest.

Now, exactly what good are these debt holdings as long as their country continues to carry a trade dollar surplus? Not much, if the locals don't want to hold dollar assets. In the end, if the CBs were to sell these treasury holdings it would crater the US debt markets long before any value was received. And, to add further, that value could only come from using the dollars to buy something. Now what does a Cb use it's reserves to buy, cars, TVs, other currencies??

No, the only avenue to balance currency value is through the age old asset of gold. Indeed, if you already hold enough gold, one just uses the dollars to bid for gold until the dollars become worthless (price of gold spikes to the sky). Usually only the intention to bid is enough?
-----next excerpt-------
Truly, if gold is repriced high enough, as a competing currency, the falloff in jewelry demand will negate the need for any additional supply. At extreme prices, the CBs could supply the market for years to come without impairing their asset reserves. Production curbs on the mines could again restrict them to minimal profits even if gold was in the tens of thousands. A mess indeed.
-------next excerpt---------
Well, I don't expect the fiat currencies to disappear. Look at Brazil or Mexico? Years (decades) of regular currency death and they still use the dam things. A testimony to the persistence of mankind. In a similar light, I expect the US dollar to be devalued on a grand scale. Yes, it will most likely stay in use, only, like these other countries, it will be worth a lot less. Indeed, I can picture the American citizens using cash Euros to store wealth and make trades, just as others do presently using dollars. Say, in Canada?

Your presumption that the foreign dollars are more valuable as claims on US production should be adjusted to include a true accounting of just how many are outstanding. A little research will show that these dollars would buy up almost all of our production for decades! The real problem is that we are still in a deficit trade condition. If these dollars are unneeded to buy now, how could they become more valuable later? If we don't have enough to sell them using current trade, what would they buy using all the additional float? Remember, these countries in Europe have assets for their people to invest in and goods and services for them to buy. They don't need to buy from us on a scale that the dollar overhang would require.
As for economic wars, they are never won, rather always ongoing. Thanks FOA
--------END-----------
tom fumich
Gold Gold shorts...
If anyone would believe...that the longs in Gold have won anything....you better check the price of Gold....we lost...now it is time to recoup some of the losses with the help of the former shorts....that's allll!!!!
tom fumich
It's called...
a team effort in a different direction...very profitable...
Peter Asher
Robots are automatons,

They can only do what they are programed to do. That is what has happened to a good portion of the labor force in the last half of this century. The more "specialized" the job description, the more limited (robotic) the job. These are the jobs that are being replaced by information and robotics technology. --- This is not a bad thing!!

In the post-war boom of the late forties, it was observed (in a big feature article in Life Magazine) that blue collar workers were earning more than white collar. This was actually quite upsetting to a world of people who had come to believe that the sole road to affluence was a college degree.

In the early part of the industrial age, it was physical laborers who were the worker bees, but after WWII, it was the office drones pouring in and out of sky-scrapers that became the faceless masses behind corporate profits. It was labor unions, of course, that was the major force behind that change, but it was also the job competition between the increased percentage of the population who had access to a college education. Finally there was the fact that a far ranging expanding economy was becoming buried in paper. People who had became literate and mathematically proficient spent their days inhabiting the universe of In, Pending and Out.

The new job evolution described by The Office of Personnel Management speech, is a resurgence of opportunity for all who aspire to make the most of their capabilities. No longer will they find themselves trapped in a "Dead end job." The ability to think, originate ideas, and solve problems; the ability to apply knowledge and observation to evolving situations and dilemmas; will be the asset to market for affluent exchange.

The automaton jobs are being replaced by technology,but the robot inmates can not run the asylum. The more complex the tasks become that are handled by artificial intelligence, the more things will depend on sentient intelligence to keep the wheels from coming off.

What some are perceiving as a crises, will be a new and different opportunity!
tom fumich
Agree...
How does that pertain to a bowl off rice...or Gold...don't get me wrong ...i'm in the middle of this....is this productivety(sp)?????
tom fumich
I thought...
after today's statements....Gold was dough????
tom fumich
I thought Gold was now back...
as a reserve currency....IMF seems to think so....
tom fumich
everytime i mention the truth about gold....
I seem to get my backside kicked....not here ....Gold is money!!!!!!!believe me....it is money!!!!!!
tom fumich
Goepel McDermid...
Gold Research...."Fundamentals Hint Gold May Have Found a Bottom"....this is a paper on the condition of Gold for the near future.....the paper says Buy to end of year....it says accumulate pdg....take it as you will....God Bless you all...
Leigh
IMF Gold Revaluation
"According to the Financial Times, the IMF is prepared to revalue nearly 10 percent of its 103-million ounce gold reserve to market value after an agreement on debt relief for poor countries became politically unreachable." (UPI)

How can they only revalue 10 percent of their gold? Does that mean the other 90 percent stays at the lower value? That doesn't make sense!
tom fumich
The rumour is a new player is getting in .
on the long side...let's wait and see...
tom fumich
only a rumour...
mind you....God bless amerika!!!!!!
tom fumich
I guess that rumour...
is quashed...Gold went down....but that does not mean much...
ET
Venezuela
http://216.46.238.34/articles/?a=1999/9/8/54929
US on Siesta As Communist Coup Takes Place in Venezuela

Christopher Ruddy
September 8, 1999


A Castro-style takeover is taking place right in America's backyard,
but practically no one is paying attention.

It wouldn't be quite accurate to say that the leftist take-over of
Venezuela by former Lt. Col. Hugo Chavez has been totally ignored
by the major media.

Here and there we do find isolated reports that speak of events in
Venezuela after the election to the presidency last July of the
45-year-old Marxist. But most of these reports have a clear slant in
accepting Pres. Chavez, who has proclaimed that his power-grab,
his "peaceful revolution," is intended to bring true democracy to
Venezuela.

The Chavez coverage here in the U.S. bears an eerie resemblance
to the positive press treatment afforded a young Fidel Castro who
promised democracy for the Cuban people.

Chavez demonstrated his "democratic" intentions in the past two
months by disbanding of the Venezuelan congress and supreme
court and vesting authority in a "Constitutional Assembly" he
controls.

On a clear path to dictatorship, Chaivez's Constitutional Assembly
has summarily eliminated the democratic separation of powers in
Venezuela and declared itself the nation's "supreme body." It has
even amassed the power to remove as it sees fit duly elected judges,
mayors and governors outside the federal government.

Still the U.S media snoozes as one of most important Latin
American nation's remakes itself in the Castro mold.

Venezuela, a country of 23 million, has been one of those restless
Latin American nation's transitioning to democracy. By most
accounts it has been long considered the most stable democracy in
all of Latin America. So a president who dissolves the congress and
unseats the supreme court of the land is no small matter.

The United States also has a vested interest in preserving
Venezuela's national integrity. Fifteen percent of all US oil imports
come from Venezuela--an extremely important factor for our own
national security and economy.

As for Venezuela itself, oil revenues comprise about 60 percent of
its total budget. Chavez has already taken control over Petroleos de
la Venezuela (PDVSA), the national oil firm, and placed his
personal friend Hector Ciavaldini at its head to "reorganize" this
hitherto flourishing enterprise.

Some top managers have already been ousted from leadership
positions, and experienced staff experts are looking around for
employment elsewhere.

In keeping with Chavez's socialist dream, PDVSA will no longer be
allowed to pay the US-level wages it has in the past because, he
feels, this is unfair to those Venezuelans not involved in oil
production, whose average income is only $150 per month.
Paradoxically, in addition to PDVSA high wages, he's also not
happy with the low oil prices that have been brought about by
PDVSA's past economies of production. He will see to it that the
wages of oil workers are lowered and that oil prices are driven up in
the future so as to put a stop to such capitalist "inequities."

The stakes are high in Venezuela. If constitutional, representative
government is not soon restored and Chavez achieves his purposes,
Venezuela will be the first major oil-producing country to come
under communist rule.

The Clinton administration, so anxious to use military force to
restore democracy in places like Haiti and Yugoslavia, has silently
consented to the coup underway in Venezuela.

The sporadic, major media news coverage of the political
developments in Venezuela has largely ignored Chavez's close ties
to Fidel Castro as well as to the corrupt regime in Columbia.

Cuba's communist press has been more revealing. "Cuban News
from Havana" reported that "more than a million Venezuelans
cheered Cuban President Fidel Castro...during and following a
speech by new Venezuelan President Hugo Chavez."

Pres. Chavez has made no secret of his admiration for Fidel Castro.
Before Castro's visit to Venezuela, Chavez had paid a personal visit
to Castro in Havana during which he offered "his hand and heart to
the Cuban people."

Only seven years ago, Lt. Col. Chavez, then an army paratrooper,
had launched an unsuccessful Marxist coup against the democratic
Venezuelan government. Yet our opinion makers in the US prefer
to reserve judgement on Mr. Chavez.

Not everyone in Venezuela is happy with Chavez, without
resistance. There have already been armed confrontations in
Caracas, and many "deposed" officials are courageously trying to
restore the duly established representative government. Venezuela
has without a doubt not been totally free of corruption and injustice,
but the solution is not to leap from an imperfect democracy into the
jaws of communist tyranny.
TownCrier
Fed seen adding reserves via overnight system RPs
http://biz.yahoo.com/rf/990908/nz.htmlAn economist estimated that the average daily add need was $8.5 billion for the current reserve maintenance period.
tom fumich
i'd hate to say it ....but the left is taking over the world....
left...right ...maybe the same these days...don't be afeared....part of the plan....not to make light of it... but it seems the new way....that's why the news of yesterday seems somehow strange....communists don't like Gold...can't write paper....
tom fumich
I's that one world government coming into place...
maybe one currency...as well...backed by GOLD!!!!!!i don't know....
tom fumich
One world currency...
backed buy Gold at a new valuation....i don't know....figure it out for yourselves....
ORO
FOA /ANOTHER/MK
The gold for oil deal is as real in my understanding as the appearance of the sun in the morning. My experiences of late indicate that Americans, down to the last, and many Europeans with some exposure to the US do not have any understanding of the degree of leverage in all markets, nor of its dangers and implications to the stock market, bonds, the dollar and gold.
When I present my arguments (mostly presented by yourselves as well) in simple terms, I meet with two reactions: 1. we'll nuke 'em and take the oil. 2. Can't be true, the latter from financial professionals. It was interesting for me to note reactions to the fact of a consistent history of default by the US on its obligations through a variety of methods: inflations (the favorite), dollar settlement laws (next in line for favorite), gold confiscation, and plain default etc.. The funny thing was that default by inflation was expected, though the consequences were not thought through. Actually, the lack of moral compunctions about default on debt that I found among many Americans is probably the main reason that such a scenario is so likely. There is no sympathy for the creditor, tough luck to him.
Conversing with friends, familly, and acquaintances I present the oil for gold scenario, the Euro for gold scenario, and the inevitable destruction of the dollar with or without these events, and the inevitability of the destruction of the paper gold markets (financial pro's didn't understand why the paper market would fail on the way up or on the way down) simply out of the effect of defaults.
I believe it is important for people's survival in the future, and for the future of the US economy to have them "insured" by physical gold holdings that will form the bassis of future capital pools that will drag the country out of the collapse of paper money.
It was obvious to me that "it will happen some time in the future" is not enough. For this conclusion no figures are needed, but only a basic understanding of what debt is, how its mechanics work in the economy, the obvious mechanics of money creation. In order to gain action from people, one needs to provide a timetable for the events (within my nephew's lifetime, mine, my parents' or my grandparents', or before the year turns, any time now...). This is the kind of support that I myself required before I was willing to accept the need for putting resources into "gilded insurance". The same need for support with numbers and charts that I am working on filling is needed to induce the financial pros to give their clients direction. The issue is a patriotic one. Small business America will not survive without small capital hoards. The same problem they had in the depression. The reason for the length of the depression, was the confiscation of gold. The inability of small businesses to find capital pools in an atmosphere of credit unwinding, and the simple death of the money supply in lew of the indestructible gold that was confiscated was the cause for an extra decade of suffering. The only way I see to avoid it is to convince people to build these pools now or end up working for a foreigner for the rest of their lives, since only foreign pools of gold capital will be available (India, perhaps Europe, Arab countries, Asians from countries that managed to pick up the pieces most quickly).
The key to the numbers is that set of numbers that quantifies the issues. Particularly important is the understanding of how the international dollar system works, how leveraged it is, how that makes it susceptible even to small shocks, how a dollar collapse in international markets would play out in the US.
Once the arguments and the numbers are shown and it is possible to convince a professional of the dangers facing the dollar both as reserve currency and the currency of the US, only then is it possible to make the argument for gold as anything other than another paper airplane to ride in the markets.
Perhaps you will start a presentation of the qualitative issues regarding the dollar (rather than gold), interspersed with the data you may want to quote. I am currently working on the data to show the details of the situation.
The first rough pieces show the cumulative balance of payments compounds to 145% of US GDP, and with foreign financial investment (only 7% has been actual direct investment), compounds to 350% of GDP. As a comparison, the beginnings of the inflation of the late 60s to 1982 are to be found in the expansion of the gap to a peak of 120% and 250% in 1961. The resulting move in the dollar was a 5 fold drop as GDP repriced itself to fit the debt service to domestic and foreign creditors. This was accompanied by a loss of 50% of gold reserves (250 mil oz) before the high inflation and the devastation of the dollar started gathering steam in earnest in 1971.
Annual dollar debt demand from emerging market economies has dropped from 1.34 trillion at end of 97 to 1.09 at end 98. If russian debt is excluded as defaulted, then 1 trillion remains. Note that the US is a minor creditor. The net debt (outstanding less reserves) fell from 3.11 trillion to 2.67 trillion. (http://www.oecd.org/dac/debt/).
The US in the meantime grew its foreign liabilities and took in more dollars into financial assets, raising them by some 2 trillion gross and 1 trillion net.
1998 marks the first time that foreign investment income was lower than US investment income due to foreigners. This may be the point of no return. Much $ denominated foreign debt was charged higher interest than US payable debt so that the fact that the US has become a net debtor nation in 1984 has not eliminated the US advantage in $ interest rates. Note that since the US has a higher interest rate than the rest of the G7, excepting the UK, there is a disadvantage in US non dollar denominated obligations that has accumulated via the carry trades. The profitability of the trades was based on the fact that they produce more $ than they consume SF, Yen or Euro, by a hefty margin, thus producing another supply of dollars. The meaning of all this is that the US has to export $ as debt payments even if the US were to stop its trade deficit in its tracks.
This additional stream of outgoing $ has created a quandary. For if the US increases interest rates to keep the $ exchange rate high, the stream will increase, as will the stream produced by a growing trade deficit. If the rates are reduced in order to lower the $ exchange rate in order to reduce the trade deficit, it will cause inflation in the US and raise long term interest rates to compensate for the inflation. Furthermore, the decline in the $ as a result of lower short term rates would raise the $ debt payment stream on non$ debt. Thus, there should be a period ahead in which a medium term to long term decline in the dollar down to beyond trade balance must occur, not as a matter of speculation or opinion, but as a matter of mathematical certainty. My current quest is to determine the speed of the action and its timing, without regard to non-US financial or political events that may cause renewed flight into the dollar (China devaluation, War in Europe or Asia, etc.).

Thank you.

ORO
TownCrier
IMF to revalue gold, avoiding open-market sales
http://biz.yahoo.com/rf/990907/0j.htmlMore details added to the info provided here yesterday. Read this one and share your thoughts.
tom fumich
We now have a global market...
Companies are global....would be much easier to have one currency...more efficient...does that make sense...i don't know....
Goldspoon
Monopoly.......
One thing struck me as i read the latest scam by the IMF and ORO's Gold/oil....The more i learn of the worlds past/present currency dealings.... is that it reminds me of when we played Monopoly as kids.. sure, we played by the rules.. but we also made them up as we went.. so everyone could still play after they went broke... Why is it that the personal bankruptsy laws seem to be in a tightning mood just as it is "OK" for nations and hedge funds to default????... Hey!.. the good ole U.S of A. has done it several times.. and look at US.. "The #1 economy in the World"!!..for now... What's that old saying.. "He that has the Gold makes the Rules".... also... "Might makes Right"... "Combine" these and you get... "He who has the Might decides the worlds "Gold" is (U.S. Dollar)... and then makes the Rules"
Thus "Might" has a good time at others expense being the Ruler therefore making the rules..."But" as we know "All" rules have un intended consequences!!! and those who must play by the rules take advantage of these consequences.. As the game progresses and begins to go sour for "Might" He simply changes the rules as to what the new "Gold" is... within a certain "range" as circumstances dictate.... Looking ahead.. to possible rule changes by "Might"..physical Gold does indeed seem to play apart... but.. look for "And/Buts" to also play a part..of the "new rules"..
i would suggest diversifing into Platinum/Gold/Silver just to give yourself a better chance of dodging some of the flying Ands or Butts.........which ever the case may be...
TownCrier
Japan could act with others on forex--PM spokesman
http://biz.yahoo.com/rf/990908/b0.htmlSHORT article.
Why does the spokesman feel the need to mention any kind of fallout or expectations in the event of "a sudden fluctuation"? For a long time now things have appeared so stable that a sudden ANYTHING would seem to belong to the realm of science fiction. Does he know something is brewing behind the scenes?
Cage Rattler
re Japan
Context of that news release is the release of GDP figure tomorrow which is being sold as a bad news number at present.
Leigh
IMF Gold Pricing Scheme
Does anyone remember FOA's June 14th prediction of a major shift in gold valuations? He said the U.S. would openly go along with this change. Well, it looks like this is it. My question, again, is how and why they are only revaluing 10 percent of their reserves. What - are they going to mark up the prices of the shiniest bars and keep the ones with scratches at the lower price? Will they REFUSE the chance to come up with more money for their schemes under the pretext of not upsetting the market?

I have two cars. This morning I went outside and revalued the Accord at $100,000. That added a lot to my net worth! But I'm only going to revalue ONE car; if my net worth goes up too much, my neighbors might want to revalue their cars, too. That would upset the auto market here in town! It would also mean property values would go up as people realize how high-class we are. Then no one would want to live in other towns. Can't upset the real estate market. So, I'm only going to revalue my Accord, and I expect all of you to pay homage to my thoughtfulness for others.
USAGOLD
Market Analysis: Of Lighthouse Beacons, Misdirected IMF Proposals, and IMF Gold Policies
MARKET ANALYSIS (9/8/99): Gold stayed sideways this morning after yesterday's
solid move to the upside. Most analysts attributed yesterday's strength to a new
International Monetary Fund proposal that was mysteriously leaked at the Dutch finance
ministry's web site. (How does one go about making a mistake like that?... "Oh, darn, I
meant to mail that to the ECB and I'll be hogtied if it didn't suddenly show up at our web
site. Sorry, boss. Can't figure it out.") The proposal, it appears, represents a fundamental
shift in the way the IMF would handle its gold reserves -- at least on the surface.

In the proposal, IMF gold reserves would be revalued from $47 per ounce to free market
levels so that a stronger balance sheet could be used as collateral to back loans to third
world countries. If that doesn't make sense to you, join the club. Most gold traders and
analysts are still scratching their heads over that one. In the real world gold sells at a certain
price, let's say $256 per ounce at today's levels. Any banker lending money to or through
the IMF could have picked up the local newspaper, turned to the financial section and said
to himself/herself: "Hmmm....Gold is $256. I will loan 80% against that figure. Yes, I
think that's probably it." What would the IMF have said? "You can't do that because we
carry it on the books at $47." (???)

One thing is certain, if the IMF issues gold backed loans at the current price, we could very
well have seen the bottom as far as G-7 is concerned. They won't want gold to fall from
here because it would damage the collateral, and the loans just might get called. Perhaps,
this is all just IMF's attempt to gracefully withdraw from the gold market and still appear
that they are doing something to help their high-risk third world clientele. Next question is
what happens when those third world countries belly-up on those loans -- which inevitably
they will. Is that when the gold gets sold into the market?

Oh well, if so, at least the sales will be piecemeal. And at least the IMF is signalling that
they do not have a great deal of interest in running this gold through the London Bullion
Market Association and assuaging the needs flagged in recent months in foggy old
Londontown. It has been a source of speculation both here and elsewhere that the Bank of
England sale as well as the hard push by the British government for IMF sales might have
been linked to some gold borrower being on the ropes with respect to repaying gold loans.
This, of course is difficult if not impossible, to confirm at this point, but with lease rates
continuing to edge up, Goldman Sach's tying up of the COMEX warehouse stocks
(Another 32,314 ounces left the warehouse yesterday) and the whereabouts of the gold
from the first BOE sale still unknown, one senses that there was more to the British action
than what was publicly advertised.

All of which adds up to the sudden appearance of some subtle bullish indicators if you
happen to be a full-time student of the gold market -- like a lighthouse beacon cutting
through a foggy sea-bound night. That's why the gold market, at least for the moment,
appears to be turning.

The September edition of News & Views is a major you-don't-want-to-miss-it, highly
informative, and slightly irreverent blockbuster. We revisit our Five Horsemen of the
New Apocalypse -- the euro challenge, Y2K, the Asian contagion, the bubble stock
market and rising oil -- none of which have taken the summer off. We also preview the
Ten Reasons Why Main Street Worldwide Is Returning to Gold and Short &
Sweet (as is our custom) rambles with a hint of cynicism through a litany of world
political and economic events. You won't want to miss our look at the world of gold to kick
off the Fall investment season. The Season of the Yellow Metal? Just might be so...........

Please call 800-869-5115 (Ask for Mary Conway) if you have an interest in receiving
a trial subscription to our widely read newsletter, News & Views: Forecasts,
Commentary and Analysis on the Economy and Precious Metals. Or you can
go to our ORDER FORM and submit your request by E-Mail. You will also receive our
introductory packet on investing in gold.
Crossroads
Peter Asher: regarding job evolution
http://biz.yahoo.com/prnews/990902/il_contac_1.htmlPeter, I enjoyed your post and just wanted to share this as well.
The link I posted just came in as I was reading your post.

About a year ago, I shared my thoughts with a board that I sit on at a local vocational school regarding their concerns about the appearance of a declining enrollment. It seems this decline is common throughout the vocational education system and they were asking for feedback from those of us that were not involved in the teaching and administration aspects.

I expressed my opinion in this way. I asked them to consider the most effective way to draw masses into a common thread of thinking, and which form of media that young people, from early adolescent on through mature adult was probably the most influential? It was unanimous that television had the greatest impact. Has anyone noticed what the ads depict about success? Has anyone seen the quantity of ads aimed at the only way a person in today's society can live a wonderful life is to be a successful businessman of executive? How about the ads that target this successful executive that he can invest with an investment firm and have a lifestyle like the wealthy have? And not to mention the quantity of ads telling you how an experience is priceless so go ahead and charge it. Then I asked the group to consider what the parents of young people going into high school tell their children. "If you get good grades you can get a scholarship into college then you can get a good education which will allow you to get a high paying job, so you won't end up carving out a living by laying brick or swinging a hammer�.like me." Have any of you sat in a session with a high school counselor and one of these young students and heard what these students are encouraged to do? They're encouraged to go to college! Get a good education! They are never encouraged to be a laborer. None of these young people envision themselves as a common laborer. On the contrary, they are all going to be CEO's.

As our work force is being retired and sold out to cheaper foreign labor, a new development is in the works. We are creating a shortage of workers who are qualified. This is happening because everyone wants to go where the money is. We all want to be executives. Suddenly the "common laborer" is gone.

Another interesting thought was that the boomers for many years were the do-it-yourselfer generation. Home Depot has already recognized that these people have determined that they are getting tired of doing it themselves and their market focus is moving in a new direction as we speak. When these people who control a large majority of today's money decide they need a "common laborer" to build on an addition or remodel their kitchen, they are going to be looking for a person who will contract this labor. What they will find is that the only people out there are the contractors who do poor quality work. Why? Because the few good ones will all be busy! The result of this will then drive the cost of having a builder doing our work will again become expensive.

The following press release somewhat supports my theory.

Square D Company issued a press release to commemorate Labor Day, in which the company noted that "An estimated 240,000 skilled contracting workers
each year are retiring or leaving contracting for different occupations. Among
electricians, the shortage is having a ripple effect on Square D and other
manufacturers of electrical products, say executives at the Palatine,
Ill.-based North American electrical industry leader."

Peter, you spoke of job evolution and this was just an addition to what you said, and it seems to support the theory that everything is cyclical. I may share additional thought on this topic, however things are backing up on me.

Later
TownCrier
Indonesian rupiah touches 8,500 to dollar
http://biz.yahoo.com/rf/990908/de.htmlAfter reading this good comment by Sir Goldspoon, check out the following quote from the linked Reuters article.

"The more i learn of the worlds past/present currency dealings.... is that it reminds me of when we played Monopoly as kids.. sure, we played by the rules.. but we also made them up as we went.. so everyone could still play after they went broke..."--Goldspoon

In this article, Reuters reports from Jakarta the troubling situation about the crisis in East Timor and the Bank Bali scandal that have weakened the rupiah enough to fall to 8,500 per dollar. (that's 2,167,500 rupiahs per ounce of gold) Reuters says: "'The rupiah broke the 8,500 level when most Indonesian forex dealers were having lunch. A player from Singapore bought a dollar offer at 8,500 probably from Indonesian players,' a dealer with a foreign bank said."
"...Dealers expected further losses in the rupiah...Players took profits at around midday..."
"...the scandal over PT Bank Bali Tbk and the situation in East Timor caused players to release their rupiah holdings, dealers said."

To everyone outside the mayhem, it's just a game in which to squeeze some "profits." The key is to realize that these same profits are only similar tokens within the larger game. To cash out and join the real world of free and independent people, you need to exchange your Monopoly money for gold while the other "players" are distracted by "winning the game." When the game ends, you won't be exposed to the harsh Reality Check.

Everyone here in The Tower has the highest regard for our gracious host over at The Castle in this regard. Drop MK an e-mail (cpm@usagold.com) and tell him you're interested in getting out of this monetary rat race. With his connections, MK can get you just about any form of precious metal you'd want. He's genuine, and not a "player." (That's the official view from The Tower.)
Goldfly
Did Goldspoon say that?

Hey, that's great!

A nomination for enrollment to the Lighter Side of the Hall of Record!

Any seconds?

GF
TownCrier
FOMC oks changes in daily mkt operations for Y2K
http://biz.yahoo.com/rf/990908/xm.htmlIt's all Monopoly...here we see them changing the rules in broad daylight so they can keep playing the game. We warned that this would happen...could see it from miles away with this high plains vantage point atop our sturdy tower.
TownCrier
OECD urges Bank of Canada to resist rate hikes
http://biz.yahoo.com/rf/990908/j6.htmlThe OECD says the Bank of Canada need not match the recent rate hike by the Fed "because the inflation pressures facing the U.S. Federal Reserve were not evident in Canada."

Do you ever get that heavy feeling that there are too many US Dollars out there in the real world?
TownCrier
U.S. Treasuries open weaker as U.K. hikes rates
http://biz.yahoo.com/rf/990908/t2.htmlBoE rate hike wasn't widely expected.
ORO
MK, is the IMF a little bit pregnant? + Note to Goldspoon
The repricing scheme for 10% of the gold in their vault is not going to make sense to anyone but those who value the gold at the 35 SDR $42 level, who would be the lenders. The result is the use of gold as reserve currency by the IMF.
This is a micrometer move towards a gold standard defacto.

The building of the gold short position is a necessary step towards a gold standard as well. Greenspan's old competitive gold bond vs. $ bond concept has essentially been adopted by the bullion departments of the banking industry, and their bonds have been found lacking (ref. lease rates going from 0.9% to 3.7%-4.5% is quite a blow for a bond holder). So is what we have a failing gold standard stunted in its infancy by fiat level keverage?

The modern banker would not expect a currency without forced demand to survive and rise in value. The success of the dollar since Volcker has much to do with the $ debt of the resource rich emerging nations (a.k.a. colonies), has much to do with the rise of their $ debt and their need to trade their resources for dollars to repay it. Hence creating the conditions for prolonged demand due to debt is the prerequisite for a return to a gold standard. Of course, one does not want the gold banking system to keel over before a gold standard starts in earnest, proving to the bankers that it is not desirable.

Note to Goldspoon - Wonderful observation - The purpose of the IMF is indeed to help the US keep the $ game going. Once one "wins" by bankrupting everyone else, the game is over and the "winner" is stuck with no partners - i.e. no trade - and the board is folded and put away - i.e. collapse of the winner's economy along with the rest. Therefore, the potential bankruptcy is rectified by Paul lending to Peter, who must then pay Paul back more than was borrowed. This results in the creation of $ demand growth for the purposes of maintaining the value of the $ (or rather, "lending" it some value for a while). Each default lowers the future demand for $, and hence its future value. If the debt driven demand dries up because of repayment of debt or the default of it, the value of the $ falls because those who accumulated $ to settle trade with the resource rich countries would not have any need for the $, as the demand for $ would evaporate.
Hill Billy Mitchell
Net effect of discount window loans
I have a question, which is simple for those who know. Please help me! Something has been nagging at me ever since the Fed. Announced that it was printing FRN's and would keep the discount window open to any bank in need of cash to quash a run. The question is as follows:

1) If customers of BANK "A" remove demand deposits totaling $1,000,000
2) These demand deposits are not replaced by other demand deposits
3) BANK "A" chooses to replace the shortage in reserves via the discount window rather than reducing the amount of loans outstanding

Will the funds obtained from the Fed. put the bank in the same position as before in terms of being able to continue with no change in the amount of loans outstanding allowed for BANK "A"? This question assumes that BANK A (before and after) has the maximum amount of loans outstanding allowed under the reserved requirements in force.


FOR SOME REASON I HAVE DOUBTS THAT THE FED WILL PROVIDE RESERVES TO ANY AND ALL BANKS THROUGH THE DISCOUNT WINDOW IF THE BANK BECOMES SO UNHEALTHY FROM THE LOSS OF DEMAND DEPOSITS THAT IT IS NOT A REASONABLE RISK FOR OBTAINING A LOAN FROM THE LENDER OF LAST RESORT.

I have tried to ask this question in several ways and I am beginning to think that my understanding is so lacking that I cannot ask the question in such a way as to stimulate a response. Please forgive me and someone have mercy. Look through my ignorance and open my eyes.

Thanks in advance

HBM
TownCrier
Remarks by Chairman Alan Greenspan: Maintaining Economic Vitality
http://www.bog.frb.fed.us/BoardDocs/speeches/1999/19990908.HTMMillennium Lecture Series, sponsored by the Gerald R. Ford Foundation and Grand Valley State University, Grand Rapids, Michigan
September 8, 1999

"Thank you for your kind welcome to Grand Valley State University and the Ford Museum Millennium Lecture Series.

Over the past quarter-century I have appeared on many platforms with President Ford. He never seems to change, but I keep losing my hair.
[...]
But scientific proficiency will not be enough. Skill alone may not be sufficient to move the frontier of technology far enough to meet the many challenges that our nation will confront in the decades ahead. And technological advances alone will not buttress the democratic institutions, supported by a rule of law, which are so essential to our dynamic and vigorous American economy. Each is merely a tool, which, without the enrichment of human wisdom, is of modest value.

A crucial challenge of education is to transform skills and intelligence into wisdom--into a process of thinking capable of forming truly new insights. But learning and knowledge--and even wisdom--are not enough.

National well-being, including material prosperity, rests to a substantial extent on the personal qualities of the people who inhabit a nation. Civilization, our civilization, rests on the presumption of a productive interaction of people engaged in the division of labor, driven by a process economists label comparative advantage. This implies mutual exchange to mutual advantage among free people.

To repeat what I said five years ago here in Grand Rapids before the Gerald R. Ford Foundation: Institutions are needed that give free play to the inventive capacities of people and effectively promote the translation of conceptual innovations into increased output of goods and services that are the lifeblood of material progress. What these particular institutions should be has not always been as clear as it is today. Much of this past century, in effect, has been a test of whether capitalist institutions or more centrally planned socialist institutions would work better, over the long run, in serving the needs of human society.

Specifically, on November 9, 1989, the Berlin Wall came down, symbolizing the end of an experiment in social policy that began more than four decades earlier with the division of the states of Western and Central Europe into market economies and those governed by state central planning. At the end of World War II, as Winston Churchill put it, "From Stettin in the Baltic to Trieste in the Adriatic an iron curtain�descended across the Continent." The economies on the Soviet side of the "curtain" had been, in the prewar period, similar to the market-based economies on the western side. Over four decades both types of economies developed with limited interaction across the dividing line. It was as close to a controlled experiment in economic systems as could ever be implemented.

With the books now closed on this experiment, we of course have learned much about how communist economics works, or, more exactly, does not. How highly inefficient prior to 1989 the economies of Eastern Europe and the former Soviet Union were is best illustrated by the fact that energy consumed per unit of output was as much as five to seven times higher than in the West. Moreover, the exceptionally large amount of resources devoted to capital investment, without contributing to the productive capacity of these economies, suggested that these resources were largely wasted.

In addition, such gaps in efficiency actually understated the gap in performance because they failed to take into account the impact of industrial activity on the environment. The market economies of the West have expanded resources to minimize the adverse impact of industrial activity on the environment. No such resource allocation was made in the Soviet bloc, and the cumulative effect of this neglect is appalling.

At least for the foreseeable future, the experiment seems to have been concluded overwhelmingly in favor of the free-market capitalist institutions. The bottom line is that coercive societies rarely enhance the state of what we call civilization. But neither do coercive relationships among people.

It is decidedly not true that "nice guys finish last," as that highly original American baseball philosopher, LeoDurocher, was once alleged to have said. I do not deny that many in our society appear to have succeeded in a material way by cutting corners and manipulating associates, both in their professional and in their personal lives. But material success is possible in this world without exploiting others, and clearly, having a reputation for fair dealing is a profoundly practical virtue. We call it "good will" in business and add it to our balance sheets.

Trust is at the root of any economic system based on mutually beneficial exchange. In virtually all transactions, we rely on the word of those with whom we do business. Were this not the case, exchange of goods and services could not take place on any reasonable scale. Our commercial codes and contract law presume that only a tiny fraction of contracts, at most, need be adjudicated. If a significant number of businesspeople violated the trust upon which our interactions are based, our court system and our economy would be swamped into immobility.

It is not by chance that in nineteenth-century America, many bankers could effectively issue uncollateralized currency because they were able to develop a reputation that their word was their bond. For these institutions to succeed and prosper, people had to trust their promise of redemption in specie. Now, as then, a contractor with a reputation for shoddy work will not prosper long. [you know, the Fed Chairmain ALWAYS finds a way to subtly work gold into his speeches--T.C.]

In today's world, where ideas are increasingly displacing the physical in the production of economic value, competition for reputation becomes a significant driving force, propelling our economy forward. Manufactured goods often can be evaluated before the completion of a transaction. Service providers, on the other hand, usually can offer only their reputations.

The extraordinarily complex machine that we call the economy of the United States is, in the end, made up of human beings struggling to improve their lives. The individual values of those Americans and their reputations will continue to influence the structure of the institutions that support market transactions, as they have throughout our history. Without mutual trust, and market participants abiding by a rule of law, no economy can prosper. Our system works fundamentally on individual fair dealing. We need only look around today's world to realize how rare and valuable this is.

While we have achieved much in this regard, more remains to be done. Considerable progress, for example, has been evident in recent decades in the reduction of racial and other forms of discrimination. But this job is still far from completion.

A free-market capitalist system cannot operate fully effectively unless all participants in the economy are given opportunities to achieve their best. If we succeed in opening up opportunities to everyone, our national affluence will almost surely become more widespread. Of even greater import is that all Americans believe that they are part of a system they perceive as fair and worthy of support.

Our forefathers bestowed upon us a system of government, and a culture of enterprise, that has propelled the United States to the greatest prosperity the world has ever experienced. The contributions of our national leaders, people like President Ford, have sustained and promoted that culture in the most difficult of circumstances and have given us the tools to improve upon this inheritance in ways that we have yet to imagine."

[you might recall that it was President Ford's administration (with Mr. Greenspan as an advisor) that knocked down the Roosevelt hurdles, thus making it lawful for Americans to once again own gold.]
ORO
Hill - Is this an answer?
Not being a banker, I can only say that the Fed can maintain a bank's solvency as long as the discount rate is lower than the rate on the outstanding loan portfolio, less the expense rate and the default rate. The bank now pays 3 - 3.5% to depositors, and would loose the 1.5% margin by going to the Fed. I believe this leaves the bank at breakeven on high quality lenders, and well in the black on higher risk consumer loans.
The withdrawal of deposits does not cause a bank to keel over unless the Fed charges more than the bank gets (taking expenses into account). So far as I know, the Fed will not pull the rug from under a bank until it is truely incapable of paying back a loan.
mike55
ORO - Posts 13029 & 13043
I share your understanding and belief of the gold for oil deal. My experience in discussion of the subject, in simple terms, with colleagues, friends, and family members usually results in similar responses. And "we'll nuke 'em and take the oil" has been (sad to say) an approach the West has taken over the years by direct aggression, by pitting one Mid-East country against the other, or through financial burden. Oil is considered to be of such strategic value to national security and of such "need" for the largesse of the US consumer that virtually any questionable or immoral method of obtainining it (at an artificially low price) is unfortunately considered fair game. The same US approach is true for numerous other natural resources in other countries around the world.

About the only way I've managed to get people to begin to take the first step in understanding the importance of oil to our way of life, and that of most developed countries in the world, is to ask: "Look around. Which items in your sight (barring the Earth and sky) do not use petroleum directly in the end product, their manufacture, or their distribution and delivery?" Once a person begins to consider the extent that petroleum has fueled this century's economic and technical growth, and its far-reaching effect -- generation of power, gasoline, plastics, clothing, food production, this computer keyboard, etc., then room for discussion usually begins to open.

"Must" the dollar decline beyond the trade balance as a matter of mathematical certainty if we continue to invoke our legacy of various brands of illegitimate force and control around the world? Wars, puppet governments, loans, inflation and default, etc.

Thanks for your great posts.
TownCrier
U.S. stocks turn negative after Meyer's remarks
http://biz.yahoo.com/rf/990908/2h.htmlMarkets ignore remarks of Mssrs. Summers and Greenspan today, but react to hawkish sentiment regarding inflations as expressed by Federal Reserve Governor Laurence Meyer.

Meanwhile, permabull M. AJ Cohen of Goldman Sachs did her best to rally the troops with promises of higher returns for the DOW and S&P 500.
ORO
Mike55 Must?
The problem is that each delay raises the amplitude of the move as more debt is piled up. Furthermore, war is very resource intensive (even with laser bombs) and tends to increase US trade deficits greatly. In particular, local expenses within range of the theater are very high relative to the home base. Furthermore, the US is quickly loosing both excess military capacity and support. In addition to this, it is pushing everyone into nukes because nuclear threats are the only deterrent to the US. This alienates some European Green-ish coalitions.
We are well into the land of diminishing returns where each step proppels us less in our direction than the previous one, as we are in the economy itself; i.e. more credit growth results in a proportionately smaller marginal increase in GDP. When $ barely budged with the Pakistan (US client and first Islamic bomb) and Indian nuke tests, it was obvious that the scare tactic is not working anymore.
In this context, the Kosovo effort, in which the US bombed the infrastructure of millions of civillians, ostensibly to effect change in the dictatorial leadership (democratically elected). I think the purpose was other than stated - threaten opposition to US policy, try to threaten Italy and Germany and destabilize Europe (get an extra boost to the $ to boot and prevent them from doing their bit, at least for a while longer) by getting Milosevic to throw a scud at someone, to show support to Moslems (re Bosnia), thereby justifying the great sacrifice of oil by the Saudis and Kuwaitis since they were "saved" (Iraq simply took payment of its prize according to the deal with the US about devastating Iran). New Rome is no different than the old one.
One more point under the smoke screen - the nuclear proliferation is a necessary deterrent to the US blowing its top and getting the world destroyed - the US itself included. Whomever disclosed the US nuclear secrets to China (proliferator #1) might actually have done the US some good. A patriot? Like the guys who gave the nuke secrets to the USSR? Thus preventing world domination by the mildly fascist US of the time? If I were DeGaulle, I would have done just that.
Hill Billy Mitchell
ORO thanks and one else?
ORO thanks for your reponse. Any one else have any thoughts.

Should not the money supply collapse when demand deposits are withdrawn in the form of cash and unspent. Does the FED. Indeed solve this problem by providing cash at the discount window or does it only provide cash available without alleviating the problem of the shrinking cash reserves in the banking system?

HBM
TownCrier
Given the nature of this report, you have to admit there must be more to Y2K than simply marketing hype
Two Horsemen Ride Together (not a link)Iraq seen as one of the least Y2K-ready oil producers
By Carola Hoyos, Bridge News
New York--Aug 18--Iraq, one of the world's largest crude oil suppliers, more than likely is nowhere near prepared for the year 2000 transition, and that could mean supply interruptions, UN oil industry experts and analysts said. The country's oil-production systems already are viewed as antiquated and unreliable largely because of 9 years of UN-imposed sanctions, they said.

However, preparedness is difficult to measure as Iraq's generally opaque government, which control's the country's oil sector, has not made readily available information on its efforts to squash the Y2K bug. The United Nations' Office of the Iraq Programme, which oversees Iraq's oil exports and its imports of oil infrastructure parts under the oil-for-food deal, has not been involved in preparing Iraq's oil industry for the millenium change, UN officials said. Experts stationed in Baghdad have also not witnessed Iraq try and rectify the problem. "We don't have a Y2K section of the distribution plan," one UN official said, referring to the document Iraq must submit to the UN every 6 months outlining how it plans to spend the revenue it garners from its oil sales under oil-for-food.

Meanwhile, UN officials said they aren't even sure whether the UN's oil metering equipment at Iraq's boarders is prepared for the date change. Iraq produces about 2.8 million barrels of oil per day and exports an average of 2.2 to 2.3 million of those barrels under the oil-for-food deal.

About 50% of Iraq's exports go to Europe, 35% to the US and the rest to the Far East. From well to loading port, Iraq's oil infrastructure is antiquated and poorly maintained while its electricity supply--vital to the operation of wells, pipelines, refineries and ports--is highly susceptible to interruptions, experts said.

Iraq's Mina al-Bakr port and Iraq's pipeline sending crude to the Turkish port of Ceyhan have both been singled out by UN oil experts as unreliable and overtaxed. The pipeline's communication system is in dire need of repair and some automatic processes are having to be done manually due to lack of spare parts, according to UN-assigned oil experts. The age and disrepair of Iraq's oil industry on the other hand means that Iraq depends less on computers and oil officials are well practiced in creative "glitch management."

Iraq exports 45% of its oil via Turkey in the north, and 55% via its own port of Mina al-Bakr. In case of problems on the southern transport root Iraq will have little ability to reroute oil through the north as that pipeline is already operating at near full capacity. Iraq's ability to reroute through the south in case of the opposite scenario is limited by loading facilities at Mina al Bakr.

In the case of Iraq, Y2K glitches would most likely reduce exports unless refineries are solely affected, in which case Iraq will likely hike crude exports and limit internal gasoline and diesel consumption. If Iraq experiences production problems, internal supply will likely be the first to suffer as Baghdad tries to maximize exports, experts 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
Hill Billy Mitchell
Y2K blame for martial law
The U. S. Gov't does not fear a Y2K disaster nor economic chaos. It just wants the scenario to be under its own terms. Why not orchestrate the whole affair. Usher in martial law and blame the subjects for their self-imposed slavery.
TownCrier
A real-world exercise in economics. If YOU were the Minister of Tade and Finance, what would you accept as solid payment in a shaky region?
Russia seen resuming gas exports to Yugoslavia after debt talks
By Maria Zabralova,
Bridge News Moscow--Sep 8--Russian gas giant Gazprom is expected to resume exports to Yugoslavia once an agreement on its debts is reached, a Gazprom official said today. The transit of Russian gas was suspended on Sep 1 due to Yugoslavia's inability to pay Russia for the gas, and Hungary for the cost of transit.

Gazprom is reported to have assumed responsibility for covering Belgrade's outstanding debt to Hungary for the transit of Russian gas. "Gazprom and Hungary's (major oil and gas trading and marketing company) MOL are in talks now on gas amounts to be supplied to Hungary as payment for Serbia's debt," the official told Bridge News. The official said Serbia might be allowed to re-export Russian gas to Hungary to repay its debt.

Russia was scheduled to supply 2.3 billion cubic meters of gas to Yugoslavia this year under an intergovernmental agreement, but had managed to export only 545 million cubic meters in January-July. NATO imposed an embargo on the country when it launched air strikes in March. "Hungary obeyed the embargo imposed by NATO and did not deliver crude or gas to Serbia," a MOL official said. He confirmed that small amounts of Russian gas had been transported to Bosnia, but they were also suspended Sep 1.

However, Russia and Hungary presented different reasons for the suspension. Russia said the suspension was caused by Yugoslavia's debt to Hungary for gas transit, while Hungary said it was a Russian move to make Yugoslavia pay Gazprom. "As soon as the parties agree on the amount of payment, I think the gas supplies would be resumed," the Gazprom official 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

[Now you know why gold will never go out of style.]
Hill Billy Mitchell
National Sales Tax
A national sales tax implemented to replace uncollectable income tax under Y2K breakdown would make it much easier for the implementation of the beast system - buying and selling restricted to cashless transactions.

Although a national sales tax would be fair in the opinion of Libertarians it would expedite the process of removal of all freedom through the implementation of the beast system

HBM :)
TownCrier
"r"
There it is!
TownCrier
"[the Fed] will step in and take extraordinary actions to make sure things are OK [for Y2K]"
http://biz.yahoo.com/rf/990908/38.html"It looks like something major changed in the market," Remy said.
HSBC Securities head trader comments on the latest decision by the Fed.
Hill Billy Mitchell
Harry Schultz optimistic
I have always preferred a national sales tax to an unconstitutional income tax. Now that the possibility is on the horizon I have misgivings. Like Harry Schultz I believe that the ease of collection of the tax might very well be the only option for the quick fix should the IRS collection system fail. I do not share his optimism, as total control would be implemented much more easily. Any underground economy would quickly be crushed.

HBM
TownCrier
U.S. consumer credit use shot up in July
http://biz.yahoo.com/rf/990908/4b.htmlAmericans credit card usage expanded credit in July by $8.8 billion, up from the Fed's initial estimate of June credit at $2.8 billion, which they subsequently revised upward to $3.3 billion.

A similar percentage revision to the July value next month would show July's credit expansion to be $10.4 billion. Yikes!
Hill Billy Mitchell
Clinton will not give up power - no matter what!!!
Cut off nuclear power under the guise of meltdown prevention. Trigger domino affect. Implement martial law "operation Schwartzcopf" No need for national election.
HBM
mike55
ORO - Must?
Thanks for your insightful observations.
Dave
Hill Billy Mithell, (Msg ID:13054)
I see you've been reading Revelation 13 & 14 again.

Y2K will be a unique and destructive event. Could be the cause of that "time of trouble such as there never was since there was a nation" (Daniel 12:1, Joel 2:2, Matthew 24:21, Mark 13:19, Luke 21:23).

Does the "shoe fit"?
Goldspoon
Townie, Goldfly, ORO + Leigh
My humble thanks for expanding on my comments....
Rumor i heard in the forest, just outside the castle..or was it posted on a bank web site,anyway....FED to accept baseball card, celebrity autograph, and old record collections as bank collateral for repos....has the worlds economys and its string pullers entered the Twilight Zone or what???... strange days indeed...Can we atribute this to Total Fear of hurricane force winds from a Y2K bank run colapsing thier houses built of paper??...
Bartender..Make mine Gold please....

Leigh, your comments about revaluing your car cracked me up...thanks for the laugh..
USAGOLD
UK Raises Interest Rates...
Crazy.

The British just raised interest rates to support the pound which has essentially been in free fall since the May 7 gold sale announcement.

Remember when "analysts" were telling us that the British may have sold gold to deliberately tank the pound against the euro before EU entrance? I have to state the obvious: It worked. Splendidly.

But hold on a minute........Now they raise interest rates to stop that plummet. Whatever happened to letting the pound drop against the euro??

So another "plausible explanation" for this BOE gold selling insanity crash lands right next to:

the "we-want-portfolio-balance" explanation;

the "we-had-to-get-rid-of-our-gold-now-before-EU entrance because-they-won't-let-us-sell-it-after-we-join (in 2004 or whatever)" explanation;

and the "we-had-to-sell-it-now-before-the-IMF-unloads" explanation.

What next?

As James Grant recently stated so eloquently we now understand why the word sterling has dropped from the description of the British currency.
Hill Billy Mitchell
SUBMISSION

I am certain that our children do not remember the freedoms
which we enjoyed and have lost. They are trapped in a
system which will guarantee their subjection to totalitarian
rule. They inherited this system from us and our parents. It
is too late to reverse the inevitable totalitarian rule but it is not too late provide them with survival assets. These
survival assets must be secured for ourselves and our direct
decendants. It is our responsibility to provide for our own
families. "...if any provide not for his own, and specially for those of his own house, he hath denied the faith, and is worse than an infidel. 1 Thimothy 5:8".

What went wrong with our country and the life that once was ours. The indisputable facts:

The cowardly submission to slavery without lifting a finger. It happened in Germany and it is happening in our country today. We do not have to be a part of this cowardly submission. There are ways to fight for our freedom without exposing ourselves. Bondage begins with dependence upon the slave owner. How do we avoid giving up our economic independence to the coming tyranny.

The answer:

Physical possession of survival assets for ourselves and those we love.
Neo
Things looking up!! BUT????
When the IMF proposes a "gold friendly" solution to their HIPC fund and liquidity problems, as has been done, I get very nervous. Why the change in stance? What have they got hidden up that greasy sleeve of theirs?
Loved the car re-valuation concept, Leigh.

A question for the honourable host : Michael
I have been talking to a few of the Gold Coin dealers in South Africa, and most of them have expressed dissappointment in the activity that they are experienceing. Asked them whether they have experienced a tightening in the supply, and most remarked, " No". My question to you is, how is the supply/demand of Gold Coins at USAGOLD progressing.
Thanks

To end off, I have a good feeling about tommorrow. 9/9/99 and add to that the fact that it is exactly 52 days after the DOW high, and you will never guess what happened 52 days after the highs in 1929 and 1987? ( Think its 52 days?? Actual days elludes me, BUT I know the DAY is tommorrow )
Hold on all!!!!!
RAINMAN
(No Subject)
The FED can flood the market with as much liquidity as they want , the real problem is elsewhere.
The liquidity injected by the FED is supposed to reach primary borrowers through banks.
However , most banks are reluctant to inflate their balancesheet at year end since it will deteriorate their cooke ratios and they will certainly be downgraded by rating agencies.
Some big names have understood that. This the reason why big borrowers like FORD or IBM are issuing bonds as if there was no tomorrow.
The problem is that most small and medium size borrowers don't have access to the bond market to get cheap financing.
THERE WILL BE A LIQUIDITY SQUEEZE DOWN THE ROAD TOWARD YEAR END.
Goldspoon
Tomcat
Remember my post about palladium would have to retreat or platinum move higher...palladium retreated (bad news) platinum held on to $5 (more or less) of yesterdays gain..(good news).... maybe tomorrow....Looks like oil is ready to ruin the stock market party... i don't see how they can ignore it much longer..Hey! who spiked this party punch with oil..?!?...and there is little flakes of gold floating around in it too...Yuck! im leaving...come on Doris and steal thier Silverware while your at it!!
Aragorn III
Hill Billy Mitchell and your 13059... Fortunately, I find that my own outlook is not so bleak.
A simple but lifeless beacon in the night has more power to give direction to mankind than does any living and active manifestation of his greatest fears howsoever duly elected it may be.

Similarly, a single free man of honor may, by example, change the world. Consider one Abu al-Qasim Muhammad ibn 'Abd Allah ibn 'Abd al-Muttalib ibn Hashim, or one Jesus of Nazareth, or one Siddhartha Gautama. Your own personal religious views aside, one must in all candor recognize the lasting worldwide impact of Muhammad, of Christ, of Buddha. Live free, and fear no nightly noises. Should you find yourself confronted in the wilderness by a dark cloaked rider, let yourself shine like the Sun and witness the power of one free man. You might not change the world, but you just might change your life...though there are some that would be quick to say a world seen through new eyes is a new world indeed.

got gold?
Hill Billy Mitchell
Portfolio mix
Suggested portfolio allocation in these times:

Physical holdings only:

40% GOLD
20% SILVER
20% FOOD CLOTHING SHELTER
20% SELF-DEFENSE

Forget real estate (you should be renting at this time)

Your gold will buy 1,000 acres of standing timber or whatever real estate you want to convert to when the hammer falls on paper.

Goldspoon
IMF needs to take a pill....
http://dailynews.yahoo.com/h/nm/19990908/bs/financial_imf_2.htmlHere it is!!! IMF's comments sound as if it is becoming a Gold Bug again,... the first of the article sounds as if they are having a nervous breakdown about the stockmarket, non compliant banks, dollar trade imbalance,etc.... i say "duh"..... the end of the article wonders aloud about.. "is it time to scrap the free floating currency idea"??? They did not say it... but this is a lament for the Gold standard...Their actions on revaluing Gold is a foot in the door... i see movement behind the curtain....things going on behind our backs...trial ballons being floated... sells of gold that make no sense...plans being made... Greenspan-"I told them so.. but noooo...it all collapsed and now the gold standard is the only way out"......

IMF's comments sound as if they have been reading this forum.... to little too late i say....
TownCrier
BBC: Bank of England rate rise anger
http://news.bbc.co.uk/hi/english/business/the_economy/newsid_441000/441772.stmThe Old Lady of Threadneedle Street is being bitterly condemned for raising interest rates by a quarter-point to 5.25% --said it was done to stem inflation from rising property valuations, tight labor market, and the eventual carry-through effects of higher oil prices.
TownCrier
BBC: IMF rethinks gold sale plan
http://news.bbc.co.uk/hi/english/business/the_economy/newsid_441000/441263.stmBBC says: "It would be a remarkable change of view for the Fund. Only last month a senior IMF official dismissed the idea of revaluing the gold, calling it "inconsistent with the Fund's Articles of Agreement." "

You're already one step ahead if you read our news briefing yesterday.
Hill Billy Mitchell
Gloomy outlook
Aragorn I

Have gold physical gold!

We, many of us on this sight, are single free men some of honor and some not. I consider you a man of honor and take your not so bleak outlook as an outlook with more hope than I can muster up for this earth. This earth as we know it is rather temporary. How we handle ourselves on this temporary earth will affect both the temporary and the eternal for ourselves as well as others. I consider your outlook honorable; however I do not see much hope for change in my lifetime. I do look for survival of the hope for freedom in my grand children. " A world full of ignorant people is dangerous to live in," Archibald Mcleash. I am not judging who is ignorant and who is not. I will say that my opinion is that you are not in the ignorant category. But you are a great exception. Ignorance is as plentiful as paper at this time. I do not hold out hope for preservation of freedom in the U.S. because I am convinced that in the mid eighties time ran out for reversal of the enslavement of our people.

Please do not take this to mean that I intend to go down without a fight.

My plans are to somehow survive and help others to do the same.

HBM
ORO
USAGOLD Is the IMF testing for pregnancy?
Do you read into their action a test baloon?
Goldspoon
Step right up... we have no money...how about travelers checks instead??
Clip from a bank web site....
*********
Should I withdraw extra cash for Y2K?
That is a personal decision. We do know that many people are considering withdrawing extra cash in anticipation of the Y2K date change, and we're concerned about the safety of those who plan to carry a large amount of cash. If you plan to have extra cash on hand, we recommend you use traveler's cheques instead. Unlike cash, traveler's cheques cannot be used if stolen and can be replaced. Because we strongly recommend traveler's cheques, we will waive the traditional fees for our customers for the purchase of traveler's cheques at every Bank United branch during the month of December 1999.
Aragorn III
HBM...yours is a quotable quote..."Ignorance is as plentiful as paper at this time. "
Perhaps the history books will look back and say that you spoke with such clarity, how could others miss the message? Maybe an alteration is in order for your good words.

"Optimism is as plentiful as paper at this time."

But judging from your words, this alternative I suggest does not reflect the clear and present danger. I propose another:

"Arrogance is as plentiful as paper at this time."

Yes, that must be it...that is why some do not listen. Do they not say that pride goes before the fall? The meek shall inherit the Earth...because the meek have gold.

got gold?
Hill Billy Mitchell
Dave, Yes! etal.
Dave and others

Yes!

We run the race together.

Nothing counts but Christ!

I am a pre-wrather (not a very popular position to take at this time)

"With thy wisdom and with thine understanding thou hast gotten thee riches, and hast gotten gold and silver into thy treasures." Ezekiel 28:4

A.W. Pink, I believe, wrote the definitive work on the "Beast". He says that the above passage is without a doubt a reference to the "Beast". If the "Beast is active on the earth at this time, and I suspect that he is, he is undoubtedly accumulating gold and silver into his treasuries. "Was it not for this Bible reference I would ignore silver and accumulate gold only. Since he will use his great control of the world's gold and silver I feel that we have a key to survival in this fact. Another's insight concerning the Euro and its gold backing which will be used to destroy the dollar is especially helpful in conjunction with Ezekiel 28:4.

HBM
USAGOLD
ORO...
I am concerned that the IMF might be paving the way for future gold sales by making gold loans now.

But to answer your question more directly I think you might be close to the truth if I'm reading you correctly...but with a subtlety. I think they would like to slide this by their critics particularly in the U.S. Congress (and gold community in general) so that they can make bigger loans in the near future. This 10% business might be a ploy to lull IMF critics to sleep. Instead of selling the gold and handing the cash over to the third world countries in the form of a loan, they are borrowing against it (if the press reports are to be believed). They then relend the money to the third world. The next step would be a major default at some point in the future -- possibly even a major country like Russia. Then they come back saying that we have to sell the gold now to cover the loans -- political expediency, if you will.

I worry more about it being a set up than a trial baloon. It's alot easier to get Congress to do something during a "crisis" -- financial or otherwise -- and the need for saving the world has conveniently presented itself. Perhaps they feel the need for an action generating crisis to accomplish their goal of dumping the gold.

What mitigates against this scenario is the length of time to get this to play out. Meanwhile, the gold carry trade relentlessly ticks away and could blow up at any moment.

My advice to the IMF gold selling advocates would be to make a gold backed loan to Russia. The money would promptly disappear into private bank accounts necessitating selling of the collateral. They now have the crisis they're looking for. Congress buckles. The door flies open.

Paranoia? Maybe. And I don't have all the facts. Just some conjecture to spice the conversation this afternoon. As you can I see, I have a difficult time trusting in the intentions of the IMF as many of my august colleagues gathered at this table have already expressed during the course of the day's discussion.
Hill Billy Mitchell
Reply to Aragorn III
Aragorn III

You are right! Arrogance is most plentiful! I fear that I may have more than my fair share of it. I pray that it may soon be replaced with the meekness without too much discipline required from the Creator. Your gentle rebukes are helpful and needed. Thanks for being here for us.

HBM

Hill Billy Mitchell
USAGOLD re: IMF ACTIONS
To USAGOLD:

I have ceased to be ruffled by the actions of the IMF, central banks, etc. concerning the lending of gold and facilitating the shorters. The worst that can happen is the delay of the inevitable just as you indicate in your well thought out offerings. I am convinced that when the powers that be have the proper amount of physical gold accumulated and have completed their organized distribution out of paper, then and then only, will they not only allow the POG to rise but will manipulate the price upward to their great benefit. The trick is for us to move the portion of precious metals that are not our permanent holdings into whatever is undervalued when gold and silver is over valued and to do so before the big guys move back into real estate and digital money. When they leave metals I am convinced it will be at lightening speed.

Hope this does not appear to be a refutation of what you have said. I just mean that our pananoia(you said it, not me) will not serve us well in the light of absolute power.

The "Giant's footsteps" are becoming quite visible, I think?
TownCrier
After the Close: the GOLDEN VIEW from The Tower
http://dailynews.yahoo.com/h/nm/19990908/bs/financial_imf_2.htmlWe start today's report by highlighting a Reuters article first presented by fellow knight, Sir Goldspoon. It is a ***MUST READ***. The IMF warns of the U.S. market bubble and the potential consequences upon world markets upon its collapse. Also mentioned is the large U.S. current account deficit that puts at risk the banking and financial sector, noting the trade imbalance seen between the U.S. and Europe pressuring the dollar in the medium term. "The general expectation is that exchange rates could adjust in an orderly fashion, but there is a risk they will not, said Gary Schinasi, one of the authors of the report.

The IMF's International Capital Markets report also gives a sobering warning about Y2K and its potential impact on the banking sector. "All financial institutions face risks stemming from an adverse market reaction (whether warranted or not) as tensions will likely build up in the run up to the millennium," the IMF said, noting that the appetite for risk could fall and money could become more expensive. "Market reactions could range from a moderate flight to quality to an extreme flight..." On our foundation of gold, everyone here in The Tower is nodding with satisfaction in regard to the idea that "money could become more expensive." The article concludes with the IMF rethinking their onetime strong support of open capital markets, recognizing the vulnerability to such knock-on effects as witnessed during the recent Asian contagion.

The airwaves were full of speeches today by Treasury and Fed officials, Mssrs. Summers, Greenspan, and Meyer. Stocks were down, up, down, and finished mixed, with the DOW even and the Nasdaq taking a 1% loss on the chin. The Long Bond also finished nearly even with a microscopic drop in yield.

Derivative traders at COMEX found little direction today, and trading was described as "very thin," but with one trader saying, "The market is definitely trending higher." And so it is. The ink-on-paper December gold contract traded up 40 cents to close within a dime of the top of its range at $257.70 per ounce. Spot gold took the cue and was last quoted in NY at $256.10. The one-month lease rate remains in backwardation through year-end at a high annualized rate of 3.78% The big news in gold remains the recent about face of the IMF in regard to the WGC suggestion that they revalue their gold, an idea which the IMF originally dismissed, saying "A pure revaluation of the Fund's gold would result only in an accounting gain and would not provide the cash resources needed to fund the initiatives. Moreover, a revaluation of gold is inconsistent with the Fund's Articles of Agreement." For more on this we refer you to yesterday's reports and the various articles posted today.

It was a light day for the COMEX vault attendants. Two kilos of gold were escorted out of the Scotia Mocatta vault, withdrawn from the already small Eligible inventory.

October crude touched a 23-month high of $22.86 ahead of the release of American Petroleum Institute data (which are expected to show drops in crude stockpiles last week), and settled up 5c at $22.66 for the day. Prices also found support from OPEC Secretary General Rilwanu Lukman's comments that the group's current cuts in oil production could be kept from March 2000 onwards if oil prices were to soften during the typically low demand of springtime.

And finally, we are saddened to see the first stages of senility set in upon that dear Old Lady of Threadneedle Street. It seems that she is out of sorts, raising interest rates, selling gold, and in all regards simply defying our best attempt to interpret her game plan. We think it is time to take some good advice offered previously here at the Round Table...we'll take our checkers and go home.

And that's the view from here...after the close.
714
The Financial Criminals of the 90's
http://www.bloomberg.com/feature.htmlVery interesting take coming from "mainstream" financial press. Hmmm...wonder if they're thinking what we're thinking.

Got gold?
Aragorn III
Hill Billy Mitchell...
Please be assured there was no essence of rebuke in my words. I saw that you had a fine phrase that hit the nail nearly square on the head...I only righted the hammer swing a bit. It is I who remain but a humble apprentice in these matters.
TownCrier
Hear ye! Hear ye! There is now an update at USAGOLD!
http://www.usagold.com/wgc.htmlTHIS WEEK IN GOLD has now been amended with the latest weekly gold market commentary of World Gold Council staff. In it they review the significant events that affected the gold market for the week August 30-September 3, 1999. Grab your torch and wander down the hall and to the right.

We'll keep your chair for you.
FOA
Reply
Cmax (09/07/99; 19:59:17MDT - Msg ID:12996)

Cmax, Hello and welcome again!
Thank you for sharing your present thoughts and very relevant earlier posts. Did you read Holtzman #12765? His excellent post was able to create a nice perception for physical gold, "street gold". A well written analogy that allows the average investor to grasp what I believe will be a new, much larger market for gold world-wide. It also generates a real understanding of how the "street price" would differ from all other established markets. He used the 1864 American civil war to demonstrate how two issues of paper money (as in comparison to paper gold?) were discounted in common circulation. It is a tremendous help to anyone that reads it.

In any event, I believe most of the lesser developed countries will be in the forefront of building a high "street price" for physical gold. Especially China! For them (some Chinese are very, very wealthy), price was never the real consideration, rather it was the enormous amounts they had to bring in well ahead of any supply disruptions. Hence their buying patterns over the last many years. Many very large buyers were moving gold through Hong Kong, before and after the take-over. I believe, far more gold has already entered that country than public figures show. It will not be available at any price when the storm hits. They already have the gold! Any move to announce an open bid, using dollar reserves would be after the fact. The oil producers are very well in the same situation. I think it was the poster "GFD" (hello GFD!) that noted China the other day. He also pointed out how "street gold" could shield many citizens outside the Western block from the extreme fracture that is coming. Y2K will be something to behold, but it will be a side-show when the modern gold market breaks!
Again, thanks for reading from Venezuela and write when able.

FOA


FOA
Reply
Leigh (9/8/99; 9:35:05MDT - Msg ID:13035)
IMF Gold Pricing Scheme
Does anyone remember FOA's June 14th prediction of a major shift in gold valuations? He said theU.S. would openly go along with this change. Well, it looks like this is it. My question, again, is how and why they are only revaluing 10 percent of their reserves.

Hello Leigh,
Let's look at what they propose and lay that upon the 1976 Jamaica Accords. With that background we can work out why the US dollar block is "now" moving in the gold direction.


------------By Mark Egan

WASHINGTON, Sept 8 (Reuters) - The International Monetary Fund will revalue some of its gold to fund debt relief thereby avoiding open-market gold sales, a politically difficult proposition that spooked gold markets, documents posted on the Internet revealed on Tuesday.-----------

First, I want to say that the posting of those documents was no accident as some think. No one wanted to take credit for floating this in public, so an order was given to send it out the back door! This is a major shift in international currency dealings that will eventually impact the LBMA gold
market in a big way. The BOE gold sales to help out some favoured dealers is no longer looking like a bumbling operation. Because no more gold was coming out of Euroland and the USA cannot touch it's bullion, London had to be on track to cover some bases if the original IMF deal fell
through. But, you might say, they always had the Swiss sale to back them up if the IMF went sour? No possible way! The US knew that world liquidity was drying up and the dollar would have to be sacrificed with some move to gold revaluation if congress cut off the sale. Once that "gold currency" door was opened, the Swiss will never sell! Change is coming to the gold world and London had to already be online to the EMU before this hits the dollar. "Street Gold" and "Paper Gold" are going to part ways!

-----------The documents released on the Internet provided few details on the new plan but sources told Reuters the latest plan had already been approved by the Group of Seven nations. Under the plan, countries which owe the IMF money from past loans, such as Mexico, would buy IMF gold the day before loan payments are due and then repay the instalment the next day with the same gold, sources familiar with the scheme told Reuters.The plan raises cash for the IMF because the fund values the gold on its balance sheet at about $46
an ounce. Since gold is actually worth about $255 an ounce, the transaction would net the IMF profits of about $209 an ounce, or about $2.1 billion. After selling the gold, the fund would return $46 per ounce back to its General Resource Account and then transfer the $2.1 billion in profits to a trust fund. The trust would invest the $2.1 billion and
use the proceeds to fund both the HIPC debt relief nitiative and ESAF. The new plan will likely appease the gold industry and lawmakers from U.S. gold producing states since the IMF's gold would probably never leave its vaults. ---------

Leigh, this action is a direct violation of the Jamaica Accords:

2.C Managed floating system and the G-7 Council

-----------In January 1976, the IMF convened a monetary summit in Jamaica to reach some agreement on a new monetary system. The Jamaica Accords formally recognized the managed
floating system and allowed nations the choice of a foreign exchange regime as long as their actions did not prove disruptive to trade partners and the world economy. Gold was demonetized as a reserve asset. The Jamaica Accords were ratified in April 1978.-------------

For the first time sense 1978, gold is going to be recognized and utilized as an "international currency" "in the open" on a G-7 level! They are accepting the gold as a "MONEY" payment and will hold it as a real Monetary reserve to lend paper currency against. This is a HUGE reversal for the Dollar / IMF block and will work to the advantage of the ECB / BIS! If this action holds, the ECB has won the dollar roll for Europe thru default!
The point I made in my June posts (and prior) was that everyone was buying physical gold and "running like hell"! They were doing this because of the risk implications! If none of the non Euro major gold holders could sell gold to further support the paper gold market, it would fail and bring down the dollar. When England announced their gold sale, it was obvious that the political chances of new gold hitting the market had become almost zero. Now with GS locking up "street bullion" and selling future months like crazy, we can see where the split is going to occur. This could mark the turn!

All: I hope to reply to ORO, Michael and everyone, but must take care of several things.

Will return much later. thank you FOA


Cavan Man
FOA
Having been away for awhile, it is good to return here, once more and benefit from your earnest efforts to provide a different perspective other than what is accepted as, "the norm".

"......if you can get the right book at the right time you taste joys--not only bodily, physical, but spiritual also, which pass one out above and beyond one's miserable self, as it were through a huge air, following the light of another man's thought. And you can never be quite the old self again. You have forgotten a little bit: or rather pushed it out with a little of the inspiration of what is immortal in someone who has gone before you.

T.E. Lawrence

USAGOLD
Various...
HillBilly...Please be assured. I am not married to my own thinking as expressed from time to time here. I like you pursue the Grail and look to my fellow knights and ladies to help me find the way. If something I say sparks another thought and then that leads to something else, who knows? At some point we might find ourselves embracing the truth (reality).

---------

Aragorn III: Your words: "A simple but lifeless beacon in the night has more power to give direction to mankind than does any living and active manifestation of his greatest fears howsoever duly elected it may be."

The very definition of knightly chivalry. Let he who is pure enough pull the sword from the stone.

The challenge of our everyday lives. Who says we have to live mundane lives?

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

Towncrier: Did I ever tell you how much I enjoy your knightly reports? You light the hall with that torch you carry from the tower. I think I speak for all gathered here when I say we appreciate your daily analysis.

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

Cmax: Thanks for taking your rightful place at this formidable table. We have been waiting for your return from faraway lands and that first post tells the reasons why.

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

Tomcat and Peter: Thanks for keeping the fire lit over this past weekend. The many readers appreciated your campfire tales, and dreams of gold and a secure life. And also the humor and good spirit that prevailed all around.

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

I see my good friend FOA has posted. I return to the Forum to read what now occupies that great mind........

My best wishes to all.

Thank you for being here, Leigh. I wish we could get more of the courtly Ladies to post their views. Thanks for the well spoken effort in that regard.
USAGOLD
Various, cont.
Cavan Man....Welcome back. Good to have you back tilting a cup with your fellows.....
FOA
Link to my last post
http://biz.yahoo.com/rf/990908/bda.html------Republican Jim Leach, chairman of the House of representatives Banking Committee, welcomed the IMF's new approach to the thorny issue of unlocking the value of its gold which would see the fund revalue some of its gold rather than sell it on the open market.--------

Cavan Man, nice.

USAGOLD, much thanks for this forum, but just as soon as England is in the EMU I'll still have to collect that dollar! FOA
Hill Billy Mitchell
The problem with trade deficits
The problem with trade deficits

Only by consuming more than one produces can a balance of payments deficit occur. When an individual consumes more than he produces he does so if and only if another produces more than he consumes. Now the one that consumes more that he produces will owe the one who produces more than he consumes. For only one who produces more than he consumes has the savings available to enslave the over consumer.

The laws of economics (supply and demand, price equilibrium, etc.) are legislated and administrated by the Creator just as surely as he legislates and administrates the laws physics (the laws of gravity or the laws of thermo-dynamics etc.)

Now a nation of people can no more break the Creator's laws without suffering the consequences than can an individual. When a nation has a balance of payments deficit of $200 billion, that nation just as surely hands over its sovereignty to those who produced the excess as an individual becomes a servant to the lender. The nation with the balance of payments deficit, that accumulates to a point beyond the ability of that nation to service the interest on the loan, goes into a bondage from which it can never be freed short of war.

I have learned in my time that the Creator does not cotton too highly to those who ignore His laws. He allows delinquency to the point of His choosing and allows it to no further.

I am convinced that His laws are so clearly delineated that careful reading reveals the exactness of the legislation and the sureness of the administration of such laws. The laws governing the debtor and the creditor are as follows:

1) "Owe no man anything"�Romans 13:8 (a Greek scholar has said that the literal rendition of the Greek would be translated "Owe no man nothing, no not anything, no nothing at all)

2) "No man can serve two masters�"Matthew 6:24

3) �"the borrower is servant to the lender." Proverbs 22:7


Enter into debt if you dare. It is your freedom. Rest assured that the He will execute the proper administrative rules as His perfect justice requires.

To those who would call Him LORD be warned--He is not your LORD if you have any other master. If you have debt you would do well to liquidate the debt with all speed so that you might not be a liar when you call Him LORD.

The next time that you are told by the lofty intellectual that your nation owes its debt to itself, bring to mind that a nation like an individual cannot consume more than it produces without debt to the nation or nations who produce that excess consumption. It is not a gift. These lender nations will require payment. Only when and if that debt is paid does the U.S. no longer bow the knee to the lending nations.

I suggest that our $200 billion+ per year accumulated balance of payment deficits has put the U.S. dangerously close to a point of bondage from which it cannot be freed short of war. The day the gig is up and the trillions of dollars are repatriated, the U.S.(once referred to as a sleeping giant) will discover that it is harmless slave with no hope of repudiation short of war, a war of which the outcome may have already been determined.

And we wonder why those masters have been so willing to purchased U.S. Treasury Bonds. I tell you Christian or not these masters understand the laws of the Creator and how they work. A nation full of ignorant people (arrogant people) is dangerous to live in.

Gold is not debt money! Owe no man nothing, no not anything, no nothing at all! You can do nothing about a nation gone mad. You can do something about yourself and your house.

Better get some physical gold soon.

I apologize for the long post.

HBM
USAGOLD
FOA...
Hrummmmmmmph......I have placed one nice crisp, rapidly depreciating Federal Reserve Note aside for that day....Amidst all the confusion maybe there is a life for beloved England in the Union....(but I don't think so)...We watch this new England together, yes?
THX-1138
RE: PH in LA Msg; 13006
I did not mean to cause offense to anyone when I posted the link to the site that you refered to, nor did I intent to be spreading Clinton hate mongering.

My intentions in posting the link were to provide some previous background info regarding hidden trust funds for the Clinton's, and the mentioned hidden trust fund mentioned in GATA's latest posting. I realize now that the site the info was attached to was an anti-Clinton web site.

In anyone has been offended then I apologize.

However I do find it ironic that all the alleged accusations with regards to Clinton Administration seem to be turning up true in some cases. With regards to the puzzle pieces falling in place, if the allegations regarding the gold shorting practices of Hillary's blind trust fund are true then the Clinton's would appear to be associated with gold munipulation and therefore his calling for the IMF gold sales start making sense. That was what I was refering too.
I guess I will need to make myself more clear next time, and will more closely look at the links I intend to post.


THX-1138
Cavan Man
Hill Billy Mitchell/Goldspoon
I admire the fervor of your exhortations but, so much taken out of context! I myself am guilty of quoting the Scriptures when to my advantage; woe unto me because all is vanity before The Lord. Oops; I did it again.

I enjoy discussing Scripture and religion as much as anyone but I am dismayed to find so much of it expressed here in the context of "doom" and, "the end" etc.; it has kept me away from this much loved forum.

While I might agree with your sentiments exactly, I find it difficult if not impossible to carry on each day as my Creator would have me so do while contemplating such thoughts as your comments express.

While it might be good and sensible from a secular perspective to look for a "heads up", if you praise God, pray for mercy and forgiveness and seek to do His Will always in the Spirit of thankfulness and the "basics" delineated in both the New and Old Covenant contexts, you (I suspect)will flourish in Eternity. That is the goal.

Before the Trumpet of Saint Michael sounds, we will all be sorely tested; gold and silver, FMJ and various provisions will prove to be superfluous and, ineffective at best.

The content of this forum is but one act of a production for all to enjoy daily. We enjoy because of His Grace. I know we will all benefit from possession of PM. However, I also am assured that those who do not possess even .1867 of AU will be better off than me.

I do enjoy reading your posts else I would not respond.

I know a woman who is an invalid; emaciated and incapacitated by rheumatoid (sp?) arthritis. Her brother and care giver, just suffered a heart attack and survives in critical and unstable condition. Yet, her faith is unlike any I have ever known. She will worship in Eternity but has not an inkling of what goes on in the world outside of her room nor does she care. She has little fiat money and even less gold I suspect. However, her "riches" are beyond compare.

Please forgive the long post.

Kind regards...CM

Canuck
Canada sells 6 mt.
Canada sold nearly 6 tonnes of gold and little is said, there has been little notice and no obvious impacts on the POG.

This raises 2 questions;

a) Why did Canada sell this gold?
b) When BOE sells gold, there is a ruckus. Albeit there is
more at stake(in terms of quantity) is again raises the
question of why is the BOE selling its gold? It again
raises the question of why the BOE is so vocal in its
sale? It again raises the question as to why does the BOE
appear to have a hidden agenda? Why is it that this
agenda is not known? I posed a question 2 days ago and I
repeat this to all at the table round, why is it that as
tax paying citizens (especially British tax paying
citizens) we do not know the agenda of our respective
country's reserves? After 4 months (May 6- Sept. 6) we do
not know any more of the BOE sale. Why is this???
Canuck
Comex
Can someone confirm that the Comex contract positions close on Friday, Sept. 24th.

Mr. Murphy send a 'dare' to G.S. in a recent 'MIDAS' suggesting the near squeeze on Aug. 27th. Does anyone expect
any similarities or events this month?
Hill Billy Mitchell
Cavan Man - out of context?
So much? Could you be more specific? On second thought
no need to explain.

You know, it is almost impossible to make statements of such vast import without over simplifying. I certainly am guilty of that.

You are absolutely right about the worshiping old lady who abounds in riches I have not accumulated
SteveH
Oro and FOA
You guys continue to enlighten us (and amaze). FOA, your most recent post removes doubt, where doubt existed, as to the motive of the IMF for its reevaluation of 10% of its gold. Your view is the glass half-full viewpoint, whereas, Michael's is the glass is half-empty. ORO simply resizes the glass to dispense with doubt and says, he is sure that the dollar is under duress, he wants to know when the duress will make any investment moves wise and timely.

I say to you both that the frequency of change in this gold market is in crescendo, with news everyday that provides both a timeline and a storyline that will be discussed as long as there are discussions. The time it would seem is now, the story is that gold will soon realign itself as it has three other times this century in at least a 1:1 (1:2) ratio of gold to the Dow. In fact, it may actually beat this ratio this time as it has been held back to far for too long and may actually swing dramatically the other way before realizing a 1:1 (1:2) ratio. So let the DOW go to 20000 in narrow breadth, that merely raises the window for gold's distinctive travels to reach parity to the DOW.

ORO, continue your search for timing as we will all benefit. Remember the crescendo and don't forget unintended consequences of staving the move and prolonging the inevitable.
AEL
HBM: exit strategy
Hill Billy Mitchell (09/08/99; 17:25:54MDT - Msg ID:13080):
"The trick is for us to move the portion of precious metals that are not
our permanent holdings into whatever is undervalued when gold and silver is over valued and to do
so before the big guys move back into real estate and digital money. When they leave metals I am
convinced it will be at lightening speed."

... Care to expand a bit? What would be the indicator of "overvaluation" in the metals? How can this be timed? etcetera...
Richard, Oregon
Please Don't Give Up
Funny story from last Saturday. We went to town, driving past a businesses marque board, my wife reads "Please don't give up. . . . .Get your ammunition here". Then she says it out load and comments how strange that sounds and is this Y2K hype? My son says 'Noooo . . .It says "Fleas don't give up. . . . .Get your ammunition here". That didn't quite make sense so we drove back around the block to check and found out it was a veterinary shop. Boy, was that a good one!!
PH in LA
Reply to THX-1138

Re: (9/8/99; 20:07:31MDT - Msg ID:13093)

Please, THX-1138, be assured that I never dreamt of taking offense at your post. Nor did it ever occur to me that you intended any hate-mongering towards Clinton.

My only intention was to underline the source of your information so that everyone could weigh its merits fairly and without predudice.

Sometimes I seem to come across as more judgemental and critical than I intend; for which I ask your indulgence.

That said, please allow me comment on your remark: "I do find it ironic that all the alleged accusations with regards to Clinton Administration seem to be turning up true in some cases" by asking just exactly what "all the alledged accusations...in some cases" really means. In any case, considering all the absurd allegations that have been leveled at the Clintons, it would violate the law of averages if some of them did not turn out to be true, if only by accident.

Keep up the good work!
Hill Billy Mitchell
Goldspoon's bank web site clip
Goldspoon (9/8/99; 16:29:08MDT - Msg ID:13075)
Step right up... we have no money...how about travelers checks instead??
Clip from a bank web site....
*********
Should I withdraw extra cash for Y2K?
That is a personal decision. We do know that many people are considering withdrawing extra cash in anticipation of the Y2K date change, and we're concerned about the safety of those who plan to carry a large amount of cash. If you plan to have extra cash on hand, we recommend you use traveler's cheques instead.

Goldspoon:

You have sharp mind. This I'll guarantee went over the head of 99% of the readers which of course was the intent of the message. Travelers checks never leave the banking system do they? They are always floating until they are deposited in someone's bank account, at which time they immediately become once again a demand deposit?

These bankers are slick. They could very well deceive us into letting them protect us from our money forever!
Peter Asher
Traveller's checks
Are the most clever financial product ever invented. In return for the security guarantee, you pay them a fee for the act of LENDING THEM money at 0% interest, from the time you buy them till the time you cash them. Some people come home from a trip and put away the unused checks for a year or more. This is what built American Express Co.
Hill Billy Mitchell
Expansion on exit strategy
AEL (09/08/99; 21:28:02MDT - Msg ID:13099)
Hill Billy Mitchell (09/08/99; 17:25:54MDT - Msg ID:13080):
"The trick is for us to move the portion of precious metals that are not
our permanent holdings into whatever is undervalued when gold and silver is over valued and to do
so before the big guys move back into real estate and digital money. When they leave metals I am
convinced it will be at lightening speed."

... Care to expand a bit? What would be the indicator of "overvaluation" in the metals? How can this be timed? Etceteras...

Expansion on exit strategy

Just now what I find among the fence setters a problem of bottom fishing from the fence. Let me paraphrase Joe Kennedy, "I never buy at the bottom and I always sell too soon"

Kennedy was an insider if there ever was one. He was along with Jesse Livermore a notorious manipulator. Given this Kennedy admitted that he could not time the market at the bottom or at the top.

That being the case I think he did not take any undue risks with his wealth. It was not that difficult to determine in 1929 that stocks were grossly overvalued. He had no problem understanding when, say GM stock became undervalued in the 1930's. The situation is very similar today.

Anyone can see that Gold is grossly undervalued. To continue to test the bottom before you set the hook and get you some physical gold is to say that one will not ever get around to buying gold at bargain prices. The time will come when we will know that Gold buys way more than it should in the way of either paper or real estate. When that time comes only the greed factor to milk the gold bull to the last tick will deter one from moving a good portion of their precious metal physical holdings to those items which the herd do not want or cannot afford at the time. The reason I lean to real estate rather than undervalued paper assets is because I have a natural aversion to paper. Walmart Stock @ $12 - $25 would probably an awful le good buy. If so there will be even better paper assets available which will be readily identifiable.

When your gold will buy too much it will be overvalued. Trust me. You will know when it is overvalued. The problem will be a human one. Just like some are still waiting to find out if gold has really bottomed there will be those who will still be waiting to see if gold has really topped out. I truly hope that you and I are not among those who make that mistake. We are not talking intelligence here. Were talking common sense and guts to go against the crowd. If you are ridiculed for your leaning to gold now expect to be called an idiot when you convert your gold some day, especially if you do like Joe Kennedy and get out while gold is still going up.

Not much help but the best I can do.

Get it now -- get rid of it later

HBM
Gandalf the White
Just a few comments!
Thanks FOA for the view of the "floated" IMF change of policy thought. -- Years ago, when I was in the other Wash. (DC), it was common technique to float a rumor and see the response before implementing a new policy. No scream heard from either party or the sheeple, and BANG a new law or policy! -- The IMF had already said to the WGC that it could not do as the WGC had suggested, as it was against their own charter, BUT now after the webpage error -- do you hear anything ? --- We watch together, yes? --- BTW the Hobbits each have their "precious" !!
<;-)
Gandalf the White
Oh, YES -- one more item !!
I am still looking for the TWO seconds of my nomination of the posting by "Holtzie" to the HOF !! How about IT?
<;-)
jinx44
IMF gold sale - a question to anyone.....
Foa's 13086 was another keeper. I love the tale unfolding and I can only pray this may be a way for us to find our collective way out of the dark times at hand.

That being said, I can only wonder how the current IMF plan differs in function than an outright sale? I understand the accounting tricks-wink wink nod nod-but the disposition of the yellow stuff is still into a market of some sort, right? Will the IMF sell to the good 'ol boys or what? The gold is still absorbed into the market place. I don't get it.
elevator guy
@PH in LA
PH, there are many, many documented, but not widely reported, "irregularities" with the behavior of the Clintons. It is not hate mongering to speak the truth.

The only difference between our press, and the press in foreign countries is, that in foreign countries, they at least KNOW their press in controlled.

It is perjury to lie under oath. No matter how you define sex, no matter if it is a personal matter that shouldn't involve the sheople, uh, I mean, people, it is still lying.
This may seem like a small point that a forgiving American can easily overlook. But it tramples on one small, little persistant detail, and that is Truth.

Truth with a capital "T". To use any other version of Truth is a dangerous thing. It means that in future affairs of State, you may not be told the Truth. Like when the President says we have to send our sons and daughters to _________ (insert foreign country's name here), to fight a war. How do you know that you are hearing the "Truth", or just the "truth"?

I've used the one example of lying under oath, (which is a felony), because its an easy one to follow for someone who is not used to hearing the Truth, or able to discern Truth.
Real Truth sounds weird and unusual, to those who have been ingesting a steady diet of "all the truth that fits". You must take some Truth in small doses at first, as your psyche adjusts to seeing things as they are. As one grows in grace and knolwedge, they may be able to finally let go of the imitation truth, and drink deeply of reality. We have nothing to fear. We need not berate those who are not converted. They may see, in time.

If you have an open mind, you are not afraid to go back to that website in the privacy of your room, and read without predjudice, the documented cases of governmental lying, coverups, and crimes, all commited by those who have our best interests at heart. If you come away without so much as any gained knowledge, I will be surprised, and think of you as a stalwart supporter of the staus quo, who maintains with vigor the illusion of an open government in a free land, a land where the constitution has not been comprimised by monetary gain, where the rights and safety of God fearing citizens has in no way been tarnished by the special interests of the few rich and powerful who will stop at nothing for personal gain.

elevator guy
To FOA
Regarding your post #13086.

If GS continues selling paper like crazy, and snatching up the physical, and the G7 starts to use real gold for currency, where does that leave little ole me, with my meager Dec and Feb calls? Is the paper gold tower about to fall like a house of cards? I take it that the answer is "yes". Does that mean that my paper calls will be worthless?

Whatever the result, it seems imperative at this time to quit pussy footing around with paper, and start buying real physical gold.

See what this forum has done? I come to find out which way the paper is going to go, and I find out it is going up in flames!
Goldsun
How Many Funds
would a monetary fund mark, if a monetary fund could mark funds?
Would a woodchuck mark to market if it thought the price was heading down?
Goldsun
Canuck
Tickers
Can someone please confirm these 'tickers'.

GOLD,HGMCY,NEM and BMG.

Thanks in advance.
SteveH
Nader/IMF
http://www.house.gov/banking/42198nad.htmDec gold now...$258.40.

"Like other forms of socialized insurance, IMF bailouts exacerbate risky behavior by the private beneficiaries of the free insurance -- here, private sector international lenders. But the IMF is perhaps unique among corporate welfare insurance providers in affirmatively promoting risky conditions, as it seeks to do with the new drive to promote capital account liberalization that is sure to increase the volatility of the international financial system." -- Nader
FOA
IMF comment
------jinx44 (09/08/99; 22:49:44MDT - Msg ID:13107)
IMF gold sale - a question to anyone.....
Foa's 13086 was another keeper. I love the tale unfolding and I can only pray this may be a way for us to find our collective way out of the dark times at hand. That being said, I can only wonder how the current IMF plan differs in function than an outright sale? I understand the accounting tricks-wink wink nod nod-but the disposition of the yellow stuff is still into a market of some sort, right? Will the IMF sell to the good 'ol boys or what? The gold is still absorbed into the market place. I don't get it.------

---Gandalf the White (09/08/99; 22:25:25MDT - Msg ID:13105)
Just a few comments! Thanks FOA for the view of the "floated" IMF change of policy thought. -- Years ago, when I was in the other Wash. (DC), it was common technique to float a rumor and see the response before implementing a new policy. No scream heard from either party or the sheeple, and BANG a new law or policy! -- The IMF had already said to the WGC that it could not do as the WGC had suggested, as it was against their own charter, BUT now after the webpage error -- do you hear anything ? --- We watch together, yes? --- BTW the Hobbits each have their "precious" !!<;-)------

Jinx44 and Gandalf,
This IMF change is a fresh revelation on the market and may take some time to sink in. My current understanding is that the G7 accepted it as an inevitable consequence! Yes, it was a "floated" idea, but changes of this magnitude are never "put out" for approval. Rather, it's an "announcement" of direction and "everyone make adjustments" as they see fit.

Jinx, the gold will be sold (to Mexico as an example) at $46 ounce. That $46 in real cash (paid from Mexico) will go fill the hole left in the IMF bullion account. It won't change the rest of the bullion holdings as they will still be valued at $46. The sold gold will then be accepted by the IMF as payment (again example, Mexico) on a loan at the new $255+/-. You should recognize this for what it does. Gold will for the first time in "a while" be taken as a cash payment for a G7 loan obligation. Prior to this the gold had to be sold for currency and the currency used in payment.

Further: This "new money gold" will go into a IMF new account as a real currency reserve (just like dollars and marks) and be used as collateral to lend currency against. Read that collateral word as being just like all the other currency reserves CBs now hold. The big "no no" about this is that from the Jamaica Accords until now, gold could only be held as a commodity to be sold or lent before it's liquidity was recognized!

Leigh; This action opens up the door to use all "unlent" gold resources as currency. It could set off a scramble to "unlend" all "lent" gold. Especially notable is the fact that, through this precedent, the CBs could sell gold reserves to anyone at $46 and receive it back as a currency at market price for loan payments. That is why it's so important for the IMF to hold the other 90% back in another
account! Need I tell you that this action uses "physical gold" "as is", no paper! If, and it's a big IF, this goes through it will be the death of the paper gold era. AND, it will open the door to get the "street price" as high as possible!!! If they don't back off from this, it will open a can of worms the size of the pacific ocean! We patiently watch! FOA


Fasolt
Fasolt: My first time posting on a web site
Fasolt: My wife works in a govt.office here in D.C. Last night she found this here coffee-stained letter, ripped in pieces, in the waste basket of one of the head honchos. She brung it home to ask my opinion, but I don't know what to make of it.
Lawrense Summers, Secretary,
US Treasury Dept.
Washington, D.C.
Dear Larry,
This may weird to you, Larry, but even though I am the richest man in the world (can you believe? the last estimate was over $US100Billion), I'd been having trouble sleeping for some time. The Justice Dept and their anti-monopoly lawsuit against my Microsuft Co., although an annoyance, really wasn't the reason for my insomnia. No, it was the constant awareness that some bright young men were working on the development of an operating system which would render my Windows utterly obsolete--and which would, in due course, destroy my company. Besides, just between us, I was getting kind of bored with software, and I wanted a new, less ephemeral, sort of business venture. I have changed jobs, and I wanted you to be the first to know.

I have quietly sold 90% of my Microsuft stock (net proceeds=$92 Billion), and even more quietly, I have been buying stock in gold mining companies on various exchanges throughout the world. I now own most of the world's unmined supply of gold. Thanks to their stock prices being so low, I was able to acquire a majority interest in the following companies: Anglogold, Ashanti, Barrick, Battle Mountain, Durban-Deep, Freeport-McMoran, Euro/Franco-Nevada, Gold Fields, Harmony, Homestake, Kinross, Lihir, Newmont, Normandy, Placer Dome, Randgold, Western Areas, and a few others I can not disclose, since some sensitive negotiations are still underway. I have BIG and exciting plans for my new company, as follows:

First, the new amalgamated company, comprised of all the above gold mining companies will be called MACROHARD. My new MACROHARD head offices will be located here on Grand Cayman Island.

Second, not every cloud has a golden lining. The sad practice of "forward selling" of their gold reserves, which some of my recently acquired companies used to engage in, has been a real pain in the neck! So I plan to use most of my stock-piled gold, and most of the production from the gold mines I own to fulfill this unfortunate financial obligation to bullion banks and other institutions. I estimate this process will take less than six months, following which most of my gold mines will cease production and be placed on a care and maintenance basis.

Therefore, effective immediately, MACROHARD will not deliver any more gold to the world's commodity exchanges--except deliveries to those institutions which hold contracts of gold already (unfortunately) sold forward to them.

Now, aren't you glad that the USA has 8K tonnes of gold held in the vaults of Fort Knox and New York, more than enough to supply the demand of the entire world for over two years? As long as world demand does not increase, the other central banks have an additional 20K tonnes, or enough to meet demand for about five more years. Plus, as an added bonus, you have the gold production from all the small to medium-sized gold mining companies, whose stock I have not acquired [yet]. My wealth was not unlimited, and I was only able to buy less than 20% of the world's gold mines--but that 20% comprises more than 88% of the world's gold production.

I will inform the various Boards of Directors of these companies that their services are no longer required. The management teams will, as a matter of course, be downsized. But since these men are mostly millionaires (with even an occasional billionaire thrown in), I don't expect to lose too much sleep about this. After all, they own sizeable minority interests in the various companies which now will be known, collectively, as MACROHARD. I shall have to wait and see what creative contributions they can make regarding future policy here at MACROHARD. Personally, and just between you and me, Larry, I'm kind of surprised that they managed to sleep as well as they did these last few years--and getting all worked up about you r friends' central bank sales while they were (apparently) awake, and not doing anything all the while except complaining.

Although I understand your position on the approximately 165,000 gold miners in "the rest of the world" who are now my employees, and although I understand your concern for my 52,000 miners in the USA who work in my mines, let me assure you that I regard them all as my children. Generous severance or retirement packages are now being devised. Those miners who are both young and highly desirable to retain as employees will be able to regain their former jobs in about eight years, possibly less--if business conditions warrant. You see, I plan to give them the option of taking their severance/retirement packages in either the currency of their choice or my new gold coin.

Ah yes, my new gold coin. I am presently constructing here on Grand Cayman Island an underground, bomb-resistant, gold coin manufacturing plant. The new coins will be 99.99% pure gold, in denominations of 1/10 oz, 1/2 oz, 1 oz, and 10 oz sizes. I intend on naming my new coins: the "Micro," "Midi," Macro," and "Big Macro." My plan, so far, is to have a smiling face of yours truly on one side, and an imprint of my favorite bird, the Ostrich, on the reverse, but I'm not sure yet what posture the Ostrich will be in. However, public tendencies being what they are, I would not be surprised, nor particularly disappointed, if they ended up being referred to simply as "The Bird." These new coins will be made available to the public when business conditions warrant.

Which brings me to another important aspect of my recent acquisition. Since all of my gold mining companies will be without a source of income for an (as yet to be determined) period of time, the minority shareholders of these companies, some of long standing, deserve adequate rewards and incentives regarding their investments. Consequently, both individuals and institutions who own shares in my gold companies as of today will receive annual dividends equivalent to the interest paid on Ten Year US Treasury Bonds--but they will be paid in MACROHARD's new gold coins. These shareholders can, of course, subsequently convert their gold coin dividends into whatever currency they choose. This is why I said most of my gold mines in an above paragraph: relatively high cost mines and/or mines which are near the end of their ore reserves will be kept in operation primarily for the production of gold coins which will be used to pay dividends to all MACROHARD shareholders. I have always valued loyalty.

Recently, I lave been lucky to secure the services of two capable men to help me operate MACROHARD. Henceforth, all public relations and media-oriented communications will be handled by my neighbor, John Felderhoof. Meanwhile, my new Chief Financial Officer, who has another, smaller company located here, is my friend, George Sorrows. Together, we intend to make MACROHARD and the world a better place to live in.
Bill Grates
President and CEO,
MACROHARD

P.S. I've been sleeping much better recently. How about you?
P.P.S. I almost forgot. Within a couple of days, John has a rather creative version of this letter that he will post on some internet chat sites. The following day he will submit an even more creative full page notice in the WSJ, NYT, FT, etc. Hope you're enjoying your new job as much as I am mine. ["mine"--get the pun?]

FOA
More on IMF!
http://www.iht.com/IHT/TODAY/THU/FIN/imf.2.htmlParis, Thursday, September 9, 1999

IMF Plans to Revalue Its Gold Reserves

Accounting Step Is Latest Effort to Finance Debt Relief for Poor Nations

By Paul Blustein Washington Post Service

(FOA note: see link for full story)

------According to Reuters, which translated from Dutch the document posted on the Web site of the Dutch Finance Ministry, the plan works as follows: A country that is not having trouble making its debt payments would buy gold from the IMF at the lower price the day before a loan payment is
due and then make its payment the next day with the same gold.

The IMF would then have gold it could value at about $209 an ounce more than the gold it started with, based on current market prices.

The IMF would set aside the ''profit'' in a special trust fund for poor-country debt relief, as well as another low-interest loan program for low-income nations. ---------



Hipplebeck
imf plan

They are , in effect, handing out a huge chunk of free money to someone of their choosing, and loaning, at interest, to someone who is in financial trouble.
Why not do this deal with the one who needs it? CONTROL.
AEL
exit strategy
Hill Billy Mitchell (09/08/99; 22:22:52MDT - Msg ID:13104): "The reason I lean to real estate
rather than undervalued paper assets is because I have a natural aversion to paper."

.... same here, HBM, same here! Trade one tangible for the next. Only next time, I want something I can *use* -- like a house.

Thanks for your comments. I was seeking to open up the conversation about exit strategy, about which I ponder frequently. Given the wide range of POG predictions -- from $500 to $30K and beyond, the question is at what point do you make your move? It would be an awful shame to jump ship at $2K and then watch the stuff move thru $6K. I am certain that there will be an overshoot of some kind -- a wild spike upward like in the early 1980's -- before it settles back to a fair value (much higher than today). Sure would be nice to catch it somewhere mid-spike. I realize that this is impossible to predict with any accuracy. Just seeking your (and others') thoughts on the matter. Signs, indicators, warnings?
TownCrier
Fed seen doing overnight, possibly term repos
http://biz.yahoo.com/rf/990909/nx.htmlThe banking system keeps asking for more money, more money...
TownCrier
Dollar tumbles to eight-month lows vs yen
http://biz.yahoo.com/rf/990909/pg.htmlThis, despite wariness of possible Bank of Japan intervention to weaken the yen. Oh my...
ss of nep
exit strategy
If the US$ price of Au eventually goes through the roof, and I think it will, it may well end up being THE currency, in which case you would be tradung directly.
If it is not THE currency, then one could average one's way out.
Again one should not be greedy.
Just my point of view.
TownCrier
Fed Says Added $3.000 Bln Reserves in 7-day Rps, $4.527 Bln in Overnight Rps
http://biz.yahoo.com/rf/990909/q4.htmlHeadline only. $7.5 billion total...that extra $50 billion won't last long at this rate; not if the money leaving the banking system is cash.
TownCrier
IMF gold revaluation endorsed by key U.S. lawmakers
http://biz.yahoo.com/rf/990908/bda.htmlCongressmen Leach and Bachus climb on board, Saxton remains skeptical.
Bill
SPECULATION
Paper & physical separating? This has never occured... in any market in history. I don't think it will happen now. We can speculate gold to death and any other commodity for that matter. This simple fact will remain....... Gold is a commodity just like any other. It was here yesterday, it's here today and it will be here tomorrow. Wow, what a difference in "posts" there will be in say..... September.
Got gold?..... in any form?
ss of nep
BILL
In the beginning,

There was NO paper ?
FOA
Comment
Hello ORO,

-----ORO (9/8/99; 10:46:57MDT - Msg ID:13043)
MK, is the IMF a little bit pregnant?
The repricing scheme for 10% of the gold in their vault is not going to make sense to anyone but those who value the gold at the 35 SDR $42 level, who would be the lenders. The result is the use of gold as reserve currency by the IMF. This is a micrometer move towards a gold standard
defacto. ----------

ORO: This was the corner that the ECB was hoping to squeeze the US into. Because the modern gold market was built upon the concept of using "proxy paper" for gold, it was vulnerable to any return to using gold itself as a currency asset. The use of actual bullion as a money asset, negates the use of gold IOUs in the fractional reserve function they now occupy. The trend changes as investors
want to use the "street gold" itself for the payment of debts. The advantage of this becomes evident as this "new acceptable currency" is seen as appreciating against other currencies.

The problem is manifest in every entity that made a market or used "IOU gold" in their dealings. It's much the same way that modern banks fold if all their customers start using cash and depositing it into their safety deposit boxes. Because we are most familiar with a currency fractional reserve, it's obvious that the treasury just prints cash until everyone is satisfied and price inflation has it's way. But, with a return to bullion, the BB have to eat their paper in a general default as all of the
physical gold is diverted for other uses.

The US started this when they nailed gold as only a physical commodity. Now with the IMF in a bind to save the dollar reserve system, they are forced to use gold as a very physical asset and in the process return it back into a medium of exchange currency context! The very dynamics that
destroys the need for a IOU gold market. They ran so fast, they caught themselves!

--------------The building of the gold short position is a necessary step towards a gold standard as well. Greenspan's old competitive gold bond vs. $ bond concept has essentially been adopted by the bullion departments of the banking industry, and their bonds have been found lacking (ref. lease rates going from 0.9% to 3.7%-4.5% is quite a blow for a bond holder). So is what we have a failing gold standard stunted in its infancy by fiat level leverage? -----------

I think this whole market started as a way of absorbing all the demand for gold by diverting it into a paper product. It also allowed important (oil) buyers an avenue to channel surplus cash into gold without driving the price. The more purpose the product served, the more it was accepted. The Dollar / IMF faction brought into it early on because in addition, it drove the dollar price of gold down, thereby making it (dollars) look better. Perhaps it is a kind of "oddball" gold standard! Whatever the case, it became massive enough to make it a threat to the dollar system. A major breakdown in the LBMA gold market, in conjunction with a spiking "street price" will push the
IMF rescue operations and the dollar over the cliff. This is where I see a run into the Euro by default. This brings me to your next item:

------The modern banker would not expect a currency without forced demand to survive and rise in value. The success of the dollar since Volcker has much to do with the $ debt of the resource rich emerging nations (a.k.a. colonies), has much to do with the rise of their $ debt and their need
to trade their resources for dollars to repay it. Hence creating the conditions for prolonged demand due to debt is the prerequisite for a return to a gold standard. Of course, one does not want the gold banking system to keel over before a gold standard starts in earnest, proving to the bankers that it is not desirable.-------

I think the new "gold standard" of the future will evolve from the collapse of the present paper one. They will never revert back to a "gold exchange" operation again. Rather a free trading physical market (again "street gold") most likely based in Euroland. It will give the governments the freedom to run their currencies as wanted and gold will seek it's own level. None of this will extract the old "paper gold" system from a protracted "workout". Look for the Mines, Bullion Banks and CBs to be at it for many years.

I saw your post about putting some numbers and times on this so people can understand it better. Another always had a definite "workout" period for this, but he never wanted readers to trade that knowledge. Too many variables that would entrap most "family savers". Besides, just buying gold and holding during this end time was plenty. Never the less, I'll try to put something together.

Thanks FOA

USAGOLD
Today's Gold Market Report: Gold Up Amidst Strong Market for Physical Delivery; Dollar Flight
MARKET ANALYSIS (9/9/99): Gold continued its climb this morning as October crude
oil broke through the $23 barrier and computer experts worldwide babysat electronic
systems to see whether or not the date 9/9/99 would be a code stopper. The gold market has
been building strength for the past several weeks as the IMF gold sales were shelved and
the Swiss sales were stymied. The market has pretty much factored in the Bank of England
sales and most analysts now believe that the British auctions will play only a minor role in
future pricing. The good news thus far is that there is no news on the 9/9/99 effect. We will
see what happens as the day proceeds.

Thin markets overseas also yielded higher gold prices. The yellow continues to get ample
attention from physical buyers and occasional short covering in New York. The rally this
morning could contain elements of short covering although no reports have surfaced as yet.
The physical inventory continues to be drawn down by investors worldwide and large
institutions. The London market reports a steady, but quiet, session this morning. The
Asian markets report buying from Japan driven by dollar weakness and selling from
Singapore and Australia.

The dollar sold off sharply overseas tumbling to an eight month low against the yen as the
process of Japanese capital repatriation continues unabated. Treasuries are getting
hammered again today probably for the same reason though the mainstream press likes to
blame the glut of corporate bonds heading for market. If there were a strong demand for the
dollar, there wouldn't be a glut of corporates. Reduced to fundamentals, the weakness in
the bond market is directly related to dollar flight though the mainstream press would have
you believe it is for more mundane and financially correct reasons.

The September edition of News & Views is a major you-don't-want-to-miss-it, highly
informative, and slightly irreverent blockbuster. We revisit our Five Horsemen of the
New Apocalypse -- the euro challenge, Y2K, the Asian contagion, the bubble stock
market and rising oil -- none of which have taken the summer off. We also preview the
Ten Reasons Why Main Street Worldwide Is Returning to Gold and Short &
Sweet (as is our custom) rambles with a hint of cynicism through a litany of world
political and economic events. You won't want to miss our look at the world of gold to kick
off the Fall investment season. The Season of the Yellow Metal? Just might be so...........

Please call 800-869-5115 (Ask for Mary Conway) if you have an interest in receiving
a trial subscription to our widely read newsletter, News & Views: Forecasts,
Commentary and Analysis on the Economy and Precious Metals. Or you can
go to our ORDER FORM and submit your request by E-Mail. You will also receive our
introductory packet on investing in gold.
Goldspoon
Holtzman 12765
After sleeping on Holtzman's 12765 post... i agree with Gandalf the White's nomination... This post contained an essential nugget for understanding the difference of Spot/Street... and should be left in a place easily referenced i.e. "The Great Hall of Fame"....
Phos
Fed Repos
The following is a question & answer from another chat group (LWT). I think it is interesting and may have a bearing on markets and the gold price. It sounds like the Fed is not all that keen to kill the stock market bubble yet. Presumably, this is negative for gold unless inflation is the result.
I would interested in the ideas of those much more knowledgeable than I in these matters (FOA, ORO?).
DS >

Here is a quote from Caroline Baum's column on Bloomberg. Howard, would you please translate its implications for the markets?

"In order to insure that it remains safe, the Fed announced
today it was broadening the range of securities eligible for
collateral on repurchase agreements, or collateralized loans that the Fed makes to primary dealers. In addition to Treasury and agency securities, the Fed will accept mortgage-backed securities and zero-coupon Treasuries as loan collateral through April 2000. The Fed permanently extended the maximum term for its repos to 90 days from 60."

Reply from HH:

"This is very significant. More than $1 Trillion in collateral just got qualified for Fed repo financing. I'll have to check, but it could be more than $2 T total. Now I can buy into D's blow-off as a possibility, and, if it
does happen that this facility is used to any significant degree, we also have the date for the crash (April 2000). Simply amazing to me! The only saving grace is that regulatory capital standards will continue for the
Primaries, meaning 6% regulatory capital will be needed to support 30-year MBS holdings. Nonetheless, this almost beats using the Social Security Trust Fund to balance the budget, or to pump up the stock market.

Leigh
Fasolt's Post
I confess, I don't understand Fasolt's "letter from Bill Grates." Is it a joke? What's the meaning of it? Would someone please explain to us slow-to-understand readers? Thank you!
Goldspoon
Platinum/Palladium leading indicator..
As of this post Palladium has once again moved up to near Platinum and Platinum had to move up $2 to stay ahead.. very bullish!! If Platinum should move on up to $260 by palladiums push on platinum....my estimation is that would be the signal that a gold breakout is imminent....
The Scot
Inflation - Deflation - Stagflation
Help me someone, I'm confused. I have always thought that, If the government increased the money supply that the value of the money would be affected. Inflation? / Deflation?

I guess if you triple the amount of something that has zero value you can't affect its value.

Am I missing something here? The Scot
Goldspoon
Correction to platinum post $260 should read $360
Platinums spot is $357.50 at this post.
Hill Billy Mitchell
AEL...exit strategy
AEL Exit strategy

What a fresh new subject. Great to talk about what to do when we get there for a change rather than IF we will ever get there.

A spin meister with Brown Brothers & Hariman on CNBC just suggested that the "paper people" begin planning for a bear market. Take away the "spinspeak" and he was saying that it is "exit strategy" time. When pressed for specifics on what to do he reminded of myself last nite for he came down with a severe case of lock-jaw. He stuttered and murmured and spat out something to the effect that there is still some good paper out there.

I have given "exit strategy" a good deal of thought ever since August 31, 1998. Here are some things I have shared with others close to me:

1) When the dust settles Gold will not drop back to $300 again in the foreseeable future. One should subjectively set a reasonable value for gold in your mind when it settles back to reality. Real value for the DOW is, lets say, $4,000 therefore a reasonable value for gold @ 2:1 would be $2,000. My conservative choice would be $1,500

2) After settling on a reasonable fair value of $1,500, one can now develop a strategy considering the following:

A) At what point does one cease to buy on the way up? I say at the point where you determine that gold is approaching "fair value". I plan to stop accumulating at around 750 to 1,200 depending on the rapidity of the rise. The faster the rise the quicker I cease to accumulate.

B) At what point does one begin to sell on the way up? Determine your average cost. When the market reaches five times your cost you can sell 20% of your holdings and get your investment back assuming you have a place to go with it other than paper.

C) You now have 80% of your precious metals left. If Gold moves up without a 10% break I would not sell. Since at this point we take the position that gold may be overvalued, when it gets over $2,000 we should be willing to sell our overvalued assets and convert to that which we feel is undervalued. When gold breaks below its high by 10% once it has reached $2,000 I plan to sell another 20%

D) You now have 60% of your precious metals left. Continue the above process until you have only 20% of your PM left. I will never sell the last 20% of my physical holdings.

Now I have exposed my neck. Surely there are those out there who have given this a lot of thought. Give us some help. We need it. Before you know it we may get enough on board with the same plan that we can produce our own self-fulfilling prophecy and develop our own method of orderly distribution.

Again please do not accuse me of being over-simplistic. One cannot respond to this sort of question in such a few words without generalizing and using the principle of, ceterus peribus (sp).
Phos
The Scot - Inflation, etc.
If the money supply keeps increasing, we sure should start seeing inflation! I thinbk it is already there. The problem is, the government keeps altering the way it reports inflation to make it look like there isn't any. How's this for no inflation (from Steven Kaplan's site):

In the New York Times "House and Home" section of Thursday, September 2, 1999, page 1, is an article entitled
"Once Dross, Now Dream: Wrecks are Suddenly Hot." The article begins by saying: "A few years ago, agents say, the smallish two-bedroom apartment overlooking Sutton Place South, with a sidelong glance at the East River, would have been priced at around $475,000--and labeled a wreck. The worn linoleum in its dark Pullman kitchen was starting to crack; the grout in the bathroom was falling out. Wind whistled through the old window sashes. This year, the apartment, up for sale, was labeled, primly and elegantly, in estate condition. The asking price: $895,000. It sold immediately, with at least six bidders." The article
continues for many more paragraphs in a similar vein. Historically, major market tops have always coincided with wild real estate speculation in the city considered to be the financial capital of the country experiencing the equity bubble.
Hill Billy Mitchell
ss of nep
Thanks for your input. I had not read your post before my last post. Your point concerning PM being used again in daily exchange is well taken. I think this would more likely happen with silver coinage first and for this reason I have a couple thousand $ face in silver. Also never selling the final 20% could in dire situations be used for money as a last resort. Most of my gold will be spent on standing timber acreage on which I plan to live and build. Therefore 80% of my holdings will be spent whether exchanged for paper to perform the transaction or exchanged directly for real estate or a combination of both.
TownCrier
Rapid yen appreciation unwelcome - Japan official
http://biz.yahoo.com/rf/990909/xj.htmlIf your country's government is intent upon souring your currency, the obvious choice is to become a nation unto yourself and hold your monetary wealth in gold.
Leigh
Hill Billy Mitchell
Dear HB: As I read your message, I kept thinking about "waves" of devaluation. The ruble, for example, has been devalued over and over again. I imagine other falling currencies have also. Therefore, pulling out of gold and into paper might cause you to be left with a lot of devalued paper after the next wave.

I haven't thought much about "exit strategy" - I just plan to hold on and spend my gold as necessary. If a bargain - land or such - that I really need comes along, I'll use my gold to get it, but I imagine it will be difficult to buy up more gold to replace what I spend.

BTW, what book of Pink's talked about the "Beast?" I have read one of Pink's books and think highly of him. I didn't know he wrote about the Tribulation.
Goldspoon
AEL
Exit strategy.. "Let profits run and cut your losses"....OK, great!! but how is this accomplished?? One thing to remember is that the move up (when it comes) will be sharp and choppy... As the price moves up take a liberal # say 15% and say to yourself... when the POG drops 10% from its current high i will sell x#% of my holdings...if the POG drops another 5% i will sell X#% of my holdings and so on... The principle here is that as the price moves upward your minimum profits are locked in without capping the upside potential.... you do not sell on a minor move backwards and miss the top of the run on the POG...however neither will you collect the very top price either.....also
I would never plan to sell all of my Platinum/Gold/Silver as this is BASE wealth (insurance) aginst all of your other holdings be it stock,home,currency,bonds or whatever...not holding Gold is like not buying insurance on and expensive house (it just isn't done) "Gold you see is insurance on your wealth".... When a fire destroys a house you by insurance to be able to rebuild or recoup.....You should by Gold in the same manner..as insurance for your wealth...Gold is insurance for the currency you use, insurance company you depend on, bank you trust, nation and world disasters, massive fraud etc.. Oh, by the way.. the price of insurance is going at a premium...look at lease rates for gold..Often as the probability of an insurance policy collection goes up.. so does the premium....What does this say about Gold???......
TownCrier
Cresvale says already halted Princeton bond sales
http://biz.yahoo.com/rf/990909/u6.htmlJapanese regulators say Princeton Economics International's Cresvale arm failed to seperately hold clients' investments separately as they claimed they would. Cresvale claimed that they believed the clients' assets were in segregated accounts within the brokerage unit of Republic New York Corp. Republic is currently under U.S. regulatory scrutiny due to its dealings with Cresvale and woth another Princeton affiliate as to whether Republic inflated the value of futures and other derivatives it held for them.

This might help explain why gold has been flying out of the Republic depository at COMEX recently. People are nervous.
Golden Truth
TO THE SCOTT
Hello "The Scott" it sounds like your where i was a couple of months ago, all confused about the different scenarios.
I suggest you check out "Ravi Batra" new book "The Crash Of The Millenninm" Its about surviving the coming "inflationary depression".
I think some of the big guns on this site have mentioned this outcome, this book just hit the shelfs last week and i just got my copy yesterday.
From what i've gleened so far is the depression part wouldn't start until the stock market crashes,the inflation part is already here,only to get a lot worse "Super Inflation". I got my copy from Chapters on line, why don't you do a search on "Ravi Batra" he is well thought of by many people. I think this book would clear up all your worries.
G.T
TownCrier
Dollar plunges to three-yr lows vs. the yen
http://biz.yahoo.com/rf/990909/y1.htmlDollar falls more than 3% from its overnight exchange rate vs. the yen. Don't fret. Choose gold, and whistle a happy tune...you're immune.
TownCrier
US stock values appear rational -Fed's McDonough
http://biz.yahoo.com/rf/990909/yk.htmlFederal Reserve Bank of New York President William McDonough said, "Nobody knows for sure whether the present value of the stock market is appropriate or not."

That's right...because NOBODY KNOWS what a dollar is worth.
TownCrier
IMF to revalue gold, to renounce further sales
http://biz.yahoo.com/rf/990909/zm.htmlThis article contains a mistake within the follow-up link. It says:
"Under the plan the IMF would sell its gold at market prices to countries in good standing which had payments coming due for past loans. Those countries would then pay their IMF obligations in gold. While the gold would be sold, it would never hit the open market and so should not move the price of gold lower or higher, the document said."

But what it should have said is:
"Under the plan the IMF would sell its gold at its current book value of SDR35 (less than $50) to countries in good standing which had payments coming due for past loans. Those countries would then pay their IMF obligations using this same gold although revalued at world market values. While the gold would be essentially "sold" twice, it would never hit the open market and so should not move the price of gold lower or higher, the document said."

You can see how this is a facility for a poor country to repay (currently) $250 in debt for every $50 cash it can come up with. And the higher the price of gold, the easier it is for these indebted countries to wipe the slate clean. I think it becomes quite clear where is is going to lead. ZOOM! You can't clear out debt by paying with credit. Gold, however, contains ALL the end value. Get it before others see the light.
jinx44
IMF and the exit
FOA~your 13113. Thank you for the clarification. I misunderstood the process and thought the HIBC's would sell the gold into the market to make the USD payment. You are a savvy fellow(?).

HBM~your exit strategy. If I wanted to, say, emigrate in the next 1-2 years to a smaller less dictatorial place than the usa, I would have several months physical cash for the y2k issue, and the rest in gold with digital cash for living expense and whatever. As gold goes up, I would transfer it to e-gold or a similar depository company and upon selling it, I would have the proceeds in euros wired offshore to a neutral jurisdiction. Safer than the usa freezing it or writing anymore bad cheques on it. Using the e-gold route hopefully leaves less of a trail since they aren't yet considered a financial institution. Only transfer the amount you want to sell, retaining personal possession of the rest.
TownCrier
Fed's Ferguson says Fed cannot target stock market
http://biz.yahoo.com/rf/990909/2r.htmlDialog like this occurs only when there is trouble, only when the end is nigh.
TownCrier
U.S. c/a gap leaves room for lower dollar-Fischer
http://biz.yahoo.com/rf/990909/25.htmlIMF First Deputy Managing Director Stanley Fischer noted the "strong dollar" had about 20% to lose while still being a "strong dollar" in line with the US Treasury's position on the matter.

Sorta like Babe Ruth calling his shot, wouldn't you say?
Broken Oak
IMF scheme, the depreciation of dollar denominated debt, the appreciation of gold.
There is no stopping them from recycling this gold when/as the gold price goes higher. In essence this is a settlement of US dollar debt at pennies on the dollar(debt). Or looked at another way, by using the differential of book to market they have made it easier for debtors to repay the loans (on paper). This is basicly a write down on the loans. It institutionalizes an increasing of market gold price as a means of settling dollar debt on terms which are able to be paid by the debtor nations. By then pushing gold higher they can make it easier to settle the debt accounts outstanding to the 2nd and 3rd world nations (possibly aslo US T-Bill debts as well???). When ever they need to settle a pile of debts then they will push gold higher in order to leverage the book to market as a means of write down. It is an accounting mechanism but much, much more than that. Gold is the fulcrum and the fulcrum will be moved to the point (and continually moved) that US dollar denominated debts can all be repaid without destroying the 'system' of paper currencies. Truly those who hold gold will make the rules.

$42/$257=16.4� to the $1 write down.
$257/$42=gold's value as 612% of market value for debt repayments.

$257*6.12=$1572.84/troy oz equivalent for debt settlement.

Gold has just been revalued my friends, by the debt holders.

Now we must consider the total outstanding problem loans and the needed rollover in order to settle them. I can only see that this means of repricing loan payment offs will indeed act as a 'strange attractor' to the market gold price. Each time a loan is repaid with gold at a higher price it will redefine the price in this way and continue to 'attract' gold to a higher price in the market.

I will now go to my leetle hiding place and change all the price tags on my treasures. (smile)
Farfel
Vindication! Martin Armstrong, Cresvale, and GATA
I just read the article from Bill Murphy re: Martin Armstrong, Cresvale, and securities fraud charges.

All I can say is this: I sent a letter to Chris Powell some time ago urging him to cease and desist in spreading the Martin Armstrong anti-gold polemic via GATA (see below).

How RIGHT I was!

My comments were ferocious but GATA needed to hear them. Unfortunately, they resulted in a schism between GATA and myself.

I genuinely continue to wish GATA the best....but they MUST strategize in a much more effective, logical manner. They are facing formidable foes and it is imperative that they greatly broaden their executive committee to show genuine gold industry representation. If the gold mining honchos don't want to lend their bodies to such a committee, then GATA should place at least five to seven prominent gold analysts on the executive board. It simply is NOT sufficient to hire a law firm (no matter how prominent) since anybody with money can hire a law firm. Retention of legal counsel does NOT indicate that a legal action is truly with merit; rather it only indicates that sufficient monies were raised to hire counsel.

As it stands, where GATA is concerned, the reality is this:

One person holding a press conference is considered a "lunatic;" two persons doing the same are considered "queer;" three persons doing the same are considered a "menage a trois;" four persons doing the same are considered "a little committee;" five persons doing the same are considered "unnerving;" six persons doing the same are considered " a real threat;" seven persons doing the same are considered "a real bona fide executive committee!"

Thanks

F*
---

Subject:
Armstrong Again??? Screw Him!
Date:
Sun, 27 Jun 1999 22:32:28 +0100
From:
farfel
To:
C.Powell


Dear Chris:


I truly do NOT understand why you continue to provide this slimebag sack
of human waste, Martin Armstrong, with a public forum for his
self-deluded polemic, his sundry lies and distortions, and his litany of
egregious bullsh_t. Of course, he will deny my assertions on the simple
basis that "the market proves me to be correct." However, when a market
is rigged, then it is never too difficult to be correct.

Do you think you are doing GATA a favor by presenting his views? Is it
beneficial to GATA to refer to Armstrong as an "articulate expert?"

No, rather you are undermining goldbug confidence in the value of their
primary investment. You are shooting yourself in the foot...over and
over and over again.

What galls me most about Armstrong is his incessant usage of
double-speak. I will not bother to litanize the errors and deficiencies
of his various concoctions as I do not wish to take the time. However,
hopefully, you will provide a more than compelling rebuttal to
Armstrong's deceptions in order to redress the damage of tacitly
endorsing his anti-gold polemic.

Farfel.
Hill Billy Mitchell
Leigh...A.W. Pink also exit strategy
Leigh A. W. Pink and exit strategy

I was referring to Pink's book from recall. I have temporarily misplaced the book. The book is a pure treasure as are all of Pink's writings. As soon as I find it I will give you the information. As you probably know he died in the fifties and his books are out of print. This is one of the few, which has been brought out of the mothballs and has been reprinted and is available in paperback.

Concerning your statement, "Therefore pulling out of gold and into paper might cause you to be left with a lot of devalued paper after the next wave."

You will remember my statement that I have an aversion to holding paper assets. The only reason to move to paper is to facilitate the exchange of gold for hard assets. I would be in the paper for about 20 seconds and have the paper price locked in before the exchange if the seller wants to be paid in paper. Of course I would gladly pay for real estate with gold coins if the seller should prefer. Believe me if people prefer to be paid in paper when I am ready to move I will make sure that the risk is transferred to them in the contract for sale by tying the purchase price to a maximum # of ounces of gold. If the paper is devalued in the short period between the contract and closing you can be assured that the amount of paper I will be delivering will be locked in. If we have such a scenario woe be unto the fool who requires payment in paper or digits for that matter.

Yes it will be difficult to buy up more gold to replace what you spend. Why should one buy gold while gold is overpriced? My viewpoint is that I would not replace gold holdings until I once again see a bargain, a circumstance that may not occur again in my lifetime. For this reason I will never sell the final 20% of my holdings because as Goldspoon makes the point, that is our " BASE wealth insurance.
Broken Oak
Another attempt at explaining the practical side of this.
The IMF takes 10 million ounces of gold at $42 per ounce. They cycle this through to a debt holder and then mark the gold up to $257 per ounce on the return. They have 90 million more ounces to do this with before they have lost all their leverage at current gold pricing. Well, folks, that's a toal of $20 billion in write down on bad loans to countries (for the whole 100 million ounces) and they have ALOT more than that in bad, outstanding debts. What to do, what to do?

Well, why not buy some gold in open market to goose the price up? Now you have a bit more gold and have rejuvenated the leverage on the 100 million ounces. You can recycle the gold and mark from book of $257 to whatever the current market price is. Since the gold market is very thin and there are significant vested interests who whould like you to be able to quietly write down the debts without destroying the system then they would support you in your efforts to affect the markets in a permanent way.

The interesting thing to note about the just revealed plan is that the 'excess' monies would go to 'releaving the debt' of other nations (who owe you). How? well, you could loan them some more money, in which case you will definitely see them at the gold window in the future for a writedown on their debt. This attempt to keep up current debt practices while at the same time using gold to write down the debts will feed on itself and produce alot of upward pressure on gold price..a defacto devaluation of the dollar in relationship to gold. In fact what this means is that all debt will be cancelled via a revaluation of the dollar vis a vis gold price.

Another interesting points is that each recycling of gold will require a repricing of gold to a much higher price in order to have the same quantitative effect as before.

Goal $20 billion writedown, book at $42, market at $257 (difference of $209)

Rebook at $257

How to get another $20 billion effect from current book?

Move market to $257+$209=$466 price range.

And for the next $20 billion? Add another $209 to the second price, and so on.

Now keep doing this for each $20 billion you need until all the bad, uncollectable debts are repaid.

Now check out the outstanding loans on IMF books. What is the total?

Now consider a worldwide crash and all those loans going into default (total loan portfolio). Also consider that alot of countries will see how easy it is to get their loans written down and will start to become 'non performing' rather easily.

Let's say the IMF has $250 billion in outstanding loans. Divide this by $20 billion and you have 12.5 . Now multiply $209*12.5+$42=$2654.50 as new basis for gold after all debts are repaid using this scheme. That will be the book value of gold on the CB's book. They will defend that price forever.
Broken Oak
in addition and finally
They will have to compete with all the other market players to get what little gold is available. So the price action will be much more severe than a simple rise. At some point the shorts will have to cover or at least try to do so.
TownCrier
Yugoslavia Devalues Its Currency
http://biz.yahoo.com/apf/990909/yugoslavia_1.htmlGold is not only immune to this, it shines!
Farfel
New Deflationary Threat: Gold UNDER 240
Pursuant to my previous posts, I have looked over the financial conditions of some 20 most prominent gold companies in the world. Pretty awful!

Although many have hedged gold in order to protect themselves at these ultra-low gold prices, I remain convinced that a gold price collapse will be a forerunner to a major global asset deflationary event.

Whereas I postulated that a gold price below 200 would create this condition (on a psychological basis alone, irrespective of hedging), I now believe the critical point is a sustained gold price @240 or lower, which likely would reaffirm the gold bear market in most investors' minds. So we are perilously close to the edge today!

I think that any sustained gold price below 240 will shake out the last tiny vestiges of bullish confidence at many major global gold producers and result in an abundance of foreclosures and bankruptcies. In gold-dependent Africa, we could witness the next regional economic crisis.

With a negative multiplier effect rapidly spreading through the gold industry and a large number of dependent industries/regions, then I think a major, pure deflationary event will result, i.e., a stock/bond market crash here in America.

Although right now all evidence suggests we are moving into a full blown stagflation (an economic condition I predicted quite accurately some two years ago at KITCO), I now see that, with a mere slip of the finger, the Clinton government could quite easily usher in the most awful pure deflation ever seen on the globe.

I really wish I could provide a much happier picture but I now believe a deflationary event is a much greater threat than the stagflation we are currently witnessing.
The Stranger
Farfel
"Although right now all evidence suggests we are moving into a full blown stagflation (an economic condition I predicted quite
accurately some two years ago at KITCO), I now see that, with a mere slip of the finger, the Clinton government could quite
easily usher in the most awful pure deflation ever seen on the globe."

Stranger's Note: If you don't know what is going on, why not use the Forum as a place to learn, rather than just making stuff up.
Farfel
Stranger, Nobody Really Knows.
If the stock/bond/gold market continue to move up, then it's stagflation.

If the stock/bond market crash and the gold market moves up, it's stagflation.

If the gold market crashes, its pure deflation.

If the gold market, bond market crash, it's pure deflation.

If the gold market, stock market crash, it's pure deflation.

If the gold marekt, stock market, bond market crash, it's pure deflation.

Many permutations are possible, ultimately determined by government policy, mass psychology, and other variables.

I DON'T know which it will be, but rest assured I am NOT making anything up.

Twenty years studying economics, that's the basis for my predictions.

Thanks

F*
TownCrier
European Bank Leaves Rates Unchanged
http://biz.yahoo.com/apf/990909/europe_int_1.htmlBanking 101: learn about banking system interest rates here.
Leigh
HBM, Neo, Goldspoon, FOA, Peter
Hill Billy, I didn't mean to insult your intelligence! Sorry!

Neo and Goldspoon, I'm glad you liked the story about revaluing my car. When I'm very tired (as I was yesterday) I get more and more sarcastic, but not in a malicious way, so I hope no one will ever take anything the wrong way. I also hope that if I'm way off base, someone will politely point me straight instead of politely staying silent. That's how we learn!

FOA, thank you so much for helping us understand about this IMF proposal. What would we do without you? We are all waiting eagerly to hear what you have to say about timing.

Peter, those are great suggestions about using movies to teach economics! It is not surprising that you and Robin "B" have such wonderful and interesting children of your own.
TownCrier
The global financial crisis, which swept through Asia, Russia and Latin America last year and threatened to bring down the world's financial system
http://biz.yahoo.com/rf/990909/6c.htmlBank of England Deputy Governor Mervyn King essentially says it is time to stop privatizing profits while socializing losses...with private banks leaving the public sector and CBs to pick up the pieces when emerging markets are hit by rapid capital outflows. Wasn't King also the one who recently said that CBs may be a dying breed?
TownCrier
Tea leaves
http://biz.yahoo.com/rf/990909/9w.htmlIMM currency futures end mixed, yen up sharply
FOA
More comments
http://abcnews.go.com/wire/World/reuters19990909_2765.htmlWIRE:09/09/1999 13:10:00 ET
FOCUS-IMF plans to renounce further gold sales

WASHINGTON, Sept 9 (Reuters) -

----------The document said many of the fund's directors believed "that a public statement should effectively limit the amount of gold that the fund would use for this purpose and would renounce any further gold sales for a given period of time in the future." --------

ALL: Once all the members get a taste of how painless this process is, the above "" for a given period of time in the future"" will be qiickly adjusted. Besides, who are they really addressing with this statement? None of the world gold advocates would have ever objected to using gold in this fashion! No, this "public statement" is aimed directly at dollar reserve holders! Don't want to start a land slide, do we?

--------"Since these transactions would take place between the fund and a member at a market-related price, they could not be regarded as having been undertaken with the
objective of managing the price of gold in the gold market, which would be contrary to (the fund's rules,)" the document said. -------------

ALL: Here they are trying to balance the old Jamaica Accords, just a bit. Also, when this happened before (see below), it wasn't the same process. Don't have the facts right here, but I know it was different. Hope we can find a record of it.

-------The fund noted that a precedent was set in 1992 when it accepted from Cambodia a payment in gold, which it had sold in restitution to Cambodia at a market-related price in partial payment of Cambodia's overdue obligations to the fund. ----------

Give this some time to sink in! It's a major concession that demonstrated just how much world liquidity is falling. The ECB and the BIS handed them this rope and then pointed to a near by tree.
What a mess??

FOA
TownCrier
Details of IMF gold revaluation plan
http://biz.yahoo.com/rf/990909/bbh.htmlHmmmmm...this description of the operation is different than our original take on the matter, and is certainly a bit more convoluted in that a solvent IMF borrower would purchase IMF gold at market value prior to making a cash loan repayment, and then would immediately use that same gold to make their payment at the same price. The gold would then be held in account at that price. (Book juggling! What a farce.)
The IMF upon making this sale would set aside the profits to be invested for the benefit of the the Enhanced Structural Loan Facility/Highly Indebted Poor Countries Initiative Trust.

Looks like there is really no easy write-off of debt, and the HIPC's will continue to be supplied with enough credit to thoroughly hang themselves. The dollar/IMF scheme appears to live on, although ONE STEP CLOSER to the abyss.
CoBra(too)
IMF=NWO???
Not claiming to be current on the forum, since Iv'e just dropped in I'd love to hear FOA expanding on his latest post 13160 (FOA-pls forgive me if answered before).
IMF will resort to this revaluation of 10% of "its" gold to market(or is it still sell) for just a period of time (limited to or too?), which may or not be construed as remonitization of the preciuos metal, but as you (FO) stated it is a breach of the Jamaica accord, I also would think, in terms of adoption of new and creative accounting practises for the IMF the same standard voting rule would apply, which means a clear 85% vote of all members (according to their voting "weights", of course), or is the IMF the proxy for NWO, god forbid!
Reagards CB2



.
phaedrus
Goldman Sachs prediction

Any of you guys hear anything about the Reuters story on Goldman Sachs that sez GS is looking for an average price of $270 for gold for the rest of the year, based on "private forecasts" and a stemming of central bank sales?

Clint H
FOA (09/09/99; 06:52:59MDT - Msg ID:13115)
FOA- IMF Plans to Revalue Its Gold Reserves
Anyone,
I'm a little slow so I need some help here.
Let's say I owe the IMF $210 and I am unable to pay, I'm going to default.
The IMF then says, "Please do not default. We will loan you a 1oz gold coin that we value at $42. You now owe us $252. Tomorrow you pay us back the 1oz gold coin at market value of $252 and we will call it even.
We will then put the 1oz coin back in the vault and deposit the $210 principal payoff in a special account to draw interest.
You are debt free and we made $210.

Did I miss something here?
Goldspoon
Platinum leading gold indicator
Palladium continues to pressure Platinum higher we are now at the price i said that if platinum could hold on to then look for Gold to break $258 and martch upward....
The platinum contracts currently show a slight backwardation, with the October contract at $361 and the January 2000 contract at $359.50. One refinery dealer, commenting on the upswing in platinum group metals, told Reuters "As long as no one steps in and sells a larger chunk - the Russians might consider it at these levels - it's supported by the fundamentals� The industrial offtake is certainly enough to take up the mine production.

So I think the short term spec / investment types might be more looking toward the upside."
Goldspoon
Good Gold news....
Australia's Ross Mining announced Thursday, September 9, 1999 that it had closed out hedges for 262,838 ounces of gold during the months of July and August, realizing a profit of $26.8 million Australian (a little over $17.5 million U.S.). By buying back gold that had previously been sold forward, the management at Ross Mining was proclaiming with their actions, not just words, that they believed that the price of gold was close to a bottom. Gold edged up 90 cents to $257.05 spot, silver added 1.5 cents, platinum rallied $6.40, and palladium surged $9.00. The spread between the XAU and spot gold fell 0.8 to 189.2, and is below recent norms near 220.
All: Does anyone in this group invest in slabed $20 gold pieces?? If so thoughts and recomendations would be apreciated...USAGOLD, any thoughts????
TownCrier
After the Close: the GOLDEN VIEW from The Tower
http://www.washingtonpost.com/wp-srv/business/feed/a37283-1999sep9.htmIn today's gold market, trading in London was described as quiet, with some caution ahead of the September 21 UK auction. Reuters reports, however, that physical demand remained strong, particularly in Asia overnight. As the world turned a bit further on its axis, the paper pushers at COMEX seemed to muster more optimism than pessimism about the viability of their December gold contracts, with the wagers pushing the price up 90c to $258.6, just 20c below the top of today's trading range. Spot price took the cue and was last quoted in NY at $256.90 per troy ounce.

In COMEX vault action, we saw yet more gold flee the scene. Before long, the guards at the COMEX gold vaults will be able to trade in their revolvers for water pistols as there will be nothing left to guard. Today, half a tonne was withdrawn from the Registered gold stock stored at the Scotia Mocatta depository. All was quiet for a change at Republic.

The big news on the day for gold remains the latest IMF alternative proposal to outright gold sales. As it has come to shape up so far, the IMF is essentially preparing to mark a portion of their gold holdings to market, although through a convoluted process that is no doubt necessary to stay with their operational guidelines of the Jamaica Accords, or at least within past precedence of accepting gold at book value when used in payment from a member country. We can't simply have them remark the value directly, now, can we. That would be how the ECB does it. Tsk Tsk. The IMF governing Interim Committee is expected to discuss this proposal Sep 26. Marking this gold to market would raise its current IMF book value carried at SDR 35 ($48) per ounce to whatever the world market price is at the time of the convoluted operation. For more on that process, please see the recent article posted by one of The Tower's scouts.

So, how's life in Dollarsville? Not too pretty. The dollar was forced to a three-year low against the yen at 107.58 yen, a decline of more than 3.0 percent from overnight highs above 111 yen. But rather than a dollar slide, we could probably more aptly call this move a yen rally. The yen's rally began after Japanese GDP grew 0.2 percent in the April-June quarter, which surprised forecasters who had been predicting a contraction. Today's sharp yen gains have dealers concerned about possible central bank interventions as were seen this summer (when the Bank of Japan repeatedly sold dollars for yen), especially after yesterday's warning by senior Japanese officials that any sudden moves would be met with appropriate action.

That rumbling you hear in the distance is not exactly a storm brewing by the hands of Mother Nature. It is actually the thundering hooves of our Fifth Horseman, Rising Oil. NYMEX crude futures stormed past key resistance levels, gaining ground by 67c mid-day to mount a fresh 31-month high at $23.33. Traders said the gains were supported by weekly API inventory data showing an unexpectedly large drop of 6 million barrels in crude stockpiles last week, catching many people by surprise. Supporting the validity of these figures, DOE data showed a 4.5-million-barrel drop in crude stockpiles. October crude settled at $23.25 on the day.

We're happy to report that we had an uneventful day of "nines," and even more pleased to see that the Round Table has shaken itself free of its past problems. For a while there, we were beginning to feel like a crash-test-dummy. Speaking of crashes, check out today's featured link. It gives more detail on our report from yesterday that the Fed stands prepared to accept a wide variety of collateral from banks should they experience a deposit drawdown that would otherwise threaten their solvency. Basically, the banks can for the first time pass some of their better assets (such as Fannie Mae and Freddie Mac mortgage-securities) to the Fed in the ultimate end-game as lender of last resort. If you do the math, it seems that the physical cash would run out long before deposits could dip below troublesome levels. Where else can the digital account money go? If it's spent digitally, it'll just end up in another account, so the operation is a wash. We'll be most curious to see what public reaction follows when the bank drawers are empty. On that note, today the Fed added reserves to the banking system to the tune of $7.5 billion through a combination of 7-day and overnight repurchase agreements. As we said this morning, with money leaving at such a daily rate, it won't take long for that extra $50 billion they printed to be absorbed. The thought in The Tower is that gold could react at any given time, but for certain, when the cash is gone, gold will quickly follow.

And that's the view from here...after the close.
watcher
Question FOA
Could this process of selling the gold and rebuying it as Street Gold somehow release the IMF of any past obligation of that gold if there is any.
The Stranger
Farfel
If you will cite just one statistic indicating that growth in the American enonomy has lately been stagnant, as per your apparent prediction, I will gladly retract my earlier statement.

watcher
correction
Not buy back but accept as payment


Correction Correction
Hipplebeck
To Clint
Yes, Clint, you did miss something.
They are not going to do this deal with someone who can't pay, they are goiung to give the good deal to someone who is able to pay, and then loan the money to someone who cannot pay. That way they do a favor to someone of their choosing, and then charge interest to the one who is in the most financial trouble. CONTROL.
Gandalf the White
Comment to Goldspoon
Perhaps you should give respect to Mr. Steven Jon Kaplan of the goldminingoutlook.com for some of your "word for word" comments shortly after his postings.
<;-)
Hipplebeck
To Farfel
Farfel, wake up.
If gold ever gets below $200 you'll have to get in a very long line in order to buy some.
BARFLY
Pssst
There is a massive deflationary force awaiting to be unleashed,a costly factor of production is to be made redundant.
At what point equilibrium is reached with the stagflation already here but hidden won't be known till after the dust settles.
Fossil fuels were made obsolete a long long time ago.
For one reason and another tech suppression is to end
The pending default of the paper gold market
The oil for gold scenario
Interesting implications?
Puzzle piece from left field
The masters of mayhem
will tip over the chess board
Timing?
FOA
Comment
TownCrier and all:
I have to laugh as they (IMF) keep revising their plan. I can just picture someone faxing out the "last" revision and another official running in saying "no, no, no, no, that won't work. we have to reword it"!

No matter how they cut it, the G7 has given the ok to revalue gold to market. That is where the extra equity will come from to give debt relief. Weather they sell it at par $46+/- or sell it at $300 or buy and sell it ten times, when it comes back to them it will carry more value than when it left. All the jawboning is a smokescreen to get around their articles. Otherwise, they would just revalue all their gold and work from there.

Because none of the rich member countries want to fund the IMF any higher, the precedent of re-valuing gold to market will used much more often. That, in turn will create a changed atmosphere in the gold world as the use of it's hidden equity will be impossible to ignore. If this action is pushed through it will legitimize "physical gold" as a valid currency for the payment of debts
Let's wait for them to issue a few dozen more explanations. Then have another look.
I'll be back later.
thanks FOA


Quixotic1
Goldspoon, numismatic info for you.
Goldspoon,
I did some archive cut and paste. If your interested in the spreadsheet, please email me and I'll send it promptly. This offer is valid for anyone else as well.

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

Quixotic1 (3/24/99; 23:14:29MDT - Msg ID:3820)
How much is that Slab in the window???
Steve H, and All,
In response to your inquiry, I did an informal historical beta plot on numismatic gold coins, with data going back as far as Coin Dealer NewsLetter(CDNL) would allow. I sent to CDNL for their reprints, to obtain the data first hand. On a spreadsheet, I did a comparison for graded 2 �, 5 and 10 Indians, $20 Saints, as well as about 10 better date $20. Saints. I tried to find reliably data for MS62 thrum MS65 grade of coins. I plotted data from before the last boom/peak(6/89), thru till 1 year after peak, just to get a better sense of the dynamics of the runup and subsequent blowoff.
I've had some very interesting observations about the spreadsheet. In general, it seems that the better grading of coin, the greater the beta during the peak. Also, and perhaps more interesting, the better date Saints, in general went up less % at that point in time, but they had much better post bubble price staying power.
The long and short of it, buy the best grade that you can afford, or purchase better date coins. I did this little comparison back in '98, but I bring it out of the closet to add information for people when making purchase allocation decisions.
If any one is interested in seeing this spreadsheet, please email me, and I'll get it out ASAP. Quixotic1@mediaone.net.com I'm a very long-term student of this sight, but haven't posted in the past. Normally, the serfs eat outside with the peasants. I'll stick to the eavesdropping on the Round Table. Great job that you scholars do. I just want to say THANK YOU. It's truly an inspiration for all who drink of the trough�. Gary

Gold for the good guys !


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

Date: Tue Feb 24 1998 16:11
LGB (@ Quixotic) ID#269409:
Re your earlier request for pointers on "Saints".

1 ) Both the "raw" BU and the certified BU are better buy's and have better appreciation potential than circulated stuff ( which I'd avoid )
2 ) Buy them "untoned" if possible, the market's better for lustrous "brilliant" pieces.
3 ) If you buy "raw" ( unslabbed, uncertified ) , you'll pay less from most dealers than certified, however, beware of shiny "cleaned" AU coins ( very lightly circulated ) masquerading as BU. Buy from a reputable dealer, I can't name names here or Bart'll get mad. My advice, get a "Coin World" at a large magazine/bookseller, and run a "test order" of 1 piece from several dealers and compare price/quality/delivery. Nice BU raw coins are around $440 to $480. See Roebell's post below for wholesale cost of certified "Saints".
4 ) Ask the dealer if they'll buy back their own coins and what the spread is. If you hear a lot of hemming and hawing and
ambiguity, AVOID that dealer like the plague! Also, if a dealer isn't quick to give you a good quote based on what you're requesting, and seems to be "feeling you out" to determine what you know and how much they might "take you" for, AVOID them like the plauge! ( I won't name names cause Bart'll get mad! )
5 ) Don't get talked into "Liberty" $20 pieces which trade at slightly less. The "Saint" is a more liquid, more sought after coin and worth the extra $10 premium. ( I'm talking common dates here of course...in the rare stuff, there are expensive date/mint combo's in both series that are highly sought after by Numismaticists )
6 ) Ask about delivery times before ordering. The lowest priced dealer of BU "Saints" in coin world, who is selling about $15 below anyone else, delivers inferior coins with a 6 to 8 week delivery time. ( Again, I shan't name names... ) For the most part you get what you pay for.
7 ) If all the foibles and pitfalls of "raw" Saints seems too daunting, stick with "certified" Saints slabbed by either NGC or PCGS, untoned, in grades of M/S 62 or M/S 63 if you want a lot of Gold, or M/S 64 and M/S 65, if you want to try for more "premium" leverage, but less Gold in an up POG market. The higher grade coins tend to increase more exponentially in a hot market, and correspondingly, their premiums shrink more during mean, bad, viscous bear markets like we've seen the past few years.
You can buy beautiful M/S 65 Saints right now, for less than 25% of what they cost in 1980. Remember, "there aren't minting any more of these". When demand starts to build...look out! Finite supply.... of the "World's most
beautiful coin" ( according to many Numismaticists )
Farfel
For the Stranger: re: STAGFLATION
Friend, you best understand, at the very least, the layman definition of stagflation:

RISING INTEREST RATES WITH SLOWING GROWTH.

The engine of growth in America (the stock market) is not performing as well this year as it did last year. Meanwhile, bond interest rates are rising as bond market liquidity dries up in advance of pre-y2k concerns. SLOWING GROWTH WITH RISING INTEREST RATES.

The economy is fully employed (by historical measures) and the odds favor unemployment in the future rather than increased employment.
SLOWING GROWTH WITH RISING INTEREST RATES.

The US dollar must be protected at all costs in order to protect the stock/bond market. However a strong US Dollar is destroying America's export industry and the trade deficit continues to grow astronomically. SLOWING GROWTH WITH RISING INTEREST RATES.

We are in the very early stage of a stagflation, and if the Clinton government is not careful (particularly in allowing a gold collapse), then that stagflation will transmute upon the spin of a dime into a full blown pure deflationary global collapse (in the form of a bond/stock market crash). With well over 100,000 tons of gold held by private entities as a store of wealth throughout the world (above and beyond the 40,000 tons held by central banks), then gold price collapse is a very dangerous thing.

My own evaluation today is that 240 gold is the Maginot Line. If gold tumbles under that price, then I think it's all over for the global financial markets.

Again, it really is ironic: the gold bears might get their wish at the expense of systemic global collapse.

Aaaah, be careful what you wish for!

Unfortunately, the way economic affairs are conducted by the Clinton government, I would say there is a better than 50% chance of such a crash today.
Phos
Oil Prices
Good Lord - here is a letter to the Financial Times suggesting the US engineered the Oil cutbacks and price rise:
Phos
Lettter - sorry hit some funny key
LETTERS TO THE EDITOR
THE FINANCIAL TIMES

Oil price fears have no strong base
From Dr. Peter R. Odell

"Sir, Your editorial "oiling the cartel's wheels" (September 4-5) on recent oil price increases simplistically suggests that they resulted from "Opec members getting their act together." This fails to recognize the much more powerful force which, in effect, used the Organisation of Petroleum Exporting Countries to secure a price for oil whereby the shock emerging from the destabilising effect on the world economy, as a result of the earlier fall in the price of oil to pre-1974 levels, was avoided.

All major exporters faced potential disaster from the low prices and needed "saving" to inhibit national/regional unrest in critical areas of the world. Even more important, however, was the threat to the global politico-economic system from the undermining of Russia's already fragile viability, given its dependence on oil revenues and exchange earnings from gas to the same extent as the most exposed Opec countries.

Thus, from August 1998, the US government reversed its "hands off" policy towards the international oil market
(with oil viewed as "just another commodity"). Instead, parallel negotiations began with the three key Opec members
whereby their agreement to cut production significantly was sought, in return for important concessions and/or help from the US. It took all of six months to secure agreements from Saudi Arabia, Iran and Venezuela to accept cuts they had previously considered to be contrary to their national interest. All other Opec members, and some non-Opec exporters (Mexico and Norway), agreed to fall in line. The major international oil corporations, also under pressure from the US government, accepted that they should not take advantage of others' cutbacks by marketing more of their equity crude.

In other words, the US exercised its hegemonic powers in the interest of global stability and brought the price of oil
back into line with its post-1986 levels. Hardly a voice has been raised in protest at its initiative, even though it firmly puts the US in place as the supporter - or even the saviour - of a cartel, contrary to the country's usually strong views against such barriers to free trade.

Given this background to today's ordered oil market, your fears for extreme price volatility are not strongly based (outside the narrow range, that is, of a few dollars per barrel which the markets may operate). Indeed, further simultaneous action by the US to strengthen the international Energy Agency in its market-watching functions and its enhanced co-operation with Opec's own monitors makes the provision of timely warnings on the need to adjust quotas much more effectively available.

Finally, perhaps as just a bonus for the deal or, more likely, as an integral part of it, actions by energy producers in the US to secure the return of US import quotas on oil and/or the introduction of countervailing tariffs to protect indigenous oil, gas and coal producers against low-cost - and even "dumped' oil - have been avoided.

Peter R. Odell
7 Constitution Hill
Ipswich IPI3RG
UK

And on top of that, Bill Murphy says Goldman Sachs is advising clients that the oil price rise manipulation is now complete and it will ease back. May be time to sell your oils or at least keep a close eye on prices.

He also said GS and Chase were in the market selling gold today to hold the price down.
The Stranger
Farfel
The term "stagflation" was coined in the 1970s to describe the phenomenon of rising inflation occurring despite stagnant economic growth. What we are experiencing today is the onset of inflation, yes, but contemporaneously with the strongest economy in a generation. Both the appearance of inflation and the strong economy owe a lot to recent robust monetary expansion (the same monetary expansion, by the way, which has been reducing the value of the dollar on forex markets and may ultimately produce higher gold prices).

Bond prices peaked last October when the threat of deflation was perceived by many to be greatest. Over the many months since then, as fears of deflation have subsided and subsequently been replaced by fears of inflation, they have pretty much steadily declined.

As to your assertion that there is some sort of y2k liquidity shortage forcing people to sell their bonds, nothing could be further from the truth. The monetary aggregates are published every week for anybody who would care to follow them. You obviously don't.

I am sorry to single you out for this treatment, Farfel. If you actually believe what you posted here today, that's one thing. But if you have the kind of experience you suggest, and you are deliberately being provocative just to get attention, you are abusing the Forum privilege, IMO. People in here who are searching for answers to their investment concerns deserve better.
Richard, Oregon
Anybody Out There Tonight?
I've been thinking I should purchase some additional prec. metel SMALL pieces to supplement what I have. Specifically, silver pieces. Two forms came to mind, American Eagles and circulated Morgan silver dollars. I wanted pieces easily recognizeable by the public. Any one have thoughs either way on these two or do you have something else to recommend? I haven't contacted the CPM as of yet, wanted to poll the table first.
Hill Billy Mitchell
Leigh...my intelligence was not insulted
As you know I am a new poster on this forum. I am, I hope, slowly learning how to communicate on this site without being either misunderstood or sounding so arrogant. It is a new experience for me. I fear I am much better at lurking.

You certainly did not insult me in any way.

By the way I have not had a chance to find the A.W. Pink book. I am at my offce and I think it is home. I have not lost it for it has stood the test of time as few books in the area of prophecy do.
Hill Billy Mitchell
Oregon...purcases
I prefer Silver American Eagles at this time. The price is right. I believe there is less downside to them than any other silver option. All of them are fungible and no problem in selling them as such. Another option would be Choice Uncirculated Kennedy Halves if you can buy them for under 4.75 times face.

I am sure that someone out there has other maybe better ideas.

HBM
Hill Billy Mitchell
Goldspoon...slabs
http://www.the-moneychanger.com/html/coin_con.htmlI believe the above link would be of value to you in deciding on numismatics as opposed to bullion coins.
Hill Billy Mitchell
Quixotic1
Your post was welcome. I appreciate information from one who has dug it out of the pits. Give us more.
Cmax
FOA Re: Holtzman #12765.
Esteemed FOA,
Yes, "backwardation". That was an excellent post. Not so long ago, "spot" value really was "street value", but the general population have not yet awoken to the fact that today�s "spot" is but A REFERENCE TO THE VALUE OF PAPER GOLD. Anyone involved in gold, does so as a hedge against his fiat and derivative practices. Such a person would sees this as going to church on Sunday, to compensate (hedge) against their dishonest lifestyle during the week.

But WHY would anyone ever hedge their already leveraged derivative position, with something that in itself is a derivative (paper gold) with as bad or worse FIAT practices than fractional banking? Yes, it appears that the paper gold market has spoken for gold at a 100:1 ratio, a ratio that even the share holders of the New York Federal Reserve (a privately owned money printing company) would be proud of!

To me, this is the height of insanity (and irresponsability) to knowingly hedge a portfolio with something that will indeed fail, for the very same reasons that would bring down one's derivative investments to begin with. A total lack of common sense at the most basic level.

Back on backwardation:
The US and most of Europe are not really so acutely aware of this, as are the inhabitants of third world developing countries, where even the shoe shiner knows it. As in Venezuela, not long ago there was an official exchange rate of 170 bolivars to the dollar, but the "street price" of the dollar was 360. In all cases, when rigid or "virtual" exchange controls are applied to ANY money, the "street price" always runs the official price out of the market. (Greshams Law assumes greed and temporary ignorarance, but good money will eventually push bad money out). Just as the POG is a "virtual" exchange control that can only be sustained by the faith (and ignorance) of the general population, the street price (POG+premium) will very soon take over, as more people wake up. The masses of people in "developed" countries are only beginning to discover that which anyone already knows in any "third world" country��that goverments are but self-satisfying animals in competition with it�s citizens.
Backwardation = "black market" = free enterprise.

Yes, it is for these exact reasons that I agree with your statement :
"I believe most of the lesser developed countries will be in the forefront of building a high "street price" for physical gold".

I for one, hope the POG falls below $200....what do I care about the price of derivative gold that can only be collected on by only 1% of it�s holders?

Al Fulchino
Phos
Intersting letter. here are a couple of comments. One: Do we trust the man from GS? i.e. watch your oil stocks the price rise is complete? I believe that if the oil companies made money at 12 dollars per barrel they wil make more at 23 or there abouts. Yes the book cost of the commodity is up, but just look at the Saudi, Texaco, Shell deal. The one guy takes the same oil out of the ground places it in the hand of his American/International global partner/retailer. Where is the rise in the cost of goods sold? Oh yes! Either in someones pockets or maybe in the stock price. Just an opinion on my part of course. Hope its the stock price.

Also, regarding the author of the letter being of the opinion that world forces have gotten together to convince the main members of OPEC to work with them. Where were they when the price was dropping off the cliff? Was it future economic tragedy that prompted this black gold get together? What a fine bunch of fellows... The argument previous was that the Saudi's, who can produce a barrel for about $3 /barrel, was trying to drive out producers of small wellsand to punish other Opec members.

From where I sit, I follow the money. And you are paying it at the pump < a form of tax for the international community is what I call it>. I am still in Mobil and Exxon, and have done well the last few mos and will be the next three at least.
THX-1138
Clinton's house money
http://www.iht.com/IHT/TODAY/THU/ED/edhouse.htmlOk, now I am confused. GATA claims the money for the Clinton's new house came from a blind trust fund that shorted gold. Well then who is this guy that is supposed to be the one giving the Clinton's his money.

Is this the blind trust fund manager? The Clinton's bookie?
Does this guy run any hedge funds and is he shorting the gold market?

Here is article excerpt:

There is something uncomfortable about Bill and Hillary Clinton's financing
of their New York house with $1.35 million belonging to the fund-raiser
Terence McAuliffe. The problem is not a legal one. The money is not
exactly a gift or a loan, because Mr. McAuliffe merely is putting up
collateral for the president's mortgage and because the president is, in any
event, allowed to receive gifts. It is a problem of appearances. President
Clinton has accepted an enormous, personal financial favor from a wealthy
businessman, and one is entitled at least to wonder what if anything Mr.
McAuliffe will get in return.
Farfel
Stranger, you are both arrogant and wrong.
Stranger said:

The term "stagflation" was coined in the 1970s to describe the phenomenon of rising inflation occurring despite stagnant economic growth.
---
Farfel says:

You are categorically wrong in your definition of stagflation. Stagflation, once again, is RISING interest rates occurring with slower growth. It is a definition based upon interest rate movement in conjunction with various key indices of economic activity. Despite the name (stagflation), in reality, it has NOTHING to do explicity with inflation. Sorry.
---
Stranger said:

What we are experiencing today is the onset of inflation, yes, but contemporaneously with the strongest
economy in a generation.
---

Farfel Says:

Again, you are categorically wrong. The economy, as measured by key indices, is tapering off. We have passed the strongest point and weakening is occurring everywhere.
The most serious measurement of weakness is occurring amongst American exporters ( via the burgeoning trade deficit), who are simply being devastated in today's economy.
----

The Stranger said:

Both the appearance of inflation and the strong economy owe a lot to recent robust monetary expansion (the same monetary expansion, by the way, which has been reducing the value of the dollar on forex markets and may ultimately produce higher gold prices).

----

Farfel Says:

Wrong again. The monetary expansion has resulted primarily in financial asset inflation, NOT consumption inflation.
Until the stock market bubble pops, that trend will continue.

------

The Stranger says:

Bond prices peaked last October when the threat of deflation was perceived by many to be greatest. Over the many months
since then, as fears of deflation have subsided and subsequently been replaced by fears of inflation, they have pretty much steadily declined.

-----

Farfel Says:

The fear of inflation is NOT the primary factor behind bond market weakness. Rather, it is the imperative of raising interest rates to induce people to hold bonds through the uncertainty of y2k. It is entirely a liquidity crisis in the bond market, and NOT primarily an inflation issue. All consumption indices are relatively benign today.
--------

The Stranger says:

As to your assertion that there is some sort of y2k liquidity shortage forcing people to sell their bonds, nothing could be further from the truth. The monetary aggregates are published every week for anybody who would care to follow them. You obviously don't.

----

Farfel says:

The preceding paragraph makes absolutely no sense. First, I never said any such thing, so you have misinterpreted me. Re-read my preceding paragraph. The liquidity issue is NOT forcing people to sell their bonds, it is forcing them to raise interest rates. You seem confused between the chicken and egg in economics, apparently focusing on monetary aggregates rather than interest rate movements.
-----

The Stranger says:

I am sorry to single you out for this treatment, Farfel. If you actually believe what you posted here today, that's one thing. But if you have the kind of experience you suggest, and you are deliberately being provocative just to get attention, you are abusing the Forum privilege, IMO. People in here who are searching for answers to their investment concerns deserve better.

----

Farfel says:

I am not being provocative. I am stating a simple fact:

Any further notable deterioration in gold asset prices (my estimate, anything under 240) will reconfirm the gold bear in most gold investors/producers minds with disastrous psychological effects. Further, it will trigger a full scale global deflationary collapse. I stand by that. We are at the cusp of a great disaster. The collapse of gold is the collapse of the global financial markets.

Ironic but true. "Gold shorts, be careful what you wish for, you might just get it!"
Goldsun
Ravi Batra Cookbook
Add a grain of salt to most dishes.
Goldsun
AEL
silver rounds & etc.
Hill Billy Mitchell (09/09/99; 21:42:23MDT - Msg ID:13183): American Eagles (silver) have such a high premium; any reason not to go with rounds at $1.25 less per oz? ps: thanks to you and others for the exit strategy comments.

BARFLY (09/09/99; 18:27:37MDT - Msg ID:13174): hmmmm. Care to flesh out -- more detail, in more complete sentences?

THANKS TO ALL for very informative and valuable posts over the last several weeks.

Stranger and Farfel: Let's be gentlemen, gentlemen. Thanks for all your inputs. Opinionation and contention is useful.
AEL
cashing out?
from the TB2000 board; I wonder if this is true?

-- AEL

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

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001K1o

"Households" consisting primarly of wealthy retirees, corporate
executives and corporate founders (Bill Gates and Michael Dell) have
pulled a Trillion dollars of CASH out of stocks in 1997 and 1998.

It is the greatest wealth transfer in the history of the world.

Getting one segment of the population (primarily Baby Boomer 401(k)
mutual fund buyers, corporations buying back stock to prop up option
values, state and local government pension plans and foreigners) to
hand over a Trillion dollars to another segment of the population
involves a process, and, with the exception of Corporations which are
helpless in the face of the self-interest of their CEOs, the process
involves an intense psychological conditioning to convince Joe
Sixpack of the truth of one obviously silly idea -- that you can buy
and hold stocks for retirement and the marked-to-market values that
arise because of YOUR actions will motivate a new generation of
investors to duplicate your behaviour years from now when you retire.

The problem is the present generation of movers and shakers who have
been selling into this rally has made off with a Trillion dollars of
cold hard cash by providing stock to the market over the past two
years.

Do you suppose that the corporate execs who sold option stock or
founders stock in 1997 feel bad because marked-to market prices are
higher now? I doubt it.



SteveH
GATA
Dec gold now...$257.60. Crude $23.05, Silver...$5.23, Natural Gas...$2.889 (up .038!).


Le Metropole members,

The Martin Armstrong - Princeton Economics International
scandal is picking up steam. It is important for us to
monitor this situation because two highly reliable
sources have told us that he is mega short "borrowed
gold." One foreign source told us that Martin
Armstrong is short up to 20 million ounces of gold.
The other source, U.S based, says he believes Armstrong
is short 8 million ounces. Either way, the numbers are
significant and cannot be easily covered.

(Republic Bank of New York (Republic Securities) clears
PEI's business, and has suspended the chief of is
securities operation, James E. Sweeney.

Tokyo - Dow Jones - Sept. 9 -

"The Financial Supervisory Agency Thursday ordered
Cresvale International Ltd. to stop selling bonds
issued by its U.S. parent for six months, citing
investor protection concerns, Kyodo News reported.

The ban on sales of the dollar-denominated Princeton
bonds took effect the same day.

Cresvale International, formerly the Tokyo unit of
Britain's Cresvale investment banking group, was
acquired in 1995 by Princeton Economics International
Ltd., a global investment and economic research company.

Princeton Economics International issued bonds through
a paper company set up in the Cayman Islands. Cresvale
International has sold about Y120 billion in the
Princeton bonds to dozens of companies in Japan, saying
that customer assets are under SEPARATE custody by a
U.S. securities company.

But the FSA's inspection of Cresvale International
in May found NO evidence of such practice.

The financial industry watchdog decided to impose
the sales ban to protect investors, fearing losses
on their assets, Kyodo News said�."

A Reuters story today added the following," Analysts
and sources close to the situation told Reuters that
regulators are investigating whether Republic inflated
the value of futures and other derivatives it held for
Cresvale International and investment manager
Princeton Global Management."

According to Caf� sources, Martin Armstrong has not
been seen in the gold and silver pits for some time
and the word on the Comex floor is that his financial
operations are in trouble.

According to a Wall Street Journal article last Friday,
Republic had advised U.S. law enforcement and
regulatory authorities in May of its findings.
"Spokesman for the U.S. Attorney's Office for the
Southern District of New York in Manhattan did not comment."

Knowledgeable parties close to the Caf� and very
familiar with law enforcement have told us that it
is highly unusual for the U.S. Attorney's Office to
be involved and just as highly unusual that information
of this nature was let out in the public domain. That
same party suggested that the investigation must be
in more advanced stages and that it could be
very significant.

I repeat that our camp hears that just 4 hedge fund
operations (Soros, Tiger, Moore Capital and Martin
Armstrong) are short 30 million to 50 million ounces
of gold. There is no way that amount of gold can be covered
in a pinch without driving the gold price sharply higher.
Unless of course the U.S. government and the N.Y. Fed
decides to bail out them out.

The rumored gold position of LTCM was swept under
the table. If Armstrong is short as much "borrowed
gold" as we think he his, it will not be that easy
to do. That is so because U.S. law enforcement is
involved as well as so many investors. That is why
we are pressing on with this story. If it becomes
publicly known he is mega short gold, it could start
a gold buying stampede - especially, if all his
trading activities have been frozen.

For those of you that did not read my Labor Day
weekend piece, "Caf� Des Scandales," at the
Mattisse Table, the following is an excerpt from
a May 14 letter from Martin Armstrong to GATA and
our Secretary, e-group leader, Chris Powell:

"I hate to tell you, but gold will drop to under
$200 before it turns. I find it extremely one-sided
how a Buffet and company of tagalongs is not a
manipulation because they buy, while selling is a
manipulation. The very guys you argue are manipulating
gold down were big sellers of gold and buyers of
silver during the Buffet rally. GS or not, the
economy simply does not support your position. And
I do not want to hear how I am short or some nonsense
to try to discredit my views, because it is not true.
PEI owns a 51 percent stake in a public gold mine in
Australia. That is my long-term view; it does not
change my short-term view.

You cannot make a case for gold manipulation when
central banks are willing sellers. They have
demonetized gold and that is a simple fact of life.
If you want a free market, then don't stand in the
way of this bear market. Let the central bankers
sell everything they have and then there will be
no overhead supply to worry about. You cannot
argue manipulation and take the position that
these guys are not allowed to sell what they have.
The banks know what is coming and if they sell
ahead of the central banks, so be it --
that's a free market."

MARTIN ARMSTRONG
Princeton Economics

Japanese regulatory authorities have seen enough to
shut down part of Martin Armstrong's financial
operations in that country. They have concluded that
one of his financial entities has been lying to
regulators. Is he lying to GATA about his gold
position too?

All the best,

Bill Murphy

Le Patron
Chairman, Gold Anti-Trust Action Committee
http://www.LeMetropoleCafe.com



ORO
FOA IMF's corner
I appreciate your 13125 earlier today and your 13086 yesterday, they are very informative. Thank you.
You read the IMF action as acquiesence to the need for a replacement for "IOU Gold" and SDR in settling world trade and debt in excess of demand for the dollar to settle $ denominated debt of countries other than the US. These are extensions of the gold convertible $ of the period before the 1971 break.
Since information on the settlement mechanics from the Jamaica Accords is unavailable in public, there is a question of what an SDR is, how they were allocated and how they are used.
I understand the "IOU Gold" is predominantly a matter of settling trade with Arab Oil. In this, 45% or more of the world supply of oil is traded at an unseen gold price via this settlement mechanism.
SDR seem to be used to complement the "IOU Gold" and "street gold" in settling the balance. The fictional part of the official SDR exchange rates is either the SDR price of gold, or the SDR exchange rates to currencies. The former seem to be the "fake" portion. One interesting point in this is the possible exchange of 2829 $M in SDR for 65 $B during the 1992 settlement of Saudi and Kuwaiti obligations to the US due to the Iraqi war. These imply an exchange rate of 805 $/oz for 1992, and perhaps for all periods since the 1980 blast in POG. At the time, the US was reputedly solvent at the exchange rate of $800/oz or so.
The issuing of $ gold exchange paper contracts does fill in the "conversion on demand" aspect of the old system. The point being that this is done by the "markets" as proxy of the settling the gold conversion by the US itself. This was essentially a mechanism to extract gold from producing countries instead of taking it out of Fort Knox. This also had the effect of mobilizing private gold hoards through the prefferential returns on paper holdings rather than physical ("street"), a result of Volcker's interest rate spike. The rate policy made very profitable the forward selling of any commodity and any currency carrying lower interest rates. This induced a one time supply shock that lowered commodity prices steeply, and has continued to reduce commodity prices to this day. The unintended consequence was filling the world with dollar debt at a higher rate than before. This caused, in part, the turning of the US into a debtor nation in 1984. The rest of the move of the US into debt was the work of the banks compounded by US government deficits.
You, ANOTHER, and some others have pointed out that this is a patchwork system extending the life of the old one "till something better comes along". The details of the mechanics of this are given in the general terms of the gold for oil deal. You and/or another indicated that the mechanism was sabotaged by excess gold lending by EU members and excess borrowing by hedge funds seeking cheap funds.
The implementation of this patchwork seems to be through private banking working in parallel with central bankers. Thus an increase in external debt of US (not a direct part of money supply, M3 but may include it) through the banking sector and credit markets should show up as an increase in gold loans. The increase in dollar monetization (M1) should show up as demand for gold, particularly so if foreign debt is monetized by the Fed at a higher rate than new foreign debt is produced.
Tracking the net foreign owned US assets to GDP ratio, which peaked in Dec 1960 at 222% and continued to decline into 1978 at 133% and 1981 at 138%, the Fed replaced the missing foreign inflow with increased monetization going from M1 and M3 to Fed holdings ratios of 5.5 and 11.6 to a bottom of 1.6 and 6.2. in Q3 1980. The monetization process begun in 1960-61 ended in the Fed multiplying its holdings by a factor of five. From 1978 to 1981, the Fed increased its holdings 25% while raising interest rates through the roof. During this period gold backing of M1 went from 11% to about 52% (solvency in banking terms is at 40%).
Since 1980, the US net foreign debt to GDP grew from 133-138% to the current 243% and the M1 and M3 ratios to Fed holdings changed from 1.3 to 2 and from 6.2 to 10.4. The gold price and price inflation correlate to the rise in monetization of debt and to the expansion of credit. As long as cash backing by the fed did not grow more quickly than gold supply was growing (5% rate since the late 80s), there was no energy in the gold market. The only exceptions were a slip up to a 10-12% growth rate in 1986-1987 as interest rates were raised to prevent a heated debt bubble from going too high, and the second in 1993, where the debt default dangers were just too strong.
Both of the moves are the bassis of the broad trends in gold prices going from $35 to $800 in the previous monetization. The price was going down as the gold is shorted in close correspondence to the rise in foreign owned debt in the US. The rate of growth of US indebtedness through the current accounts deficit would necessitate a rise of gold shorting in proportion to the rise in the current accounts deficit, i.e. from about 120$B in 95 to about 300 $B, or a 2.5 fold rise in the short position from 2500 tons (US data only, Q1 1995) to about 6250 tons. My estimate is a US gold short position of 6500 to 7300 tons (one model indicates 8700 but I don't trust it).
In the POG, a rise in foreign indebtedness should be proportional to a drop in gold prices in $, as foreign money preffers holding $ debt to holding gold as long as the US monetizes at a rate that is lower than the rate of growth in gold supply (both hovering at 5% for most of the last 20 years). Indeed, in the 1995 to early 1999 period, the net foreign held US debt increased from the 7 to 9 $t to the 10 to 14 $t, a rise of 35%, which imlies a drop of POG by 1-1/135%=26% (through June), which fits very well with the 31% drop in the POG from $385 in Q1 95 to $262 in June. Clearly someone "unauthorized" took it down further by riding on it that extra 5%.
So.... All the pieces of this puzzle are falling in place...
The current situation is similar to the previous situation of the 60s with a few significant differences. The 1960s provided the US with a way out because net indebtedness to foreign countries relative to cash (M1) was 8, but it is 20 today. Meaning that the monetization required to avert a catastrophic default in the case of foreign withdrawals from the US debt markets and US banks, would require the Fed to buy all the US treasury debt and all of the Fannie Mae and Freddie Mac issues while raising interest rates to make the holding of US debt by foreigners more attractive. Does this sound like a familliar issue? Has not the Fed just announced that it will buy all debt down to your gambling losses (internet stock calls...) and your stamp collection?
The current situation is also problematic because of the point of no return issue: the current foreign ownership of US financial assets is about 31 $t (yes - trillion) and the US owns 10 - 14 $t of foreign financial assets. At the current Eurodollar rate of 6% that would mean that the 10 $t must earn a 16.5% return and 12% on the higher figure is needed, which can not be had. The current imbalance has the US at the point where protecting the value of the $ by the traditional method of increasing $ interest rates increases the stream of international dollar supply, and exacerbates the negative relative investment position. In a parallel to this, the lowering of interest rates to the point where $ is competitive for export and the trade deficit is balanced would be an obvious weak dollar policy that would result in the withdrawal of funds from the markets and must induce the Fed to monetize large portions of the US debt to the point of producing significant new price inflation.
A 10% drop in $ would rase the prices of over half the products we buy, which are one third of the nation's expenditure, meaning a 2% rise in price inflation, and would raise the portion of imported goods in the basket from about 20% of GDP to 22%. Any additional move down in the dollar would raise inflation further. In a consumption happy country, the products will still be consumed at the higher price.
Aside from this, the US has little export capacity. About 56% of US goods consumption is foreign made.
The employment situation is another problem in gearing for export. Employment in finance, insurance, real estate, retail, and government are not exportable to a meaningful extent but the portion of labor in these occupations has risen from 50% in the early 1960s to 63% today. Much of the remaining balance does not do exportable work either. In these tight labor markets, how much higher must pay go to achieve a sufficient transition of labor to exportable areas of the economy? How much higher would inflation be as a result?
Over the last few years, as interest rates abated, Americans increased their disposable income by reducing debt expenditures through home refinancings (150 $B on average per year) . The result of higher interest rates would be higher wage demands. The pullout of foreign money would increase interest rates even more, thus pressuring wages further.

FOA Is this the US/IMF corner?
Canuck
Swiss gold
Where did I see that Switzerland is selling 1,300 mt.??

I have checked USAGOLD and KITCO; no mention, was I halucinating?
ORO
Canuck Swiss
British press. Tiny release yesterday. Even the paid for journalists are getting tired of this...
tom fumich