USAGOLD Discussion - October 1999

All times are U.S. Mountain Time

elevator guy
(10/01/1999; 00:02:27 MDT - Msg ID: 15051)
blackout!
Is anyone else having trouble accessing Kitco and /or Quote.com info?
I can bring up Quote.com, but it wont display the spot price overseas. Just a blank window, where it usually shows the spot/ask/settle 30 minutes delayed.
Kitco wont come up at all.
Does anyone have a good site where you can see the spot price overseas in real time?
SteveH
(10/01/1999; 00:09:38 MDT - Msg ID: 15052)
Dec. gold up 1.7 to...
$301.10.

This just in from GATA:

Good read!

9:15p EDT Thursday, September 30, 1999

Dear Friend of GATA and Gold:

Here's an essay by GATA's vice chairman and treasurer,
John D. Meyer, founder of Berkshire Financial Advisors
in Great Barrington, Mass., and a 30-year veteran of
the money-management business, posted at
www.lemetropolecafe.com.

Better than anything else I've seen, John's essay
explains the meaning of the decision by the European
central banks to stop facilitating the gold carry
trade.

Please post this as seems useful.

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

* * *

THE WORLD DECLARES MONETARY INDEPENDENCE
FROM THE U.S. DOLLAR
AND HANNIBAL'S WORST NIGHTMARE BEGINS

www.lemetropolecafe.com


By JOHN D. MEYER
Vice Chairman and Treasurer
Gold Anti-Trust Action Committee Inc.


September 28, 1999

Three cheers for Midas Murphy!

Pinch me quick and tell me I'm not dreaming. How can
this be? Fourteen European central banks plus even the
English Poodle announce that they will restrict gold
sales and lending for the next five years. In one
dramatic sweeping step the reign of terror besieging
the gold bullion market has been broken. But the
question remains: Why would the European central banks
wish to reassure the gold markets?

For many years the gold world has been throttled by
perceptions and short selling. Central banks gold sales
were in fact never the problem, but the gold lending
and the well-orchestrated propaganda directed by the
United States was. Since early 1996 the threat of
central bank gold sales and a raising volume of gold
lending strategically timed and presented by the
mainstream financial press attacked gold whenever an
uptrend threatened. This has now ended.

THE TWILIGHT OF THE DOLLAR

With the monetary system facing the greatest defaults
since the 1930s, the manipulation of gold, the ultimate
preserver of wealth, serves precisely to conceal the
bankruptcy of our current monetary system.

Single events often appear distant and unrelated, yet
with a more critical eye they can be seen to be part of
a pattern. It is my position that the European central
bank announcement is a defining moment in monetary
history. The propaganda windmills, mostly English
speaking, would have you believe that money is a
creation of government. As Martin Armstrong liked to
say, gold has been demonetized.

We hold a different view. Namely, that money is
determined by a market process. The European central
bank decision is a major part of this market process,
which has two consequences.

First, it partially restores gold's monetary role.
Second, and more importantly, it is a determined
attempt to turn away from the dollar as a reserve
currency.

The reality is that the greatest crisis in credit since
the 1930s is under way. While the problem may appear to
have begun in Asia, in fact its origin is a monetary
system that allows the United States to have "deficits
without tears." Every nation in the world has suffered
as they have been forced to import our inflation (that
is, to buy dollars and U.S. debt) because it is the
reserve currency of the world's financial system. The
dollar as the reserve currency forces other countries
to accept our paper as payment for their goods and
services. Jacques Rueff named this dirty little secret
"The Monetary Sin of the West."

Our global monetary system is dysfunctional. The Asian
currency epidemic was the first act in a play destined
to take down the U.S. dollar. Starting with Mexico in
1995, Asia in 1997, and Russia and Brazil in 1998, we
have experienced an escalation in each crisis as larger
and larger countries are ravaged. The monetary mischief
of competitive currency devaluations claimed its first
victim in North America with the collapse last fall of
Long-Term Capital Management.

As 1998 was ending the Japanese authorities (December
22) blind-sided the financial markets, saying that they
would cut back their purchases of Japanese government
bonds. Japanese long term bond prices were pummeled and
the U. S. dollar crumbled. Then on Jan. 1, 1999, Prime
Minister Obuchi proposed the establishment of a
monetary system composed of three key currencies -- the
yen, the dollar, and the euro. Japan signaled its
intention to internationalize the yen turning it into
the key currency of Asia.

On Sept. 20 this year, despite warnings, the Bank of
Japan refused to ease monetary policy to curb a rapid
rise in the yen against the dollar. A week later the
European central banks befriended gold.

The Russian default in 1998 launched us into a new
phase of this meltdown, which directly affected the
derivative arena. Default has been staved off for
decades through credit expansion (i.e., bailouts). New
debt piled on the old. Finally, when the excesses are
too great and the economies too anemic, default becomes
the final solution. Default immediately exposes
systemic weaknesses. Since derivatives are leveraged
contracts dependent upon an underlying "asset," default
of the underlying asset immediately wipes out that
derivative. The wizards' computer model programs are
not programmed for events that might cause a non-
standard deviation movement.

For the Federal Reserve to admit that a single hedge
fund, with a mere $4 billion in equity, jeopardized the
entire financial system is an admission of a profound
failure in the Federal Reserve policy. What can be the
justification for bailing out a den of gamblers?

It proves the mutual dependency and just how cozy the
alliance is between Wall Street and Washington. LTCM
was bailed out because government officials realized
other hedge funds and Wall Street trading desks had
similar leveraged positions. This crisis is still
largely unknown to the public. It is the story of the
"carry trade," the naked borrowing of yen and gold to
finance these extraordinarily leveraged positions of
the financial community.

Between August and October 1998 the yen fell from 147
to 112. Then, on Oct. 15, facing a breakdown in the
interbank payment system, the Fed initiated the first
of three rate cuts. As 1999 commenced the U.S.
financial system had been brought back from the brink
by another massive ballooning of credit.

These fixes have merely exacerbated the underlying
systemic risks. After decades of a policy of "too big
to fail," the Fed's unwillingness to address underlying
structural problems of debt has led to putting the
entire system at risk.

The Bank of Japan and the European central banks are
declaring an end to this state of affairs. The U.S.
financial markets have become a fool's paradise, and
the affairs of LTCM down to the current scandals
involving Martin Armstrong and others have not been
lost on the global banking community.

As a young man Alan Greenspan wrote an essay titled
"Gold and Economic Freedom," detailed the cause of the
1929 crash. It appears to me as though he repeats the
mistakes he accused the Fed of committing in 1927-28.

That is, Greenspan has created a bubble
(hyperinflation) in our financial markets. Wall Street
has become a casino. The greatest fear for the central
bankers of the world is the U.S. dollar, which
comprises the bulk of their monetary reserves.

For years now the mainstream gold analysis has been
fixated on the supply of gold. This is not the issue.
The critical determinant in the price of gold
ultimately is the supply of DOLLARS. As the United
States is the world's largest debtor nation, with
endlessly mounting trade deficits, negative savings,
and inflated security markets, it is not hard to image
the fear motivating recent developments by the Japanese
and the Europeans. Enough is enough. Gold reserves are
not the problem for central banks but rather their
excessive position of dollars, which has entered a
major secular downtrend.

THE COMING DOLLAR BACKLASH

The European central banks' new gold policy must be
viewed as an aggressive escalation in their policy to
establish monetary independence. The world has crossed
the threshold into a monetary system that will be
comprised of three reserve currencies. Gold is no
longer to be held hostage to American monetary policy.

On this point it is quite interesting to see that the
English Poodle, in an obvious break with its American
friends, has turned its leash over to the Europeans.

It will be interesting to see what response the Bank of
Japan will make to the European central banks. An Asian
yen-backed currency has a long way to go to equal the
gold reserves backing the dollar and the euro. Until
now the currency world has been engaged in a
competitive race to the cellar. It could be that the
race for competitive legitimacy has begun. Central
banks' bids for gold are likely to far exceed the sale
limits just established by the Europeans. The historic
actions by the European central banks and Japan over
recent days are extremely bearish for the dollar and
U.S. financial markets. So far the markets have failed
to understand this.

WHERE DOES GATA GO FROM HERE?

As treasurer of GATA I wish express our sincere
appreciation for the support from hundreds of people
who have rallied to our cause. Your letters and notes
have been a source of strength to the committee. We
salute and thank you. We are likewise indebted to a
select and courageous few within the gold-mining
community. Unfortunately most mining companies have yet
to come on board.

Clearly the surge of events is vindicating and
confirming the task set out by GATA. No matter how
sweet this first victory may be, a long battle still
lies ahead. We need to capitalize on this moment by
moving on to the next level of our investigation.

It would be gratifying to see some of the senior gold
mining companies step forward to support GATA
publically. GATA Chairman Bill Murphy has detailed one
of our failed attempts (the "Vancouver Affair") to find
major corporate support. "Hannibal" seems to have a
long reach.

We have made many other attempts to enlist the larger
mining houses. One senior North American producer
approached us last spring and actually explored a
relationship with us for nearly a month. We cooperated
in every way, opening all our work for the company's
review. Then suddenly the company disappeared without
explanation. Phone calls were not returned. We were
just plain dumped.

Someday we may tell the world about that episode too;
the story rivals the "Vancouver Affair." For now we
continue patiently with restraint, but hope that the
larger members of the mining industry will awake and
throw aside their fears.

One way or another GATA is here for the duration. Keep
up the support. We will prevail.

A FINAL WORD

Murphy's heroic effort and foresight are only now
beginning to be understood. Bill and his Internet site,
www.lemetropolecafe.com, have nailed the events that
are now unfolding. If the Bank of England's gold sale
didn't convince the world that the gold market was
being manipulated, maybe a $60 explosion in the gold
price will. The recent extreme price action in gold
should show that the market has been suppressed. One
wonders how much it will take to generate an
acknowledgment of Bill's tremendous performance.

-END-


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

eGroups.com home: http://www.egroups.com/group/gata
http://www.egroups.com - Simplifying group communications



SteveH
(10/01/1999; 00:24:06 MDT - Msg ID: 15053)
propoganda?
Friday October 1, 12:16 am Eastern Time
Gold price falters as signs of liquidity emerge
SYDNEY, Oct 1 (Reuters) - A unexpected injection of liquidity overnight and expectations of more gold hitting the market soon were threatening to end gold's dramatic bull run this week, bullion dealers and analysts said on Friday.

Spot gold was fetching US$297.50/$299.50 per troy ounce at 12:56 p.m. Sydney Time (0256 GMT) after slipping below $300 an ounce on Thursday, a first sign that the market's short covering rally had lost a step, dealers said.

Lease rates -- as high as 10 percent at the height of gold's dizzying ascent -- have recoiled to a still-higher-than-usual but more palatable four-to five percent, possibly responding to the Thursday announcement by African miner Ashanti Goldfields Co Ltd (Australia:AHA.AX - news) that it had restructured 80 percent of its hedge book, equivalent to 80 million ounces.

Lower lease rates encourage more borrowers.

``Gold must return to around $305 to regain the momentum,'' Keith Goode, an analyst for Bell Securities Ltd in Sydney said.

``It is looking quite vulnerable right now, and there is the danger of a bull trap,'' Goode said.

Gold rocketed to a momentary peak of $327.30 an ounce earlier this week as short position holders scrambled for bullion to minimise losses after 15 European central banks vowed to cap gold sales at 400 tonnes a year and keep leasings in check.

The ceiling on gold sales was largely in line with what the banks had been collectively disposing of in the past, but served to remove uncertainty over how the banks would manage their reserves.

Since the Sunday announcement, rumours of other official holders of gold taking up the slack with fresh disposals of bullion have abounded, although no banks have stated they were new sellers.

``Lots of fingers are pointing to Russia and other parts of western and eastern Europe, but so far it's just talk,'' said a bullion dealer in Melbourne.

The Ashanti announcement may have more do with market sentiment and perception than any actual new gold entering the worldwide trough, the so-called ``gold pool,'' where borrowers go for their bullion.

Ashanti said the restructuring was initiated before the gold rally as part of its contingency planning, Bell's Goode noted.

Also, it included converting a substantial component of the forward sales positions into synthetic put options.

``It means the gold didn't enter the system,'' Goode said.

Synthetic puts are established by purchasing of call options and a long or short underlying position.

In a further sign of diminishing volatility, the spread between bid and offer prices for spot gold narrowed to between $1.50 and $2.00 an ounce from around $3.00 on Thursday.

Spot gold and forward prices were for a period in backwardation in which spot gold is dearer than the future gold price -- an unusual situation for this market -- but prices had now converged, traders said.
SteveH
(10/01/1999; 00:24:52 MDT - Msg ID: 15054)
propoganda?
http://biz.yahoo.com/rf/991001/l.html

below's link. oops.
SteveH
(10/01/1999; 00:48:28 MDT - Msg ID: 15055)
Chapman
http://www.gold-eagle.com/gold_digest_99/chapman100299.html"...That money was used to provide liquidity for world stock and bond markets, particularly the U.S. markets. That source of liquidity is now dead. Next we expect the yen at 103 to be borrowed and sold, the carry-trade and the funds will be used to keep the stock market correction at 15%-20% and 30-year bond yields at 5 3/4% to 6%. That action and with the help of central banks the yen will be moved down to 118 again. We can assure you the Japanese were reamed at the G-7 meeting for acting unilaterally. Unless the yen goes lower, that game will end in a few months and two sources of world financial liquidity will be gone. The third, carry-trade in the Swiss franc is over. The currency should trade down to 1.55 and could go to 1.65, but that's it. Thus, if these three sources of liquidity dry up, the gold carry-trade finished and yen and franc carry-trade limited, then banks will be forced to create liquidity. They'll do this by monetizing debt. That is the Fed buying U.S. Treasury Paper, which is immediately inflationary. Otherwise they'll print money which will show up in inflation in 6-12 months. Gold went to $329 and corrected back to $309. It will consolidate between $300-$320, then by the end of January should be attacking $350 an ounce. The bad news is the stock market will trade between 9200 and 11,306 for 6 to 9 months, then head lower...."
WAC (Wide Awake Club)
(10/01/1999; 01:20:35 MDT - Msg ID: 15056)
Leigh - Belgian Gold
Leigh, we received 0.75kg with the other 1kg due for delivery next week.
It was on wednesday 29th september, that all the branch managers of BBL were called to an emergency meeting in Leuven regarding gold sales. I do not yet know the outcome of the meeting, but it would appear that they are still deliverying gold. Perhaps someone with some inside access to the BBL structure can enquire and enlighten us. FOX?
714
(10/01/1999; 04:07:08 MDT - Msg ID: 15057)
SteveH re: Chapman
Chapman doesn't seem to take insolvent hedge funds into account. Or am I missing something? In 1998, we saw a crisis develop after LTCM was going belly up. The meltdown was averted by an astute Alan Greenspan and Robert Rubin. Since then, the re-established stability has been a fragile one and it was recently jolted by gold's new life. We don't yet know the full consequences of this jump in POG, but it's a pretty safe bet that some big financial houses and hedge funds are deep underwater.

Furthermore, what happens to the US dollar hinges on what the Japanese do. If they start bringing their money home, taking it out of US Treasuries, Wall Street and the dollar go down much, much sooner than 6-9 months. And as for the carry trades, they're dead. They leave very nasty burns.

Maybe I'm being a pessimist, but I wouldn't be surprised to see Clinton on TV by the end of October, talking to the American people about the deepening economic crisis. I've been wrong plenty of times before, but we haven't seen all the fallout from gold's resurgence.
Goldspoon
(10/01/1999; 04:29:07 MDT - Msg ID: 15058)
elevator guy
http://www.metalsman.com/masterprices.htmTry this one.....
WAC (Wide Awake Club)
(10/01/1999; 04:33:31 MDT - Msg ID: 15059)
Goldspoon
Platinum up $26??
RossL
(10/01/1999; 04:39:07 MDT - Msg ID: 15060)
Delivery on COMEX gold contracts
http://www.nymex.com/markets/cont_all.cfm?cid=15&cont_name=term_sched#1999Delivery on COMEX gold contracts is usually the last Friday of the month. Trading on the October contract ends on Oct 27 and delivery is due on Oct 29. Expect a squeeze in about 3 weeks.
Goldspoon
(10/01/1999; 05:22:36 MDT - Msg ID: 15061)
Leigh....horse race...
Leigh, i told FOA, Koan yesterday that i was getting back on (ole horse with no name) and to resume the race...must have caught them by surprize,,,,at this moment $422 up $31.
Maybe they don't know their way around the track,,,,no matter i'll gladly be their escort.....
BY the way...would you have the honor of naming my horse?? a good noble name perhaps... one that will motivate him???
Names are important ya know,,,, each one contains a certain karma....a winner/leaders name for he has assumed the leadership role from the start....as he goes forward the others then follow.... as he retreats the others still follow....looks like gold and silver are caught in my wake....OH well, Higher! Horse with no name!!

The other horse story, Ritch Man's Gold and Yellow Gold are getting tired of the evil owner stalking them with his S&P 100 rope.... they will try and charge him today, look for a fight to break out.....

i may be a little spooky.. but harmless... what did you expect to find in such an enchanted place as this...
a scarecrow with no brains??? ...only straw..(sigh)...
Love and Peace to all........and follow the Yellow Gold Road!.....
Leigh
(10/01/1999; 05:29:50 MDT - Msg ID: 15062)
Goldspoon
Goldspoon, you've got me baffled!! The horse with no name is the palladium horse, who is half dead right now. I thought the platinum horse was Ritch Man's Gold, and that he was running in the same race as Golden Sun and Silver Mood (I figured you'd changed the names of Yellow Gold and Hi Ho Silver). So now there are TWO races going on? What's the difference?

I can't think of a good name for the palladium horse because I don't know anything about palladium. Isn't it invisible or something? I mean, has anyone ever seen any?

I want the bear and the bull to come charging in and mess up the race. Can you work them in somehow?
Goldspoon
(10/01/1999; 05:31:11 MDT - Msg ID: 15063)
WAC...................Woah...horse with no name....easy....
Every time the gold bug gallery lets out a cheer... it spooks him....easy Goldspoon (talking to myself) you don't want to fall off again and hit your head or we'll never get where we're going....
Leigh
(10/01/1999; 05:31:14 MDT - Msg ID: 15064)
Silver MOON
That was a typo.
RossL
(10/01/1999; 05:53:06 MDT - Msg ID: 15065)
Timing the squeeze
The October contract is relatively thinly traded and the shorts _could_ borrow to cover their obligations. It is possible that the day of reckoning could be postponed until the end of December.
The Dec contract has 128505 contracts open. What happens if 100000 contracts holders get delivery notices? That is ten million ounces! It hurts my head to think about it. To put that in perspective, Anglogold produces seven million ounces per year. They are the biggest!
Of course, this analysis is centered on the COMEX. There are other contracts to consider. Gold leases do not have any specific schedules and a large lease could come due at any time.
The end is near for the shorts. There is not much time to accumulate physical.


Goldspoon
(10/01/1999; 05:54:49 MDT - Msg ID: 15066)
Leigh, my apologies for being sooooo confusing.
There are two stories going on...the first one is not a race..it's an escape from the evil owner...remember Stocks was just running around in the corral showing off to the bidders that were buying him and when he stumbled from running so hard Ritch Man's Gold and Yellow Gold jumped the fence to excape and run free..... and now the evil owner is trying to recapture them with a rope made from the S&P 100 stock index (it's 200 day moving average is very important to the future direction of the stock market if the average on the downside can be broken agressively money will come out of stocks to power gold higher....i expect to see a battle here today over this).....

Horse Race....FOA, KOAN, and myself were in a heated discussion about leadership of this race FOA favored GOld, Koan favored Silver, i did not tell them that i would be riding platinum.....
So i named these horses different names so as not to be confusing.....Golden SUN, and Silver Moon, and when platinum fell first (signaling the retreat of the rest) FOA quiped "it was a horse with no name" thus it neads a name...any suggestions from anyone or shall i name him myself.....if suggestions are submitted i have the authors privlige to pick....after all i'm trying to ride this unruley beast.... and the trick is he needs a good winners name...


My fault.... "only staw"....
Goldspoon
(10/01/1999; 05:59:43 MDT - Msg ID: 15067)
"only straw" ....."only straw" !!!
not staw
Black Blade
(10/01/1999; 06:00:13 MDT - Msg ID: 15068)
Horse with no name
Goldspoon, "Horse with no name" sounds like a good enough name, after all a band named America had a hit with the same title. BTW, s&p futures down 5 pts. I don't know what fair value is but looks like a the market open will be down if it holds. Gold is at $303 in London. Off to the races!
SteveH
(10/01/1999; 06:06:30 MDT - Msg ID: 15069)
Gold carry, Yen Carry, Concealed Carry...
http://www.us.net/potomac/pencak.htmlbut first Dec gold up $6.50!

This was a case in a may carry state. My take on it is that the courts look for legal arguments without logic that support their bias. You decide.

The Carry Trades all seem to hurt somebody. Protecting that gold:

Christopher PENCAK, Plaintiff,

v.

CONCEALED WEAPON LICENSING
BOARD FOR the COUNTY OF ST. CLAIR;
County of St. Clair; Marion Sargent, in her
official capacity and individual capacity;
Jean Gibson Sturtbridge, in her official and
individual capacity; Det. Sgt. Michael Waite;
in his official and individual capacity;
Sgt. Michael G. Bloomfield, in his official
and individual capacity, jointly and severally,
Defendant.

No. 94-73073.

United States District Court,
E.D. Michigan,
Southern Division.

Dec. 16, 1994.

Applicant for concealed weapons permit brought action chaltenging county's alleged policy of blanket denial of licenses and denial, of license to him. On board's motion for, summary judgment, the District Court, Edmunds, J., held that: (1) county licensing board was legal entity which could be sued; (2) Second Amendment does not apply to states; (3) denial of license did not infringe upon applicant's rights to interstate or intrastate travel; and (4) denial did not violate due process.

Judgment for defendant.

1. Federal Civil Procedure [key]2546

Mere existence of scintilla of evidence in support of nonmovant is not sufficient to avoid summary judgment, as there must be sufficient evidence upon which jury could reasonably find for the nonmovant. Fed. Rules Civ.Proc.Rule 56(c), 28 Ll.S.C.A.

2. Counties [key]208

Michigan county concealed weapons linsing board is an entity that can be sued, t merely department of the county. C.L.A. � 28.426(1).

3. States [key]4.1(2)


Weapons [key]1
Second Amendment does not apply to the states. U.S.C.A. Const.Amend. 2.

4. Constitutional Law [key]225.1

Second Amendment does not provide invidual fundamental right to carry concealed weapon as to which strict scrutiny analysis would be applicable under equal protection guarantee of Fourteenth Amendment. U.S.C.A. Const.Amends. 2, 14.

5. Constitutional Law [key]83(6)

Weapons [key]12
Refusal of county concealed weapons licensing board to grant permit did not deny applicant the right to travel, even though he claimed that it deprived him of the right to migrate to that county from another county iere he had a license.

6. Constitution Law [key]83(6)

Right to intrastate travel is a basic freedom under the Michigan Constitution, and analysis of government burdens on intrastate under that Constitution is identical to analysis applied to government burdens on interstate travel under the United States Constitution.

7. Constitutional Law [key]83(4.1)

Not every policy that possibly burdens the to travel triggers strict scrutiny, as court must consider whether policy at issue deters migration or serves to penalize the right to travel. U.S.C.A. Const.Amend: 14.

8. Constitutional Law [key]277(1)

Property interests protected by due process clause do not arise whenever person has only abstract need or desire for or unilateral expectation of a benefit; they arise from legitimate claims of entitlement defined by existing rules or understandings that stem from independent source, such as state law. U.S.C.A. Const.Amend. 14.

9. Constitutional Law [key]287.1

Weapons [key]12
Applicant for concealed weapon ficense who had been ucensed in prior county of residence did not have due process rights violated by county's alleged policy of blanket denial of concealed weapons pernuts. U.S.C.A. Const.Amend. 14; M.C.L.A. � 28.426(1).



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

Christopher Pencak, Warren, MI, for plaintiff.

Laura Amtsbuechler, St. Clair Shores, MI, Eric Eggan, Lansing, MI, for defendant.


MEMORANDUM OPINION AND ORDER
GRANTING DEFENDANTS' MOTION
TO DISMISS OR FOR SUMMARY JUDGMENT

EDMUNDS; District Judge.

This matter has come before the Court upon Defendants' Concealed Weapon Licensing Board for the County of St. Clair; County of St. Clair; and the members of the Board, Marion Sargent, Jean Gibaon Sturtbridge, Det. Sgt. Michael, Waite, and Sgt. Michael G.. Bloomfield Motion to Dismiss or for Summary Judgment.

Background

Plaintiff Christopher Pencak is an Attorney and "Pharmacy Consultant." For many years he carried a concealed weapons license issued by Concealed Weapons Licensing Board for the County of Macomb, restricted to two years while licensed as an attorney. The license expired on September 10, 1993. Some time prior to September 10, 1993, Plaintiff moved from Macomb County to . St. Clair County. Plaintiff applied in St. Clair County for a renewal of his license. He alleges that he was told by the county clerk that he should not spend his money for the renewal application because "nobody gets a CCW permit in St. Clair County. That is just the way it is." Plaintiff requested the renewal application nonetheless and paid the fee. He also requested an appointment with the prosecutor. Plaintiff alleges that the prosecutor told Pencak that the county had a policy of not issuing CCW permits, that the county licensing board would hold a hearing for him but that it would be futile, and that others have sued concerning this policy in St. Clair County Circuit Court but have been denied relief.

Plaintiff appeared at the hearing November 18, 1993 and presented his reasons for requiring his CCW permit to be renewed and his compliance with applicable law. Plaintiff contended that in his work representing criminal defendants and visiting pharmacy clients late at night he is subject to physical danger and therefore must be allowed to carry a concealed weapon.

The Board denied Plaintiff's application because it determined that Pencak did not provide compelling reasons for the issuance of a permit.

Plaintiff filed a complaint in this Court under 42 U.S.C. � 1983 asserting that the denial of his application to have a concealed weapons license by the St. Clair County Concealed Weapons Licensing Board violates the Second Amendment's right to bear arms, and the Fifth and Fourteenth Amendments and Michigan Constitution guarantees of due process and equal protection because he met all the statutory requirements to carry a concealed weapon, but was not awarded a permit pursuant to Defendants' blanket policy of denying such permits. Defendants' filed this Motion to Dismiss or for Summary Judgment, arguing that the St. Clair County Concealed Weapons Licensing Board is not a legal entity that can be sued, that the Board's exercise of its discretion to deny Plaintiff a permit was reasonable, and that Plaintiff has failed to establish a liberty or property inierest in either a license to carry a concealed weapon or to have his license renewed.

II. Standards of review


A. Standard for a motion to dismise
In considering a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) this Court "must construe the complaint in the light most favorable to the plaintiff, accept all factual allegations as true, and determine whether the plaintiff undoubtedly can prove no set of facts in support of his claims that would entitle him to relief." In re Delorean Motor Company, 991 F.2d 1236, 1240 (6th Cir.1993). A motion to dismiss under Rule 12(b)(6) tests the sufficiency of a complaint. Elliot Co., Inc. v. Caribbean Utilities Co., Ltd., 513 F.2d 1176, 1182 (6th Cir.1975). . The complaint must include direct or indirect allegations "respecting all the material elements to sustain a recovery under some viable legal theory." In re Delorean Motor Company, 991 y F.2d at 1240. (citations omitted). A motion to dismiss a complafnt for failure to state a claim should not be granted "unless it appears beyond doubt that plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Id. (citations omitted).


B. Standard for summary,judgment

In considering a motion for summary judgment, the Court may grant the motion only if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). I As the Supreme Court ruled in Celotex, "Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986).

The court must view the allegationa of the complaint in the light most favorable to the non-moving party. Windsor v. The Tenneasean, 719 F.2d 155, 158 (6th Cir.1983). "Tho evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson v. Liberty Lobby, Inc." 477 U.S. 242, 256, 106 S.Ct. 2506, 2619, L.Ed.2d 202 (1986).

[1] But the mere existence of a scintilla of evidence in support of the non-movant is not sufficient; there must be sufficient eviice upon which a jury could reasonably for the non-movant. Liberty Lobby, 477 U.S. at 252, 106 S.Ct. at 2512. "The movant has the burden of showing that there is no genuine issue of fact, but the plaintiff is not thereby relieved of his own burden of producing in turn evidence that would support a jury verdict." Id. at 256, 106 S.Ct. at 2514. "Where the record taken as a whole could not lead a rational trier of fact to find for the moving party, there is no 'genuine issue' for trial." Street v. J.C. Bradford & Co., 886 F.2d 1472, 1478 (6th Cir.1989) (citing Matsuda ELectric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, lO6 S.Ct. 1348, 89 L.E2d 638 (1986)).

III. Analysis


A. Whether the Board is a legal entity that can be sued.
[2] Plaintiff has named as one Defendant Concealed Weapons Licensing Board for County of St. Clair. Defendants argue the Board is not a separate legal entity but rather, a department of St. Clair County thus not a legal entity that can be sued. Hughson v. County of Antrim, 707 F.Supp. 304 (W.D.Mich.l988).

The Concealed Weapons Licensing Board for the County of St. Clair is a creature of state statute, not a department of St. Clair County. Section 28.426(1) of Mich.Comp. Laws Ann. provides that


[t]he prosecuting attorney, the sheriff, and the director of the department of state police, or their respective authorized deputies shall constitute boards exclusively authorized to issue a license to an applicant residing within their respective counties, to carry a pistol concealed on the person and to carry a pistol, whether concealed or otherwise, in a vehicle operated or occupied by the applicant. The county clerk of each county shall be clerk of the licensing board, which board shall be knows as the concealed weapon licensing board . . . .

Mich.Comp.Laws Ann. � 28.426(1). Further, the concealed weapons license itself makes clear that the concealed weapons licensing boards are state statutory creations. The top of the license reads "Michigan Department of State Police," "Michigan Concealed Pistols License." The license provides that the applicant is "hereby licensed by the Concealed Weapons Licensing Board to carry a pistol ..." and at the bottom of the license lists the issuing county. Based on the foregoing, the Concealed Weapons Licensing Board for the County of St. Clear is a state, rather than county, department. Therefore, it is a proper legal entity against which a suit may lie.
B. Second Amendment

[3] Plaintiff asserts that Defendants deprived him of his right to carry a concealed weapon guaranteed by the Second Amendment to the United States Constitution. Plaintiff's Second Amendment claim is not viable because the Second Amendment does not apply to the states. "The Second Amendment declares that it shall not be infringed, but this . .. means no more than that it shall not be infringed by Congress. This is one of the amendments that has no other effect than to restrict the powers of the National Government. Presser v. Illinois, 116 U.S. 252, 265, 6 S.Ct. 580, 584, 29 L.Ed. 615 (1886). Federal courts still follow Presser. E.g., Quilici v. Village of Morton Grove, 695 F.2d 261, 269 (7th Cir.1982), cert. denied, 464 U.S. 863, 104 S.Ct. 194, 78 L.Ed.2d I70 (1983).

C. Equal protection

[4] Plaintiff argues, that Defendants' denial of a concealed weapon license violated the Fourteenth Amendment's guarantee of equal protection: Plaintiff apparently argues that Defendants deprived him of the fundamental right to carry a concealed weapon and travel, thus triggering strict scrutiny. The Second Amendment, however, does not provide Plaintiff with a fundamental right to carry a concealed weapon. An individual has "no private right to keep and bear arms under the Second Amendment . . ." United States v. Warin, 530 F.2d 103; 106 (6th Cir.), cert. denied, 426 U.S. 948, 96 S.Ct. 3168, 49 L.Ed.2d 1185 (1976).

[5, 6] Nor does the St. Clair County Concealed Weapons Licensing Board's refusal to grant Plaintiff a permit deny him the right to travel. The right to interstate travel is a basic constitutional freedom. Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1969). The right to intrastate travel is a basic freedom under the Michigan Constitution, and the analysis of government burdens on intrastate travel under the Michigan Constitution is identical to the analysis applied to government burdens on interstate travel under the United States Constitution. Musto v. Redford Township, 137 Mich.App. 30, 34, 357 N.W.2d 791 (1984).

[7] Plaintiff contends that through their blanket policy of denying residents concealed weapons permits, Defendants have unconstitutionally deprived him of the right� to migrate to St. Clair County. But not every policy that possibly burdens the right to travel triggers strict scrutiny. The court must consider whether the policy at issue deter migration or serves to penalize the right to travel. Memorial Hospital v. Maricopa County, 415 U.S. 250, 257, 94 S.Ct. 1076, 1081-82, 39 L.Ed.2d 306 (1974). Further, the "right to interstate [and intrastate] travel must be seen as insuring new residents the same right to vital government benefits and privileges in the States [and Counties] to which they migrate as are eqjoyed by other residents." Id at 261, 94 S.Ct. at 1084. Plaintiff has cited no authority for the proposition that denial of a concealed weapon permit deters migration, penalizes the right to travel, or that a concealed weapons pernut is a "vital government benefit[ ) arid privilege[ ]." While Plaintiff may feel a bit less secure not being able to carry a concealed weapon on his person or in his car when he drives into urban areas, the denial of a license for a concealed weapon is not tantamount to the denial or waiting period for the right to vote, Dunn v. Blumstein, 405 U.S. 330, 92 S.Ct. 995, 31 L.Ed.2d 274 (1972), or to receive welfare or medical benefits, Shapiro, supra, and Maricopa County, supra. A con cealed weapons license is not even a government benefit that rises to the level of benefits deemed by the United States Supreme Court as not vital, such as lower university tuition, Starns v. Malkerson, 401 U.S. 985, 91 S.C. 1231, 28 L.Ed.2d 527 (1971), or suing for divorce, Sosna v. Iowa, 419 U.S. 393, 95 S.Ct. 553, 42 L.Ed.2d 532 (1975). Based on the foregoing, Defendants did not deprive Plaintiff of the right to travel and strict scrutiny is not triggered.

Therefore, the court must apply the rational basis test. This test is easily met. The state has an obvious "legitimate interest in limiting access to weapons peculiarly suited for criminal purposes." People v. McFadden, 31 Mich.App. 512, 516, 188 N.W.2d 191 (1971).

D. Due Process

[8, 9] Plaintiff finally argues that Defendants deprived him of due process of law by its blanket policy of denying concealed weapon permits. Nevertheless, Defendants are entitled to judgment as a matter of law because there is no genuine issue of ,material fact that Plaintiff has a property interest in obtaining ,a license to carry, a concealed weapon.1 Property interests protected by the Due Process Clause of the Fourteenth Amendment do not arise whenever a person has only "an abstract need or desire for," or "unilateral expectation of," a benefit. Board of Regents v. Roth, 408 U.S. 564, 677, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 (1972). Rather, they arise from "legitimate claim[s] of entitlement . . . defined by existing rules or understandings that stem from an independent source such as state law."' Id.

In Erdelyi v. O'Brien, 680 F.2d 61 (9th Cir.1982), the Ninth Circuit Court of Appeals considered a claim by a plaintiff who had been denied a license to carry a concealed weapon and who brought suit under � 1983 alleging that the denial of the license violated her right to due process. The court rejected plaintiff's constitutional challenge, holding that plaintiff had no property interest in carrying a concealed weapon. The court reasoned:

Concealed weapons are closely regulated by the State of California.... Whether the statute creates a property interest in concealed weapons licenses depends largely upon the extent to which the statute contains mandatory language that restricts the discretion of the (issuing authority] to deny licenses to applicants who claim to meet the minimum eligibility requirements. Section 12050 explicitly grants discretion to the issuing officer to issue or not issue a license to applicants meeting the minimum statutory requirements. Where state law gives the issuing authority broad discretion to grant or deny license applications in a closely regulated field, initial applicants do not have a property right in such licenses protected by the Fourteenth Amendment. Id. (citations omitted).

The Michigan Concealed Weapons Law similarly grants discretion to the issuing authority. It establishes boards for each county exclusively authorized to issue a license to applicant residing within their respective counties. Mich.Comp.Laws Ann. � 28.426(1). The statute establishes minimum criteria for concealed weapons permit. An applicant for a permit to carry a concealed weapon must be at least 18 years old, a United States citizen and reside in the State of Michigan for at least the past six months. Id The statute further provides that "[a] license shall at be issued unless it appears that the applicant has good reason to fear injury to his or her person or property, or has other proper reasons, and is a suitable person to be licensed. Id.

The St. Clair County Concealed Weapons Licensing Board Policy Manual in effect at the time Plaintiff applied for a license there makes clear that Pencak does not have a legitimate claim of entitlement to a concealed weapons permit. First, the Policy Manual grants the Board a large degree of discretion in issuing permits. It provides that [l]icensing may be available depending iupon the facts and circumstances presentred to the Concealed Weapons Licensing Board in support of an application. The Concealed Weapons Licensing Board will ievaluate all applications uniformly and exercise its discretion as it deems proper to assure the safety, interest and well-being of the citizens of this County and State.

Manual, page 4.

Moreover, the manual makes clear that the County Board normally will not issue concealed weapons permits. The manual provides for two types of permits: general and restrictive. General permits are restricted to "those persons connected with the criminal justice system, where there is a legitimate threat of bodily injury because of past, present or future dealing , with criminal defendants." Manual, page 5. Further, the manual provides that "[t]his Board will require the applicant to establish by clear and convincing evidence that the presumption against issuance of [a general] license should be overruled in his or her case." Id.

The manual specifies four categorieg of restricted licenses, two of which Plaintiff conceivably could avail himself. One category is the "Direct Transit between BankBusiness/Home" permit. To obtain this permit, an applicant must, among other things, demonstrate the dangerousness of the area in which he or she transacts business and the unreasonableness of alternative measures which would accomplish the same purpose without the necessity of a concealed weapon license. Manual, page 8. Moreover, "[a] license of this nature will not normally be issued . . ." and an applicant "must establish by clear and convincing evidence that this presumption against licensing should be overruled in his or her individual case." Id. The other category of which Plainiiff might fit is an "employment-related" permit. But to obtain one of these restricted permits, the applicant should be a security or bank guard. Manual, page 10. Based on the foregoing, there is no genuine issue of material fact that Plaintiff does not have a property interest in obtaining a concealed weapon license. Plaintiff argues that Erdelyi only applies to initial applications for licenses and that he has a property interest in a license renewal. This argument has no merit. First, the manual, expressly indicates that one should not expect to have his or her permit renewed as of right. The manual provides that


[l]icense holders who move here from another Michigan county are not automatically issued a St. Clair County. License. The fact that the applicant has a previous permit will be noted, if a photocopy is provided to the Board, but the application will be considered as "new" and not a "renewal," and will be judged pursuant to St. Clair County standards and procedures.

Manual, page 13. Second, the structure of the Michigan concealed weapons statute shows that each county is responsible for determining to whom it will issue concealed weapons licenses. The statute establishes county boards and vests them with the exclusive authority to issue such licenses. Mich. Comp.Laws Ann. � 28.426(1). "[P)ower to issue and revoke [concealed weapons]
Black Blade
(10/01/1999; 06:07:11 MDT - Msg ID: 15070)
Goldspoon your horse sure is fast!
"Rich man's gold" is charging hard down the backstretch at $28 (420), "Yellow gold" at $7.30 (305), and "Silver moon" (5.66) at 0.10. "Horse with no name" looks to be hung up at the gate? The race is on!
Goldspoon
(10/01/1999; 06:07:34 MDT - Msg ID: 15071)
Black Blade
Thank for the input... i picked up on the song connection and wondered if someone else did....
What is your link to look at the S&P futures contract?
Black Blade
(10/01/1999; 06:15:46 MDT - Msg ID: 15072)
Steve, CW laws
Steve, very interesting. I am fortunate enough to live where there is relatively little problem in getting a CW permit. The only requirement is a short course dealing with the legal issues and some time on the range with the instructor. My take is where the laws are patently absurd, why bother with a CW permit? Better judged by 12, than carried by 6.
Black Blade
(10/01/1999; 06:18:36 MDT - Msg ID: 15073)
Goldspoon
I heard the s&p futures over the radio, but I think that they can be accessed on the CNBC site, or on their station. I would like to know a www link as well.
ss of nep
(10/01/1999; 06:33:15 MDT - Msg ID: 15074)
(No Subject)
http://www.cme.com/cgi-bin/gflash.cgiS&P 500

and more
Cavan Man
(10/01/1999; 06:46:07 MDT - Msg ID: 15075)
SteveH 15069
A .380 in the proper holster with the right attire is CC.

BTW, Colt is exiting the consumer toy business.
Cavan Man
(10/01/1999; 06:48:46 MDT - Msg ID: 15076)
Black Blade
www.mrci.com
apdchief
(10/01/1999; 06:48:50 MDT - Msg ID: 15077)
Rich Man's Gold
http://www.kitco.com/lease.rate.htmlLease Rates for platinum at 27%!!!!! What's going on?
Black Blade
(10/01/1999; 06:54:05 MDT - Msg ID: 15078)
s&p futures
Thanks for the links all. s&p futures are sinking fast -6.90.
Black Blade
(10/01/1999; 06:55:34 MDT - Msg ID: 15079)
(No Subject)
Previous post "special" thanks to Cavan Man and ss of nep!
elevator guy
(10/01/1999; 06:57:16 MDT - Msg ID: 15080)
@quote.com/livechartscom/
Spot 308!
Here spike, good doggy!
(Loved that analogy, Goldfly!)
mike55
(10/01/1999; 07:07:30 MDT - Msg ID: 15081)
SteveH - Carry Trades
You're exactly right -- all carry trades are manipulated in the manner wished by those who administer the particular trade. FWIW, in Michigan, three adjoining counties with fairly similar demographics administer the CCW law in completely different manners. In Oakland County, only 10% general permits are issued, the balance being restricted permits; in Macomb County, virtually all applicants are issued general permits; and in St. Clair County, as noted in the case you cited, virtually no CCW permits are issued.

The activities over the last week certainly have made me confident that I've been carrying the right metal -- the bright, yellow, shiny kind! Thanks to all who frequent this place of great thinking.
Bonedaddy
(10/01/1999; 07:28:37 MDT - Msg ID: 15082)
Why Granny, It's You!
Welcome Granny! The talk here is quite excited at the moment, so new posters may not be afforded all the cordiality that is normal on this forum. (Shame on us) In regard to your investment question, you have very nearly arrived at the proper answer. You have come here, to the round table of gold. Your only decisions now are how much and what form to aquire. If you choose to purchase physical metal and take possession, your gold will be "close at hand in any emergency". Let's peer down the road several years. If the dollar has collapsed, I doubt you will be kicking yourself because you bought Maple Leafs instead of Angels. There are advantages to both. The pre-1933 gold was exempted from the last government gold confiscation. It is selling at a small premium now and there is currently no requirement for dealers to report it if you choose to sell it back through a dealer. If you trade it to your neighbor for a few buckets of wheat, any gold is probably not reportable. Of course gold is only a money question, the best investment one can make now, or at any other time, is time spent in prayer.
Bonedaddy
(10/01/1999; 07:31:53 MDT - Msg ID: 15083)
Cavan, ...Man... a .380?
Do you speak IPSC?
mike55
(10/01/1999; 07:41:22 MDT - Msg ID: 15084)
Daily Quote
As I opened my planner (brain substitute) to today's date, I read the daily quote and believe it is apropos for veterans and new visitors of this site.

"No trumpets sound when the important decisions of our life are made. Destiny is made known silently." Agnes DeMille
onlychild
(10/01/1999; 08:04:50 MDT - Msg ID: 15085)
Question for the folks "down under"
Can any of our Austrailian posters enlighten me on the confiscation of weapons there? What is public sentiment? What ploy did the government use to justify such a radical action? What weapons were affected?
onlychild
(10/01/1999; 08:30:04 MDT - Msg ID: 15086)
Hey MK
What are the chances of getting a "search" function on the forum so we can search for a topic by keyword or poster name?

Broncos and Jets, who to bet on.........
Buena Fe
(10/01/1999; 08:37:43 MDT - Msg ID: 15087)
Side Show
-30 yr T-Bond = new low (within this cycle)
-$ = new lows (same)
-SP 500 = soon to follow?

The financial earthquake of the past weekend has many tremors!!!!!!!!!
Keep Awake
USAGOLD
(10/01/1999; 09:02:39 MDT - Msg ID: 15088)
Today's Gold Market Report: Day Five of the Big Breakout; The Cruellest Month (for equities markets) Begins
MARKET REPORT (10/1/99): Day Five of the Big Breakout....Here comes October --
the cruelest month in investment markets -- living up to its reputation....Dow down 75.
Bonds getting hammered. Yen, euro very strong. Gold up $7.50 (was up $11.50 earlier)
after a strong European market. Merrill Lynch presciently goes out on limb, raises Q4 gold
price estimate to $300. Courageous call since gold is already $306 and has been as high as
the $320s. Bridge News reports that "NYMEX is currently trying to resolve some of the
complaints it has received from customers who were unable to get their gold option orders
executed on the COMEX division this week." Funny. We never had the problem when the
shorts dominated the market action. Nor did anyone raise the margin requirements on
COMEX gold contracts until the small investor deluged the market with buy orders this past
week. That might backfire on the exchange since it amounts to a higher capital requirement
in order for the shorts to cover. Standard Bank London is calling support in the $290-95
range and overhead resistance at $315 - 30. Gold lease rates down on Russia saying they
will offer gold to the lease market. That's it for today, my fellow goldmeisters. Have a
good weekend. (See the links below for more info.)

The October edition of News & Views will be ready early next week and we invite all
our visitors to take advantage of a free trial subscription to one of the most popular, widely
read and quoted gold newsletters. Last month we predicted an explosion in the gold price.
This month we deal with the nettlesome subject of paper assets in this tenth month of the
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NORTH OF 49
(10/01/1999; 09:36:36 MDT - Msg ID: 15089)
What's gonna happen to the little guys?
Given the opinions of some of our esteemed Knights that the POG is charted for rather lofty levels, a thought comes to mind. For the most part, I have been picking up physical from the Bank of Nova Scotia. Primarily I do this because the manager is a close friend, and the bank itself is within easy walking distance. They (BNS) give me (as Sir Canamami pointed out earlier) a pretty good routing, both coming (buying) and going (selling, if I chose to do so) on several levels such as currency exchange, service charges, armoured car charges, and a couple of others that I can't recall without getting steamed up again. As the POG begins its' journey to the stratosphere, these "little extras" start to become very annoying!!
Now, there are alternatives. Those being some larger and well established companies such CPM, and more prevalent smaller "Mom and Pop" operations operating out of tiny little shops that have been around since we were kids. The latter, are the ones that I see facing a financial timebomb. All of a sudden, inventory costs may multiply, wholesale financing may come into question, if even only in the form of operating loans. How will these small operations survive with the POG at, say, $3,000/oz, requiring an inventory that may be valued in the hundreds of thousands, if not into the million catagory.
My thoughts are that banks, the ones that will have been smacked in the hindquarters by the very industry that is now coming to them for financial backing, may be somewhat less than enthusiastic about "sleeping with the enemy".
Thoughts anyone??

No49
granny
(10/01/1999; 10:03:53 MDT - Msg ID: 15090)
Bonedaddy
Bonedaddy,

Thanks for the welcome. I'm granny enough to know "BUSY" so no hurt feelings here.

So what do I do with this dreaded "legal tender"?????????

I love horses and in all colors, cautious pale or flashy white or golden royal. As I ask of all my critters, I require all to earn their keep most of the time. All work to some extent, even if only to sleep in the front yard at night (big doggies) for physical presence (If burglars, murderers, rapist, terrorist, etc.. did make it through the canine brigade and into the house, and if they survived our arsenal, they would probably trip over enough big doggies to cause enough injury to seriously slow down or arrest retreat!!!) FROM LESSONS LEARNED IN THE "REAL" WORLD (much observation and minor "experience").... DO NOT resist ANY "officers" of the law, no matter how innocent you are!!!!

I haven't had enough time to get in prerequisite reading with such a sudden turn of events (shame on ME) to be able to make very wise judgments right now. I imagine many "ol timers" are scratching their heads, wondering what to do. Granny is about to pull out her hair!

All post are studied; looking for more direction or even specific ADVICE.

Be well all
granny
(10/01/1999; 10:09:40 MDT - Msg ID: 15091)
Delayed delivery of Gold Eagles
Received a call this a.m. that delivery on a few 1 oz. Gold Eagles will be delayed for about 2 weeks. Reason given that mint is behind, or something like that. Is this usual at "ordinary" times or does this have anything to do with what is going on right now? (I'm not a "dealer" by any means; just ordering from one.)
TownCrier
(10/01/1999; 10:20:04 MDT - Msg ID: 15092)
New York Fed details Y2K liquidity measures
http://biz.yahoo.com/rf/990930/ber.htmlIn a nutshell, the Fed will accept a broader array of collateral for longer periods when banks need to "borrow" cash as their customers' deposits are withdrawn or spent down in advance of Y2K.
Leigh
(10/01/1999; 10:25:30 MDT - Msg ID: 15093)
granny
Hi again, granny! You know, it would be inappropriate for any of us to give you advice on gold buying since we're not dealers. Luckily, Mr. Kosares IS a very experienced (and nice) one; I imagine he will be happy to help you. There's a phone number on the "Info Packet" page, or you can e-mail him. Good luck!
TownCrier
(10/01/1999; 10:30:04 MDT - Msg ID: 15094)
Japan recovery is key for world economy -Summers
http://biz.yahoo.com/rf/990930/bgh.htmlThe SecTreas carefully tip-toes around a strong-dollar question (and doesn't reveal its fate), as Japan is made out early in the article to be the key to the world economy. That's a lot of weight to bear for an island nation, isn't it? We should change their name to Atlas. The dollar and the yen have a fate that is tied, that's why there is all this "concern."

You know, it wasn't long ago (days) that an ECB official said a strong Japan would be preferred, but that the European Union would prosper regardless the outcome in Japan.
TownCrier
(10/01/1999; 10:35:22 MDT - Msg ID: 15095)
Fed added $4.316 bln in wkend, $1.345 bln in 6-day RPs
http://biz.yahoo.com/rf/991001/qe.htmlAt what point will the Fed start accepting beanie babies and baseball trading cards as collateral to replenish the banking system's reserves?
ORO
(10/01/1999; 10:45:47 MDT - Msg ID: 15096)
Lease Rates
Looks like a short term bottom in gold lease rates is in today. The Platinum lease rates are still through the roof.

Once the newly borrowed gold finishes reaching the market, the next tranche from Russia, if it ever gets off the ground, will be absorbed. Then we will see the market go in to the next upswing. The exposure of the BNY deals with Russians probably had to do with the refusal of the Russians to send out the gold to market.

We rarely get to see what the banking system is actually like. This glimpse through the gold market is the most public ever. The banking system gets overextended in a cyclical fashion as bankers chase in turn after borrowers or depositors. As this herd of bankers (they could barely hide the fact that they are Zebra herds, hence the pinstripes) changes short term rates to at once entice depositors or borrowers, we see these huge moves. Why is this system so unstable? Afew reasons, but one of the main reasons is psychological. The banker is usually conservative, as any dealer in leverage should be, and thus tends to seek backing in consensus. Consensus leads to everyone moving to the one side of the boat, eventually leading to a noticeable lilt to one side as leverage is employed. The second point is the borrow short, lend long strategy, from which the banks earn their spread, allways imperfectly balancing risks and rewards. Inevitably, the trouble caused by one view dominating the direction of leverage ends up pushing the other way.
Bankers cooperate. They are risk averse as the munitions warehouse is. They know each sits on a barrel of powder and there are live fuze lines connecting all of them. That is why they put together the Federal Reserve system, to stabilize the daily dealings and avoid small disasters on the one hand, and to palm off their losses on the poppulation at large. Banker's schemes to save themselves have backfired as all attempts at cornering and regulating markets allways do. The creation of the ultimate market regulator, the Fed, has created a shared risk, as a portion of all the powder kegs is put into one big one, to which all fuze lines, now bigger and more reliable, connect. As in 29-39, there is no escape from an explosion of the whole system. The international interconnectedness of all banks and central banks, has created a new doomsday mechanism. Banking business revolves arround avoiding its detonation while attempting to profit from the sale of matches (in return for more powder).
Government, of course, would like nothing better than to continuously extort the bankers and have been doing this since the gilded age and before. In this routine the politician is allways in a banker's pocket. Through obvious and public cooperation, we have learned to follow the bankers and their representatives in congress and the executive branch. Together they determine the policies that shape economic and international life.
While in centuries past the world at large was less affected by the banks, their tie with government and the money printing press has eliminated all chances of isolation from the doomsday mechanism.
The match lit in Mexico at the end of 94 lit the fuze and has been steadilly blowing up one deposit of powder after another. We all watch as instead of severing connections to the powder kegs now burning, the bankers attempt to snuff the flame by smothering it with more powder while replacing the old powder with new powder and laying down fresh new fuze lines. Meanwhile, the advancing firefront approaches the central barrel of the doomsday mechanism. We put on the golden sun glasses and walk away from the center hoping that we are far enough away and that the glasses will allow us to watch safely.

TownCrier
(10/01/1999; 10:46:04 MDT - Msg ID: 15097)
Russia c.bank amends precious metals pricing system
http://biz.yahoo.com/rf/991001/t4.htmlRouble? What's a rouble? Here's a look at Russia's real money and the cost of transactions.
Marius
(10/01/1999; 10:52:01 MDT - Msg ID: 15098)
A strange call from my broker
Good day, all! I've been reading this board for quite a while, but this is my first post. I just had a rather unsettling call from my broker, who seemed rather emphatic that I should exit my long position in gold. (I have Feb 00 290 calls, & June 00 290 calls). He said: "Several analysts are calling for a big drop on Monday."

I asked him if those analysts explained what event could lead to such a drop, when (a) the carry trade has been curtailed, and (b) the shorts are going nuts trying to buy at virtually any price. He couldn't (wouldn't?) give me a satisfactory answer. I've been considering taking some profit before any major pullback, so I went ahead and placed the order to liquidate the Feb calls. He was still upset that I wanted to hold on to the June calls. (I don't think we're anywhere near done with this bull rush.)

Is anyone aware of some major event that could tank the price sufficiently to make a broker behave in this manner? Have seen nothing here or at GATA that suggests this, and the demand still seems very strong. Any comment would be greatly appreciated.
granny
(10/01/1999; 11:08:42 MDT - Msg ID: 15099)
Govt. Confiscation of Gold
So, if I have my gold buried somewhere, let's presume in a place secured enough to hamper metal detection of it all... what measures can the govt. take against me, physical and legal to confiscate it?? How do they know that I have not "bartered" it all away?
Phos
(10/01/1999; 11:09:07 MDT - Msg ID: 15100)
@Marius - gold
The only thing that could tank gold on the weekend, I would think, would be an announcement of a large amount about to hit the market. It cannot be the Europeans. Could the US dishoard onto the market without Ccongressional approval? I don't think there is enough elsewhere to do the trick. Everyone else is buying. Or alternatively, they could announce that the market is closing until....... Don't know the answer to that one. I take it your broker did not divulge any sources?
PH in LA
(10/01/1999; 11:26:43 MDT - Msg ID: 15101)
Strange Calls and Used-Car Salesmen
Agreed, ORO, that the present situation is a fantastic glimse of "what the banking system is actually like." Maybe a little imagination coupled with your astute comments and observations can help illuminate the "strange call from (Marius') broker" (10/01/99; 10:52:01MDT - Msg ID:15098) who tells us that: "Several analysts are calling for a big drop on Monday."

Welcome Marius!

If you have been reading here for any length of time you certainly know that analysts' calling does not determine drops (or rises) in markets. In fact, I find it a much better perspective to recognize analyists' "calls" for what they really are; explanations invented after the fact for poorly understood events, then backdated to convince the gullible that they were delivered early enough to qualify as predictions.

No one knows the future. We all extrapolate from the present to prepare ourselves for it. But that is not knowing. It is guessing. Sometimes educated guessing...sometimes not. If your broker was unable to offer "a satisfactory answer" it would suggest that he is unprepared and/or uneducated in his extrapolations. It can be very hard for us non-professionals to admit that most brokers are about as qualified to extrapolate the future from the present as, say, used car salesmen.

It sounds like yours got a directive from his boss coming down through the chain-of-command to cover all calls, no matter what. How could he even hope to know what will happen from now until June 2000? You should be pondering FOA's many warnings about paper and defaults rather than whether or not a big drop is coming before monday that will not be corrected before next June.

Just my 2-cents worth. After all, you did ask.

Again, welcome. Your information is very interesting and does fit perfectly with the view we are getting here. Thanks for your contribution.
Cavan Man
(10/01/1999; 11:32:33 MDT - Msg ID: 15102)
Marius
Glad to have you here. Please, don't be a stranger. IMHO, I'd get another broker. I'd avoid the ups and downs of trading paper. You will sleep sounder and live longer if you buy the metal and lock it up. If you have been watching for awhile, you probably agree with me that the best analysis is right here. Our host is undoubtedly one of the most knowledgable gold analysts in the US and perhaps the world. I'd give him a call at 800-869-5115.
Peter Asher
(10/01/1999; 11:52:24 MDT - Msg ID: 15103)
Marius
Possibly there is a sell gold campaign being circulated by the big guys, who control the analysts as much as the news people.

Otherwise, it's the usual --"Find customers with profits and get them to sell", this is the best way to churn accounts.
Golden Boy
(10/01/1999; 12:00:39 MDT - Msg ID: 15104)
Russia Leasing
Could someone please direct me to a report stating that Russia is now leasing their gold. Russia has publically stated that they are now selling but I haven't seen any statements regarding them leasing. At the end of the daily report, michael comments on Russia leasing.
Mr Gresham
(10/01/1999; 12:17:48 MDT - Msg ID: 15105)
Oro 15096!
ORO! You surpass yourself!

Clear vision is such a pleasure to see put into clear writing.

My Oro WP document (30 pgs.) grows daily.

I relish the thought of re-reading it soon, and returning to today's posting later for a refresher.
gidsek
(10/01/1999; 12:24:32 MDT - Msg ID: 15106)
Gold trading remains suspended
Don't know the import or verity of this one.

http://www.dawn.com/daily/19991001/ebr7.htm

gidsek
gidsek
(10/01/1999; 12:25:16 MDT - Msg ID: 15107)
Sorry, link
http://www.dawn.com/daily/19991001/ebr7.htmgidsek
gidsek
(10/01/1999; 12:30:22 MDT - Msg ID: 15108)
Russia leasing
The last I read was the the Russian CB had increased the discount at which it buys domestically mined gold to %5.5 from well below that.

This is a greater hit than the %5 export duty so whereas once it was less advantageous for miners or whomever to export gold now is more.

Sorry no link, was from Yahoo I think. Read this on Kitco last night.

Remember this is a battle, and battles that are worth winning never go your way over their entire course.

gidsek
Angel
(10/01/1999; 12:45:59 MDT - Msg ID: 15109)
Hi Guys and Gals
This is my first post but I am unable to allow my shyness to continue in the midst of all this excitement. I have been lurking here since early March. I made the decision last January to liquidate stocks and mutual finds because of a growing fear of loosing everything to the Y2K horseman.

I found Michael's book quite by accident (it shouldn't have been in the book section of Barnes and Noble that I was perusing) and since I have always lived by the premise that "everything happens for a reason", I read the book, made the call to MK and sent him a check. This is certainly atypical behavior for me since I am not a very trusting perosn especially where money is concerned. As soon as i heard his voice on the telephone I KNEW this was a man I could trust and with whom I would have a long and prosperous association.

I feel now as if I know each and everyone of you personally. You have made me laugh out loud and at times have brought tears to my eyes. Such a wealth of sensitivity, intelligence and grace. I have learned so much not only about gold and economics but about life. Thank you. If you will allow me, i would like to be a contributor to this incredible forum of wise ones.

P.S. Goldfly.....I live about 60 miles north of Nashville and may be able to help you with your song writing career.
Marius
(10/01/1999; 12:49:04 MDT - Msg ID: 15110)
Thanks for your comments
Thanks, everyone, for your comments about what could be going on with my broker. I did cross my mind, after posting the question, that they might have someone desperate for having sold calls in this climate. He's usually pretty good at not "churning", plus the broker doesn't get a commission for closing the position. I had already decided to try switching to on-line, discounted commission service, and this latest situation reinforces the idea!

I agree that it doesn't seem likely enough gold could just show up to shut this run down. I am familiar with the opinions here re: "paper" gold, and don't intend to stay in options indefinitely. I'd definitely consider the physical metal or stocks with some of the options profits.

I close with Bill Murphy's recent battle cry: Be strong, go long!

Phos
(10/01/1999; 12:49:42 MDT - Msg ID: 15111)
Bill Murphy's bombshell
"In the last Midas, I reported to you that several sources told me that the Federal Reserve was "jawboning" futures
commission merchants not to pressure firms to "deliver gold." In other words, they know that the gold is not there
for the shorts to deliver and, as I have long suspected, it appears that they are protecting the positions of certain bullion dealers and of other financial institutions that are short gold. This corroborative information is clear evidence that the gold market has been manipulated as the Gold Anti-Trust Action Committee has alleged.

Two days ago, I received information that a futures commission was told by another futures commission merchant that it was prepared not to deliver gold on its "gold forward or futures contract" obligations that was expected by a client of the firm who was standing for delivery. In essence, the shorts were declaring "force majeure" - WE
CANNOT DELIVER.

This is not a Comex problem as far as I know. From what I am hearing, it is an OTC problem, where few people really know what is really going on behind the scenes. The firm that expected delivery was stunned. It was about to be "floored." According to our sources, this firm then got a phone call from the Federal Reserve requesting that they do not pressure the shorts into making delivery and that they would make sure that the longs received their gold. I am not privy as to exactly how that would happen.

According to another source, there were actually a couple of firms that told the longs that they were not prepared to deliver "forward" contract gold in the size expected. Goldman Sachs is one of the firms mentioned to me that is not prepared to fulfil its obligations. That is what my sources in the market place are telling me.

It should be of no surprise to any of you that Counterparty Risk Management Group Co-Chair's, Goldman Sachs and J.P. Morgan were all over London CNBC this morning talking down the gold market. Sources tell me that Goldman suggested on the tube that the big gold shorts covered on the run up while Morgan's Kevin Crisp was calling for $275 to $280 gold when this blip was sorted out. Whose risk are they both concerned about?

Strange. Today, Goldman Sachs and Chase banks were big buyers of gold options on Comex. Why buy options if you are not bullish or you believe the gold market has topped out for the time being. Yes, the buying can be for clients. Are their clients not listening to them? On that note, for maybe the first time in Comex history, the gold option volatility is higher than that for the silver contract.

There are other Goldman Sachs stories out there, but I want more confirmation of them before I present them to you.

Last night, I received a phone from a "very plugged in hedge fund manager" who confirmed to me that George Soros is long "forward" gold. NOT COMEX GOLD. That is not a rumor anymore; that is a fact, according to my source. Soros is also long aluminum and silver according to that same source.

This source also tells me that George Soros most likely does Comex business with Refco as do many of the big hedge funds. I do not know about who he does his OTC business with or who he trades with in London. However, according to this hedge fund manager, one should start at Refco as a starting place in tying this altogether.

This extraordinary development is an affront to all that believe in free markets.

There has been an orchestration by some bullion dealers and some of our own "officialdom" to hold down the gold price so that their own selfish interests can be served. In the meantime, gold miners are out of work, gold companies are going bankrupt, gold stock shareholders have been decimated, etc.

This is an outrage of the highest order and it has been going on for some time. "
TownCrier
(10/01/1999; 12:52:29 MDT - Msg ID: 15112)
Sirs gidsek and Golden Boy...the Russian link was provided at my 10:46:04 - Msg ID:15097
http://biz.yahoo.com/rf/991001/t4.htmlHere it is again.

The jist of the situation is that if gold holding Russians are more inclined to hold cash than gold, it is now less "taxed" for them to export the gold than to sell it to the Russian central bank (by 0.5%). If they sell it to the bank, the bank has the gold, and they get the cash. If they instead export the gold out of the country, they give up 5% at the time of the operation...however, this gold may be moving under a cash sale motive, or for deposit in outside bullion banks to earn the high lease returns. There is no way to know for certain, except the easing lease rate indicates some of the immediate pressure has come off. If I were in Russia, I'd rather hold my gold given the uncertainties, but if forced to move it, I'd far rather lease it than sell it outright for the obvious reasons. But as just said, the risks are too great to part with it, although some will anyway I'm sure.
Phos
(10/01/1999; 13:00:35 MDT - Msg ID: 15113)
Platinum Lease Rates
Does anyone know why platinum lease rates have gone so high today? Does it have any relevance to other precious metals?
ORO
(10/01/1999; 13:01:14 MDT - Msg ID: 15114)
gidsek
A glimpse of things to come. I was not aware of the closure of the Karachi gold exchange. It is telling that they fell apart at $290. LBMA is still functional. I wonder at what price they keel over at the point of no possible short term supply being able to save them?

The wide anticipation of a plunge will assure the lack of such a plunge coming from the Karachi market's demand. Could eveybody be witholding buys because of this expectation? Bodes well for the future of POG.

PH in LA and Mr Gresham, thanks.
I am sorry not to be writing much on the analytical side now, but hopefully there will be some time later.
TownCrier
(10/01/1999; 13:11:58 MDT - Msg ID: 15115)
Swiss Nat Bank says will be prudent on gold sales
http://biz.yahoo.com/rf/991001/xh.htmlSNB Chairman Hans Meyer said on Friday, "It will be in our own interest to exercise the necessary diligence when converting part of our gold holdings into interest-bearing assets."

Now, we all know full-well that interest is a product of the business contracts and NOT of the asset itself as some of our Knights have discussed previously. As we watch gold lease rates go sky high it is abundantly clear that gold can be utilized as an interest bearing asset. Mr. Meyer is not telling the straight story. Could it be that when the interest generating gold lending operation collapses upon itself that all future gold lending will be prohibited? Whouldn't that be nice. You can borrow national currencies for repayment with interest, but gold supply will henceforth not be allowed to be artificially expanded.

Yes, The Tower does like that thought! In a world of freely floating currencies, gold will always be the unadulterated yardstick.
TownCrier
(10/01/1999; 13:18:28 MDT - Msg ID: 15116)
Strong Sept NAPM stirs market's US rate hike worries
http://biz.yahoo.com/rf/991001/uo.htmlWe'll know next Tuesday what the Fed thinks. But for now, investors were spooked by the National Association of Purchasing Management's manufacturing index which jumped to 57.8 in September. This greatly exceeded analysts' forecasts for a slight rise over August, predicting 54.3 for September.
Mr Gresham
(10/01/1999; 13:34:40 MDT - Msg ID: 15117)
Why Paper Money?
http://www.prorege.com/north/6348.htmlGary North answers a reader.
ORO
(10/01/1999; 13:37:09 MDT - Msg ID: 15118)
Marius
Perhaps Murphy answered your question.

I like his pointing out that putting kitties Morgan and Goldman in charge of determining the risks to the milk bowl is not done in the interest of other hungry kitties.
gidsek
(10/01/1999; 13:38:08 MDT - Msg ID: 15119)
Oro, that may not be the only one..
If this has been posted already I apologize.

Date: Fri Oct 01 1999 14:33
crazytimes (the BOMBSHELL from Bill Murpy!!!) ID#344326:
Copyright � 1999 crazytimes/Kitco Inc. All rights reserved
"BOMBSHELL !"

In the last Midas, I reported to you that several sources told me that the Federal Reserve was "jawboning" futures commission merchants not to pressure firms to "deliver gold." In other words, they know that the gold is not there for the shorts to deliver and, as I have long suspected, it appears that they are protecting the positions of certain bullion dealers and of other financial institutions that are short gold. This corroborative information is clear evidence that the gold market has been manipulated as the Gold Anti-Trust Action Committee has alleged.

Two days ago, I received information that a futures commission was told by another futures commission merchant that it was prepared not to deliver gold on its " gold forward or futures contract" obligations that was expected by a client of the firm who was standing for delivery. In essence, the shorts were declaring "force majeure" - WE CANNOT DELIVER.

This is not a Comex problem as far as I know. From what I am hearing, it is an OTC problem, where few people really know what is really going on behind the scenes. The firm that expected delivery was stunned. It was about to be "floored." According to our sources, this firm then got a phone call from the Federal Reserve requesting that they do not pressure the shorts into making delivery and that they would make sure that the longs received their gold. I am not privy as to exactly how that would happen.

According to another source, there were actually a couple of firms that told the longs that they were not prepared to deliver "forward" contract gold in the size expected. Goldman Sachs is one of the firms mentioned to me that is not prepared to fulfil its obligations. That is what my sources in the market place are telling me.

It should be of no surprise to any of you that Counterparty Risk Management Group Co-Chair's, Goldman Sachs and J.P. Morgan were all over London CNBC this morning talking down the gold market. Sources tell me that Goldman suggested on the tube that the big gold shorts covered on the run up while Morgan's Kevin Crisp was calling for $275 to $280 gold when this blip was sorted out. Whose risk are they both concerned about?

Strange. Today, Goldman Sachs and Chase banks were big buyers of gold options on Comex. Why buy options if you are not bullish or you believe the gold market has topped out for the time being. Yes, the buying can be for clients. Are their clients not listening to them? On that note, for maybe the first time in Comex history, the gold option volatility is higher than that for the silver contract.

There are other Goldman Sachs stories out there, but I want more confirmation of them before I present them to you.

Last night, I received a phone from a "very plugged in hedge fund manager" who confirmed to me that George Soros is long "forward" gold. NOT COMEX GOLD. That is not a rumor anymore; that is a fact, according to my source. Soros is also long aluminum and silver according to that same source.

This source also tells me that George Soros most likely does Comex business with Refco as do many of the big hedge funds. I do not know about who he does his OTC business with or who he trades with in London. However, according to this hedge fund manager, one should start at Refco as a starting place in tying this altogether.

This extraordinary development is an affront to all that believe in free markets.

There has been an orchestration by some bullion dealers and some of our own "officialdom" to hold down the gold price so that their own selfish interests can be served. In the meantime, gold miners are out of work, gold companies are going bankrupt, gold stock shareholders have been decimated, etc.

This is an outrage of the highest order and it has been going on for some time.

gidsek
gidsek
(10/01/1999; 13:40:53 MDT - Msg ID: 15120)
TownCrier Russian Link
My humble apologies. Credit where credit is due!! Very tired here (I see little scrollbars when I close my eyes).

gidsek

TownCrier
(10/01/1999; 14:16:56 MDT - Msg ID: 15121)
Sir gidsek, I wasn't after credit...
was simply being "at your service."
GFD
(10/01/1999; 14:29:18 MDT - Msg ID: 15122)
RE: BOMBSHELL!!
Tsk, tsk... Such rhetoric. One would think that people ran the futures exchanges for the benefit of the poor suckers trying to do business with them! ;^)

This sound like a replay of the Hunt Brothers. It might be worthwhile to point out a couple of things:

a.) The Hunt Brothers lost. The way they lost was that the exchanges changed the rules on them.

b.) Seeing a futures exchange as "fair" or a "free market" is horrifically naive for any "informed observer" of the markets.

c.) What the futures exchanges do or not do, in colusion or not in colusion with the Fed is utterly irrelevant to the big picture. All this paoper manipulation has masked and, in fact aggravated, a large and widening spread between supply and demand for the physical bullion.

Why it may still be possible to "buy bullion in Belgium" the day may not be too far off where it is not. Unless Al has the combination number for Fort Knox, all this "bombshell" stuff is "market stablization".

In other words the Plunge Protection Team will do what Plunge Protection Teams do.

What is VERY interesting about this is basically that the physical gold markets are very, very close to official force majeur for large physical bullion positions. However, this has largely been the case unofficially for the last couple of years according to BT/The Writer/Another.

So what happens when Tifany stops doing gold?
Cavan Man
(10/01/1999; 14:36:12 MDT - Msg ID: 15123)
Mr. Gresham 15117
Gary North is wrong on this one. I know. I am in the printing business. "Intaglio" is a reference to rotogravure printing where cylinder is engraved with the image to be reproduced on paper. The engraving is below the surface of the cylinder and creates microscopic cells which hold microscopic amounts of ink. The depth of these cells is measured in microns. This type of process is suited for very long and continuous runs (yeah, that sounds like the FED right?)and will provide excellent color consistency. Offset printing on the other hand is on par with gravure as regards quality; no one outside of the printing industry could tell the difference between the two processes and many within the industry cannot tell! I have seen the same job printed offset and intaglio, laid side by side and could only "tell the difference" by looking thru a printer's glass.

While some sort of a special press might be required to print money, there is nothing special about the process. The company I work with has two "intaglio" presses.

I wonder what else Gary North is not entirely clear about?
POPEYE
(10/01/1999; 15:08:53 MDT - Msg ID: 15124)
No Subject
My first post.
I've been a viewer of this site for years and have learned a great deal from all of the participants.For this I am truly grateful.
Your posts gave me the courage to keep buying gold when the horizon looked dark and menacing. I was fortunate to hear and act on, "GOT GOLD ANYONE", and decided to commit to purchasing on a monthly basis as the price of POG went down.
Then some one said watch your allocation of assets and then I stopped.
I don't know how to give back to this forum,and admit that I have been a sponge at this site.
I am registered at a number of other investment sites and do not have time to keep up with all of them on a daily basis. I submit the following that comes from a daily news alert. I hope this is appropriate to the last few days of discussion.

Date: Fri, 1 Oct 1999 10:08:16 -0400
From: dailyreckoning@agora-inc.com
GOLD AT $380/OZ?
A COMMENT FROM JAMES PASSIN...
I just got back this morning from South Africa.
We met with some "institutional analysts" near Johannesburg. The gold analyst
gave us a very bearish presentation on gold and gold shares. He talked about
cental bank selling, etc.-and predicted further declines in gold and gold shares.
The next day, gold began a 3-day rally of $50.
As you may know, I have been waiting for a massive gold rally all year. Gold
looked like the classic "bull trap" -- the market was building up a huge short
position and universal pessimism, while physical inventory was being squeezed out
of the market (evidenced by the doubling in lease rates). The strength in other
commodities, weakness in dollar/yen and resurgence of inflation created a
fundamentally bullish environment.
The move reveals the poverty of robotic "trend following," which keeps you short
at the bottom and long at the top, and only seems useful in explaining
yesterday's price action. The trend followers are trapped: the popular trade was
to borrow gold at 2%, sell it into the market ($270 - $255) and then invest the
proceeds into U.S. treasuries at 6% on 20X leverage. With the dollar weak and
gold strong, this trade has turned into a total disaster. Stop losses are getting
triggered. There are rumors of hedge fund implosions (including the Tiger fund).
The central banks are brilliant: they trapped the shorts by staging a bogus gold
auction which created trivial overhang but overwhelming bearishness. Whether the
unexpected demand came from jewelry wholesalers or short sellers, the demand is
there...The new central bank policies of restraining leasing and curtailing sales
have altered the economics of producer hedging (since producers short against
future production and recapture the spread between the lease rate and treasuries
on the proceeds) and speculative short selling. I believe that gold could trade
as high as $380.
However, the central banks are still intent on liquidating their inventories.
Unless an inflationary spiral emerges (which is now possible), I would expect
central bank supply to flood the market if gold in fact reaches the upper $300s.
Yes I like The expresion "GOT GOD ANYONE?" Sorry my sense of humor got in there. Should be Gold also. Popeye

.
Goldspoon
(10/01/1999; 15:21:41 MDT - Msg ID: 15125)
Phos
http://www.kitco.com/lease.rate.htmlPlatinum is a special animal....a must have for militarys and industrys....Some industrys stockpile for hard to get times 40 times rarer than gold...
So whith this stockpile laying around lets lend it and make some more platinum for our time...A same (simular as gold carry trade) except x10 due to i being rarer and fewer sources of rescue....
Thus the lease/forward trade has degraded into loan sharking.
Youse knows what happens when youse don't pays the loan eh, Guetio??? Where's my stuff Guetio?? kraaacckckkkk.....
PH in LA
(10/01/1999; 15:31:48 MDT - Msg ID: 15126)
Re: Bombshell!!!!
Point well made! GFD.

Since it was the futures exchange who brought down the Hunts by changing the rules, there is no reason whatsoever that they might not do it again.

In one of his last posts, FOA mentioned that they might push down the price one last time before it goes completely ballistic. It seems like a move such as this might do just that. An announcement over the weekend... something like the exchange is in suspension, all contracts and options to be settled in cash within 6 months (with interest), etc. That would drive the price through the floor as everyone ran for cover. Later, things could reopen under completely different rules. ie. street gold vs. paper contracts, big taxes on physical sales... etc.

Where is FOA on this?
AEL
(10/01/1999; 15:32:06 MDT - Msg ID: 15127)
marius, angel, other lurkers (?)
Welcome to the party! Looks like its gonna be a hummdinger, here, very soon! Other lurkers: come out of the woodwork.
(Angel, are you really an angel? :) )
SteveH
(10/01/1999; 15:47:05 MDT - Msg ID: 15128)
Gold trading halted in India?
http://www.dawn.com/daily/19991001/ebr7.htm?
AEL
(10/01/1999; 15:50:20 MDT - Msg ID: 15129)
cavan man
Cavan Man (10/01/99; 14:36:12MDT - Msg ID:15123): are you saying that it is (rather) easy to counterfeit U.S. currency? North may have some of his tech details wrong (uniqueness of "intaglio"), but his point was that authentic FRNs have a measure of "specialness" (is it the paper?) and cannot be duplicated at will. If this is incorrect, perhaps we should all get into the printing biz, while FRNs are still worth something... ;)
TownCrier
(10/01/1999; 15:58:09 MDT - Msg ID: 15130)
After the Close: the GOLDEN VIEW from The Tower
There is much excitement and talk in The Tower about the gold-quest movie "Three Kings" (opening today) so everyone here is making haste to wrap this up for the grand opening. This TownCrier is typing as fast as possible, so please for give the mistakes. We'll give you the review when The Tower is re-manned.

Yesterday's stock market rally in hindsight seems to have truly been driven by quarterly position adjustments as we described yesterday, and the selling resumed today right from the start. Only a late day rally saved the indices from bigger losses on the day. The DOW lost nearly 64, and the Nasdaq gave back nine points.

The 30-Yr Bond took a beating on a surge in the National Association of Purchasing Management's manufacturing index. This was discussed in an earlier report, so suffice to say that the long bond lost 1-9/32 in price, driving the yield up to 6.145%.

In currencies, the dollar lost 1.22 yen over the previous close, and the euro climbed to $1.0724, gaining .29 cents.

Turning now to gold, the day's price gain of $6.30 beat the $5.80 seen on the December contract. We wonder when this will become standard operating procedure. For now, spot prices were last quoted in NY at $304.00. We'll turn it over to Bridge News for comments on today's futures trading:

NY Precious Metals Review: Dec gold up $5.8 after NAPM figures
By Melanie Lovatt and Tina Petersen, Bridge News
Washington--Oct 1--COMEX Dec gold settled up $5.80 at $305.3 per
ounce, boosted by the dip in bonds, stocks and the dollar's continued
slide against the yen.

The financial markets were hit by the jump in the US Sep National
Association of Purchasing Management index, with the price component
hitting its highest level since May 1995.
The US NAPM Sep price index was at 67.6, up from August's 59.8. The
big NAPM number is fueling inflation fears, a positive for gold which is
often used as an inflation hedge.
However, some are concerned that it will encourage the US Federal
Reserve to hike interest rates at its meeting next Tuesday and Wednesday,
which could prove a short-term negative for gold.
Nevertheless, traders said that the gold market remains bullish and
that it was simply following its recent trend, which resulted in Tuesday's
1 1/2-year high of $329.

Leonard Kaplan, chief bullion dealer at LFG Bullion Services, noted
that while lease rates have fallen back from their highs of over 9% for 1
month this week, they remain "enormously high at 4.8%." He noted that they
are "10 times what they were a few months ago" and should continue to fuel
gold's price rally.

[Here's our interjection of the gold lease rates at day's end:

1-month 5.1510% -1.7490
2-month 5.2200% -1.2510
3-month 5.5850% -1.4980
6-month 4.9610% -0.5000
12-mnth 4.5400% -0.4950 ... now back to our tale...]

With lease rates at these levels and the continued need for many
players to cover options exposure, the price could rally up to $340-360,
Kaplan said.

He noted that gold had held support when Dec slipped back to $295.10
Thursday and could now head higher. "It is a bull market and it will tend
to move higher when there is no significant news," he said.
Bill O'Neill, director of futures research for Merrill Lynch said
today that gold prices should at least average $300 per ounce in the
fourth quarter of this year, with a near-term range of $280-340. O'Neill
said this week's announcement that European and Swiss central banks will
cap gold sales and limit lending alleviates the major negative for the
market.
David Meger, senior metals analyst at Alaron Trading, said that on a
purely technical basis, he could call for a "blow off top," which is a
spike that would end the move higher. However, he said that he can't agree
with this on a fundamental basis. "There are too many leasers and people
with options exposure still," he said. He noted that he expected to see
them try to gradually cover their positions in small tranches on the
London open. "They'll try to cover gradually because they've already
gotten enough attention," he said.
Dec gold reached a high of $310 in the morning, its highest level
since Wednesday's $322.40. Traders said they expect gold to continue to be
supported on the breaks. "This is the first time I am having a really
positive view toward the market," said an analyst.
***
(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
---

COMEX delivery intentions so far for October is now up to 1,603 contracts (5 tonnes). Today, 120 notices were added to yesterday's First Notice Day sum of 1,483 contracts.
+
We'll walk you trough this if you're interested, if not, skip ahead my merry friend. When COMEX trading began yesterday, there were 2114 October contracts in open interest...a theoretical buyer on one side and a theoretical seller on the other side at the price agreed upon at the time they put up their margins and "shook hands" on the deal. The market changed from under them when it became obvious to others following the European central bank announcement that gold would not be "abandoned" as the important financial asset which it truly is. The resulting scurry of these new "investors" to get in on the action pushed prices up to these new levels, as buyers were much more aggressive than sellers.
+
From records now available of yesterday's events, we can see that of the 2,114 open October gold contracts, by the end of the day that number had been reduced by 1,502, and stood at 612 open contracts this morning. Recall from earlier that yesterday morning, 1,483 contracts were called for delivery, so of the 1,502 contracts that were closed yesterday, we can see that only 19 of them chose to settle with cash. That translates to over 98% of the contracts as being settled with metal. Wow. [Can anyone confirm what the deadline is to provide delivery on a gold contract? Last day of month, maybe? That question was raised yesterday, and we've yet to confirm the answer.]
+
This morning began with a whopping (by comparison) 126,972 open December contracts. With each contract theoretically representing the potential for 100 oz to be called up "front and center!", that could mobilized 395 tonnes of gold that isn't necessarily in the hands of the theoretical "seller." If their contract were called for delivery, they'd probably pass the buck by immediately purchasing another December contract and announce delivery intentions on that with which to settle their other obligation. And so the buck gets passed as sellers turn buyers, and only if a seller is found prepared to deliver gold at the new price does this cascading meltdown (meltup?) find some relief. Otherwise, someone at some point has to turn to the spot market. And we must ask ourselves again, why didn't the buyers simply seek spot gold in the first place? We seem to recall positing that size can't be gotten at spot markets without gunning the price. Any other suggestions? Open interest for all COMEX gold contracts total 209,241...theoretical obligations to mobilize 651 tonnes. Hah!

Wouldn't it be nice to take a similar walk throught the LBMA? Always keep in mind as you read this that the COMEX is dwarfed by both size and type of operations occurring through the LBMA.

Bottom line on futures: the contract pricing by supply and demand forces acting upon the contracts themselves may (or may not) earn you a dollar profit, but there is no guarantee that this trading will reflect the realities of the physical supply and demand, or that your contracts could be successfully exchanged for physical. Stepping over now to the less theoretical, more tangible side of the COMEX operations, the gold depositories saw a little reshuffling action today. Registered gold at the Scotia Mocatta vault was transferred to the Registered inventory at Republic National. 14,609 ounces to be exact. Apparently somebody wanted it a little closer to home. Meanwhile, 385 oz (12 kilos) of Eligible gold fled the Scotia Mocatta scene altogether. We're sure the new owner is quite proud of his London Good Delivery Bar...if that's what it was. Total COMEX gold inventory stands at 927,620 ounces (less than 29 tonnes). Given the high rate of contract exchange for physical, it becomes somewhat within the scope of reality to compare that amount with the 395 tonne potential sitting in current December open interest. This could get interesting. And then there's alway the LBMA, which could be imploding even as we speak...we'd never know 'til it was too late.

The Towers scouts are kept busy in their quests for news of gold, so we don't see a change to provide additional comments of the pale precious metals as occasionally requested. MK over at the Castle (CPM) has available the various metals, but here in The Tower it is gold that holds our interest and keeps us plenty busy. This following commentary was taken from Bridge News, and underscores The Tower's reluctance to track the white metals:

----Despite the run-up in platinum and palladium, traders said they are
seeing very little consumer interest.------
Traders said that profit-taking sales were being offset by trade house purchasing.

As you'll see, there is a fundamental difference between the PGM's and the monetary driven market of gold. Only gold is exactly gold, so to speak. This is also shown in the following comments Bridge reported regarding silver:

-----Silver is seeing a lack of follow through from the recent gold run-up,
but a trader explained that the reasons that gold has rallied do not apply
to silver.
Nevertheless, he still expects silver to act as a "tag along" commodity
and to reach $5.70 in the near term.-----

November crude future opened strongly, reaching the day's high of $24.85 before settling back for a 3c gain on the day, closing at $24.54 in trading that was described as boring on thin volume.

And that's the view from here...after the close.
ORO
(10/01/1999; 16:00:23 MDT - Msg ID: 15131)
Ph in LA - they already did that
http://www.wallstreetuncut.com/wsuArchive.htmWe are in the middle of the bear raid. Why do you think the futures were in backwardation? If you expected delivery on the COMEX you would have bought the futures when they were selling well below spot.
News has been coming out to supress:
Russian selling/lending, response +$6. Why? it means there might be delivery, thereby getting some to buy futures instead of waiting on the sidelines as cash is freed up from their stocks.

Besides, there used to be a mint at Placer, and minting and minting equipment is really a cheap if quality control is not that much of an issue. All producers can hire minters to get their product to the public.

Great interviews, Granville - his musical analogy is marvelous:
http://www.wallstreetuncut.com/scripts/audiohurl.asp?format=ns⌖=wsu19991001-final
http://www.wallstreetuncut.com/scripts/audiohurl.asp?format=rm⌖=wsu19991001-final
Others at link above, including Faber, Flecky, Tice, Dent, Eliades, Montgomery, Bianco...
Cavan Man
(10/01/1999; 16:07:24 MDT - Msg ID: 15132)
AEL 15129
Thanks you for asking. I enjoy your posts.

Yes, undoubtedly there is "something" special about printing FRN. Certainly, the paper(stock) is different and that is 50% of the job. The printing business is very complex and highly specialized as well as fragmented. There are many niches. I took the liberty of taking this particular opportunity to imply that Mr. North may not have all of the facts straight across the board on other issues relating to you know what as well. That's because I am SO weary of all the gloom and doom talk everywhere. BTW, I am guilty as anyone.

Moreover, what he represented was not pure, unadulterated truth (I believe there is such animal). If I see misinformation, I like to point it out. Thanks again for asking now, back to gold.
PH in LA
(10/01/1999; 16:36:18 MDT - Msg ID: 15133)
SteveH Re: (10/01/99; 15:47:05MDT - Msg ID:15128)
http://www.geocities.com/TheTropics/Shores/6299/Karachi.htmlSteveH:

Karachi is in Pakistan. (See Link)

phaedrus
(10/01/1999; 16:39:36 MDT - Msg ID: 15134)
Bombshell
Regarding the possibility of suspending trading in the futures markets or limiting ability to take delivery: no way. Not gonna happen. In today's financial climate, that would be like dangling a bloody steak in front of a pack of starving wolves. It would broadcast a message to the world that there was no gold to be found and that the powers that be are desperate. Gold would have to get to $900 an ounce again before they took measures that drastic, because such a move would expose their terror in full.

And furthermore, since there is no manipulation to point to as reason for intervention, as there was in the case of the Hunt brothers, such a move would completely destroy the credibility of the exchange- which would be immediately slapped with billions of dollars in lawsuits, by the way. The COMEX, a privately owned entity, has no desire to destroy itself, regardless of the government's needs or interests.

And a side note to those of you who pooh-pooh paper over actually buying physical: those who bought out of the money gold options are sitting on anywhere from five hundred to five thousand percent returns right now, while the physical metal is still up less than 40%. I could cash out half my option positions right now, buy physical with it, and be miles ahead of anyone who invested the same amount of capital in physical from the getgo.

Soros pointed out that not only do you want to find divergences between perception and reality, you also want to ride the false trends as long as they are profitable.

Also: five days is usually about the time that clearing firms start getting nasty in regards to margin calls, which means next week shorts should really start feeling the heat. Suggestions that this was a short-covering rally that is almost over are completely ludicrous; if that were the case we would have seen open interest fall off rapidly. Ain't happened.

nickel62
(10/01/1999; 16:44:10 MDT - Msg ID: 15135)
Hedge posture of Dayton Mining
I have found many of the comments on the USA Gold Link to be very helpful and wonder if anyone has any idea of the hedge posture of Dayton Mining. Thanks
ORO
(10/01/1999; 17:19:48 MDT - Msg ID: 15136)
dayton
The Company realized an average gold price of US$336 per ounce in 1998 compared with US$402 per ounce in 1997. Dayton's hedging program for 1999 consists of 84,000 ounces of puts at US$340 per ounce. These hedges are spread evenly over the year at 7,000 ounces per month.

RossL
(10/01/1999; 17:22:13 MDT - Msg ID: 15137)
Hedge posture of Dayton Mining
http://www.dayton-mining.com/I don't know for sure. See their web site. It has a vague statement about hedging. The share volume this afternoon was over a million. I don't know what that means except there are plenty of buyers and sellers for a gold stock that costs 9 cents a share.
GFD
(10/01/1999; 17:35:25 MDT - Msg ID: 15138)
Eyes Wide ??
phaedrus: I feel that the key here is to go in eyes very wide open and take a balanced approach. Sophisticated traders should be playing both sides using successful paper trades to build a larger position in bullion. I would say that not having a position in bullion at this stage given all the warning signs out there is tempting fate.

Having said all of that, I would like to add that I am still amused at the idea of COMEX being a "fair and free" market...
16-penny
(10/01/1999; 17:41:03 MDT - Msg ID: 15139)
street price
the cost of a 1oz kruggerand at the only coin shop in a town nearby is $335+tax unless you buy $1,000 worth then it is tax free
Chicken man
(10/01/1999; 17:54:39 MDT - Msg ID: 15140)
phaedrus - Reflexivity
Hi....I take it you are familiar with this "theory"......there is a lot to be gleaned from reading his books.....

Enjoyed your take on the markets....
RossL
(10/01/1999; 18:15:45 MDT - Msg ID: 15141)
TownCrier After the Close
http://www.nymex.com/markets/cont_all.cfm?cid=15&cont_name=term_sched#1999TC sez:
[Can anyone confirm what the deadline is to provide delivery on a gold contract? Last day of month, maybe? That question was raised yesterday, and we've yet to confirm the answer.]


I posted the answer this morning at 04:39 while you were still in bed. Msg ID:15060
See the link above!


Also, TC sez:
"And so the buck gets passed as sellers turn buyers, and only if a seller is found prepared to deliver gold at the new price does this cascading meltdown (meltup?) find some relief. Otherwise, someone at some point has to turn to the spot market. And we must ask ourselves again, why didn't the buyers simply seek spot gold in the first place? We seem to recall positing that size can't be gotten at spot markets without gunning the price. Any other suggestions? Open interest for all COMEX gold contracts total 209,241...theoretical obligations to mobilize 651 tonnes. Hah!"


The textbooks on futures markets all say that a trader shouldn't worry about delivery until the last day or so. Most contracts typically get closed out and/or rolled over into the next month. Futures are for hedging price risk and speculation. If the COMEX gold market becomes a venue to force delivery in quantities, then the gold market has indeed siezed up.


Are you ready for gold to take off like a rocket?
NewGold
(10/01/1999; 19:23:27 MDT - Msg ID: 15142)
Another South African Top ANC MP attacked!
http://www.iol.co.za/news/newsview.php3?click_id=79&art_id=qw938813941868M100&set_id=1That make it 2 in 48 hours, looks like something BIG is going on in South Africa against the marxist ANC Gov ?
Goldfly
(10/01/1999; 19:29:47 MDT - Msg ID: 15143)
Oh, Oh, HOHOHOHOHO HEE HEE HEE HAHAHAHAAAAAAA.......

Angel - ROFL!! ROFL!!

Oh my.......oh, let me catch my breath.....

Hey Gandalf! You should have bought the rights to "I Got AU Babe" when you had the chance! Ha Ha HAAA.....

Angel, I surely appreciate the thought, but you couldn't be serious......




Could you???

Cmax
(10/01/1999; 19:40:06 MDT - Msg ID: 15144)
Millhouse @Gold Eagle
This excerpt is undoubtedly being used out of the context that the author intended, but I just couldn't resist undelining this part in my mind's eye:

".....THE STOCK MARKET DISCOUNTS THE FUTURE, which is why a bull market invariably ends when the short term outlook for earnings growth appears to be at its brightest and commences amidst the worst stages of an economic decline. This discounting mechanism, applied to the Y2K phenomenon, may mean that the negative impact of Y2K on the stock market will be felt prior to 1/1/00...."

...........and inversely, such a discounting mechanism will proportionately reinforce the POG, all other new factors aside.
Gold Power
(10/01/1999; 19:41:41 MDT - Msg ID: 15145)
The New Golden Bull
We are now less than two weeks into a new bull market in gold. I am reminded of the first two-week drop in the Vancouver Stock Exchange in June 1996. Very few of us believed it was for real then. The VSE Index then fell from a high of 1480 to a low of 380. It took less than 30 months.

I think the current sea change in the markets is much greater than the final touches on the gold bear market that is now over, Bob Prechter notwithstanding.

These investment interests that are so massively short gold, might consider gold stocks as a hedge to their gold positions. It may not be the best hedge in the world, but it may be the best hedge available in the world.

The world has allowed the U.S. to export its inflation while the U.S. wallowed in the success of its extravagance. No more. The dollars that have flooded the globe should now start finding their way back into the U.S.

So in terms of U.S. dollars, hard goods of all sorts should start rising in price.

This is my first post on this forum. I think I'll step back now and see how it is received before saying more.

Thank you.
Snowy
(10/01/1999; 19:45:55 MDT - Msg ID: 15146)
Gun Controll in Australia
@onlychild (10/01/99; 08:30:04MDT - Msg ID:15086)

The Firearm confiscation in Australia followed a Masacre in a tourist restraunt in which 26 people(I think) were killed.

The killer was an heir to a large gambling fortune who also it seemes has the maturity of a pre-teen, a deadly combination.

Tha arms subject to confiscation/with compensation were Semi-automatic shotguns and rifles of any caliber as well as pump action shotguns. Hanguns which are strictly controlled were not considered within the framework of the policy/legistlation. The rumour is the additional work to ban handguns would have caused the anouncement of the new legislation to fall after the 6.00Pm News time slot.

Any political or social commentater in Australia who speakes favourably toward the shooting sports or firearms for self protection is howled down and derided as a "redneck". During the formutation of the new gunlaws representatives of the shooting sports and representatives of the firearm industry were excluded from presenting their views or offerin advice on formulating a workable system of regulation.

I myself am a sporting pistol shooter and have suffered many derogatory taunts about my "fixation" with firarms. I might also add that I served in the Australian defence forces in the Infantry man as a younger man.

God bless,
Snowy.
PH in LA
(10/01/1999; 19:52:08 MDT - Msg ID: 15147)
Re: Bill Murphy's Bombshell
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=11423193
"For what it is worth, Alan G has been PERSONALLY jawboning big money Gold Buyers to not add physical stockpiles positions since Late March, so this bombshell of Murph's is nothing new."--ole 49r @ Silicon Investor Gold Price Monitor


The poster at SI who calls himself "Ole49r" seems very sure of himself. Bill Murphy's bombshell was news to me. Anyone else heard anything about this before today and "since late March"?
FOA
(10/01/1999; 20:11:14 MDT - Msg ID: 15148)
Comment
All:
I just finished reading all the posts today and must say that this is a wonderful group. It's not just the information that's presented as it's great to see it all assembled. Rather, it's good to see everyone offering their feelings (not just their projections) as this market evolves. It's becoming impossible to discuss with everyone because so many people are entering here. Each with their
own slant or take on the day's moves. Very, very good! Michael has created a "one of a kind".

Gold always has been an emotional subject. Especially if you buy it for it's future monetary value instead of trying to quickly trade it for cash. I know there are traders here. It's seen in their cool style and council. For them gold is but a quick paper liquidation and "if I ever need to" it's "off to USAGOLD" to purchase. Hmmmm.

Yes phaedrus, in your world "it ain't going to happen". The failure of paper, that is. But please consider that I move in a different world from you. No, not the high speed "connected" "mover" environment. Rather it's a world attached to a timeline of "ages old" events and "reoccurring human nature". This realm exists today in the minds of a people you will mostly never know. Yet, they hold the very destiny of our modern currency system in their hands. Intelligent, sharp, and filed with "the simple Thoughts", they do very well understand the western differences of common sense. Up vs down, rough vs smooth and most especially "I have" vs "they owes"!

Presently, in your world, the concept of holding "paper gold "they owes"" can and does gain the great percentage returns you reference. I expect your ability to trade will move you quickly ahead of all others before you when the time comes. Then again, it strains credibility to suggest that one could "out trade" every other player when "lightning strikes in the night". I think I saw a movie
where it was counselled "a man's just got to know his limitations". I have been given a view of this storm and my feet are not that fast.

My message (as an extension of Another's) is for the ones that are so very slow. That's me, too! We are doomed to trod the slow path as do the giants, because, in the end things go up faster than traders can revalue paper. Funny as it may seem, all of us will most likely again meet the "fast
traders" though our location in the race will somehow change.
Imagine, if you will the logic of Another:

"This world be still round, my friend. And days have changed with modern toys for boys to play. Though they circle the earth with much speed, full circle bring them but one step "behind me""

Some people may not like the connotations that presents, but boy, it sure keeps my brain clear.

ALL: The end of this currency game will see people trading their hearts out only to use all their winnings to buy the same amount of gold (or much less) they could have purchased in the first place. They did the same thing in Rome, still fighting over economic contracts as the war raged just outside the walls.

Trading IOU paper will never create more gold for anyone until they liquidate and buy. Mostly we don't and what we usually truly gain is only more paper with an "attitude" to prove it. It is against human nature to expect anyone to leave a paper crap table while they are ahead. Millions
and millions of gamblers try to convince themselves and others that they can do it. 99.9% of them never have and never will. It's a siren song as old as time itself. It's the same in the modern stock markets. When the game "truly" ends, few walk away with what they thought they had.

We are on the road of returning to the natural, true monetary values of gold. Values that will not be the one ounce for a suit some still proclaim relevant. It value will be magnified 100 times by the modern advances this society has created. Some will lose their jobs, some will lose money, but the world will not end. Babies will be born and employers will employ. Only the yardstick for measuring wealth will have changed. As events unfold this truth, Another will respond to reference this journey we all will travel. Truly, "events will prove all things".

Thanks ALL FOA

onlychild
(10/01/1999; 20:40:33 MDT - Msg ID: 15149)
Snowy
Thanks so much for the info on firearms. I am afraid that our own government is taking advantage of several senseless incidents of violence here to move closer to confiscation in the US. Any student of history should be scared stiff at the ramifications of a disarmed public. If only Tom Jefferson and his cronies were around to explain what they meant in the Second Amendment......

P.S. Isn't it funny that many of the gun control advocates are what we call "pro-choice". What has become of a society when it believes that deadly force against the unborn is acceptable, but deadly force against an assailant is not.
PH in LA
(10/01/1999; 20:41:09 MDT - Msg ID: 15150)
Is time running out? Or has it already run out?
Thanks, FOA, for you fine comment today.

Like most here, I marvel at how your predictions are being fulfilled. Recently you said that a move to $300 would bring about the first defaults. You have described what is going on beneath the surface during this pause. It certainly sounds like turmoil and devastation. And this after only a move to �$300, a level that seemed like a floor only a few months ago. Andy Smith goes on record that gold is suddenly money again... after proclaiming that it was a mere commodity for how many years? He now pleads with the Europeans to reconsider their new position in order to avoid dire consequences. What will be happening when spot reaches the $400 area, if the system is threatened with collapse at $300? Most of us remember $400 (and higher) POG. The world funtioned just fine then. The world of gold is "not as before" Another has been telling us for years. Obviously!

You (and Another) have said many times that the other side will fight furiously to preserve their system. And we know that Big Trader/The Writer/Another has tried to show us how close to collapse their system has been since December of 1996. Today Bill Murphy strongly hints that no settlement by delivery will be allowed on the Comex beginning as soon as this Monday. Has the situation deteriorated so far so fast? Do you know anything about this? What effect on the physical market would such a move imply? Would it bring about a final spike downward to give us one last chance to load up at Michael's Company Store?

You recently said that small purchases of street gold might remain available until November 99. Is that timeline running out?

How much time do we really have?
Golden Truth
(10/01/1999; 20:50:03 MDT - Msg ID: 15151)
TO F.O.A
Bravo F.O.A, Bravo!!!
From all in the "Bullion Boyz Club".
Hope to hear from you in the near future again.
G.T :-)
PH in LA
(10/01/1999; 21:03:18 MDT - Msg ID: 15152)
Any reactions over here to this?
Date: Fri Oct 01 1999 22:41
flierdude (Can somebody help me out here?) ID#341249:
Copyright � 1999 flierdude/Kitco Inc. All rights reserved
Up until June of this year I had never bought an option. I loaded up on Dec gold calls and Dow puts. In the last 3 days I have tryed to unload 10 of the calls, and, my target price had been hit each of the three days. But, no execution of the trade.

I have a very poor opinion of options right now because of this. I am just wanting to sell ten 320's to get back my original investment on all these option plays from June that I made. The rest I will let ride for 2 or 3 weeks.

I have a very strong feeling that the entire gold options market is going to default. My question to you is this. Do you think this is possible?
If so, at what gold spot price will it default? What would be your best guess of the timing of this default?

Thank You,

Mike
RossL
(10/01/1999; 21:18:23 MDT - Msg ID: 15153)
Is time running out? Or has it already run out?
PH in LA (10/01/99; 20:41:09MDT - Msg ID:15150) Sez:

"Do you know anything about this? What effect on the physical market would such a move imply? Would it bring about a final spike downward to give us one last chance to load up at Michael's Company Store?"

I fail to see the logic in a prediciton of a downward spike. Who is going to dump their physical gold right now? Russians? Pakistanis? Buy whatever you can before Monday morning !!!
Cavan Man
(10/01/1999; 21:34:46 MDT - Msg ID: 15154)
FOA 15148
FOA,

I would gladly meet you anywhere in the continental US to enjoy a very fine meal at my expense if only to discuss anything and everything (even rugby) EXCEPT the subject of gold with you.

My meager words cannot express the respect and admiration I have for you. Cyberspace is a very strange place to meet someone and to assess motivation and character. However, I am with you on that road no matter what the final destination might be. Many thanks for your time...CM
Marius
(10/01/1999; 21:45:29 MDT - Msg ID: 15155)
A comment to Phaedrus & PH
15134 & 15152Phaedrus

"And a side note to those of you who pooh-pooh paper over actually buying physical: those who bought out of the money gold options are sitting on anywhere from five hundred to five thousand percent returns right now, while the physical metal is still up less than 40%. I could cash out half my
option positions right now, buy physical with it, and be miles ahead of anyone who invested the same amount of capital in physical from the getgo."

I felt much the same way prior to today! I was convinced by my broker to at least liquidate my Feb 2000 290 calls. As of 4:45PM EST, more than 2 hours after COMEX closed, no transaction had been made. He would only offer a market order (no limit orders accepted), and could not assure me a timely fill. Hmmm. Yes, this trade makes me rich "on paper", but it's worthless if it can't be executed. Don't count it 'till it's in the bank!

Is anyone aware whether a market order can be canceled once initiated?

Cavan Man
(10/01/1999; 21:46:09 MDT - Msg ID: 15156)
Other Cultures & FOA
Here in the west, we would do well to consider the wisdom of the east and of cultures and peoples who have been engaged in commerce for over 5000 years. We complain about and comment upon contemporary media. However, egocentricity has created a historical bias in education towards the "Western Heritage" which has robbed us of valuable lessons learned centuries ago by peoples who walk this earth still.
Beowulf
(10/01/1999; 21:51:19 MDT - Msg ID: 15157)
LTCM may be out of business, Fed's McDonough says
http://biz.yahoo.com/rf/991001/bbl.htmla little sample:
"The near collapse of Long Term Capital Management LP, which specialized in highly risky
investment bets, last year prompted its main creditor banks to come up with a $3.5 billion dollar
salvage package. The deal was arranged by New York Federal Reserve President William
McDonough amid fears that the firm's demise could devastate the entire global finance system."
FOA
(10/01/1999; 21:59:26 MDT - Msg ID: 15158)
Comment
PH, Everybody,
I have more to say than could possibly write now. When I get back we will have an awful lot to cover. We'll all understand later.

Golden Truth,
The "Bullion Boys" did OK today. Golden Sun just about outran (percentage wise) everything. Easy to do when one horse (Silver Moon) hits the rail and flips his rider, "backwards", no less! (smile)

Goldspoon, my vote is "horse with no name" for Platinum. I now remember the song by America.

ALL:
The Russian announcement was in some ways like the English sale. They were asked to publicly say it to drive others to lease before they did (and lower the rate). A ploy only, as some bank shorts withdrew their bid to cover now, waiting to see what would happen (this also lowered
demand (and rates)). The USSR was always the very best at gold trading. Cut your shirt clean off and you never knew you lost it! Dumb, stupid Russian dealers??? No more so than us. Russians good at poker, oh yes. Russians announce deal before the fact to bid themselves a lower rate?? Did anyone buy that one?

I bet Michael still has gold for sale. Still at a good price for a while at least. All you paper traders better take the advise of this old Western Scout, "watch your top knot out there"!

Be back when I can................FOA


RossL
(10/01/1999; 22:03:56 MDT - Msg ID: 15159)
Marius
Marius (10/01/99; 21:45:29MDT - Msg ID:15155) Sez:

"Is anyone aware whether a market order can be canceled once initiated?"

I'm not sure about the rules at COMEX, but generally, you can cancel an order if your "cancel" gets to the floor traders before they execute your order. I suggest you contact your broker before the Monday open.
Afterwards, fire your broker!




koan
(10/01/1999; 22:24:27 MDT - Msg ID: 15160)
Kaplan is Bearish
I have more to gain than most with a continuing gold rally; but its hard to argue with Kaplan on gold. He says lease rates have declined from 9 to 4.8% and the shorts have been covered. We are really only $15 above the pre BOE debacle. Gold has been freed, but I think the chances are better than even that Kaplan is right and we will see a correction. My guess would be to $285. I believe if there was a real shortage in gold the world community would right now be bidding it much higher than it is. For those who search for objectivity you must consider Kaplan's statistics.
Both gold and silver are running total deficits, but both have overhangs that will be adjusted over the next year or two with some sort of supply/demand equation. Last several of us ( the stranger was one, I believe, I miss his posts) felt gold would find a floor at 250 - we were pretty adamant, for those who remember! Others talked about $200, $100 and even $10. So far those of us who were talking $250 floor while not being very sexy, were correct - it looks like. Just trying to inject a little sobriety.
PH in LA
(10/01/1999; 22:29:28 MDT - Msg ID: 15161)
RossL & Marius
"I fail to see the logic in a prediciton of a downward spike. Who is going to dump their physical gold right now? Russians? Pakistanis? Buy whatever you can before Monday morning !!!"

RossL:

We have discussed, disected and guessed for many hours over many years about what exactly is the POG or the Spot Price. It seems to be a very strange animal; part supply/demand, part derivitive/paper/option, part sale of leased material, whatever that means (derivitives) in this crazy, modern world of gold. FOA and Another have predicted a separation of physical, street gold from paper/option/futures market gold. No one can say exactly how or when that will occur. Would the price of physical follow the futures' price down one more time? Or would this be the event that uncouples the two? There is logic in both answers. Certainly, those who have watched these 20 years have seen the price fall, even when no one is "dumping their physical gold...Russians? Pakistanis?"

You are correct in that there is little logic to be found here, (except in a convoluted, illogical sort of way). The modern world has never seen an outright default in the gold market's "dirty float" as it has functioned since 1971. Anyone who claims to see which way it will go by the simple use of logic had better be prepared to explain many things unknowable to many of us.

BTW, where do you propose that we "buy whatever (we) can before Monday morning"?

Marius:
I remember Another speaking to this question of execution long ago: "Your plan is a good one... but the question at that time will not be 'How good is your plan?' But rather 'How good is your broker?'

Truly, this market is not "as before".
Peter Asher
(10/01/1999; 23:06:29 MDT - Msg ID: 15162)
Marius Phadreus and PH


From � Peter Asher (9/28/99; 21:18:44MDT - Msg ID:14805)
>>>>>The Comex was not guaranteeing limit orders today, due to the
chaotic activity, and market orders were at the floor traders mercy.<<<<<

I bought three Nov. 550 Silver last Friday morning for $100 + comm. each. I called my broker when they were trading at .29 ($1450) He, in his panic gave me the quote for the Dec. 550, of .37 and I decided to sell one contract into the "blow-off" I thought was occurring. That's when he told me that "because trading was so fast, Comex was not guaranteeing any limit orders even if the price traded through."

I took the chance and got the .29 high of that period. (I consistently get good aggressive executions from the Comex floor with this company. Later, when the blow-off actually occurred (Spot ran to $5.95) To .40 then down to .18 then to .32 then to .20 and the .27, all in two hours. So who knows what would have occurred later with market order? The November options are actually calls on the December contract that expire on the second Friday of Oct. instead of November. They are a very thin issue! The broker and I have been going around a bit over the "Would have could have" of his false quote.

Later I figured out a strategy that is viable when you have an 'in the money' option. You can sell the future itself and then exercise the option to call in the buy side. You have both the liquidity of the futures market and the probability that future will be trading a little higher than the equivalent option price. (When well in the money)

Peter Asher
(10/01/1999; 23:10:15 MDT - Msg ID: 15163)
Uh Huh!
http://news.excite.com/news/r/991001/22/financial-ltcmLTCM may be out of business, Fed's
McDonough says
koan
(10/01/1999; 23:14:33 MDT - Msg ID: 15164)
USA GOLD or any coin shop
You think gold is going through the roof before Monday, the above places can sell you all you want. The fundamentals look good for gold and all of the PM's, but it will take time. As I have said before speculation is hard to quantify. When any of the PM's rise or fall it has an effect on the other PM's. Remember ALL PM's rose this week and it was all a change in psychology and technicals of trading (i.e. short covering, etc) - nothing fundamental changed. If COMEX gets short of gold and gold rises India can sell gold and silver until the cows come home - whatever that means - if the price is high enough.
koan
(10/01/1999; 23:29:29 MDT - Msg ID: 15165)
dollar volume small
Dollar volume on both the Vancouver and Alberta exchanges was small v - 8.8 mil and A - 6.7 mil.
elevator guy
(10/01/1999; 23:30:53 MDT - Msg ID: 15166)
@ Marius, and others. Regarding gold call options.
Ok, I'm not one of the "bullion boys". I did'nt get the big picture, 'cause I started late. Now get off my back, will 'ya? Sheesh!

My question is for anyone who has tried to sell their call options. Have your orders been filled? What kind of order did you place? If you tell your broker that you want to sell "at the market", does that mean that they may sell your position at any old price they come up with? (Is there any skill to it, or do they just lower the price until someone buys?) What is a limit order? Is that where you tell your broker to sell your option for no less than a certain price, and that order stands until it is withdrawn?
I knew this stuff once, a few years ago, but only traded once, and then I got busy with work, and didn't look into the markets until recently. (Thats my story, and I'm sticking to it!)
AllanC
(10/01/1999; 23:45:01 MDT - Msg ID: 15167)
Seamless logic
FOA

I appreciated reading your response to Mr Phaedrus.
Your analogy about the gambler in all of us should serve as a lesson to all those who think they can outrade the mob!

Physical is the only way to go.
duki
(10/02/1999; 00:06:01 MDT - Msg ID: 15168)
Another Lurker Outed
Hello, I've only been lurking here for a couple of months. It would seem that you good people have covered just about everything I might have to say on the subjects of gold, fiat currency, gun control, etc. I broke my financial back fighting against fiat currency in 87. Now that my back is better, I just accumulate physical, and equity gold and silver. once again just sayin HELLO.
canamami
(10/02/1999; 00:15:42 MDT - Msg ID: 15169)
Don Coxe's Conference Call - Lengthy and Interesting Gold Discussions
http://www.jonesheward.com/commentary.cfmThis week's conference call is well worth the time for a follower of this Forum. Gold was the main topic of the call. Most relevant portions are minutes 0:00 - 15:45 and 29:30 to 33:30. A very wide-ranging discussion, and too lengthy to summarize.
THX-1138
(10/02/1999; 00:21:30 MDT - Msg ID: 15170)
Mountie coins
Since the street price of gold has gone up to around the price of $320 I was thinking about purchasing a couple Canadian Mountie coins. My reasoning is with the increasing supply issues of US Eagles, and Maple leafs, and Krugerands, I figure nobody has thought about purchasing the Mounties as the price remained $320/oz while spot gold was at $255. I will have to ask my coin dealer what coins are actually the cheapest, but if the current prices are within $2 of a Mountie, I am going for them this week. They are actually much prettier than a Maple Leaf. Does anyone have any thoughts about this?
Chris Powell
(10/02/1999; 00:36:08 MDT - Msg ID: 15171)
BOOM! Gold shorts start to default
http://www.egroups.com/group/gata/223.html?Latest "Midas" commentary
by GATA Chairman Bill Murphy.
Spread the word.
SteveH
(10/02/1999; 00:40:50 MDT - Msg ID: 15172)
CM -thanks and Note to a friend
Leroy,

Gold's story actually seems to have made it to a major newspaper. I remember when Aldous Huxley (forgive me if I spelled the name wrong) spoke at my University. He spoke of a people from Africa and his tale of writing about them. His manner, diction, and story captivated and enthralled me. For the next four years I searched for his book. I told many people of the man and his tale but the book never came out. I had all but given up on telling the story but one day I heard that a book called ROOTS had just made it to the New York Best Sellers List. It was huge. Never before had I seen such fanfare and hoorah. I actually felt disappointed that a story whose banner I had raised for years after the speach, was no so large and telling that my part in it was over. I am beginning to feel that way about the gold baton, but not yet. But the parallel is quite similar. For over a year I have been telling gold's story without trying to be offensive or overbearing or out of place but as in Roots, it has been an obscure story that seemed to be a forgotten niche that seems to be exploding as Roots did to be one of the major stories of the decade.

SteveH

PS. This is from GATA:


11:30p EDT Friday, October 1, 1999

Dear Friend of GATA and Gold:

The gold carry trade and the short squeeze are finally
news for the mainstream press. Here's a fine article
from the Sydney Morning Herald for Saturday, October 2.
Those of us on the other side of the planet get to read
it a day before publication!

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

* * *

A SQUEEZE TO PLEASE

By Steve Burrell
Sydney Morning Herald

Saturday, October 2, 1999

Paul Lee, the head of gold trading at Dresdner
Kleinwort Benson in Sydney, could be forgiven for
forgetting where he lived this week.

He didn't go to bed for three nights straight as he and
his fellow traders stayed at their screens around the
clock, riding the biggest and fastest rise in the gold
price in almost 20 years.

Lee's sleepless-in-the-saddle week began last Sunday
with unexpected news from the other side of the world.

With his unruly shock of hair and unfashionable black-
framed glasses, European Central Bank president Wim
Duisenberg looks more like a slightly owlish university
don than a white knight.

But when he and 15 of his fellow European central
bankers announced at the IMF-World Bank meeting in
Washington that they were capping sales and lending of
gold out of their official reserves, they became a
battalion of white knights and the Seventh Cavalry
rolled into one for the beleaguered gold sector.

The unprecedented announcement took the market
completely by surprise and sparked one of the most
dramatic surges in the gold price in a generation.

The gold price soared almost 25 percent in a few days
to as high as $US329 an ounce 30 percent above its
late August low of $US252.90 before consolidating
around $US300 by the end of the week.

On Tuesday alone, the London price rose $US20.40 an
ounce, the largest increase in dollar or percentage
terms in more than 17 years.

The agreement, master-minded by the central banks of
the world's 10 biggest economies, was a co-ordinated
attempt to reverse the long slump in the gold price
which had recently seen it crash to 20-year lows of
around $US250 an ounce, putting gold producers around
the word under extreme pressure.

Secret discussions on the deal began in earnest in
August, after an announcement on May 7 by the UK that
it was planning to sell gold reserves sparked a $US30
per ounce crash in the gold price and left the market
vulnerable to further falls.

Last weekend's announcement lifted a black cloud which
had hung over the gold market for more than three
years.

"The enormity of the announcement by European central
banks cannot be underestimated," says Colonial State
Bank chief economist Craig James. "The threat of
central bank sales was the prime factor driving the
gold price lower.

"The expectation of lower prices led to short selling
by speculators, inducing further downside.

"The removal of the spectre of substantial central bank
sales means mine supply and demand will again be the
main determinants of the gold price."

But while the sudden, spectacular surge in the gold
price has produced some happy miners and gold company
shareholders, for others the revival of the precious
metal has come as an expensive surprise.

For a lot of speculators, including some of the world's
biggest hedge funds, it was a case of the free lunch
biting back.

They were up to their eyeballs in the financial
markets' latest version of a licence to print money,
the "gold carry trade."

The near-vertical trajectory of the once-languishing
gold price in the wake of the central bank announcement
has all the hallmarks of a rush of speculators to the
exits.

The hedge funds and other financial market heavyweights
including, market rumour has it , big investment banks
such as Goldman Sachs were forced to unwind plays which
could involve around $US25 billion ($38.4 billion) in
borrowed gold, frantically buying to cover their
"short" positions and driving the price up even
further.

On Tuesday, as gold prices spiked higher to $US326 from
$US304 in matter of minutes, rumours swirled about
massive buying by a New York dealer on behalf of a
client unwinding a $4 billion bet on the gold price
falling, according to the Wall Street Journal.

Gold's amazing resurgence may also have dramatically
changed the rules of the game for many producers, who,
like the funds, had borrowed central bank gold and sold
forward to hedge their production.

The higher interest cost of carrying these positions
means it is no longer profitable for them to sell
forward and may even prompt a major buyback by
producers to cover these short positions, according to
some analysts.

As Paul Lee notes: "Structurally, the entire industry
has changed."

The "gold carry" is a close cousin of the "yen carry
trade," which got the hedge funds into so much trouble
last year.

Speculators borrowed yen at ultra-low interest rates
and reinvested the proceeds in higher yielding
securities a guaranteed money-making proposition until
the yen started to rise against the US dollar and made
paying back the borrowings more expensive. With the
gold carry, hedge funds and other speculators borrow
gold from a central bank, leveraging up their position
by using bank credit to increase the size of the
exposure.

They then sell this borrowed gold and invest the
proceeds in other securities, such as US Treasury
bonds.

The trick in this case was that, until recently, the
cost of borrowing gold was only around 1.5 percent to
2 percent because central banks, keen to earn some
interest on their large gold holdings, were prepared
lend it out at a low rate.

With rates on US Treasuries at more than 5.5 percent,
it was money for jam.

What's more, with gold prices falling, they could also
expect to make money when they eventually returned the
gold to the central bank because they could buy it at a
lower price than when they borrowed it a standard
speculative play called shorting the market .

With leverage, these speculative positions could
deliver the hedge funds and their investors returns of
40 percent or more.

Unlike the yen carry trade, there is no currency risk
involved, though, as they were to discover, they were
exposed to interest rate risk and, of course, the
chance that the gold price might actually rise.

With central banks selling their gold reserves, so-
called "fabrication" demand for gold in the previously
strong Asian market still recovering from the economic
crisis and inflation low, there seemed little risk of
that.

If anything, with the spectre of central bank sales
hanging over the market, further falls were expected.

It was little wonder that the hedge funds arrived in
droves to take advantage of this free lunch during the
past year or two.

Just as no-one really knows how exposed the hedge funds
were to the yen last year, it is hard to be sure how
big their short position in gold was going into last
week and at what price those positions started going
under water.

Some analysts have put their collective short positions
as high as 8,000 tonnes. More reliable estimates of
central bank lending of around 5,000 to 6,000 tonnes to
both forward selling gold producers and speculators
suggests it would be closer to 2,000 to 2,500 tonnes.
Still, that's up to $US25 billion worth of gold at
current prices.

One of the first signs that the magic pudding of the
gold carry was about to turn sour came the previous
week when gold rallied almost $US6 an ounce in the wake
of the Bank of England's second auction of its gold
reserves.

The 25-tonne auction, part of a gradual unloading of
half of Britain's total reserves, was eight times
oversubscribed, with some of the world's biggest
producers among those buying up big to cover short
hedging positions.

The subsequent price rise to more than $US260 an ounce
was only the beginning.

The rally was supercharged over the weekend with the
surprise announcement by the European central banks
that they were capping annual gold sales from their
official reserves at 400 tonnes for the next five
years. With sales of around 1,715 tonnes by the UK and
Switzerland already decided, this was close to a
moratorium on selling until late 2004.

It also dramatically reduced the amount of central bank
gold likely to be sold worldwide in the next few years.

Together the European central banks, the US and the
International Monetary Fund hold 80 percent of
official sector gold. With the IMF changing its mind
about on-market sales to fund its recent debt relief
initiative and the US not having sold gold since the
late 1970s, the European decision was pivotal.

The announcement largely removed the threat of massive
central bank sales which had hung over the market since
the Belgian central bank announced it was unloading
gold reserves in March 1996 a fear which was
intensified greatly when Australia's own Reserve Bank
revealed in early July 1997 it had already begun
selling gold.

The European banks' weekend announcement fuelled an
immediate $US16-an-ounce jump in the gold price, taking
it above $US280 an ounce for the first time since early
May.

Although the average price at which the funds were
carrying their gold positions is unclear, this would
have started to take them close to the danger zone
where it would cost them more to repay the gold they
had borrowed from the central banks than when they
borrowed it.

They were already facing a squeeze from another
direction the interest rates charged by the central
banks for borrowing their gold. In recent months this
so-called lease rate had jumped from 1.5 percent to
around 4 percent, amid rumours the central banks were
withdrawing gold from the market. This sharply reduced
gains on the gold carry.

At one stage during the turmoil of the past week the
lease rate climbed above 10 percent.

For those borrowing on a "floating lease" basis akin to
a floating rate mortgage this means the gold carry was
costing them a lot of money.

Significantly, the European banks said last weekend
that, in addition to limiting their gold sales, they
would also curb their gold lending, agreeing "not to
expand their gold leasings and their use of gold
futures and options over this period".

With the European central banks holding around a third
of the estimated 5,000 to 6,000 tonne pool of bullion
reserves available to be lent out, this could have a
significant impact on the level of gold borrowings and
will help keep lease rates high.

Combined with the rising gold price, the rise in the
lease rates appears to have been the signal for the
speculators to get out by buying gold to cover their
short positions.

This bail-out made the climb in the gold price even
more spectacular, driving it as high as $US329 an ounce
in London trading on Wednedsay and leaving it at $US302
an ounce, a rise of 14 percent over the week,
yesterday.

The short squeeze was tightened even further by the
fact there were few sellers in the market. This was
partly because producers and other holders of gold were
waiting to see if the price rose further and partly
because producers were themselves short because of
previous forward selling at prices much lower than
prevailing now.

In effect their position was not much better than the
hedge fund themselves.

To put this week's rise in perspective, however, the
gold price is still well below the $US340 to $US350 an
ounce range that prevailed before the RBA's sale
announcement in mid-1997.

And it's still miles away from the $US400-an-ounce
levels of early 1996, before the Belgian sales
announcement not to mention its all-time high of $835
an ounce in 1980.

Although there is a big question mark over whether gold
will approach the levels of two years ago, the price
outlook is definitely brighter and current levels could
well be maintained or bettered, according to analysts.

While the recent spikes were driven by the bail-out of
the speculators, the rise in the gold price is also
reflecting shifting fundamentals in the industry and
the world economy.

The unexpectedly rapid recovery from financial crisis
of many of the East Asian economies among the biggest
buyers of gold for jewellery and other manufacturing
uses means fabrication demand is stronger and likely to
improve, as will the generally stronger outlook for the
world economy as whole.

The World Gold Council put gold demand at record levels
in the June quarter, with supply down by 5 percent on
six months earlier.

The annual gap between fabrication demand and mine
production has been around 500 tonnes for the past few
years and, according to a respected analyst of the
market, NM Rothschild & Sons chief economist Ric Simes,
it will rise to 1,000 tonnes a year for each of the
next few years as mine production growth slows.

The prospect of higher global inflation and signs that
the recent era of US dollar strength is coming to an
end also makes gold a more attractive proposition,
though the inflation hedge factor is far less important
than it has been in the past.

And on the supply side of the market, the European
central banks' decision to limit sales and lending,
along with the rethink on sales by the IMF, will also
lend price support.

After the present bout of volatility and short-covering
passes, Dresdner's Paul Lee sees the gold price
establishing a new firm foundation around $US275 to
$US280, although he doesn't rule out the price spiking
even higher than $US329 in the short term if hedging
positions continue to be unwound.

With demand firm, Colonial State Bank's Craig James
sees the price returning to around the $US325 to $US350
level which prevailed before the threat of central bank
sales slammed the market.

Rothschild's Ric Simes sees the price settling above
$US300 an ounce. "The reasons why gold might trend
higher were already accumulating (before the recent
price jump)," he said.

"They included US dollar weakness, strong physical
demand, the current short-term liquidity issues,
strength in other commodity prices, especially oil,
strong coin demand in the US and marked slowdown in
mine production growth.

"Y2K and weaknesses, or a sharp fall, in US equities
were other candidates that could lend strength to any
rally."

Simes says the likelihood of producers selling forward
could cap further price rallies in coming months,
though they may be deterred from this if the market
stays in a state of "backwardation", where spot prices
are higher than prices for future sales.

"Longer term, the market deficits will absorb sizable
amounts of above-ground stocks," he said. "Given where
costs of production are, a price settling above $US300
an ounce and noticeably above this level if the US
dollar is weak would appear warranted."

-END-


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duki
(10/02/1999; 00:58:57 MDT - Msg ID: 15173)
THX 1138 MOUNTIES
As I understand these coins are sold at 320 ( I saw 325 ) with a put option to sell them back at 310, good till 12/31/99. In the last POG spike I saw the price of mounties rise above their "normal" price right along with the rest of the coins. I don't know about the purity of the Mounties but assuming that they are equivalent to Maples, once the other coins rise, the Mounties at the same price would have a free asset ( 310 put ) attached.
Tanglewild
(10/02/1999; 04:37:52 MDT - Msg ID: 15174)
Gold options
Hi,
First post with a question or two...
Deciding to gamble a little on the y2k situation(much uncertainty there.....) I purchased a feb 280 gold call($180.00) and a couple of march 700 silver calls($250.00) about 3 or 4 weeks ago. If my math is right the gold call is up 1600%($2950) and the silver up 160%($400).

The online trading firm i purchased them through now says:


UNTIL FURTHER NOTICE, ALL NEW METAL OPTION ORDERS MUST BE
MARKET ORDERS. WORKING
LIMIT OR STOP ORDERS PRIOR TO 9/30 WILL CONTINUTE TO WORK BUT CAN
ONLY BE
CANCELLED OR CXL/REPLACED TO THE MARKET. ANY ATTEMPTS TO
CXL/REPLACE AN ORDER
MAY BE REJECTED BY THE FLOOR WITHOUT NOTICE. ALL COMEX ORDERS
CONTINUE TO BE
NOT HELD.

Needless to say the orders to sell that I placed two days ago were rejected because of the above.(market orders only being accepted..)

I don't really know what goes on in the options pits but i have my suspicions that it's not quite on the up and up. If I enter a market order to sell I am at their mercy as to what price I will receive. It seems to me that they play games like selling at the lows of the day and buying at the highs of the day. The quote yesterday (which was the first full day of the new policy stated above) was about $3300 for the high and $200 for the low which was way out of line of the past few days. The price of gold did not fluctuate enough to warrant $200 for the low yet somehow the floor brokers found it.....

I'm not willing to let these contracts go for a song and it seems the trading conditions have calmed to a level where this policy is not really needed but they want to have the luxury of selling me out for next to nothing.

Any insight from the many knowledgeable people here would be appreciated as to what I should do and also how the game on the floor really is.

BTW, I do collect coins and have physical also. (just in case...)

Thanks for your time. I really enjoy reading all of your posts here ! A wealth of information :-)
Tanglewild
Leigh
(10/02/1999; 06:12:52 MDT - Msg ID: 15175)
SteveH
I think you mean Alex Haley. What an interesting letter! Leroy is a lucky person to have a friend like you.
Hipplebeck
(10/02/1999; 06:53:33 MDT - Msg ID: 15176)
gold leasing
Good Morning
About a month ago I posted a question concerning gold lease agreements, namely, Do these entities who lease out gold require it to be paid back as gold when the lease is up, or do they accept payment in currency? No one knew exactly how these agreements work. I guess none of us has seen one of the lease agreements. It is a very important question. If indeed the gold has to be paid back as gold and even perhaps the percentage rate is required to be paid in gold, then as I postulated, the central banks are going to acquire gold out of these lease agreements.
Everyone on the forum keeps saying that the speculators borrow the gold, then sell it on the market, then buy treasuries etc. with it. Well what happens at the end of the lease? Let's say I borrowed gold on a one month lease, sold it, and bought something else with it. At the end of the month, do I settle up with the gold bank in cash? Do I rollover the lease, or do I buy that gold back on the open market to return it to the gold bank? It seems the only way to make money doing this is to pay back in currency unless the gold price continually goes down, in which case I could buy back the gold on the open market at the end of the month and return it to the gold bank.
In any case, the important question is: Do these entities who lease out gold require the pay back to be in gold or do they accept pay back in currency?
This one question is the determining factor in whether the central banks have been, in reality, selling gold in their leasing agreements or actually acquiring gold. If the payment is required to be paid back in gold, then all these leasing agreements are hanging over these traders and speculators until they return all that leased gold, plus interest. The central banks squeeze a bunch of gold out of the markets to put in their vaults and at the same time it becomes much more valuable. Could they have done this on purpose?
elevator guy
(10/02/1999; 06:54:47 MDT - Msg ID: 15177)
Psychology of the game
For years the shorts have had the market by the tail, and very few cryed "foul". (Except for this forum, and GATA, and maybe a couple of others)
Our lives continued, because there was nothing we could do about it.
Now that the market, due to a shift in the worlds currency paradigm, by the European Central Banks cutting the dollar loose to float like a dead fish, there has been a sea change of events, and the market has turned for us, we immediately have thoughts like:
It won't last.
Our side is still doomed.
There will be fresh gold somewhere to bail out the shorts, so they can maintain their strangle hold.
A few of us anxiously scour the net and the news wires, looking for signs of default and seizure. And what you look for, you will find.
I feel there is kind of a psychology of defeat in some of us, that won't let us ride the wave of success.
Its almost like someone saying, after they have been set free: "I don't deserve this, maybe I better let them beat me again, just to keep order in the universe- Gosh, look, they have whips and chains!" And while focusing on what "they" can do, we look not in the direction of freedom, just at the door.
Don't crumble.
Be brave.
A new day is dawning.
Gold is for free men.
ORO
(10/02/1999; 06:56:06 MDT - Msg ID: 15178)
A note to the Skeptic
The following is a condensed version of all the major issues that I have discussed so far regarding gold.

Gold short position.

Have no doubt, the gold short position is still intact, virtually unchanged from before the rally. The physical gold obligations are 8000 to 10000 tons, the pure paper gold (short) derivatives account for at least that amount once over (call options etc).
Sources:
Quoting gold bear Andy Smith, 6000 tons of CB gold were lent, 1500 from EU members. Actually, I believe he is referring to the combination of CB and semi-official institutions, including the Vatican, Saudi and Kuwaiti royals, etc..
An additional 2000-4000 tons were taken from private unallocated gold accounts.
The physical borrowing mechanism has two parts, the producer hedge/forward and the speculative borrower using the gold for financing or as a pure short. The gold producer hedge is only 3500 tons. The balance is speculative ammounting to 4500 to 6500 tons.
The pure paper positions are predominantly intended for directional speculation and the issue of naked calls hoping that they expire worthless and from spread trades.
Each borrowing operation generates two short positions as the bullion is lent to the bullion bank (BB) and re-lent to the final borrower, be it the producer or the speculator. The bullion hits the market as certificates or as straight physical gold, sold by the BB for the borrower. The BB may then sell the miner's contract for a third short. Both the BB and the borrower are short where the BB also has a long position, but if the miner's hedge is sold, the BB has a naked position.
In this way, at least two buyers are satisfied and perhaps three with the same one ounce.

Supply demand deficits:
The 500 ton annual supply deficit of the past 5 or more years, has been met by this mechanism, according to Veneroso's estimates. In addition to this, there is the Arab oil position. Over the last decade about 1500 tons were purchased per year in long term supply contracts. These are generated by the trade of short term oil futures for long term gold forwards of the mines (or speculators), while the gold was lent by the Arab oil party, and then repurchased by them. This gold never hit the market. Purely a closed door operation. When added up over the last 10 years, minus the supply delivered from these contracts to the Arab oil countries and the scrap recovery from Asian sales last year (say 1000 tons), we have just under 9500 tons of physical gold supplied to the buyers, 2/3 to the Arab oil buyers, the balance to the markets. Using the mechanism described above, at least just under 19000 tons were shorted.

Price short covering interaction.
Gold demand, though price sensitive in the East, is inversely related to the price in the West. Thus demand increases on the way down in price. On the way up, demand declines more slowly because of the jumping on of Western momentum player. Therefore, there is an assymetry favorable towards the long side. Furthermore, there is a tendency to return to sustainable production levels, rather than operation at 140% of design capacity through highgrading. Producers will also be wary of increasing investment in new production beyond the current depressed levels that are only sufficient to replace 60% of current production going into 2005. The retrenchment in production from last years' peak will ammount to a 5% to 10% drop if prices are stable and rising, or a quick 20 to 40% drop if prices rise well above $400 and stabilize there. It is the combination of these basics with the aggressiveness of short covering under duress that will shoot prices higher.
By my estimate of the price reaction to the short covering during the initial stages of the process, there would be a $2.4 (+/- $0.70) rise in price during short covering for every $1 lost during the shorting process. Since the shorting process dropped prices from over $400 in late 96 to the previous low level of $250, the gold price recovery as a result of this element alone should give rise to a $500 price. Longer term, the gold short position formed in the 95-96 period prior to the fall in price, will be added to this to raise the price further, perhaps contributing to an extra $100 gain. On top of this is the growth in demand and the assured loss of future supply from lack of investment and from cessation of fresh leasing. The result is unpredictable, but is surely to be quite robust. So a stable price level should be very significantly above $600 that would be caused by short covering alone. Doubling this figure would not be difficult in such a thinned market.

Dollar weakness.
The abysmal US economic performance of the last few years has brought the world a sea of dollars, currently the major export the US has ever produced (including the current value of all of WWII munitions "exports" to Dresden and the like). US manufacturing has withered, and we have turned into a nation of traders of the goods and money of others, plunderers of the weak, debtors to the strong. The borrowed bubble lent by Japan and Europe is being eliminated through repatriation. The foreign debt of poor and quickly re-emerging countries is being rapidly eliminated with each purchase at the neighborhood mall, and vulture capitalists exchanging debt for equity. Even quicker has been the elimination of $ denominated debt of the Asian countries by its the refinancing to Euros, SF and Yen. They will soon not need $ for debt settlement.
If oil countries start selling their oil in all currencies, or join the EU in using the Euro, there will be no reason left for anyone to keep $. They will not be percieved as a store of value any longer. The sea of debt of the US will look for anything American to buy, from alfalfa to zeolites. BMW, Mercedes, Toyota, Honda, Toshiba, Sony and others built plants here in the expectation of a decline in $ that would make a Ford Taurus come closer in price to a Hyundai Elantra. Import -export parity probably stands at 40 - 60 Yen to the dollar and a 60%-70% devaluation relative even to the Yuan.
The promise of the Fed to monetize all debt in order to keep the banking system liquid will end up with the most massive money printing operation since Weimar and Brazil. If only this were to occur, the $ would fall into an abyss as did the Ruble. If not, the banking system will implode as Japanese, Swiss and EU creditors leave the markets and flight capital returns to its home. The latter case would result in a rapid drop in the $ accompanied by massive collapse. Just that the bottom would not be as low.

Military roles
The Anglo world's moralistic and humanistic intervention is broadly viewed as destabilizing and dangerous. It forces all nations to ask under what circumstances would their borders be under assault and whether they, or indeed the US and its Anglo allies would come short upon this "humanistic" examination. Malaysia's Mahatir Muhamed, though I abhor him and his political system, has stated the issue outright. It is a parsimonious missionary force to bring moral and political colonialism back into independent countries if they just don't happen to have atomic weapons.
China, Russia, Pakistan, and India will quickly assist anybody with a flag and money in putting together their own little MAD for self protection from the US. The world will be a much less stable place and the US high tech forces will be useless in these conditions. The US would face the fact that in its zeal to protect the weak, it has become a pariah nation and a destructive force serving its own agendas in the guise of phillanthropy and peace.

The current system is on its last legs. No matter how terrible the retribution for dismantling the $ reserve system and its mirror of the US/Anglo military "police" actions, the alternatives are worse for both the US and the rest of the world.
nugget101
(10/02/1999; 07:18:38 MDT - Msg ID: 15179)
Granny re: Confiscation by Gov
If desperate enough or if it is important enough, gov will take whatever measures necessary to get what some beaurecrat wants without thought to legalities.
Because your gold isn't registered in a database, I wouldn't be too worried about them knocking on your door. They might, and ASK... but they would probably be bluffing. I won't be surprised if we see a patriotic appeal for gold redemption (ala Korea) with a veiled threat at the end but the logistics are too great in my opinion.
Now guns are a different matter..... as is any extra food that you have "hoarded" (quantity decided arbitrarily by thugs).
nugget101
(10/02/1999; 07:39:02 MDT - Msg ID: 15180)
Intaglio vs Offset and Gary North msg 15123
Cut this guy some slack. He's not a printer nor would say he is an expert in that field. I would expect he means that the quality of the printing will be noticably poorer and therefore apparent to even the dimmest sheeple. I would expect that there wouldn't be enough paper stock available and they would have to use something entirely different. Maybe something like military script or food stamps. That alone would kill confidence. Forgery is easier and this money would most likely only be able to be used domestically.
Bonedaddy
(10/02/1999; 07:44:23 MDT - Msg ID: 15181)
Granny, what big teeth you have! :)
Arsenal of weapons? Buried gold? As Yosemite Sam would say, "thats my kinda gal". Leigh is right, call CPM and talk to one of the dealers. (I'll put in a plug for George now. I have been ordering my stash from him since 1996.) They can advise on availability and advantages of the different type of PHYSICAL gold. Of course a lady of your caliber (pun intnded) would only buy the physical and take delivery. You don't have to be concerned about the long delivery times when ordering from CPM. They're honest. By the way I've got three "quarter horses with chrome" standing in the corral and another on order for March Delivery. Tobianos one and all.
RossL
(10/02/1999; 08:09:05 MDT - Msg ID: 15182)
Is time running out? Or has it already run out?
PH in LA

I've been wrong before, and I'm sure I'll be proven wrong again! There are local coin dealers open Saturday with gold for sale... I think I will buy some. Preserving wealth is more important than making trading gains measured in dollars.
If the "price of gold" now goes down in terms of dollars it will signal deflation. Deflation would bring defaults in the capital markets.

We absolutely have covered this many times before, but I now have the "gut feeling" that the time is here. Another short-covering rally could start ant any time.

Hipplebeck

I think your summary of gold leasing is pretty close, but you need to add the risk of default into the picture. The central banks wont be accumulating gold if the borrowers default.
Paying back the principle + interest is not a problem if the borrower is a gold miner who wants to finance production. If the borrower is a speculator, then he could be squeezed.
Bonedaddy
(10/02/1999; 08:28:04 MDT - Msg ID: 15183)
To: Elevator, Cavan, Granny, Leigh, and all..
About gold ownership. Why try to get rich? (For heavens sake, we're already rich!) Just try not to suffer as much loss when the Paper Palace comes down. The greatest obstacle for all of us to overcome will be the LUST TO BOAST about being right after all this time. I couldn't care less what my stock buying aquaintences think. What ever we do, we must do in the UTMOST PRIVACY. When it all comes unwound, the "victims" will look for scapegoats. If we have money and most people don't, it must have been our fault. The media establishment will blame gold, just as they blame firearms now. Because both are necessities for personal freedom. If you ever give up either, you may still be breathing, but you're just not living anymore. By refusing to hold paper instead of gold, we are throwing the British tea in the harbor. In their own time, they will come for us. Do not be deluded about that fact. If you don't have the mind set to stand your ground, it would be better to get out of street right now. You see, in a world filled with both good and evil, there ain't no neutral ground. You've got to serve one or the other. Sittin' the fence will get you shot from either side.
Bonedaddy
(10/02/1999; 08:28:17 MDT - Msg ID: 15184)
To: Elevator, Cavan, Granny, Leigh, and all..
About gold ownership. Why try to get rich? (For heavens sake, we're already rich!) Just try not to suffer as much loss when the Paper Palace comes down. The greatest obstacle for all of us to overcome will be the LUST TO BOAST about being right after all this time. I couldn't care less what my stock buying aquaintences think. What ever we do, we must do in the UTMOST PRIVACY. When it all comes unwound, the "victims" will look for scapegoats. If we have money and most people don't, it must have been our fault. The media establishment will blame gold, just as they blame firearms now. Because both are necessities for personal freedom. If you ever give up either, you may still be breathing, but you're just not living anymore. By refusing to hold paper instead of gold, we are throwing the British tea in the harbor. In their own time, they will come for us. Do not be deluded about that fact. If you don't have the mind set to stand your ground, it would be better to get out of street right now. You see, in a world filled with both good and evil, there ain't no neutral ground. You've got to serve one or the other. Sittin' the fence will get you shot from either side.
Bonedaddy
(10/02/1999; 08:28:37 MDT - Msg ID: 15185)
To: Elevator, Cavan, Granny, Leigh, and all..
About gold ownership. Why try to get rich? (For heavens sake, we're already rich!) Just try not to suffer as much loss when the Paper Palace comes down. The greatest obstacle for all of us to overcome will be the LUST TO BOAST about being right after all this time. I couldn't care less what my stock buying aquaintences think. What ever we do, we must do in the UTMOST PRIVACY. When it all comes unwound, the "victims" will look for scapegoats. If we have money and most people don't, it must have been our fault. The media establishment will blame gold, just as they blame firearms now. Because both are necessities for personal freedom. If you ever give up either, you may still be breathing, but you're just not living anymore. By refusing to hold paper instead of gold, we are throwing the British tea in the harbor. In their own time, they will come for us. Do not be deluded about that fact. If you don't have the mind set to stand your ground, it would be better to get out of street right now. You see, in a world filled with both good and evil, there ain't no neutral ground. You've got to serve one or the other. Sittin' the fence will get you shot from either side.
elevator guy
(10/02/1999; 08:30:22 MDT - Msg ID: 15186)
My post of 10-1, id# 15166
Sorry if my first sentence seemed aimed at you, Marius. I was talking to that little man of wisdom and reason, who I've been ignoring, as he taps me on the shoulder and says:"Why don't you buy some REAL gold?"

The second part of that post was kind of a continuation of your discussion about market orders, and limit orders.

From reading a few of the other posts, it appears that we are subject to the whim of the floor traders now!
RossL
(10/02/1999; 08:40:20 MDT - Msg ID: 15187)
Hipplebeck
It is my understanding that principle + interest on gold leases are to be paid back in gold.
nickel62
(10/02/1999; 09:29:43 MDT - Msg ID: 15188)
Smaller gold mining companies that are currently uneconomic
It seems to me that now might be the time to resurect some of the investment ideas of 1995 and 1996 when the small gold stocks were flying high and every investment banker was fighting over raising financing for every moose pasture that they could find in most of the western and eastern world. As the apparent commodity appreciation continues the dollar decline and the relative weakness in the stock and bond markets will unleash a healthy amount of investment capital looking for a home. To say nothing of an army of investment bankers willing to finance anything that moves. Many of the scams of that last market are gone and thank god. But there were some actual viable deposits that faded into obscurity when the economics changed so radically and can now be bought for a song. This forum is repleat with individuals who have experience in this area and now is the time to be sharing the information. Too often after the move has gone too far along all you hear are already invested owners talking their personal book,in a rather hopefull wish that it will somehow make their own stocks go higher. Many of these deposits where highly valued in the marketplace and some of them still have vialbel gold mining and gold production comapanies that trade on exchanges. These woill be the first to raise new capital and thereby the stock price when the investment banking cycle starts again in this sector.CARPE DEIM
granny
(10/02/1999; 10:35:21 MDT - Msg ID: 15189)
(No Subject)
Thanks all. I really appreciate you guys(includes gals) and all that I'm learning from ya.

Suppose one runs out today, to a few local pawn shops, to check on coins and maybe buy. Any coins in particular one should focus on? Any ideas about how much over spot one should stay under for newly minted coins and/or junk, silver/gold (excuse my PM grammer but I'm still in first grade :D )? BTW (by the way) one doesn't feel real comfortable purchasing too much "local" especially with potential hardships approaching in about 90 days.

Granny does carry a big stick, literally. (A branch fell off a tree this week, firmly lodging in the wipers across the hood of Big Red, granny's F250 diesel.)Granny has gotten many a good chuckle especially when someone "gets it".
Peter Asher
(10/02/1999; 10:39:55 MDT - Msg ID: 15190)
Uh,Steve
That's Alex Haley, not Aldous Huxley. The latter was well known for a book called "The doors to perception" along with many novels, one of which was "Island."
Peter Asher
(10/02/1999; 10:48:41 MDT - Msg ID: 15191)
Tanglewild
Excercise the Gold option by calling in the underlying future, You are close to having enough equity to meet the margin requirement and you will have a month longer on the future.

The Silver call has plenty of time to let more events unfold.
PH in LA
(10/02/1999; 10:55:20 MDT - Msg ID: 15192)
Aldous Huxley
Peter Asher:

Didn't he also write the wildly futuristic novel "1984"?

Leigh
(10/02/1999; 11:02:53 MDT - Msg ID: 15193)
PH in La
George Orwell. Aldous Huxley (1894-1963) wrote "Brave New World." He was the grandson of the famous sociologist Thomas Henry Huxley and the brother of the noted biologist Sir Julian Huxley. (We have a World Book Encyclopedia next to the computer desk!)
Leigh
(10/02/1999; 11:08:20 MDT - Msg ID: 15194)
MK and Town Crier
How was "Three Kings?" Is it worth going to see? Did you see a lot of gold?
Peter Asher
(10/02/1999; 11:15:17 MDT - Msg ID: 15195)
PH
It was the "Other one" , "Brave New World"
Leigh
(10/02/1999; 11:57:14 MDT - Msg ID: 15196)
granny
Granny, don't feel that you have to buy your coins locally, unless there's a merchant that you like and trust. There are lots of dealers on the Internet, or you can go to your nearest big city. Don't be afraid to have the coins shipped. I was at first (sending gold by U.S. MAIL? Are you crazy????), but it's actually very safe. There's a long paper trail the Postal employees have to follow, and if anyone is caught stealing they are fired. The prices are very competitive. I like to buy bullion coins, which are new, very pretty, and often 0.999 pure. They're also a better bet than purchasing coins you aren't familiar with, especially if you aren't quite sure of the dealer.
turbohawg
(10/02/1999; 12:05:21 MDT - Msg ID: 15197)
Tough Talk From The European Central Bank
http://www.prudentbear.com/markcomm/markcomm.htmThe latest commentary from the Prudent Bear, David Tice ...

>Our sense is that developments in Europe could now prove most significant. It certainly appears to us that the European Central Bank (ECB) is preparing the markets for a rate increase at its meeting next Thursday, and they may decide to act aggressively. A strong tone of independence now emanates from European officials. With tough talk focused on rising inflationary pressures, ECB President Wim Duisenberg and Chief Economist Otmar Issing provide quite a contrast to dovish pronouncements from our central bankers. While European central bankers are becoming noticeably nervous, our Federal Reserve apparently could not be happier.

...

All the same, with the continuation of such banter, we would be very surprised if the Federal Reserve increases interest rates next Tuesday and we sense the stock market anticipating no action by the Fed. We certainly now assume that the Fed is going to let this bubble run its course, instead of acting responsibly. However, if the Europeans do raise rates next week, this could prove a significant event for the US bubble. With the dollar acutely vulnerable right now, higher European interest rates could quickly translate into a weaker dollar that would likely put additional pressure on US interest rates and stock prices. In this regard, we will repeat a point we made within Wednesday's rambling commentary: "the Fed is losing control." <

got toilet paper ??

turbohawg
(10/02/1999; 12:11:50 MDT - Msg ID: 15198)
National ID killed by House
http://www.house.gov/paul/press/press99/pr100199.htm>WASHINGTON, DC -- In approving the House-Senate compromise on the Transportation Appropriations legislation Friday, the House of Representatives killed an ill-conceived plan that would have prevented Americans from getting new jobs, boarding airplanes or exercising their Second Amendment rights without holding a National ID card. The National ID was slated to go into effect Oct. 1, 2000.<

Which means the totalitarians will now try Plan B.
granny
(10/02/1999; 12:16:27 MDT - Msg ID: 15199)
Leigh..local purchase
Thanks Leigh. I just recently made two "online" purchases of recently minted bullion. I have received one shipment but the other is "delayed". Reason told has something to do with minting backlog or such. I'm unsure if I should be uneasy about this or if this is "normal". In both cases the "dealers" are either well known, recommended or highly visible and in both cases I have spoken with the proprietor, personally. I am happy with the arrived purchase and when second arrives I'm certain(hope) I'll say the same. AND they are really pretty and pristine. Had to get the dissecting microscope out, though, to really appreciate the 1/10 oz. Hubby was shocked that so much "worth" could be contained in such a small package! Easy to hide/bury though. He's more used to "vintage" silver.

I thought I'd venture down to the local shops to see if I could find any bargains. Last time I was in the shops I wasn't as prepared as I am now (although a little bit of knowledge CAN be dangerous, I realize). Appreciate your assistance. Be well.
Leigh
(10/02/1999; 12:19:42 MDT - Msg ID: 15200)
Hooray!!
Thank you, God, and thank you, Ron Paul! Mr. Paul is a diligent advocate for our freedom, and we owe him A LOT!!!
SteveH
(10/02/1999; 12:24:18 MDT - Msg ID: 15201)
Peter and Leign
It was late/early. Thanks.
Chicken man
(10/02/1999; 12:45:38 MDT - Msg ID: 15202)
ORO - Trading of the Future or Future of Trading...?
First of all ,thanks for that post this A.M......thank you for your "time" you spent putting the "pieces of the puzzle" together...!

This is a post from marketforum.com (it is mainly a forum that chats soybeans, corn, hogs, cattle etc).... the main "buzz" now is gold calls and the bad/no fills they have been receiving from the COMEX...here is the post:











" Nymex/Comex Follies Herald End of Open Outcry???

Posted By: John J. Lothian
Saturday, 2 October 1999, at 11:53 a.m.

With the follies at the Nymex/Comex this week, the inking of the Eurex/CBOT deal and the
announcement by the MGE they will enter into an agreement with a company called ePit to develop an
electronic commodity exchange, could this week have been the turning point for the end of open outcry
trading in the U.S. as we know it.

The Nymex/Comex was ill-prepared for the huge explosion of order volume they saw this week. They
seemingly have had their heads in the sand as the Internet revolution and technological advancements
have brought new demands upon the efficiency of their markets.

They have seemingly ignored the success of the E-mini S&P contract at the CME, which not only
helped ease the flow of customer paper into and out of the big S&P 500 pit, but has attracted masses
of new traders into the futures markets. For example, why has the Nymex/Comex not started side by
side trading with their ACCESS electronic trading system during the day, or better offered a smaller
size contract on it running side by side with the big pit traded contracts. I believe this approach has
added liquidity to the S&Ps, not stolen volume from them. While a Nymex/Comex approach would be
somewhat more similar to the un-robust CBOT Project A offerings during the day, it would at least
give the exchange another avenue to handle explosions of volume. Open ACCESS up to the FIX API
the CME is introducing (if possible?) and suddenly the Nymex/Comex has opened their markets to
electronic futures traders around the world in a meaningful way.

Electronic traders do already have access to the Nymex/Comex, but the efficiency ends at the point
where the human brokers can not handle the volume of order flow. The Nymex/Comex, to my
knowledge, has done nothing to technologically enhance the open outcry efficiency. At the CBOT
there are about 100 Electronic Clerk (EC) terminals which aid brokers and clerks in managing the
customer orders, easing execution, and speeding reporting of fills. In fact, my CBOT floor manager this
week told me he has an EC pilot program in the Corn options, where this terminal is receiving only
straight buy and sell corn option market orders. That is a first, to my knowledge. At the CME, they
are behind in their unofficial goal to put 200 CUBS2 terminals in by the end of 1999. However, I can
now route orders to 5 different CUBS2 terminals on the CME floor and the list is growing every
month.

In the old days the flow of orders was limited to the number of phone clerks on the trading floor and
the speed they could take orders. It was also limited by the number of floor runners and their ability to
get orders into the brokers quickly and return to the desk for more orders. Sometimes runners would
stack up getting into a particular busy broker, thus the flow of orders was regulated by this physical
limitation.

With Internet order routing systems routing orders to New York, the flow of orders to the trading floor
is a function of the number and speed of order printers on the trading floors. Those printers and
computer systems can quickly send hundreds of orders to the trading floor within minutes. From there
though the Nymex/Comex did not and does not have a technological tool to help manage this order
flow. They could throw more human beings at the pits, pull clerks and runners off of other pits and
desks. I am sure there was plenty of this people shuffling going on at the Nymex/Comex this week, but
during the largest volumes it could not meet the challenge.

Clearly to me, the Nymex/Comex needs to technologically advance the efficiency of their open outcry
trading, or their black eye this week will speed the demise of open outcry trading at all U.S. exchanges.
The Nymex/Comex failure to efficiently perform this week for the retail traders presents an opening
for a would be predatory exchange or e-alliance. Once an existing or new exchange shows it can steal
the business of an open outcry market here in the U.S., momentum will be increasing for more markets
to switch to electronic trading or have volume stolen from existing markets.

Here is my suggestions for the Nymex/Comex:

1) Enhance open outcry trading by opening the exchange to the entrance of Electronic Clerk or CUBS2
terminals from the CBOT and CME to connect them to existing TOPS networking in place. 2) Create a
* sized gold and silver contract and trade them on ACCESS 23 * hours during the trading week. 3) Give
away free quotes for your ACCESS contracts. 4) Develop an open API for ACCESS to open the
system up to Internet order routing systems. 5) Promote the heck out of these contracts on the
Internet. 6) If you can't do these things by yourself in a timely manner, think about merging with
another exchange that has the technological ability already. It is not enough today just to transform
yourself into a for-profit corporation, you must have the strategic partners, capital and mass to
effectively compete. 7) At least forge an alliance with another exchange to get access to better
technology if you can't bring the necessary products to market in a timely fashion. It is better to make
some new alliances than have competitors develop competing products you can't match.

The Nymex/Comex must understand they don't exist in a vacuum. The gold and silver markets are
nearly as old as human civilization. Every country uses petroleum products. Today more of the
world's population has inexpensive access to futures prices than ever before in history, via free and
fee-based Internet sites and services. The traders who have flocked to the stock index trading in then
last 18 + years and are now trading via the Internet or through technologically equipped brokers are
clearly familiar with the traditional gold and silver markets. All it took to attract some attention to the
gold and silver market was the first substantial bull move in 13 years on Monday.

I will admit that the almost continuous bear market in gold for the last 13 years left a lot of people
with low expectations for this market. On Tuesday driving to the train I heard some analyst/trader
being quoted on the radio as saying the market action on Monday suggested that by the end of the year
Gold could be trading at $300 per ounce. It actually took only 26 minutes of trading on Tuesday until
the December contract traded there. Yowza!

The world has clearly changed because of the technological advancements and accompanying cost
barrier reductions. Millions of people can and have visited futures exchanges cyber visitor galleries via
the Internet. The huge spikes in the E-mini S&P on Fed announcements and government reports should
be a sign of the power of the global public's interest in our markets and a warning about the
inefficiency of the physical limitations of open outcry trading. If this kind of interest in the e-mini S&P
continually has this type of effect during key moments, how can un-enhanced open outcry trading
compete during similar surges in trading interest? I don't think it can.

Lets hope the Nymex/Comex can put aside traditional territorial political concerns and enhances their
open outcry trading before their follies turn into a trend and speed the end of open outcry trading in
the U.S. as we know it. I acknowledge the inevitability of the dominance of electronic trading, but am
hoping for a smooth transition rather than a disruptive one.

Regards,

John J. Lothian

Disclosure: Futures trading involves financial risk, lots of it!

Disclosure: John J. Lothian is the President of the Electronic Trading Division of The Price Futures
Group, Inc., an Introducing Broker. "

The poster has some very good points....and a vision where the future of trading is headed.....it is going into the cyber world because it HAS to...! way too much volume to handle by the "open outcry" method....
One thing I have been wondering about is how this lease scam will end....all the paper just can't be covered unless it is "settled" in paper.....if "24hr world trading" via the WWW (World Wide WAIT) there could not be a "settlement point" to demand delivery.... would you be so kind to share what you "see"....?
thx
PH in LA
(10/02/1999; 12:50:07 MDT - Msg ID: 15203)
Re: Option settlement (The more things change...)
Date: Sat Apr 18 1998 22:31
LIBERTY__A (Gold mining stocks and their golden path!) ID#263379:
Copyright � 1998 LIBERTY__A/Kitco Inc. All rights reserved


...As much as I would like to follow your specific recommendations of owning physical gold now, I cannot at this time for reasons stated below. Others that post here at KITCO are gold bugs of the western world belief ( as you labeled) that are staged, and ready for that big gold move as you have postulated. Unfortunately, most with gold mining stocks in possession that maintain a present day formidable loss that at some point will be regained.

Now, I'm sure a large majority here can relate to this position and question.

My plan is one that switches from my gold mining stocks ( before they burn ) to the physical, for a hold of a lifetime, as you have gracefully stated.

I acknowledge a possible LOCK in the physical gold market at, or about $1,000.

1 ) Sell 1/2 position of the mining stocks @ $650 and buy physical gold. ( coins or bars )
2 ) Sell the remaining 1/2 position @ $750 and complete the physical gold purchase.

This would assure a possible great % stock profit and more purchasing power to buy the physical. How do you envision gold availability at this level?

Mr. Another, can you be specific. Is this plan a viable one, and what caviats to you envison? Please advise this writer and your audience.

Best regards, and thank you.....



Date: Sun Apr 19 1998 00:08
ANOTHER (THOUGHTS!) ID#60253:
Copyright � 1998 ANOTHER/Kitco Inc. All rights reserved

Mr. Liberty_A,
Sir, the plan is good, the question is, "how good is your broker"? Noone can know how this world change will come about, in specifics. The gold market may lock at $400? Or $4,000! When the
public perception does come to understand, many entities I know of will not be buying "at the market" as your broker will. These ones, they will be "above the market", "well above the market"!
Will you bid $1,000 when your broker screen shows $475? I myself, as a country will be "there"! You sir, will stand well behind most in line.

I tell my children, as you may tell yours: "when a thousand hungry lions fight for one scrap of food, small dogs should hide with what's in their belly"

Thank You
Angel
(10/02/1999; 12:52:26 MDT - Msg ID: 15204)
Gold by US Mail
I had to go to the Post office to pick up my coins that came via registered mail. While I was signing all the forms the Postmaster plunked down two boxes aprox. 6 inches long by 4 inches wide stating "these little suckers are heavy...what ya got in there gold bullion?".....if only he'd known.

Aldous Huxley was also a close friend of the infamous Timothy Leary. Opps, I guess that tells you how old I am.

Goldfly...how about a new song entitled "The Night They Drove The Gold Shorts Down". Just a suggestion
granny
(10/02/1999; 12:54:57 MDT - Msg ID: 15205)
Just a little story.
Just a short sweet story.

Recently my 84 yr. old father had successful, mutiple bypass surgery (it didn't go all that smoothly for about a year but he's doing much better and we still have him around to love and enjoy.)

Just prior to taking him to hospital, for scheduled surgery, he insisted that we empty the contents of his safety deposit box to find his one and only 1800's gold coin. The BAGS of coins were quite shocking to us as we remembered, from childhood, his occasionally bringing out his books of coin collection so carefully arranged and protected. He sold off most of his silver in the 70's and made a nice profit but continued to collect silver, unbeknownst to us, by throwing coins, any silver coin, in a bag, then bags, and then more bags (they are heavy). It took two of us to take the box out of its drawer after taking seve`;�:':--pGET /business/cpm/cpmforum/archives/3019999/default.html HTTP/1.0
Host: www.usagold.com
Accept: */*, q
Tomcat
(10/02/1999; 13:04:57 MDT - Msg ID: 15206)
ORO: The half life of the dollar

Your last post to Skeptic was a great summary. Times are going to change very fast from here on out. Since we are entering a stage where inflation could be a very big issue I have a few questions about it.

In physics there is the concept of a half life for radioactive material. It is the time it takes for the radioactivite intensity of the material to decrease to one half of its original intensity.

In any inflationary environment the dollar would also have a half life for its value: the time it took for the dollar to be worth fifty cents.

Someone asked me if I could predict how fast the dollar would decay if the US did not devalue but monetized the debt? I thought about it and was clueless due to the fact that there are so many varibles like repatriazation.

Then I said to myself, there must be upper(faster) and lower(slower) bounds to the problem. Clearly on the slower side you could say its at about 7% inflation which would give a half life of about 10 years.

The difficultly for me is estimating the fastest half life. If the Fed kept pumping repos and buying treasuries and we had repatriaization at a super fast rate, what would be the fasted time it would take to get a 50% decrease in the dollar's buying power within the US? Could it happen in six months? It would seem that for us to experience rapid inflation in the US, those repatriated dollars would have to get into the US and actually be used purchase goods and competed with US dollars on mainstreet; and that take a bit of time. No?

Also, it the US dollar was devalued by fifty percent, how long would it take before the dollar dropped by 50% on main street?

Could you provide a bit of input here. I am not expecting a direct preciction. However, an orientation of how to look at the half life problem and the what the key variables are would be very helpful.
Peter Asher
(10/02/1999; 13:36:12 MDT - Msg ID: 15207)
Angel
Angel

If memory serves, you wouldn't have to change much else for a great Gold celebration song. If I can find my Baez Albums tonight, I'll take a crack at it.

Where were you in the summer of '66? I believe that was the year that Leary did the "Turn on, "Tune in, "Drop out" seminar at the Fillmore East with incense, candles and as background music, the Massa Luba.

About song publishing, I have music and lyrics to a future fiction folk-song about Miners of all ores. It's also a 'treatment' for a potential screenplay, so I haven't gone public with it as yet. Interested?

Peter@peterasher.com
Cavan Man
(10/02/1999; 14:00:24 MDT - Msg ID: 15208)
granny
Hello. I would not buy from local coin shops unless the size of your purchase warrants. I would purchase pre-'33/34 European bullion coins and newly minted 1 OZ. Austrian Philharmonics. I would not buy US Eagles or gold coins denominated by any other country with strong ties to the US dollar. The European bullion coins will have some numismatic value because of dates/condition. Since the troy weight is approximately a 1/4 OZ. or less, they can also be used as the "money" they once were if necessary. The Austrian coins have the highest monetary value (2000 Schillings) about $US180 last time I looked and they are closely tied to the Euro block. Both products will be a store of wealth. The Philharmonics could be considered an "investment" if your diversification strategy permits. MK can sell you all you need.
Cavan Man
(10/02/1999; 14:02:27 MDT - Msg ID: 15209)
Bonedaddy
Your many contributions are, right on!
Cavan Man
(10/02/1999; 14:07:13 MDT - Msg ID: 15210)
@ ORO
I really enjoyed your last two posts here! Thank you.

Since I didn't have to wade through so much quantitative analysis that is difficult for me to understand (my education deficit disorder problem), I now have a better understanding of your overall perspective. Also, I now know that you are also a regular midwestern guy ala Spock (his last enagagement with the dilithium crystals) when he said to Kirk; "I have been and always will be your friend". Know what I mean Vern?
Cavan Man
(10/02/1999; 14:25:24 MDT - Msg ID: 15211)
Reality Check
RE: Gloom and Doomy Forecasts

My wife has an Aunt I have known for about six years. Her Aunt recently spent a week with us. Sophia is a Greek immigrant who came to this country in 1953 with many other ethnic Greeks living in an area of Albania bordering Epiros (northern Greece).

During WWII, it was uncertain with the continental upheaval which way things would turn out for these people; would they be governed by Nazi's, Communist's or, the Royalist's? There were six villages in this particular area and for the most part, the people who lived there including Sophia and her family stayed put until they could be certain which side in the conflagration would win out above the others. In 1943, IN THE MIDDLE OF WWII, it became clear that a very bad man who they still discuss Hoxa (pronounced HOJA) was taking control of the country. He was a murderer and a communist. In 1943, Sophia's father, a Greek grocer in his Albanian village, moved alone to Greece and opened a restaurant; IN THE MIDDLE OF WWII! Later, Sophia and the rest of his family reunited (about three years or so) in Greece and they were lucky enough to share a two room bunkhouse with another family where they cooked on a camping stove for eight years. Sophia had a friend, Aristea who slept with her in the same bed for eight years. While Sophia's financial fortunes did not turn out as well as many others from Sopiki (one of the six villages), her brother for one came to this country in 1956 unable to speak a word of English, with no money, took a job as a waiter, and parlayed his hard work into a donut shop and now owns resort property in Florida; truly a self made man; not the Bill Gates variety. Aristea's husband has a similar story only his fortune was built upon real estate as well as hard work.

I am sure we can all tell a story like this. The point is, as Dean Acheson's father was fond of saying to his son, "buck up lad". Here in the US, win, lose or draw, we are the luckiest civilization in the history of the modern or ancient world. Even if worse comes to worse, we sure do have alot to fall back upon.

CoBra(too)
(10/02/1999; 14:29:13 MDT - Msg ID: 15212)
Humble retort to 2 days of great posts -
Hello - Leigh - you've made my day by looking over to the other Midas site - thanks for signing up and I'm not the only one giving Bill Murphy a lot of credit in expressing his views, without fear of repercussion to some of the big guns in your and anybody else's government. -
And that, on the other hand is part of my belief, that the dollarization, globalization, (blatant) manipulation et al of all and every market -the gold market in particular - will not just surrender peacefullly in a way, where a new regimen (sounder?) can take its place right away. No, I feel, like many others here (A,FOA, ORO et al) that the final battle in an ongoing war against the hegemony of the paperization of the world in terms of US currency is coming under attack- a world which is starting to become weary of debts being seviced by more debts, or IOU's and a world, which is and has been financing the bubble economy of the US for too long -fearing the collapse of the consumer of the last resort and, of course the paper debt it (Asia & EU) still hasn't reptriated.
EC and ECB's gold sale curb was a more than pleasant, though unexpectedly harsh (in wording) surprise at this, hinting on very grave disequilibriums - probably because of the lenient posture towards derivative trading in the US/UK banking community, spelling major upheavals akin to systemic risks in todays monetary (or better $-) system - finally identified as grandest scale scam casino.
This is not free trade, nor is it capitalism, no it isn't even casino capitalism - it is pure gambling - made possible by the worlds largest cash pools and banks leveraging the gamblers up to their hilts - and not caring a damn about their risk/reward ratio anymore, which their doomed shareholders will remind them in time. The licence to create (il-)legal tender IOU's, was never supposed to be the licence to use this swindle for their own benefit.
Since I'm getting carried away, I would like to conclude - If they have gotten away with this scam sofar, it will be pretty tough to fight them on their own turf - and it may take some time!
Still, goldhearts, our time has just begun and wer'e looking ahead to a prolonged bull market for gold - and I would like to add, while A/FOA's message is clear and understood, don't expect the opposition to surrender that easy.

Thank you CB2
Goldspoon
(10/02/1999; 14:36:24 MDT - Msg ID: 15213)
Next weeks and next Months Headlines.....TODAY!!
Next week:
The horse with no name rises from the dead, after being shot last week and begins to check out! The other horses stand around for awhile from shock and amazement then begin to follow.

Next Month: From Goldspoon's bones.... Y2K fears are in the background as more imeadiate concerns grip the world.. the natural and manmade disasters increase in number and the time between each event grows ever shorter....Disease and illness also begin to play a role...The urge to Hoard becomes strong....
(Sell insurance company stocks as the come under increasing pressure).....as if the others wouldn't.....
koan
(10/02/1999; 14:42:29 MDT - Msg ID: 15214)
Aldous Huxley - and gold
I don't know how you wondered onto that subject, but the Huxley family is/was? one of the great intellectual families over the last 150 years. Sir Julian Huxley is famous for his great defense of Charles Darwin. I am very curious about Mondays action on the PM's. The stage seems to be set for a rise with inflation up and hedging down. But I am worried about Kaplan's bearish comments and statistics. The variable which could make the difference on the upsdide would be new buyer's which is almost impossible to predict and would counter act Kaplans stats. Over the longer term I am more bullish. Kaiser is real bullish. He thinks this is the $800 move. Sure hope he is right as I can then do my trading fome Bora, Bora. Peter, Aldous Huxley is famous for Brave New World - you and I and a few others are probably the only one's who ever read Door's of Perception ( I thought a very good treatise). lol
schippi
(10/02/1999; 14:43:20 MDT - Msg ID: 15215)
To ALL Gold Bears
Regression analysis of all 39 Fidelity Select sectors
which collectively act as a proxy for the market, show:
Precious Metals (FDPMX) and Select Gold ( FSAGX)
to be in First and Second place on the 30 day regression table.
Also FDPMX is First on the 60 day table and FSAGX is Third.

My suggestion to all Gold Bears including S.J. Kaplan is
to do the math!
Marius
(10/02/1999; 14:47:33 MDT - Msg ID: 15216)
It's a fill! (Unless...)
Elevator Guy: no offense taken! I'm in much the same position as you. For a variety of reasons, options trading has been "my thing" for the past year and a half. I do want to get some of the profits into less risky vehicles, so physical and/or stocks will get a fair hearing from me.

Koan, RossL, Peter Asher et al: The COMEX/broker tale keeps getting more interesting. The recent article posted here about NYMEX/COMEX being technologically backward helps explain a lot. But I get ahead of myself.

Got a call from my broker this PM, indicating a "preliminary
fill" on my market order to sell Feb 00 290 calls. ACCORDING TO COMEX I can't consider this a completed fill (ie, trade with the money) until it is confirmed. The broker said it is theoretically possible for the price to be adjusted, or the trade to be undone. They have not had it happen to their traders yet, but know of others who weren't so lucky. So, until I hear back (hopefully on Monday) it's in the bag...unless it isn't! These guys have done very well for me for the past year and a half, which is one reason I didn't consider on-line trading sooner. I find some of what they did in this interval suspect, but I'm not saying or doing anything about it until the profits from everything (still have June 00 290's) are really in hand!

FYI: I bought the calls in July at 2.8, & they were supposedly liquidated at 23. If I recall my math accurately, that's about 721%.

Best of luck to all, & hold on. This ride's just getting started!
Peter Asher
(10/02/1999; 14:51:35 MDT - Msg ID: 15217)
Angel
Original lyrics to follow:
---
The Bank of England is my name, and I served my master's gain
Till Duisenberg's cavalry came and tore up the carry game
In September of '99, the shorts were hungry and on the line.
To the twenty first, the POG still fell, it's a ti-me I remember oh so well.

** Chorus
The Night They Drove the Gold Shorts Down, and all the phones were ringing,
The Night They Drove the Gold Shorts Down, and all the Forum was Cheering. They went La, La Yad-de-dah---- ETC.

**
Back with my wife in Tennessee, when one day she came to me.
Virgil, quick, come and see, There goes the P-O-G.
Now I don't have to be choppin' wood, and I don't care if the Fiat's no good.
Ya take what you need and you leave the rest, but they should ne-ver taken the ve-ry best.

**
Chorus
**
Like my father before me, I will work for Gold.
Like the Gold-hearts, who never sold.
Like Another, so proud and brave, will put the Yankee bankers in their grave.
I swear by the Mine beneath my feet, you can't ra-ise the dollar when it's in defeat!

**
Chorus
Peter Asher
(10/02/1999; 14:56:44 MDT - Msg ID: 15218)
Angle, Goldfly
thanks to the incredible Internet, Robin was able to get the lyrics in minutes. Here they are.

:THE NIGHT THEY DROVE OLD DIXIE DOWN}
{st:The Band}

[C] [Am] Virgil [C/G]Caine is the name, and I serve[F]d on th[F/E]e
Danvill[Dm]e train,
[Am] 'Til Stoneman'[C/G]s Calvery came an[F]d tore up th[F/E]e
tracks[Dm] again.
[Am/E] In the winter o[F]f '65, We wer[C]e hungry, jus[Dm]t barely
alive.
[Am/E] By May the tenth[F], Richmond had fell, it's a ti[C]me I
[Dm]remember, oh s[D]o well,

{c:Chorus}
The [C/G]Night They Dr[Fmaj7]ove Old Dixie [C/G]Down, and the
[Fmaj7]bells were ringing,
The [C/G]Night They [Fmaj7]Drove Old Dixie [C/G]Down, and the
[Fmaj7]people were singin'. They went
[C/G]La, La, La, [Am]La, La, La, [Gsus4]La, La, La, La, La, La,
[F] La, La,

[Am] Back with my wife i[C]n Tennessee, Whe[F]n one day sh[F/E]e
called t[Dm]o me,
[Am] "Virgil[C], quick, come see[F], there goe[F/E]s Robert E[Dm].
Lee!"
[Am/E] Now I don't min[F]d choppin' wood, and [C]I don't care if
th[Dm]e money's no good.
[Am/E] Ya take what ya need and y[F]a leave the rest,
But the[C]y never should hav[Dm]e taken the ver[D]y best.
(Chorus)

[Am] Like my father [C]before me[F], I wil[F/E]l work th[Dm]e land,
[Am] Like my brothe[C]r above me[F], who took [F/E]a rebe[Dm]l
stand.
[Am/E] He was just eighteen[F], proud and brave,[C] But a Yankee
laid hi[Dm]m in his grave,
[Am/E] I swear by the mud [F]below my feet,
Yo[C]u can't raise a Caine bac[Dm]k up when he's in [D]defeat.
(Chorus and fade)




Leigh
(10/02/1999; 14:58:06 MDT - Msg ID: 15219)
Peter
Peter, that's brilliant!!
Lafisrap
(10/02/1999; 15:01:01 MDT - Msg ID: 15220)
It's still a good time to buy, isn't it?

I shopped around today and found that American Gold Eagles are still generally available. The price is a bit higher though, between $330 and $335 per ounce.

It appears that the preminum over spot has gone up by about $5. One of the larger coin dealers told me that as the spot price of gold recently increased, his sales of American Gold Eagles dropped off to almost nothing. That's what he said, and he still charged me the additional $5 premium. It does not make sense to me.

I sure do need gold to go to $30,000 per ounce. I hear Monday will be an exciting day for the gold markets. I will be only watching for a while.

Lafisrap

CoBra(too)
(10/02/1999; 15:05:44 MDT - Msg ID: 15221)
@Cavan Man - Reality Check-
Dear CM,
History is all about fall back positions - we're the greatest already and we've got every shelter to fall back to if worse comes to worse, that is exactly what the Romans felt, while war was raging outside the "LIMES".

A modern equivalent is Drexel, Burnham's Michael Milken, who smartly derived that only 16 corporate (AAA+) rated +triple A bonds were left in the late seventies. He therefor deduced Junk bonds should overall have a better performance on average- He's been pretty right for some time - So have the "hedge" funds - FOR THE LAST TIME!

OK-I've got to vote tomorrow - Austria's gen'l elections - would be real tough, if there was an alternate .... for me ...
CB2
Peter Asher
(10/02/1999; 15:10:13 MDT - Msg ID: 15222)
Caven Man
Thanks for the inspirational story.

The sub-heading from the cover of "True Comics" in the '40's

"Truth is stranger, and a thousand times more thrilling, then fiction."
koan
(10/02/1999; 15:11:25 MDT - Msg ID: 15223)
Silver and gold
I have always wondered to what extent silver may be manipulted by the users? If silver gets above $6.00 or if the comex stocks drop below 70,000,000 oz, I think anyone who may be manipulatiing it will lose control as it should directly go to $7.00. Gold is harder to figure because we don't realy know what the short positions are, or, once again, the potential demand. The world does seem to be buying big time - which was real evident when gold was around $250. Even the gold carry, foreward selling and shorts couldn't push it below that figure - too much demand at those prices. I think one of the reasons gold took off better than silver was more short covering on gold, but silver will catch up - $10 before $500. Last, silver now has the big guns in its corner, Bill Gates, Soros and Buffet - they now all have an interest in a rising silver price. The monastic trio.
koan
(10/02/1999; 15:58:39 MDT - Msg ID: 15224)
Monastic Trio - inspired
I think there was an old John Coltrane album with Miles Davis, and Theloneous Monk or a woman, called the Monastic Trio -always liked the sound of it - three inspired muscians. Schippi, I hope you are right because I havn't taken much off the table, I am pretty much long - let your long positions run. Kaplan is just so persuasive.
watcher
(10/02/1999; 16:26:12 MDT - Msg ID: 15225)
too much optimism/ Kaplan ???


Hi to all.
I really can't believe my ears these days . Too much optimism.. too much .... Like that had anything to do with the sudden rise in POG.
First of all the rally started over seas each time and was met with opposition only when it reached the shores of "the Land of the free" . Pardon my pessimism.
We have only, in our brighter outlook'seen others recognized that the patient is not dead afterall as we new all along. Kaplan even had the nerve to say we had a double top in the last few days and it was all over because of our optimisim. Irresponsible at best . Maybe suspect. He has ignored even what the main stream is beginning to recognize as a reality. I am starting to feel more like I did about him as I did when reading M. Armstrong. Just doesn't add up

This forum or any other is not responsible because of a little glee of emotion leaks out. These statements are meant to further someone elses gain. Not ours for sure.

Is the POG overvalued yet. I have not heard one statement that the price is to high. Just that it might go down anyway.We all have been thru a lot of that and short term ,in this market, anything can happen. What we are witnessing
is the Calvary HAS ARRIVED. This is what Another and FOA and ORO have alluded to . The titans have started at it and we at this point can participate carefully but we must recognize that until an agreement is worked out ( or may already have been started)this is war and anything goes.
Surely the bell has rung and we all here have a ring side seat . FOA AND Anothers is probably the safest(buy physical)
and for traders (much to gain and much to lose)many gyrations bring both profits and losses
We can all sit back and enjoy the show knowing that we are not alone . THE CALVARY HAS ARRIVED


ORO- enjoyed reading your re-cap of your posts .Great work.
Peter Asher
(10/02/1999; 16:28:50 MDT - Msg ID: 15226)
Leigh, Angel, Golfly
Leigh -- Thank you!!

Angel, Goldfly.

I hope it was OK to answer Angel's suggestion (and inspiration) for those lyrics.

The Forum was engaged in *extremely active posting*, so I assumed that Angel had placed a *market* order, rather then one *limited* to Goldfly.
Cavan Man
(10/02/1999; 16:50:39 MDT - Msg ID: 15227)
@Peter Asher
Peter, Thank you.

Also, don't forget that Leo Burnett started his agency in the middle of the great depression; people who knew him told Leo he was crazy and would end up selling apples on street corners.

In their lobbies (LB's) today in the Chicago Loop, they feature bowls of apples for their visitors with a greeting card to relate the history of the agency
Cavan Man
(10/02/1999; 16:56:56 MDT - Msg ID: 15228)
A Y2K Aside
Some months ago here someone made a comment concerning embedded chip architecture in plastics (resin) manufacturing plants. The concern was that the process would freeze up in some way and the tubes, pipes etc would become clogged with an intermediate substance that would permanently take those lines down....something like that. Chaos would follow.

I have a friend who is an attorney for Monsanto; they have basically the same concerns in many of their plants. Guess how they intend to respond? Monsanto will take their plants offline and fill the "lines" with water until they can sort things out. Yankee ingenuity!
Tanglewild
(10/02/1999; 17:14:59 MDT - Msg ID: 15229)
Peter Asher
Thank you for the advice Peter, I think that's a great idea regarding calling in the futures contract on the gold. I was wondering if it would be better for me to call it in just before expiration or sooner? I don't even know how to call it in..lol. Any help would be appreciated :-)
Thanks,
TW
Angel
(10/02/1999; 17:30:54 MDT - Msg ID: 15230)
Peter Asher
Peter, that was Great ! I can't believe you wrote that so fast. Maybe Goldfly can work on something else.....Hmmmm lets see, something mellow. How about "The first Time Ever I Saw An Ounce" ala Roberta Flack.

Stopped in at my local coin dealer after grocery shopping to see if he had anything left. I pretty much cleaned him out on Wednesday. He had a few Philharmonics and some .10 oz Mapleleafs. I bought them all and told him to call me when he got more but he didn't think he would get anymore anytime soon. He said silver was his biggest mover but he wouldn't or couldn't elaborate.

Cavan Man...wonderful story. My father's family immigrated to the East coast from Turkey in 1910. They were Armenians escaping the persecution of the Turks. I remember hearing all the horror stories while growing up and thought everyone must have this kind of background. I also know that they brought GOLD with them and that enabled them to start a business.
watcher
(10/02/1999; 17:34:04 MDT - Msg ID: 15231)
peter asher
now you've done it . gonna have that tune in our heads.
good job

Maybe goldfly will will write one and we'll enjoy that one also.
Peter Asher
(10/02/1999; 17:35:39 MDT - Msg ID: 15232)
Tanglewild
It would be best to call it in when your equity exceeds the margin requirement. It's just a request to your broker to excercise you option. Your account is debited with the strike price and credited with the furture's value at the time of execution. The differential is your margin acct. value.
Cavan Man
(10/02/1999; 17:35:57 MDT - Msg ID: 15233)
Angel 15230
Angel,

Ah, you must be a shrewd one; to your credit!

History remembers but "the West" does not; there was an Armenian holocaust of significant proportions during that period.
goldnbones
(10/02/1999; 17:36:56 MDT - Msg ID: 15234)
gold hedging
During the last week I watched the share price of Eldorado Gold go from $0.98 on Sept 20 to close at $1.30 on Oct 1. That is up about 33%, performing well because Eldo is said to be one of those producers whose share price is strongly tied to the spot price of gold.

However - this is what Eldo had to say in their 2Q financial rpt.

Hedging Programs
Eldorado unwound gold hedges to a value of $5 million in this quarter, and used the proceeds to pay down debt. The Company now has 510,000 ounces hedged, representing 100% of production for the next three years, at an average price of $297 per ounce. The hedged ounces are all in instruments that enable them to be rolled over, should spot prices exceed the strike price. The Company conducts an active currency hedging program for Brazilian currency (Real). At present, all real denominated operating costs are fully hedged for 6 months, and the Company has the capacity to extend this for a further 6 months if appropriate.

So...they have the next 3 yrs production hedged at $297/oz, but can roll those hedges over if spot gets too high.

My question is that if the hedges are rolled over, aren't they rolled over using the current higher lease rates? So that if you roll them over, it might not benefit that much, if at all. And therefore Eldo may not benefit from the higher gold prices, and following Another/FOA's postings, may even be hurt by them.

But here is an interesting point - Eldo is 39% owned by....Gold Fields Limited.

Cavan Man
(10/02/1999; 17:39:26 MDT - Msg ID: 15235)
Peter Asher
Peter, can you imagine? Start a new business in the middle of WWII! When I remarked upon that feat, Sopia said; "When you have a family you do what you have to do."

Of genuine concern to all I think is the fact that many Americans have never had to, "do what they have to do". or, at least they forget.
goldnbones
(10/02/1999; 17:42:17 MDT - Msg ID: 15236)
oops
oops! Make that $0.98 on Sept 24
Angel
(10/02/1999; 17:46:32 MDT - Msg ID: 15237)
Cavan Man
Shrewd? Yes I have been called that before. Guess it is in the genes. I am extremely proud of my heritage. Everyone tried to take a piece of the Armenians but they still kept coming back. There aren't too many of us left.
Cavan Man
(10/02/1999; 18:13:32 MDT - Msg ID: 15238)
Angel
Genes don't lie. Believe it! CM

Where is our kindred spirit FOA tonight?
Cavan Man
(10/02/1999; 18:17:32 MDT - Msg ID: 15239)
watcher 15225
I'd can Kaplan. Wisdom and knowledge he has but, he trades his book same as the rest. I've thrown in my lot with Another/FOA/ORO et al. I have a real good feeling about those guys.
Cavan Man
(10/02/1999; 18:22:25 MDT - Msg ID: 15240)
OOPS!
I forgot to mention Mike Kosares. His analysis is the best!
We're lucky he hangs around with us. He could be working for one of the networks you know.
canamami
(10/02/1999; 20:28:48 MDT - Msg ID: 15241)
Testing
Testing.
Al Fulchino
(10/02/1999; 21:11:51 MDT - Msg ID: 15242)
Confiscation
Is there anyone here that went thru confiscation, in the 30's? or anywhere? I would like to hear what can be said from first hand experience. It would be useful to us all.

An issue is at hand, if gold DOES get to anything like $30,000 then it is POSSIBLE that many who do not hold gold in gov't and in society as a whole is likely to be jealous and it would be politically correct to make an issue of ownership.
Canuck
(10/02/1999; 21:26:39 MDT - Msg ID: 15243)
POG: An addendum to ORO this am.
The POG has received numerous bonuses in the last 12 days.

The 15 member EU consortium placed a cap on gold sales, there is no 'sudden' supply to flood the market. Demand will and does exceed supply even moreso. I am buying physical Monday and if I am buying physical there must be a fierce demand for I have to be thoroughly convinced. I am not saying that I am correct, I am saying that I am ultra conservative and I see no data indicating gold's retreat.

Oil has doubled, this must lead to inflation. One can analyse until blue in the face, but oil and its refined byproducts affect the price of everything ie: shipping a bag of milk to the grocery store; taking a cab; a courier.
Oil's price has filtered to the individual.

The dollar drop vs the yen. Higher import costs will impact
cost of living. A 20% increase in yen increases everything purchased from Japan.

Gold has been at a bottom for many years, this does not guarantee upswing but it does provide confidence of one.

Supply and demand, ultimately, dictates cost/price. Forget, for a moment, the collusion debate, the BOE auction, the FED, the paper chase, etc. There IS unbelievable demand for gold, the world is nervous, the markets and the financial players are beyond anxious, the volatility is absurd and investors are perplexed. We are well inside 100 days to year 2000 and most of us KNOW turmoil is to set. No need to discuss Y2K, the company I work for will miss Y2K targets by 10%. Time, money and resources have and will dictate the outcome, not Y2K itself. I fear 10% of other companies will miss targets by 10% and this is the essence of why Y2K will be what it will be.

There have been several posts today indicating the decay of paper gold. This is the FOA/Another theory manifesting. Ask
yourself if there is going to be a turnaround. The answer is you can't UNSCRAMBLE A SCRAMBLED EGG.
AEL
(10/02/1999; 21:39:17 MDT - Msg ID: 15244)
eagles vs philharmonics
Cavan Man (10/2/99; 14:00:24MDT - Msg ID:15208):
"I would not buy US Eagles or gold coins denominated by any other country with strong ties to the US dollar."

Why is this? Is not bullion bullion? When it comes time to sell/trade, would not bullion be bullion, regardless of the particular geopolitical issue?
Goldfly
(10/02/1999; 22:10:11 MDT - Msg ID: 15245)
Mish-mash

THX- Mounties..... Unless your afraid of the POG crashing again, they're really not that big of a deal. About a year ago, when the POG was still up there (or that is, almost up here), I bought a number of them. I was able to laugh all through this year knowing I had time. But now it's only going to buy you a couple of months. Unless you're buying a good quantity, I wouldn't worry about it. Except of course if you just want something different....

Goldspoon- The Bone Report? Hmmmmm.... It's got potential. Should Townie start getting his resume out?

Peter- You extracted much more out of that song than I could have. (Never got into The Band.)

Angel- It seems a number of postal employees are too nosy for their own good. Once when we got a PM delivery, they kept asking my wife "Is this somebody?" (OK, get this- they thought that it was someone's cremated remains) and "What's in there?" It seems the postman was really shook up that it might be an urn with ashes... (I don't know, I'm suspicious, but I wasn't there to gauge him...) I told her next time to just say that's what it is or that it's computer or car parts.

Roberta Flak? Ewwww.... that's not my speed either. Tell you what, I've got a half-baked project that I should finish to keep it timely anyway. Something worthy of Nashville. I'll try and crank it out.

Cavan Man- I think FOA is incommunicado. From past experience, something like "I'll get back when I can" could be awhile.

Aristotle, Aragorn III, Gandalf, Stranger- What are you guys doing? Did you make a foursome and go off to a 5000 hole golf course? Or are you spending the days in the backroom, counting out your chests of gold?

Regards all,

GF
SteveH
(10/02/1999; 22:11:51 MDT - Msg ID: 15246)
Dabchick
www.kitco.comgood work Dabchick:

Date: Sat Oct 02 1999 10:13
Dabchick (Valuing gold independent of fiat currencies) ID#258195:
Copyright � 1999 Dabchick/Kitco Inc. All rights reserved
Here are the Dabchick Gold Index figures for the past week ( calculated from the London Bullion Market figures published in the F.T. ) . All figures refer to the London close.
These figures are intended to show changes in the True Value of Gold relative to its value in January 1982. Because these values are independent of debased fiat paper currencies, they are also independent of the inflation caused to all other prices by governments that indulge in fiat currency debasement.
Date... | Close | . High. | .. Low .. |
27 Sep | 65.12 | 66.10 | 65.08 |
28 Sep | 69.91 | 70.90 | 65.83 |
29 Sep | 69.98 | 75.07 | 68.48 |
30 Sep | 69.46 | 70.84 | 68.76 |
01 Oct | 70.37 | 70.48 | 68.76 |
( Basis : Jan 1982 = 100 ) .
The dramatic up-move in the index this week is more pronounced ( by far ) than any I've seen in my records of the last 18 years. Its significance ( IMHO ) should not be under-estimated. Its rapidity and size probably signals the end of the long bear market, particularly as it was launched from the last 20-year low at 59.46 only one week previously ( on 17th Sept ) .
Furthermore, Friday's close at 70.37 took the index above the 22-month congestion area between 68-70. Although some resistance was evident at the 70 level on Tues, Weds, Thurs this week, there was only slight loss of momentum. The 70 level could now turn out to be another launch-pad. Let's hope so.
Regards.............Dabchick
SteveH
(10/02/1999; 22:15:06 MDT - Msg ID: 15247)
AEL
Agreed. I believe their logic is the pre-1933 confiscation for one, but new philharmonics over Eagles, I am not sure the logic. I know the reporting requirements for Eagles are less because they are US currency, whereas philharmonics would have reporting requirement if over a certain value. Obviously that could be a big deal to some.

Perhaps they will explain.
Peter Asher
(10/02/1999; 22:30:34 MDT - Msg ID: 15248)
Goldfly
Thankyou !

I never heard of "The Band" They came up on the lyric search.

I know the song as sung by my most revered singer on earth, Joan Baez. She has the ability to take a concept that you may not believe in, and put the emotion of the belief into her song so that you feel the feeling of believing it, and then therefore believe.
SteveH
(10/02/1999; 22:30:56 MDT - Msg ID: 15249)
protecting gold
http://www.ccrkba.org/1999Emersoncase2amend.htmlThe above link is the latest and most significant 2nd ammendment case as it was in 1999 and it breaks the oldest hold on the 2nd ammendment by the Federal Courts that used to say she was a state right and not an individual right; not anymore. This is a most interesting read. This may change things in a case-law system that has hitherto been against individual rights.

snippet:

By January of 1788, Delaware, Pennsylvania, New Jersey, Georgia and Connecticut ratified the Constitution without insisting upon amendments. Several specific amendments were proposed, but were not adopted at the time the Constitution was ratified. The Pennsylvania convention, for example, debated fifteen amendments, one of which concerned the right of the people to be armed, another with the militia. The amendment on the right to bear arms read:

That the people have a right to bear arms for the defence of themselves and their own State, or the United States, or for the purpose of killing game; and no law shall be passed for disarming the people or any of them, unless for crimes committed, or real danger of public injury from individuals; and as standing armies in time of peace are dangerous to liberty, they ought not to be kept up; and that the military shall be kept under strict subordination to and be governed by the civil power.

MALCOLM, supra at 158 (citing PENNSYLVANIA AND THE FEDERAL CONSTITUTION, 1787-1788, at 422).


The Massachusetts convention also ratified the Constitution with an attached list of proposed amendments. Id. In the end, the ratification convention was so evenly divided between those for and against the Constitution that the federalists agreed to amendments to assure ratification. Id. Samuel Adams proposed that the Constitution

[B]e never construed to authorize Congress to infringe the just liberty of the press, or the rights of conscience; or to prevent the people of the United States, who are peaceable citizens, from keeping their own arms; or to raise standing armies, unless when necessary for the defence of the United States, or of some one or more of them; or to prevent the people from petitioning, in a peaceable and orderly manner, the federal legislature, for a redress of their grievances: or to subject the people to unreasonable searches and seizures.

snippet 2:

Structural Analysis

The structure of the Second Amendment within the Bill of Rights proves that the right to bear arms is an individual right, rather than a collective one. The collective rights� idea that the Second Amendment can only be viewed in terms of state or federal power "ignores the implication that might be drawn from the Second, Ninth, and Tenth Amendments: the citizenry itself can be viewed as an important third component of republican governance as far as it stands ready to defend republican liberty against the depredations of the other two structures, however futile that might appear as a practical matter." Sanford Levinson, The Embarrassing Second Amendment, 99 YALE L.J. 637, 651 (1989).

Third snippet:

This Court has not had recent occasion to consider the nature of the substantive right safeguarded by the Second Amendment. [see footnote 2] If, however, the Second Amendment is read to confer a personal right to "keep and bear arms," a colorable argument exists that the Federal Government's regulatory scheme, at least as it pertains to the purely intrastate sale or possession of firearms, runs afoul of that Amendment's protections. [see footnote 3]

Final snippet:

[comment: and here comes the best part. Don't you love it?]

Some scholars have argued that even if the original intent of the Second Amendment was to provide an individual right to bear arms, modern-day prudential concerns about social costs outweigh such original intent and should govern current review of the amendment. However, there is a problem with such reasoning. If one accepts the plausibility of any of the arguments on behalf of a strong reading of the Second Amendment, but, nevertheless, rejects them in the name of social prudence and the present-day consequences of an individual right to bear arms, why do we not apply such consequentialist criteria to each and every part of the Bill of Rights? Levinson, supra at 658.

As Professor Ronald Dworkin has argued, what it means to take rights seriously is that one will honor them even when there is significant social cost in doing so. Protecting freedom of speech, the rights of criminal defendants, or any other part of the Bill of Rights has significant costs�criminals going free, oppressed groups having to hear viciously racist speech and so on�consequences which we take for granted in defending the Bill of Rights. This mind-set changes, however, when the Second Amendment is concerned. "Cost-benefit" analysis, rightly or wrongly, has become viewed as a "conservative" weapon to attack liberal rights. Yet the tables are strikingly turned when the Second Amendment comes into play. Here "conservatives" argue in effect that social costs are irrelevant and "liberals" argue for a notion of the "living Constitution" and "changed circumstances" that would have the practical consequence of erasing the Second Amendment from the Constitution. Levinson, supra at 657-58.

Other commentators, including Justice Scalia, have argued that even if there would be "few tears shed if and when the Second Amendment is held to guarantee nothing more than the state National Guard, this would simply show that the Founders were right when they feared that some future generation might wish to abandon liberties that they considered essential, and so sought to protect those liberties in a Bill of Rights. We may tolerate the abridgement of property rights and the elimination of a right to bear arms; but we should not pretend that these are not reductions of rights."

RossL
(10/02/1999; 22:32:20 MDT - Msg ID: 15250)
Exercising gold call options
Just a quick refresher on the pros and cons of exercising your gold call options that are now in the money.

Basic principles
1. Managing time value is one of the keys to options trading.
2. Determining the proper strike is one of the keys to options trading.
3. Deep in the money options lose their time value.
4. Exercising options erases the time value.

For example, lets say that spot is 310 on Monday. A June 2000 call at the strike price of 280 is deep in the money. Lets say I predict a continuing bull market in gold and I think gold will hit 350 by January and 400 by May.

Determinations
1. I need to calculate my return, based on my predictions, of holding the option until May.
2. I need to calculate the current time value and intrinsic value of the option.
3. I need to calculate my return, based on my predictions, of exercising that call for one futures contract.
4. I need to calculate my return, based on my predictions, of selling that call and buying several out-of-the-money June 400 calls. The price of June 400 calls is pure time value and no intrinsic value.
5. I need to consider the lack of customer service that now exists at the COMEX.

Generally, options will be better off sold than exercised unless they are due to expire within the week.

My opinion is that I would be better off selling the call right now and buying as many June 350's or 400's that I can with the proceeds.
Check out some of these scenarios before you exercise that call! Leverage is able and waiting!

Feel free to critique this analysis or add to it.
Peter Asher
(10/02/1999; 22:47:43 MDT - Msg ID: 15251)
RossL
The issue on the floor today was the current problem in the Comex option pit involving "Premium rape" There is no binding valuation constraint, and there have been some absurd sale prices far below the intrinsic value of the option contract.

Also, when the future spikes briefly on a blowoff the in the money option may not keep pace. When silver spiked to 5.95 the Nov. 5.50 only traded as high as .40, for one tick.

The exercise manuever is a way to sell into a more liquid market.
Tanglewild
(10/02/1999; 22:51:40 MDT - Msg ID: 15252)
Options
My thanks to Ross and Peter for their time and suggestions as to the options. Considering the state of the comex right now and more than 3 months left on the option i will elect to wait it out a bit and not be at the mercy of the floor brokers. I too think this bull has young legs under it and more suprises may be in store in the near future.
Best of everything to you both and thanks again.
TW
koan
(10/02/1999; 23:19:25 MDT - Msg ID: 15253)
stock options can be safer than stock!
As long as we are on this subject I will show you a cool trick regarding stock options: For a real example take Pan American Silver (10% just purchased by Bill Gates): All in Canadian: Stock is about $11. wts about 3.30-45 - 1 for1. with a strike price of 9 dollars (2 bucks in the money) - wts are good until feb 2001. Lets say you bought 1000 shares. It would cost you $11,000, but the wts would only cost you $3,450. If the stock goes up the wts should track the stock 1 for 1 with 3.5 leverage. But lets say the stock drops to $7. If you bought the stock you would now be $4,000 in the hole, BUT and this is a big but (pun intended) the wts would probably only drop to around 1.50 ot 1.75 because they would retain time value and leverage value. In essence a free lunch. Leverage on the upside and reduced loss on the downside. Pretty cool huh?
RossL
(10/02/1999; 23:51:39 MDT - Msg ID: 15254)
Exercising options
Peter, I agree with you that fast moving markets will also have to be taken into consideration. Another general principle would should be added:
If your time horizion is timing the markets to the minute, then you should be trading futures instead of options.
RossL
(10/03/1999; 00:06:08 MDT - Msg ID: 15255)
Exercising gold call options (revised)
A quick refresher on the pros and cons of exercising your gold call options that are now in the money.

Basic principles
1. Managing time value is one of the keys to options trading.
2. Determining the proper strike is one of the keys to options trading.
3. Deep in the money options lose their time value.
4. Exercising options erases the time value.
5, If your time horizion is timing the markets to the minute, then you should be trading futures instead of options. An exercised option converts to a future at the open of the next trading day. Your best sale price may be had by shorting a future at today's peak price and giving your broker instructions to exercise the option during the same day.

For example, lets say that spot is 310 on Monday. A June 2000 call at the strike price of 280 is deep in the money. Lets say I predict a continuing bull market in gold and I think gold will hit 350 by January and 400 by May.

Determinations
1. I need to calculate my return, based on my predictions, of holding the option until May.
2. I need to calculate the current time value and intrinsic value of the option.
3. I need to calculate my return, based on my predictions, of exercising that call for one futures contract.
4. I need to calculate my return, based on my predictions, of selling that call and buying several out-of-the-money June 400 calls. The price of June 400 calls is pure time value and no intrinsic value.
5. I need to consider the lack of customer service that now exists at the COMEX.

Generally, options will be better off sold than exercised unless they are due to expire within the week.

My opinion is that I would be better off selling the call right now and buying as many June 350's or 400's that I can with the proceeds.
Check out some of these scenarios before you exercise that call! Leverage is able and waiting!

Feel free to critique this analysis or add to it.
RossL
(10/03/1999; 00:12:05 MDT - Msg ID: 15256)
Exercising options
P.S. The future you short MUST be the sane month as your call option!
elevator guy
(10/03/1999; 00:42:15 MDT - Msg ID: 15257)
More gold songs!
Hopefully you know the tune to Guns and Roses "Sweet Child of Mine"

"Sweet gold of mine"

Its got a shine, that it seems to me,
Gives us a chance at prosperity,
And by the grace of God,
We'll enter a bright new day.

Now and then, when I'm feeling down,
I'll take out my stash, of golden crowns,
And with the gains they've seen,
It really blows me away.

Chorus: Whoa, whoa, whoa, Sweet gold of mine,
Whoa, whoa, whoa, Sweet gold of mine

They're serving bear steaks on the trading floor,
While Goldamn Sachs, makes for the door,
And the rapist shorts,
They got no where to hide.

Change will come, to our economy,
When only real gold, is good currency,
'Cause without Europes' banks,
The dollar's on a downhill slide.

Chorus: Whoa Whoa Whoa, Sweet gold of mine,
Whoa Whoa Whoa, Sweet gold of mine.


Another good candidate for revised lyrics would be Collective Soul's "Shine" Someone wanna take a stab at it?
Peter Asher
(10/03/1999; 00:49:12 MDT - Msg ID: 15258)
RossL
The future you sell must be the one that your option CALLS.

Confusion comes from the fact that in-between months on options are the right to buy the next months future, but expire a month earlier. This confusion is further compounded by the option carring the same monthly designation as its callable future, expires the month before.

Example:: A Dec 300 gives you the right to buy the Dec future for $300, but only till the second Friday in NOVEMBER . The Nov 300 (In-between month) Gives you the right to buy that same Dec future, but only till the second Friday in OCTOBER.
Leigh
(10/03/1999; 06:20:07 MDT - Msg ID: 15259)
Granny
Dear Granny: If you're worried about your Gold Eagles arriving in a timely manner, perhaps you could call your dealer and ask him to substitute another coin, like Maple Leafs or something. It would be better than getting stuck with nothing if the market goes down!

I'm not going to post much today because I'm sick, but I was lying in bed thinking about your Eagles and wanted to let you know that you can do this. That's what I'd do anyway.
canamami
(10/03/1999; 06:53:30 MDT - Msg ID: 15260)
Reply to SteveH _ #15429
SteveH,

Thanx for the link to the Emerson case. Do you know if this was appealed to the Circuit Court of Appeals? I've devoted some of my spare time to developing an argument which would protect Canadians' right to own firearms, based on pre-Confederation and other statutes. At present, most of the provinces are taking part in an proceeding to strike down the federal government's new gun registration system, but I doubt they're invoking the arguments I would use, and given the biases' of the extreme liberal-leftist Supreme Court of Canada, the provinces will lose. (Being a government employee, I won't have the chance to make these arguments unless I go back into private practice). I used to be a rah-rah Canadian patriot, but I'm so demoralized by the actions of the SCC and the various governments that I would emigrate to the US if I were just a touch younger (could have trouble getting in now). The US has many of the same problems, but at least one can cut out and protect a private space for oneself in the US.
Cavan Man
(10/03/1999; 07:32:37 MDT - Msg ID: 15261)
David Tice & FOA
www.prudentbear.comIn Friday's commentary, Mr. Tice speaks of the growing independence of the ECB vis a vis their gold pronouncement and, the likelihood of an increase in interest rates there.
Tomcat
(10/03/1999; 08:10:54 MDT - Msg ID: 15262)
The Y2k End Game and The Fallacy of The Last 10%.

Canuck, said in #15243: "...the company I work for will miss Y2K targets by 10%. Time, money and resources have and will dictate the outcome, not Y2K itself. I fear 10% of other companies will miss targets by 10% and this is the essence of why Y2K will be what it will be."

I agree with the statement above. In fact, they will be lucky of they only miss the deadline by 10%. I used to work in testing of large engineering systems. When we got to what looked like the last %10 percent on a project, only the old timers know that we were nowhere's near the last 10%.

What happens is that there is a transistion near the end of projects that go from many isolated subsytems (that are being built) to the joining of these subsytems into a large system whose parts must work in harmony. Most of the employees are involved in the subsystem building and they indeed are at the 90% completion stage. Each subsystem manager sees only 10% left in his subsystem budget. They are the ones the set in the idea the the overall project has only 10% to go.

Then the days of full system testing start and this is time of the wildcard. All sorts of things go wrong a this stage and it is not until the full up system is turned on and tested that you have any idea of how far along you entire system is.

This "all up" full system testing is just beginning in many companies. They are just now getting a handle on where they stand. They are finding out that they are way behind.

For many, tracking Y2k progress has become a bit of a bore. However, now is the time when all the important data is coming on line. Get re-involved. Read the data. They are finding that the most frequent form of errors are numerical errors that are transfered from one subsytem to another that won't cause a shut down but will cause an infection. If too many of these numerical infections spread there will be no way to stop the spread of the infections.

Get re-involved. Read the data. You have your own castle to watch over so get on watch. Don't look back on these days and let it be said your castle went down on your watch.

We are entering an era we will never forget.

Get your gold while you can but recognize that gold is not enough. Get prepared.
AEL
(10/03/1999; 09:14:36 MDT - Msg ID: 15263)
the last 10%
I has been said, by those in programming, that 90% of large programming projects are 90% completed for about 90% of the time during which they exist.
AEL
(10/03/1999; 09:19:24 MDT - Msg ID: 15264)
oil, food, Y2K

Here's the first paragraph of a very interesting article by a friend of mine -- Terry Cottam, a Y2K activist in Canada. I can post the whole article if you all would like (do not want to spam the board with Y2K stuff). Terry is a tad hysterical, but only a small tad; the risks are very real; this article is nicely documented......

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

Date: Thu, 23 Sep 1999 11:34:09 -0400
From: Terry Cottam
Subject: Oil Disruptions May Crash Markets In January 2000

OIL DISRUPTIONS MAY CRASH MARKETS IN JANUARY 2000
-------------------------------------------------

By Terry Cottam, Ottawa, Canada, 23 Sep 1999

Revised, expanded from an article for Peace and Environment News,
Oct 1999

IN THIS ARTICLE:
-- Markets could crash
-- Long-term food shortages likely
-- The "Lucy factor"
-- Authorities fight efforts to prepare
-- What's Next?

OIL IS OFTEN OVERLOOKED in all the seemingly good news lately on Y2K.
The International Energy Agency (IEA) warns "vulnerabilities still exist
at all levels of the oil supply chain." [1] A survey by Gartner Group
revealed U.S. companies have "not been providing accurate disclosures"
on their Y2K risks. The IEA says this could have "serious implications"
for oil supplies. [2] Another oil industry observer expects "multiple
embedded systems going down on each oil well" with no parts or
replacement systems available "for quite a long while." [3]

........
mike55
(10/03/1999; 09:40:18 MDT - Msg ID: 15265)
Tomcat & The Last 10%
Tomcat,

We're in full agreement. The potential for an economic slowdown and related social problems have a fairly high probability IMHO. You and I had the discussion here several months ago regarding manufacturing systems, JIT, SPD, interconnectivity, etc. In the one of the major manufacturing businesses that are left in the US, last month's review on Y2K remediation at just one manufacturing plant gave me cause for concern. The report went something like this: "...381 programmable controllers replaced, 217 programs fixed, and 244 tools/machines with known problems that will not be corrected due to time, money, resources,etc. The date codes in these programs will be rolled back to a January 1999 date in December 1999, and we'll fix the problems in 2000. Still have xxx hundred machines to verify for compliance, which will be done by 9/30/99." This is only ONE component plant of dozens that supply many larger plants at only one manufacturer. These plants in turn deal with thousands of suppliers. If there's only 1% failure in the last 10%, there will be problems. I know the possible effect of this is hard to grasp if one doesn't work in a business sector or industry that is so reliant on interconnectivity and good data. As some naysayers have suggested, you might be able to go back to manual methods in some areas, but this would have the same effect as ******* in the wind. The time lost in material and cash flow alone in these tight systems will quickly cause the related economic slowdown. Then as sales slow, so does employment, and the cycle becomes self-fulfilling. We need to fix the problems, not go back to the pre-industrial days. To the manufacturer's credit, at one of dozens of plants, they will try a full plant date roll-forward sometime before the end of this year to see how the remediation to-date will work. They're working to prepare for the worst, and now hope for the best.

Tomcat said it well, "Get your gold while you can but recognize that gold is not enough. Get prepared."
ET
(10/03/1999; 09:42:39 MDT - Msg ID: 15266)
Tomcat, Turbo, AEL, options traders

Hey guys, how's it goin? TC - excellent piece! You're right, with all the gold excitement, etc., nobody is paying much attention to that big bear sneaking up behind them. More and more candid responses to readiness are making the news but they're being downplayed or reported on page D34. I heard the the Feds are going to try to improve readiness amongst the populace starting this month as they've been accused of downplaying the situation to the point of complacency. Apathy reigns. Maybe knocking a few thousand off the Dow would get people's attention, eh? Probably only wishful thinking on my part!

Turbo - thanks for that bit about the National ID card. Good to see that at least some can see the freedom and liberty ramifications from that bit of bs. Now if we could just find some more reps like Ron Paul. At least we won't be stuck with a national id when we want to exchange our gold for Euros, eh?

AEL - hey buddy, this is posted from the Linux platform. You gotta get it to believe it! I'm working on loading the Linux version of PGP today. I can pull up USAGold forum in about 2.5 seconds as I no longer use a browser such as Netscape because the desktop of KDE (the GUI interface) is a browser. The platform treats http files just like any other file and can be iconed to the desktop just like any other program or file. Pretty cool and very fast!

Options traders - good luck you guys, I think you'll need it. I've been trading futures and options for a long time and as of the first of this year I stopped trading altogether. The reason for my pullback from these markets is liquidity. Last fall when everybody was loading up on the Dec 390 calls my broker buddy in Chicago called and we talked about the situation for a couple of hours. He is one of the principle's in a very large trading firm there. We have talked several times since. He says and I quote, 'People don't understand how thin some of these options markets are'. In other words, just because you have bought a put or call DOESN'T mean the guy on the other side of the trade has any money! Believe it! The only way you can get paid is if the markets trade within their normal volatility because that is how the options are priced initially. Once markets move outside this average window of volatility to any great degree, the market will cease to trade as some have found out this week. You have to remember, brokerage houses are going to try to protect their big clients (read - option writers (of course, this is where all the money has always been made in this racket)), before they try to help the little traders (read - you guys). Imagine this scenario - market moves against big trader big time, broker gets call, 'Hey Bob, I need a few days to cover that position, can you help me out?' 'Sure Ed, but I can't put the firm at risk, so instead of loaning you your margin maybe we can slow down the execution for a few days and hope that the Fed can intervene enough to slow down the move.' Now, you have to believe that this is exactly what is happening as traders and clearinghouses search for any liquidity they can find to keep from going belly up and closing the markets. If the clearinghouses can't or won't cover these trades the markets will not open the following morning. Believe it! In my opinion the greatest risk today is not the trade itself but the clearing of the trade. Remember, your profit is only someone elses loss if he has the money or can borrow it from someone else.

This trading game is getting more like y2k everyday. This following bit of wisdom from an unknown author is appropriate, 'It's not the odds, it's the stakes'.

ET
Leigh
(10/03/1999; 10:02:54 MDT - Msg ID: 15267)
AEL
Dear AEL: Would you mind either posting the whole article or printing a link for it? I'd like to read it. Thank you.
SteveH
(10/03/1999; 10:21:44 MDT - Msg ID: 15268)
Canamami and emerson
This is a July 1999 ruling and as such stands (for now). I would doubt an Appelate Court would rule against it or that the state would move it up the ladder as based on my reading, it was extremely well written with very sound logic. The state would take a chance of it holding precedence to a much wider range of cases or it possibly being picked up by the Supreme Court and I believe that they wouldn't risk that. My opinion.
AEL
(10/03/1999; 10:40:10 MDT - Msg ID: 15269)
linux -- ET
ET (10/3/99; 9:42:39MDT - Msg ID:15266):
"I can pull up USAGold forum in about 2.5 seconds as I
no longer use a browser such as Netscape"

???

I had understood this to be a bandwidth deal, not a matter of which (or whether) browser. The 50K or 100K (or whatever) worth of gold forum text comes thru the line at whatever speed it comes thru (28k, 56k, or DSL-speed, or T1-speed, or whatever); the browser cannot slow things down appreciably, I dont think (?). Explain.
ET
(10/03/1999; 11:19:51 MDT - Msg ID: 15270)
AEL
Hey AEL - you want me to explain it? Beats me! If I load the Netscape browser and attempt to load the forum it takes about 3 seconds. Now just testing from the desktop it took 2 seconds. Could be some overhead involved or different cache sizes, I'm not familiar enough with the system to know but maybe after a few weeks of learning how it functions I can tell you. The difference is insignificant at any rate.

After having spent a number of hours over the last week playing with this thing I can see that in the future this might give Microsoft a run for their money even at the single user level. It's not quite there yet unless you have some background with these things and it lacks the application base that Windows has. It hasn't quit on me however and it's been up and running since last weekend. I've had problems with Windows dropping ISP connections and locking up requiring reboot (of course this always seemed to happen right before I hit the 'Post Message' button). It has some rough edges yet but from a stability standpoint seems to be quite excellent. I've reviewed the list of applications that come with this version and from a cost/benefit basis it can't be beat. Fifty bucks buys an enormous amount of built-in's including two complete office setups, several development languages, graphics, games, multimedia, network/internet, and a host of nifty utility packages. Online documentation is adequate but I went ahead and bought the Que book ($40) anyway.

Maybe we can get old Tomcat to test it for us and give us a real insiders view, eh? Thanks for the response.

ET
Ray Patten
(10/03/1999; 11:30:48 MDT - Msg ID: 15271)
Possible Comex bankruptcy.

On Thursday, my commodity broker said that only market orders were allowed in the Gold options pit...no limit orders. I scaned my 38 years of commodity trading experience to try to remember a similar occurance, but I could not. I thought "These guys must be desperate." Then I looked at the numbers. As of Thursdays close, there were about 525,000 Gold calls outstanding. The floor traders or locals are the people who usually wright or sell us options. They have been getting our money for the last three years. As of September 21st, the committment of traders report said that the large traders were long only about 25,000 contracts. That means that the locals could be naked short over 400,000 calls. With an open interest of just over 200,000, where are they going to find the liquidity to get hedged. If Gold were to go up to $400 per ounce, their loss could be upwards of $4 billion. That could be enough to bring down the exchange.

I've had the idea for a long time that if Gold was ever freed, it would go straight to about $475 without a decent thechnical correction. It now looks to me like it will be there before the end of this month.

It's pay back time, but i'm not going to stay for the last tick. It may be that if the exchange closes, I may get nothing.
Cavan Man
(10/03/1999; 12:25:38 MDT - Msg ID: 15272)
Tomcat, mike55, ET
I did not mean to offend any of you with regards to your feelings on Y2k. I am very prepared myself. I even bought some KI just in case. Need H2O filter and porto-potty and a little more food then I am done.

Sorry to all.....CM
ET
(10/03/1999; 12:37:41 MDT - Msg ID: 15273)
Ray
Hey Ray - 38 years! How many times have you made a fortune and lost a fortune?

It seems to me the Comex is already bankrupt. They can't cover these positions and they know it. The floor traders have had it and if I'm not mistaken the only backup they have is the exchange itself. I suppose they'll have to get in the ever-increasing-in-length line at the Fed for their bailout. It makes you wonder if they'll be able to find a chair of their own when the music stops. I think what people forget is the fact that gold isn't just 'any' commodity. It is real money and when the world starts demanding real money an exchange such as this will never have the liquidity to keep the market stable (or even open for that matter).

- got liquidity?

ET
ET
(10/03/1999; 12:46:32 MDT - Msg ID: 15274)
Cavan Man

Hey CM - offense? What offense?

Like Tomcat has said, the big test is yet to come! Only one test matters and that is the one at the end of the year when it all tries to work together. Only then will one know if he made the right call, eh? Just like this gold thing, when everybody knows what to do, it's too late to do anything! We're all speculators at this point, some seem to be a bit more conservative than others. Who was it that said, 'Time will prove all things!'?

ET
DD
(10/03/1999; 14:01:02 MDT - Msg ID: 15275)
Tomcat -- Y2k/90% Complete
Tomcat - Well said. Having consulted with a number of software/high-tech firms, projects generally are on time until 90% of the budgeted time has elapsed. Then, if the project isn't cancelled, it's rushed to "completion" in order to minimize the number of months the project will slip. All sorts of corner cutting is promoted, particularly in testing, and the product is put into production/shipped to the customer. Then, the phone starts ringing off the hook as users scream bloody murder that the stuff doesn't work. This causes huge amounts of fire fighting resources to be chaotically flung upon the mess. This is called in Y2k terms, "Fix on Failure". Good luck with this strategy in a globally interconnected system of systems that nobody understands or could ever hope to. I think there's two questions we should be asking ourselves -- in this order. Prepared for Y2k? Got gold, too? Best, DD
Leigh
(10/03/1999; 14:30:45 MDT - Msg ID: 15276)
Forum Songwriters
OK, let's liven things up a little bit here. Let's write songs! I'll start:

GOLDBUGS' GLOAT TO OUR STOCKHOLDING FRIENDS

If you miss the train we're on,
You will know the gold's all gone.
Lord, it's 500 now and to the moon!
To the moon, to the moon, to the moon, to the moon,
Lord, it's 500 now and to the moon!

Not a shirt on your back,
Not a penny to your name.
Lord, you don't have a home left, anyway,
Anyway, anyway, anyway, anyway,
Lord, you don't have a home left, anyway.

Would anyone care to add lyrics, or write new songs? Angel, would you like to judge our feeble little efforts? No prize or anything, just a break from boredom.
Peter Asher
(10/03/1999; 14:53:41 MDT - Msg ID: 15277)
Leigh and All
I must confess to being the "Agent Provocateur" to Leigh's decision to be the leader of the Forum Glee Club. I wrote this for a post last night, and then chickened out and sent it just to Leigh and Angel. ----Personally, I could use some distraction between now and tomorrow's Comex opening

Today, inspired by our new member, Angel, we bring you the first unauthorized broadcast of the Forum "New Gold Oprey"

First to the tune and following lyrics of Baez's "Copper Kettle"

Get you a cooper kettle, get you a copper coil.
Cover with new made corn mash, and never more you'll toil.

(Chorus)
You'll just lay there by the juniper, while the moon is bright,
Watch them jugs a filling, in the pale moonlight.

My daddy he made whisky, my granddaddy did too,
We ain't paid no whisky tax since seventeen ninety-two.
*****
We have the Commodities E-trader theme song ----

Get you a copper future, get you a future in oil.
Cover your short sale corn cash, and never more you'll toil.

Chorus:
You'll just stay there by the computer, trading through the night.
Watch those orders filling, though bid and asked are tight.

My daddy he traded risky, my granddaddy did too.
I've been taking profits, since nineteen ninety-two.

Chorus ---

Then we have, to a tune and words you will all remember,
The "Short Seller's Lament.

Oh, I missed the trend we're on, didn't know the Gold's all gone.
You could hear me screaming loud, "Five hundred dollars?"

(Chorus)
Five hundred dollars! Five hundred dollars! Spot Gold's got me by the collar.
You could hear me screaming load, "Five Hundred dollars?

(Then the second stanza works as written!!!)
Not a shirt on my back, not a penny to my name.
Lord, I can't a'go on living this a'way. ------
Chicken man
(10/03/1999; 15:15:14 MDT - Msg ID: 15278)
Ray - Beware of the rumor tumor...!
This is first of many "tumor rumors" (COMEX is terminally ill)....there will be more too..! as to the health of the COMEX....they are bent in a pretty bad way about now,but they won't go busted....they can't go busted right now, the FED needs them....if the US loses their "gold market",then where is gold going to be traded in the world....and what "influence" could the FED have on the POG...? they have their "ways" of healing theirselves.....GS could "dump" all their gold they have been accumilating,nice profit to boot....the floor could increase volitility to the upside first to get all the boys standing around the water cooler to buy the hottest thing going (gold calls)....then "beat the living daylight" out of the metal markets......and increase the margin due to extreme volitility.....this would give the floor a great chance to get on the right side of the market...eh?
The game being played at the COMEX is a zero sum game....for every $ "won" , some poor ole soul lost a $.....I don't look for the COMEX to belly up as much as I do all the little dot. com. commodity trading firms.....if you don't get your margin call to your brokerage firm,they have to have sufficiant capital to cover their traders loses overnight.....every brokerage has to play "bank" ....the COMEX does not play "bank"...in a case where a brokerage firm can't cover their loses ,all accounts are frozen (ie, Griffin Trading Co,Dec,98, London)...this comes from the Mar99 issue of FUTURES mag.....

The point I'm trying to make is don't worry about the COMEX....worry about the firm that is "holding" your money...ps...I'm in the process of transfering my account to a "large" firm...
What was your first trade 28 yrs ago..?
Peter Asher
(10/03/1999; 15:31:42 MDT - Msg ID: 15279)
ChickenMan, Ray et al
Chicken Man

If I read you right, The money owed by the option writer is secured by his credit and margin with his Brokerage outfit and that ALL positions that firm has with the Comex are subject to being held as collateral.

BTW Remember several months back, they HALVED the margin requirements on option writing. That is a perfect example of braiding your own hanging rope.
Angel
(10/03/1999; 15:38:16 MDT - Msg ID: 15280)
Leigh, Peter
Leigh...I love it and I would love to be a judge but I don't have very much time today. # 2 son is coming home on leave from the Navy and I have spent all day cooking his favorite foods and getting ready......maybe later tonight after we have had time to catch up.

Peter...so glad you deceided to post. As I told you last night I smell Grammy.

All: I certainly hope we aren't offending anyone with all this levity. We still have hours before the overseas markets open on what may be the start of the BIG GOLD RUSH.
Besides I would really like to see Goldfly tackle something like "Bad To The Bone". I should have known he wasn't a Roberta Flack kinda guy.
AREM
(10/03/1999; 15:50:52 MDT - Msg ID: 15281)
To ET (10/3/99; 9:42:39MDT - Msg ID:15266) and other friends of Liberty
http://www.house.gov/paul/openingpage.htm
You said:

<<>>

Check out Congressman's Paul home page at the above link, called PROJECT FREEDOM. Be sure to read his biography.
The following is from his web page:


The Congressional Record (House)
May 16, 1997
Voting for libertarianism is voting for Liberty

[Page: H2862]

(Responding to criticism from two members, both saying that Ron Paul is too consistent.)
(Mr. PAUL asked and was given permission to address the House for 1 minute.)

Mr. PAUL. Mr. Speaker, we have just finished the debate on the jobs programs bill, and in the discussion I was referred to as a libertarian, but a very consistent one that voted the same way on each type of legislation.

I would like to remind my colleagues that voting for libertarianism is voting for liberty. Also it is a very consistent vote with the doctrine of enumerated powers. It is said in the Constitution that we can only do here in the Congress which is enumerated by the clauses within the document. So therefore, if it is said that I am very consistent and want to be labeled as libertarian, that is one thing, I do not deny that. But in the other sense, I am a strict constitutionalist that obeys and listens very carefully to my pledge to the Constitution as well as paying close attention to the ninth and tenth amendment.

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

I also urge everyone to check out the Libertarian Party web site at http://www.lp.org/ and be sure to take the World's Smallest Political Quiz.

AREM

Chicken man
(10/03/1999; 16:22:38 MDT - Msg ID: 15282)
Peter Asher - Yep...!
The way I read it ...till the CFTC sorts out everthing ...it's frozen....the question is ...when would they get around to "sorting" things out....? after the market peaked..?.and leave one high and dry without any profits
This could change the tears of joy to tears of sorrow....something a person "remembers for a lifetime"...! why take a chance on a under-capitalize firm to save 5 bucks..?
Tomcat
(10/03/1999; 16:37:21 MDT - Msg ID: 15283)
Turbo, Mike55, ET, DD, Peter A, Chicken man, AREM, MK

Turbo: Your post on the national ID card was very helpful. I was wondering if that bill would go through.

Mike55: I remember out earlier communication. The information you presented about that manufacturing company could, IMO, very well be a representative example of a firm's preparadness. Scary.

DD: If more people could experience the BS, unethical actions, and fraud that occurs in the last 10% of a project then we would would have a lot more people prepared for y2k.

Peter Asher: I lived in Hollywood and worked in Burbank for over twenty years. Got to know a lot of people in the music and film industry. You would do great there with your creativity.

Chicken man: Great perspective on who is liable. But what happens if we have four or five LTCMs? Perhaps the expression is Doomer Rumor Tumor! Can the FED print money that faster then the tumor spreads?

AREM: I am checking into the Libertarian Party. Got to do something. Hope we have elections next fall!

Leigh: I read and enjoy your posts. Nice to have you hear.

Cavan Man: Didn't see anything that would be taken as offensive. Always get something out of your posts and questions.

AEL: Do you have a link to your friends's post?

MK: Just started reading your recommended "The House of Morgan". So far so good. One of the first things that I notice is that the Morgan interests have been super close to the FED and they are one of the groups who are very short on gold! Makes one wonder.

The Stranger, Aristotle, Aragorn III et al: Where are you?

All: Should be a very interesting week which we all will share.
schippi
(10/03/1999; 17:00:27 MDT - Msg ID: 15284)
It doesn't get much better then this!
Regression analysis of all 39 Fidelity Select sectors
which collectively act as a proxy for the market, show:
Precious Metals (FDPMX) and Select Gold ( FSAGX)
to be in First and Second place on the 30 day
regression table.
Also FDPMX is First on the 60 day table
and FSAGX is Third.
FSAGX & FDPMX Hourly Gold chart:
http://www.SelectSectors.com/agpm70.gif
Ps:
Even if you hate mutual funds, The Select Gold
sectors have less noise than the XAU, and therefore
are better/easier for prediction.
Gandalf the White
(10/03/1999; 17:14:30 MDT - Msg ID: 15285)
Hey GOLDFLY !
Time to wakeup SPOT and SPIKE !! -- and see what you started at the FORUM, --- Tis looking more like MoTown or Country Hoedown boards now. -- Get Au or get the Blues.
<;-)
Tomcat
(10/03/1999; 17:28:49 MDT - Msg ID: 15286)
Ted Butler on Silver
http://www.gold-eagle.com/research/butlerndx.html
My positive position on silver has been, over time, highly influenced by Ted Butler, the author of the above linked article.

When reading the above post, which sounds a bit wild, keep in mind who the author is. The author, Ted Butler, was exposing the gold/silver short scam when many of us did not have a clue. He preached and talked and wrote when many could care less. In April of 97 he wrote a public letter to Mr. Greenspan and Mr. Rubin exposing the scam directly to them. This year he took on the commodity regulators. Ted knows commodity trading and is tough. I respect him.
Canuck
(10/03/1999; 17:34:36 MDT - Msg ID: 15287)
Tomcat, Mike55, AEL, DD
Y2K........ 10% left.Glad you guys responded to my message last night.

Y2K will be a terror, make no mistake about it. The financially elite have and will deal with it (ie: countries,
corporations and individuals). The financially strapped are forced with 'FOF'. How does that grab you? The oil industry
has seen low margin prices for a long time (say up to 10 months ago), they have not had time nor money to 'anticipate' Y2K remediation. The USA imports nearly 30% of its oil from S.A. Can you begin to imagine if the USA receives 70% of its required oil in Jan. 2000?

I was aimlessly walking about the ranch today when it dawned on me that coffee is going to go through the roof.
Coffee is S.A. Chocolate bars, hmmmm, caramilk bars, I told my kids I'm buying 1,000 caramilk bars just in case of Y2K.
My son said, "What if Y2K is nothing and you have a 1,000 caramilk bars, what are you going to do with them?"

I'm going to eat them, son; and if Y2K is fearsome, I will eat half and sell the other half for $7.95 each!

Thus my friends, is the no-lose scenario for Y2K, which co-incidentally involves purchasing LARGE BAGS OF GOLD.
turbohawg
(10/03/1999; 17:37:32 MDT - Msg ID: 15288)
ET
>Now if we could just find some more reps like Ron Paul.<

Right you are ... the potential is there, but as you undoubtedly know, those potential reps reside in the Libertarian Party, as AREM points out, and the LP just can't seem to get any traction. Recent figures do show, however, that the LP has multiplied both it's membership and contributors on the order of eight-fold in just the last 4 years or so.

It's interesting that in this Klinton-conceived New Era economy , that the major parties appear to be fracturing. The anointed Democrat, VP Gore, is facing a challenge from Bradley, with others possible (Warren Beatty ?!) The Republicans are seeing defections (Buchanan, Bob Smith). Even the Reform Party now has the American Reform Party splintering off.

Peering into my crystal ball (I can't claim my crystal ball has the clarity of Gandalf's), I see the LP being pulled into the mainstream when hard times hit and persist and the masses become desperate for answers ... wishful thinking perhaps.

>At least we won't be stuck with a national id when we want to exchange our gold for Euros, eh?<

Indeed !! But they'll likely have some pernicious scheme up their sleeve. Therefore, one might want to consider hedging against the dollar in other ways too, such as an account held in another currency (as touched on the other day by gidsek and PH in LA) or in the Franklin-Templeton Hard Currency Fund, which protects against a weakening dollar by investing in other currencies (when last checked about a year ago, it was about 75% in the mark, franc, and yen, I believe).

Keep us updated on your experience with Linux ... that's interesting.

By the way, given your talent for providing an appropriate Mises quote for any situation, have you considered doing a regular snippet of Mises quotes ?? How 'bout it ?? I even have a name to suggest !! Mises Pieces !! (Apologies to Reece's).
AEL
(10/03/1999; 17:44:38 MDT - Msg ID: 15289)
Cottam on Y2K
Here, in response to a couple requests, is the full writeup that I mentioned earlier. It is a bit long, but very well-documented; a neat piece to clip and mail to friends who shrug off Y2K. It is not anywhere on the web that I know of. I got it by email.

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


Date: Thu, 23 Sep 1999 11:34:09 -0400
From: Terry Cottam
Subject: Oil Disruptions May Crash Markets In January 2000

OIL DISRUPTIONS MAY CRASH MARKETS IN JANUARY 2000
-------------------------------------------------

By Terry Cottam, Ottawa, Canada, 23 Sep 1999

Revised, expanded from an article for Peace and Environment News,
Oct 1999

IN THIS ARTICLE:
-- Markets could crash
-- Long-term food shortages likely
-- The "Lucy factor"
-- Authorities fight efforts to prepare
-- What's Next?

OIL IS OFTEN OVERLOOKED in all the seemingly good news lately on Y2K. The
International Energy Agency (IEA) warns "vulnerabilities still exist at all levels of
the oil supply chain." [1] A survey by Gartner Group revealed U.S. companies have "not
been providing accurate disclosures" on their Y2K risks. The IEA says this could have
"serious implications" for oil supplies. [2] Another oil industry observer expects
"multiple embedded systems going down on each oil well" with no parts or replacement
systems available "for quite a long while." [3]

Canada exports to the US, which in turn imports half its supply. The Maritimes depend
entirely on imports. But the Canadian Association of Petroleum Producers surveyed its
members and says 100 per cent "expect to have mission critical systems tested and
compliant ...before year-end 1999." [4]

Such Y2K self-reporting is usually unaudited and therefore unreliable. The National
Energy Board (NEB) has quietly imposed a requirement for third-party Y2K auditing for
"all major regulated pipelines." However other NEB-regulated companies are only
"required to file quarterly progress reports." [5] We should watch for more details in
upcoming Y2K hearings, shortly after House of Commons resumes sitting on Oct 12th.
They are open to the public only for viewing, and are barely publicized. Please see my
website below for updates on time and place.

The American Petroleum Institute (API) says "Americans can expect few, if any,
shortages," [6] and says major oil exporters such as Venezuela and Saudi Arabia will
be prepared. [7] More credible sources such as the Gartner Group [8] suggest OPEC
countries are far behind in Y2K oil preparations. The API also claims the industry
"has no plans to ration fuel and foresees no need to do so." [9] In fact, OPEC
producers are increasing the risk of shortages by deliberately CUTTING PRODUCTION TO
KEEP PRICES UP even though Y2K fears may "cause consumers, processors and distributors
to stockpile crude oil and products." [10]

Oil may still be enroute from the Arabian Gulf for the first 35 days of 2000. [11] But
by mid-January, if the tankers are loading less oil, this foretells rising oil prices
and gasoline rationing. The U.S. Strategic Petroleum Reserve could supply 3.9 million
barrels per day for 90 more days. [12] At worst, the reserves would run out in May
2000. The U.S. General Accounting Office questions whether the reserve "would be
available or sufficient in case of shortages," and says U.S. companies "haven't
established a cooperative nationwide contingency plan for Y2K problems, such as supply
shortages or disruptions." [13]

MARKETS COULD CRASH

The stock markets may react within days of the first reports of serious oil shortages
in January 2000. They are already unstable, having been weakened by government
controls which encourage stock market speculation. Says Mark Germine, an American
expert in systems theory: "If the market were in a stable position, the Y2K phenomenon
would have only a minor, transient effect. However, we are already in an overinflated
market of the same magnitude as accompanied the crash of 1929. Our current 'control'
of the market, is, paradoxically, what has caused us to reach this position of loss of
control." [14]

If the markets crashed, then "we would suddenly be in a very different world" says
currency expert Bernard Lietaer. "In 1929, the stock market crashed, but the gold
standard held. The monetary system held." But now, power has shifted drastically from
governments to financial markets. Lietaer cites the Roman Empire collapse, which ended
Roman currency. "That was, of course, at a time when it took about a century and a
half for the breakdown to spread through the empire; now it would take a few hours."
[15] In the Depression, economic suffering prompted people to start up local
currencies. This may again become a desirable complement to federal currencies if they
become destabilized. (For a new way to quickly launch local currencies, please see
http://communityway.org.)

Why this fragility, especially since the financial sector is widely deemed a low Y2K
risk? For starters, "sectors it totally depends on like energy and telecommunications
are at high-to-medium risk" says Roberto Verzola. As depositors and fund managers get
their funds out of high-risk areas, they would likely seek "real, tangible assets
which do not lose their value so easily -- land, production facilities and tools,
goods, precious metals, and so on." But for years, governments have allowed banks to
issue dubious loans using new money. As a result, "$20 to $50 of money or its
equivalent is circulating today for every dollar of real goods and services." If
nervous investors try to convert all these floating dollars at once into real goods
and services, "we'd have the equivalent of some 20 cars racing for the parking space
for one." [16]

LONG-TERM FOOD SHORTAGES LIKELY

May 2000 is also planting season in the Northern Hemisphere. Economist Ed Yardeni
asked the U.S. Senate: "Will disruptions in our energy supply chains (electric, oil,
and gas) hamper the ability of farmers to grow their crops and feed their livestock?"
[17] According to the Food and Agriculture Organization (FAO), the whole food chain is
vulnerable. "Basic inputs like seeds and fertilizers could be threatened - as well as
supplies of irrigation water and electricity." However, "most experts pinpoint
transportation as the weakest link." [18] Food requires on average 2000 km of
motorized transport from farm to fork. [19] Supermarkets hold just three days supply
of food. Here in Ottawa, Canada, unlike other cities, we have no food warehousing
facilities.

THE "LUCY FACTOR"

Many people assume that governments and corporations won't let Y2K affect their hold
on power. But Jim Lord notes that "over the past thirty years and more, six of every
seven large software projects are either finished late or cancelled. Meanwhile, Y2K is
the largest and most expensive software project in history and it has an inflexible
deadline." [20]

Lord refers to the "Lucy Factor" after the running gag in the Peanuts comic strip.
"What makes this gag so funny is that Lucy always assures Charlie that THIS TIME she
won't move the ball. Good old trusting Charlie always believes her but she always
moves the ball. And down goes Charlie."

The authorities are Lucy. We are Charlie Brown. Decades of managerial incompetence
brought us the Y2K problem in the first place. In 1960, Robert Bemer, an "IBM wizard"
joined 47 other industry and government specialists in lobbying for the four-digit
date standard. But in 1970, the U.S. Department of Defense, the largest computer
operator on earth, set the industry standard by refusing to adopt the four-digit year.
"For bigger-bang-for-the-buck reasons, it was unshakable on the subject of year dates:
no 19s. 'They wouldn't listen to anything else,' says Harry White, a D.O.D.
computer-code specialist and Bemer ally. 'They were more occupied with ... Vietnam.'"
[21]

People have been fooled by the official "happy talk" on Y2K into assuming business as
usual. For instance, last week, over 1,000 organizations from 80 countries demanded a
halt to talks in Seattle by the World Trade Organization (WTO), fearing it is becoming
a "secret world government." [22] But this won't happen if cheap, plentiful oil comes
to an end. The WTO, its giant corporate clients, and nation-states of any size all
rely completely on "bug-free" technology, including oil-based transport, to maintain
their organizational integrity. Meanwhile, it's a safe bet that few of those 1,000
citizens groups are planning for any disruptions in grants, fundraising, transport,
faxing, email or phones next year, or anticipate their staff, volunteers and donors
will suffer loss of food, water, heat, money or other essentials.

AUTHORITIES FIGHT EFFORTS TO PREPARE

The Cassandra Project is widely acclaimed as the pioneer of Y2K community preparedness
groups. Its mottos are "Individual preparedness is for those who can. Community
preparedness is for those who cannot" [23] and "The best security is a prepared
neighbor." [24] But across North America, grassroots organizers report that "very
little progress has been made" with local governments since January. Public interest
"began to plummet" in March. Since then, community organizing has become "increasingly
difficult." [25]

Boulder County, Colorado remains a notable exception. There, Kathy Garcia spearheaded
a successful model of neighbourhood organizing. It has been spread far and wide by
Utne Reader's Y2K Citizens Action Guide, an invaluable, practical little booklet. [26]
But cynical reviewers found it naively upbeat. [27] In retrospect, the guide
underestimated opposition to community organizing.

READY-2000, our local Y2K "public/private partnership" declined a request by our Y2K
citizens group that they distribute the guide. They did not allow us to join their
planning process. True, we have some of the best prepared municipal services in North
America. Hence their slogan "we expect little or no service disruptions." But few
residents bothered to attend their poorly publicized "community forums." [28] They
dismissed our arguments that we cannot trust unverified, self-reported assurances on
oil, food and other critical outside dependencies.

Because Ottawa experienced the ice storm, READY-2000 suggests that residents stock up
for 4-7 days of problems. But the proportion of residents intending to purchase extra
supplies has dropped by half, from 50.1% in January to 23.1% in July, even though food
and other goods may never be this cheap again. [29] Almost everywhere else,
authorities discourage stockpiling for more than a "three-day winter storm." Beyond
that is deemed to be hoarding and panic. [30]

WHAT'S NEXT?

With just 100 days left until the year 2000, we now have the benefit of some
disturbing hindsight. Many city residents will not prepare until after they suffer
disruptions. If the economy crashes, Ottawa may still avoid the riots and looting
which will undoubtedly hit large U.S. cities.

If oil becomes scarce or very expensive, only a fortunate few may own or drive a
vehicle. After a difficult winter, we may see more urban food production. The
population may shift towards food and water supplies. The city may be forced to become
like rural areas, more prepared and mutually supportive. The Cassandra Project
cautions, "you can't get away from this problem. You're safer and better off in an
area you know well... No matter how bad it gets, problems will eventually pass. We're
always stronger and better able to handle any emergency if we all work together." [31]
But for now, working together is precluded by the implacable opposition of big
business and big government.

Please see http://y2k.inode.org for more references on oil, money, Y2K preparedness,
and the upcoming Y2K federal hearings here in Ottawa.

-------

Terry Cottam can be emailed at y2k-ottawa@inode.org, or tel. (613) 236-6433 (your
feedback is much appreciated). He has researched the Year 2000 computer problem for 15
months, informing local residents with support from the Ontario Public Interest
Research Groups at Carleton University and the University of Ottawa (OPIRG-Carleton,
OPIRG-Ottawa). He co-founded the Y2K Centretown Preparedness Group in November 1998.
It went region-wide in February 1999, then dissolved in July 1999.

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

Endnotes:

1 International Energy Agency, "Update on the IEA's Y2K Activities," July 1999
http://www.iea.org/ieay2k/homepage.htm

2 International Energy Agency, "IEA Working Paper: The Year 2000 Problem and the Oil
Industry, Preliminary Findings," Mar 1999 http://www.iea.org/ieay2k/html/Prefind.htm

3 Gold-Eagle - The Internet's Premier Financial Magazine, Oil and Natural Gas: Are
They the Real Problems in Y2K? - Jun 21, 1999
http://www.gold-eagle.com/editorials_99/rc062199.html

4 Canadian Association of Petroleum Producers (CAPP), Canadian Gas Association (CGA),
Press Release: "Year 2000 Readiness; A Status Review of Canadian crude oil and natural
gas producers plus related natural gas transmission and distribution systems." May
1999 http://www.cga.ca/PressRelease/cgacapp.htm

5 John McCarthy, Business Leader, Operations, National Energy Board, (403) 299-2766,
jmccarthy@neb.gc.ca. Emailed response, 21 Sep 1999

6 American Petroleum Institute, "Y2K Questions and Answers for Consumers," August 16
1999, http://www.api.org/ecit/y2k/faqs/consumer.html#available

7 American Petroleum Institute, "Imports Will Flow to the U.S. During Year 2000
Conversion," 06/28/1999 http://www.api.org/ecit/y2k/whitepapers/imports.html

8 Lou Marcoccio, Research Director, Gartner Group, cited in "Y2K could affect flow of
U.S. oil imports," Kate Snow, CNN, March 21, 1999.
http://www.cnn.com/TECH/computing/9903/21/bigpicture.y2k.hln/

9 American Petroleum Institute, "Y2K Questions and Answers for Consumers," August 16,
1999, http://www.api.org/ecit/y2k/faqs/consumer.html#ration

10 World Bank, "Global Commodity Markets, Summary," July 1999
http://www.worldbank.org/prospects/gcmonline/summary.pdf See also "Special Feature,
Anticipating Y2K," July 1999
http://www.worldbank.org/prospects/gcmonline/y2kfeature.pdf

11 American Petroleum Institute, "Imports Will Flow to the U.S. During Year 2000
Conversion," 06/28/1999 http://www.api.org/ecit/y2k/whitepapers/imports.html

12 U.S. General Accounting Office, "Year 2000 Computing Crisis: Readiness of the Oil
and Gas Industries," May 19, 1999, pp 3-4
http://www.gao.gov/monthly.list/may99/may9913.htm#4

13 E. L. Core, "IEA, USS, GAO, DJN, NYT: Fear-Mongering, Panic-Baiting Y2K Money
Grubbers?" June 2, 1999, http://www.wbn.com/y2ktimebomb/Media/lcore9922.htm

14 Mark Germine, M.D. (publishes e-journal Dynamical Psychiatry) "Y2K Crash: Why this?
Why Now?" On the website "Book of Eli" (an anonymous author),
http://www.bookofeli.com/photo.htm

15 Bernard Lietaer, "Beyond Greed and Scarcity," Interview by Sarah van Gelder,
Editor, Yes! A Journal of Positive Futures, Spring 1997
http://www.futurenet.org/2Money/Lietaer.html

16 Roberto Verzola, "Y2K: The Homestretch,"
http://www.inode.org/y2k-news-archive/msg00031.html

17 Dr. Edward Yardeni, Chief Economist & Managing Director, Deutsche Bank Securities,
one of eleven unanswered questions on Y2K and the Food Supply in his "Statement to the
U.S. Senate Committee On Agriculture, Nutrition, and Forestry, Hearing on the Year
2000 Problem and Agriculture," July 22, 1998
http://www.senate.gov/~agriculture/yardeni.htm

18 U.N. Food and Agriculture Organization (FAO), "The Millennium Bug threatens food
supply systems - developing countries are also vulnerable, FAO warns," 19 April 1999
http://www.fao.org/news/1999/990302-e.htm

19 Donella H. Meadows, adjunct professor, environmental studies, Dartmouth College,
Nova Scotia, "Y2K and the Average Bite of Food," 2 July 1998, The Global Citizen,
http://iisd1.iisd.ca/pcdf/meadows/y2k.htm

20 Jim Lord, "The Real Y2K Problem," April 12, 1999,
http://www.wbn.com/y2ktimebomb/Tip/Lord/lord9915.htm

21 Robert Sam Anson, "The Y2K Nightmare," January 1999, Vanity Fair,
http://www.bookofeli.com/Y2Kstockmarket.htm

22 "NGOs Mobilise Against WTO," BRIDGES Weekly Trade News Digest, Vol.3, Number 37, 20
Sep 1999, http://www.ictsd.org/html/newsdigest.htm or
http://www.flora.org/flora.mai-not/13875

23 Paloma O'Riley, "Individual Preparation for Y2K," 2 Feb 1999. Cassandra Project,
http://cassandraproject.org/indprep.html

24 Paloma O'Riley, "Individual Preparation for Y2K," XI. A. "Your Neighborhood"

25 Y2K Grassroots Community Preparedness Survey, 20 May 1999,
http://www.nhne.com/y2kgrassrootssurvey/index.html

26 Utne Reader Citizens Action Guide, http://www.utne.com/aY2K.tmpl

27a Christina Spencer, Editorial Pages Editor, Ottawa Citizen, review of Utne Reader
Y2K Citizens Action Guide, 1999/01/04
http://www.ottawacitizen.com/columnists/spencer/990104/jan4.html

27b James Poniewozik, Salon online magazine, "the world is ending -- LET'S GET TO KNOW
OUR NEIGHBORS!" 1999/01/05, http://www.salon.com/media/poni/1999/01/05poni2.html

28 "APOCALYPSE (maybe): What if someone called a calamity and nobody came?" Ottawa
Citizen, 1999.05.30, The Citizen's Weekly, C5
http://www.inode.org/y2k-news-archive/msg00021.html

29 Corporate Research Group Ltd., "PERCEPTIONS 2000 - #2, JULY 1999; Awareness of Year
2000 computer problem," survey of 407 adults in the Ottawa-Hull area, week of July
26th, 1999, http://www.inode.org/y2k-news-archive/msg00032.html

30 "Letter to [CBS] 60 Minutes from the Food Industry," posted on the Web by the U.S.
Department of Agriculture, June 1999 http://www.usda.gov/aphis/FSWG/60minutesltr.html

31 Cassandra Project, "Year 2000 Frequently Asked Questions (FAQ),"
http://cassandraproject.org/y2kfaq.html


mike55
(10/03/1999; 17:54:53 MDT - Msg ID: 15290)
Cavan Man, Tomcat, Canuck
Cavan Man -- What offense? Certainly none taken. I apologize if my post was construed by you to be directed at anyone on this site. My comment of "naysayers" was related to co-workers, a lot of the general populace, and unfortunately, even some of my family members. Since the fact is that "no one knows for sure" what may happen, being prepared with the basics, including gold, seems to make sense to me.

Tomcat -- Thanks. We're on the same page.

Canuck -- Choose the industry: oil, food, finance, medical, raw materials/finished goods....let's hope for the best. If it's non-eventful and there's certain goods I have in surplus, I'll use what I can and donate the rest to elderly neighbors, shelters, and soup kitchens that are always in need.

Gotta' go -- three sons in need of the computer for homework. Thanks all!
Canuck
(10/03/1999; 18:00:44 MDT - Msg ID: 15291)
ET 15266
'In my opinion the greatest risk today is not the trade itself but the clearing of the trade. Remember, your profit is only someone elses loss if he has the money or can borrow it from someone else.'
--------------------------------------------------------

This is the tail end of ET's message, please review and contemplate the A/FOA messages of 12 months prior. Review the past 2 days posts in reference to 'option' problems.

IMHO, this is not the time to hedge, speculate, bet on 'futures', buy an 'option', liquidity is the key, you must have physical in hand, physical in hand dictates your position, you control the price. Be careful, be confident,
hold it in your hand, the price IS going up, do you want to be in a position of buying or selling?

Leigh
(10/03/1999; 18:02:57 MDT - Msg ID: 15292)
AEL
Dear AEL: Thank you for posting your friend's report. I was wondering what he would say about why authorities are discouraging people from preparing. That's something I CANNOT understand. Unless there is some diabolical plan to make everyone subservient to the government for food and power, it would be in their best interest to make sure people are well-fed and comfortable.

The other day I went to the base housing office to ask about their Y2K preparedness. I wasn't confrontational; I was earnestly trying to find out what preparations they have made so I could fill in the gaps. The head of the office smilingly assured me that the power companies in the Northeast WOULD NOT FAIL because they run on older operating systems. Western systems, which are newer, might have trouble for a few days. Therefore, he said, they have made NO plans at all because nothing will happen. As we were saying goodbye, he told the clerk to make sure she got my name. WHY? Will my house be raided first by the military police? I lie awake at night in fear of having my house searched and supplies taken.

You know, if things like food confiscation and so on do happen, people are going to be horrified. Bill Clinton will make himself the most hated person in America, and he will risk assassination. I honestly can't imagine what is going through the minds of these policymakers.

Did anyone see the message last night on Gold Eagle about the man who was told by a bank teller that in two weeks they would stop giving out cash?
elevator guy
(10/03/1999; 18:14:24 MDT - Msg ID: 15293)
AEL and ET
Just to let you know, I use Explorer, on a T1 connection, and USA GOLD Forum just appears instantaneously.
So I don't think its the browser that is the biggest issue, although I'm sure there are subtle differences between some of the browsers on the market.
Canuck
(10/03/1999; 18:15:57 MDT - Msg ID: 15294)
To Tomcat
Just wanted to mention that your messages in the last week to 10 days have been extremely informative.

A couple weeks ago I was not following you at all.

Thanks.
Canuck
(10/03/1999; 18:19:20 MDT - Msg ID: 15295)
Sydney just opened
Spot:

$404/oz.
RossL
(10/03/1999; 18:23:33 MDT - Msg ID: 15296)
Sydney just opened
$307.40 in US dollars
Chris Powell
(10/03/1999; 18:28:43 MDT - Msg ID: 15297)
Karachi exchange suspension was caused by default
http://www.egroups.com/group/gata/226.html?Latest from GATA.
elevator guy
(10/03/1999; 18:37:46 MDT - Msg ID: 15298)
Spot $404?
Canuck, can you tell me where you are getting this info? I've been using quote.com/livechartscom/, and they show something like $306 right now, and the exchange has the letter code "g". What exchange is that? I think the New York market letter code is "w". (That refers to the COMEX, right? And of course its closed right now)

And what is the letter code for Sydney?

Some help, please?
Cavan Man
(10/03/1999; 18:40:07 MDT - Msg ID: 15299)
mike55, Canuck, ET
Can you suggest a foodstuffs list or other essential items IYHO? Thanks.
Cavan Man
(10/03/1999; 18:42:15 MDT - Msg ID: 15300)
AU
Kitco shows $308.3. Market is just opening up.
Leigh
(10/03/1999; 18:42:20 MDT - Msg ID: 15301)
Fort Knox
Would someone mind straightening me out in reference to something in Chris Powell's story? I thought the gold in Fort Knox was never to be touched, at all. How can Goldman Sachs or any other firm even think of getting their paws on it? The gold belongs to the U.S. citizens; doesn't Congress have to give permission for it to be sold? Was that a joke in the story?
Al Fulchino
(10/03/1999; 18:54:44 MDT - Msg ID: 15302)
Steve H
Thanks for the post regarding confiscation. I am in total agreement with Justice Scalia. I had a thought earlier, that more than concerns me. I fear that I have lived during the generation that watched its freedom and country get lost in its comfort.
SteveH
(10/03/1999; 19:01:53 MDT - Msg ID: 15303)
Dec. Gold up 3.00
at $308.30.

Thanks Al.

AEL
(10/03/1999; 19:08:40 MDT - Msg ID: 15304)
Cavan Man -- list of supplies
http://www.provide.net/~aelewis/gold/y2kstock.htmtry the above link
Cavan Man
(10/03/1999; 19:12:12 MDT - Msg ID: 15305)
AL
You're not alone (ranger). It breaks my heart more than I can tell.
Cavan Man
(10/03/1999; 19:16:38 MDT - Msg ID: 15306)
AEL
RE: Air Filtration

I am looking for the type of "gas masks" I have seen used in Israel. Anyone know where these can be bought? Thanks..CM
Clint H
(10/03/1999; 19:29:59 MDT - Msg ID: 15307)
A bigger puzzle?
In our euphoria of watching the gold market breakout, we may not have noticed the largest asset transfer in US history. This transfer is being foisted upon the American people by the Federal Reserve Bank.

What is the pattern for disposal of fiat currency during times of hyperinflation? Spend the currency as fast as possible on any asset at almost any price in order to get from paper to things of value.

The Fed has announced that they will accept any collateral in exchange for FRNs sent to the banks as "liquidity injections." Pine trees and ink in exchange for assets of value. If the subject bank thought it worthy collateral for a loan, it must have some value.

Most people have accepted the action of the Federal Reserve Bank as necessary to keep local banks liquid. It will keep the local bank liquid but at the expense of transferring the title to all local assets to the Federal Reserve.

Picture a local bank in Anywhere USA. It is run by Mr. Joe Banker and was run by his father before him. Local Bank has been the lender for our area for two generations. They hold mortgages on farms, ranches, homes, commercial property, tractors, earth moving equipment, cars, motorcycles etc. Any of this has value but is also the infrastructure for the local economy.

Who is the largest employer in your area? Has Joe Banker loaned them money? If he has, then there is a mortgage.

Local Bank run by Joe Banker has only 2% reserves but not to worry. The Fed will ship him all the pine trees and ink he needs to stay liquid. The Fed will accept any collateral the bank has for the paper exchange (FRNs.)

Joe Banker draws down 100% liquidity to return all deposits to his customers. Joe Banker surrenders all the collateral to the Fed because he is sure all his customers will be redeposit the withdrawn cash and he can redeem the collateral from the Fed. No one gets hurt or so we are led to believe. The money is not redeposited. Joe Banker has paid all his depositors and has retained his good name but Local Bank has no deposits and no collateral to bring in income. Local Bank is now out of business with "no one getting hurt." Joe Banker came thru for them.

What about all the local assets? They are now held as collateral by the Federal Reserve Bank. If the payments are made on time the assets remain in the local economy. If not, foreclosure.

Will 90% of the assets in the US revert to the Federal Reserve in the coming crises? Pine trees and ink (FRNs) was all it took to transfer the wealth of a nation to these bankers for one last fleecing.

What do they do with the assets? The real estate will be sold into the market after a new monetary system has been established. This will be a 10 - 20 year process.

How about equipment, factories, cars, boats, motorcycles, tractor, earth moving equipment, etc?
Much of this will be put on ships and sold in world markets for EUROs. What a way to change worthless FRNs into EUROs. Is this possible? If a Harley Davidson motorcycle will sell for $50 thousand US now in Europe, will it bring $20 thousand EUROs under fire sale conditions? All it cost the Fed was pine trees and ink.

Is the local steel mill needed in the US during a severe depression? No problem. Lay off the 700 employees, ship the equipment to (?) in exchange for EUROs and use it to manufacture steel that the US can purchase at a later date. There is a world market for all the inventory also.

Garment and shoe factories have already left the country. Anyone can list many products that our parents helped to manufacture that are now imported. Much of the equipment to make the imports is the same equipment our parents labored over to make the very same product and at the same time a living for their families.

How about the excavation and road building company near you? What would their dozers, scrapers, maintainers, etc. bring in EUROs if the used equipment was loaded onto a ship and exported? All it will cost the Fed is pine trees and ink. They will pay labor to load the ships in the same FRN currency, pine trees and ink.

Does the forgiving of poor nations debt have anything to do with this picture? Is it part of the fleecing of America? Yes, These "POOR" nations will now be free to purchase vital equipment (to our nation) exported from the US. They can then use our previous industries to export products to the US of A as our economy recovers. Since we have no equipment, factories or industrial facilities we are at their mercy. It will be a long, painful and expensive experience.

Will the Federal Reserve Bank care if their money making charter is revoked? If it is, they still walk away with most of the assets that were formerly our national wealth.

Summary:

- The Federal Reserve Bank exchanges FRNs for title to any and all assets as banks are forced to ask for printed notes to stay liquid.

- The Fed will then acquire clear title to most of the assets in the US as defaults occur. This includes real estate, factories, vehicles, boats, motorcycles and any thing else that is valuable enough to carry a mortgage.

- The Fed can then export factories, equipment, cars, boats, etc. to other countries in exchange for EUROs. This could also be in partnership with the Fed in overseas plants.

- It will be many years before the US can recover any manufacturing capability especially if the remaining industrial equipment is exported.

- All central banks, including the Federal Reserve Bank need the debt forgiveness for "poor" countries that is now talked about. This would allow a clean slate for establishment of exported industry and equipment in foreign countries. All this will be done in EUROs or any currency except FRNs. What a way for bankers to transfer from the $US to safer currencies.

It appears that in less than one hundred years, the Federal Reserve bankers have managed to fleece the American people of our entire national wealth. We are now a third rate country with the best military in the world. However this is only for a short time because we are broke.

If this happened to the US, will it be the same in all countries? Are all central bankers playing thi
Clint H
(10/03/1999; 19:36:58 MDT - Msg ID: 15308)
A bigger puzzle?
Sorry. This is the last part of the previous post that did not post.

If this happened to the US, will it be the same in all countries? Are all central bankers playing this game? Will they also demand collateral that will eventually give them tittle to most assets in foreign countries?

While all the attention is on the stock market and gold, the Fed is moving all the wealth of our nation out the back door.

I know this is fiction. I made it up. Could it be true? Is there any discussion? If not, I will drop the subject but I am afraid for the US of A.

I have gold. Will I be able to buy a shoe factory with it? All my shoes are foreign made at this time. What the US of A sells is information. I can't wear or eat information and I need a tractor to plow my farm.

Got gold?
AEL
(10/03/1999; 19:38:51 MDT - Msg ID: 15309)
authorities
"why authorities are discouraging people from preparing..."

Not discouraging really, Leigh, just profoundly unenthusiastic and dismissive about the whole thing. And to the extent that there is awareness, the orientation is to stress the "3 day storm" scenario so as to prevent panic -- which is a real risk, vis a vis the banking system, etc. 'Course, far as I'm concerned, the banking system *ought* to be brought down... by a dynamic and engaged citizenry, demanding an end to the fraud of fractional reserve banking, the federal reserve system, debt money, etc. But more likely would be the banking system brought down by paniced and disengaged individuals, all seeking to get their own dough out and to hell with the consequences to anyone else. Quite understandable, and I don't blame anyone, but it would be nice to think that we could figure an equitable and fair way out of such a mess, as a society. Impossible as long as there are no leaders of integrity and moral sensibility -- as there are not. (Geez, how did I get off onto that rant?)

Anyhoo, the authorities (naturally) want everyone to think that everything will be A-OK in order to avert panic, which would result in mass bank withdrawals, mutual fund redemptions, etc., etc., (mass movement out of paper and intangibles) which could/would in turn precipitate a stock market collapse, mass insolvencies, etc., etc., you fill in the blanks. The whole financial casino/"system" could possibly blow up before the rollover, which would make the actual computer-related problems much worse. This has always been my second-biggest fear, after national electrical grid shutdown of any significant duration (which now -- happily -- looks pretty unlikely).
SteveH
(10/03/1999; 19:48:32 MDT - Msg ID: 15310)
All
Upper 60-minute bollinger for Dec. gold is $310. She is at $308.80 now. Should it hit $312 then I believe it will track up to (possibly) $320 tonight or tomorrow.
Cavan Man
(10/03/1999; 19:51:06 MDT - Msg ID: 15311)
SteveH
Steve,

What the heck is an upper 60 minute bollinger?
AEL
(10/03/1999; 19:51:11 MDT - Msg ID: 15312)
Cavan Man: gas masks
I picked up one of those Israeli masks at a gun show for about 12 bucks; extra filter cannisters for about 5 bucks. I've seen them in army surplus stores at higher prices. Not a bad idea to have some things like this around. I've also got some very fine-pore masks used by painters and asbestos workers. I hope to God(dess) that I'll never need stuff like that.
Cavan Man
(10/03/1999; 19:53:04 MDT - Msg ID: 15313)
SPOG
Now, $309.50.
Leigh
(10/03/1999; 19:56:02 MDT - Msg ID: 15314)
Cavan Man, AEL, Clint H
Cavan: I have seen these advertised at www.watertanks.com. Unfortunately, that site is down tonight. I have purchased 55-gallon water drums from this company, and they delivered them quickly.

AEL: Thank you. Can you believe all this is going to happen in less than three months? I started preparing in earnest last December, and it seems like no time at all. And the whole subject is still a mystery.

Clint H: Did you really write that? It sounds plausible to me. Another excellent reason to have gold!
Canuck
(10/03/1999; 19:56:26 MDT - Msg ID: 15315)
Elevator, Cavan, Mike, and boys
Pulling your leg with the $404/oz. I'm sorry, the week-end is over, Sydney is open, no more kidding around.

Let's have a good week!! (Hopefully $404 at the end of the week)
Cavan Man
(10/03/1999; 20:00:03 MDT - Msg ID: 15316)
Tomcat 15286
What do you advise regards holding silver? Thanks.
Tomcat
(10/03/1999; 20:01:04 MDT - Msg ID: 15317)
Clint H

Man, you can really communicate. Call it fiction if you will but that piece you just wrote really hits home.
Cavan Man
(10/03/1999; 20:02:52 MDT - Msg ID: 15318)
Leigh
Thanks. We live in an area that has a fault that when last moved, reversed the course of Big Muddy. With all the quake action, we're just waiting here.
SteveH
(10/03/1999; 20:04:30 MDT - Msg ID: 15319)
Cavan Man
CM,

Where you getting your prices (real time)?

SteveH
Leigh
(10/03/1999; 20:07:50 MDT - Msg ID: 15320)
Cavan Man, Goldspoon
Dear Cavan Man: My father-in-law, who is 79, remembers his great-aunt telling about that earthquake (she lived through it). If I can get him to tell me the story again, I'll write it up for you.

Where is Goldspoon? He must be out riding his Horse with No Name. They're far in the lead this evening!
Cavan Man
(10/03/1999; 20:11:43 MDT - Msg ID: 15321)
ClintH
After the city of Rome was sacked and surrendered for the last time about 432 AD, the western world entered the dark and then the middle ages culminating in the renaissance and next, the reformation.

What does it profit the world to devastate the US economy so as you describe? It doesn't. Perhaps I misunderstand. You use great deductive reasoning and good logic but methinks your theory is implausible.
Tomcat
(10/03/1999; 20:12:00 MDT - Msg ID: 15322)
Liegh, Canuck, Cavan Man

Leigh: Peter Asher wanted to me to tell you that his lines are down and he couldn't continuew communicating.

Canuck: Thanks for the nice compliment. It is a great group we have here.

Cavan Man: I expect silver to take some heat as gold is sorted out. I then expect it to go above $8 (fairly soon). I holding for the long run. All physical. No paper.
The Scot
(10/03/1999; 20:12:37 MDT - Msg ID: 15323)
Cavan Man Gas Masks
CM, I live in Texas and you can usually find them at the Gun Shows, I don't remember where you live but that would be my suggestion. Sincerely, The Scot
Cavan Man
(10/03/1999; 20:14:30 MDT - Msg ID: 15324)
ClintH
Pardon. I meant to tie both paragraphs together with the statement, "Why send the US back to the Middle Ages"?
Cavan Man
(10/03/1999; 20:17:50 MDT - Msg ID: 15325)
Tomcat
What do you buy?
Cavan Man
(10/03/1999; 20:19:21 MDT - Msg ID: 15326)
SteveH
http://www.kitco.com/gold.live.htmlSteve,

I use the above. It now shows $309
Cavan Man
(10/03/1999; 20:26:34 MDT - Msg ID: 15327)
nouveau riche
"System" crashes and gold owners provide investment capital pool(s). Sound like a headline?

Why wouldn't big bro allow the physical holders to rise? After all, the important people will more than likely be taken care of anyway yes?
Gandalf the White
(10/03/1999; 20:28:01 MDT - Msg ID: 15328)
SteveH
Quote.com shows Dec Gold (GC9Z) at 308.6 with a 30 min lag and FOREX.com shows SPOT the Dog at $307.20 at 7:26 PDT.
<;-)
mike55
(10/03/1999; 20:34:13 MDT - Msg ID: 15329)
Cavan Man, AEL, Leigh
http://www.usplastic.comCavan Man -- The link from AEL is the best overall checklist I have found in the last year. While some may consider it a little over the edge, depending on your perspective, it does hit all the areas and causes you to think of basics you may not have considered.

AEL -- Your 15309 post is what I've discussed before. The government is walking the fine line between adequate and timely disclosure versus "everything's fine". If the potential extent of problems were disclosed, people may just pay attention and cause "panic" that would bring the fractional reserve system and the equities markets to their knees. They've missed the boat on spreading the word over an extended period of time that would allow orderly transition of investments and supply preparedness.

Leigh -- I've dealt with United States Plastic Corp. in Ohio earlier this year and have been very satisfied with their products, prices, and delivery. Try the link I posted (hope it works or I'll have to get one of my kids to show me how to do it). :-)
Leigh
(10/03/1999; 20:35:51 MDT - Msg ID: 15330)
Cavan Man
FOA said last Sunday that gold owners would be sought after and encouraged to spend their gold to get the economy going again. Another said the same thing in his "Thoughts!" Remember, he said holding gold would be smiled upon and holding Euros would be frowned at.

Though FOA did imply we'd be taxed in a big way. I've been thinking about taxation lately, because I have heard the IRS is having Y2K problems. Does anyone think this will usher in a national sales tax instead of an income tax? It would make record-keeping a lot easier for the IRS.
Clint H
(10/03/1999; 21:00:00 MDT - Msg ID: 15331)
Cavan Man, Leigh, Tomcat

Cavan Man, You wrote,
<<describe? It doesn't. Perhaps I misunderstand. You use great deductive
reasoning and good logic but methinks your theory is implausible.>>>
I don't know. It's just scares me that this could happen and no one is preparing for it. I hope I'm wrong and you are right.

Leigh
<<excellent reason to have gold.>>>
Thanks. It's just a thought. We need to kick it around. If I'm right how do we prepare or prevent some of it from happening?

Tomcat, you wrote
<piece you just wrote really hits home.>>

Thanks for the comeback. It scares me. If I'm right the recovery time for America will be much longer than the "30s." We are not self-sufficient any more.
THX-1138
(10/03/1999; 21:09:48 MDT - Msg ID: 15332)
Gold coins, and other thoughts
Well I went and bought two more coins Saturday. The regular coin dealer wasn't there and won't be in until Tuesday. (Death in family or something...can't remember exactly). Because that person also is the stores coin buyer, (others just run the counter) they couldn't tell me much about Canadian Mounties or their prices. All they could quote was US Eagles ($330), Maple Leafs ($330), Krugerands ($326). I decided to purchase the Maple Leafs. The shop worker said they should be in by next Saturday.


Regarding sending US into Dark Ages:
If you were a foreign country hostile to the USA, what would you do to attack it?
The easiest way I thought of was to cause social unrest and internal strife.
The best way was to Crash the Stock Market and wipe out the "savings" of over 50% of the US population.
Hey, if one wacked out day trader in Atlanta went on a shooting spree from losing $500k, what would happen if more that 30 million lost their life savings? Think about it.
A foreign country wouldn't even have to set foot in the US and it would be hard to trace who caused the crash.

mike55
(10/03/1999; 21:11:08 MDT - Msg ID: 15333)
Eagles vs. Phillies
Since I can only get here on a catch-as-catch-can basis, I ask forgiveness if this has been adressed before. I seem to remember a question (discussion?) on US Eagles versus Austrian Philharmonics. The face value of 2000 Schillings at the current exchange rate is about $156 compared to an Eagle at $50. Perhaps face value is a moot point depending on currency fluctuations or devaluations that are difficult to predict. What are the pros/cons of the Eagle versus Philharmonic relative to taxation, reporting requirements on purchase/sale, etc? I'm clear on the pre-'33 coins, but am thinking I may want to shift my modern bullion mix one way or the other. Comments or suggestions, anyone? Thanks in advance.
goldnbones
(10/03/1999; 21:11:50 MDT - Msg ID: 15334)
chinese silver
http://www.reuters.com/news/I hope that link works. It doesn't look very specific. This article talks about China partially deregulating its silver market, with gold to follow.
Leigh
(10/03/1999; 21:13:42 MDT - Msg ID: 15335)
Clint H
Dear Clint: I feel, from reading Christian prophecy books about the "last days," that I know the end of the story (i.e., the "beast" who controls all commerce, mandatory biochips, major food shortages, horrifying devastation all over the world). What I don't know is how far we are from those last days, and just how the story will play out until we get there.

What I REALLY believe is that there are powerful forces in the world which want to see humankind subservient to an elitist ruling class. I believe they've been plotting and working toward this for many years now and Y2K will be the catalyst that sparks it off. How we'll fare as gold owners, I don't know. I do think we're in the best position financially we can be in. But the rules could change on us.
ET
(10/03/1999; 21:17:41 MDT - Msg ID: 15336)
Turbomeister, Al, Canuck, CM

Hey guys - I wish I had more time, I'm off to Michigan early tomorrow so I'm getting ready tonight. Thanks for the kind words Turbo, I'll leave you with a passage this evening from F A Hayek, as it seems appropriate for Mr. Al. I'm making some good progress on this Linux deal but the main reason I'm doing it is so I have some other skills to fall back on come the new year. I'm trying to relearn some C++ I used to know and pick up Perl and Java. These PC's will still be around and maybe even relied on further in the future than now. It can't hurt.

Canuck - I'm sure the options traders at least see the other side of the story now. As they always tell you when you first start out, only trade with money you can afford to lose. They never tell you that you can think you won but still lose anyway! I agree, the first priority is hard assets in your pocket.

CM - I hope AEL's list helps you out. I don't have anything to add except that finishing up your preps while the dollar still buys a lot is crucial. We seem to be fighting two different deadlines here.

Here's the Hayek from 'The Road to Serfdom', 1944;

"If we are to build a better world, we must have the courage to make a new start - even if that means some reculer pour mieux sauter. It is not those who believe in inevitable tendencies who show this courage, not those who preach a 'New Order' which is no more than a projection of the tendencies of the last forty years, and who can think of nothing better than to imitate Hitler. It is, indeed, those who cry loudest for the New Order who are most completely under the sway of the ideas which have created this war and most of the evils from which we suffer. The young are right if they have little confidence in the ideas which rule most of their elders. But they are mistaken or misled when they believe that these are still the liberal ideas of the nineteenth century, which, in fact, the younger generation hardly knows. Though we neither can wish nor possess the power to go back to the reality of the nineteenth century, we have the opportunity to realize its ideals - and they were not mean. We have little right to feel in this respect superior to our grandfathers; and we should never forget that it is we, the twentieth century, and not they, who have made a mess of things. If they had not yet fully learned what was necessary to create the world they wanted, the experience we have since gained ought to have equipped us better for the task. If in the first attempt to create a world of free men we have failed, we must try again. The guiding principle that a policy of freedom for the individual is the only truly progressive policy remains as true today as it was in the nineteenth century."

-- end Hayek.

It's a good read. I highly recommend it. Talk to you guys later this week.

ET
goldnbones
(10/03/1999; 21:21:25 MDT - Msg ID: 15337)
chinese silver
http://www.reuters.com/news/nope, the link takes you to the Reuters headline page. However if you change the business news window from "top stories" to "commodities/energy" and hit the refresh button, the headline linking the article will become available.

I hope that works for anyone foolish enough to try to follow my directions.
ET
(10/03/1999; 21:43:10 MDT - Msg ID: 15338)
One more thing - I love a good rumor!
http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001Vqz
IMF Declines Comment on Report Camdessus to Resign as Managing Director By Heidi
Przybyla

IMF Spokesman Declines Comment on Report Camdessus to Resign

Washington, Oct. 2 (Bloomberg) -- An International Monetary Fund spokesman declined
comment on reports that Michel Camdessus plans to resign as IMF managing director.
``I'm not commenting one way or the other because I don't know,'' said Graham Newman,
IMF chief press officer. Newman was responding to a report today in the Independent
newspaper in London that Camdessus will quit the IMF's top job by Christmas.

The Independent cited unnamed Washington sources as saying that Camdessus met with
senior officials last week to tell them of his intention to resign.

Talk that Camdessus might resign circulated in Washington this week, where IMF
officials were meeting. Camdessus gave the reports short shrift when asked about them
at a press conference Thursday. ``I hear that (an IMF spokesman) keeps repeating that I
enjoy my job,'' said Camdessus. ``I must confirm it.''

Francisco Baker, another IMF spokesman, said Camdessus has previously denied plans
to step down. ``He has already denied this several times,'' he said.

Baker suggested nothing has changed since Camdessus' comments Thursday. ``You think
he is going to say something Thursday and then change his mind?'' Baker said.

Camdessus, a former chairman of the European Economic Community and French
finance minister, has been in his current position since 1987.

A Bank of France spokesman said he had ``no comment on the (resignation) rumors,''
which to his knowledge ``have no basis.''
Gandalf the White
(10/03/1999; 22:20:21 MDT - Msg ID: 15339)
Jump SPOT ! -- Jump!
$308.40 now and getting ready for another jump !
<;-)
GFD
(10/03/1999; 22:23:41 MDT - Msg ID: 15340)
Risks
For what its worth, I would like to suggest that it is very unlikely that the den of thieves and rapists otherwise known as COMEX will ever be alowed to default. Too damaging to public confidence in the markets. Now the Fed may rightly want certain operators in COMEX to suffer a well deserved demise but will only do it in a fashion that is discrete and efficient.

The risk in this game is having too much paper and not enough physical.
onlychild
(10/03/1999; 23:04:52 MDT - Msg ID: 15341)
Clint H
Great piece! I wish I had time to sit down and write an essay such as yours, but I don't. So can I borrow it? I think it may be closer to reality than we would care to know. By the way, there are two US shoe companies that I buy from: Mason Shoe and Danner. http://www.masonshoe.com/catalog.html http://www.danner.com
Chris Powell
(10/03/1999; 23:05:16 MDT - Msg ID: 15342)
S. African mines plan fatal blow to gold leasing
http://www.egroups.com/group/gata/228.html?Big news from GATA.
Peter Asher
(10/04/1999; 00:02:14 MDT - Msg ID: 15343)
Y2K Preview #2
Thanks, TomCat

Had another Y2K drill out here at the end of the world where the USA literally falls into the sea.

All four lines went dead, went next door, dead, Two miles down, dead. Next, drive 8 miles out of the forest into cell-phone reception territory, nada! North another 4 miles, phones are working, So we had half the exchange area down INCLUDING the land line that feeds the local cell tower. Always thought the cell phone was the backup system, guess not.

Called into Sprint on weekend repair, got someone hundreds of miles away, no record of trouble called in after two hours of service down. I was the first one who kept driving until they found a live line. Before I found it I was having weird thoughts like, somebody nuked Portland, maybe the gold shorts sabotaged the national phone system.

Sprint lady says "we'll put a work order in for service tomorrow." I said "WHAT? You've got half a county down!!" "Well sir, I just enter the data ---yada yada---"

Went home, went nuts, Where's gold? where's silver? What's happening on the Forum?

Drove 15 miles to the top of cascade head where I can pick up the next cell-phone zone and called TomCat and got quotes. Whew!! Phones came back on an hour ago.

Leigh, Goldfly, Angel! Maybe we can do a Y2K song to that old country-western that goes "I miss you already, and your not even gone"
AEL
(10/04/1999; 00:17:57 MDT - Msg ID: 15344)
mike55: y2k prep
"The link from AEL is the best overall checklist I have found in the last year" ... thanks! there are several other very good ones, more detailed than mine. "While some may consider it a little over the edge" ... yes, well, at the time I composed it (about a year ago) I thought that a shutdown of the national (or large regional) power grid of many weeks or even months duration was possible, and in that case one almost cannot be over-prepared. I no longer think that this is a major possibility worth going far out of one's way to prepare for; though it is still possible.
Gandalf the White
(10/04/1999; 00:22:57 MDT - Msg ID: 15345)
Jump SPOT ! -- Jump!
Spot at 309.10 on Forex at 11:17 PDT
GC9Z sez 309 at 2:19 NY time
while the K Chart sez "oops another down spike error" corrected -- and then 307.75 at 2:20 NY time.
Jump SPOT Jump ! --- WHERE IS Spike ?
<;-)
Voyager
(10/04/1999; 00:39:32 MDT - Msg ID: 15346)
(No Subject)
Good Evening Peter. PDX is still here and in good working order (as we are now the CITY THAT WORKS instead of The City of Roses which we were for so long.) Dec. gold at 308.90 up 3.60.

Have been away from the round table from early August until last Sunday night. WOW what a time to return. Left PDX in early August on our boat for extended cruising in the San Juan Islands, Gulf Islands, and southeast Vancouver Island. Up there after awhile, it really does not matter what day it is. No TV watching, reading newspaper, or Internet. I was truly unplugged. Having Orcas swimming next to your boat is very exciting, but not nearly the elation from last Sunday night & Monday. I am glad to be back to the forum.

THX-1138 � The GPS rollover was a complete non-event for nearly all systems. I have the northeaster 951X integrated into the Robertson AP20 autopilot. A terrific combination. In an electronics store in Victoria BC talked to a very knowledgeable storeowner who advised me this was actually the second rollover. Scratch one millennium disaster.

Sir TownCrier � Have really enjoyed your reports From The Tower.

Lastly ,welcome to all the new contributors. Am amazed at the increase.

Gold now 309.


Voyager
(10/04/1999; 00:48:25 MDT - Msg ID: 15347)
Correction
NorthStar 951X GPS / Chart Plotter
Peter Asher
(10/04/1999; 01:20:25 MDT - Msg ID: 15348)
ClintH
Well written piece. Sometimes taking something to the most extreme possibility makes it easier to comprehend and identify a smaller scale version of the event.

First of all, where would the administrative labor force to foreclose on everything come from. I once joked here, that the big career opportunity of Y2K would be "Repo-Man." Half the creditors would die of old age before they saw a dime from the auctions.

Secondly, such an event would see the "Dogs turning on their masters." Remember those "Suits" who drove out to repossess a farm in South Dakota or thereabouts, maybe 15-20 years ago. The Farmer just upped and shot them. --- Lots of Sheriffs will be needed too.

Some earlier comments on this: from 3/7/99; 20:24:33MDT - Msg ID:3074 (the Y2K contest)

>>>On the personal level, the major item at risk is homes. Most are heavily mortgaged. The most depressing part in Nick Guardio's current newsletter is his statement that most home mortgages have a clause requiring payment-in-full on demand which takes affect if the appraisal value falls below the outstanding loan balance. The specter of banker-landlords receiving their tribute from a nation of tenants is truly gruesome. However the last time there was a great depression, a far smaller amount of the population were home owners. (I believe the current figure is 66%.) Just as Florida and one other state currently allow unlimited home equity to survive bankruptcy, it's not unthinkable that in a financial meltdown there might be a moratorium on principle residence mortgages. Which is the larger voting block � the home owners of the land or the stockholders of the lending institutions? <<
And back on 1/13 and 1/14 I was having a three-way chat with AEL and Turbohawg-----

<<
In a "collapse" scenario, only the providers of a debt moratorium on homes and cars will remain in office! Its the guys holding the paper that will be wiped out.<<<
Usul
(10/04/1999; 01:33:11 MDT - Msg ID: 15349)
Tankan
http://biz.yahoo.com/apf/991003/japan_econ_1.htmlIn early reports, the Tankan was said to have "exceeded analysts' expectations."
In later reports, it was said to be "pretty much in line with our expectations"
http://biz.yahoo.com/rf/991004/bd.html
Does anyone smell a rat?
CoinGuy
(10/04/1999; 01:38:57 MDT - Msg ID: 15350)
new to the forum...
New kid on the block...been reading the forum for awhile thought I'd join the rank and file. I'm an ex-coin dealer out of Nebraska, and hold physical. Been pretty excited about the upturn in the market. I guess all I have to say, is "About Darn Time". Would like to thank MK for the great articles, he convinced me to stay in the market, I had to quit dealing, no money to be had.

Coin Guy
Goldsun
(10/04/1999; 03:30:24 MDT - Msg ID: 15351)
Tankan Rat Getting Dizzy
Must be the spin.
New Tankan still negative, but not quite as negative,
so spin nurses rotate about "improvement".
Poor rat suffering alone, but soon to have company.
Goldsun
Leigh
(10/04/1999; 04:48:18 MDT - Msg ID: 15352)
Rise and Shine!
Gold's up $9.70 in overnight trading. What a lovely way to wake up on a Monday morning!
Bonedaddy
(10/04/1999; 04:50:13 MDT - Msg ID: 15353)
Peter Asher?
I notice that you quoted information from Nick's Guarino's Wall Street Underground. This publication, although it seems a bit "hyped" at times, is fascinating to me. Many here would probably agree with Nicks assesment of the buying opportunity that exists in gold. The letter also states that oil prices will not remain strong over the long term. After reading many of your posts, I hold your thoughts in high esteem. I have grown wary (weary)of promises to deliver, and WSU always has a big one at the close. (I had the five thousand dollars once and thought about the offer, but then I found a guy to trade me gold for my paper.) Would you give an opinion as to the accuracy of this publication?
Tomcat
(10/04/1999; 04:58:52 MDT - Msg ID: 15354)
CoinGuy

Welcome to the roundtable. If you have any data or opinion on what happens to the numismatic market during tough times I would like to hear what you have to say.

I used to collect coins. Not for not for profit or investment, although I did ok, but for the love of it. Unfortunately, I did not stay in the hobby long enough to build up a group of dealers that I could trust. I specialized in Silver Dollars from the late 1700s to the early 1800s. I knew that niche well, better than many dealers, and that led me to find that some could not be trusted. Actually more that just some. Too many coins were altered in the back room.

Since one of my ways to enjoy an endevour is develop the friendship and trust of those I deal with I, with some sadness, chose not to continue my love of the coin. These were pre-internet day and I have often thought of returning to this love but using the internet to develop better relationships; like on this forum.

BTW, most of the gold I hold is uncirculated pre-1900 pieces.
Bonedaddy
(10/04/1999; 04:59:09 MDT - Msg ID: 15355)
Good morning Leigh!
Didn't I read that you were under the weather? Here at the Bone home, it's a sad day for all when Bonemomma is down. I hope today finds you feeling much better. Up $9.70 overnight, perhaps a toast with a GOLDEN glass of orange juice would be in order?
PH in LA
(10/04/1999; 05:02:05 MDT - Msg ID: 15356)
Flawed thought processes over at Silicon Investor
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=11435122The gold perma-bear known as Hutch over at SI Gold Price Monitor posted comments there this morning (see link). Since I am not a registered poster there, I beg your indulgence for posting a response here. (Up early here on the west coast... couldn't sleep.)

"The central banks have also agreed not to increase their gold lending arrangements and derivative operations above current levels for the next five years... They never even suggested lowering those levels to 1998, 97, 96, 95 levels. Thus, this is a promise with no depth. If we assume that CB selling, leasing, and derivatives transaction have been at an all time high for the 1999 year, then a promise to go no higher becomes a deception. A falsehood, construction to lead the POG up based solely on ideas, and not based in fundamental or technical reasons. So the triumvir has only created a situation where the benefits of the derivatives and leasing becomes in their favor, and not the investors." HUTCH at SI Gold Price Monitor

Please, Mr. Hutch, let us ponder for a moment, your misinterpretation of the ECB's announcement.

By pledging not to increase their gold lending arrangements for the next five years above current levels, the Europeans are in effect freezing that level, allowing for no more leasing whatsoever. Lowering levels to 98, 97, 96, or 95 levels would imply cancelling leasing agreements already in place, which would be a default of sorts on already agreed-upon arrangements. However, even agreements already in place can only be sustained by rolling them over into new agreements. If this avenue is to be curtailed, the escape valve of leasing to supress the market price is effectly closed off. This is not a question of percentages. It is one of reality.

The market has made the proper interpretation of reality, as it always does. Are you smarter than the market? Those who would have us believe that eventually find themselves in trouble. It happened to Martin Armstrong... it can happen to you if you allow your investments to follow your flawed thought processes.

Beware!
SteveH
(10/04/1999; 05:09:27 MDT - Msg ID: 15357)
South Africans unite...
Dec. gold now...$315.00

this from kitco from GATA:

Date: Mon Oct 04 1999 01:21
Winston (Latest from GATA: SA producers to restrict gold supply.) ID#243420:
"Bill disclosed Friday that some shorts are
already defaulting. He has another big scoop
in the second weekend dispatch: South
African gold producers are about to unite to
restrict production and thereby apply the
fatal pressure to the already faltering gold-
leasing business. This will create a bit of
an OPEC for gold."
http://www.egroups.com/group/gata/228.html?

SteveH
(10/04/1999; 05:19:00 MDT - Msg ID: 15358)
Asking $316...
Dec gold. Now $315.50.
Leigh
(10/04/1999; 05:37:03 MDT - Msg ID: 15359)
Bonedaddy
Thanks for asking -- it's just a cold. I was sicker yesterday morning, but feel better today, thanks to heavy doses of aspirin and antihistamine. Are you on East Coast time too?
novice
(10/04/1999; 05:39:05 MDT - Msg ID: 15360)
Breakdown
What is the meaning of "a moratorium on a mortgage"?

My brother and I discussed the issue of total market crash, if most people's mortgages became default, what would the banks do? Take the house and rent it out? Wipe out debts and give them the house (maybe if bank went under?) Very difficult subject I think, considering the mass of the problem. It would leave millions in the streets, I doubt they would let that happen.
Mr Gresham
(10/04/1999; 05:50:00 MDT - Msg ID: 15361)
The Squeeze!
Squeeze is on!

Pretty dumb, shorting gold right before Y2k.

Spot 313.

All rise for the national anthem (South Africa's):

"Nkosi sikelel' iAfrika"

My song for the group (no translation necessary):

He-he-hahaha-hahaha-hahaha -- ahhhhhh -- WIPE OUT!

Hipplebeck
(10/04/1999; 06:10:25 MDT - Msg ID: 15362)
gold leasing
Good Morning
The world is attacking us aren't they? (USA)
Can't blame them, though
We're the imperialists.
Deep down, I believe they all would love to see the US take a dive. Those we did not defeat, we rescued, which can leave just as much of a feeling of resentment.
The Scot
(10/04/1999; 06:21:05 MDT - Msg ID: 15363)
Novice # 15360
Good morning. Your question on home repossetion is a good one and we do have a precedent as to what the government does in a case such of this. If you remember the great fall of the Savings and Loans just 15 years ago. The government forclosed on homes by the millions. Never "worked with" the home owner to help him through hard times. They foreclosed, put the owner and his family out in the street and then let the home sit empty for years before they even attempted to sell it. By then it had deterioted badly and they sold it for 50% of its earlier value.

The government is not very smart, has no compassion for it's own people but will forgive debt of other nations at the drop of a hat.

Sincerely, The Scot
novice
(10/04/1999; 06:32:12 MDT - Msg ID: 15364)
THE SCOT
Thanks for the reply,I would assume this is what would happen but, I would think there would be some other profitable answer to the problem than just letting the house deteriorate. But then again I agree they can be stupid.

Thanks again!
JCTex
(10/04/1999; 08:13:32 MDT - Msg ID: 15365)
Worth repeating
http://www.gold-eagle.com/editorials_99/madhok100499.html
"In the end I want to remind the readers that to defend a Long position taken at $400/oz, you need $400. While to defend a Short position at $400/oz, you need an oz of Gold."

Sunil Madhok
skmoi@emirates.net.ae
United Arab Emirates

5 October 1999



USAGOLD
(10/04/1999; 08:26:34 MDT - Msg ID: 15366)
Today's Gold Report......Shorts in Trouble
MARKET REPORT (10/4/99): Day Six of the Big Breakout....Gold up another $9 as
we start the week as options traders scramble to cover naked call options. Call option
owners are being kept at abeyance by traders allowing only open "at market" fills -- thus
leaving the advantage to the traders scrambling for cover. But what advantage? The
market's getting away from them, and the sell bulge reflecting an extraordinarily high
volume keeps backing up. High volatility reigns. How long until that market is deemed to
be in crisis mode and trading halted? FWN reports a strong cash London market with lease
rates firming slightly. Long time gold trader Leonard Kaplan declares "It's a bull market!"
The London trade was followed by a strong open in New York with gold soaring to one
and a half year highs. "Rumours abound, even more than usual, about massive hedge fund
short positions,'' Macquarie Equities Metals Analyst Kamal Naqvi via Reuters. "There is
almost equally dramatic talk about the books held by major bullion banks and some gold
producers. Even if these rumours are only partly true, then gold prices will continue to be
volatile for weeks, if not months, to come,'' he added. Providing a real life example of
what happens when a gold market gets squeezed, a Karachi newspaper reported over the
weekend that gold trading has been suspended in the local bullion market after a major
market maker defaulted on forward delivery contracts. The newspaper reports that "In the
meantime, a massive heart attack led to the death of a senior bullion dealer who could not
sustain the shock after suffering heavy losses in forward dealing." The Karachi market is in
chaos with dealers and the public alike scrambling for a dwindling supply of gold.

That's it for now, fellow goldmeisters. Have a good day.

The October edition of News & Views will be ready early next week and we invite all
our visitors to take advantage of a free trial subscription to one of the most popular, widely
read and quoted gold newsletters. Last month we predicted an explosion in the gold price.
This month we deal with the nettlesome subject of paper assets in this tenth month of the
penultimate year. And we all know what that means. October brings with it our annual
Halloween issue. Here's an excerpt: "And this October could very well foreshadow a most
fateful stroke of midnight only two months away. October. When markets crash and assets
go bump in the night........." We think you will gain by taking advantage of our
offer...........

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.
mike55
(10/04/1999; 08:31:59 MDT - Msg ID: 15367)
Re-Post from 10/3/99
mike55 (10/3/99; 21:11:08MDT - Msg ID:15333)
Eagles vs. Phillies
Since I can only get here on a catch-as-catch-can basis, I ask forgiveness if this has been adressed before. I seem to remember a question (discussion?) on US Eagles versus Austrian Philharmonics. The face value of 2000 Schillings at the current exchange rate is about $156 compared to an Eagle at $50. Perhaps face value is a moot point depending on currency fluctuations or devaluations that are difficult to predict. What are the pros/cons of the Eagle versus Philharmonic relative to taxation, reporting
requirements on purchase/sale, etc? I'm clear on the pre-'33 coins, but am thinking I may want to shift my modern bullion mix one way or the other. Comments or suggestions, anyone? Thanks in advance.
elevator guy
(10/04/1999; 08:33:32 MDT - Msg ID: 15368)
Options prices relative to spot price?
Hello all! And a good gold-up morning to you! Good Spot, good Spike! Nice doggies!

I have Dec calls, and Feb calls, and I noticed that this morning according to the NYMEX website, when spot was $314, my Dec 270 call options had a value of $4400 each, and Feb 270 was $4500 each.
Spot hasn't changed all that much, but when I checked back, the quoted options prices had dropped a couple of hundred dollars.
It doesn't seem reasonable that this drop is due to the spot price, since it hasn't changed all that much.
And it doesn't seem that this drop would be due to the decaying time value of the options, since they have a long way to go until expiration, and we are in a bull market.
Can anyone tell me why these quoted options prices actually went down???
CoBra(too)
(10/04/1999; 08:47:21 MDT - Msg ID: 15369)
@Hipplebeck's -the world would like to see the US take a nose dive.
Sir, being a European, I feel that would not be (political),
or otherwise correct. I, for one like the US and its people and what it stands/stood for very much and have lots of friends.
No, I think it's more the deterioration of the global hegemony of dollarization, with all its discussed excesses in the (financial/derivative) that is the cause of the present credit and asset bubble. Too many countries have been severely maimed by unscrupolous speculation and manipulation, which this system has, maybe unwittingly at first, afforded to few though major players within the same.

I think ECB's move to curb the carry trades was born from the necessity to return to sounder monetary discipline before the whole system blows up, leaving no one unscathed.

A potential meltdown of the US$ and financial markets would affect all and no one could wish for such an outcome, but we all would wish for a retreat of official interference, manipulation and potentially collusion of markets in the age of cronie casino capitalism.
Keep America great - go gold and enforce fair markets.
Best CB2

goldnbones
(10/04/1999; 09:07:30 MDT - Msg ID: 15370)
Platinum rates
One month lease rates for platinum at 40.4%??? Can anyone explain what is happening there and its effects?
The Scot
(10/04/1999; 09:07:57 MDT - Msg ID: 15371)
UP & DOWN
Europe did a nice job of pushing up the POG this morning. Any bets on how far the shorts will beat it back down this afternoon in New York? I'll guess $4.80. The Scot
Gandalf the White
(10/04/1999; 10:18:45 MDT - Msg ID: 15372)
Keep Jumping SPOT --- HIGHER !
New high for Spot today at 316.30 at 9:15 Pacific time !!! -- XAU is going wild too. WHERE is Spike ? Limit is $75. on the COMEX -- any thoughts of when we could see a limit ?
<;-)
Gandalf the White
(10/04/1999; 10:21:36 MDT - Msg ID: 15373)
Spike just woke UP !!
BLASTOFF ! ---- $317.80
<;-)
Goldfly
(10/04/1999; 10:39:47 MDT - Msg ID: 15374)
Grrrrrrrr....GRRRRRRrrrrrrrr......GRRRRRRRRRRRR

Spike! What's the matter fella?

Grrrrrrrr....

Spot! What's up boy?

(Knock knock knock)

GRRRRRRRRRrrrrrrrrRRRRRRRR

I wonder who that is? What's wrong with you guys?

Oh, it's Mr. Short.

RRRRRaaarrrrfffff. Grrrrrrrrrrrr. ROOWWWWWFFFF.

Goldfly, I'm warning you. You had better do something about those dooooooooogggggggsss!!!!

Spot! Spike! COME BACK YOU TWO! ....... Eh, well.... ok, .....never mind.

Have fun guys!


Spot 316.90
Netking
(10/04/1999; 11:29:16 MDT - Msg ID: 15375)
@ Elevator Guy - Options
Elevator Guy - Pure demand & supply, the shorts have been
covering for sure. Demand has been higher near the beginning
of the scessions of late & then drops away a little. Buyers
& sellers can quote what they want . . . pure market
economics.
apdchief
(10/04/1999; 11:46:32 MDT - Msg ID: 15376)
Bid/Ask Spread
Within the past few minutes, on a service I subscribe to, I noted that spread between bid and ask was greater than $5.
Never seen this big a spread before. Significance? Volatility indicator?
Cavan Man
(10/04/1999; 11:52:18 MDT - Msg ID: 15377)
CoBra(too)
I have been fortunate to travel internationally more so than the average person. The most profound observation I am left with after my travels is that humanity, fundamentally is pretty much the same everywhere. Too many labels and too much hubris make for bad emotions wherever one might be.

Any surprises in your elections?
Gandalf the White
(10/04/1999; 11:53:50 MDT - Msg ID: 15378)
Spread on Spot
I too show a wide $5.25 difference between BID and ASK -- but notice that most all trades are on the sell side! -- This will change and the spread widen when Mr. Short gets tired of treading water and starts to sink.-- GETUM Spot!
<;-)
Netking
(10/04/1999; 12:15:01 MDT - Msg ID: 15379)
June2000 Call's
June 2000 Calls with strike of $400 ...now selling at $900.
Those that purchased these at $30 ... well done!
Gandalf the White
(10/04/1999; 12:32:24 MDT - Msg ID: 15380)
GETUM Spike !
Spot the dog was resting for a while and now jumped to $317.90
<;-)
SteveH
(10/04/1999; 14:38:34 MDT - Msg ID: 15381)
Dec. and Feb. gold now up!
Market Mth Open High Low Last Change Date Time Ask Bid
Gold(CMX) Dec 318.5 319.5 318.5 319.5 +1.5 10/4/99 13:20 319.5 319.0
Gold(CMX) Feb 320.0 320.0 319.6 320.0b +1.5 10/4/99 13:17 320.0 319.4


Dow and Nasdaq were up, but I don't know why?
Journeyman
(10/04/1999; 15:00:24 MDT - Msg ID: 15382)
Why Dow & NASDAQ are up?
@SteveHDollar up, yen down, 30 yr. US bond up, G7 currency interventionto weaken yen.Regards, Journeyman
Clint H
(10/04/1999; 15:14:54 MDT - Msg ID: 15383)
Peter Asher, onlychild, Leigh
Peter Asher, You wrote,

<<>>
You are a true diplomat. It was very extreme. I had read your previous comments. It was probably your thoughts that triggered my analysis. I read all your posts. they are very helpful. Thanks.

onlychild, you wrote,
<yours, but I don't. So can I borrow it?>>
You are kind to say so. Use it as you wish.

Leigh, you wrote,
<<which want to see humankind subservient to an elitist ruling class. I
believe they've been plotting and working toward this for many years now
and Y2K will be the catalyst that sparks it off.>>>
Good statement. We tend to forget that there people who would enslave us. Your two other points were good also. Thanks.
Peter Asher
(10/04/1999; 15:31:05 MDT - Msg ID: 15384)
ClintH -- Leigh
Clint, thank you for the kind words. Your depection reminds me of this line from "Peter and the Wolf." >> "But what if a wolf DOES come out of the forest, what then?" said Grandfather.<<<

Leigh: Powerful forces in the world have wanted
to see humankind subservient to an elitist ruling class since somone invented the spear and the crown!
Canuck
(10/04/1999; 15:51:12 MDT - Msg ID: 15385)
FOMC meeting tomorrow
Any thoughts on the announcement tomorrow??

Rates up or unchanged? How will either affect the POG.

My feeling is A.G. is damned if he does, and damned if he doesn't. If he raises rates the markets will be hammered, if he does not the dollar continues slide. Not convinced how either will affect the POG.

Thoughts?
Cavan Man
(10/04/1999; 15:56:58 MDT - Msg ID: 15386)
Sir ORO
Are there still bears in the woods? POG seeems to be steadily rising. What do you think? Is a pullback in the making? Many thanks.
phaedrus
(10/04/1999; 15:57:40 MDT - Msg ID: 15387)
gold and greenspan
Gold just traded at 322 on the overnight, up 4 bucks.

In regards to Greenspan, I think the market will go down whether he raises rates or not. They had their party today. He'll probably adopt a tightening bias and leave it at that... though he also knows that he's going to have to surprise this market if he wants to get any respect. I for one will have my guns ready to short the dow the split second the announcement is made if he raises.

ORO
(10/04/1999; 16:23:35 MDT - Msg ID: 15388)
Cavan Man
The markets are not spinning out of control so the rise in POG should be steady. Technicals are still on the strong side and disbelief is still common among economists. There is a strong chance things will hold as the price goes up and Greenspan monetizes eveything in sight. The buying power of the $ is the US' traditional choice for a default mechanism. The banking system is at risk if the $ value is maintained.
If the shorts fall apart at the $355 area, expect extrememe turmoil and the Holzman street price vs paper price to hit the ANOTHER/FOA targets before long. The $ and bonds should fall apart long before this so they are the things to watch.
CoBra(too)
(10/04/1999; 16:25:04 MDT - Msg ID: 15389)
Gold Miners up 10% on average - do we need all else to tank?
-Very rhetoric question for most of the forum - don't we still hope, against all reason, that this final battle in the fiat money system will be played out in a way not ending in global financial and economic armageddon?
We all, I do know, hope for the best outcome for all, but we do feel the major powers overplayed their hand and what may be worse are still at it exacerbating the ultimate outcome - that's the real scary thought.
@CM-Hello my friend, I've been the son of a diplomat - even if my posts don't ever suggest that-so I've been a traveller most of my live.
The outcome of our elections, though condemmned internationally, because of right wing overtaking conservatives as 2nd or 3rd runner ups to the social democrats, scaled down to 33%, worst ever, is as I see it a major change in our buerocratic concept of democracy - and even if I personally can't just now conceive the ultimate outcome, I would like to stress that the "right wing kid" Joerg Heider is not a Le Pen, but a popular demagogue, who got his votes from former and "fed up" labor. While I miss a real liberal faction, I do feel our conservative party should take a breather from coalition and rejuvenate - a la' Germany!
The mainstream press just presses on and looks at the loudest voices, claiming we've potentially elected a new Hitler-ridiculous (reminiscent of the Waldheim affair, not doing justice to us at all) people are just fed up with 50 y's of beaurocratic Austrian style of "social partnership" or better proportional representation. Give us a chance at real democracy and we'll take care of any excesses. Trust me, we've had more than learned our lesson some generations ago - now we're in the process of getting up to speed with democracy. Thank you, CM, for your concern - I'll continue as the picture becomes more clear.
As an afterthought - we're talking about a country, which has assimilated 2 million refugees since WWII - 25% of total population in 50 years and I'm kind'a proud of our success!
Best CB2 thank you - and think gold!




PH in LA
(10/04/1999; 17:16:53 MDT - Msg ID: 15390)
Two interesting posts this afternoon at Kitco

Date: Mon Oct 04 1999 18:12
JP (The rising POG is saying that a massive Dow decline is to take place between Oct 15-25.) ID#237237: Copyright � 1999 JP/Kitco Inc. All rights reserved

The financial panic is upon us. We will have US gold backed currency within the next 2 years. A massive depression will follow the Dow decline and will last for a minimum of 5 years. Forget about inflation for many years to come despite the rising CRB. Most of the rise in the CRB is attributable to the recent precious metals advance. A massive decline will start to take place in real estate prices and all commodities in general ( except for gold ) after the Dow debacle.. Next year, short as well as long term interest will collapse as the depression sets in. Gold (with temporary corrections) will continue to rise for at least 5 years.




Date: Mon Oct 04 1999 18:12
SEQUIN (Goldman 's) ID#25171:
Copyright � 1999 SEQUIN/Kitco Inc. All rights reserved
Goldman's Option trader got fired .

You guys can't even start to imagine how much blood there is.

Bullion banks are in panic mode : derivative positions too big to cover , no liquidity , fear about medium size mine defaults because of overhedging and margin calls .

Very bad words in board rooms these days.

Banks hesitate to be the one who pulls the trigger on mines since they could start a cascading default chain reaction.

UBS is dead.


Morgan is sh*tting razor blades but not dead yet .

Morgan stanley disappeared from radar screen.

They NEEEEED Gold to go down .

There is about 1 year production of buy order between 280/295. If these guys start to panic it might get interesting. But too much blood is not always the best you can hope for: Beware of CBs stepping in.

If there are small to medium mines defaulting , we could see contagion on the XAU. So I would prefer an orderly rise.

I know this is too much to ask for and I am a little bit excited. THKS
Gandalf the White
(10/04/1999; 17:32:18 MDT - Msg ID: 15391)
WOWSERS -- Look at the size of the BID side on the GC9Z !
OVER 180 bids at 3:20 NY time and delayed half a hour ! -- This means that the Dec Gold price is not going to go down!!
Spot the Dog and Spike are trying to rest from the great day chasing Mr. Short, BUT looks as if there are a whole bunch of their BUDS now ready to help them. -- The golden bears have not yet started to break, but they are starting to sweat!!!
<;-)
CoBra(too)
(10/04/1999; 17:34:10 MDT - Msg ID: 15392)
@ORO - Hello - great posts on the Kitco site
Though I've never really been a trader - you're one doing you're homework - not only for trading purposes, but in the framework macro-economic, monetary, currency and maybe, most importantly - sentiment indicators. Please keep up your great work, wherever you choose to post on whatever is on your mind - Thank you - CB2




RossL
(10/04/1999; 17:37:51 MDT - Msg ID: 15393)
Wow
I just saw a trade at 323 in the after-hours access market. Wouldn't it be nice if the 330 level was crossed before the open in New York on Tuesday morning??
Gandalf the White
(10/04/1999; 17:40:41 MDT - Msg ID: 15394)
Spotty is now JUMPING!
321.10 in a big JUMP for Spotty, Spot's younger brother.
<;-)
Gandalf the White
(10/04/1999; 17:45:23 MDT - Msg ID: 15395)
Dec Gold now at $323.50 on MRCI
AND that is with a 15 minute LAG !
Get it while you can, IF you can.
My LOCAL dealer friend sez there is a $10 prem on 1 oz. Eagles over Maple Leaves now.
What is the Street price of that ugly KRand ?
<;-)
RossL
(10/04/1999; 17:52:54 MDT - Msg ID: 15396)
Gandalf
KRands aren't ugly. As long as you don't look at the reverse ...
The Scot
(10/04/1999; 17:54:07 MDT - Msg ID: 15397)
CoBra(too) #15389
Your post ..."don't we still hope, against all reason, that this final battle in the fiat money system will be played out in a way not ending in global financial and economic armageddon?
We all, I do know, hope for the best outcome for all, but we do feel the major powers overplayed their hand and what may be worse are still at it exacerbating the ultimate outcome - that's the real scary thought."

CB2, I'm glad you made the statement above. All of us on this forum, in our hopes for Gold to go to the moon, know what this will actually mean for the world ecomomy.It will be a pretty ugly situation. Lets hope we can "Win" our gold battle without massive casualities. Good Post !
The Scot
Cavan Man
(10/04/1999; 18:15:53 MDT - Msg ID: 15398)
CB2
I believe it can be orderly. I refuse to believe in financial armageddon. The puppeteers know the right strings to pull and compromise they will. If the many different worst case scenarios detailed here are played out, then I say good show! Know why? Then it must be the Creator's Will and despite "the sorrows", that's a reason to rejoice
Cavan Man
(10/04/1999; 18:18:07 MDT - Msg ID: 15399)
Buy Signal
Pat Sajak (sp?) is doing his part.

Just overheard the show on the tube while washing dishes. Yes to all, I am a real renaissance man. One of the prizes offered was, "solid silver and gold bars". No kidding. CM
Cavan Man
(10/04/1999; 18:19:32 MDT - Msg ID: 15400)
ORO
Thanks. Can you repost your Kitco's over yonder? (here)?
Cavan Man
(10/04/1999; 18:20:11 MDT - Msg ID: 15401)
KRands
Premiums are typically lower.
Cavan Man
(10/04/1999; 18:22:36 MDT - Msg ID: 15402)
Beehive
I was in a FED Bank this afternoon. All hands will be on deck for the "rollover". Also, there is no more window service. Too bad; here, it is such a beautiful (fiat) bank lobby. Could it be fear of the pitchforks?
Tubac's ears
(10/04/1999; 18:25:31 MDT - Msg ID: 15403)
silver
Greetings all! Can anyone fill me in on why silver has yet to blast off. I would have thought it would've been by now.
Thanx
DD
(10/04/1999; 18:27:19 MDT - Msg ID: 15404)
Cobra, The Scot
Hi guys - It's true that it would be nice to see the back of this funny money system broken with few casualties. It's so nice to have our cake and eat it, too. But it's unlikely to happen that way, I believe. The current system is a win/lose system whereby the the rich get richer at the expense of the rest of the people. I believe there's a larger issue than who dies with the most toys. Is the current system exploiting the natural balance of things to the point of being unstainable? It appears that we may be blessed to break this old win at any cost paradigm, regardless of the cost. Am I willing to suffer the change now in order to provide a better world for my kids and grand kids? Yes. I am. Do I hope it won't be too bad? Yes, I do. Am I optimistic for a soft landing? No. I'm not. As human beings, passengers on space ship Earth, at some point, our integrity must become more important than power hungry egos and our pocket books. Sure, it's a pointedly idealistic belief that we might someday begin to work together. But, what the hell? We've got to believe in something. Right? Best, DD
RossL
(10/04/1999; 18:30:24 MDT - Msg ID: 15405)
Krugerrands
I checked this afternoon and KRands were $330 and US Eagles were $343. At there prices, you can buy 27 Krands cheaper than 26 Eagles.

When gold hits $10000 per ounce, you will wish you bought those ugly ol' non-politically-correct Krugerrands!
Peter Asher
(10/04/1999; 18:35:44 MDT - Msg ID: 15406)
Caven Man, Exactly!
>>>>The puppeteers know the right
strings to pull and compromise they will. <<<


Cavan Man
(10/04/1999; 18:43:56 MDT - Msg ID: 15407)
ALL
"They" are going to have to deal with the new gold paradigm. They must! It will be a surer path to continued riches for the established power and money brokers to have serfdom chained to inflationary bias than to have us all eating grass. Think about it. The "rents" will be so much greater for them. World events are moving the western economies. Gold calls the tune. I believe we are witnessing history. Why not? The world makes histroy every day. If you discount the FOA/Another storyline, then you are guilty of selective perception. It can happen.
Peter Asher
(10/04/1999; 18:44:21 MDT - Msg ID: 15408)
Koan
Don't pay attention to the Kitco qoute on silver, Use The other guys!
The Scot
(10/04/1999; 18:48:26 MDT - Msg ID: 15409)
DD Cavan Man
DD, I know you are right, I was just hoping for the impossible.

Cavan Man, The Lord has us in the palm of His hand.

Sincerely, The Scot
apdchief
(10/04/1999; 18:49:21 MDT - Msg ID: 15410)
Bid/Ask Spread
I posted earlier regarding a $5.25 spread on bid/ask for spot. On the night session, the spread is now $7.80!!!! I ask again....significance?
CoinGuy
(10/04/1999; 18:55:16 MDT - Msg ID: 15411)
kitco POG overseas
What's going on with Kitco, seems to have unreliable updates? Where else can I go for foreign spot. Heck, what is the spot. Here spot...

Coinguy
The Scot
(10/04/1999; 18:57:46 MDT - Msg ID: 15412)
Which coins?
There has been much discussed the last few days about which coins to buy. I think Granny started it all. Let me put in my thoughts, if you please.
If worse comes to worse, and Gold is actually bartered on the streets, I believe the "fineness" will play a factor. The 24K coins are going to worth more than the
22k's. Right now we pay a premium for Eagles even though they only have 22k content. I think it is a waste to by anything but 24k. Anyone agree?
Gandalf the White
(10/04/1999; 19:00:58 MDT - Msg ID: 15413)
adpchief's question on Spread
IMHO when the spread widens to this amount (+$7) tween the bid and ask -- there are few sellers on the market side. -- I believe that the market maker is required to make a market by stating an offer price and if the market moves too fast he may not be able to cover his own sales.
<;-)
Cavan Man
(10/04/1999; 19:05:52 MDT - Msg ID: 15414)
The Scot
Agree. 24K = more AU.
RossL
(10/04/1999; 19:07:43 MDT - Msg ID: 15415)
Coins, spread
Which coins?

The Scot
Maple leafs are .9999 fine one ounce gold. 24K.
The KRrands and the Eagles are 1 ounce gold wilt 10% copper alloyed in for hardness and durability. 22K. They have the same number of atoms of Au as the maple leafs.

The spread

I Just looked at livecharts.com and bid is $325.4 while ask is $326.4 a few minutes ago I saw a bid of $325 for 104 contracts! Somebody is buying big time!
Gandalf the White
(10/04/1999; 19:08:05 MDT - Msg ID: 15416)
CoinGuy's Question
www.forex.freeservers.com/main2.htmlSpot the Dog is the fictious "present" price of Gold! There are many reporting boards and in many values other that US$! --- the best one that I have found is at the forex board which is setup for currancy exchange quotes.
BUT if you click GLD= and change the time to MIN and click "request" -- WALLA WALLA bing bang !!
<;-)

CoinGuy
(10/04/1999; 19:08:12 MDT - Msg ID: 15417)
Coins
Scot,

As far as coins go, I've always viewed my coins the same way I view my stock portfolio. I keep some in the investment grades(MS63 to MS65), I also have purchased a few rarities, and commons as well. I've also bought quite a few common silver and gold pieces(junk silver and gold) intended to use in a barter situation, if the need arises. As far as 22k or 24k, some people say the American eagles will be easily recognized as a "real" gold coin because it's American, I myself don't care. I don't think the price difference is worth the worry. Especially when you're in a rising market. Just be glad you bought in now. Go Spot Go...
elevator guy
(10/04/1999; 19:08:56 MDT - Msg ID: 15418)
@Coin Guy
http://www.quote.com/livechartscom/Coin Guy, you can see the Sydney market, (I think), trading at
If the window doesnt appear when you click on the link, try typing in the address manually.
When the screen comes up, it will show INDU, the Dow, at todays close. Click in the text field for the symbol name, and type in for example gcz9, to see the December contract.
You can vary the time scale of the chart also.
Cavan Man
(10/04/1999; 19:11:34 MDT - Msg ID: 15419)
Counterattack
Where is it? Anybody have a clue? What do the best mids here say?

Gold at $325 is still cheap IMHO.
Gandalf the White
(10/04/1999; 19:12:45 MDT - Msg ID: 15420)
apples and oranges !
the spread tween the Dec Future bid and ask AND the spread tween the SPOT the Dog BID and ASK are far different !
<;-)
CoinGuy
(10/04/1999; 19:15:29 MDT - Msg ID: 15421)
(No Subject)
Thanks for all the help guys, was getting tired of KittyCo...
SteveH
(10/04/1999; 19:23:07 MDT - Msg ID: 15422)
I hope you are all still awake!
www.kitco.comDec now...$324.30!!!!

from Trader_Vic [I like these words]:

Date: Mon Oct 04 1999 20:55
trader_vic (NETPI...) ID#316402:
Copyright � 1999 trader_vic/Kitco Inc. All rights reserved
As far as this move is concerned, don't even worry about the oversold condition until gold reaches $525/oz....Until then, we will just be cleaning out the shorts...or shall I say the SHORTS will be cleaning out their own shorts!!! When you consider that the normal level of gold should have been $500/oz if it had not been used as a hedge instrument, it only makes sense that until we reach the INITIAL RELATIVE VALUE OF GOLD we are just in an equalization phase....Once this phase is completed in the next several months, we can then really trade gold as the asset it trully is...It could get really hairy in here as the gold shorts unwind loosing positions and all the others just default on their investments like PEI, there is a financial disaster out there waiting and it is bigger than Y2K..the only difference is that Y2K has more publicity...This disaster is one that those in the know won't tell and will take it to their grave...or their demise!!! Watch gold, it will clear $350/oz with no problems at all and when the ball really starts rolling and the fund managers start to jump in, it will be the most fabulous bull you have ever seen....much better than 1979 & 80....this one has 100 times the power behind it that the 70's did...just think of the inflation in $ that went into the stock market that will flow directly into gold over the next 6 months...and with gold you have the thinest market of any stock issued...that's because THERE IS NO MORE GOLD!!!!
SteveH
(10/04/1999; 19:28:32 MDT - Msg ID: 15423)
Bollinger (not deringer, a topic for another time):
The monthly bollinger is at $335 and guess what is approaching it. If gold hits $350, then it is likely that it will track up the upper bollinger to around $380 or higher. The weekly u.b. was at $280. It is broken. The daily u.b. was at $260 and it is broken. Next goal is $335. Tonight?
ORO
(10/04/1999; 19:33:06 MDT - Msg ID: 15424)
Reposts
CB2 thanks -
Cavan Man thanks for reminding me.

Date: Mon Oct 04 1999 18:56
ORO (@Surfer Mine defaults) ID#71231:
Copyright � 1999 ORO/Kitco Inc. All rights reserved
Long term the mine defaults will only hurt overhedged miners, causing their assets to come to market, where all the golden sharks will come to feast.
So far, not too many medium/larger companies are in trouble. Many may refinance long term hedges given half a chance, even if survival would be a touch and go situation. If SEQUIN has it right, and my data indicate that is an understatement, then there will be a general dump of all miners, then a quick reversal in the unhedged, or lightly hedged survivors. I try to buy only those mines that have no hedges, or mines with hedges covering a small portion of production and having multiple mines ( so that closure of a mine would not be a disaster ) .
Right now I am looking for "goat pasture" gold explorers, open to suggestions. Checked out MYNG, I see a 100% to 200% dilution at the POG $300-$350 range before they produce their first ounce. So at current prices, with intentions and capacity to produce 16000 to 35000 Oz per year at 150 to 250 margins, I'd say that comes to 5-10c present value per share in the current POG range, and if they are very lucky in financing, it might be worth up to 20c. Things get interesting if POG holds over $350. Right now they have weak claims for a large gravel deposit and have to fix their debt as well as financing a mine. The weak claims would prevent an agreement with a major, say PDG/NEM. Maybe a non-distressed medium size producer would take them on.

Date: Mon Oct 04 1999 18:49
SEQUIN (On the other hand , ) ID#25171:
Copyright � 1999 SEQUIN/Kitco Inc. All rights reserved
derivatives books are so screwed that to protect them bulion banks had to buy an aggregated 15 M oz ( this doesn't take into account mine or spec buybacks ) If Gold goes back down , they will have to sell back .
If it goes up again , they will have to buy again : sounds too bad to be true ? It is the principle of gamma minus which I explained here a year ago ( give or take a few months ! )
So why not cut the position ? The problem is that in normal time , it is easy to find liquidity in options to buy 1 to 2 M oz of a strike without moving the market too much . Now , with 100 000 oz you clean the offers and you have to go 2 % vol higher to find the next offer . Since most of the option market makers have open positions in the tens of million of oz , it is just impossible .
The conclusion is that we will have very violent moves up and down with a bias toward the upside since the 100 M oz gorilla is looming around at 290 .
Very sharp pullbacks are possible due to this derivatives positions and most risk managers are waiting for the first defaults in the next 2 months.
You can trust banks to try to cover it up but since I have the best of info , I will make sure that you know about it .
Look at GCZ9 now , and smile . ( up 4 to 322 as I write this piece )
THKS

Date: Mon Oct 04 1999 18:12
SEQUIN (Goldman 's) ID#25171:
Copyright � 1999 SEQUIN/Kitco Inc. All rights reserved
Option trader got fired .
You guys can't even start to imagine how much blood there is .
Bullion banks are in panic mode : derivative positions too big to cover , no liquidity , fear about medium size mine defaults because of overhedging and margin calls .
Very bad words in board rooms these days.
Banks hesitate to be the one who pulls the trigger on mines since they could start a cascading default chain reaction.
UBS is dead.
Goldman is dead.
Morgan is sh*tting razor blades but not dead yet .
Morgan stanley disappeared from radar screen.
They NEEEEED Gold to go down .
There is about 1 year production of buy order between 280 / 295
If these guys start to panic it might get interesting . But too much blood is not always the best you can hope for : Beware of CBs stepping in .
If there are small to medium mines defaulting , we could see contagion on the XAU.
So I would prefer an orderly rise .
I know this is too much to ask for and I am a little bit excited.
THKS




Date: Mon Oct 04 1999 19:33
Silverbaron (Did the Fed bail out Goldman Sux?) ID#290456:

This one especially for SEQUIN "Goldman is dead"...

Gold producers forced to rejig hedge books

http://196.36.119.130/miningwebgold.nsf/Current/422567D9004530DF4225680000724BF6?OpenDocument



Date: Mon Oct 04 1999 21:18
ORO (@EJ @Old Gold) ID#71231:
EJ - exctically one second too late. Austrians still have to come up with a less painful transition scheme.

Old Gold - If economists saw this, why didn't they suggest some way to get arround it? Perhaps the Emperors of Rome wanted not to hear of the future belittlement of their pricipality?


Date: Mon Oct 04 1999 19:40
OLD GOLD (How the US has Benefitted from the Global Crisis) ID#242325:
Copyright � 1999 OLD GOLD/Kitco Inc. All rights reserved
Excerps from a recent academic study on the globasl financial system. After reading this I wonder why the European CBs waited so long to pull the plug on the gold carry trade.



There is no such grassroots activity in the U.S. as yet. Partly, this may
reflect the fact that the U.S. economy has thus far benefited in various
ways from the global crisis. These include seignorage profits. Over
two-thirds of U.S. currency is held outside the United States. Some is drug money, but mainly it's the increasing use of the dollar as a store of value by middle-income households upset by the instability of their local currency. The difference between the face value of the bills and the minor cost of printing them, adds up to annual seignorage profits of about 0.5% of GDP.

Another boon to the U.S. economy has been the flight to U.S. bonds by
foreign investors, whose share of all private holdings of U.S. bonds rose
from 21% at the beginning of 1995 to 38% at the end of 1998. In addition,
developing countries, who in 1997 already held 55% of global official
reserves--mainly U.S. treasury notes--though transacting only 25% of world
trade, have been desperately trying to regain the confidence of the
financial markets by increasing their dollar reserves. This has meant
curtailing imports and emphasizing exports, which has severely depressed
world prices for their chief exports: primary goods and labor-intensive
manufactures. Thus the U.S. has been able to increase its foreign
liabilities to cover its rapidly growing trade deficit without having to
raise interest rates, as the rest of the world has to do, in order to get
foreigners to hold its currency and securities.

The dark side is that U.S. residents whose income and wealth derives from
owning financial assets or who are employed in skilled jobs in the
nontraded goods sector have garnered the lion's share of the benefits. In
contrast, workers in the exporting and import-competing industries have
lost high-paid jobs and have had to migrate to lower wage, service sector
jobs. Feeling their profits squeezed by unusually low prices, agriculture,
mining, steel, and other material producing industries with political clout
are joining with labor in demanding import protection. Washington's attempt
to ride both its high horses--free trade and free capital mobility--is
becoming politically precarious.


Date: Mon Oct 04 1999 19:34
EJ (ORO - yessir) ID#23066:
Except for that little problem in the 1970s, the scheme has worked pretty well. Problem is, all the MIT and Harvard educated technocrats running the monetary policies of the world's largest nations are all in agreement as to how the global economy ought to work. As a bonus, they can all swap stories about chugging scorpion bowls at the Hong Kong in Harvard Square. But there are a few fruitcakes at MIT and Harvard who are gaining some acclaim. They are bringing up the arguments of the Austrian school.

Just in time.
-EJ

Date: Mon Oct 04 1999 19:11
ORO (@EJ - Old words from the BIS) ID#71231:
Copyright � 1999 ORO/Kitco Inc. All rights reserved
The thing they thought they could do, was to make the decision, on the part of the world as a whole, as to what is money.
They discovered, the hard and embarassing way, that the markets decide what is money, not CBs or governments. What success they may have in pushing the paper currencies over the PMs requires constant work in an environment of fluctuating debt loads and exchange rates. Their opinions are allways wrong so that eventually, somewhere, they end up introducing a large distortion in the markets/economy, ending with a bubble like today's stocks, accompanied by artificial depression, as in commodities and gold. Their control one day is the best indicator of their loosing it on the next day, when their control mechanism backfires.

Date: Mon Oct 04 1999 05:11
ORO (@Captain Kirk - How the worthless is valued) ID#71231:
Copyright � 1999 ORO All rights reserved
It is no secret that the best way to build demand for something is to make it someone's obligation. No better way to do that than through debt and taxes. Debt, in particular, is great because it has the stamp of commitment from the debtor, apparently given out of his own good will.
Thus the token has value because the debtors owe it. Say I found an enormous cave full of bats, and I had a banking lisence, if my bank were to loan you clumps of bat droppings at 1% interest rates and there was a farmer willing to take bat droppings for corn because it makes for a good fertilizer, then that would quickly become the cheapest fertilizer and everyone would borrow it. Then, as the first interest payments were coming due I raise interest rates to 20% and demand the return of my bat droppings or that you refinance the interest payments you owe. Very soon, bat droppings will have become very precious and many a farmer will kick himself for using dear bat dung for fertilizer. There would be great explorations for bat caves. Bat farms would eventually be built and the purchasing power of my bat dung hoard would rise as long as not to many went into receivership and interest rates kept ahead of bat dung production, lending and findings there would allways be more demand for bat dung than supply.
But what would happen if guano of an extinct albatros were to be offered at a 1% rate by the bank of some enterprising pacific island? Though their guano would be extremely cheap, their great enterprise, hard work, and fierce resistance to imports would cause them a great accumulation of my bat droppings. My borrowers would be at a loss to return any of the albatros guano borrowed. When the island demanded the return of its guano, it would cause a great devaluation of my bat droppings, because of the great ammount of guano debt owed, the stockpile of bat droppings everywhere and that would be suddenly seeking exchange for guano. There would be a great surge in prices quoted in bat dung. I would not raise interest rates out of fear of further depressing the economy of the world, and exacerbating the rate of bankruptcy already caused by guano debt. Since my bat dung currency is dependent upon demand for debt settlement and bankruptcy eliminates debt, future demand for bat dung would suffer

The US has trapped the world in $ debt in the late 70s and again in the early 90s. The mechanism is well known and simple. You lower interest rates and people borrow if there is something to buy with the currency you lend. When foreigners, particularly Emerging Market nations borrow, they pay a significant premium to US interest rates. Essentially the rates they pay are higher for the simple reason that they are not capable of printing $. Just as the credit card company is best served by your maintenance of a steady or growing balance as long as you are capable of making a certain minimal payment, so does the EM nation emerge from independence into debt and must maintain payments on it. This makes for the international demand for $ that the EMs must supply. Hence the demand for $ is maintained as well as its value.
The great EM debt buildup occurred in the 70s as oil, then newly made tradable exclusively in $ ( 1969 ) , made necessary the export of goods to the US in order to obtain those $. Special "development" loans from the Wrold Bank, the IMF, and commercial banks backed by US government guarantees were made available at interest rates lower than the US inflation rate. All in the interest of creating international demand for $.
Upon the beginning of Paul Volcker's taking of the reigns of the Fed, the interest rates were hiked skywards and many EM nations suffered steep currency devaluations and debt defaults that made their $ debt much more difficult to service. As a result, much of the world's supply of goods and services became cheaper for the US consumer and the US economy became the mock economy that it is today. $ supply became the more difficult, whereas goods were made plentiful for those supplying $.
Today, the Swiss Franc, Yen, Euro and gold, the latter in particular.

Is it not obvious that the value of money is made out of the debt burden of its debtor's? Is it not obvious that the currency game has been set up against the $ on all fronts, but particularly gold?

Great pieces explaining different aspect of this in clear stories are to be found in Dr. Paul Hein's articles.
A Primer On Money
http://www.golden-eagle.com/editorials_98/hein031798.html
The T.Heft Plantation
http://www.golden-eagle.com/gold_digest_98/hein110298.html

http://www.golden-eagle.com/gold_digest_99/hein070899.html
Money, Lies, and Adding-Machine Tape
http://www.golden-eagle.com/gold_digest_99/hein060199.html

Date: Mon Oct 04 1999 02:27
Captain_Kirk (africanminer@gold as money) ID#339203:
Copyright � 1999 Captain_Kirk/Kitco Inc. All rights reserved


Supposedly around 1975, the U.S. congress suspended the FDR 1933 executive type order which suspended ( anulled? ) all gold contracts. Supposedly, today, one can write a contract for payment in gold. However, any decrease in the gold price of the post-1933 dollar is viewed as a "profit" for post-1933 dollar tax purposes for the one exchanging gold for goods or for post-1933 dollars. That is, you might have to find some post-1933 dollars to pay out as Federal taxes if you realize a "gain" from the transaction. I guess the Federals want you to track each and every piece of gold, assign a post-1933 dollar "price" to it, and compare this original "price" with the final "price" when you exchange that particular piece of gold for something. If you exchange hard assets for the original piece of gold ( never use post-1933 dollars ) , then somehow, somebody has to determine the "fair market value" in post-1933 dollars for the original transaction. Ect., Ect. The whole scheme is quite confusing to me, and it is entirely unclear what they want you to do. I suppose the Federals don't won't you using gold for money, they want you to use their "primo" post-1933 dollars. Of course, I have yet to figure out just what one of these post-1933 dollars is for sure. I guess it is what they tell you it is. But they won't actually tell you what it is. It gets really confusing to me. I would prefer to stick with an ounce of this or a pound of that, which would make things a lot simpler, or so it seems to me.

Date: Mon Oct 04 1999 18:05
ORO (Technicals - SJ Kaplan) ID#71231:
Copyright � 1999 ORO/Kitco Inc. All rights reserved
I tried to move out a big chunk of my position too ( hoping to unload 1/3-1/2 ) , just as Kaplan was, with an eye to immediately reenter on the pullback. I was too slow and have too many positions, by the time I had enough limit orders in for sale ( I do classic TA to determine targets and use oscilators to time - the swings were just too quick and I could not keep up with the analyssis ) , the pullback was well underway, managed to get out of DROOY at 2.5, and reentered at 2.0.
Got out of 1/3 of my CAU at 9/16 and tried to get a fill at 7/16 and 3/8, which didn't happen ( yet-and the chart shows it may not happen at all ) .

Gold - at POG over 315 we are hovering above the old resistance. Breaking above the 324 mark ( bid ) or 329 ( ask ) should push up to the 340/350 area rather quickly, leaving $355 as the next intermediate term target. Gold is enjoying a combination of attention and disbelief, which is rather bullish.

XAU - A break over 89 and especially 92, should easilly lead to 104-105, and the XAU should then continue to about 120 at the vicinity of $350.

If the market does not fall appart as it did in Karachi, the outlook for gold shares and futures is good. If not, the gold markets will seize up and your physical will be the only thing holding value in the markets.

Recent actions by the SA miners to limit production seems to indicate their belief that the markets are not going to fall apart. We shall watch carefully.

Nasdaq- does anyone else see significance in the shoulder line not being broken on the Nasdaq composite's daily chart head and shoulders ( 1 month ) ?
Note that the formation could be a flag ( 2 months ) , as part of a steep cup and saucer, C&S ( 3 months ) .
If the shoulder line at 2820 is broken upwards convincingly, then the flag and C&S would play in to give upside targets of 3100 and 3300, respectively.
If the Neck line support under 2700 is broken, then 2500 is a good target downside, followed by a 2000-2100 downside target for the double top formation of the last 6 months.
Oscilators indicate this up move in the Nasdaq is for real but should fizzle and bring back the negative trend as an oscilator lower high.

The bearish scenario is more in line with the S&P500 H&S so long as the SP500 ( cash ) remains below 1380. A reversal at 1310-1330 tomorrow is probably has the most negative implications.

If the VIX drops to 23 or less, I would consider this rally weak and expect a quick reversal downwards at or just after options expiration.
Chris Powell
(10/04/1999; 19:36:44 MDT - Msg ID: 15425)
NY Post credits GATA for Euro CB action
http://www.egroups.com/group/gata/230.html?John Crudele's column
in Monday's NY Post.

http://www.egroups.com/group/gata/230.html?
Chris Powell
(10/04/1999; 19:38:04 MDT - Msg ID: 15426)
NY Post credits GATA for Euro CB action
http://www.egroups.com/group/gata/230.html?John Crudele's Monday column.
Bonedaddy
(10/04/1999; 19:38:25 MDT - Msg ID: 15427)
Leigh
No, I'm on Rocky Mountain Time. No traffic or streetlights here. Sometimes the antelope come in the yard and the dog barks. Then I rise with the east coast. Bloomberg is good TV at 04:00. Glad you're better.
SteveH
(10/04/1999; 19:38:51 MDT - Msg ID: 15428)
Some reposts
www.kitco.comHI ALL, WHAT A DAY/NIGHT
(ANGEL) Oct 04, 20:27

Bigdog thought I would go with DROOY ,HARMONY, and DAY, meeting with broker tomorrow I know they've had quite a run up but I think this has just started. I couldn't get any options, they're still not taking any limit orders, its strange to watch the screen and see people being skided, Jesse James never did so well. CNBC actually did an interview with a woman from one of the big banks ( sorry I didn't catch the names I came in on the middle) she actually talked about the hedgers problems and admitted they weren't clear yet. She looked as if she swallowed a pickle the whole time. By the way has anyone heard any more on the problems at the comex ? I heard they had thousands of orders hanging out unable to be filled.


Le Metropole members,

At the moment, the price of gold is trying to take out
the critical $315 area. If it can close above $315 spot
look out. One month lease rates are over 5%. Bullion
dealers are fealing great stress.

"Left Flank" on a roll today. This is the time
to keep the pressure on the shorts. Pay back time!

This just in:

THE FIX WAS IN: BRITS ROLLED ON GOLD
By John Crudele

New York Post
October 4, 1999


THE price of gold soared last week after a number
of Central Banks said they won't unload extra gold
onto the open market for the next five years. The
precious metal jumped to $329 an ounce, up almost
30 percent.

We outsiders will probably never know what prompted
the statement by the 15 governments. But it is very
interesting that an outfit called the Gold Anti-Trust
Action Committee, headed by former pro footballer
Bill Murphy, recently hired lawyers in Britain and
enlisted the help of Parliamentary members to find
out if the price of the precious metal was being
purposely kept down.

Why England? Because the Bank of England announced
last May that it was going to sell tons of gold on
the open market. Whenever there's a big seller like
that it obviously keeps the price down - whether
it's gold or dog biscuits.

"It just raised the whole issue of what was going
on. It's real simple," said Murphy. "The powers
that be went to the English government and said
we can't let gold go above $290."

That, of course, isn't the way markets are supposed
to work. So Murphy's group - headquartered down in
Houston but reaching farther through an website -
pestered members of Parliament to bring up the
gold sale for debate, which occurred this past June.

Senator Phil Gramm, chairman of the U.S. Senate
Banking Committee, got a copy of the Parliament
debate in July. Was Murphy the one who started the
ball rolling that eventally caused the 15 banks to
announce that they were laying off gold? We'll never
know. But it's as good a guess as any right now.

It looks as if someone manipulated gold prices again
last week. Despite being at $329 an ounce in the early
part of last week, gold closed at just under $300 an
ounce on Thursday. The strike price on gold futures
contracts just happens to be $300 an ounce. The very
next day gold went back up to around $311 an ounce. End


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In order to improve the operation of the Cafe, an add
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Le Metropole Cafe

All the best,

Bill Murphy
Le Patron
www.LeMetropoleCafe.com


Le Metropole members,

Yes, the "Left Flank" continues to gain ground.
Great coverage from savvy South African journalist,
Jonathon Rosenthal.

>From Business Day, Cape Times, October 1st, 1999.

INSIDE MINING - Jonathan Rosenthal

Martin Armstrong the bear is deep in the woods
Who is Martin Armstrong, what is Princeton Economics
International and what does it matter anyhow? These
are probably normal and healthy responses in the
colonies when we learn that another US hedge fund
manager is up on fraud charges.

So what if this one-time financial guru and darling
of the market took about $1 billion from Japanese
investors and now has about $46 million left in
the bank. So what if he gave his depositors false
accounts and now has three regulatory agencies
from two countries baying for his blood.

In the new economic order hedge funds going belly up
in the US are almost as common as cellphone thefts
down here.Except that quite a few prominent people in
the gold market are convinced that Armstrong was
really short on gold. Depending on who you ask he
was short anything from 300 tons to 800 tons. And
some believe that he sold short at about the $260
to $265 mark and has incurred further hair-raising
paper losses of $30 an ounce over the past few weeks.

And if Armstrong really was that short of gold, a
point Princeton Economics denied in a statement it
released last week, it could have profound
implications for the gold price. The court-appointed
managers now trying to salvage his fund could be
forced to cover the position through buying up 300
to 800 tons in an ever-tightening market.

Brett Kebble, the deputy chairman of JCI Gold, said
he believed Armstrong had run up a short position
of 800 tons."Martin Armstrong has been bearish about
gold and has been writing furiously about what a
terrible investment it is. He has been short on
gold for some time," Kebble said.

The Gold Anti-Trust Action Committee, a campaigning
organisation that argues the gold price has been
the victim of massive manipulation by powerful
financial interests, believed Armstrong had borrowed
or was short to the tune of 746 tons.

Others suggested that while Armstrong was likely to
have gone short, as he repeatedly wrote opinion
pieces and argued that the gold price was likely
to fall to $200 an ounce, they found it hard to
believe that his short position could be so large.

Garry Mead, the head of reasearch at the World Gold
Council, said he would be surprised to find that
Armstrong's fund had run up a position of that size.

Michael Coulson, head of mining research at Paribas in
London, said he would not be surprised to find
Armstrong short but suggested that a position of no
more than 300 tons was more realistic.

The US Commodities Futures Trading Commission, one of
three watchdog bodies that filed legal action against
Armstrong, refused to comment on his position.
The Securities Exchange Commission was more helpful
but had no idea what positions he might have taken
in the commodities market.

The haggle about the size of Armstrong's position
is not simply an esoteric search for truth, but could
play a large role in determining how far the rally
in the gold price could go.

Gold Fields Mineral Services (GFMS), the commodities
research group, estimates that the total size of
the net speculative short position in the market
is probably not much more than 400 or 500 tons.
That's not counting the several thousand tons of
gold that producers have sold forward. GFMS admits
that if the short position is significantly larger
than it believes it to be, then gold could rally to
$400 or even $500 an ounce.

If Armstrong is indeed short of gold, even by only
300 tons, then it implies that the GFMS figures
underestimate the short position hanging over the
market. This then opens the door to some pretty
wild assumptions as to the size of the total position.
Kebble believes it could be as large as 4,000 tons,
which implies a large number of funds are in a tight
spot right now.

If that is the case then there will simply not be
enough gold avilable on the physical market to
cover those positions. Huge hedge funds would be
unable to meet their margin calls as the price rises.

The ensuing crisis would make the collapse of Long
Term Capital Management look like a walk in the park.

Le Metropole Cafe

All the best,

Bill Murphy
Le Patron
www.LeMetropoleCafe.com

Date: Mon Oct 04 1999 19:11
ORO (@EJ - Old words from the BIS) ID#71231:
Copyright � 1999 ORO/Kitco Inc. All rights reserved
The thing they thought they could do, was to make the decision, on the part of the world as a whole, as to what is money.
They discovered, the hard and embarassing way, that the markets decide what is money, not CBs or governments. What success they may have in pushing the paper currencies over the PMs requires constant work in an environment of fluctuating debt loads and exchange rates. Their opinions are allways wrong so that eventually, somewhere, they end up introducing a large distortion in the markets/economy, ending with a bubble like today's stocks, accompanied by artificial depression, as in commodities and gold. Their control one day is the best indicator of their loosing it on the next day, when their control mechanism backfires.

SteveH
(10/04/1999; 19:43:49 MDT - Msg ID: 15429)
Fact is there are lots of excellent posts about this evening...
and I see ORO and a few of us others are sharing the wealth (info):

Date: Mon Oct 04 1999 19:01
NewPhys (Something Nasty this way comes!) ID#392177:
Copyright � 1999 NewPhys/Kitco Inc. All rights reserved
JP: I regretfully think you are right. This rapid a rise in the price of gold is unprecedented. The equity markets will continue along for some time, blissfully ignorant of the damage being done to the investment banking sector. Shockwaves will eventually pass through the rest of the world's economy, unless the CB's step in and sell gold. But -- what concessions would the US have to make for the European CB's to do this?
It will be interesting to see what happens to the US dollar, and US interest rates. Will we have a warning shot across the bow like we did in 1987, when the US dollar dropped more than 5% in a few days? I am beginning to suspect things could evolve very quickly. The 'information era' -- the 'awakening' of the net appears to have accelerated time. Or, at least the nonlinear events. I'll bet there are some Rothschilds who are watching with glee at the capitulation of the US -- goldwise, that is. Eventually the BIS will step in. For a price.
SteveH
(10/04/1999; 19:46:18 MDT - Msg ID: 15430)
Original
Rember the Bill Murphy rumor of the SA mines announcing they would limit production. Was that the announcement or was that the rumor? If it was the rumor then the SWHTF when the rumor comes out because the ECB announcement knocked gold up...what...$30? The limit on production announcement could have an even more exponential affect, eh?
SteveH
(10/04/1999; 19:51:50 MDT - Msg ID: 15431)
tough subject
www.gold-eagle.comfrom YGM:

(YGM) Oct 04, 19:45

Remember there's still a dark side in the mix. If you don't think Bankers are worried study all the press releases at the B.I.S. site. I have for along time and it
comes down to this---- They are preparing for----
---Bank defaults
---Hedge fund collapses
---Credit and debt squeezes
---Bank cash runs etc etc
***If you read between the lines and all the double talk the future of PAPER after Y2K looks pretty grim. Want to venture a guess as to how much Gold the BIS and other Central Banks have accumulated over the years that they've let the many Gold borrowers and shorters run wild? Remember CBs' are where the richest and most powerful place their bets and we all know he who has the most Gold makes the rules. Want to guess how many defaults there will be soon on Gold deliveries and futures contracts. I don't but it will be mind boggling if
indeed there are 10-14000 tonnes sold short!!!!!
Anyway I now also own alot of paper but I'm only counting on my physical metal while the eggs lay unhatched. Paper is only good for firestarter til it's turned into Gold!!!--YGM.

nttp://www.bis.org/home.htm

SteveH
(10/04/1999; 19:55:41 MDT - Msg ID: 15432)
Maverick, were not going verticle are we?
The 60-minute chart on www.quote.com gc9z is starting look exponential. She may be about to blow. Clear the launch pad, 10,9,8,7,6,5....
SteveH
(10/04/1999; 19:59:38 MDT - Msg ID: 15433)
Maverick, were not going verticle are we?
The 60-minute chart on www.quote.com gc9z is starting look exponential. She may be about to blow. Clear the launch pad, 10,9,8,7,6,5....
SteveH
(10/04/1999; 19:59:55 MDT - Msg ID: 15434)
Maverick, were not going verticle are we?
The 60-minute chart on www.quote.com gc9z is starting look exponential. She may be about to blow. Clear the launch pad, 10,9,8,7,6,5....
SteveH
(10/04/1999; 20:00:56 MDT - Msg ID: 15435)
Maverick, were not going verticle are we?
The 60-minute chart on www.quote.com gc9z is starting look exponential. She may be about to blow. Clear the launch pad, 10,9,8,7,6,5....
SteveH
(10/04/1999; 20:01:48 MDT - Msg ID: 15436)
Maverick, were not going verticle are we?
The 60-minute chart on www.quote.com gc9z is starting look exponential. She may be about to blow. Clear the launch pad, 10,9,8,7,6,5....
Cavan Man
(10/04/1999; 20:07:52 MDT - Msg ID: 15437)
SteveH
What is a bollinger?

Also, the other argument again; oil monetizes gold utilizing the Euro for transportation to the goal. What to do with all the dollars?

I have a real hard time disbelieving FOA/Another especially after they have been picked over by the likes of you and ORO et al.
Cavan Man
(10/04/1999; 20:08:11 MDT - Msg ID: 15438)
SteveH
What is a bollinger?

Also, the other argument again; oil monetizes gold utilizing the Euro for transportation to the goal. What to do with all the dollars?

I have a real hard time disbelieving FOA/Another especially after they have been picked over by the likes of you and ORO et al.
megatron
(10/04/1999; 20:08:49 MDT - Msg ID: 15439)
USA
People who want to see the US take a dive have strange thought patterns, I've always said. It's impossible to defend idiots like ClintonRubinGreenspan, but nothing is easier than defending the American Constitution, in it's original intent and form. Only an envious liberal would deny the genius that allowed the creation of the free markets we enjoy, although lately some havn't been all that "free'.
Here in Canada, US bashing is second only to hockey in terms of recreation. I find it pathetic and sad.
Cavan Man
(10/04/1999; 20:09:43 MDT - Msg ID: 15440)
SteveH
What is a bollinger?

Also, the other argument again; oil monetizes gold utilizing the Euro for transportation to the goal. What to do with all the dollars?

I have a real hard time disbelieving FOA/Another especially after they have been picked over by the likes of you and ORO et al.
Cmax
(10/04/1999; 20:10:43 MDT - Msg ID: 15441)
Voyager (10/4/99; 0:39:32MDT - Msg ID:15346)
Don't confuse the GPS calendar rollover with a Y2K event, the two are very different. As an analogy, the GPS rollover is more like a preprogrammed rollover from 12-31-99 to 1-1-(19)00. It's "calendar" never leaves it's present "century", and just continues in a time loop. It also has nothing to do with a "two digit" year or a "four digit" year.
Your boat: are you downloading the web off SSB, or Comsat?
16-penny
(10/04/1999; 20:11:38 MDT - Msg ID: 15442)
(No Subject)
cant seem to download todays discustion
Cmax
(10/04/1999; 20:11:53 MDT - Msg ID: 15443)
Voyager
Don't confuse the GPS calendar rollover with a Y2K event, the two are very different. As an analogy, the GPS rollover is more like a preprogrammed rollover from 12-31-99 to 1-1-(19)00. It's "calendar" never leaves it's present "century", and just continues in a time loop. It also has nothing to do with a "two digit" year or a "four digit" year.
Your boat: are you downloading the web off SSB, or Comsat?
SteveH
(10/04/1999; 20:19:33 MDT - Msg ID: 15444)
Maverick, were not going verticle are we?
The 60-minute chart on www.quote.com gc9z is starting look exponential. She may be about to blow. Clear the launch pad, 10,9,8,7,6,5....
oldgold
(10/04/1999; 20:39:07 MDT - Msg ID: 15445)
Fed intervention?
GATA warning about the POSSIBILITY of imminent intervention by the Fed to save the gold shorts.
oldgold
(10/04/1999; 20:39:47 MDT - Msg ID: 15446)
Fed intervention?
GATA warning about the POSSIBILITY of imminent intervention by the Fed to save the gold shorts.
Goldfly
(10/04/1999; 21:10:46 MDT - Msg ID: 15447)
YO! Hey YO! Check it out

Spot $330.30!!!!!
SteveH
(10/04/1999; 21:15:14 MDT - Msg ID: 15448)
Bollinger
Two-standard deviations or so either side of the price that depending on the measurement has a propensity to watch the underlying security trade within the bands whereby they go from one to the other with a fair degree of regularity. However, when a stock or security or gold in this case approaches then breaks through a new level is usually attained after which the in band up and down cyclicals recommence in earnest. We are see a rally of rallies in gold right now and the approachment and break out of the bollingers is just another indicator that the rally is a hot one.
SteveH
(10/04/1999; 21:18:36 MDT - Msg ID: 15449)
Last post till morning
Me thinks the charts look ready for a breakout...me thinks. Mind the Gap.
ORO
(10/04/1999; 21:27:33 MDT - Msg ID: 15450)
Bollinger Bands
Invented by John Bollinger (www.equitytrader.com).
The bands above and below the average over a period, usually 20 days on a dayly chart.
Upper band = average + n Standard deviations
Lower band = average - n Standard deviations
n usually taken as 2
Easy to do on spread sheets.

Usage:
Breakouts:
Upper band break out after a steady market is a statistically significant event indicating that the new trend (in the direction of the breakout) is underway. As in "a gold market not as before"
Temporary spike tops and bottoms occur when the band is broken in the direction of the trend in a "blowoff" vertical fashion. The temporary top is usually arround the same distance away from the upper band as the upper band is away from the average.

Trending: A powerful bull trend appeats as prices moving along the upper band. A powerfull bear trend appears as prices moving along the botom band.

Reversal: Spike tops as above, round tops are seen as a reversal between the bands, above the average but below the upper band.

Volatility: The width of the bands relative to the price level is an indication of volatility (usually measured as the standard deviation). Also the narrowing of the bands (low volatility) is commonly a precursor to high volatility. Thus a very narrow BB is an indication of a large move ahead.
Narrow volatility and the spike are the strongest/most reliable indicators. Breakouts can be misleading, with no followthrough.
Black Blade
(10/04/1999; 21:36:11 MDT - Msg ID: 15451)
all
http://www.thestreet.com/comment/taskmaster/789110.htmlTonight is lookin' good...POG spot at 329.5 and no down-side on Kitco charts.

Scot, RossL, and Coinguy, Yes Krugers are nice design, but the color is butt-ugly. Personally I buy mapleleafs. Even Eagles pale in comparison. Sorry, but I prefer the brilliance of 24K as opposed to the low-budget imitations, and I'm US citizen, so patriotism doesn't play with me.

Interesting article on the street.com about short positions in Au. The above link should get you there, if not, then search the site.

Megatron, as John Candy (who was canadian) said "Canada? isn't that the 51st state?"
16-penny
(10/04/1999; 21:36:25 MDT - Msg ID: 15452)
(No Subject)
alls well zianet has been touch and go in southern NM
GFD
(10/04/1999; 21:38:34 MDT - Msg ID: 15453)
Hot in Hongkong
Well we seem to be going parabolic upon opening in the Hongkong market. Lessee here... 100 mil oz of 390 calls at say spot at 340, say, tomorrow morning... how many of those were naked did you say?? :o

If Al does not shoot this thing down first thing tomorrow start worrying about a more real crises brewing somewhere else, maybe related maybe not...



Black Blade
(10/04/1999; 21:40:47 MDT - Msg ID: 15454)
all
Sorry, I guess you need a trial membership for the link that I posted. Anyway, Megatron...the J. Candy quote was from the movie "Canadian Bacon". Also the greatest put-down of Canada was about the beer, but I digress. Personally I like Moosehead.
Black Blade
(10/04/1999; 21:50:25 MDT - Msg ID: 15455)
Info on Shorts "dropped", more is exposed! (Pun intended)
The overall content of the article on the link posted was that of several analysts are beginning to seriously believe the rumors of short positions, and one claims that LTCM really was short 300+ tons Au, irregargless of their (LTCM)denials. The consensus is that there is really at least an overall 4000 ton short position, and possibly greater.
Black Blade
(10/04/1999; 21:53:49 MDT - Msg ID: 15456)
For our English Goldbug friends
"Shorts" in American could be similar to "knickers" in English.
Goldfly
(10/04/1999; 22:09:54 MDT - Msg ID: 15457)
Scot, Cavan Man, CB2, DD

"When I received the Nobel Prize, the only big lump sum of money I have ever seen, I had to do something with it. The easiest way to drop this hot potato was to invest it, to buy shares. I knew that World War II was coming and I was afraid that if I had shares which rise in case of war, I would wish for war. So I asked my agent to buy shares which go down in the event of war. This he did. I lost my money and saved my soul."

Albert Szent-Gyorgyi

Peter Asher
(10/04/1999; 22:10:15 MDT - Msg ID: 15458)
OLD GOLD !!!! re GATA
ARE YOU GOING TO TELL US ABOUT THIS, OR ARE YOU TRYING TO KEEP US UP ALL NIGHT ? ? ?
Tubac's ears
(10/04/1999; 22:28:55 MDT - Msg ID: 15459)
16Penny
Are you from Ruidoso? My father is a builder there and gets his net access through zianet as well.
TO ALL: WHAT'S WITH SILVER?????!!!!!!!!!!!!
Farfel
(10/04/1999; 22:31:55 MDT - Msg ID: 15460)
Where Have All the KITCO Posters Gone?
"Where have all the KITCO posters gone?
Long time passing
Where have all the KITCO posters gone?
Long time ago"

All the negative gold hypesters, from Disney to Jims to EB to LGB to Jeil to Selby...they don't seem to be posting much lately over at that forum.

Amazing what a vertical gold rush can do to those who bet against the phenomenon or refused to recognize the initial power of its manifestation.

Does it have legs?

Hmmmmm, well powerful forces are sure to intervene and oppose the rally. The big question is: when?

My own pet theory is this: I think that the general market (stocks and bonds) must be taken down or else various sectoral inflationary explosions will be enormous. You can only fudge the economic stats for so long, but at a certain point, reality slaps you in the face. So, I tend to believe that this little gold rush is sanctioned, if not encouraged, by Greenspan and gang. They need to raise interest rates to stem sectoral inflation and protect the Dollar, and gold's current upspike serves to validate an interest rate hike.

At the same time, Big Money needs a repository of safety and since gold is held by such a small percentage of the population, then gold should become that favored repository for the wealthy. Over time, maybe in another several months, the average investor will begin to dip his toes into the gold market. However, judging from my own empirical observations, the average investor still has little to no clue what is going on with precious metals today. The mainstream media has ensured that this gold verticality is occurring without any ballyhoo or great publicity.

Until the small investor gets tuned in, then it's all "wall of worry" stuff, and there will be many gold bears who will have their asses handed to them as they continuously try and pick a top on the developing gold mania.

As for myself, well, I continue to stay away from gold for the most part, waiting to see the BUY volumes escalate to a point indicating enough populist BUY pressure to overcome any interventionist efforts by the major central banks.

For those who worry about the disastrous effects to certain gold shorting bullion banks...and for those who figure Fed intervention is certain to preclude this problem, well, I am doubtful and cynical (as usual). Why? Because I think there are likely powerful, relatively healthy investment firms with great influence at the Fed and they would eagerly greet a debacle amongst various gold shorting bullion banks so that they can swoop in and pick up the pieces for pennies on the dollar -- No different than the game hedged gold miners played as they picked up the remains of collapsed unhedged gold producers over the past few years.

In conclusion, I believe that the average investor has been brainwashed to believe that gold has been one of history's most severely underperforming assets. So until gold can breach 800 an ounce (its Carter Era high point), then anti-gold propagandists can continue to note its inability to rise above its 20 year old price vs. stocks that are far ahead of their 20 year old prices. The anti-gold crowd can continue support the idea that gold is a "forever underperformer" vs. paper assets.

When gold breaks 800, then and only then, will I feel notably emboldened to get into gold in a big way. That should be the populist trigger where ALL anti-gold propaganda no longer holds water nor has any notable effect.
Gold finally PERFORMS above 800, and it should move to 2000 or higher (IF it can ever get there).

We have a long way to go before that happens.

Thanks

F*
nickel62
(10/04/1999; 22:51:49 MDT - Msg ID: 15461)
Power of the up move is tremendous
I have never seen anything like the relentless nature of this up move since mid august of 1982 when as a young portfolio manager with too much cash I watched an exploding stock market beginning lift off from the 770 on the DOW level where it had been range bound since 1968. It took me several months and a few kicks in the pants from older portfolio managers to realize that things had changed. I had been surviving by selling every rise and waiting for the market to come back down as it always had for the few years I had been in the business. This was different-this was a bull market. And as on of the old guys snarled at me "you don't trade stocks in a bull market you idiot you own them" I never did like that guy but it was very good advice. Well gentlemen we are in a bull market and one that is only days old. I pray I have the brains and guts to "own 'em" this time because I'm getting pretty old and there may not be many more chances to be in at the beginning of a full bull cycle.
Chris Powell
(10/04/1999; 22:53:04 MDT - Msg ID: 15462)
An appeal and a warning from GATA
http://www.egroups.com/group/gata/232.html?Includes latest intelligence
from GATA Chairman Bill "Midas" Murphy.
THX-1138
(10/04/1999; 23:04:08 MDT - Msg ID: 15463)
Court confirms that Gold is money.
Conseco Unit Loses Court Fight, Must Pay Iowa Rent in Gold


Washington, Oct. 4 ( Bloomberg ) -- A unit of Conseco Inc. failed
to
overturn a court order that increased its rent on a Des Moines, Iowa,
office
building by about 1,500 percent -- and required payment in gold coins.

Siding with a family of modern-day prospectors, the U.S. Supreme
Court
today rejected an appeal by Conseco Annuity Assurance Co. The decision
leaves intact a lower court order to pay $1.8 million in back rent, plus
about
$370,000 a year until 2016, on the Des Moines Building.

Today's action ends an unusual legal battle that saw the building
owners, descendants of businessman John Trostel, invoke a World War
I-era
lease provision letting them demand lease payments in gold. Conseco, an
insurer and
consumer lender based in Carmel, Indiana, argued unsuccessfully that the

provision long ago had ceased to have any legal significance.

Conseco predicted in court papers that the lower-court ruling will
``ignite a modern-day gold rush'' that could benefit landlords with
similar
leases.

When the 99-year lease was signed in 1917, gold clauses were common

contractual provisions that protected property owners against
fluctuations
in the value of the dollar. Congress and President Franklin D. Roosevelt
banned gold
clauses in 1933 as part of their efforts to devalue the dollar and
inflate
prices.

Revised Law

In 1977 Congress changed the law so that new leases could include
gold
clauses. Although that law by itself didn't affect the Des Moines
Building
gold clause, the Trostel family said the transfer of the contract to
Conseco
Annuity's corporate predecessor, American Life & Casualty Insurance Co.,

created a new lease and revived the gold provision.

The St. Louis-based 8th U.S. Circuit Court of Appeals agreed,
saying
Conseco had to pay its rent in gold. A federal trial judge then
concluded
that the company owed almost 6,000 troy ounces in back rent and almost
100
ounces per month until the lease expires. At current gold prices, the
annual
rent will be more than 15 times the $23,000 paid until 1993.

At the Supreme Court, Conseco argued unsuccessfully that the
appeals
court misconstrued the 1977 law. Today's decision marks the third time
the
nation's top tribunal has reviewed an appeal by Conseco on various
issues in the
case.

Trostel family lawyer Jim Doran said his clients probably won't
demand
that Conseco actually deliver gold coins. ``As a matter of negotiation,
we
would probably agree to a cash equivalent,'' he said.

Conseco, based in Carmel, Indiana, acquired American Life in 1996
and
moved the unit's headquarters out of Des Moines. Much of the building is
now
vacant.

The case is Conseco Annuity Assurance v. Trostel, 98-1796.

Oct/04/1999 10:15

( C ) Copyright 1999 Bloomberg L.P.



Any redistribution of Bloomberg content, including by framing or
similar means, is expressly prohibited without the prior written consent
of
Bloomberg L.P. Any reference to the material must be properly
attributed to Bloomberg
News.
THX-1138
(10/04/1999; 23:07:21 MDT - Msg ID: 15464)
previous post
Got that off of Kitco.

By the way, how would someone go about inserting a gold clause into a house or car sale?
And if you actually had someoen pay you gold what would be the reporting requirements?
Do you report it using the coin face value (US Eagles $50) or spot price?
Chris Powell
(10/04/1999; 23:09:30 MDT - Msg ID: 15465)
Panic buying in Australia
http://www.egroups.com/group/gata/233.html?The gold wildfire sweeps the world.
Simply Me
(10/04/1999; 23:20:02 MDT - Msg ID: 15466)
megatron - re: USA Bashing
It sounds, to me, like sibling rivalry. Little brother is tired of getting picked on by big brother, and worse, sometimes even having to wear his handme downs! So little brother takes small revenges whenever he can. Nothing serious. Big brother knows it's only a matter of time and potential before everything is equalized, so he taunts little brother while he still can. (Little Brother is not so little anymore!)
But if you take a look around the neighborhood, Little Brother and Big Brother are more like each other, and closer in basic ideals, than anyone else in the world. They grew up together. They may disagree on a lot of things; but when the chips are down, I believe these brothers (US and Canada) will prove to be each others' best friends.
(Except for Quebec?)
Voyager
(10/04/1999; 23:42:28 MDT - Msg ID: 15467)
Cmax - Hello
Yes, I understand that the GPS rollover and Y2K are not related. It was a facetious shot at the extreme Y2K doomsday crowd. Do not have the ability to connect to Internet via any method except by cell phone at sea. Very slow and expensive. Don't use.

Have been reading other posts. Many, many, banks, firms, people, have tremendous loss potential at the rising POG. What kind of counter attack can be expected? Seems that if POG keeps going up, little can be done to prevent a major toilet flushing. Not that they don't deserve it. Any thoughts?
elevator guy
(10/04/1999; 23:56:34 MDT - Msg ID: 15468)
COMEX den of thieves
How come the COMEX traders can demand "X" amount of dollars, when I want to buy something, but now that I want to sell that same thing, they say "no limit orders"
Where is the fairness in that?
Boy is that a one-way rigged game!

But in other news, how do you think we should be setting ourselves up for the coming fall of the DOW, fall of the dollar, rise of the Euro? I guess there is a sea change going on in our economy, that will last through 2000, and hang around for years.
Obviously, the safest place to store value is gold. Especially now, and while the dollar slides.
But assuming the dollar doesn't absolutely dry up and blow away, which is reasonable to think that it wont, we can still make profits denominated in dollars. Good profits.
I guess we can short everything that we think will go down.
I'm kinda new to this investment stuff.
Any thoughts out there on this?
Peter Asher
(10/05/1999; 00:42:26 MDT - Msg ID: 15469)
Speak Softly, But Carry a Big Stick!

I think AG is taking a cue from Teddy Roosevelt and doing just that to keep a lid on things.

To put the brakes on "Irrational exuberance" by raising interest rates would crash the economy. The solution is to apply the brakes by hinting, threatening or "Taking a bias towards" raising interest rates. This way, he keeps a lid on the Market without pulling the plug on liquidity.

The action by the Euro CB's joined by Japan could be a deliberate attempt to back Greenspan (And the Dollar) into a corner. The breakout in Gold makes it all the more disastrous if he were to raise rates.
ORO
(10/05/1999; 01:44:59 MDT - Msg ID: 15470)
Good article
http://www.egroups.com/group/gata/231.html?Highlights:
The rapid growth of these fractional reserve accounts
in recent years has had the effect of expanding the
supply of gold traded in spot markets much faster than
can be accounted for by new mine production and
mobilization of central bank reserves. Unlike non-
monetary commodities, the injection of new physical
supplies of gold into the market is subjected to a
multiplier effect, where each ounce of gold stored in
London creates several ounces worth of claims against
gold by successive deposits and loans. Undoubtedly this
leveraging of leased central bank gold via bullion
banking has been a major factor in depressing gold
prices.
The mere existence of market conditions such as we are
observing today may prompt the ordinary members of the
LBMA to lose confidence in the LBMA's market makers and
clearing members and demand redemption. If that
happens, the issuers of "paper gold" could be facing
ruin, and the unbacked "paper gold" itself will vanish.


Canuck
(10/05/1999; 03:51:20 MDT - Msg ID: 15471)
To Peter A. and all
So if A.G. does not raise rates and only hints of that what impact does this have on the POG?

I see spot at 328 this am, perhaps there is enough momentum now that A.G. nor the good Lord can't stop it now.

Should be a tough day for 'shorts' today.

Thoughts?
Goldspoon
(10/05/1999; 04:05:44 MDT - Msg ID: 15472)
Limit Up!
Let me seee..... you limited up in Tokeo last night..Good Dog Spot! Now for London..... Jump, Boy Jump!!!
Goldspoon
(10/05/1999; 04:19:38 MDT - Msg ID: 15473)
@Canuck
My Op.. Greenspan is in a box... He must raise rates now or risk capital flight that supports the debt into Gold. Add the need to make it more costly to pull cash out for 2kay.
A good ole October correction (not crash) is really what the market needs at this point.
As my Mom would say when i was a kid and i got to antsy...Son, what you need is a good workin'. She then proceeded to fill my mouth with casteroil....sure took the fight out of me...Even "If" you didn't have this gold thing... somebody needs to throw some cold water on the market to get them to sober up before they fly to close to the sun and the wax melts.......
But i'm not Greenspan......
Canuck
(10/05/1999; 04:23:44 MDT - Msg ID: 15474)
Nervous?
I just read last nights posts and links, is this ever getting messy.

I've got to think CB's are going to hold gold now, EU consortium, IMHO, is holding because ot their belief that gold will be the final reserve holding when the dust settles. Who and why would anyone dump gold now to bring down the price?
Goldspoon
(10/05/1999; 04:30:21 MDT - Msg ID: 15475)
Time for Some Fun!!
Let's start a guessing pool for Comex spot close as posted by USAGOLD.....Me first...$332.27.... Closest guess get's bragin rites.....Guesses must be posted before the Comex opens to count.....
ORO
(10/05/1999; 04:33:50 MDT - Msg ID: 15476)
Reposts and the great MOZEL
Date: Tue Oct 05 1999 06:32
ORO (@Mozel - Currency war) ID#71231:
Copyright � 1999 ORO All rights reserved
Mozel - Excellent thinking in Mozelland, how does one gain entry to Mozelland?
1. Saving the LBMA was something that the Europeans seemed to be willing to forgo ( see ANOTHER commentary ) . Considering that UK was in hock to the EU, has it been the joining of the UK with the EU action that allowed it to keep the LBMA? Was the EU also interested in the use of UKs large $ reserves?
2. The sudden disappearance of ANOTHER, FOA and most heavy thinkers save SteveH from USAGOLD through this turmoil seems to indicate that a job has been finished there. Alternatively, it could be that there is some great business and policy work to be finished - regarding the change of circumstances with the UK changing allegiance. If these are truly wired in, is this the reason?
3. Thinking through the issues that must have been dealt with in assembling the EU, it becomes obvious what it is that national currencies and their associated bank debt can do to distort economic relationships. In putting themselves in one salad bowl, the EU members were obviously made aware of the degree of US segniorage and the fact that goods are traded with the US in return for obligations that ammount to an assumption that Americans will decide to honor when Europeans or Japanese try to cash in - when in the past these were never honored. This obviously would be tolerated only as long as the US is offering something sufficiently valuable in return - i.e. defense.
A few things changed since the cold war ended, or even before. ( 1 ) The US, UK, Australia and Canada have lost the mission which allowed them to print their way into prosperity. ( 2 ) The world at large is so much more developed that the US is just too small in relation to be able to provide the currency of trade without heavy trade deficits that plunder the world, while impoverishing everyone. ( 3 ) The web of debt the US created in the 70s to enslave the emerging economies of the world had come to the point of deflationary collapse that made default impossible to escape. With their default would have come the end of subservience of Africa, South America and Asia, and of the international value of the $ and the reserves of the EU members. By the end of 98 Emerging market debt had fallen by more than 1/4, probably 1/3. The Emerging market debt trap fell appart, and EU and Japan could just plain wipe out this debt in order to eliminate $ demand and the source of the US' prosperity. Do you think this was it?
4. The elimination of the power of $ debt must have been the key to eliminating the $ tax on international trade. This must have been the reasoning for lowering the interest rates on the key currencies outside the EU ( including gold ) to near 0 soon after the Maastricht treaty. This put the US itself in a debt trap identical to the one it put the emerging markets in, no?
5. Relating to the political thinking of the EU - you put up the issue of gold as a tool of national and individual sovereignty. Is it the control of one's currency being the key? or is it the issue of Europe coming to the conclusion that national currencies are means of escaping economic consequences of trade imbalances? Particularly when through perpetuation of debt, the currency of the US allowed it preferrential pricing for commodities that Europe and Japan could not obtain gratis - in return for printing $. ANOTHER made a big deal of this issue.
( Much of the Purchasing Power Parity discrepancy between the US and the EU/Japan can be explained by this fact, and the fact that they are $ creditors, only a portion is actually related to the inefficiencies of their markets )
6. Have the "powers that be" relized that some control must be given up anyway, because of the internet? As the issue of the sovereignty of the individual transcending all borders and the yoke of national currencies was just a question of time?
Finally - what do you think of the oil for gold deals and the participation of the oil countries in the scheme?
I suspect that Russia's stopping the sales of gold after its spy at the LBMA was outed was no coincidence. Nor their doing energy deals with Europe in Euro. I think the ability to collapse the LBMA and thereby stop the supply of oil to the US and its banker allies was a crucial issue.

Thank you.

PS Thoughts of South African complicity with Europe. Might one say that the SAf had found out through us here and at USAGOLD, what a farce the economic miracle of the US really was, and most significantly - that the US was trading SAf gold for Arab oil and through this were obtaining all other commodities and Asia's manufactured goods? Could the understanding of this be behind the recent spate of political killings in SAf ( particularly the attempt on the Mines Minister?

Date: Tue Oct 05 1999 05:15
mozel (@Cap'n Kirk @Midas @What's It all About, Alphie ?) ID#153110:
Copyright � 1999 mozel/Kitco Inc. All rights reserved
@Capn' Kirk Unsolicited advice: Let the nearby ignorant and their mentors, like sleeping dogs, lie.

@Midas "Do you think that world wide things have changed because of the efforts of western ( USA ) governments to dethrone gold as a store of real value?" Hm. Well, USG sponsored a couple of generations of "future leaders" to be "eddicated" in the renowned indoctrination camps of the Ivy League and copy cat "institutions of hirer learning". This dumbdown by degree program and bribes and UN postings and other inducements enabled USG to bring into bondage a great portion of South America and parts of Asia and Africa by means of debt obligations denominated in greenbacks. The amount of worldwide debt is a big change from past times. Human and Mother Nature have not changed.

Question 2: Why the sudden about turn by the Central banks of Europe? Is it really based on a contest of currencies?" What sudden about turn ? What is the unit of account in the EU ?

@Alphie As Ah have sayed befoah, gold is the sine qua non of Sovereignty. Central Banks are the instrumentalities of government. The EU Bankspeak on gold was proxy for the Sovereigns' speaking themselves.
Gold's apolitical empowerment of Sovereighty constitutes its national and individual utility. There is no political independence without monetary independence. What nations want today, people within nations will want tomorrow.
The United States fought its War of Independence mostly on bills of credit. In the aftermath "not worth a Continental" became a byword. The United States fought the Cold War of bills of credit. We are in the aftermath. The difference between then and now is that supposedly the United States has 8,000 tons of gold with which to re-establish its credit. The similarity between then and now is that the domestic holders of continental greenbacks are holding nothing but printed paper.

Date: Tue Oct 05 1999 02:13
Midas (Mozel) ID#165282:
Copyright � 1999 Midas/Kitco Inc. All rights reserved
"The culturlal memory of what is money has been erased."

This seems to be the case in North America, where, although there are firm believers here at Kitco, I don't believe there is anywhere near the culteral depth of confidence in gold as there is in most older cultures.

Do you think that world wide things have changed because of the efforts of western ( USA ) governments to dethrone gold as a store of real value?

Question 2: Why the sudden about turn by the Central banks of Europe? Is it really based on a contest of currencies?

Very interested in your thoughts on these questions.

Date: Tue Oct 05 1999 01:55
mozel (@Thoughts From Mozelland) ID#153110:
Copyright � 1999 mozel/Kitco Inc. All rights reserved
The international exchange rate for gold is the LBMA rate. UK is pivot for gold. BOE "auctions" enough gold to cure LBMA or, in other words, to prevent LBMA failure in a gold rush. This also makes Uncle across the pond happy for the temporary relief provided. UK can now let gold run.
The Europeans announced sales of no more than X tons per year for the next five years. This gold is already in the market as leased gold. Over the next five years the existing European gold leases will be refused rollover. Very orderly.
Somebody forgot to tell the Paki's. Karachi was crushed.
Is Hong Kong in trouble ?
Are the African miners in trouble ? Or part of the great European gold ambuscade ? Who will be buying defaulting miners ?
The only entity which can save the Comex is the Federal Reserve. It has the authority, the paper, and the gold to do it.
But, even if Comex goes the way of Karachi, it matters not except to the US banking system.
What matters is that LBMA stays open. The UK have to keep LBMA open if they wish to be the gold center for Europe. Default in London will come from default of forward sold mine contracts, contracts sold by those small to medium US mines which the US banks are openly discussing foreclosing upon. How many of those contracts were sold in London and whether or not the Federal Reserve will order the banks not to foreclose on mines under water in the US and Canada will determine whether or not LBMA will stay open. The unhedged strong shall devour the weak.
The news smudgeout on the gold market is a demonstration of the power of the government over the broadcasters and of the mind control power of the broadcasters over the masses. Notice who is solicited for comment. The nature of their comments identify people in the know who have consented to participate in concealment. It may mean gold can be revalued without shaking the confidence of people. Because the cultural memory of what is money has been erased.
You say this much concealment is not possible. I tell you look into the secrets being kept by the lawyers, attorneys, and judges as a condition of their practice of law. Those who grant the permission to practice, control the practice, the speech, and even the thought of the practitioners. The same control exists over bankers and brokers and even broadcasters.
Whos will come step up to the gold line of truth or consequences first, the Japanese or the Americans ?

RossL
(10/05/1999; 04:37:11 MDT - Msg ID: 15477)
Time for Some Fun!!
Goldspoon, I'll say $335.50
Goldspoon
(10/05/1999; 04:59:59 MDT - Msg ID: 15478)
@ORO
What are the chances this was all kept seceret from the FED? i would think if the Russians knew it The USA would have been aware also?
The old money ties of the UK to the US is well known. Has the actions of the Fed also been a well scripted part in this play? If so what is the twist in the final act of this conspiracy of nations?
If the US is not a willing partner in this, LOOK for a counter measure.....After all it takes soooo long for this to unfold a defence surely was prepared..... any ideas as to what it might be??
leonard
(10/05/1999; 05:00:26 MDT - Msg ID: 15479)
the us dol.
can a doller devaluation be close.
Goldspoon
(10/05/1999; 05:15:07 MDT - Msg ID: 15480)
USA Counter Measures..... my guess
Secret stockpiling of Gold and Silver by the USA as prices were falling.... a planned return to a gold backed dollar....it's new value.... $50 to the ounce of Gold, the face value of Gold Eagles and one Dollar to the ounce of Silver, the face value of Silver Eagles......any other wild ideas??
Goldspoon
(10/05/1999; 05:20:44 MDT - Msg ID: 15481)
Spot ...jumped to 334 moments ago from 324....
Good Dog!
Goldfly, you've trained him well.....
THX-1138
(10/05/1999; 05:35:05 MDT - Msg ID: 15482)
Guess on COMEX spot close
$342
Mr Gresham
(10/05/1999; 05:35:12 MDT - Msg ID: 15483)
Oro/Mozel
ORO --

You have richly rewarded my insomnia -- thanks!

How the mighty are fallen!

Martin Luther King, Jr.: "The arc of the moral universe bends long, but it bends toward justice." Let us see some justice in our lifetimes, I pray.

When the printer's done, off to bed with "Reposts and the Great Mozel". But I won't sleep. 30+ years of Economics, and it feels like this year -- no, this WEEK -- I'm just starting to get "this picture." (Ah, SIX beautiful pages to read...)

(Has Oliver Stone bought the movie rights yet? Will Donald Sutherland play ANOTHER? Gene Hackman FOA? Stay tuned...)

Goldspoon
(10/05/1999; 05:39:19 MDT - Msg ID: 15484)
Spot Colse...
Spot now at 336....who'll guess 350???
SteveH
(10/05/1999; 05:50:37 MDT - Msg ID: 15485)
Dec gold a whopping ...
$338.0000000000!!!!!!!!!!!!!!!!!!! Up $20.00!!!!!!!!!!

(...some NY folks are going to have a fit)
AREM
(10/05/1999; 06:10:49 MDT - Msg ID: 15486)
HELP
http://www.kitco.com/gold.graph.htmlThe 24 hour spot gold chart of Kitco at the above link is stalled. Is there some other source of this information?
ss of nep
(10/05/1999; 06:17:53 MDT - Msg ID: 15487)
Chart
http://www.quote.com/livechartscom/livechart?symbols=gc99z

Goldspoon
(10/05/1999; 06:18:57 MDT - Msg ID: 15488)
AREM
Try this it works for me... thanks Gandalf!!

Gandalf the White (10/04/99; 19:08:05MDT - Msg ID:15416)
CoinGuy's Question
www.forex.freeservers.com/main2.html
Spot the Dog is the fictious "present" price of Gold! There are many reporting boards and in many values other that US$! --- the best one that I have found is at the forex board which is setup for currancy exchange quotes.
BUT if you click GLD= and change the time to MIN and click "request" -- WALLA WALLA bing bang !!
<;-)
Black Blade
(10/05/1999; 06:22:47 MDT - Msg ID: 15489)
Fun and games at Kitco
Hey all, check out platinum at Kitco! $3.00/ounce, down $403! It's a fire sale! What other strange goofs are going to occur at that site next? I know, it's the anti-platinum cabal! This is going to be one very weird day I'm afraid. Go gold!
leonard
(10/05/1999; 06:24:03 MDT - Msg ID: 15490)
(No Subject)
Click here: Listen To Don Coxe latest call, very interasting
RossL
(10/05/1999; 06:25:20 MDT - Msg ID: 15491)
Change my guess
I want to change my guess to $365.50
leonard
(10/05/1999; 06:28:38 MDT - Msg ID: 15492)
don cox's latest call
http://webevents.broadcast.com/accutel/jonesheward/ very interasting
scp
(10/05/1999; 07:12:59 MDT - Msg ID: 15493)
Manipulation prior to Fed Announcement
They must crush gold and support the dollar prior to announcing that rates remain unchanged. I think they will switch the bias towards tightening. We may get a pull-back here.
The Scot
(10/05/1999; 07:34:46 MDT - Msg ID: 15494)
Gold VS Platinum
All, have any of you given thought to Gold passing Platinum and what that might mean. Seems a real possibility to me.
The Scot
CoinGuy
(10/05/1999; 08:04:00 MDT - Msg ID: 15495)
fed rate...
I'm going out on a limb here, the fed raises rates .25 to curb the market. Otherwise, it's another bout of irrational exuberance. I think AG tries to put a curb on market activity, without pricking the bubble. Spot jumps to 336.50, just my .02.

coinguy
USAGOLD
(10/05/1999; 08:57:17 MDT - Msg ID: 15496)
Today's Gold Report: The Short & Sweet of Day Seven of the Big Breakout
MARKET REPORT (10/5/99): Day Seven of the Big Breakout....Gold up $8.50 at
$325 after hitting $333 in Asian and European trading overnight, and $339 in an early
morning blitz in Manhattan ........... "TOCOM must be suffering some type of short
squeeze as COMEX has seen," commented one broker to FWN. "Their liquidity is pretty
thin too."We're seeing the reemergence of the Asian consumer as a buyer, and Korean
buying is way up now," the broker added.*...............Since the overnight short-covering
blitzkrieg, the price has settled a bit. In a late day conversation with LFGs Leonard Kaplan,
he mentioned to me that someone offered ten tons of gold late yesterday and it was swept
up by a single buyer "about 30 seconds after it was offered."..........The buyer was
believed to be covering a short position. I wouldn't think that the fate of those ten tons
marks an end to the driving needs in the gold market. And then there's the fate of the all
those unhedged calls we talked about yesterday adding uncertainly to an already volatile
situation.**.............. Robert Rubin returned to Wall Street yesterday to say: "Just as they
reap the benefits of their decisions, private creditors and investors must also bear the risk of
failure,'' Rubin told members of the Bond Market Association at a gala dinner. "Financial
markets have fluctuated between extremes and this should be a sobering warning,'' he
added.............While most of Wall Street is thinking "no interest rate increase
announcement" after today's FOMC meeting; they also have to know that the market is
taking interest rates higher whether the Fed wants to or not. The counter-party risks
associated with the run-up in gold has to have the Fed worried. They won't make a public
issue of raising rates now for that reason; they'll let the market take them up so the Federal
Reserve can escape shouldering the blame. The net result though will still be an equities
market correction................ "Option market traders," says Helen McCaffrey of N.M.
Rothschild & Son, "continue to stare in disbelief at volatilities which have spiked to
extraordinary levels over the past week.'' She went on to say that "people" are a "little bit
concerned" that we might see further short covering from producers a la Ashanti's 80%
hedge book unwinding last week.............Gold lease rates are coming down but the return
to the 4% level hasn't seemed to cool the gold market. We think lease rates might bottom
here the evidence of which would send a new shockwave through the bullion bank
community...............XAU closed yesterday at 88.81 up 5.90. Gold stocks are regaining
their shine. I've done well with my Gold Fields.................Of the 2000 tons to be sold
by European banks over the next five years it appears that 1300 of it will be Swiss. Bridge
News quotes Swiss National Bank spokesman Werner Abegg as saying: "The SNB will
sell the 1,300 tonnes as part of the common European central bank sales agreement," he
said. Presumably that "agreement" is the one referred to in the bombshell announcement of
September 26, 1999 -- now known as Gold Sunday..............Heard on the Internet: The
cry of the bulls -- "See you at $400!".............That's it for today, my fellow goldmeisters.
Happy Trails until we meet again. We'll leave up the Big Breakout links for awhile (See
below) for all the newcomers. Welcome aboard to all those trying to find out what in the
world is happening in the gold market! Please also see the offer for a free sample copy of
our newsletter News & Views below............MK

* Those of you who regularly visit this page know that we have predicted the return of the Asian buyer (a
singularly important ingredient to the long term gold mix) since the days of the Asian contagion last year.
All you have to do is look at the price of gold in any of those currencies to know the reason why. Asians
will buy gold to protect themselves against any future manifestations of the contagion. They have been
converted to goldmeister status for life. Will Americans follow suit? Let's hope that any lessons learned are
before, not after, the fact.

**Those of you enamored with Elliott analysis might take an interest in a thumbnail Elliott sketch we ran
in the office yesterday complete with some Fibonacci ratio application. I mentioned to George Cooper, our
resident techie, that he could now take his gold charts out again because with a relatively free market now in
place -- thanks to the European central bankers -- technical analysis in gold will regain its uses. It seems
that wave one has taken us from $255 to $329. Then we had the wave two correction down to $301 area
(.38 of upmove) which matched beautifully with the Golden section retracement predicted by Prechter in his
early book, now we are in a three wave -- the long wave both in duration and price escalation. It is not
surprising that many technical analysts are putting strong support at $301. One waves are erratic, often
unpredictable, fast and furious; two's the same. Threes are longer, more stable in character and that's what we
think we are now in. I'm sure those of you who follow the Elliott model will have your own version of
this, but that's the way we see it. Any of you who have done the Wave three math work that would lead you
to a top end prediction are encouraged to offer it either at the FORUM or by e-mail and we will take a look
at it.

That's it for now, fellow goldmeisters. Have a good day.

The October edition of News & Views will be ready early next week and we invite all
our visitors to take advantage of a free trial subscription to one of the most popular, widely
read and quoted gold newsletters. Last month we predicted an explosion in the gold price.
This month we deal with the nettlesome subject of paper assets in this tenth month of the
penultimate year. And we all know what that means. October brings with it our annual
Halloween issue. Here's an excerpt: "And this October could very well foreshadow a most
fateful stroke of midnight only two months away. October. When markets crash and assets
go bump in the night........." We think you will gain by taking advantage of our
offer...........

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.
TownCrier
(10/05/1999; 09:13:58 MDT - Msg ID: 15497)
Lessons from Recent Global Financial Crises--Future financial system prone to crises
http://www.kc.frb.org/spch&bio/finanreg.htmThomas M. Hoenig, President of Federal Reserve Bank of Kansas City, presented a speech to the Chicago Fed's conference on "Lessons from Recent Global Financial Crises"

Some highlights:

"Over the past two decades, we have seen an increased incidence of financial crises, both in industrialized countries and in emerging market economies. These crises have not only disrupted the financial systems in affected countries but also have had severe effects on economic activity. Appropriately, much of the focus of this conference is on understanding the causes of these crises and on developing appropriate public policy responses. ... I think it is clear that we cannot return to, and probably do not want to return to, the highly regulated and segmented financial systems of the past. We do want to give greater scope to the market to guide the evolution of the financial system. ...

Moreover, as we proceed, we need to recognize the new realities of the financial landscape. Financial institutions will continue to increase in size, traditional boundaries between intermediaries will continue to disappear, new and more complex financial products will be developed, and cross-border linkages will increase. ... In this environment, it is clear that a redesign of regulatory policies will center on two questions: how can we make greater use of market discipline, and how can we adapt regulation and supervisory procedures to the new realities? In the final analysis, the financial system of the future is likely to be more vibrant and efficient but, also, more prone to occasional crises.

Over the past two decades, a large number of countries have experienced a serious financial crisis that has weakened the banking system, reduced credit availability, and slowed economic growth. ... many of these crises have spilled over to other countries through currency and asset markets and through disruption of trade. ... In many instances, a crisis was preceded by a rapid expansion in credit availability that was in turn associated with a prior effort to liberalize the financial system.

We recognize that there is no going back to a framework of segmented financial markets and tight regulatory control over deposit rates, bank expansion, and banking activities. And, we acknowledge the need to give greater scope to market forces in guiding the evolution of the financial system.

The difficulty with all this, however, is that we now operate in an environment with larger and more complex financial institutions whose potential failure threatens the solvency of existing insurance funds and may pose risks to the payments system. Moreover, in today's freewheeling financial markets, herd mentality may apply market discipline abruptly and at inconvenient times, punishing institutions and individual consumers rather than controlling their risk taking. Thus, while we wish to enjoy the benefits of a market-driven financial system, we may not be comfortable with the consequences when markets are disrupted or when financial institutions seem likely to fail. Few supervisory authorities will want to be responsible for the type of economic disruption recently seen in Southeast Asia and even fewer will want to risk starting a global financial crisis.

Market discipline is clearly necessary if our financial system is to have the appropriate incentives, and disincentives, guiding its evolution and development.
We should also recognize, though, that our continued reliance on public safety nets and "too big to fail" policies will necessarily temper the use of market discipline. In fact, it will be difficult to escape these limitations, given the externalities that exist in banking. Public protection may also be needed because of the learning curve that market participants and regulators will face in our rapidly changing financial environment. Therefore, the critical question is not whether we should move toward greater market discipline, to which the answer is yes. Instead, we must ask ourselves how we can make market discipline more effective within the context of public safety nets. ...

As we reestablish this equilibrium [between market and regulatory discipline], the number of crises should diminish. However, since the new equilibrium will likely place more emphasis on allowing market forces to guide the development of the financial system, realistically, we are likely to experience somewhat more crises than the historical norm. This is simply the result of allowing markets to play a larger role in the financial system."
---
Do yo get the sense that times are changing? Whatever the endgame may be, gold will always get you comfortably through the transition.

Journeyman
(10/05/1999; 09:19:11 MDT - Msg ID: 15498)
Debt Relief
Clinton & Tony Blair both signed on to third world, espec.African "debt relief." What's the REAL reason behind this?Journeyman
TownCrier
(10/05/1999; 09:42:51 MDT - Msg ID: 15499)
Fed hopes Y2K won't get in way of monetary policy
http://biz.yahoo.com/rf/991004/1h.htmlThe Fed says they don't anticipate Y2K to affect monetary policy in any way, though as we reported a few weeks ago, Fed Governor Edward Kelley said, "The Federal Reserve will remain prepared at all times, as it has in the past, to do whatever it deems to be necessary to have in place the best possible monetary policy."

The three-month London Interbank Offered Rate (LIBOR) was raised by 57 basis points last week (near 6.08 percent) in what was seen as a nod to Y2K anxiety. Due to Y2K anxiety, Richard Berner, chief economist at Morgan Stanley Dean Witter said, "People are willing to pay up for liquidity."
TownCrier
(10/05/1999; 10:00:11 MDT - Msg ID: 15500)
Robert Rubin tells investors they must bear risks
http://biz.yahoo.com/rf/991004/bcv.htmlOften, there is great truths hidden in humor. In a lighter moment during a speech last night to the Bond Market Association, ex-SecTreas Robert Rubin said he has enjoyed taking some time off, and found a major benefit to private life, saying "While I would argue my points in Washington, in the private sector I could just go short." The audience laughed, but my friends, that is SOOO true. As a public official in that position you jawbone positives because its your job...the truthful signals you send when you know the reality is at odds with the administration's desires must be done subtly. Such as the infamous statement of Rubin and Summmers, "a strong dollar remains in the best interest of the United States." That's may be true enough, but you'll notice it contains no promise that the dollar can be kept that way.
Golden Calf
(10/05/1999; 10:02:46 MDT - Msg ID: 15501)
gold passing PL
Dear Mr. Scot......
It's not impossible, but it's highly unlikely.
Whenever they came close there was a sudden
beakout and platinum far outpaced gold.

Unless something basically has changed, I would
expect the same thing to occur in the near future.

It is an intersting market though.....no?

I'm expecting a correction in this fast runup.
then in November back to going to new highs....
Gold that is, and of course pl as well
AEL
(10/05/1999; 10:03:02 MDT - Msg ID: 15502)
Gold, Thoughts from a retired Metals trader
http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001WUUinteresting tutorial and thread on the TB2000 site
TownCrier
(10/05/1999; 10:14:22 MDT - Msg ID: 15503)
Predictions of the FOMC actions today
http://biz.yahoo.com/rf/991005/xf.htmlAnalysts expect the Fed to hold steady on rates but to adopt a tightening bias. After today, Nov. 16 and Dec. 21 are the two remaining opportunities this year for the FOMC to adjust monetary policy at regularly scheduled meetings.
granny
(10/05/1999; 10:25:47 MDT - Msg ID: 15504)
Gold Pool Safety (Question)
Howdy all. Does Granny feel fortunate she "discovered" this stable of BRILLIANCE???? You bet!!! Thank you for being.

Hope you don't mind her making so much use of your wisdom. Just know that you are helping to protect her(and many other's) fanny(s). AND she is very appreciative!!!!!(Although she may be "master" in some areas she is very "novice" in this area. Know that she is passing on this extended kindness even more these days.)

QUESTION: Granny has a considerable amount (for Granny) of physical gold located in a "pool" with a large, well known, Financial Management Corporation. It is part of her Self-Employed Pension Profit Sharing Fund and she cannot touch it until after October 15th, 1999. She had few choices in terms of type of gold that would qualify for non-taxable funds; "pool" was fast, easy, and qualified. (Being in the highest tax bracket, a maximum allowed contribution to this fund keeps a significant amount of $'s out of Uncle Sam's hands and in Granny's pocket-book!! AND Granny is above the age where penalty is assessed for withdrawal of funds.)

Is Granny's "gold" safe for a few more days??? (This is a very reputable organization.) Any advice on how to take personal possession, as soon as she can?

Granny has been caught, as many others have, with a sudden need to be more educated than she is, and little time left to do so. BTW�. Last night's posts were so SURREALISTIC!!!! Granny was wondering if she had slipped over the edge or if it was the other way around.

Be kind to yourself and others.
Hogs and Kusses,
Granny

PH in LA
(10/05/1999; 10:34:12 MDT - Msg ID: 15505)
Another's Disappearance
ORO:

Do I detect a tiny insecurity in your writings on the question of Another's "oil for gold" thesis? You brought it up again with Mozel today and have mentioned it several other times without total conviction.

I recall my own interpretation of the concept when Another offered it long ago. It seemed then more like reference to a general policy of cheap oil in a financial climate that included cheap gold rather than a signed document with definite numerical agreed price/quantity ratios written formally in stone, as it was taken by critics anxious to find flaws in the story to discredit it. It seemed at the time that Another was referring to the economic system as a whole rather than to a formal agreement. Of course, it could be that my own understanding of these concepts, built as they are on very general terms, sought naturally to frame the question (and answer) in these terms. I do recall an instance when FOA referred to the oil for gold idea as one that was never implemented; rather like a threat that had been overhanging the system for some time (even one not necessarily even communicated directly to the West... rather just a theoretical possibility not intended to be lost on the Western powers). Although I commented on it at the time, I did not see an adequate clarification from FOA. It seemed like almost a mental slip on his part.

Are you convinced about Another/FOA being here at USAGold on some sort of mission that seems to have been accomplished, as you implied in your post to Mozel? One of my very first impressions of Another was that his intention was to stimulate the purchase of physical gold. I soon ruled that out in my own mind because I could not see beyond a coin shop owner trying to sell a few more ounces. Even though Michael Kosares had jumped on his writings by publishing "In the Footsteps of Giants" there seemed to be no connection between Another and MK, especially when I compared their respective writing styles. (MK was always very explicit both in public and in private that he was not Another.)

Looking at this question through your writings I still suspect that Another's motive was indeed to stimulate demand for physical. He, as much as anyone, would understand that the stalemate of short sales driving the POG ever lower would be vulnerable at the point that actual physical gold became removed from the game by physical holders. (But it always jsut seemed like a few spooky postings on the internet could hardly hope to accomplish much in the broader scope of things.) In fact, wasn't his claim of huge short overhangs made even before Frank Veneroso's work became public? Another also seemed to understand the situation of the LBMA long before it was common knowledge. He knew about the huge volumes of trading there before the bombshell announcement acknowledging it was released. And I remember him musing long ago to the effect that, "It is a sad thing, this LBMA... It will cease to exist before the coming storm in this new gold market subsides".

In any case, there is little question in my mind that Another/FOA know too much for their participation in this forum to be without purpose. That they do so in order to stimulate their own interest and knowledge seems like a very weak explanation as they contribute far more than they could ever hope to receive back.

Comments and replies: ph@ProdigitalRecords.com�

GFD? Any thoughts either public or private?
ORO
(10/05/1999; 10:46:01 MDT - Msg ID: 15506)
Conviction with oil/gold
Not MY insecurity.

I am looking at the making of a convincing argument for others.

The shadow of the oil for gold deals is found in the data. and is enough for me. The evidence you need to convince people about this is tantamount to a baseball bat to the head. People may accept the idea that the $ may one day in the future be considered worthless. That it has been so for 30 years and was completely skirted in the last 10 is something else.
Phos
(10/05/1999; 11:19:39 MDT - Msg ID: 15507)
PH in LA
I am sure you are right in saying FOA/Another have been here to stimulate gold buying. But I believe their motives are altruistic. They see a major decline in the US fiat money system on the horizon and have been warning people here to be ready for it. The best way is to return to the historic store of wealth, gold. Paper is paper, regardless of whose face is on it and the more you print the less valuable it becomes. The US has exported its debt for many years now to the benefit of its own citizens. 30 trillion US IOUs out there now, I think I read.

I hope FOA/Another have not left us but I suspect with events moving at a faster pace now they are probably very busy with little or no time to devote to the internet.
PH in LA
(10/05/1999; 11:21:27 MDT - Msg ID: 15508)
Identity Crisis
ORO:

Are you and Mozel the same person? Or would that be a personal question?
PH in LA
(10/05/1999; 11:25:56 MDT - Msg ID: 15509)
Reply to Phos
Phos:

With events moving at a faster pace now they are undoubtedly very busy with more time than ever spent on the internet (keeping a finger on the pulse, as it were).

I, too, hope they will return at their earliest opportunity.
Cavan Man
(10/05/1999; 11:28:09 MDT - Msg ID: 15510)
PH in LA
With so much tumult in the gold markets , I would surmise that at this particular juncture, FOA and Another et al are probably very involved with the responsibilities of their respective careers. I do not believe they are gone for good.

MK is Another? Ha. I have met him personally. While it is difficult to trust anyone these days, I would and do trust him. He is a very successful man with no good reason to ruin his name by perpetuating fraud here or anywhere for that matter. I don't know him well but this I can tell you; he is an honorable man.

Good thoughts from you sir. Could it be that these two gentlemen (FOA/Another) are motivated simply by good works and intentions? Hard to believe in this day and age!

The analysis corroborating by ORO is very compelling. We shall see.

If you owned vast amounts of precious resources in a mostly uninhabitable part of the world, would you trade for "promises" or, if you had a choice, would you monetize gold to a certain extent vis a vis the Euro and in the process.

That's the question to be asked.
Leigh
(10/05/1999; 11:31:06 MDT - Msg ID: 15511)
PH, Phos
Dear PH and Phos: Remember what FOA said as he signed off on Friday night:

PH, Everybody,
I have more to say than could possibly write now. When I get back we will have an awful lot to cover. We'll all understand later.
ORO
(10/05/1999; 11:33:03 MDT - Msg ID: 15512)
Another FOA motivations
Judging from the stares of incredulity I got when recounting this story and reviewing its implications with knowledgeable people who are involved in the financial markets, I would say they needed to have a place to send people to look at the picture in some detail without telling the whole story. They needed a place to find out how people would react.
The anger I found when Americans were plopped into ANOTHER's world of hard reality in mystic images as would be given by the old sage, was no short of amazing. "Nuke 'em" was not a rare response, it was the first response. Americans would rather kill en masse rather than live on the same plane with the rest of the world. Americans seemed to be more enamored of the illusion of the $ than of the actual lives of people in other lands.
After a while, the anger subsides and people start thinking differently, they suspect everything floated by the government. The thinking in terms of dollars remains, but the certainty is gone. They need a new way of thinking, because these ideas created a void and there was no acceptable replacement.
Cavan Man
(10/05/1999; 11:33:26 MDT - Msg ID: 15513)
ORO
From one "average, boring, midwestern guy" to (perhaps) another........thanks for your presence here.
Cavan Man
(10/05/1999; 11:40:58 MDT - Msg ID: 15514)
ORO
We live here in a very sick culture. This is not the same country I have read so much about in the history books.

ORO
(10/05/1999; 11:40:59 MDT - Msg ID: 15515)
Ph in LA
No, I am not Mozel.

Mozel continued working out his understanding of economic reality as presented by Mises and Hayek, and sought more and new evidence for the foibles of government in the monetary and political world. I abandoned this pursuit for nearly twenty years. I have come back to it over the last few years but have alot of reading to do to refresh my memory and stimulate further thinking.
Mozel is in this daily. It is an old occupation for him.
TownCrier
(10/05/1999; 11:48:47 MDT - Msg ID: 15516)
The new "golden dollar"...close, but no cigar (manganese brass, copper)
US Mint's new dollar coin to contain manganese brass, copper
By Bridge News
Washington--Oct 5--The US Mint announced today that the alloy for itsnew dollar coin will be a 3-layer clad system of manganese brass and copper. A Mint spokesman could not immediately say when the Mint would be issuing a solicitation to procure manganese brass and copper for the new coin, which will replace the Susan B. Anthony coin in early 2000.

The core of the new dollar will contain copper and the outer layer will be manganese brass, the Mint spokesman said. At a press conference in New York, Mint director Philip Diehl said the new alloy has been designed to produce an attractive coin that is golden in color and that matches the electro-magnetic signature and physical specifications (size and weight) of the Susan B. Anthony coin. He said the new coin is expected to be accepted immediately by the thousands of vending and mass transit machines that currently accept the Susan B. Anthony coins.

The "golden dollar" is easily distinguished by sight and touch from both the quarter and the Susan B. Anthony coin. It is gold in color and bears a smooth edge, similar to the nickel, Diehl said. Both the quarter and the Susan B. Anthony coin have ribbed edges. The coin is also distinguishable by its extra-wide border. Diehl added that the one key indication of the future success of the new dollar coin is the growing demand for the Susan B. Anthony. The Mint is now shipping more than 5 million Susan B. Anthony coins every month and the current supply will be depleted before the new golden dollar becomes available in early 2000. To bridge this gap, Diehl said the 1999 Susan B. Anthony are being minted to ensure that consumers who currently use the dollar coins will be able to continue to do so before the golden dollar is launched, said Diehl.
---
(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.

Does anyone perceived that the surging demand for the previously scorned "Susan B" might be fueled by Y2K?
ORO
(10/05/1999; 12:08:28 MDT - Msg ID: 15517)
Cavan Man
Yes, a boring midwestern X engineer. But it is an adopted identity, chosen rather than born into.
Golden Truth
(10/05/1999; 12:14:26 MDT - Msg ID: 15518)
FED INTEREST RATES!
The FED will not raise interest, COWARDS! Whats the matter afraid of "Crashing" the markets A.G?
Go GOLD go,now is the time to crush the U.S dollar.
GO EURO!!!GO.
They have adopted a bias of tighting which will leave a dark cloud over the markets. Ha Ha Ha Ha Ha !!!!!!!!!!
Peter Asher
(10/05/1999; 12:20:41 MDT - Msg ID: 15519)
Sell on news !!
Down 100 pts. in three minutes, now rebounding. Imagine if they had raised the interest rate
TownCrier
(10/05/1999; 12:21:55 MDT - Msg ID: 15520)
Gold reserves: ECB's quarterly revaluation increases gold by �13.234 billion
With the end of the third quarter, the European Central Bank remarked their gold reserves to market value, the value at which the gold will be booked until December 31st. The official valuation of ECB gold reserves increased from last quarter's mark of �114.988 billion to this quarter's value (for the same gold) at �128.222 billion.

It would seem that the central banks have finally found a stable fashion in which to do business. Whereas foreign bonds held as assets grow (from their yield) in currency terms, a devaluation of that foreign currency can with much greater speed wipe out those yield-gains and much additional value besides.
Golden Truth
(10/05/1999; 12:23:30 MDT - Msg ID: 15521)
MARKETS SWOON DOWN IN MINUTES!!!!!!
BONDS fall, S&P futures down,and the DOW lost 100 points instantly as groans from the trading floor could be heard at the N.Y stock exchange.

Gee really breaks my GOLDENHEART. ;-)
PH in LA
(10/05/1999; 12:26:14 MDT - Msg ID: 15522)
Gold Certificates
http://www.goldensextant.com/commentary.html#anchor71256Granny:
Your question about "pool" gold is commented on at the above link.
DD
(10/05/1999; 12:37:53 MDT - Msg ID: 15523)
ORO - Mindsets
ORO - So true about thinking in the US. But I think it goes even deeper. Our beliefs as a country/culture have become our prison. We don't see how we resist any new thought/belief that counters the status quo. America, the land of the free? Hardly. We the sheeple hold these lies to be self evident. However, the human mind, which creates our experience, is naturally resistant to change. We (our minds) don't change unless emotionally motivated to do so. Literally, the amount of change is directly related to the emotional content of the experience. That's why big life changes are always accompanied by significant emotional (life-changing) events. At the core of the changes we are about to experience is the changing of the mind-sets of a great many people about "how things are". With considerable "luck" we might even transform from "what's in it for me" thinking to something more sustainable for all.Changing is the most difficult thing humans must do. Many of us would rather die than change. This does not bode well for a smooth transition. It will probably be the hardest lesson of this century for the sheeple. Reality may come knocking in a big way. It will probably be a big shock (significant emotional event) when the sheeple's paper falls or the digits disappear into the cyber pit of Y2k. We, I believe, are in the end game of a western mind-set that is about to be turned up side down. Keep up the great work. Best, DD
ORO
(10/05/1999; 12:43:12 MDT - Msg ID: 15524)
Kudlow
Had just seen the Kudlow CNBC commentary.

Looks scared.

Points: (1) Fed should stop being wishy washy, and just say what it needs to say: "we'll keep on fighting for the $". (2) CNBC: mantra, "no inflation". (3) Kudlow Unsaid: CPI is a cooked stew, the tough meat has been softened. (4) Kudlow on Inflationary Reality-also see Pesek article on Volcker- oil prices, commodity indexes, gold, dollar index say $ is not what it used to be. (5) Kudlo time to choose a strong $ (Unsaid that it means weak banks) or a weak dollar and inflation. He preffers the strong $, and suggests the Fed tighten the money supply.
What Kudlow does not seem to understand is that there are no more doors open, all are clogged with $ debt.
1. The tightening of the money supply. The banks are in a liquidity squeeze due to the unwinding of Japanese and Euro deposits, and domestic Y2K withdrawals. The Fed prints money to bail them out. (a) The slightest tightening would destroy the banks and the resulting US recession would kill the $ anyway. It would also increase the number of EM defaults that kill off the future demand for $. (b) Continuing the current policy of "temporary" monetization of bonds and tassled loafers will kill the $. (c) The claimed temporary nature of the monetization is causing US banks to liquidate US owned foreign assets is driving down the ammount of high interest $ denominated debt not owed by the US, while increasing the amount of Euro and Yen denominated debt - killing future demand for $. (d) Increasing interest rates would quickly flood the world with $ because of the high US debt, again weakening the $. (e) A moratorium on imports can prevent further $ deterioration, but that would cause horrible inflation as the US tries to replace imports.
Peter Asher
(10/05/1999; 12:56:25 MDT - Msg ID: 15525)
DD
>>>We the sheeple hold these lies to be self evident. <<<

I love it. Print up some bumper stickers!!
granny
(10/05/1999; 12:56:55 MDT - Msg ID: 15526)
PH in LA Msg ID:15522--Gold Cetificates
Thanks Bunches.

Granny does have a segregated (identified) account and feels somewhat less stressed but won't feel really comfortable until that pretty stuff is right here weighing down the pockets of her apron. Granny doesn't mind, in these times, paying a litte extra for storage and insurance.
......"There are also gold certificate programs in which the gold is held in allocated, segregated or identified accounts, in which event title to the gold rests with the customer, the relationship created is a bailment, and the gold is neither carried on the bank's balance sheet nor available for leasing. These accounts offer the customer greater security but also typically incur higher storage and insurance charges and of course do not pay any interest...(snip).....Private depositors, on the other hand, worry principally about themselves. Should they begin to doubt the soundness of their bullion bankers, they could start an old-fashioned bank panic in the blink of an eye."

Now for those people who do not have segregated (or identified) accounts .... ideas on if they should demand delivery very soon??

More info welcome. Be well.
ORO
(10/05/1999; 12:58:08 MDT - Msg ID: 15527)
DD - mindsets
The shock of some people I talked to before over the sudden rise in $ POG was something else, for the first time they were truly thinking through what I said. The fear on the phone was palpable. The questions that were asked show that they are now completely lost.
The Scot
(10/05/1999; 13:00:18 MDT - Msg ID: 15528)
Another is with us
I suspect that "ANOTHER" has not abandoned us but is monitoring us closely. With many of his predictions coming true it's time for a little "rest & relaxation".
Maybe he has revisited us with a new "Handle". We have so many new participants anyone of them could be him. I think it is "Granny"....... come-on Granny fess up.
Just kidding (Smile)
Sincerely, The Scot
TownCrier
(10/05/1999; 13:00:47 MDT - Msg ID: 15529)
Fed leaves rates unchanged, adopts tightening bias
http://biz.yahoo.com/rf/991005/2p.htmlText of FOMC's statement from Reuters.
Buena Fe
(10/05/1999; 13:10:32 MDT - Msg ID: 15530)
two down, two to go!
Gold= breakout (#1) accomplished
Bonds= breakdown!!!!!!(#2) underway
S&P 500= correction/crash (#3) soon to follow
$= meltdown (#4) any moment

I take no joy in the pain that the readjustments in the worlds financial scales is causing. But I do look forward to a short (1-3year period) of greater freedom!
Keep Well!
granny
(10/05/1999; 13:23:19 MDT - Msg ID: 15531)
The Scot --Another is with us
"...Maybe he has revisited us with a new "Handle". We have so many new participants anyone of them could be him. I think it is "Granny"....... come-on Granny fess up...."
Granny can only dream that she will any time soon have the knowledge possessed by our 'ol Sages!!!! (Not that she isn't a quick study.)She loves walking with GIANTS but can only offer questions, at this time. Hopefully some of her questions will stimulate answers for those who are too meek to ask.
Gandalf the White
(10/05/1999; 13:27:42 MDT - Msg ID: 15532)
OK -- Spot -- Time to wakeup again !
RUN and JUMP Spot !
<;-)
DD
(10/05/1999; 13:33:52 MDT - Msg ID: 15533)
ORO - Fear = Just Prior to the Significant Emotional Event??
ORO - It's amazing, isn't it? We go merrily along filtering out anything that doesn't fit with present perceptions/beliefs and WHOOPS! Reality begins to catch up with mind-set. For anyone who has faced significant adversity or change, I think it's natural that fear is the first responce. We actually have to get to fear before we go into denial, a likely next step. However, as reality pounds on the old coconut, we move more toward acceptance and finally action. Acceptance and action take the fear away...at least most of it. We'll probably go through these steps as individuals and as a culture if things come as unglued as is currently indicated. Keep a close eye on Y2k. 00 may be the final bale of straw on an already flattened camel. Best, DD
Goldfly
(10/05/1999; 13:37:20 MDT - Msg ID: 15534)
Well, Spot and Spike came in about an hour ago....

They were out all night and boy- they look dog-tired.

Rrrrrrrrrr....

Oh, sorry Spike, no offence.

They seem, however, to be quite happy, and after devouring their bowls, have settled themselves for a nap by the computer to await the Town Criers report.

I too cannot wait to see this one....

GF
ORO
(10/05/1999; 13:37:46 MDT - Msg ID: 15535)
DD
I would like to second Peter Asher

>>>We the sheeple hold these lies to be self evident. <<<

Wins the medal of honor for saying of the day, phrase of the week......
Neo
(10/05/1999; 13:52:23 MDT - Msg ID: 15536)
GATA on South African Radio
http://196.36.119.130/BusToday.nsf/Current/422567D900452FF842256801006240D7?OpenDocumentLooks like Bill Murphy and GATA are finally gaining the recognition they deserve. Appeared on South Africa's most popular financial news show, Moneyweb. Would recommend this site to anyone seeking REAL information on what is transpiring in SA's financial markets.
TownCrier
(10/05/1999; 14:37:32 MDT - Msg ID: 15537)
U.S. congressional study slams IMF accounting
http://biz.yahoo.com/rf/991005/1b.htmlA congressionally commissioned report by the General Accounting Office was released this week. It accused the International Monetary Fund of understating its lending capacity through the deduction of $19 billion in liquid reserves to a reserve fund that hasn't been used in over 20 years. It also claimed the IMF may be unprepared for the millennium date change.

This report will surely add fuel to the fire as Congress debates in the coming weeks whether to impose its veto authority in regard to the IMF's intention to revalue a portion of its gold reserves in a scheme to provide debt relief to the world's poorest countries.
TownCrier
(10/05/1999; 14:53:36 MDT - Msg ID: 15538)
Prospects dim for return to record-low US bond yield
http://biz.yahoo.com/rf/991005/44.htmlIt was exactly a year ago that U.S. Treasury 30-year bond's reached an all-time low yield of 4.69 percent.

Analysts said it had more to do with flight-to-safety capital flows following a global crisis--including the Russian debt default--than it had to do with economic fundamentals. One analyst said those rates were not sustainable from the very start, and were "artificially low."

Current U.S. 30-year bond rates are 6.168%. By contrast, a recent auction of Brazillian treasuries occurred with a yield of over 22%.
TownCrier
(10/05/1999; 15:20:41 MDT - Msg ID: 15539)
Hear ye! Hear ye! There is an update to the pages of USAGOLD!
http://www.usagold.com/wgc.htmlTHIS WEEK IN GOLD has now been updated with the latest weekly gold market commentary, hot off the press by the World Gold Council. Their staff recounts the events of September 27 - October 1, the exciting and volatile week following the european announcement curbing future gold sales and leasing operations. In the WGC's words, "This agreement marks an unprecedented level of co-ordination among governments about gold reserves and changes the entire market background."

Also in this week's commentary:
"By this time a serious shortage of physical metal was emerging. Gold lease rates, which had been strengthening for the previous two months, suddenly rocketed with the one-month rate soaring above 10% on Wednesday, pushing the market into backwardation (spot prices higher than forward prices)."

Grab your torch to get there at the link above, though you won't need it when you arrive at this well-lit room.

We'll see you when you get back.
TownCrier
(10/05/1999; 15:50:05 MDT - Msg ID: 15540)
Timeline of Official Sector gold sales vs gold price
http://www.gold.org/Gra/Statistics/Osgchart.htmThis is a helpful chart for those who think they've missed their gold-buying opportunity. Although the chart shows only recent years, gold is still near 20 year lows, and in truth, the buying opportunity remains for as long as sellers may be found...but at what price? Always remember, if nothing else, that it's a much wider world out there than the perspective typically taken by many derivative traders at COMEX.
Canuck
(10/05/1999; 17:46:12 MDT - Msg ID: 15541)
Identities
Often wondered about FOA and Another; even MK and Another.

How does Granny know of 'ol Sage? (15531)

And definitely, Farfel is Stranger!
Canuck
(10/05/1999; 17:48:55 MDT - Msg ID: 15542)
ET .... Employment numbers
ET,

Remember the '13th of the month theory', to be released first Wednesday of the month, tomorrow.

Thoughts?
Canuck
(10/05/1999; 17:52:00 MDT - Msg ID: 15543)
Inflation numbers
Does anyone have Sept. PPI and CPI release dates?

I anticipate week of 12th. Please confirm.
Goldspoon
(10/05/1999; 18:15:40 MDT - Msg ID: 15544)
***Fun and Games..."Place your Guess!!"***** MUST PLAY!!!
Want to have some fun? Guess what tomorrow's Comex closing price is.... as posted by Townie or USAGOLD... entries must be posted here before this site rolls over to tomorrow...the winner is the person who gets closest to the posted price (over or under is OK, Just be the closest)...
The winner gets the title of "USAGOLD ORICLE FOR A DAY" (braggin rights)..... Good Luck!! but you'll have to beat me..(i'm preety good ya know... handsome and modest too)...


RossL and i played the game this morning just before the Comex opened.... the winner was...well, i don't want to embareass Ross.....
granny
(10/05/1999; 18:24:57 MDT - Msg ID: 15545)
Canuck ..Identities
Howdy All,
Must be a coincidence. Please don't make any more of it than it is ... there is enough excitement and mystery to worry about. Granny doesn't know the'ol Sage you are probably referring to. "Sage" is a common but not too often used word in Granny's vocabulary (rare the human who can qualify). Be well, granny
Back to assemblin storage shelves for you know what ... don't we all wish we could say we needed this much storage for Go*d!!?? ... come to think of it ... this T-paper and green coffee beans might be worth their weight in Go*d in a few months!!)
apdchief
(10/05/1999; 18:26:43 MDT - Msg ID: 15546)
@Goldspoon
OK...I'll Play. Tomorrow's the day...limit up...$399.00.
Canuck
(10/05/1999; 18:27:58 MDT - Msg ID: 15547)
Goldspoon: Comex close
$343.00
granny
(10/05/1999; 18:31:10 MDT - Msg ID: 15548)
Goldspoon: Comex close
Me too ..... $357
RossL
(10/05/1999; 18:38:42 MDT - Msg ID: 15549)
Goldspoon: Comex close on Wed.
OK! I was hit by a spell of irrational exuberance this morning. Tomorrow close is $332.30
YGM
(10/05/1999; 18:42:01 MDT - Msg ID: 15550)
FOA & Another and SteveH
I've felt compelled for some time to make a comment or two on the thoughts of these two fine gentlemen and as I post here from time to time I felt it prudent to espouse from my regular chair at the Gold-Eagle forum, and have just done so. Tit for tat for site recomendations.

SteveH--I've also wanted to say I'm very flattered that you felt some of my personal thoughts there were worthy of re-posting here. It helps make the time taken to read & write
personal views more worthwhile. Thanks--YGM
onlychild
(10/05/1999; 18:46:17 MDT - Msg ID: 15551)
***Comex close***
I'm in: $336.50
Goldspoon
(10/05/1999; 18:48:40 MDT - Msg ID: 15552)
**** i wonder...?...***
Think someone here can out guess that bunch over at KittyCO?
i don't have postin' rights over there....never felt it was worth it....but if someone wants to copy my posts over, well..... it would make thins a bit more interesting wouldn't it???
Goldspoon
(10/05/1999; 18:55:43 MDT - Msg ID: 15553)
@RossL...
That's OK Ross..... anybody can make a mistake...bbbBBAAWWWWHHHA!! .....oops...i new i couldn't say that with a straight face..;>}
Cavan Man
(10/05/1999; 19:00:16 MDT - Msg ID: 15554)
YGM
Hello. I do not understand the meaning of your last post. Could you clarify please? Thanks.
Tanglewild
(10/05/1999; 19:13:26 MDT - Msg ID: 15555)
Canuck-PPI_CPI-
I think you may have been asking about October's dates which are PPI on Friday the 15th and the CPI on Monday the 19th.
My guess for tomorrow...a little backing and filling before the next leg up...318.80 at the close.
The Believer
(10/05/1999; 19:16:35 MDT - Msg ID: 15556)
Here we go....?
So...the "money" runs to gold.
We have waited for this a long time...
But will the long awaited move for gold mean
the end for the U.S. dollar?
It is with a cold lump in my belly that I see my faith
in gold being rewarded.
Another is proving to be quite astute...no?
The U.S.A. may be a "changed" place soon enough...
Tanglewild
(10/05/1999; 19:17:58 MDT - Msg ID: 15557)
Canuck
Oh, just in case....sept's dates were the 10th and the 15th
YGM
(10/05/1999; 19:26:41 MDT - Msg ID: 15558)
Cavan Man
I'm not sure what you don't understand? Possibly I lost you by mentioning that my comments were made at Gold-Eagle forum? Have you been there? If not I will post the link if you
wish.--YGM

PS: I like BOTH sites equally well and used to post here
quite often but it's hard to have two ongoing group relationships at once so I read here daily and post at Gold-Eagle. Hope this helps.-----YGM.
Cmax
(10/05/1999; 19:28:45 MDT - Msg ID: 15559)
Voyager (10/04/99; 23:42:28MDT - Msg ID:15467
Yes Voyager, it seems that we ARE presently witnessing the flushing of your mentioned toilet. Counter attacks? If 10 tons was snatched up on COMEX only 30 seconds after the offer, it would seem that any such tactic would only prove futile and a gross waste of wealth by any organization that attempted. And even then, it was probably only to cover the short.
Thoughts? The parameters of the world gold market have changed (Eurobank announcement).....different rules now....it's a brave new world and we're sailing into uncharted waters (at least in the modern sense). This coupled with Y2K, an immovable deadline breathing down our necks, and you have an event without precedent. I myself look forward to the economic cleansing to come (unfortunately I still have a very large economic interest in the status quo), just as an old forrest NEEDS a brushfire, only this time, I think that this will be the catalyst of worldwide tax reduction, hence worldwide goverment reduction, and ultimately greater liberties. Our internet has given us an unprecedented view and power as individuals, that did not exist but a decade ago. The game is different, just very few people have opened their minds wide enough to see it. All major paradigm changes in history, (of lesser calibur than mentioned above), have all resulted in immediate and violent change of hands of power and wealth. It is in each of our rational best interest to recognize this change, and act accordingly.
Silver Tongue
(10/05/1999; 19:44:30 MDT - Msg ID: 15560)
Tomorrow's closing price
Sorry to be a pessimist but I predict that tomorrow's closing Comex gold price will be $313.90.
Tomcat
(10/05/1999; 19:52:12 MDT - Msg ID: 15561)
ORO

In your post on Kudlow you stated:
"(c) The claimed temporary nature of the monetization is causing US banks to liquidate US owned foreign assets is driving down the ammount of high interest $ denominated debt not owed by the US, while increasing the amount of Euro and Yen denominated debt - killing future demand for $. (d)
Increasing interest rates would quickly flood the world with $ because of the high US debt, again weakening the $."

Could you explain (c)? I just didn't get it.

Regarding (d), how does increasing interest rates flood the world with dollars? Does the loss in liquidity cause the redemtion of bonds and notes etc.? I thought tightening (raising rates) lessened liquidity and this meant less, not more, dollars.

Still reviewing your post re Mozel. Good stuff.
apdchief
(10/05/1999; 19:59:53 MDT - Msg ID: 15562)
Golden View
PLEASE....not two nights in a row without TC's wisdom!!!!!
SteveH
(10/05/1999; 20:01:15 MDT - Msg ID: 15563)
War
The technical prowess of this gold battle is astonishing. By rights that 4.5 drop should have clobbered this but it bounced back with vengeance. Sides!
Goldspoon
(10/05/1999; 20:01:39 MDT - Msg ID: 15564)
*Goldspoon's guess.....*******
Well said Cmax.....

Ross....my contrarrian indicator......(Ok, sorry Ross, love ya man) Platinum up big tomorrow....remember if platinum has a slow day gold ain't goin nowhere much....The big boys telegraph what they are thinkin with the price of platinum...(study this and read em like a book)....hence if Platinum is up big, gold is turned loose to break the 330 resistance level..(OK,..OK...im' gettin to it..sheesh..)
Comex Close, Gold tomorrow...$343.73.....
Cavan Man
(10/05/1999; 20:02:28 MDT - Msg ID: 15565)
SPOG
Now $328.
Cavan Man
(10/05/1999; 20:05:39 MDT - Msg ID: 15566)
Leigh
Hope you're feelin' better. Mother CM is down tonight. You know the old saying? "A house without a Mother is like a ship without a rudder; a house without a Father is no bother."
SteveH
(10/05/1999; 20:07:04 MDT - Msg ID: 15567)
report
I visited my coin dealer friend. His thoughts (remember he went through the 79'-80' run in gold and silver) were that the public hasn't even become involved in this.

I asked him what would happen when it did.

He said there would be no gold available for a while.

He said there was a ways to go with this one yet, because the public weren't buyers yet, not like in the late 70's.

That's what he said.
SteveH
(10/05/1999; 20:15:01 MDT - Msg ID: 15568)
TA
YGM, you deserve the credit. Good piece.

Gold now up (dec that is) $1.00. She is turning. This is the day against night again.

TA shows upper bollinger on 60-minute chart at 334.50. That means if she hits $338 or higher she may track up. Last night it hit $337 or so and reversed (just like a good technical). There appears to be nothing technical about this trading yet, except to define some underlying forces of which we probably can't begin to grasp, not yet anyway.

Onwards.
Cmax
(10/05/1999; 20:23:05 MDT - Msg ID: 15569)
An old, but significant post
Sometimes when one is entering uncharted waters (such as where we are now), it helps to review where you have been. For me, my whole perception of the economic world collapsed in the last days of January 1997, when the LBMA broke silence and made a press release disclosing their daily gold volumes. The following day it was published, I posted the following on Kitco, which was the beginning of a personal odessey and discovery as to the real nature of the world's money system. Now in hindsight, it may seem a little funny, but believe me, it wasn't at the time. We have all come a long way since this day.

Kitco January 31, 1997

HOW HOW WOW....., is this "enlightened" age of information, exist something SO large as loco London?? It has been hidden all this time not by government mandate...but by private enterprise. Selby gives a number of 241,000
tons per year moved through this market; that is 660 TONS PER DAY! And we have been blaming news releases on the Dutch for their little 300 ton sale (during the year) as a major contributing factor in the slump of gold? No way. The "discovery" of loco London, economically, is akin to the discovery of the New World by Columbus. 30 million ounces traded in ONE day (Jan 29)? These are not COMEX numbers....these are numbers of a GOLDEN ALTERNATE CURRENCY, here and NOW. I don't think the world has yet REALLY assimilated what this really means. Goldbugs have been putting the excuse of their plight on old "management" by Central Banks. With these numbers flowing in the previously occulted London Exchange, Central Bank's could not possibly manipulate. Gold then must be acting NOW as a commodity, supply and demand. And the price that we have now, is it's commodity price (rather than manipulated price). And as any commodity, it is subject to the market's perception. Popular economists refer to gold as a dead horse....these are not numbers of an inactive currency. WHEN the masses translate this loco London information, the perception of gold must change dramatically.

After all, this information was only released what....3 days ago? The Central Bank directors must be squirming when they see these numbers. With such incredibly high volume, and great fundamentals, do you REALLY think that this large of a market can allow gold to drop much further? I don't see how. However, we do have a paradox:
Since gold as an alternative currency DOES exist, why is it SO cheap? I remember Ann Rand saying somewhere
that in nature, paradoxes cannot exist......one must recheck their premises. Our PREMISES definitely need some
rechecking now; OR the general market needs to recheck their's. Gold, with this volume (and new information), is
behaving paranormally. Next question is:

What ever prompted the "perfectly" occulted London gold market to go public??

This is against the very nature of it's participants. And against the interests of the Central Bank's and governments.
This London market is no little news...what are their intentions with this release? First thing that comes to mind, is that if I wanted to undermine the very root of fiat currencies, this is exactly the information I would release.

Leigh
(10/05/1999; 20:25:07 MDT - Msg ID: 15570)
Cavan Man
Dear Cavan Man: Thank you for asking about me! I'm actually sicker, so I'm just quietly lurking and reading what you guys write. Hope Mrs. Cavan is feeling better soon.

Town Crier has been very quiet for a couple of days; I hope he's all right. He promised to fill us in on "Three Kings." TC, what was the movie like?
Tomcat
(10/05/1999; 20:25:52 MDT - Msg ID: 15571)
Cmax, YGM, PH in LA
My call for tomorrow is $325.

Cmax: If "the rougher times to come" elevated the awareness and action level of just one percent of the population who then spread the word on the internet then we would have a new and more honest world. During the depression statistics showed that people spent more time at the theater. If we have a depression perhaps more will have time for the internet! The internet can spread more truth and expose more lies faster than any medium in history.

YGM: Like your stuff. Could you post your Gold-Eagle posts over here when you feel it is appropriate?

PH in LA: You might be right about the motives of ANOTHER and FOA. However, rather than focus on who ANOTHER and FOA might be, should we not reflect on who we have become because of them?
Cavan Man
(10/05/1999; 20:28:41 MDT - Msg ID: 15572)
SteveH
I exchanged some FRN for Irish Punts today. My first thought was, my, this money really looks funny. Just thinking about it; there is no difference between the two really. Question; why is the Irish pound and the British Pound so "dear" in dollar value?

Here's a point--I've been looking at the US dollar for so very long, I actually think it should be worth more than an Irish Punt or, anything else for that matter. I remember the first time I went to Ireland. I wondered why I gave them 500 and got back 250. Anyway, my point is that a mountain will need to be moved to get people weaned even a little bit off the $ and into some hard assets beholden to none. This thought is from your last post. A friend of mine considers gold ownership a "hobby". Once John Q. Public begins to move in the direction of AU, "Katy bar the door".
onlychild
(10/05/1999; 20:30:23 MDT - Msg ID: 15573)
Expert says don't buy stocks for six weeks
http://moneycentral.msn.com/articles/invest/jubak/4749.asp?special=msnnipThis "expert" suggests building a cash position for the next six weeks. He tells us how shaky the market is and outlines the losers. OK so far, but he goes on to state that there is nothing on the rise right now. Has he been in a cave or what?
The Believer
(10/05/1999; 20:30:52 MDT - Msg ID: 15574)
YGM
YGM...So what is this comment?
PH in LA
(10/05/1999; 20:36:53 MDT - Msg ID: 15575)
Being all that we can be!
Tomcat:
Just part of the process of assessing whether we have become all that we might think we have... You know, just tryin' to get closer and closer to reality. It's a process that never ends!
Cavan Man
(10/05/1999; 20:37:59 MDT - Msg ID: 15576)
Tomcat (PH)
I believe Mr. PH espoused a belief in FOA/Another endeavoring to encourage PM ownership earlier today. Am I correct? I don't want to scroll back. If that is so, I ask; what is their motivation? Everyone posting and lurking here who would buy 1000 OZ. would affect the POG in a very small way. Why then? I have a hunch. These two gentlemen are the penultimate insiders. I am playing my hunch.

Cavan Man
(10/05/1999; 20:40:14 MDT - Msg ID: 15577)
PH in LA 15575
Yes, indeed!
Cmax
(10/05/1999; 20:41:20 MDT - Msg ID: 15578)
Tomcat
Tomcat
With the few living brain cells that are still functioning, my basic math tells me that if physical gold to paper gold ratio is 100:1.....and if as you say only 1 percent of the population was elevated to the awareness to act, then the 1 percent of the perceptive population should then hold 100% of the physical gold, no? (smiley thing)
TownCrier
(10/05/1999; 20:47:35 MDT - Msg ID: 15579)
After the Close: the GOLDEN VIEW from The Tower
The most-watched financial news of the day was whether the Federal Reserve Board's FOMC meeting would result in either a change in lending rates, or an altered bias at the least. The decision was announced today at 2:15 EDT that they voted to leave rates as is (federal funds rate target at 5.25% and discount rate at 4.75%), but that they adopted a policy directive biased toward raising interest rates in the future. Stocks and bonds immediately turned sharply south, and gold, which had always been in positive territory, rebounded from a sag in its earlier highs during its brief remaining trading period.

As reported by TheStreet.com, Dennis Gartman, publisher of The Gartman Letter, suggested that the FOMC members might have gotten a preview the Labor Department's September employment report, (to be released Friday) and if strong it would explain the tightening bias. This seems credible in light of the Fed's press release regarding the FOMC decision in which they say "Nonetheless, the growth of demand has continued to outpace that of supply, as evidenced by a decreasing pool of available workers willing to take jobs." Gartman suggests that scrutiny must now shift to the September PPI and CPI (released mid-October) and to the October jobs report (released November 5) in advance of the FOMC's next meeting on November 16. In an interesting additional note, Gartman says, "But for Y2K, there's no question they would have moved to tighten. They are praying for some slowdown in the numbers that will allow them not to tighten before the end of the year."

At Wall Street's closing bell, the DOW and Nasdaq regained ground from the post-FOMC selloff to finish essentially even on the day, although NYSE decliners outnumbered advancers nearly 4-3, and 145 issues set new 52-week lows while only 54 reached new highs.

The 30-year Bond was the day's biggest basketcase, losing 1-6/32 in price (6.168%), plumbing the depths near its lowest price of the year.

In currencies, the dollar also weakened after the Federal Open Market Committee announcement, probably in reaction to the decline in bonds and stocks. Dollar/yen settled down from an earlier 5-day high of 107.14 to close at �106.52 per dollar. The euro/yen reached nearly a month high on the Fed decision as dealers covered shorts and corporate customers bought the euro/dollar. Also a factor is the expectation for a possible euro-rate tightening as the European Central Bank counterpart to the FOMC meets Thursday. The euro settled up at �114.41 per euro.

Bridge News gives another thorough report today with comments from traders and dealers on life in the futures pits, so we'll cut away to them shortly. But first, we'll quickly catch you up on spot gold price movement in NY from our last GOLDEN VIEW on Friday. (For those wondering, our absence was due to a long-overdue visit to the Castle (Centennial Precious Metals). We hitched the horses to the wagon and made the long trip from The Tower (which is frankly little more than our humble news outpost here in the endless wilderness of the internet). Believe this meek TownCrier when he says the Castle (CPM) is even more impressive in person than it is over the Net. Thanks go out to Michael for his hospitality while we were in Denver and within his Halls.) Spot prices were last quoted in NY today at $324, up $6.70 over Monday's close of $317.30--which was up $13.30 over Friday's $304 close (which in turn was up $6.30 from Thursday, etc).

NY Precious Metals Review: Dec gold up 2.5%; trims early rally
By Darcy Keith, Bridge News
New York--Oct 5--COMEX Dec gold futures settled up $8.0, or 2.52%, at
$326.0 per ounce, trimming more than half of its early morning gains that
brought Dec to a 2-year high of $339.00. Gold saw fierce gains today in
overnight ACCESS trading, but could not sustain the lofty levels for long
as profit-taking set in during regular COMEX trade.

While most of gold's retracement off its highs came amid the first
hour of trading, further selling pressure emerged following the US Fed's
announcement that it has left interest rates unchanged.
Although most analysts believed the Fed would keep rates unchanged,
there were still some thoughts that they might hike, and such a scenario
could have sent stock markets tumbling and investors fleeing to the safe
haven of gold.

[On the other hand, such nonchalance by the Fed in regard to inflation should send PROACTIVE investors toward gold--to seek its safety while the Fed demonstrates such trivial inflation-fighting stamina. If the Fed were more actively "doing something," these same investors might conceivably shun gold in deference to the Fed; however, that same action by the Fed would surely send both stocks and bonds lower, leaving gold as the only place to be by both proactive AND reactive investors at large. So, where gold temporarily had a huge day in early trading, it settled for simply a "big" day.]

While the Fed kept interest rates unchanged, it also announced that it
had adopted a tightening bias, which may have limited the downward
reaction in the gold market.
According to a number of sources, a large gold transaction took place
in ACCESS trading late Monday above the market price at that time, and
this helped to spur further buying interest in Asia and Europe overnight.
One dealer said some 10 tonnes of gold, or 3,500 contracts, was offered at
$321, when spot gold was hovering close to $315. A buyer--rumored to be in
desperate need of short-covering--was found, the sources said.
Others said the sudden move in gold prices overnight was related to
options plays, as well as many rumors making the rounds, including talk
that a major gold producer has started to embark on programs of hedge
restructuring or buy-backs.
The only confirmed development, however, was that Ashanti Goldfields
has been left with an obligation to pay margin calls to its gold-hedging
counterparties because of the recent huge rise in the gold price. Ashanti
said it has entered an arrangement with its hedging partners for
continuing support.

Some players said, however, it was a sudden rush of short-covering in
an otherwise illiquid market helping gold to post its overnight gains.
"TOCOM must be suffering some type of short squeeze as COMEX has
seen," commented one broker. "Their liquidity is pretty thin too."
"We're seeing the reemergence of the Asian consumer as a buyer, and
Korean buying is way up now," the broker added.
More of this short-covering and options activity in gold--both
overseas and in the US--is seen continuing.
"I still think there's a whole lot of shorts," said Leonard Kaplan,
chief bullion dealer with LFG Bullion Services. "Now that we're moving
higher and higher, it is delta hedging of the options that's driving the
marketplace."
Vanessa Motto, analyst with CPM Group, said the rally is primarily
being driven by short-covering, rather than a lot of fresh long positions
being put on. "A lot of people are waiting to see
how this all shakes out before taking fresh positions," she said.
Continuing to lend support, added Kaplan, are firm lease rates. This
morning, 1-month lease rates were seen around 4.60%, which is down
slightly from 5.00-5.50% Monday, but still far above lease rates of just 1
month ago.

[currently the gold lease rates are:
1-month 4.4220%
2-month 4.5000%
3-month 4.8800%
6-month 5.0660%
12-mnth 5.1210%....]

Doris Hildebrandt, gold dealer with Toronto Dominion Bank in Toronto,
said that spot gold jumped very quickly overnight from about $320 to $330.
"That's got to be because of a big option play. There's clearly some huge
option plays going on; people are getting killed," she said.
Hildebrandt suggested that gold quickly ran out of upward momentum
when New York trading opened this morning because there were feelings the
overnight rally was overdone. "Whatever was forcing it up overnight in
Asia and Europe, New York traders don't necessarily see that as a buying
opportunity," she said.
Hildebrandt also noted that $340 is a major resistance level for spot
gold, and it was not surprising that prices backed off those levels when
New York trading began. However, should gold be able to break above that
resistance level and stay there, gold could have much further to climb,
she said.

The break through $340 in 1993--thanks to positions taken by George
Soros and Sir James Goldsmith--led to a major bull market.
On the downside good support should come in a $320-325, Hildebrandt
said.

David Meger, senior metals analyst with Alaron Trading, also cited the
covering of large lease positions that had been accumulated over the last
few months as a key driving force behind gold's rally.
"This just reeks of further lease covering, which is effectively
putting more buying into the marketplace," said Meger. The big US banks
are believed to be behind much of the lease covering, he added.
Meger also added that gold has reached levels where the locals will
"step in front of some of these rallies."

[******Here comes the best paragraph of the whole affair, and had it not been said here, we'd have surely said it elsewhere. (In fact, we alluded to it in an earlier post when we said "Always remember, if nothing else, that it's a much wider world out there than the perspective typically taken by many derivative traders at COMEX.") One small official proclamation here or there and *POW*...it's a totally different market than your see-thru plastic rulers and graph paper said it was.********]

Most market players agree that it is not technicals driving the
market, but fundamentals, following last week's shock announcement that
several key European banks have agreed to limit gold sales and lending.
"The psychology has totally reversed here," said a broker. "Without
the central banks selling and lending into the market, we have a shortfall
of supplies, as they have been up until now making up the difference
between supply and demand."

In the news today, the Australian National Bank said it has no plans
to sell gold for the foreseeable future. Also, Canada said it sold
136,000 ounces of gold in September.

[Here, we think our lovely Bridge reporter meant to say Austrian (not Australian) National Bank. Another Bridge report gives details that ANB board member Peter Zoellner was commenting on the 15 European central banks reaching their now famous decision at the September IMF meeting, and further elaborating that the ANB currently holds 407 tonnes gold. Australia now holds only about 80 tonnes (they are not expected to sell either, by the way.)]
***
(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.
---
In other gold news from Bridge, The New York Mercantile Exchange indicated it is additional gold options strike prices for trading outside the parameters of those normally listed, effective Wednesday. Volatility or expectations of yet more to come must have surely played into that decision.

Now that Andy Smith's anti-gold rhetoric has faded somewhat, apparently the latest bear to go crashing through the china shop is Ted Arnold, analyst at Pru-Bache. According to his report, this current state of robust health in the gold market is merely a reprieve from an ultimately oversupplied market, and Arnold further argues that the central banks who were signatories on last week's gold sales moratorium will remain "very overweight gold" and will "eventually cheat" on the agreement. What would they have to gain by cheating except paper? With the future of the "strong dollar" in grave doubt, and a yen that would like to be jawboned into the grave along side, gold reserves seem the only way to go...especially when you consider how the Europeans are going about it. Watch this, as reported earlier today...

In their third such quarterly revaluation of gold reserves to market following the initial valuation of gold reserves at market values with the introduction of the euro based on December 31 values, this latest gold revaluation increased the ECB' reserves by �13.234 billion over the previous quarter. The official valuation of
European Central Bank gold reserves at which the gold will be booked until December 31st now stands at �128.222 billion, up from last quarter's mark of �114.988 billion (for the same gold.)
Take note, Mr. Arnold... whereas foreign bonds held as assets grow (from their yield) in currency terms, a devaluation of that currency can easily erase those gains and much more besides. So, what's wrong with gold now, Mr. Arnold? Wake up and smell the paper burning, my friend.

Follow along with this one if you can...
You may recall from our last report (on Friday) that the day began with open interest in 612 October contracts, with 120 receiving delivery intentions that morning. Monday stats reveal that by end-of-day Friday, Open Interest (October) dropped by 152 to 460 contracts. New delivery intentions on Monday were received for 18 contracts (bringing the total for Oct. to 1,621), and Tuesday stats reveal that by end-of-Monday, open interest had changed by a net drop of 13, leaving 447 contracts in open interest.
+
This is where it gets interesting, because this morning's delivery intentions exceeded--by almost double--yesterday's remaining open interest in the October gold contract. Unless our read on this is mistaken, because the turnaround was immediate, this clearly appears to be new contracts entered into for the sole purpose of acquiring gold. Though we don't know whether there was a brief period of backwardation since yesterday's close, it almost looks as though this were an arbitrage opportunity during which spot prices were higher than future prices...otherwise, why wasn't this same delivery sought on the spot market to begin with? From First Notice Day for Delivery Intentions on September 30th, October contacts in open interest totaled only 2,114. In the ensuing four days, delivery intentions have been announced on 2,437 contracts so far for October. Either way you slice it, the final interpretation remains the same...the physical market is TIGHT.

There was no change in COMEX gold depositories both Monday and Tuesday. Inventory stands at 839,029 Registered ounces and 88,591 Eligible ounces for a total of 927,620 ounces housed within vaults at ScotiaMocatta and Republic National.

In the oil market, traders said they were concerned about the outcome of a meeting to be held in late November between oil ministers of Mexico, Venezuela and Saudi Arabia. Their concern is that these ministers could discuss whether to keep their output cut agreement past March, and when a market is going well, any news that could disrupt things is always of concern. Venezuela Energy Minister Ali Rodriguez said the discussion would be about output levels, oil demand and world inventories.

On the topic of inventories, the United Arab Emirates Oil Minister Obaid al-Nassiri said that despite this rise in oil prices, "figures indicate that [world oil] inventories are still high compared to ordinary levels," and that OPEC's decision in September to maintain the production cuts through March 31, 2000 "would lead to
the stability of the oil market." Nassiri was speaking at an oil conference in Abu Dhabi Monday.

In NYMEX crude futures trading today, prices hit a 1-month low ahead of weekly inventory data that were generally expected to show crude stockpiles as flat or up last week. November crude ended down 28c at
$23.48 before the subsequent API report confirmed that US crude stockpiles rose 1.004 million barrels last
week, which was actually more than double what most brokers had expected (flat to up only 400,000 barrels.) In overnight Access trading, contracts for November WTI had lost an additional 14c.

And that's the view from here...after the close.
Tomcat
(10/05/1999; 20:52:03 MDT - Msg ID: 15580)
PH, Cavan Man

PH: You said "Just part of the process of assessing whether we have become all that we might think we have..." Very well put. Now you have me wonderin! Thanks for all you posts. I follow all your stuff.

Cavan Man: I agree. They are certainly positioned with unique perspective.Hard to believe it is not on the inside. BTW, I think you asked yesterday or Sunday what I buy. For gold its almost all pre-1899 uncirculated fifth ounces pieces like angles and roosters. One pays a small premium over Eagles for these. Cheap insurance as far as I am concerned. For silver it is all bags of pre-65 dimes and halves which I am told is the most popular for of silver.
Goldspoon
(10/05/1999; 20:56:52 MDT - Msg ID: 15581)
***Comex Close Tomorrow**
Here's what i have so far...(oh yeah..no changing guesses)

apdcheif-$399
Canuck- $343
Granny- $357
RossL- $332.30
onlychild$336.50
Tanglewild$318.80 (like your handle)
Silvertongue$313.90
Goldspoon$343.73 (can't stand this guy..such a knowit all)
Tomcat $325 (keep it up you'll go places)
SteveH ??
Leigh ??
Others ??
Tomcat
(10/05/1999; 21:05:49 MDT - Msg ID: 15582)
TC, Cmax

TC: Great upate.

Cmax: Yes, I agree. I was also alluding to the fact the if one percent of the population just woke up regarding how sheeplized they have become; how the press is bought off, how our Constitutions is no longer ours, etc. then perhaps, through the internet, there would be a ray of hope. Even now, as we speak, a transformation in freedom might be occuring. It might be a grass roots movement but it must be growing, even if small.
canamami
(10/05/1999; 21:25:46 MDT - Msg ID: 15583)
****$321.23*****
My guess on tomorrow's COMEX close. (It's so volatile, who knows, but it may be a day for retrenchment). I hope I'm wrong: I really want it to spike out of control.
ORO
(10/05/1999; 21:28:11 MDT - Msg ID: 15584)
Tomcat
The priority is to save banks from default/insolvency. The way this is done, the CB borrows or buys the banks' assets and in return deposits cash (electronic or paper) at the bank. If the asset is held to maturity, there will be more money in the system until that point is reached. It is therefore inflationary. If the asset is in default, the cash sent to the bank is permanently in the economy and it is highly inflationary.
That is why the Fed does "temporary" borrowings under reposession agreements rather than straight purchases. But the repos are more probably going to turn into outright purchases because the cash withdrawals will not come back (negative US savings rate and cash withdrawals for Y2K, most significant are Yen withdrawals).
When the Japanese withdraws funds from the US bank and converts them to Yen, those deposits are replaced by either Fed repos or by the bank selling loans on the free market, or simply not rolling over old loans that come due. Looking at the US banks, the loss of deposits from abroad will cause them to drop their own assets abroad, hence the severe tumble of the Eurodollar and rise in interest rates. When this happens, the $ obligations of foreigners are diminished, while the $ obligations of US entities remain the same. The $ dumped into the market by the Japanese withdrawal are sopped up by the US banks not rolling over old debt or selling/refinancing assets into Euro based or Yen based hands.
So the math makes every repo by the Fed a net injection of $ into the international economy now. While each unreplaced or sold foreign $ loan removes future $ demand from the world outside the US. The rest of it ends up in the US markets where the sale of assets causes rates to rise.
The Fed action weekens the dollar now, the bank response weakens the $ later or the bond market now.
The "tightening" by the Fed means that the $ will fall later instead of now. In the long run the result is the same.
The effect of raising interest rates in a debtor nation undergoing an exodus of foreign funds is inflationary and weakens the currency as the increased rates increase outgoing payments more than they do incoming payments. Therefore $ supply to the world increases. If enough $ are recycled back into the US system because of higher rates, then the $ may stay strong a while longer, but the future supply of $ would increase.
Last year, the $ income from the teeny debt owed to US creditors was smaller than the $ payments made by the US to foreigners. This acts as a trigger for a vicious circle-
1. if interest rates are low, there will be an unwinding of foreign owned debt, and $ will fall
2. if interest rates are high, US interest payments will grow, and the US economy will see both higher prices as a result of higher interest costs and on top of this the economy would slow. The slower economy makes investing in US operations unattractive and the incoming money seeking high returns is balanced by outgoing money rebuffed by low economic returns from the slow economy.
3. If Money supply is restricted (as Kudlow suggests), then the severely undercapitalized banking system collapses and investors panic, selling off everything quickly.
4. Prices of foreign supplied commodities rise as $ falls, and more $ are supplied.

The $ would fall until the $ needed for repayment of interest abroad or for importing US products and their proxy (still oil and gold - and most other commodities) are no longer less than the $ supplied by net US interest payments and imports into the US as well as outgoing investment money. At this point, the $ index (DX) value at which this balance is achieved is at the 40 to 60 range vs 98 today.
Bill
(10/05/1999; 21:33:25 MDT - Msg ID: 15585)
Goldspoon: Comex close tomorrow
Hope I'm wrong .. $318.50
Then again, we can just get more.
TownCrier
(10/05/1999; 21:34:55 MDT - Msg ID: 15586)
Three Kings
Hello Leigh
If you happen to be one of the handful that burden themselves each evening to read the ramblings of the GOLDEN VIEW, you will without doubt discover the reason for the TownCrier's absence since Friday...the staff at The Tower wanted to meet the good master of the Castle in a real world setting, not one "confined" by cyberspace, so to speak. If you haven't already met Michael, you are really missing out. In person he is even more gracious than he seems through the many wonders of modern substitutes...those being phone, fax, or internet. We're safely back at our Tower outpost, better for the experience, and eager to return as time allows.

Turning to the subject matter of your other inquiry...
Three Kings. Consensus among The Tower is that of a first rate movie, but not for the overly sensitive. This is near-war, after all, with the expected complement of soldierly language and actions. HOWEVER...there is the gold, which plays a MAJOR role, and is treated with the respect it deserves. Without giving away the movie, those same who had respect for gold acheived more easily than the others the proper balance and respect for human life in the end.

The director did an artful job of mixing reality with the surreal without sacrificing credibility and the importance of things that are important. Flying bullets, for example. Nearly each and every bullet fired took you along for the ride, and you knew how each pull of the trigger changed life for either the sender or receiver, or both.

And then there's the gold. You will see expressions on faces that portray wonderment beyond the ability of paper to inspire. You will also learn the difference between common thievery, and noble endeavors.

I'm sure we'll be taking others to see it.

TownCrier's bottom line: this is a perfect movie to help usher in America's improved gold-awareness on the social scene while gold also makes its popular return on the financial scene.
Hill Billy Mitchell
(10/05/1999; 21:36:16 MDT - Msg ID: 15587)
Tomarrow's close
****$309.50

Tomarrow's COMEX close. Look out for the spike on Monday,
Oct. 11


CoinGuy
(10/05/1999; 21:41:25 MDT - Msg ID: 15588)
Goldspoon...
Put me down for $334.75. GO SPOT GO!!!
Chris Powell
(10/05/1999; 21:41:51 MDT - Msg ID: 15589)
Short squeeze is only beginning
http://www.egroups.com/group/gata/235.html?GATA's Bill "Midas" Murphy
tells of the panic backstage.
Black Blade
(10/05/1999; 21:51:31 MDT - Msg ID: 15590)
Those GD hedgers with no confidence in their own product!
Oh....OK, I'll play...gold at $231 at close.

When I saw the oil price drop at first I thought that POG would respond to that, but the XAU dropped while POG rose. Well it appears that the drop in the XAU was attributed to hedged miners. My unhedged such as Harmony (HGMCY) did quite well, while Barrick (ABX) and other dropped. I would suspect that the hedge being priced in will cap the XAU to some degree, while unhegded (those that did not short gold) will continue to rise as long as Au rises. It appears that hedged miners do not have confidence in their own product, so why invest in those those companies? Although I do have shares in some, I wonder about how difficult it would be to unwind these positions. I see that Ashanti (ASL) has had margin calls on their short position in Au.....serves them right. Also Barrick's price has been constrained as well, and the rumor is that they have had similar problems. When mining companies short gold they do their shareholders a dis-service! It appears that Newmont (NEM) and Placer Dome (PDG) have had their prices held under due to the same concerns. OK, so I ranted and got that off my chest.
Gandalf the White
(10/05/1999; 21:51:36 MDT - Msg ID: 15591)
Goldspoon's contest !
$321.0
<;-)
jaydeevee
(10/05/1999; 21:52:13 MDT - Msg ID: 15592)
Tonight's closing POG
http://www.usagold.comHi from Australia! Today, with a $6.70 rise in POG last night, and with SPOT currently down $1.50; my blue-chip, unhedged Australian gold shares (and most others) are currently down 8.25% and look like falling further. I would have thought with a tightening bias last night ( the worst possible decision for stocks and bonds worldwide!) that POG would have rallied more than it did. What a strange, unique experience these last few days have been. How great it's been to have been reading this forum for a few months, so as to have been part of this great move forward to truth! I'v been reading estimates in this forum of how high gold will go tonight. I'll be happy if the price holds! Today, here in OZ, the unreasonable bearishness with quality gold shares suggests a fall in POG tonight. Can someone out there tell me why they they are confident the price will hold.
Gandalf the White
(10/05/1999; 21:54:24 MDT - Msg ID: 15593)
What did you mean BB ?
Did you mean $321 ?
IF so you beat me by a few seconds !
<;-)
Gandalf the White
(10/05/1999; 21:57:38 MDT - Msg ID: 15594)
JDV's question
FAITH, JDV !
<;-)
Black Blade
(10/05/1999; 21:59:02 MDT - Msg ID: 15595)
TomCat
I collect Liberties ($20, $10, and $5) and a few Indians, some mexican pesos (the gold ones with the Mayan calender and pres. Morales(?)), and Morgan Silver dollars. My bullion is mostly mapleleafs in Au and Siver rounds. Much bullion is also what I have bought from miners which were distributed as company awards, thereby avoiding the premium. Damn, I love this gold business!
Tubac's ears
(10/05/1999; 22:00:19 MDT - Msg ID: 15596)
SILVER!!!!!!!!!!!!!!!!!!!!!!!!!
Pleeeeeeeze sweet Jeeeeezus, breathe some life into the pile of scrapmetal SH*T hidden under my bed!!!!!!
Why hast thou forsaken meeeeeeeee????!!!!!
Black Blade
(10/05/1999; 22:01:30 MDT - Msg ID: 15597)
Goldspoon and POG change
OK, so I'm dislexic....POG at $321 at close. So it was a little deja vu? No, just a few bottles of Negra Modelo!
Black Blade
(10/05/1999; 22:04:00 MDT - Msg ID: 15598)
Gandolf and Goldspoon and yet another POG change
OK Gandy, I'll cut you some slack, I'll go $323.50. You got me.
jaydeevee
(10/05/1999; 22:05:32 MDT - Msg ID: 15599)
Gandalf the White's Reply to JDV's Question....
http://www.usagold.comMany thanks Reverend!
Black Blade
(10/05/1999; 22:09:05 MDT - Msg ID: 15600)
jaydeevee
good day mate! I didn't know there were any unhedged Aussie producers left. Normandy among others seem to be excessively hedged. Maybe there are a few unhedged miners that got caught in the whirlpool today. BTW, which Aussie producers are unhedged if you don't mind?
sstins
(10/05/1999; 22:10:06 MDT - Msg ID: 15601)
Tomorrow's gold close will be...
$362.5 at close upon which time I will be wishing that I would have purchased just one more gold eagle.

Oh... so much potential. Thanks to all those short sellers for all the years of manipulating the market and providing us with this exceptional oportunity. Let's do it again in about 15 years

BTW still waiting for 1 silver eagle.
Also BTW my local coin dealer is now asking $10 for silver eagles. Two weeks ago it was $8. They are to hard to find, he says. No big deal as I took home some of the heavier stuff.

Time to give silver a lift???

Steve
jaydeevee
(10/05/1999; 22:18:42 MDT - Msg ID: 15602)
Reply to Black Blade: Blue chip Aussie gold miners with 'small' hedge books.
To my knowledge in Australia Accacia Resources & Newcrest mining are the pick of the stocks with small hedge books.
Both companies have traded profitably at the recent low gold prices. Accacia Resources has the lowest cost of production
of the major producers. I think it is the pick of the stocks.
Marius
(10/05/1999; 22:21:17 MDT - Msg ID: 15603)
Wed POG guess
Oh, alright. I'll play too! $338 at COMEX close on Wed. All this interest rate stuff is (those of you with more delicate sensibilities had best cover your ears) a mere fart in a windstorm when compared to short covering and Asian buying. Also, I think the Dow bulls will delude themselves a while longer before (belately) fleeing. Short the dollar, short the Dow; ride that gold bull, AND HOW!
Journeyman
(10/05/1999; 22:24:29 MDT - Msg ID: 15604)
Bringing Up Baby
Several posts have pointed out that today's Americans just don'tget it about gold. Ah, yep.Convincing otherwise intelligent people that gold is better thanpaper, at least for some things, is, well, difficult. A friendof mine has a degree in bio-engineering and another in economics. He holds many accounts in Asian currencies. I warned him aboutthree years ago he should watch his won accounts (Korea),Philippean pesos and the Malaysian ringitt. We got in a bit ofan argument, whereupon I stupidly mentioned that gold protectspeople from the necessity of playing musical chairs to avoidlosses with paper of all sorts. He ended up telling me that itwas more likely that a large gold asteroid would land on earthand destroy the value of gold by ballooning the supply than thatthe dollar would drop because the Fed increased the money supplytoo much. I believe he kept all three foreign accounts -- andI'm sure he has dollar accounts now. Oh well.Another friend who prides himself on being a Mensa member (thehigh I.Q. club) took a similar attitude. He has an MBA fromUCLA. I finally "got him" with two questions. 1. "What is thelowest price a $100 bill could theoretically reach?" (He admittedit COULD become worthless.) I then asked him, 2. "What is thelowest price an ounce of gold could reach?" After much stammeringand delay, he said he didn't really know, but it obviously wasn'tzero. (At least he's honest.) He doesn't talk to me much anymore.Oh well.Maybe it's just the economically "educated" who have this chronica problem?Regards,Journeyman
flierdude
(10/05/1999; 22:26:43 MDT - Msg ID: 15605)
Comex Close
Goldspoon,

Right me down @ $316.00 Comex close. Hello all.
Black Blade
(10/05/1999; 22:27:16 MDT - Msg ID: 15606)
Jaydeevee
Thanks, I guess since they don't trade in the US I didn't have a lot of background on those. I also pick a few Canadians such as Euro-nevada and franco-Nevada (sister companies) which have merged. Great since they are primarily Au royalty companies with no debt, and with a high grade underground mine (Ken Snyder Mine) at Midas, Nevada. I've kind of shyed away from Aussie miners, probably due to Normandy. Good luck to ya mate!
Tomcat
(10/05/1999; 22:34:27 MDT - Msg ID: 15607)
All the shorts have to do is wait a while.
http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001Wf6
I picked this up on the Yourdon site.

BERN, Switzerland (AP) � Swiss lawmakers Tuesday approved legislation that will enable the country's central bank to begin sales of 1,300 tons of gold reserves starting next spring.

The 151-0 vote by parliament's lower house clears the way for the upper house to take up the bill in December. It will then go to the ruling coalition Cabinet around April.

The sell-off would represent half of the National Bank's 2,600-ton reserve. The other half will be kept to underpin the Swiss franc.

"It is in our interest that the gold sales begin as fast as possible,'' Finance Minister Kaspar Villiger told lawmakers.

The central banks of Switzerland and 14 other countries last month announced that they would limit their combined sales of bullion to 400 tons per year for a total of five years.

"From Switzerland's point of view, the pact is exceedingly advantageous,'' Villiger said, noting the rally in the gold price that followed the announcement.

Villiger repeated Switzerland's long-standing pledge that the gold will be sold in careful doses over a period of years.

In a referendum last April, Swiss voters approved a constitution which ended the traditional requirement for the Swiss franc to be backed by gold.
Bonedaddy
(10/05/1999; 22:36:14 MDT - Msg ID: 15608)
(No Subject)
Driving from Cheyenne to Denver you wouldn't know the world was round. You probably couldn't tell it by driving from Anchorage to Mexico City either. Fact is when motoring along the highway, the rear view pretty much resembles the view out the front windshield. How is it then that we know the world is round? Is it faith? No, probably not. I think it's just plain old education. Yeah, education, just steadily beating back the forests of ignorance that engulf the planet. Why, not so many years ago, old Nick Copernicus discovered that the world, was indeed, quite round. He didn't need a space shuttle to figure it out either. He came to the conclusion with a humble telescope. Of course he couldn't tell many people, he was smart enough to know they would get mad. Don't cast pearls before swine, you know. Later, after his death, when word got out of his "theory" the leaders dug up his bones and burned them... Heretic! (We'll show him!)
So the dollar, she looks mighty strong....been that way for over fifty years. Nothin' will ever be sounder than the dollar. Look at them fools buying that gold. Pass me some more of that dot com, if you please.
Simply Me
(10/05/1999; 22:41:02 MDT - Msg ID: 15609)
Guessing Comex Gold Close
Hi, Goldspoon. If you're still recording "guesses" this time of night...please put me down for $330.50.
HopeingII
(10/05/1999; 22:41:13 MDT - Msg ID: 15610)
TC - A Question
First of all, a thank you for all your effort on this forum.

Next, a question.

When "delivery intention" is given, can it be changed ?
To be more specific can one cancel the intention or
alter the date (if in fact a date is given in the original intention) ? Perhaps in your answer you could elaborate
on the details of issueing "delivery intention". I hope my
question is clear to you, if not, please ask for clarification.

Thanks in advance and thanks again for all you do.....
jaydeevee
(10/05/1999; 22:48:15 MDT - Msg ID: 15611)
My guess @ tonight's price
http://www.usagold.comLooks as if this column is short on BEARS........so I'll come out of my cave and try $318-50. Hope those rabid dogs SPOT & SPIKE see me and beat the living s@##> out of me!
Tomcat
(10/05/1999; 22:49:31 MDT - Msg ID: 15612)
Journeyman, Black Blade, flierdude.

Journeyman: It appears that a large portion of mankind gets to the point where their mind is filled with ideas which become fixed in place. Once set, it is very uncomfortable for people to change these somewhat hardened stale points of view. Oddly enough, your friend with many banks accounts probably still has the same losers because changing his ideas might be more difficult than losing money. This aspect of history repeats with every generation.

BB: Nice mix you have there. Too bad we aren't close. We could trade.

flierdude: Greetings. I follow your posts over at Kitco. In fact, I believe I have seen some of your posts at TB 2000. Nice that you drop in for a spell.
Black Blade
(10/05/1999; 22:51:40 MDT - Msg ID: 15613)
Chris Powell and GATA
Hey, you guys are good! I had to deduce some of this stuff and you guys had some very interesting info. It looks like the hedgers are in deep. I keep a running profile on share prices for several Mining companies, and noticed something was amiss. Keep up the good work guys! Hopefully these companies will see the error of their ways.
Chris Powell
(10/05/1999; 23:06:36 MDT - Msg ID: 15614)
Text of Murphy interview on South African radio
http://www.egroups.com/group/gata/235.html?Tuesday's "Moneyweb" program
with GATA chairman.

Chris Powell
(10/05/1999; 23:07:57 MDT - Msg ID: 15615)
Corrected link for Murphy interview
http://www.egroups.com/group/gata/236.html?Sorry 'bout that.
Goldfly
(10/05/1999; 23:15:00 MDT - Msg ID: 15616)
Ross, Goldspoon.....

You guys are very close-

Tomorrow's close $332.00

GF
TEX
(10/05/1999; 23:17:13 MDT - Msg ID: 15617)
Goldspoon: COMEX Close
I've been lurking out there since I first visited the CPM bunker in February. This is my first post and why not start out with a winning hand......place my bet at $332.25.

Also, just got my bank statement today. I had a nice letter asking me to please inform my banker with three days notice if I intend to remove more than $10,000 from my account(s)
anytime between Nov. 1 and December 31. Hmmmmmm......I'm taking it all out tomorrow.

Last but not least.......Three Kings, see it.
Peter Asher
(10/05/1999; 23:33:32 MDT - Msg ID: 15618)
Price Guess
Now that the panic has subsided, the floor traders have changed to clean, dry cloths and careful accumulation will resume.

I'll call for a small rise to $30.80
Peter Asher
(10/05/1999; 23:43:49 MDT - Msg ID: 15619)
Bonedaddy
Men first observed the world was round in the early days of tall sailing ships. In clear weather, when a ship could be seen many miles out to sea, only the upper rigging was visible. They soon figured out that the lower part of the ship was hidden by the curve of the Earth.

I once experienced a perfect example of this, when out on Long Island Sound on a clear day, 40 miles from NYC. I was in a 12' boat very close to the water and rising above the horizon, seemingly out of the water, were the upper halves of the Empire State, and Chrysler buildings along with the tops of a few others. (Circa 1952-3)
Jason Hommel
(10/05/1999; 23:47:57 MDT - Msg ID: 15620)
guessing/predicting...
How about another high one...

Gold at $348/oz. by comex close tomorrow.
elevator guy
(10/06/1999; 00:05:49 MDT - Msg ID: 15621)
Tomorrows' close!
Hi, Goldspoon! I think tomorrow's close will be $337.

Anyone know how to play the LBMA market?

What happened to the COMEX in 1979-1980, when the price reached, was it, $800/oz? Did the COMEX suspend trading?
Was there massive defaults? Was there as big of a short position as there is now?
Goldsun
(10/06/1999; 00:16:45 MDT - Msg ID: 15622)
Copernican Confusion
Bonedaddy
Copernicus figured out the basic workings of the solar system - planets revolving around the sun and all that.
Far from being considered a heretic, he was an employee of the Catholic Church, and was encouraged in his astronomical research by the Church leaders.
Education, like money, is a dangerous tool, best kept out of the hands of governments. BTW, I am not a Catholic.
Goldsun
elevator guy
(10/06/1999; 00:24:46 MDT - Msg ID: 15623)
Various
We all know now that the COMEX is a balloon with a couple of marbles in it, and will not be able to deliver gold if called upon by enough to do so.
But will it still settle its accounts in cash? How long can it do so? Is counter-party risk assumed by the brokerage houses, individuals, or what? I'm just wondering how long to stay at the paper party, before moving into physical, and gold and silver stocks.

Where's my buddy Tom Fumich? I didn't see him at Golden Sunday's victory toast.
YGM
(10/06/1999; 00:58:16 MDT - Msg ID: 15624)
CavanMan, Tomcat & Believer
Sorry it's late & I'm just back at the screen. What I said was that IMHO, FOA & Another have the apparent (to me & possibly others) knowledge & perception of world events unfolding w/ respect to money matters and Gold that it's comparable to that of the so called Gnomes of Zurich. I
feel that they have connections to knowledge that few are privy to and in an intentionally obtund way are trying to tell us all to expect a sudden and drastic change in many things financial. Both continually have tried to gently urge us not to rely too heavily on anything paper. Physical Gold is always at the edges of the messages. I apologize for reading my own deductions into what these fine and eloquent gentlemen have taken so long to tell us and sometimes repeat for many who are new to this forum. I
think the defaults will shock the world before this scenario
plays out! I DO NOT BELIEVE for a minute that their messages in any way are meant to stimulate Gold buying for any other reason than that of financial safety for those so inclined to listen to the message and read between the lines. I know this is alot more than I posted at Gold-Eagle today but I feel it needs to be said. All that remains uppermost in my mind is that the real power in the world lives behind the doors of the soundproof meeting rooms of the Central Banks of the world. Tell me where does all the non-publicly held Gold lie? 35% est in Bank Vaults and the rest to a few lucky souls. From every, shall we say extremly rich and connected (Banks and Bullion Circles) person that I've talked to and those (rumors) passed on to people I know there are stories of $2000.00 Gold and a $0.40 - .50 cent U.S.Dollar in the future. Who starts these if there is no fabric of truth. Sound stranger than fiction ? Well as far as I can see the truth usually is. These thoughts have guided my moves into having Gold in the ground so as to always have a edge on the system as I'm not among those with the wealth to stockpile Dory bars and wafers. So I guess I've had little faith in paper for alot longer than I 've been getting an education from here or GE and the Cafe.
Another even warned me once that I should be wary of Government when push came to shove and whose Gold lies under my mining claims. Gold, Default and Denial. I believe these will be the most used words in the near times ahead. Sorry for being long winded if any of you read all of this. Maybe I've read too much and studied too long to have a clear perspective but then who among us knows what lies dead ahead in this new millenium. I will stick to mostly physical and nobody will sway me from my course.
***and yes if I can make one iota of sense to you here I'll gladly post more often.G' Nite--YGM
Black Blade
(10/06/1999; 01:05:19 MDT - Msg ID: 15625)
Oh no! it's round?
As I understand it, the ancient Greeks (circa the time of Plato, etc.) knew that the earth was round by using simple geometry and trigonometry.

Also, has anyone heard of the "Flat Earth Society"? I wonder what those skeptics are up to these days.
SteveH
(10/06/1999; 01:59:35 MDT - Msg ID: 15626)
GATA
11:35p EDT Tuesday, October 5, 1999

Dear Friend of GATA and Gold:

I'm sending you the whole of GATA Chairman Bill
Murphy's "Midas" commentary tonight at
www.lemetropolecafe.com in the hope of letting
everyone know that any momentary calm in the
gold market only masks the panic that continues
backstage. The short squeeze is just beginning.

Please post this as seems useful.

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

* * *

MIDAS COMMENTARY FOR
TUESDAY, OCTOBER 5, 1999

By Bill Murphy
www.lemetropolecafe.com

Spot Gold $324.40 up $8 Spot
Silver $5.55 down 3 cents

Technicals

"Vox populi, vox Dei" -- "The voice of the people is
the voice God."

The gold market continues its rocket ride. Today the
December futures contract traded as high as $339 early
this morning before selling off going into the Comex
open. The gold market is on fire.

When gold was trading in the $250s, Midas told you that
we had the shorts "right where we want them." Many of
you believed in what I had to say and loaded up on gold
call options. Congratulations. While some of you were
buying calls, futures, gold stocks, etc., the bullion
dealer camp was laughing at us. We knew then that we
had them, and we know know that we do.

Some of the bullion dealers, overhedged gold companies,
and gold-borrowing funds are in big trouble. Last night
I sent out commentary that included this statement:
"Our camp will be more gracious than the Hannibals have
been. We will show mercy on them and let them out of
the back end of our 'enveloping horn.' When the price
of gold hits $340, we will accept their surrender."

I never meant to suggest that I would be happy with
$340 gold. This morning I did a radio interview about
GATA with the well-known Alec Hogge of South African
radio. When asked where I thought the price of gold was
going, I told his listeners that, in my opinion, the
proper equilibrium price is a bit north of $600.

Anyway, never have I received such an onslaught of the
same sort of feedback. Such as:

"As the man at the BIS said ... Gold will take no
prisoners."

"What do you mean that you will accept their surrender
at $340? Peanuts to you."

"Why take prisoners? These jokers have shown no mercy
for the past 10 years! Most of my mining stocks are
still a fraction of what I paid, at least one is in
Chapter 11, and another one (Benguet B) has not traded
over 25 cents (yes, cents) for the past year. (The
story of how it stays listed on the Big Board is the
subject of another investigation.) Gold goes up 25
bucks and you want to be Mr. Nice Guy. Give us a
break!"

The Cafe and the Internet have spoken. In earlier Midas
commentary I suggested that what we would eventually
have is a "fight to the death" in the gold market. In
the Roman Coliseum days the gladiators battled until
one beat the other. The victorious gladiator would look
up to the adjudicator to see if he would get a "thumbs
up" or "thumbs down" on whether to finish off his
vanquished foe. The adjudicator would often listen to
the crowd for direction. It was called "Vox populi, vox
Dei."

You have been resounding. Thumbs down to Hannibal
Lecter and the Hannibal Cannibals.

That can happen in many ways. One of them I told you
about this summer. Do you remember when I mentioned
that one of the Cafe's most plugged-in sources told me
that plans were being set in place to squeeze the
December Comex gold contract? That plan is still intact
and gaining advocates. At the time I noted that squeeze
artists were buying the December gold contract and
selling April and June.

The open interest on Comex is 222,031 contracts, having
gone up 7,449 contracts more yesterday. The December
open interest rose 6,263 contracts and now stands at
136,022 contracts or 13.6 million ounces. There are
less than a million ounces of gold in the Comex
warehouses. Of course most of the specs do not want to
take delivery, but not all the gold in the warehouses
is available either, as much it just sits there for
margin purposes.

The August futures contract was almost squeezed
recently, but one bullion dealer let the shorts off the
hook for a $2 or $3 premium over the contract price.
You might recall that Goldman Sachs took delivery of
more than 90 percent of the August deliveries. Our camp
speculated at that time that they were trying to get
their hands on as much physical gold as possible
(either for themselves or for clients) in case of times
such as we have now.

If the August contract was almost squeezed in a dull,
glacier-like gold environment, what do you think they
will do to the December contract in this new blazing-
hot environment? As we head into the late fall, the
gold shorts are going to have to deal with the monster
call option position that is now only $65 above today's
close, restricted gold lending by the central banks and
building Y2K fears. The recipe for a gold short squeeze
will get better and better.

The gold shorts and the Hannibal Cannibal bullion
dealers have had it their way for years. It is payback
time. Big-time!

Don't be too stressed that silver has not taken off
like gold yet. Many of the hedge funds were long silver
and short gold. They are buying back their gold and
selling silver now. In a recent Midas you were informed
that sources had told us that Moore Capital could be
short as much as 25 million ounces of gold. Moore was
the big silver seller today. They must have tremendous
margin call pressure and need to sell to shore up their
balance sheet.

$9.78 silver coming.

Fundamentals

The big story of the day for most was Ashanti
Goldfields. They have been one of the leading
proponents of hedging and have massive forward sale
positions. The other day they announced that they had
restructured their hedges. The marketplace took that to
mean they covered their hedges. The Cafe's John
Brimelow was not fooled and told me so at the time. The
bullion dealer camp was spreading the word that had
Ashanti had covered and the gold market had taken the
company's buying well. But Brimelow doubted that they
had covered and was proved right today as it was
disclosed that Ashanti's hedge book still represents a
net hedge of 10 million ounces. That shocked industry
participants.

More from today's Platts: "The sharp rise in the gold
price since the Sept. 26 announcement of gold sale
restrictions by the 15 European central banks 'has
resulted in a substantial increase in the value of
Ashanti's unhedged reserves,' the company noted. The
rise in prices and increased volatility 'has led to
certain counterparties being entitled to margin calls,'
the company said. Ashanti 'has entered into a joint
arrangement with its major hedging partners for
continuing support,' it added."

The market told Ashanti today what it thought of this
announcement. Ashanti stock sank to something like 5
1/2 from 9 3/8 with the price of gold going up $8. What
gives?

Ashanti and its bullion dealers, that is what. Sources
told me today that Ashanti has big problems relating to
maturity mismatches, margin call pressures, and forward
sale buyback liquidity problems, and are suffering from
faulty hedging programs laid on them by certain
consultants and bullion dealers.

I was informed today that Ashanti had a $300 million
margin gap with its bullion dealers. I am told that
Goldman Sachs is Ashanti's main dealer. That means that
the bullion dealers front the first $300 million of
margin calls. Of course that is no picnic for the
bullion dealer. Stress surfaces in all quarters and
that stress feeds on itself throughout the bullion
dealer and gold producer camps.

Another source told me that Ashanti started to reel at
$280 gold, much less $325 gold. Ashanti is hedged as
much as 10 years out. There is not a big market for
getting out of forward-sale 10-year-out gold positions.

Ashanti has significant problems that are likely to
worsen.

With every Midas now I try to explain that gold is
exploding when almost no one thought it would because
the industry was working from disinformation supplied
by the bullion dealer camp -- many of them old Hannibal
Cannibals. Their allies too. For instance, note these
comments by Barrick Gold's Jamie Sokalsky in a Dow
Jones story:

"'Gold producers account for perhaps 3,000 tonnes of
short positions, about two-thirds of the market total,'
according to Jamie Sokalsky, chief financial officer of
Toronto's Barrick Gold, one of the world's largest
producers.

"Gold producers took short positions to hedge against
falling prices, essentially locking in sales prices
before gold is even mined. Now, with gold prices
soaring, those short positions are money-losers, and
the market is bracing for massive unwinding by
producers.

"'This is only the first round or two of short
covering,' one commodities analyst said."

Sokalsky is telling everyone that the total number of
gold loans is only 4,500 tonnes (two-thirds of 4,500 is
3,000). He is using Gold Field Mineral Service numbers.
GFMS is a Hannibal apologist. The Cafe uses Frank
Veneroso's numbers and they tell us that the gold loans
are probably a bit greater than 10,000 tonnes.

Who is right? Well, if GFMS was right and the loans
were only 4,500 tonnes, the gold market would not be
doing what it is doing today. Case closed. Yet Barrick,
one of the most heavily hedged gold companies in the
world, continues to spout the Hannibal line. Barrick is
becoming a sad case. Its stock was hit today too as the
Ashanti news has run up the red-flag warning signs of
the companies that have overhedged.

Wake up, Barrick! You have been in the penthouse in
public esteem. If you tarry too long, you might end up
in the outhouse.

There might have been a much bigger story today. More
from Sequin, who put this up at the Kitco gold site:

"The big big rumor today is about the Fed bailing out
Goldman on 10 million ounces. The market is all excited
about it: THEY are doing something. Since it is the
role of the FED (as painful as it might be for us) to
prevent a systemic collapse, there might be some basis
for the rumor.

"Still, I would be surprised, since the Fed hasn't been
seen in the lease market for ages.

"Yes, they get some other CBs to do the dirty stuff for
them. But they are limited by status. So it would be
interesting to know to what extent they are at liberty
to do that.

"Technically, leasing is not selling. However, at 10
million ounces a clip, we might not see them every
other day.

"Today is the day to speak about black holes.

"You know, if you happen to fly in their vicinity, you
get sucked in, but you won't care, since at this point
the whole spaceship will not even be the size of a
grain of sand.

"Well, there is a black hole in our universe and it is
called the 390 December call. It is traded on Comex and
yesterday the open position was a tad above 55,000.

"That's a nice 5.5 million ounces and change. When you
know that major market makers show $3 wide on 10,000
ounces, you can bet on some fun in case we go in the
low 360's.

"Let me explain. As we go close to the strike, the
shorts, who usually are option market makers, will have
to adjust their delta. (The delta is the sensitivity of
an option to spot moves.)

"Hence, the higher the spot goes, the more they will
have to buy. In such an illiquid market a few million
ounces will push it through the strike in seconds.

"Since the law of maximum pain applies these days in
gold, I would not be completely surprised to see a
seriously punishing run-up there and higher. This is of
course without taking the OTC derivatives into account.

"Only five weeks to go, but I know a few options
dealers who are not going to sleep that much."

Sequin is obviously a pro; he knows his stuff. It is
interesting how he is commenting on the December $390
calls too. If he and I are jumping up and down about
it, so are a lot of others. This is explosive!

But what may be more explosive is what Sequin says
about Goldman Sachs and the Fed. How many times have
you heard Midas pound away on this theme? It extends to
the core of the Bank of England sale, etc. And it is
supportive commentary of the "Bombshell" I delivered to
you last Friday in Midas commentary. The key point from
that Midas:

"Two days ago I received information that a futures
commission merchant (a Refco-type firm) was told by
another futures commission merchant that it was not
prepared to deliver gold on its gold forward or futures
contract obligations that were expected by a client of
the firm that was standing for delivery. In essence,
the shorts were declaring force majeure: 'We cannot
deliver.

"This is not a Comex problem as far as I know. From
what I am hearing it is an OTC problem, where few
people really know what is really going on behind the
scenes. The firm that expected delivery was stunned. It
was about to be 'floored.' According to our sources,
this firm then got a phone call from the Federal
Reserve requesting that it not pressure the shorts into
making delivery and asserting that the Fed would make
sure that the longs received their gold. I am not privy
as to exactly how that would happen.

"According to another source, there were actually a
couple of firms that told the longs that they were not
prepared to deliver forward contract gold in the size
expected. Goldman Sachs is one of the firms mentioned
that is not prepared to fulfill its obligations. That
is what my sources are telling me."

Now two days later the word on The Street is that
Goldman was fed 10 million ounces by the Fed. Don't you
think that our "Bombshell" story should gain
credibility and get some legs?

Potpourri and the Gold Shares

The XAU retreated today to close at 84.61 down $4.20.
Gold was strong all day, so the XAU was perplexing to
many. But it isn't really perplexing. We have told you
about the hedge funds being short gold. We have even
told you about the hedge funds being long the big cap
gold stocks. The hedge fund gold shorts are covering
their gold shorts, so they are selling their gold
stocks. They have to get out.

In addition, the Ashanti issue has many money managers
reassessing their gold stock allocations.

>From Reuters: "Gold trading in Pakistan, one of the
largest importers, has largely come to a halt as rising
international prices have left several major players
unable to deliver their commitments, traders said on
Tuesday."

The gold premiums in Asia are holding up surprisingly
well on this mega move up for gold.

Cambior is a great little gold producer, but it's
shares fell 21 percent today, its biggest loss in 4
years on concerns that is too has overly hedged.

Funny, a couple of months ago the Hannibals strongly
suggested that the likes of Newmont sell a good deal of
forward production for fear of losing its credit
ratings. Now the price of gold rallies sharply and the
companies that have stuck their toe too much in the
hedging waters might lose their credit ratings anyway
because they hedged TOO MUCH, not too little. What an
industry!

Anglogold came out with a strong press release today
announcing that it "has no gold lease rate exposure at
all before early 2000 (and limited exposure
thereafter), and this has contributed substantially to
the stability of its hedged position." In other words,
Anglogold's bullion dealers have the "roll risk," not
Anglogold.

Tiger Watch: This hedge fund continues to stink up the
place. Its net assets have slumped from some $22
billion down to $8 billion. The fund lost another 6.7
percent for September and is now down 23 percent for
the year. I wonder how many illiquid positions Tiger
still has on its books and is stuck with.

More bullion dealer hedging problem news from Reuters:

"A bullion trading source said market talk that an
Australian bank was facing huge losses from recent
sharp gains in bullion prices triggered fresh buying as
the bank would be forced to cover its position soon.
Banking sources in bullion markets in Australia said
most Australian banks running gold books were short to
some degree.

"One source said the hedge book of Bankers Trust,
recently acquired by Australia's Macquarie Bank Ltd.
was in 'pretty dismal shape.'"

The gold investment game has changed overnight. I think
the coming play in the gold share sector will be the
small junior companies that have found gold resources
or reserves. They have gold in the ground and no or few
hedges if they are gold producers too. I am picking up
some of these babies.

One of my bigger gold stock positions is one such
company: Golden Star Resources on the AMEX. GSR is
trading right below 1. It once traded at 21. It is a
Frank Veneroso favorite and has six properties (most in
the Guyana Shield) that could become significant mines.
I found out today that two highly regarded hedge fund
managers are bidding for the stock.

The prices of many of the little-guy gold stocks are
nowhere near where they should be. That is because some
long-time shareholders of size are selling now. They
can get out easily for the first time in a long time.
These people do not believe that the gold move is for
real, so they are practically giving the stock away
practically. They will be very sorry. As the price of
gold moves up from these levels, these little golden
jewels should shine as investments.

Gold price dips can, and will, occur at any time. They
present buying opportunities.

-END-



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

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SteveH
(10/06/1999; 02:00:25 MDT - Msg ID: 15627)
Preacher
www.kitco.comDate: Tue Oct 05 1999 23:59
Preacher (Perspective) ID#30281:
Copyright � 1999 Preacher/Kitco Inc. All rights reserved
I think we are in a new bull market for gold. Simple proposition.

Gold has broken through the May '99 peak of $291; the Oct '98 peak of $296; and the April '98 peak of $317. Today, it moved up to the Oct'97 peak of $338.50 and backed off.

Still, it has made a lot of progress in a very short time.

The XAU is not faring as well, but it is doing well. The XAU has broken through the May '99 peak, the Oct '98 peak, but has not quite cleared the April '98 peak at 92.??.

So at this point, the metal is outperforming the XAU on a relative basis.

For the record, the XAU peak in Oct '97 was 112.

A bear market is a series of lower lows and lower highs. A bull market is a series of higher lows and higher highs.

So the first thing we must see in a new bull market is a series of highs above previous highs. We are seeing this.

Next we need to see lows above previous lows. The first pullback took us to a low of $296 or so. Let's see if the current pullback stops short of that figure.

We have seen several high-energy predictions of gold at $375 in the near future. Technically, after today's high is breeched, the next technical high sits at $365, set in Feb '97.

Another short-covering rally could push up toward that mark.

Keep it in perspective.

One thing that alarms me is the "phantom" fundamental news we get -- news that is not varifiable. We are told that Goldman Sachs is massively short in the gold market. We saw news earlier from the same sources that Sachs was getting long in a big way in August.

So how do we know Sachs is massively short?

Now we hear rumors that the Fed just arranged to cover Sachs' shorts to the tune of 10 million ounces.

None of this is verifiable info, IMO. This is what I call phantom fundamentals. How do we know that certain rumor-mongers first led us to believe that Sachs was massively short, and now to cover their own tall tales, they come up with another tale that the Fed is bailing Sachs out.

It's like a great drama has unfolded and we don't know if any of it is true.

I keep my eye on the bouncing ball, the price action of gold and the XAU. Gold needs to hold above the previous pullback low. That would be a nice next step in the new bull market.

The Preacher
SteveH
(10/06/1999; 02:44:48 MDT - Msg ID: 15628)
Send this to moneyline@cnnfn.com
To whom it may concern:

I am an avid watcher of CNN's Moneyline. Oddly, I am also a gold stock investor. Forgive my observation but Moneyline seems to avoid a fair coverage of events in the Gold Market place and is focusing on mega deals in the stockmarket. Both the lack of coverage of gold and the over coverage of 'big deals' paints an inaccurate picture of the market as it is today.

A second observation is that you cover the major indices, to wit: the DOW and NASDAQ, but most technical market watchers have confirmed months ago that the markets are in a confirmed DOW bear market. The DOW and NASDAQ just haven't joined the rest of the market yet but represent on a select 130 stocks. It is clear to me anyway that most money has pulled from small and mid caps and gone into these indices for now. This isn't made clear on your show. Too much chear leading by analysts talking their book, so to speak.

Also, your coverage of events in the gold market has been, forgive my use of this word, lame. Your analysts and especially your advertisers for the most part have very good reasons for not wanting to mention the 'gold' word as it is and gold stocks are a contrary investment to their 'books.' It does not go unnoticed that this $80 runup has been only slightly covered by Moneyline. What is more, you clearly don't have the 'big picture' and, in my opinion, you are going to likely suffer credibility when the gold runs to $1,000 per ounce and you finally get on board with some of the excitement there. Because you don't have anaylysts who understand the market and who aren't short the gold market (in other words, you can't have Bullion Bank gold experts talk about the gold market because they will talk their book: gold shorting -- they have been involved in gold shorting and leasing of gold into the market for years). To get a truly accurate picture of the gold market you have to interview people like Frank Venerasso or Bill Murphy (lepatron@lemetropolecafe.com) for a truer picture of the problems causing the gold market to explode. Once you have interviewed these guys then bring on the bullion banks for there story. Other possible interviewees? Gold mining presidents of non-hedged mining companies. If you pick a highly hedged company like Barrick or Placer Dome you will again get a biased opinion of gold because these folks are heavily short the market or hedged, as it were, and will talk down gold in order to possible save their skin right now.

Why concern yourselves with being the first major network financial news show with a special on gold? Because, by not doing it you will loose credibility. It is clear to me and I would guess others, that you only cover two of the three markets well: bonds and stocks. Any financial knowledgeable person knows there are three sides to investments: stocks, bonds, and gold. And when gold does go to $1,000 per ounce or higher and all of sudden you start to cover it, people will begin to question why it got so high before Moneyline started to explain things. They will realize that Moneyline follows the trends that are popular or that "folks want to hear" and not what is hot and important but not widely understood. But when gold does hit the $1000 mark and you waited to cover it then, people will say, "hey, why are they just now telling me about this?"

Here are some reasons that you may consider doing an expose on the gold shenanigans that may cause an explosion in gold prices:

Rumors of market manipulation and gold leasing by the federal reserve.
Rumors of bail outs by the Fed for 'in-trouble' bullion banks such as Goldman Sach's bullion division.
A whopping 14,000 ton gold short position overhanging the LBMA and COMDEX.
Significant open interest at the above with extremely low gold inventory to back it.
Rumors of physical gold not available in quantity anywhere in the world for shorts to cover their gold hedges or short positions.
GATA (Bill Murphy) and company saying that the gold market is totally manipulated.

So imagine if Moneyline ignores or doesn't cover any of these or only some of these topics and it turns out to be true (as I believe it to be). Credibility folks. Because one day we will all wake up and gold will have risen that far ($1,00 or higher) and you will be scratching your heads in wonderment. Now is the time to investigate the above allegations, rumors, and innuendos to see where the truth lies and the rumors end.

I would suggest your folks scour the www.usagold.com, the www.kitco.com, and the www.gold-eagle.com web sites for clues and possible stories to confirm (or deny). The gold market NOW warrants your attention, for failure to get in early on the affairs here will be a great diservice to your viewers in the end.


Steve


PS. Here is a somewhat shocking story by Bill Murphy of GATA and what he considers going on in the gold market. Note the rumors about the fed intervening in the gold market.

11:35p EDT Tuesday, October 5, 1999

Dear Friend of GATA and Gold:

I'm sending you the whole of GATA Chairman Bill
Murphy's "Midas" commentary tonight at
www.lemetropolecafe.com in the hope of letting
everyone know that any momentary calm in the
gold market only masks the panic that continues
backstage. The short squeeze is just beginning.

Please post this as seems useful.

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

* * *

MIDAS COMMENTARY FOR
TUESDAY, OCTOBER 5, 1999

By Bill Murphy
www.lemetropolecafe.com

Spot Gold $324.40 up $8 Spot
Silver $5.55 down 3 cents

Technicals

"Vox populi, vox Dei" -- "The voice of the people is
the voice God."

The gold market continues its rocket ride. Today the
December futures contract traded as high as $339 early
this morning before selling off going into the Comex
open. The gold market is on fire.

When gold was trading in the $250s, Midas told you that
we had the shorts "right where we want them." Many of
you believed in what I had to say and loaded up on gold
call options. Congratulations. While some of you were
buying calls, futures, gold stocks, etc., the bullion
dealer camp was laughing at us. We knew then that we
had them, and we know know that we do.

Some of the bullion dealers, overhedged gold companies,
and gold-borrowing funds are in big trouble. Last night
I sent out commentary that included this statement:
"Our camp will be more gracious than the Hannibals have
been. We will show mercy on them and let them out of
the back end of our 'enveloping horn.' When the price
of gold hits $340, we will accept their surrender."

I never meant to suggest that I would be happy with
$340 gold. This morning I did a radio interview about
GATA with the well-known Alec Hogge of South African
radio. When asked where I thought the price of gold was
going, I told his listeners that, in my opinion, the
proper equilibrium price is a bit north of $600.

Anyway, never have I received such an onslaught of the
same sort of feedback. Such as:

"As the man at the BIS said ... Gold will take no
prisoners."

"What do you mean that you will accept their surrender
at $340? Peanuts to you."

"Why take prisoners? These jokers have shown no mercy
for the past 10 years! Most of my mining stocks are
still a fraction of what I paid, at least one is in
Chapter 11, and another one (Benguet B) has not traded
over 25 cents (yes, cents) for the past year. (The
story of how it stays listed on the Big Board is the
subject of another investigation.) Gold goes up 25
bucks and you want to be Mr. Nice Guy. Give us a
break!"

The Cafe and the Internet have spoken. In earlier Midas
commentary I suggested that what we would eventually
have is a "fight to the death" in the gold market. In
the Roman Coliseum days the gladiators battled until
one beat the other. The victorious gladiator would look
up to the adjudicator to see if he would get a "thumbs
up" or "thumbs down" on whether to finish off his
vanquished foe. The adjudicator would often listen to
the crowd for direction. It was called "Vox populi, vox
Dei."

You have been resounding. Thumbs down to Hannibal
Lecter and the Hannibal Cannibals.

That can happen in many ways. One of them I told you
about this summer. Do you remember when I mentioned
that one of the Cafe's most plugged-in sources told me
that plans were being set in place to squeeze the
December Comex gold contract? That plan is still intact
and gaining advocates. At the time I noted that squeeze
artists were buying the December gold contract and
selling April and June.

The open interest on Comex is 222,031 contracts, having
gone up 7,449 contracts more yesterday. The December
open interest rose 6,263 contracts and now stands at
136,022 contracts or 13.6 million ounces. There are
less than a million ounces of gold in the Comex
warehouses. Of course most of the specs do not want to
take delivery, but not all the gold in the warehouses
is available either, as much it just sits there for
margin purposes.

The August futures contract was almost squeezed
recently, but one bullion dealer let the shorts off the
hook for a $2 or $3 premium over the contract price.
You might recall that Goldman Sachs took delivery of
more than 90 percent of the August deliveries. Our camp
speculated at that time that they were trying to get
their hands on as much physical gold as possible
(either for themselves or for clients) in case of times
such as we have now.

If the August contract was almost squeezed in a dull,
glacier-like gold environment, what do you think they
will do to the December contract in this new blazing-
hot environment? As we head into the late fall, the
gold shorts are going to have to deal with the monster
call option position that is now only $65 above today's
close, restricted gold lending by the central banks and
building Y2K fears. The recipe for a gold short squeeze
will get better and better.

The gold shorts and the Hannibal Cannibal bullion
dealers have had it their way for years. It is payback
time. Big-time!

Don't be too stressed that silver has not taken off
like gold yet. Many of the hedge funds were long silver
and short gold. They are buying back their gold and
selling silver now. In a recent Midas you were informed
that sources had told us that Moore Capital could be
short as much as 25 million ounces of gold. Moore was
the big silver seller today. They must have tremendous
margin call pressure and need to sell to shore up their
balance sheet.

$9.78 silver coming.

Fundamentals

The big story of the day for most was Ashanti
Goldfields. They have been one of the leading
proponents of hedging and have massive forward sale
positions. The other day they announced that they had
restructured their hedges. The marketplace took that to
mean they covered their hedges. The Cafe's John
Brimelow was not fooled and told me so at the time. The
bullion dealer camp was spreading the word that had
Ashanti had covered and the gold market had taken the
company's buying well. But Brimelow doubted that they
had covered and was proved right today as it was
disclosed that Ashanti's hedge book still represents a
net hedge of 10 million ounces. That shocked industry
participants.

More from today's Platts: "The sharp rise in the gold
price since the Sept. 26 announcement of gold sale
restrictions by the 15 European central banks 'has
resulted in a substantial increase in the value of
Ashanti's unhedged reserves,' the company noted. The
rise in prices and increased volatility 'has led to
certain counterparties being entitled to margin calls,'
the company said. Ashanti 'has entered into a joint
arrangement with its major hedging partners for
continuing support,' it added."

The market told Ashanti today what it thought of this
announcement. Ashanti stock sank to something like 5
1/2 from 9 3/8 with the price of gold going up $8. What
gives?

Ashanti and its bullion dealers, that is what. Sources
told me today that Ashanti has big problems relating to
maturity mismatches, margin call pressures, and forward
sale buyback liquidity problems, and are suffering from
faulty hedging programs laid on them by certain
consultants and bullion dealers.

I was informed today that Ashanti had a $300 million
margin gap with its bullion dealers. I am told that
Goldman Sachs is Ashanti's main dealer. That means that
the bullion dealers front the first $300 million of
margin calls. Of course that is no picnic for the
bullion dealer. Stress surfaces in all quarters and
that stress feeds on itself throughout the bullion
dealer and gold producer camps.

Another source told me that Ashanti started to reel at
$280 gold, much less $325 gold. Ashanti is hedged as
much as 10 years out. There is not a big market for
getting out of forward-sale 10-year-out gold positions.

Ashanti has significant problems that are likely to
worsen.

With every Midas now I try to explain that gold is
exploding when almost no one thought it would because
the industry was working from disinformation supplied
by the bullion dealer camp -- many of them old Hannibal
Cannibals. Their allies too. For instance, note these
comments by Barrick Gold's Jamie Sokalsky in a Dow
Jones story:

"'Gold producers account for perhaps 3,000 tonnes of
short positions, about two-thirds of the market total,'
according to Jamie Sokalsky, chief financial officer of
Toronto's Barrick Gold, one of the world's largest
producers.

"Gold producers took short positions to hedge against
falling prices, essentially locking in sales prices
before gold is even mined. Now, with gold prices
soaring, those short positions are money-losers, and
the market is bracing for massive unwinding by
producers.

"'This is only the first round or two of short
covering,' one commodities analyst said."

Sokalsky is telling everyone that the total number of
gold loans is only 4,500 tonnes (two-thirds of 4,500 is
3,000). He is using Gold Field Mineral Service numbers.
GFMS is a Hannibal apologist. The Cafe uses Frank
Veneroso's numbers and they tell us that the gold loans
are probably a bit greater than 10,000 tonnes.

Who is right? Well, if GFMS was right and the loans
were only 4,500 tonnes, the gold market would not be
doing what it is doing today. Case closed. Yet Barrick,
one of the most heavily hedged gold companies in the
world, continues to spout the Hannibal line. Barrick is
becoming a sad case. Its stock was hit today too as the
Ashanti news has run up the red-flag warning signs of
the companies that have overhedged.

Wake up, Barrick! You have been in the penthouse in
public esteem. If you tarry too long, you might end up
in the outhouse.

There might have been a much bigger story today. More
from Sequin, who put this up at the Kitco gold site:

"The big big rumor today is about the Fed bailing out
Goldman on 10 million ounces. The market is all excited
about it: THEY are doing something. Since it is the
role of the FED (as painful as it might be for us) to
prevent a systemic collapse, there might be some basis
for the rumor.

"Still, I would be surprised, since the Fed hasn't been
seen in the lease market for ages.

"Yes, they get some other CBs to do the dirty stuff for
them. But they are limited by status. So it would be
interesting to know to what extent they are at liberty
to do that.

"Technically, leasing is not selling. However, at 10
million ounces a clip, we might not see them every
other day.

"Today is the day to speak about black holes.

"You know, if you happen to fly in their vicinity, you
get sucked in, but you won't care, since at this point
the whole spaceship will not even be the size of a
grain of sand.

"Well, there is a black hole in our universe and it is
called the 390 December call. It is traded on Comex and
yesterday the open position was a tad above 55,000.

"That's a nice 5.5 million ounces and change. When you
know that major market makers show $3 wide on 10,000
ounces, you can bet on some fun in case we go in the
low 360's.

"Let me explain. As we go close to the strike, the
shorts, who usually are option market makers, will have
to adjust their delta. (The delta is the sensitivity of
an option to spot moves.)

"Hence, the higher the spot goes, the more they will
have to buy. In such an illiquid market a few million
ounces will push it through the strike in seconds.

"Since the law of maximum pain applies these days in
gold, I would not be completely surprised to see a
seriously punishing run-up there and higher. This is of
course without taking the OTC derivatives into account.

"Only five weeks to go, but I know a few options
dealers who are not going to sleep that much."

Sequin is obviously a pro; he knows his stuff. It is
interesting how he is commenting on the December $390
calls too. If he and I are jumping up and down about
it, so are a lot of others. This is explosive!

But what may be more explosive is what Sequin says
about Goldman Sachs and the Fed. How many times have
you heard Midas pound away on this theme? It extends to
the core of the Bank of England sale, etc. And it is
supportive commentary of the "Bombshell" I delivered to
you last Friday in Midas commentary. The key point from
that Midas:

"Two days ago I received information that a futures
commission merchant (a Refco-type firm) was told by
another futures commission merchant that it was not
prepared to deliver gold on its gold forward or futures
contract obligations that were expected by a client of
the firm that was standing for delivery. In essence,
the shorts were declaring force majeure: 'We cannot
deliver.

"This is not a Comex problem as far as I know. From
what I am hearing it is an OTC problem, where few
people really know what is really going on behind the
scenes. The firm that expected delivery was stunned. It
was about to be 'floored.' According to our sources,
this firm then got a phone call from the Federal
Reserve requesting that it not pressure the shorts into
making delivery and asserting that the Fed would make
sure that the longs received their gold. I am not privy
as to exactly how that would happen.

"According to another source, there were actually a
couple of firms that told the longs that they were not
prepared to deliver forward contract gold in the size
expected. Goldman Sachs is one of the firms mentioned
that is not prepared to fulfill its obligations. That
is what my sources are telling me."

Now two days later the word on The Street is that
Goldman was fed 10 million ounces by the Fed. Don't you
think that our "Bombshell" story should gain
credibility and get some legs?

Potpourri and the Gold Shares

The XAU retreated today to close at 84.61 down $4.20.
Gold was strong all day, so the XAU was perplexing to
many. But it isn't really perplexing. We have told you
about the hedge funds being short gold. We have even
told you about the hedge funds being long the big cap
gold stocks. The hedge fund gold shorts are covering
their gold shorts, so they are selling their gold
stocks. They have to get out.

In addition, the Ashanti issue has many money managers
reassessing their gold stock allocations.

>From Reuters: "Gold trading in Pakistan, one of the
largest importers, has largely come to a halt as rising
international prices have left several major players
unable to deliver their commitments, traders said on
Tuesday."

The gold premiums in Asia are holding up surprisingly
well on this mega move up for gold.

Cambior is a great little gold producer, but it's
shares fell 21 percent today, its biggest loss in 4
years on concerns that is too has overly hedged.

Funny, a couple of months ago the Hannibals strongly
suggested that the likes of Newmont sell a good deal of
forward production for fear of losing its credit
ratings. Now the price of gold rallies sharply and the
companies that have stuck their toe too much in the
hedging waters might lose their credit ratings anyway
because they hedged TOO MUCH, not too little. What an
industry!

Anglogold came out with a strong press release today
announcing that it "has no gold lease rate exposure at
all before early 2000 (and limited exposure
thereafter), and this has contributed substantially to
the stability of its hedged position." In other words,
Anglogold's bullion dealers have the "roll risk," not
Anglogold.

Tiger Watch: This hedge fund continues to stink up the
place. Its net assets have slumped from some $22
billion down to $8 billion. The fund lost another 6.7
percent for September and is now down 23 percent for
the year. I wonder how many illiquid positions Tiger
still has on its books and is stuck with.

More bullion dealer hedging problem news from Reuters:

"A bullion trading source said market talk that an
Australian bank was facing huge losses from recent
sharp gains in bullion prices triggered fresh buying as
the bank would be forced to cover its position soon.
Banking sources in bullion ma
The Scot
(10/06/1999; 03:48:27 MDT - Msg ID: 15629)
COMEX $$$$
Goldspoon, If it's not too late, put me down for $ 333.33
The Scot
CoBra(too)
(10/06/1999; 04:10:12 MDT - Msg ID: 15630)
Can't agree more with your #15628 Sir SteveH.,
only allow me to make one remark. You've named Barrick and Placer Dome as overhedged gold producers. I would think these two companies are very different kettle of fish. While ABX, correctly can be termed a hedge fund, though still having some great gold deposits (question will be who will own them at POG, say 500+), PDG is still a very viable gold miner, with a hedge position congruent to their business needs and structured to be a real "hedge". Since, my group has been in negotiations with the PDG management off and on for some years, I've had the opportunity to learn more of the company's philosophy and have been impressed with their able and savvy management team. The latest "crown jewel" in PDG's mine portfolio are the "Pipeline" deposits at Nevada's Crescent Valley (Battle Mountain Trend)the Cortez JV (60%PDG/40%RTZ), a 10Moz deposit and still counting.
Thank you and regards CB2
leonard
(10/06/1999; 05:27:56 MDT - Msg ID: 15631)
CNBC
stev i just read your post on cnn,if you wont to see biased reporting on gold you have to chick out CNBC,i belive they fear for ther jubs an just say wate ther told to say.
The Believer
(10/06/1999; 05:37:41 MDT - Msg ID: 15632)
YGM
Thanks YGM,
I did get over to Gold-Eagle and read your post.
And yes,I'm hearing the rumors about $2000 gold
and cheap dollars too.
RossL
(10/06/1999; 05:47:14 MDT - Msg ID: 15633)
YGM
You're making sense to me!
Thanks for expressing your views.
RossL
(10/06/1999; 05:54:56 MDT - Msg ID: 15634)
A note to TC
First notice of delivery on a COMEX future is not binding. What matters is how many longs demand delivery and refuse to roll over their contract at the expiration. A squeeze happens when, in a sort of poker game, longs wait 'till the last hour to get the shorts desperate.
SteveH
(10/06/1999; 05:57:33 MDT - Msg ID: 15635)
Protecting Gold
http://sorrel.humboldt.edu/~jae1/emenLyngScrutiny.htmlGold getting hammered right now, Dec at $317. (did GS get more gold from the Fed?)

Summary: A Michigan Concealed Weapons Board refused to renew a CCW permit. The person sued on a number of counts, one being a 14th Amendment under equal protection of 14th Amendment. The Court ruled that the 2nd Amendment does not provide individual fundamental right to bear arms as to which strict scrutiny analysis would be applicable. The emerson case (see link below) concluded that the 2nd Amendment is an individual right thus countering the Michigan's court ruling regarding Strict Scrutiny not applying and that the state has an obvious "legitmate interest" in limiting access to weapons peculiarly suited for criminal purposes (People v McFadden). That should open the doors to a less discriminatory CCW boards, at least on a complaint to a court regarding any decision using Strict Scrutiny and equal protection.

Rational Basis or Strict Scrutiny

In the United States courts exercise the power of judicial review over the actions of other governmental bodies. They may determine whether an act by the President, Congress, a national, state, or local administrative official, a state legislature, a local governing board, or a lower court is valid. They do not judge whether an act is wise or foolish, but whether is is constitutional or unconstitutional, whether it is permitted or null and void. The U.S. Constitution prescribes the legitimate powers of the national government, reserves others to the states, and protects individuals from governmental invasion of their freedoms of religion, speech, press, and other rights.

Based upon the interpretation of Article VI, clause 2, by Chief Justice John Marshall in Marbury v. Madison, (1803), judges may invalidate a government's action if the power for it is not prescribed in the Constitution, or if it conflicts with a right of the people. Of course the power does not have to be expressly delegated to the national government; it may be implied from Article I, section 8, clause 18, the "elastic clause." See Chief Justice John Marshall again in the opinion of McCulloch v. Maryland, (1819)

In Lyng v. Northwest Cemetery Protective Association the question was whether the Forest Service had the power to build a road and execute its forest management plan, i.e., harvest timber, under the authority of Article IV, section 3, clause 2, or if such action conflicted with the rights of persons to the free exercise of their religion guaranteed by the second clause of the First Amendment.

The Court concluded that the road and timbering were internal government affairs that only incidentally affected the free exercise of religion. Therefore, the Court applied the so-called rational basis test of judicial review. That is, it upheld the government's action as a rational means of accomplishing a legitimate end. If, however, the Court had deemed there was a threat to a fundamental right, it likely would have increased its scrutiny of the government's action, requiring that the means be necessary to achieve a compelling state interest. In other words the Court in Lyng deferred to the government's use of National Forest property. It upheld the decision to build the road so long as it was a reasonable means to achieve a legitimate purpose. The road did not have to be necessary to achieve a compelling state interest. See footnote 4 in then-Associate Justice Harlan F. Stone's opinion of the Court in U.S. v. Carolene Products, 304 U.S. 144 (1938).

http:/nrawinningteam.com/cummings.html is the emerson case that recently ruled the 2nd Amendment is an individual right not a state right.
elevator guy
(10/06/1999; 07:01:32 MDT - Msg ID: 15636)
Flat Earth Society! RE: Black Blade Msg id# 15625
I know what the Flat Earth Society is doing now!

Thhey have moved into journalism, and are covering the precious metals markets!

8^)
The Scot
(10/06/1999; 07:04:56 MDT - Msg ID: 15637)
Gold War
Kitco's gold graph this morning looks like a war zone.
What strange forces these are at work.
The Scot
Goldspoon
(10/06/1999; 07:21:50 MDT - Msg ID: 15638)
***Comex Close****
apdcheif-$399
Canuck- $343
Granny- $357
RossL- $332.30
onlychild$336.50
Tanglewild$318.80 (like your handle)
Silvertongue$313.90
Goldspoon$343.73 (can't stand this guy..such a knowit all)
Tomcat $325 (keep it up you'll go places)
Canamami $321.23
Bill $318.50
Hill Billy Mitchell $309.50
Coin Guy $334.75
Black Blade $xXx.xX $XXx.Xx $323.50
Gandalf The White <;-) $321
SStins $362.50
Marius $338
flierdude $316.00
Simply me $330.50
jaydeevee $318.50
Goldfly, Spike and Spot $332.00
TEX $332.25
Peter Asher +$30.25 from yesterdays close....????
Jason Hommel $$348.00

Belated Guesses
The Scot $333.33
elevator guy $337

Hope i did not miss anyone... and Good Luck!!

Sorry..i'll be to busy tomorrow ...maybe someone else would like to play bookie for a day??
elevator guy
(10/06/1999; 08:01:19 MDT - Msg ID: 15639)
COMEX in 1979-80?
Has anyone been in the gold market long enough to know what happened to the COMEX exchange in 1979-80, when gold hit an all-time high?

Did the market close? Was there any gold available, and if not, were there still cash settlements on contracts?
Peter Asher
(10/06/1999; 08:52:06 MDT - Msg ID: 15640)
Goldspoon
Typo --$330.25
USAGOLD
(10/06/1999; 08:54:44 MDT - Msg ID: 15641)
Today's Gold Market Report: A Well-Deserved Breather in Early Trading
MARKET REPORT (10/6/99): Day Eight of the Big Breakout....Gold taking a
well-deserved breather after hitting two year highs at $339 yesterday......... Interesting
quote from a European trader reported on FWN: "We're just easing into the backfill created
by the rally (on Tuesday)...The shorts have mostly covered, there are just a few daily short
players left--nobody will hold short positions overnight with the market longs playing the
market in the manner that they are."..........................Correct me if I'm wrong, but if
that doesn't sound like we are in a free gold market, I don't know what does. The short
position is no longer sacrosanct? Quite an attitude adjustment......At any rate Frederic
Panizutti disagrees with that trader: "The market being still short, any up-move would likely
result in irrational panic buying."..................The Ashanti Goldfields story continues to
cause concern not just for that company itself but the potential ripple effect to other
"hedged" producers. Bridge News says: "Ashanti Goldfields Co. Ltd. said today that the
recent huge rise in the price of gold has left it with an obligation to pay margin calls to its
gold-hedging counterparties, but that it has enter r ed an arrangement with its hedging
partners for continuing support. On Friday, Ashanti said it had restructured 80% of its
hedges to remove its sensitivity to the rising price.".......As a warning to all those who
think a "gold stock is a gold stock" the warning is clear: the XAU retreated significantly as a
result of the Ashanti news and the portential for similar problems surfacing at other
producers........ (Editor's Note: At the time of the Friday announcement, Ashanti forgot to
tell us that they were on the phone to their brokers about some hefty margin calls. I guess
you can define a margin call as "restructuring" if you want to. )................ Alan
Greenspan and the Fed played tag with the interest rate devil at yesterday's meeting and
chose not to get burned with Y2K looming on the not too distant horizon. The stock and
bond markets appeared to be in a quandary over what will happen next. It matters not -- the
markets will determine interest rates. More specifically, Japanese bond traders will
determine U.S. interest rates in the near term............. Today the yen is down and U.S.
stocks and bonds are up...............The gold market has moved away from its long time
trading rhythm wherein the price was set in New York on the COMEX and the rest of the
world played catch-up overnight. Now the market is being driven higher nearly every night
overseas and New York paper players have been throwing water on the
surges.......................Jeff Rhodes, general manager for Standard Bank London's Dubai
office as quoted on this morning's Reuter's London report: "Having lived through the bull
markets of 1978/1980, 1986/1987 and 1993/1995, the first lesson is never to stand in the
way of a runaway bull.''.......................That's it for now, fellow goldmeisters. Have a
good day. MK

The October edition of News & Views will be ready early next week and we invite all
our visitors to take advantage of a free trial subscription to one of the most popular, widely
read and quoted gold newsletters. Last month we predicted an explosion in the gold price.
This month we deal with the nettlesome subject of paper assets in this tenth month of the
penultimate year. And we all know what that means. October brings with it our annual
Halloween issue. Here's an excerpt: "And this October could very well foreshadow a most
fateful stroke of midnight only two months away. October. When markets crash and assets
go bump in the night........." We think you will gain by taking advantage of our
offer...........

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.
TownCrier
(10/06/1999; 09:00:52 MDT - Msg ID: 15642)
BOJ mulls controversial new operation
http://biz.yahoo.com/rf/991006/ga.htmlThe yen has risen about 15% against the dollar since June. the Bank of Japan has come under pressure to adopt a more aggressive policy of easing to "prevent the yen from sapping offshore corporate profits while the recovery is fragile." (Notice here how the pressure and tendency is to weaken the purchasing power of currency to the detriment of an individual's savings in favor of corporate profits. Many southeast Asians have already discovered that gold won't betray them in this fashion.)

The BOJ is considering a new operation to accelerate its supply of funds through outright purchases of short-term government securities by the central bank from the market. Critics say would turn the BOJ into a money printing machine for the government and represent a monetisation of government debt.

Kazuo Mizuno, general manager of Economic Research Department at Kokusai Securities summed it up like this: "If the BOJ accepts to do more, that would strengthen the current vicious cycle of money flow from Japan via Europe to the U.S. financial markets and create massive U.S. external debt, and the BOJ would have to be involved in this cycle not only this year but next year and onwards. As a result, the BOJ would not only lose its independence from the government, but its monetary policy would have to go under control of the United States."
TownCrier
(10/06/1999; 09:20:15 MDT - Msg ID: 15643)
Fed adds $4.011 billion in banking reserves; 1st day broader collateral use
http://biz.yahoo.com/rf/991006/jy.htmlThe Fed debuts its "tri-party" settlement operations developed ostensibly as a Y2K contingency plan. Between this operation (whereby the Fed essentially monetizes a broader array of debt-based collateral) and the Japanese proposal described moments ago, we'll all be hip deep in cash soon. Suggest you act accordingly and get some gold platform shoes...or maybe gold stilts.
TownCrier
(10/06/1999; 09:26:32 MDT - Msg ID: 15644)
BOJ's Yamaguchi to attend Paris central bank talks
http://biz.yahoo.com/rf/991005/bfy.htmlOn October 7-9, Bank of Japan Deputy Governor Yutaka Yamaguchi will attend a financial conference hosted by the French central bank. So soon after the gathering of the G7 and IMF, we wonder what's up.
Gandalf the White
(10/06/1999; 09:31:09 MDT - Msg ID: 15645)
Sir Elevator Guy's Question
Re: COMEX in the 79-80 era. IF you will allow me to setforth my recollection of the $800+. gold spike, -- (BUT remember that I am old and senile! )--- IT was not the same as now !! -- The gold market was greatly influenced by the silver market where the Hunt Bro's were attempting to corner the market and did until they COMEX changed the rules and the Hunts wished to try and sell some of the paper that they had collected. -- The gold market was pushed by "Joe SixPac" and everyone had a gold chain around either their neck (Male) or their waist or ankle (Female)!!
-- This 80's market was like the forthcoming end of this present market projected at about 2005 when ALL the public finally figures out that the best thing to have in your pocket is a GOLD coin rather than the paper with the dead Presidents (and others) pictures on it. --- CONCLUSION -- History will repeat again, but in a far more dramatic way.
<;-)
Jon
(10/06/1999; 09:35:42 MDT - Msg ID: 15646)
Volume of shorts
Today's USAGold report quotes an analyst who said the shorts have mostly covered. If that is the case, why isn't POG substantially higher? Could it be that quantity of shorts was greatly overstated? Or perhaps, much of the short position is still open? Comments please. Thanks
nugget101
(10/06/1999; 09:38:58 MDT - Msg ID: 15647)
Bill Murphy interview
Bill Murphy (GATA) was on Jeff Rense's show of 10/05 (www.sightings.com).
Check it out if you can.
The Scot
(10/06/1999; 09:44:17 MDT - Msg ID: 15648)
Live Gold or Dead Presidents......Your Choice
How about the above for a bumpersticker, do you think
Joe Sixpack would understand????
The Scot
PH in LA
(10/06/1999; 09:58:10 MDT - Msg ID: 15649)
Recollections of 1980
Gandalf:

Just at the moment when gold was at �$800/oz, someone hired one of those skywriting airplanes on a hot summer Sunday to write: "Gold--Best Investment" in the skies over Los Angeles. At that moment I knew that someone was desperate to unload (distribute) a large amount of gold to the general public. Sure enough... very shortly thereafter the price had fallen dramatically, and Mr. and Mrs. Joe Sixpack had been fleeced again.
PH in LA
(10/06/1999; 10:17:24 MDT - Msg ID: 15650)
Joke of the Day
Subject: Wife 1.0, Tech Support Request

Last year I upgraded Girlfriend 1.0 to Wife 1.0 and noticed that the new program began unexpected child processing that took up a lot of space and valuable resources. No mention of this phenomenon was included in the product brochure. In addition, Wife 1.0 installs itself into all other programs and launches during system initialization where it monitors all other system activity. Applications such as Pokernight 10.3 and Beerbash 2.5 no longer run, crashing the system whenever selected.

I can not seem to purge Wife 1.0 from my system. I am thinking about going back to Girlfriend 1.0 but un-install does not work on this program. Can you help me?

Jonathan Powell


Dear Jonathan Powell-
This is a very common problem men complain about but is mostly due to a primary misconception. Many people upgrade from Girlfriend 1.0 to Wife 1.0 with the idea that Wife 1.0 is merely a "UTILITIES & ENTERTAINMENT" program.

Wife 1.0 is an OPERATING SYSTEM and designed by its creator to run everything. WARNING DO NOT TRY TO un-install, delete, or purge the program from the system once installed. Trying to un-install Wife 1.0 can be disastrous. Doing so may destroy your hard and/or floppy drive. Trying to un-install or remove Wife 1.0 will destroy valuable system resources. You can not go back to Girlfriend 1.0 because Wife 1.0 is not designed to do this.

Some have tried to install Girlfriend 2.0 or Wife 2.0 but end up with more problems than the original system. Look in your manual under ----Warnings-Alimony/Child Support.

Others have tried to run Girlfriend 1.0 in the background, while Wife 1.0 is running. Eventually Wife 1.0 detects Girlfriend 1.0 and a system conflict occurs, this can lead to a non- recoverable system crash. Some users have tried to download similar products such as Fling and 1NiteStand. Often their systems have become infected with a virus. I recommend you keep Wife 1.0 And just deal with the situation.

Having Wife 1.0 installed myself, I might also suggest you read the entire section regarding General Protection Faults (GPFs). You must assume all responsibility for faults and problems that might occur. The best course of action will be to push the apologize button then the reset button as soon as lock-up occurs. The system will run smooth as long as you take the blame for all GPFs. Wife 1.0 is a great program, but is very high maintenance.

Suggestions for improved operation of Wife 1.0
-Monthly use of utilities such as TLC and FTD
-Frequently use Communicator 5.0

-Tech Support
elevator guy
(10/06/1999; 10:31:49 MDT - Msg ID: 15651)
Wife 1.0
Funny you should mention this program! I'm having trouble with the data from my system, as it is often unitelligible. Its hard to tell if there is a critical fault with the hardware, or if there is just lost file fragments jamming up the works.

Also- it appears impossible to run Disk Defragmenter, or scan disk.

Control-alt-delete has no effect. Guess I'll wait and see if the system re-stabilizes itself.

Thats too funny, PH!
elevator guy
(10/06/1999; 10:40:35 MDT - Msg ID: 15652)
@Gandalf the White
Thanks for your perspective! And do you remember if the COMEX stayed open? What I am getting at here, is an FOA/Another scenario of market shut down. Don't wanna be left holding paper. Just trying to time it right, and not get burned.
Gold Dancer
(10/06/1999; 11:07:28 MDT - Msg ID: 15653)
PH in LA
What a great joke! I am in the process of upgrading girlfriend 1.0 to wife 1.0. I just became engaged this weekend to the woman I adore and this really made me laugh. I am sure she will also. Thanks.

Gold Dancer
USAGOLD
(10/06/1999; 11:31:28 MDT - Msg ID: 15654)
Cambior on Ropes?
Gold was down significantly early and is now way up.

Here's why:

The Canadian producer Cambior appears to have sold forward and/or written calls on substantially more gold than they have produced for 1999 and will produce over the next three years, according to a Reuters release issued from Canadian Corporate News.

Cambior for 1999 has written calls on 921,000 ounces of gold at $287. Their 1999 production is estimated by president Louis P. Gignac at 630,000 ounces of gold. In addition they have sold forward another 159,000 ounces at $335 avg price.

In other words, they appear they may be over-extended especially if prices continue to rise.

For the year 2000 they have sold forwarded 642,000 ounces at $298 with another 299,000 ounces sold as calls at $323.

For 2001, 642,000 ounces forwarded at $292 with another 382,000 ounces sold as calls at $352.

Lastly for 2002 they have forwards of 597,000 ounces at $292 and 303,000 ounces of calls at $348.

So this appears to be an incredible gamble with stockholder's money. Most analysts in the gold business consider it imprudent to sell forward or write calls on more than you produce on an annual basis. As one of my associates, how could the lender's mentioned below let them get in this deep?? Incredible.

The report goes on to say that "the counterparties to these hedging operations consist of international banks and financial insitutions, principally lenders in the revolving credit facility. In the context of the rapid rise of the gold price, Cambior has been managing its hedge positions and will continue to monitor the situation. Cambior will pursue discussions with such financial institutions concerning the management of this situation."

I should think they would.

Cambior stock went from $4.74 early in the day to $3.04 now and dropping like a rock. Gold is now up $1.50.

The problem here is not just what happens to Cambior but that this could be going on all over the gold mining industry. This situation follows on the heels of the Ashanti situation which in itself is tenuous. Ashanti borrowed money from its market maker to meet a margin call. People don't understand the import of an event like that. That would be like you getting a margin call from your commodities broker. You say "Sorry, I don't have any money." He responds, "Don't worry about it, I'll lend you the money so neither one of us goes under on this deal, since I don't have enough on deposit." Ashanti does have huge gold reserves so this could translate to simply a liquidity crisis rather than an asset crisis. Ashanti stock is down 65% in two days.

So it goes.

Hard metal in your hand -- the only true safety.

I have to say on this Cambior thing that I could be misinterpreting events, but others must see it the same way given the action in both the gold market and Cambior stock.

We don't know if there's any gold loans associated with this but usually there is when forwards are in place.
jaydeevee
(10/06/1999; 11:50:06 MDT - Msg ID: 15655)
Gold seems down $7 in a vertical drop
http://www.usagold.comAny clues anyone?
jaydeevee
(10/06/1999; 11:54:13 MDT - Msg ID: 15656)
Kitco graphs gone haywire again?
http://www.usagold.comWhat is the gold price now?
CoBra(too)
(10/06/1999; 12:00:08 MDT - Msg ID: 15657)
repost to Steve H.
StH re PDG - even knowing that you're an advocate of pure physical, sound money - please let me follow up on my former post.
PDG - hedge position 4,5 moz = 1,5 y's of production vs 13,5 moz ABX 4-5 y's. Agreed too much at prrices over 350 -400, but actual cost of production favors PDG - if need be.
Conclusion - if gold miners survive it would be the juniors coming close to prefeasibility on major new deposits - as I can't see confiscatory taxation or anything else to that effect (without revolt(ing)s) on a global basis for the "right to min(t)e real money!
CB2

TownCrier
(10/06/1999; 12:13:12 MDT - Msg ID: 15658)
Canada's Martin pleased, not surprised by gold price rise
Mont-Tremblant, Quebec--Oct 6--Canadian Finance Minister Paul Martin
said today that he was not surprised by last week's announcement by
European central banks to cap their gold sales. Martin added that the
resulting spike in gold prices also came as no surprise, but said it will
have spin-off benefits for Canada's economy.

Asked if the central banks' statement had surprised him, Martin said
"not really. I think it was a welcome move by the European central banks."
"We're a major gold producer and obviously, anything that increases
the price of gold is going to be beneficial, especially to an awful lot of
communities in Northern Canada," he added.
Martin's comments come, ironically, just 1 day after Canada announced
it had further decreased its own gold reserves by 136,000 ounces in
September, bringing Canada's dwindling gold reserves to just 1.8 million
ounces.
By Paul Badertscher, Bridge News
(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.
Gandalf the White
(10/06/1999; 12:30:46 MDT - Msg ID: 15659)
Sir Elevator Man's other Question
OH INDEED the COMEX did stay open and sold Gold like no end!!! That was the time that the floor Traders were in heaven. -- IF & WHEN the COMEX does come under presure, expect to see a number of rules changes BEFORE the demise of the trading efforts. -- AFTER all fails, THEN we shall see FOA's "freeze" !! Good luck to all you paper traders. Got PHYSICAL ?
<;-)
phaedrus
(10/06/1999; 12:49:36 MDT - Msg ID: 15660)
December Comex Gold finishes Unchanged
Settled at $326, unchanged. Not bad for starting out almost ten bucks down.

Us paper traders are doing just fine, by the way: gold options currently up in the neighborhood of 2000%.
AEL
(10/06/1999; 12:56:29 MDT - Msg ID: 15661)
phaedrus
I'm happy with my little june 2000 330 gold call, too... bought for $100 (play money), worth upwards of $1500 now. But it is just play money, which I EXPECT to lose. The nuclear blast could occur at any moment. Meanwhile, have fun, but don't bank on it.
PH in LA
(10/06/1999; 13:07:57 MDT - Msg ID: 15662)
Ashanti
On Kitco someone is reporting that CNBC has just reported that Ashanti has announced that it will default on its hedge position. Search of Reuters reveals that on Sept. 30th they had announced an 80% successfull unwinding of their overall hedge position. Go figure!

Thursday September 30, 6:34 am Eastern Time

FOCUS-Ashanti scampers to close its gold hedges

By Patrick Chalmers

LONDON, Sept 30 (Reuters) - Ghanaian producer Ashanti Goldfields Co Ltd said on Thursday it closed most of
its 11 million ounce hedge book this week as gold prices soared.

The move, planned for several weeks, unwound 80 percent of the miner's gold hedge book, equivalent to nine million
ounces.

``A very significant amount of this has been done in the last three days,'' Chief Financial Officer Mark Keatley told
Reuters by telephone from Ghana.

Gold has surged from the $250s per ounce in the last 10 days, boosted first by heavy bidding at Britain's 25-tonne reserve gold auction on September 21 and
then taking off from $270.00 after Sunday's pledge by European central banks to curb reserves sales, gold lending and derivatives activity.

Gold spot and forwards saw frenzied activity through into Wednesday, with spot prices spiking to two-year peaks in the high $320s while one-month lease rates
stretched to 10 percent.

``We were not buying at $327.00. We were not buying anywhere remotely near those prices. On Monday and Tuesday morning the price was in the $280s,''
Keatley said in reply to questions about when hedge positions were covered.

Wednesday's lease rate moves, which pushed the market into backwardation, meaning spot prices exceeded those for futures, were evidence of a bullion market
gasping for liquidity.

Forward hedged miners with floating lease rate contracts, as opposed to fixed rate ones, were particularly exposed to the higher rates, an issue Ashanti addressed
in its news release.

LEASE EXPOSURE

``The company had already, before the rally, eliminated any exposure to floating lease rates during the rest of 1999 and the first quarter of 2000,'' Ashanti said in
the statement.

Gold miners use a variety of hedging strategies to protect themselves from falling gold prices, including both buying and writing options and executing forward
sales.

The significance of choosing a floating lease rate versus a fixed one is that miners on the former can boost profits on forward sales if the difference between gold
lease rates and, normally higher, inter-bank money rates increases.

Such tactics had been a reasonable bet before last May, when Britain's announcement of a 415 tonne reserve sale sparked a 10 percent gold price fall and
increased lease rates.

With lease rates at the levels seen this week, floating rate hedges would be distinctly hazardous, with exposed mines or short funds facing rates five percentage
points above money rates.

``I am very concerned that we are going to see some casualties,'' Jessica Cross of Virtual Metals Research and Consulting said on Wednesday in reference to
those miners overly reliant on gold derivatives.

SUCCESS IN TANZANIA

Ashanti also announced a successful drilling campaign at its Geita project in Tanzania, which it said had boosted resources by 20 percent.

The company was revising the Geita mine plan to lift gold production to 500,000 ounces per year at a cash operating cost below $180 per ounce, it said in the
statement.

The Ghanaian miner repeated its mid-September report that overall production and costs for the second half of 1999 would be broadly in line with the mid-year
forecast of 800,000 ounces at a cash operating cost of $214 per ounce.
TownCrier
(10/06/1999; 13:26:23 MDT - Msg ID: 15663)
Playing Matchmaker
Sir HopeingII (10/05/99; 22:41:13MDT - Msg ID:15610) asked a question yesterday summarized "When "delivery intention" is given, can it be changed?"

Sir RossL (10/6/99; 5:54:56MDT - Msg ID:15634) was good enough to provide an answer summarized "First notice of delivery on a COMEX future is not binding."

No one in The Tower is actively engaged in gold derivative trading, so specifics on COMEX "rules of engagement" are always gladly deferred to any among the Round Table that might know the details of any inquiry such as this.

Sir RossL, if you are in a position to do so, it might be helpful to Sir HopeingII (and probably many others--Tower included) if you could elaborate on the point at which these delivery intentions do become "binding" if not so upon First Notice. Are there stats available somewhere, as with "COMEX Delivery Intentions," that track the total of reneged delivery intentions? Our impression was that any action could essentially be undone, but at whatever cost was associated with taking a position in another contract with which to facilitate the undoing.

Thanks to both of you, and everyone else, for the continuing input.
phaedrus
(10/06/1999; 13:29:35 MDT - Msg ID: 15664)
@AEL re 330 calls
I've got a boatload of those calls too.

What do you mean, you "expect" to lose on your calls? Do you expect the dollar to become completely worthless, or the Comex to go out of business, or what? Their doors didn't close when gold went to $800 before, so why should they now?
Yellin' of troy
(10/06/1999; 13:37:19 MDT - Msg ID: 15665)
name for goldspoon's palladium horse
I suggest naming the nameless horse Gold Fusion (alluding to
palladium's moment of notoriety)--or does that sound too
skeptical and pessimistic?
TownCrier
(10/06/1999; 13:39:56 MDT - Msg ID: 15666)
Sir Tex and "Three Kings"
In your post yesterday (10/05/99; 23:17:13MDT - Msg ID:15617) you concluded with the comment, "Last but not least.......Three Kings, see it."

Do you agree with The Tower's review of the movie yesterday in our post: TownCrier (10/05/99; 21:34:55MDT - Msg ID:15586)?

Do you (or anybody else that has already enjoyed Three Kings) have any comments on what impression this movie may make on the viewing public in regard to gold and freedom, etc.? Please don't reveal anything that might spoil the drama for those who have not yet seen it.
Leigh
(10/06/1999; 13:41:20 MDT - Msg ID: 15667)
Yellin' of Troy
Dear Yellin': I'm afraid Goldspoon's horse is a platinum one, not palladium. It's my fault; I thought he was palladium, and I said that a couple of time. So you were inadvertently given the wrong idea. I apologize.

Why are you called Yellin' of Troy. Do you yell a lot?
YGM
(10/06/1999; 13:52:46 MDT - Msg ID: 15668)
Hedge Book Figures --According to Tim Hoares' Roger Chaplin
Wed Oct 6 /99 Total Hedge Book Positions-----------------------
Company - Approx % of 1999 prod - Equiv. Yrs Prod'n
Anglogold - 77 1.6
Newmont - 35 0.7
Goldfields - 20 0.3
Barrick - 100 3.1
Placer Dome- 45 3.0
Rio Tinto - 0 0
Homestake - 20 0.2
FCX - 0 0
Ashanti - 61 7.4
Normandy - 13 2.5
YGM
(10/06/1999; 13:57:48 MDT - Msg ID: 15669)
Hedge Book Figures --According to Tim Hoares' Roger Chaplin
Wed Oct 6 /99 Total Hedge Book Positions-----------------------
Company - Approx % of 1999 prod - Equiv. Yrs Prod'n
Anglogold - 77 1.6
Newmont - 35 0.7
Goldfields - 20 0.3
Barrick -----------------------100-------------------------------- 3.1
Placer Dome-----------------------45-----------------------------------3.0
Rio Tinto ------------------------0-------------------------------------0
Homestake -----------------------20------------------------------------0.2
FCX ------------------------0--------------------------------------0
Ashanti ------------------------61------------------------------------7.4
Normandy ------------------------13-----------------------------------2.5
gidsek
(10/06/1999; 13:59:26 MDT - Msg ID: 15670)
Hedge Positions
Franco Nevada 0% zip.. nada.. :)

gidsek
CoBra(too)
(10/06/1999; 14:01:43 MDT - Msg ID: 15671)
Hi there YGM -
Seems like Ashanti defaulted on a Goldman "Sucks" margin call for $400 million on hedge of 10 moz (10 y's production)
-it'll catch up to GS as well when NY Fed runs out of physical - good to see you back for the mayhem! best CB2
YGM
(10/06/1999; 14:02:47 MDT - Msg ID: 15672)
Oh well I tried---I'm sure you can figure out the first three!
I'll learn how to use this thing someday -Sorry ---YGM
YGM
(10/06/1999; 14:08:12 MDT - Msg ID: 15673)
Cobra(too)
Thanks--- Seems like every where you look we get different sets of numbers, right down to the so-called real time quotes. Does anybody really know? I suspect w/ the OTC markets they don't and all may be much worse than we suspect. Like I say the three most used words in the near term will be "Gold/Default & Denial" IMHO--YGM.
Goldfly
(10/06/1999; 14:09:22 MDT - Msg ID: 15674)
Farfel- this one's for you!
Angel, I hope you like it too. This should really need no introduction, except�. Respects to Tennessee Ernie Ford. The man who said:

"You have to remember, success is in the eye of the beholder."



16 Tons

Let me tell you the story why my name is mud
I worked a hustle in somebody's blood
Fleecing investors and doing wrong
With a line that's a-weak, I'm Martin Armstrong

(Refrain)
You short sixteen tons, what do you get?
Another day order and somebody's debt
BOE don't you call me 'cause I can't cover
I sold your gold down at the COMEX floor

If you see me comin', better run and hide
A lotta men didn't, and their assets are fried
Bars of iron, and vaults of steel
If the Feds don't a-get you, then GATA sure will

(Refrain)

I was bored one morning - I said "gold it don't shine"
Picked up a ledger and I added some lines
Shorted 16 tons of pure refined Gold
And the Vault Clerk said "well a-bless my soul"

(Refrain)

I had a racket but it's down the drain
Leasin' and shortin' is the name of my game
Ran a gold carry with a with the bonds a-buyin'
Can't a-make the margin with my credit line

You short sixteen tons, what do you get?
Another day order and somebody's debt
BOE don't you call me 'cause I can't cover
I sold your gold down at the COMEX floor

I SOOLLLD your GoOoOollllld down at the COMEX floor



Got requests? . goldfly-mania@juno.com

AEL
(10/06/1999; 14:21:34 MDT - Msg ID: 15675)
phaedrus
I mean the sudden freezing/seizing-up of comex and other markets, accompanied (perhaps) by a prolonged and messy settlement period during which physical metal becomes entirely unavailable, and during which the dollar does indeed lose considerable value generally, but especially against physical metal. I may finally get my check for $3000, but it might only buy a half ounce (rather than 10 ounces) -- that is, if it can buy any at all!

Yes, comex did not shut down in 1980, but the probable (no way to verify for sure) underlying fundamentals make for a potentially explosive, unprecedented situation today, versus then. We shall see. I might be completely wrong. It is a hunch, based mostly on what I have read here (and elsewhere, a bit).

AEL
(10/06/1999; 14:22:07 MDT - Msg ID: 15676)
phaedrus
I mean the sudden freezing/seizing-up of comex and other markets, accompanied (perhaps) by a prolonged and messy settlement period during which physical metal becomes entirely unavailable, and during which the dollar does indeed lose considerable value generally, but especially against physical metal. I may finally get my check for $3000, but it might only buy a half ounce (rather than 10 ounces) -- that is, if it can buy any at all!

Yes, comex did not shut down in 1980, but the probable (no way to verify for sure) underlying fundamentals make for a potentially explosive, unprecedented situation today, versus then. We shall see. I might be completely wrong. It is a hunch, based mostly on what I have read here (and elsewhere, a bit).

Meanwhile I am having fun with my call. May even buy another! Better than the lottery.

Cavan Man
(10/06/1999; 14:33:27 MDT - Msg ID: 15677)
Dear FOA
I am told the good ship GOLD is preparing to make sail for a new port. While you were away on ship's leave, the captain and crew have been quite busy preparing for the voyage. Is it time now to set the rigging and hoist the mainsail? Will we be in open water soon? What say ye good Sir Knight?

Cead Mile Failte (back).....CM

Cavan Man
(10/06/1999; 14:34:38 MDT - Msg ID: 15678)
peter asher
Peter-Hope I didn't sound too "green" in that last post.
Leigh
(10/06/1999; 14:39:20 MDT - Msg ID: 15679)
Cavan Man
Are you prone to seasickness, Cavan?
TownCrier
(10/06/1999; 14:45:20 MDT - Msg ID: 15680)
Tea leaves
http://biz.yahoo.com/rf/991006/s9.htmlDollar holds ground vs yen, rises against euro
YGM
(10/06/1999; 14:55:11 MDT - Msg ID: 15681)
Goldfly
Your tune will see many wks of #1 on the charts. May even go Gold or Platinum. Excellently done & Hilarious. Thanks for sharing it------YGM.
CoBra(too)
(10/06/1999; 15:09:50 MDT - Msg ID: 15682)
CM - I' pretty unmusical (for a Viennese -that is) but I''m at the age....
of remembering the great sound of s.i.x.t.e.e.n t.o.n.s, in the late 60's. Good stuff-made my day and won't get the tune out of my head for some time - G(ee) S(h)ucks!
see ya later ...
JCS
(10/06/1999; 15:22:33 MDT - Msg ID: 15683)
Hedge Books
Anyone know the hedge book positions of
DROOY (DURBAN DEEP)
HMGCY (HARMONY GOLD)
Or where I can find them if you don't know the numbers.
Thanks
CoBra(too)
(10/06/1999; 15:26:30 MDT - Msg ID: 15684)
@StH - sorry for rubbing it in again...
... or some poor soul may have acted on my post re ABX/PDG.
PDG - up 45cts ABX down 1.25 and all other majors down too.

Coincidence, I guess?? G'night CB2
TownCrier
(10/06/1999; 15:27:15 MDT - Msg ID: 15685)
Canadian miner Cambior hurt by gold hedge concerns
http://biz.yahoo.com/rf/991006/s6.html"Every company with a hedge book is having some very intense conversations with counterparties." --John Ing, president of Maison Placements Canada Inc (a Canadian brokerage in Toronto)

In addition to Cambior Inc., the hedging woes of Ghana's Ashanti Goldfields Co Ltd. are discussed.

A mining company seems akin to the US Treasury...just because they "make" the money (being the source) doesn't mean they are worth all that they produce, nor does it ensure that they are a profitable enterprise at the end of the day.
SteveH
(10/06/1999; 15:28:16 MDT - Msg ID: 15686)
Cobra(too)
Criticims absorbed. Thanks.

Did you see? Gold (dec.) is up $2.5 in overseas trading. Yahoooooooooo!
Tomcat
(10/06/1999; 15:29:37 MDT - Msg ID: 15687)
Something is beginning to smell

It is beginning to look like more mining companies might be in trouble (due to shorting, forward sales, and call writing) than was earlier estimated. If this turns out to be true, then someone is going to have to come in a rescue these bankrupt mines at firesale prices.

Now these mines didn't just jump into their hedged positions. They were urged to do so by their bankers to keep their good credit.

When the smoke clears, who is going to end up with the ownership of these mines and the gold? After these mines are rescued, will the POG then start to rise even higher still?

Perhaps I am a bit skeptical because I came from the streets. But for the benefit of those who grew up honestly, let me tell you how an old street hand would have set this up.

1. As a banker, with mining clients, I would get the mining management replaced with super ambitious greed filled CEOs.
2. I would then train them in how they could get rich with by selling short, writing calls, and selling forward. They would be convinced they had made it to heaven.
3. I would find greedy counter-parties to back the deals.
4. When the POG went up (Oh gosh, what a tragic surprise) I would be there to help the CEOs quit their jobs before they were tarred and feathered. The absent CEOs would then be the scapegoat.
4. I would then be there to save the stokholders from further losses by taking over the mines at a firesale prices. Yes, I would be their hero.

In street parlance, my freinds, this is called a sting. In the end you walk away with someones money and he thanks you for rescuing him.
YGM
(10/06/1999; 15:41:09 MDT - Msg ID: 15688)
Tomcat
Sounds like a very feasible "Part" of the bigger picture. In fact I do believe Another has alluded to this similar type of scenario.---YGM.
Goldspoon
(10/06/1999; 15:46:58 MDT - Msg ID: 15689)
****Comex Close Unofical Winner!!!*******
By my figgers (ya i know it's speled "figures" but its pernounced figgers) Todays Market Maven.... "USAGOLD ORICAL of the Day" is that man on the prowel...loved by many...... known by few (thousands)...(OK,OK im' gettin there)...My ole buddy...TOMCAT!!! lets here it for Tomcat!!!! Meow, Meow, er i mean HORRAY!!!!

My guess for tomorrow... is the one i had for today... $343.73..my mama said... i was a day early and one card short of a full deck....i've always wondered zackly what that meant...

****Get your Guesses in for tomorrows.. Greatest Game on Earth!!**
What? Why?..cause i said so...

Goldfly er ahh.. not to be insultin' nor nuthin' like that...but uhh...you from Tennessee too??? GO VOLS!!

Platinum laid down on me...but did you see that move he made around noon today ...er... just before gold took off..what?? don't beleive me??? well look at the charts yourself its there.....
Where's Koan????
FOA, its not nice.. not to speak to ole Goldspoon once in a while.....you're there... Goldspoon's bones knows it...i pull the Comex Close price out of the air...but i can feel your presence with my bones....still love ya man.....
Skip
(10/06/1999; 15:49:19 MDT - Msg ID: 15690)
@JCS (Msg ID:15683 re: Hedgebooks)
http://www.harmony.co.za/news/press/a4oct99.htmCheck the link (www.harmony.co.za/news/press/a4oct99.htm) to read about HGMCY being totally unhedged. This bodes VERY well for Harmony's stockholders!!!

--Skip
TownCrier
(10/06/1999; 15:49:56 MDT - Msg ID: 15691)
Interesting!
http://tfc.com/syndication/TFC/GoldReport.html?G=GoldReportWhile wandering around rooting out news this was found. It would seem our good host's words are widely distributed, even outside of USAGOLD-land. Cool. You learn something new every day!
CoBra(too)
(10/06/1999; 15:52:20 MDT - Msg ID: 15692)
StH-no criticism intended - yahooo -to you too - and no Dot.Coms ...
and thank you for your ongoing great input - invaluable- brother in arms pro gold and monetary truth (no truce to colluders) - BC2
Goldspoon
(10/06/1999; 16:13:06 MDT - Msg ID: 15693)
**Kitco Posters***
Hope ya'll didn't take offence to Goldspoons challenge yesterday....just havin' some funnnnn..... thats all...
RossL
(10/06/1999; 16:13:43 MDT - Msg ID: 15694)
TC - futures delivery
"First notice of delivery" doesn't really mean anything other than a friendly call from your broker to remind you that your contract is coming due soon.

I can force delivery on a futures contract by holding it until expiration. Lets say I went long in July on an Oct gold contract at 260. If I hold it through expiration, the next day afterwards my account will be debited $26000 and I will be given a warehouse receipt for the 100 ounces of gold. The short will be credited $26000 and must surrender the title to the gold he is required to have in one of the approved warehouses.

A short can get out of his obligation any time (while the market is still liquid) by going long to cancel out his obligation. (and vice versa) In the last few days or hours, most of the speculators will have exited their positions. Whoever is caught short may not be able to exit their position. He may only hope that one of the longs decides he doesn't want delivery and sells before the close. The price may go WAYYYY UP. Otherwise he will have to buy on the spot market if he doesn't have any gold.

http://charts.quotewatch.com/charts/futures/COMEX/GCV9-intraday.html

I just checked this page and found out that there are 316 Oct gold contracts open with 117 volume yesterday. This is not very liquid, but, at the moment, it looks like there is enough eligible gold in the warehouse to cover. The big squeeze could come in December. Thousands of shorts could be skinned and dried!
Tomcat
(10/06/1999; 16:21:05 MDT - Msg ID: 15695)
Acceptance Speech

Ladies and Knights of the Roundtable. It is my honor this evening to accept from Sir Goldspoon the prize of being The Oracle of the Day.

As I understand it, an oracle is a person who is respected for his wise council and accurate predictions. With that in mind I would like to council every member to keep getting all the physical gold you.

My prediction is that the POG will continue to rise and fall in increasing volatility which will give the shorts opportunities to buy in the dips. This will be disheartening to many but the fearless members of the honorable table will make it through the storm. Indeed, you will come out way ahead after the POG resumes its climb to the stars.

In the tradition of all prize winners who have gone before me, I would like to thank a very important person in my life; my son Eric. "Thanks son, I love you. Dad".
flierdude
(10/06/1999; 16:26:00 MDT - Msg ID: 15696)
Comex close October 7, 1999
Goldspun Were on the next leg up so I'll say $338.00 Comex close.

Mike
Golden Truth
(10/06/1999; 16:44:27 MDT - Msg ID: 15697)
GOLD UP $4.00
Here we go again!! YAHOO!!!!!!!!!!!!!!!!!!!!!!!!!!!
JCS
(10/06/1999; 16:47:16 MDT - Msg ID: 15698)
Hedge books
Skip,
Thanks for info.
Any idea on DROOY. Looked all over and can't find a thing.
Goldspoon
(10/06/1999; 16:48:51 MDT - Msg ID: 15699)
***Tomcat's aceptance speach sets a new rule***
All future winners of the ORICAL award must bestow upon us their flash of wisdom and intelegance by the fine example of Sir Tomcat.......

Just wondering.... ORICAL...ORIFACE...ORAL..."aceptance speach".....root word connection?? anybody?? OR?
TownCrier
(10/06/1999; 16:57:12 MDT - Msg ID: 15700)
A blast from the recent past...CBSMarketwatch's "Wall St. Eavesdropper" from Sept. 22
http://cbs.marketwatch.com/archive/19990922/news/current/eavesdropper.htx?source=blq/yhoo&dist=yhooGold gets some respect

"Gold bugs rejoice! While the "mainstream" media points to the Bank of England's gold auction as the cause for Tuesday's sudden jump in gold prices, MarketMaven's Michael Kosares prefers to focus on the attendees. One heavy bidder was South African-based Gold Fields (GOLD: news, msgs), buying half of the 25 tons offered. Its chairman, Chris Thompson said he would have bought more if he could and that he plans to attend future BOE auctions, adding that it was time for gold producers to start "supporting their industry." Also in attendance was fellow South African producer AngloGold (AU: news, msgs).
"The action of two of the world's top mining companies serves as a warning shot across the bow of those who short the market," writes Kosares. The most positive news for gold investors is that while stock bourses around the world plummeted, gold rallied strongly. London gold popped up as much as $9.40 to at $264 before settling back to $262.60 at Tuesday's close. Gold's luster also shined brightly in New York and Asia."

This was also found while looking for news. MK, everyone in this Tower outpost is impressed that you are such a towering figure in the gold scene. (Replay a scene from Wayne's World..."We're not worthy!")

To anyone following along with the woes of the mining companies coming to terms with their upside-down hedge books, Gold Fields Ltd here is not to be confused with Ashanti Gamblingfields, er, we mean Ashanti Goldfields Ltd, which was hedged to the hilt and suddenly finding themselves to be the weak-side counterparty. While Ashanti's stock took a dip today, Gold Fields ended up. Hope this clears any confusion from their similar names.
TownCrier
(10/06/1999; 17:19:11 MDT - Msg ID: 15701)
Gold firms Ashanti,Lonmin meet to stave off crises
http://biz.yahoo.com/rf/991006/ky.htmlGhana's Ashanti Goldfields Co Ltd and mining group Lonmin Plc were both in talks with their major banking counterparties to not to push them into default by asking for margin payments. The Reuters boys summed up the situation nicely by saying "As the dust settled from the [gold] rally, market participants in the banking and mining sectors were beginning to count the cost of having been resolutely bearish on gold's prospects."

Sir Tomcat a short while ago hit the nail on the head.
TownCrier
(10/06/1999; 17:44:42 MDT - Msg ID: 15702)
Gold seen up to $350 in days -PruBache's Arnold
http://biz.yahoo.com/rf/991006/dv.htmlRemember Ted Arnold from our GOLDEN VIEW comments yesterday? Reuters today reports more fully on Mr. Arnold's analysis that we mentioned. Mr. Arnold estimates that funds had been short 40 million ounces prior to the announcement by the European central banks, and therefore expects gold to reach $350 on technically driven fund buying in a matter of days.
Arnold says, "Covering this in has, we understand, gutted several very big funds. It also savaged a number of bullion banks...One well-known bullion bank is thought to have lost between $30 million and $50 million between its world-wide book and its option writing."

It is at this point that Arnold says "it is worth pointing out the problem of the grossly overweighted gold portfolios of the European central banks has not gone away. The moratorium is no more than a reprieve... we doubt if the ranks of the 15 will hold for a full five years."

It was yesterday's GOLDEN VIEW that called into question any modicum of substance behind that comment, especially in light of the accounting practice that now shows them to be regularly marking the value of these gold reserves to market. Mr. Arnold worries about their net ability to hold onto this gold for five years. They sure didn't arrive at this point in time with "grossly overweighted gold portfolios" by selling it throughout the many preceding years of history, now, did they? Gimme a break.
Canuck
(10/06/1999; 17:56:01 MDT - Msg ID: 15703)
gidsek msg: 15670
Went long on Franco-Nevada last week, are you sure about no hedging. Please confirm.

Thanks in advance.
Canuck
(10/06/1999; 17:59:25 MDT - Msg ID: 15704)
gidsek
That is to say, I was told that FN was not a forward seller but would like to positively confirm. I believe you and my other source but confirmation eases the nerves so to speak.

Thanks again.
Canuck
(10/06/1999; 18:01:40 MDT - Msg ID: 15705)
YGM
Where did you get the forward sales/hedging info?

Thanks
Journeyman
(10/06/1999; 18:50:55 MDT - Msg ID: 15706)
Small Change
In MID 15702 our Crier said a BB may have lost "$30 to$50 millon." Given the situation, that doesn't seem likeall that much. What is the net worth of the average BBanyway -- and how many of them are there?Regards,Journeyman
Bonedaddy
(10/06/1999; 18:54:30 MDT - Msg ID: 15707)
Peter and Goldsun, Ha!
Hoist with my own petard! I can't help but enjoy the humor. I was going on about how people don't learn form history, and as you fellows pointed out so aptly, I obviously haven't. Oh well, I hope I serve as a good example of what happens when one doesn't remember his lessons.
RossL
(10/06/1999; 19:12:56 MDT - Msg ID: 15708)
Great cartoon
http://www.grantspub.com/toon/index.htmlHey everybody! A great cartoon. Just click on the link.
Journeyman
(10/06/1999; 19:20:24 MDT - Msg ID: 15709)
Prechter's DEFLATION: Does it contradict FOA/Another?
Just received the following from a good friend. ASS-U-MEingPrechter's right, how does DEFLATION fit the FOA/Another model?Or does Prechter's model CONTRADICT FOA/Another?Today's Lesson From At the Crest of the Tidal Wave by Robert Prechter, Jr. Despite a nearly unanimous opinion to the contrary, governmentcannot impose inflation to solve the deflation threat. Deflation in acredit economy results from a collective state of mind. It is not amechanical phenomena, as it is to a far greater degree in currencybased economies. This is particularly true in today's economy in theUS. While the Fed and the government might have had some power tocontrol interest rates temporarily in the past, they have created somuch debt that they no longer control the market. The power todetermine interest rates is entirely in the hands of creditors in whatis now a multi-trillion dollar debt market. Because their collectivestate of mind is susceptible to a loss of confidence in governmentpaper, the Fed has no choice but to tailor its actions to please them.Soon, the government will have to plead for bondowner's confidence aswell, and act to keep it. Although many inflationists continue toclaim that "all the government has to do is fire up the printingpress," it simply cannot be done without destroying the bond market.If the government and the Fed were to collude in an attempt to inflatethe money supply, that very act would panic bond investors, who wouldsell. Any attempted inflation would more than be offset by thedisappearance of purchasing power that is currently being held in theform of bonds, notes and bills. Whatever liquidity the governmenttries to add to the system will come at the cost of falling prices fordebt instruments, resulting in a net destruction of presumed wealth.The government, then, cannot combat deflation, which will run itscourse regardless of actions taken or not taken. Regards,Journeyman
Silver Tongue
(10/06/1999; 19:21:36 MDT - Msg ID: 15710)
Eating Crow
Yesterday my prediction was that gold would settle about 214 per ounce at the New York close. I did all right on this until New York Comex opened, then I was blown without ceremony out of the water. This is once occasion though when I don't mind being wrong at all. I do feel bad that I didn't win the gold Clinton coin going to the winner.
Tubac's ears
(10/06/1999; 19:36:15 MDT - Msg ID: 15711)
!!!!!!!!!!!!!!!SILVER!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Just read on kitco that Gates and WB are cornering Silver! Does anyone have a clue to the legitimacy of this claim? I've got to dig some up, but its drying up here in N. CA.
Let's hope it really does go POSTAL soon.
!!!!!!!!!!!!!!!!!GO SILVER!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
TownCrier
(10/06/1999; 19:54:53 MDT - Msg ID: 15712)
After the Close: the GOLDEN VIEW from The Tower
We'll begin with two quotes that for various reasons we thought worth passing along to stimulate your thoughts. First up...
"There is no question that with the rise in the gold price that companies such as Cambior do face potential margin calls and the decision on unwinding and how expensive it may be...Every company with a hedge book is having some very intense conversations with counterparties." --John Ing, president of Maison Placements Canada Inc (a Canadian brokerage in Toronto)

And second, from the What-Pills-Has-He-Been-Taking? Dept...
"I was actually convinced the market bottomed yesterday, then the Fed hit. Now you can put it in stone. The bottom has been put in." --Gary Kaltbaum, chief technical analyst at GSG Securities (in Orlando)

Yes, he's talkin' about the stock market folks. Join with the many voices in The Tower as we ask aloud the question that is on everyone's lip..."WHAT bottom??" Must be some kind of new-fangled "phantom bottom" because the markets are still looking top heavy at a point many thousands above the level at which Fed Chairman Greenspans proclaimed "irrational exuberance" in December 1996.

On this day that saw the DOW climb with certain exuberance 187 points to close at 10,588 points, NYSE stocks reaching new 52-week lows still outnumbered new highs by 143 to 48. With the often unnerving month of October only now freshly underway, and with the Federal Reserve now accepting a broader array of banks' debt-based collateral with which to recharge dwindling banking reserves at the approach of Y2K coupled with foreign withdrawals, we'd say calls for a stock market bottom--particularly those carved in stone--are a tad bit premature.

The bellweather bond gained 3/32 in price, dropping the yield to 6.17%. After yesterday's sharp post-FOMC announcement of a bias toward tightening, today's gain might best be described as a dead cat bounce. Traders expect the bond to be in limbo until Friday's release of the Semptember's employment report and payroll data, except for one potential stumbling block. Tomorrow the European Central Bank is scheduled to meet to decide whether a rate rise is warranted. Hawkish sentiments have been heard as recently as last week by ECB President Wim Duisenberg and board member Otmar Issing about price inflation picking up within the EMU. The impact to U.S. bonds is that as European bond yields rise, investors have a tendency to pare down their holdings of U.S. bonds, while higher rates could also strengthen the euro against other currencies, including the dollar.

In further currency news, there was strong demand for the dollar today from a US investment banks and Japanese trust banks as US asset markets surged higher. The dollar touched 16-day highs against the yen, and broke a 7 day streak of losses against the euro which had attained a 2-month high against the dollar at $1.0776. Today closed with a dollar worth �107.55 and the euro worth $1.0690.

Moving on to gold, the spot price was last quoted in NY at $324, registering no net change over yesterday's quote...after enduring 24 hours of trading that took a long path to get there. It's nice when the technical traders can work out their market corrections and retracements within a 24-hr period, isn't it? On several days since this upward movement began we've seen several spikes (mostly up, some down) that resolved themselves within the course of the day, allowing the business at hand (higher prices) to continue without substantial delay.

A couple GOLDEN VIEWS ago when the price settled down near $300 from earlier highs, we suggested that while all might appear calm on the surface, you could be certain there was a fair degree of damage assessment taking place behind the scenes. The various Reuters reports today further bore that out. One quoted Ted Arnold (whom you might remember from our report yesterday) saying, "Covering this in has, we understand, gutted several very big funds. It also savaged a number of bullion banks...One well-known bullion bank is thought to have lost between $30 million and $50 million between its world-wide book and its option writing." There was also this bit which we offered mid-day with a link to the whole, sordid story......Ghana's Ashanti Goldfields Co Ltd and mining group Lonmin Plc were both in talks with their major banking counterparties to not to push them into default by asking for margin payments. The Reuters boys summed up the situation nicely by saying "As the dust settled from the [gold] rally, market participants in the banking and mining sectors were beginning to count the cost of having been resolutely bearish on gold's prospects."

In a 10:30 am EDT report by Bridge, their reporter offered this comment following gold's brief price-correction: "Dec had been down as much as $10.8 in NYMEX Access trading, but bargain hunters and fund buying cut those losses more than half." Good grief. Doesn't the phrase "bargain hunters and fund buying" sound like what we've heard for years without end in regard to the stock markets? We'll stay with Bridge News for their wrapup on the day's events and the thoughts of those busy futures traders...

NY Precious Metals Review: Gold bounces off lows, settles unch
By Tina Petersen and Mary Powers, Bridge News
Washington--Oct 6--COMEX Dec gold futures bounced off early lows,
settling unchanged at $326 per ounce in rangebound, volatile market
conditions. Dec had been down by as much as $10.80 in NYMEX Access
trading, but afternoon bargain hunters and fund buying reversed those
losses.

Dec gold saw an expected retracement throughout most of the day on
profit-taking and producer selling after fierce gains on Tuesday brought
Dec to a 2-year high of $339 per ounce. A trader said trade and bank selling
pushed the market down in the NYMEX Access session, but fund buying, as
well as a stronger dollar versus the yen, pushed the market back up.
"We're seeing very rangebound trade in volatile technical market
conditions," said the trader. "That stands to reason when we've had a rally
up to $339. We would expect to see substantial retracement and
profit-taking and when the profit-taking began, it snowballed down to the
$316 level, which is now the new support level."

Added another trader: "[Tuesday's] rally created a vacuum, so
inevitably the market would be sold off" in the morning, said a trader.
"The trade saw an opportunity to come in and run some stops and push the
market down," he said.
The near-term picture for gold remains uncertain. While some said they
thought the market should see further profit-taking in the near term,
others said strong fundamentals should keep the market moving up to about
$330.
"There is still a great deal of uncertainty in the gold market," said
a trader. "It is going to take days or weeks before the market settles
down.
Technically, it could go either way. There is a general nervousness in the
market."
Strong fundamentals are backing the rally," a bullish trader said.
"The trend higher has not been taken out." He said that the dips in gold
prices are well supported by the buyers.

However, he said "the big question out there" is how much leases are
covered and hedges lifted and restructured. "How much of short covering
already been done is the bottom line question," he said.
Leonard Kaplan, chief bullion dealer for LFG Bullion, said the gold
market is continuing to be volatile, with anticipated producer selling. He
said gold possibly is establishing a trading range, with support at $315
and resistance at $330. He said lease rates have declined slightly from
last week, with 1-month rates at 3.82%.

[at last check, these were were latest gold lease rates (annualized, of course)
1-month 4.1680%
2-month 4.2580%
3-month 5.1630%
6-month 4.8180%
12-mnth 4.6850%...back to the report...]

Traders said they are guarded to see if other gold producers will
begin embarking on programs of hedge restructuring or buy-backs.
Canada's Cambior Inc. today reported it has hedging positions for 2.7
million ounces of gold at an average price of US $318 per ounce until
2007. As of Sep 30, Cambior said it had sold call options for 1.9 million
ounces of gold at an average price of US $315 per ounce, with a floating
lease rate swap on 648,000 ounces.

In addition, Ashanti Goldfields said Tuesday it has been left with an
obligation to pay margin calls to its gold-hedging counterparties because
of the recent huge rise in the gold price. Ashanti said it has entered an
arrangement with its hedging partners for continuing support.
[That comment about agreements with hedging partners for continuing support sounds nice and friendly, doesn't it? As reported earlier by Reuters, the situation was described as a "crisis." Meanwhile, a host of other mining companies are coming forward with plenty of fast talking about what their hedged postion has or hasn't done to their viability. Companies performed worse than the metal as the Philadelphia Stock Exchange Gold & Silver Index slid 2.5% today.]
***
(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN.
---
North of the border, those guys are unflappable...or else well-informed. Canadian Finance Minister Paul Martin said today he wasn't surprised by either of last week's announcement by European central banks to cap their gold sales or by the resulting spike in gold prices. What we all wouldn't give for a look through Mr. Martin's magic glasses into the future.

Today's statistics reveal that yesterday's trading ended with COMEX open interest on all gold contracts totalling 215,041, down 6990 for the day. The December contract alone accounted for 127,203 positions in open interst.

Open interest in the October contract fell Tuesday by 376, leaving 71. This morning total delivery notices for gold issues were 27, bringing the grand total so far for October to 2,464.

Our scout returning from his visit to the COMEX vaults said to simply add Wednesday to the list and rerun yesterday's report. While these tired fingers celebrate, here it is...again. "There was no change in COMEX gold depositories both Monday and Tuesday. Inventory stands at 839,029 Registered ounces and 88,591 Eligible ounces for a total of 927,620 ounces housed within vaults at ScotiaMocatta and Republic National."

Following yesterday's post-trading release of American Petroleum Institute data showing a rise in crude stockpiles (by1.004-million-barrel last week) which was double the market's expectations, this morning's report by the U.S. Department of Energy provided a conflicting view, reporting a 400,000-barrel drop. November crude settled down 18c at $23.27.

And that's the view from here...after the close.
FOA
(10/06/1999; 20:19:41 MDT - Msg ID: 15713)
Comment
Where gold is now going, no other investment can follow!

We have been on the gold trail for a number of days now and it's time to stop and talk. Everyone has read the USAGOLD HOF site and understands the tie in of gold and oil. Now lets look at how these factors are beginning to close in on our gold markets.

Earlier this year, when gold was just falling into the $280 range we discussed how then was the time to buy large blocks of bullion. Many large entities were taking delivery to avoid the approaching storm. It seemed that $280 had been the magic number. If gold fell below that value there was a risk that the number of paper creations, known as gold derivatives could explode in a final frenzy. Indeed, in the march to $250, the fractional nature of paper gold trading has created a massive glut of "paper gold commitments" that have no gold behind them. Prior to this $250 fall, the gold market was already bursting with derivatives. Enough so to destroy the credibility of any form of real "gold delivery". Today, those numbers are off the charts. Had the ECB and it's consortium of major Euro supporting Central Banks not stepped in to stop the madness, the gold market would have been crushed to the price floor. Long before that floor was reached, the valuations of paper gold would have begun a discount phase. Where their traded price reflected the inability of the bullion markets to supply even a tenth of the real gold that these contracts stood for. Yes, for big investors the time to take delivery was before the lions begun to fight over an ever smaller supply of gold. I thank Mr. PHinLA for posting Another's analogy about the coming "Gold Lions".

One way or another, the modern gold market of today is going to fail. Weather the trading price goes to $1,000 or falls to $10, the massive overhang of gold derivatives cannot be honoured. What physical gold that remains in private hands will be cut free by this failure and trade for a while in "street form". (see Mr. Holtzman in the HOF for a better understanding of this)

I have discussed before how the modern "fractional gold system" was used to multiply the outstanding ownership of gold while the actual physical gold stocks remained static. This allowed the price of gold to fall as this new paper covered the massive demand. Physical gold could then be
used to support fabrication and, more importantly flow in a direction that increased oil supplies. Mr. ORO has searched for a formal agreement or even numbers that account for this process. The numbers are evident as presented, yet the agreement was political in nature.

A few years ago, continued good oil flow required gold below $360. But, below that number, the asian Trader would emerge with tremendous accounts. It wasn't long after the fall below $360 that the LBMA had to make public the enormous buying of their paper commitments. Even as the
Main Central bank committed to keep gold above $280 to preserve value, it was obvious that the paper market would one day implode itself from "fractional gold" creation. The end of our markets was written the day we fell below $360. We embarked on a trail of no return.

Over the last few years the gold market developed with a two tier nature. Entities that had massive oil to supply a needing world would most certainly receive their gold in "allocated" form if they asked for it. Weather it be from private investor who exchanged their physical for holding
paper derivatives or from the vaults of Major CBs, this gold would come from somewhere, "come hell or high water". Truly, with the explosion of gold commitments outstanding today, we can now clearly see how this will unfold.

The modern financing tool we call the "gold carry trade" is now becoming the poison that will kill this market. The demands of gold lenders to return their "at risk" positions are creating an atmosphere where no amount of physical gold exists that can supply the outstanding paper claims. Great blocks of gold are now lent into the markets at 4% or greater, where once 1% was considered a good return. As each new group of lenders enter the market they are followed close behind by former lenders demanding their gold return. Fear begins to grip those who were once bullion owners as they now became paper pawns. Each new demand for "full allocation" creates yet further demands to borrow. The supply of new lenders grows smaller and smaller as the
possibility of default increases.

The ECB moved to block any further erosion of the Euroland position. Most certainly, all world gold contracts denominated in dollars would have gravitated towards Euro conversion to best advantage the EMCB gold stocks. Indeed, in a brilliant move they have blocked that escape and
doomed the dollar gold market to collapse from non delivery. The ECB can now effectively support it's gold commitments thru either bullion allocation or Euro settlement. By marking to the market their gold reserves they will contrast the advantage of a dollar gold market collapse no matter what form it takes. Weather discounting of paper gold from non delivery as derivatives are sold in mass (plunging dollar gold price) or a complete run for delivery (what we are seeing now) that leaves 95% of the market shut down and still holding paper demands ( paper gold priced in the many thousands. prior to lock up), the Euro will gain reserve backing.

Onward:

The mine defaults seen today are just the beginning. For every mine that fails it's stockholders during a $70 gold price increase, fifty will fail from a $2,000 run! Weather the bullion price reflects the "street price" or the "run for delivery paper price", the turmoil will devastate most contract strategies. Why is this happening? Modern people, be them investors, mine managers or "carry trade" operators alike have never seen a true gold market. Their perception of a gold run is where jewellery demand and 6% inflation gun the price to their historical "natural level", $500! Truly, in this world, $500 is where gold starts it's great move.

Our dollar/IMF currency operates on contract liquidity by creating paper IOU that are never called. Be they cash, bonds, CDs or stocks, they represent elevated wealth only because they are never liquidated into real things. If humanity ever decides to sell them (something they will do only if forced from fear), the value of real things quickly increases to a level much higher than the total value of such paper. It does this because, in a panic, things are held back, thereby lowering supply.

The recent (last 10+/- years) gold market has reflected it's transition into a similar paper "contract liquidity" system. This was done to enhance the credibility of the dollar in the eyes of it's trading partners. Today, the Euro system has offered a reason to test the credibility of this gold system. This "new gold market" is not as before and will run in dollar terms unlike anything anyone has ever seen. Gold is now in the process of becoming money and that pricing process will destroy most any contract ever written against gold.

In the future, no investment on earth will keep up with the real value of gold, nothing! It will run until the dollar system is destroyed and a new system takes it's place. The effects and beginning events are starting now. In the background the gold market is under stress, even as small traders make quick paper gains. When the stress breaks into full view, all traders will be "eaten alive" by the next biggest trader. And so on up the food chain. So, why trade. Already, gold bullion has done very well against shares and other metals. What ever small percentage gain one has made above this is for how much risk? I would like to see the owners of Ashanti Goldfields Co trade their paper
gains for bullion tomorrow? We have discussed this often and this is only the first good example. Yet gold has only just begun to move! No option, futures, silver, platinum or gold stock will match gold when it runs $100 a day for days on end (perhaps in a Euro marketplace).


Our road has just begun and I will walk it also. Hold a tight line as we proceed down this dangerous path. It will be a wonderful hike for everyone that can stay on the trail and understand the sights along the way.

On the road to $30,000...........thank you FOA

Nice joke PH! My wife almost killed me! (smile)


TEX
(10/06/1999; 20:20:16 MDT - Msg ID: 15714)
Town Crier - Three Kings - Goldspoon's COMEX
TC:
I guess the best way to describe Three Kings is "Kelly's Heros with a conscience". I have a friend that fought in Desert Storm and years ago described some of the "ground level" situations that are portrayed in the film.....things that many of us really don't know or understand to this day.
It is interesting to note that there were many opportunities for the main characters to focus on other items of physical value......in the end, GOLD (and a little moral backbone)was
the primary motivator. You are right about the difference between common thievery and noble endeavors. Interesting note about improved gold-awareness......I took my 15 year old son with me to see the film. Prior to seeing the film, he bearly (I know, pad pun)had a passing interest in my GOLD endeavors over the past few months. Now, each day on our drive to school, he pays more attention to our local "business for breakfast" radio show that gives the opening markets and gold reports. He has even started to look over my shoulder and study the evening charts. In a nutshell, yep I think it puts GOLD into a positive light and could (for a few weeks or a month) increase its overall awareness.

Goldspoon:
Second go-round is the same as the first......$332.25

Chris Powell
(10/06/1999; 20:21:26 MDT - Msg ID: 15715)
WorldNetDaily.com interviews GATA's Murphy
http://www.egroups.com/group/gata/238.html?Manipulation message is getting across.
YGM
(10/06/1999; 21:04:18 MDT - Msg ID: 15716)
F.O.A.
Thank You, I think! In fact this last post of yours will take much reflection and consideration. Simply put you have me temporarily thunderstruck. Regards---YGM.
elevator guy
(10/06/1999; 22:03:51 MDT - Msg ID: 15717)
@Goldfly- 16 tons song ! What a riot!!!
Forgive if I'm posting in the middle of something good, cause I'm startin at the bottom of the page, and reading my way up to the newer posts, but-

That was a great song, Goldfly, based on 16 tons! Lyrics fit the music, and had good meaning. Very dramatic ending, too.

Can you write lyrics to Collective Souls' "Shine"?
SteveH
(10/06/1999; 22:20:05 MDT - Msg ID: 15718)
To a friend
Leroy,

FOA posted tonight after being gone for most of the recent gold run up. In his words are comfort and angst. Comfort from the knowledge that gold's run is just beginning, but angst from knowing that, in his opinion, paper gold products will fail or be dishonored -- truly a scary thought. In the end, FOA is a Euro person. If you will, he talks his book, and that is physical gold and Euros. Why he chooses this path, I don't know. I am fairly certain that he knows what is going on behind gold's interior and what he sees isn't pretty for the dollar or anything else dollar derived. Ignore his comments many do, but I fear that in the end he will be more right than wrong. The energy in this inkling and infant gold bull is evident to all. The power to change gold from a derided old woman to a vibrant lass at a debutant ball changed in a week, in a day. What if gold hits $500? This month? That would open some eyes and have people asking lots of questions, no? If you recall, FOA means friend of Another, and is a handle of a poster at the below site. He can be considered along with a poster called Another, the deep throat insider source to the gold industry. We believe Another is Saudi or mid-Eastern and FOA an American in Europe. They both started posting over two years ago at www.kitco.com and then when disbelievers chased them off, they were invited onto the www.usagold.com site where they appear and disappear majically and with preannouncement. Does one credit them with wisdom and knowledge the rest of us don't have? Many do. Some scorn them. But at a minimum one must know of their writings or else miss out on the biggest story of the millenium: gold's rise back into favor and a once in a lifetime revaluation of gold that FOA says could be $30,000 per ounce.

If that got your attention then visit those two web site above for further information. You will see references to the gold for oil deals and not hear that anywhere else. It seems from FOA and Another that the deal started after 1971 when President Nixon defaulted the dollar off the gold standard and allowed the dollar to stand on its own. Without a competitive currency like the Euro, this allowed the dollar to be the reserve currency of choice until January 1, 1999. Now, FOA says, there is an alternative: the Euro. In 1976, the Jamaica Accords, an IMF meeting of many countries floated gold and would appear to be the start of some gold for some oil that managed to apparently keep the price of oil down in dollars as long as cheap gold could be had by the Middle East. Of late, however, hedge funds managed to knock the price of gold below $360 per ounce that had the end result of naked shorting the gold market to a possible 14,000 tons. That is one-half of all Central Bank gold in the world (reported at 32,000 tons). In short, this is the basis of FOA's theory, first put forth by the person named Another.

No one, who is telling anyway, knows the identity of FOA or Another. But their Internet personas are picking up steam on the Internet. They represent a return to a grass roots currency backed by gold and that marks a turn away from derivatives and hedging paper and dollars. In part this is a result of European and Eastern loss of confidence in printed dollars with zero gold backing. When the IMF couldn't get funded by Congress, their ultimate proposal to accept gold in payment for debt is the first time since 1971 that gold has been monetized without a conversion to another currency. If you have picked up the significane of gold as it gains steam in all countries but the US, you begin to understand the importance of the A/FOA message. Watch the gold train. A lot of behind the scene energy is being put to bear on it from all corners of the world. So much so, that many gold mines, hedge funds, and bullion banks may or are failing as we speak and no one is yet the wiser. Gold and its importance has returned with a vengeance and we got but a small taste of that last week when gold rose from a 20-year low $85 to a high of $339 (so far).

SteveH

Golden Truth
(10/06/1999; 22:46:53 MDT - Msg ID: 15719)
TO F.O.A
Hello F.O.A, i must say you are like a breath of fresh morning air!
It tickles my soul to hear your thoughts again, but the best part is that i don't have to ask "when" anymore. :-)))
Thanks for not forgetting about the little guy! and we'll see you at $30,000, you bet!!!!!!!!!!
Thanks as always. G.T
Chris Powell
(10/06/1999; 22:50:42 MDT - Msg ID: 15720)
The hedging horror unfold
http://www.egroups.com/group/gata/239.html?Latest "Midas" commentary
from GATA Chairman Bill Murphy.
ORO
(10/06/1999; 23:44:47 MDT - Msg ID: 15721)
SteveH - Your letter - a mechanism
FOA has, once again, portrayed the basic concept of the future he sees from his position, which you assume is a Saudi point of view. For myself, I do not know and will not venture a guess. The form of expression is appropriate to a Saudi official.
The thing most of us miss most of the time, is that the simple fact that everybody's interests, save the governing class in the US, are stacked up towards this new format for floating currencies and reserves. It puts everybody on an equal footing and opens the possibility of a level playing field for both banking and trade. It also eliminates the segnorage of the US in printing the world's medium of trade and debt settlement and has a chance of revaluing the debt of the EMs into insignificance - freeing them from the trap the US bankers sprung on them. (see Mozel post) One more issue is that the gold accumulated in Europe, Asia, and Arabia through trade, and in the US through payments for services in war is given its original weight as the representation of a whole nations' past financial achievements. (again a good Mozel point)
The US elite is very much like the elite of Johnstown before the flood, enjoying the night in a cocktail party as the engineer tells them of the near certainty of the collapse of the dam if the storm outside continues, and even if it stops. As the custodians of the dam run for their lives, having seen water coming through the cracks, the elite continue talking of the new library they will have built, the wives talking of the benefits to the poor, the husbands organizing their conspiracy to rig the bidding. Notice that even the engineer, convinced of the impending disaster and its ramifications - including the high probability of his own death - still comes to the party. (This account is partly fictional - so take no offense)
The working mechanism of the new currency system ANOTHER foresees and is involved in implementing is very straightforward, though only somewhat less fictional than what we have today. It just happens to artificially favor gold.
The manner of strengthening a currency is the main difference from the current system. Each country, and the IMF as well, strengthens its currency by bidding for gold within its borders. As the price of gold increases locally, the backing of the currency has both increased in quantity and in price - and therefore in percentage of backing. Other countries respond according to their need for a stronger or weaker currency for domestic or international political or economic purposes. Through the importation of gold, there is something gained for a net exporter. Through the import of goods, one's currency is necessarilly weakened as it is eventually used to buy gold by the exporter, strengthening their currency relative to the importer. It restores the best aspects of the gold standard in trade and in the settlement of debt, but it will enslave the countries that do not have their own gold and are net debtors. Countries that are US creditors but have no gold will be left with whatever the gold value of the $ would be relative to the Euro, SF and other major currencies.
The gold price in this system has no cap. All have a vested interest in keeping the gold price high. In the meantime, the gold miners will be taxed at incredible rates and gold holders will be picked at as the capital gains taxes on their gold sales are raised over and over. Initially, there would be a strong push to have the gold holders spend the money unhindered, to jump start a shocked economy. After the initial spring time for the gold owners, there would be the atmosphere of growing taxation of gold profits (inducing people not to spend their gold).
Monetary policy would ammount to the throwing of unbacked paper into the market, which would cause the decline of the currency and a surge of exports. The exports will garner a large chunk of gold coming in, and would either displace the currency (if gold is not bought to increase its backing) or will be used by the governmnet to support the currency.
Contrast this with the current system, where one needs to devalue the $ in order to strengthen one's currency, by throwing $ into the market and buying one's own. Thus the $ gained in trade are lost in defense of a currency in what is a sure defeat if you are a debtor nation - the US Fed/banks can invent as many $ as are necessary to borrow your own currency from your banks and dump it on the market. As you raise your interest rates, your economy grinds to a halt and as you supply more of your currency to your creditors as a result of higher interest rates, you are either more in debt, or the funds fall into the market where they eventually lower the value of your currency. If this attack on your currency was accompanied by a rush of hot money out of your financial markets, your economy would be destroyed. Your $ denominated paper would be defaulted, and your debts remain hanging arround your neck like an albatros. These will force you to sell your products and real assets at a discount to their cost and real value, in order to settle $ debt.
The US has been trapped in this way too. It is by far the largest debtor the world has ever seen, in relative size to the world economy, or in relation to its own. The list of creditors is growing as each country resolves it $ debt. Japan made it in the 70s, Germany and France in the 60s, China in 97, Korea Thailand and the Phillipines (almost) in 98 and 99. Russia, Malaysia, and Ecuador are just saying "go #$^& yourself".

I will say this. This new international monetary system too will fail in one way or another, and produce unpredictable results. It is such a new concept that I can't say with certainty how it would work in reality. I have a vague thought that gold would displace the currencies in this system, since it would be the most reliable store of value, less subject to the whims of government.


Simply Me
(10/06/1999; 23:59:12 MDT - Msg ID: 15722)
Thank yoo, Sir FOA.
Your words of encouragement are needed now more than ever.
Many of us are "in" gold to the hilt...according to our means. And the smaller the means, the more important that small store of value is. If I read you correctly, it may, next year or soon after, mean the difference of food on the table or not.
Got children?....Got Gold?
Gandalf the White
(10/07/1999; 00:16:54 MDT - Msg ID: 15723)
Goldspoon's second daily contest ! + PS: FOA's post
Comex close = $321.0 --- (same as last guess)
PS: THANKS FOA for dropping by and bringing us the view from the shoulders of the Giants. -- Twil be interesting!
<;-)
elevator guy
(10/07/1999; 00:20:15 MDT - Msg ID: 15724)
Many Thanks are in order!
FOA, Another, Michael Kosares, Bill Murphy, ORO, SteveH, and so many others here, I would like to thank you all for your efforts at tipping me off to the truths behind our currency system.

How often during ones life does one have the priveledge of becoming the beneficiary of the wisdom and efforts of a mentor, whose insights profoundly enhance ones success and happiness.

Myself and others have benefited in the short term, and now, as we look to future, and can now see the events coming, I am sure that the works of the above gentlemen will benefit all who listen, for years to come.

This has been my greatest undeserved gift, second only to my salvation.
Golden Truth
(10/07/1999; 00:26:10 MDT - Msg ID: 15725)
TO Elevator Guy
Very true words you speak! and sincerely humble, may God bless you all your life. :-)
gidsek
(10/07/1999; 00:45:11 MDT - Msg ID: 15726)
Drooy Hedge for JCS
http://www.goldseek.com/wwwboard/drooy/index.html
gidsek
(10/07/1999; 01:23:07 MDT - Msg ID: 15727)
Canuck Franco? Hedge??
http://www.franco-nevada.com/Well it seems I've chucked my last annual report. My link to Pierre Lasondes' denunciation of hedging doesn't work anymore (although it's buried in THESE pages somewhere) and though there's nothing in the financials indicating hedging they don't just out and claim they don't either!!!
So my friend, best get it from the horses mouth. These late nights are making me buggy.

20 Eglinton Avenue West
Suite 1900, Box 2005
Toronto, CANADA
M4R 1K8

Tel: (416) 480-6480
Fax: (416) 488-6598

gidsek

Farfel
(10/07/1999; 01:23:35 MDT - Msg ID: 15728)
Gold, Kaplan, and Radical Thoughts from a Contrary Indicator
Always interesting to read Kaplan's comments on gold.

First, let me state that, contrary to opinions I once expressed in the past, I will not truly believe we have entered a genuine bull market in gold until the metal breaks through 800. We are a long way from that figure yet that is the figure needed to convince non-goldbug/average American investors that gold is once again a performing asset that has a positive return rather than the negative return mainstream Wall Street gold critics consistently ridicule ("gold was 800 in 1981 and where is it today? Ha, ha, ha!")

Again, I believe that, with a slip of the wrist, Greenspan and Co. can throw the wrong lever and cause a huge deflationary spiral, resulting in a financial markets crash.

In such a scenario, gold might lead the crash or be a victim of it, although it will most likely be the first asset to rebound once the crisis is resolved.

However, assuming Greenspan is throwing the right lever, then it is conceivable gold is moving slowly into a bull market, to be confirmed by its break past 800.

So the major question is this: if gold is actually headed for a bull market, what will be the velocity of its upward thrust?

According to Kaplan, it is impossible for gold to move up quickly or too strongly since there are too many fearful goldbugs out there, victims of a lengthy gold bear market. Hence, Kaplan states they will be too quick to sell on the first decent, sizable rallies, thus preventing any dramatic, notable upspike in gold. In Kaplan's opinion, a new gold bull will be a lengthy, slow development.

As evidence, Kaplan cites the last notable gold bull culminating in the 1981 gold surge (to 800), and notes that it began around '76, thereby proving that any gold bull will be as slow to develop as the current equities bull.

I disagree quite strongly.

There is a huge difference between the events of the late Seventies and today. Fundamentals cannot be ignored, and in fact, the current upspike in gold is entirely based upon a fundamental development, namely the Duisenberg European gold announcements.

The most significant fundamental event lurking around the corner today that MIGHT create a most dramatic upspike in the short term is , of course, y2k.

The fear of a hi tech collapse leading to systemic financial crises can only accelerate as we enter the pre-y2k homestretch. If such fear bursts forth in all its fury, possibly triggered by some left-field, y2k engendered event, then gold could jump 300 dollars per week during the crisis.

In the late Seventies, an unexpected oil crisis, gas lines all across America, and rapidly increasing interest rates caused gold to surge dramatically.

Today, most Americans are expecting "little problems" -- relatively painless and easy to fix.

Americans today are coming off a decade of tremendous calm, complacency, prosperity, and fun.

Therein lies the irony: back in the late Seventies, Americans were emerging from a lengthy recession. Despite the hardships suffered, still, they were not prepared psychologically for the gas crisis, and they panicked accordingly.

Today, things are quite different: most Americans are "expecting the expected." They know y2k is coming and are convinced it will be no big deal. Whatever tension exists is subconscious at best, hidden in the darkness of their minds.

Any truly left field event that causes first-hand hardship will likely result in a much more severe panic than the equivalent Carter Years scare.

Young Americans in particular are not psychologically prepared for hardship and not accustomed to experiencing it.

Therein lies the seeds of a truly severe panic: when the normalcy of America's most tranquil decade is suddenly upset, hysteria is bound to be the resultant human emotion.

So gold's jump could be much more intense than that experienced some 20 years ago, and it could take place in a much more compressed period of time.

In summary, people who have passed through hardship and troubles usually develop stronger constitutions such that they are better able to handle new problems as opposed to those who have never endured them. For those who are not used to crisis, their emotional reactions can be extreme, to say the least. A truly left-field crisis over the next 2-3 months could set off "the Mother of all Gold moon-shots."

If that happens, then Gold is truly in a New Paradigm.

Thanks

F*
SteveH
(10/07/1999; 04:00:14 MDT - Msg ID: 15729)
Dualing Kitcos
www.kitco.comFirst,GT, we'ze just people like you. We just knows what makes sense 51% of the time whenze we see it. Thanks.

Over at kitco is a standup posting day. Here is a snippet from Mozel of a series of posts from the greats of kitco's discussing world finances and what an education:

Date: Thu Oct 07 1999 05:27
mozel (@Thoughts From Mozelland @RB) ID#153110:
Copyright � 1999 mozel/Kitco Inc. All rights reserved
What is the relationship between paper gold discounted to $6,000 per ounce and the exchange value of an ounce of gold in hand ?
None.
The first is a creditworthiness of the promise valuation. The second is not.
**********
A theory of the FOA & A Team is that the greenback "market" for gold must fail. Because there are more promises for gold delivery than can be delivered upon. Hmm. Well, let's look at it. First from the miner problem.
The Ashanti trouble is the kind of trouble farmers have gotten into when the farms finances don't look good to the banker on paper. Even if the farm is making money and the payments are up to date, if the collateral valuation falls below the loan exposure, the banker will foreclose. For the option writing miner the problem is not delivery of gold on the option, at the moment anyway, the problem is that volatility of the option price, which is his liability from the banker's on paper view of things, puts the miner's balance sheet underwater. Well, as was seen in the case of Ashanti, if the banker carries the miner's option price volatility liability, things go on. And if the Federal Reserve allows the banker to do so, things go on swimmingly so long as the miner has the gold in the ground and can mine and deliver the gold.
In the case of miners who have written options beyond their resources or reserves, it's curtains. The Big "B" as in Bankruptcy and Bre-X. Is that the end of the gold market in greenbacks ?
I don't see it yet. Maybe I'm not seeing something, but the gold market in greenbacks is, compared to say, the budget for Medicare, a mini-market. I just can't stop hearing those words of Greaseman in my head about how every two or three generations the taxpayers have to bail out the banking system. Because when you analyze the flow of consequneces from the gold loan debacle, they always end up back at the banking system, which as we all should know, was made Federal Reserve System, a.k.a. Lender of Last Resort, for just this sort of debacle.

The banking system can defend itself. It can simply make a rule that the liability for delivery of gold will be a ) reported off balance sheet b ) reported at the original option valuation when issued. Or something even more creative. It doesn't matter then if gold goes to Big Number. The banking system has immunized itself.

Another exposure is through hedge funds that are short gold. Hmm. Well, who have the lenders been ? We are told 50% are private parties, like uptick's clients. Ooops. Lender's risk. The other 50%, the European central banks, have announced their five year work out plan. So, they get whole.

Well, won't these defaults sap liquidity from the system ? Yes, but won't a rise in the greenback exchange rate for gold add it back ?

Maybe, the IMF and the IMF greenback are toast. It wouldn't surprise me. But the USA is a different corporate going concern in bankruptcy altogether.

The only thing to hang your hat on at the moment is that unit of account in .0whatever ( where is SDRer ? ) grams of gold in the euro, which if there is no legal tender 100 euro coin doesn't mean a whole lot except at international transaction settlement time.

In gold terms, the Arabs have oil overpriced. It takes a whole lot more work to get gold out of Mother Nature than to get oil. The last time the Arabs OPECed the world ( and created HIPC of the oil poor who had to have greenbacks to get any oil ) , the problem soon became how to recyle "petro dollars" into productive use. Demand for oil is elastic. Maybe this time somebody will realize the better solution is really, really to increase gold production. Like with tax and enviro exemptions instead of punitive taxation and regulation of gold production.
People say $600 per oz. is the equilibrium greenback exchange rate for gold. Where do they get that figure ? It's not high enough to attract a rush of investment funds. But, it's too high for the Indian jewelry market. I don't think anybody has a clue about what a new international monetary agreement will finally be.
TownCrier
(10/07/1999; 04:35:02 MDT - Msg ID: 15730)
Hear ye! Hear ye! There is an update to The Gilded Opinion at USAGOLD!
http://www.usagold.com/TaylorBatraCrash.htmlThis is one you definately do not want to miss. In this excellent interview of Dr. Ravi Batra by Jay Taylor, they discuss how we are poised for The Crash of the Millennium in terms you will understand. Stocks, bonds, and currencies are crushed as the market and credit bubbles pop, with physical gold playing the role of Hero to help you through this turbulent financial transition into a brighter future for all of civilization.

This one is a must read.
ss of nep
(10/07/1999; 04:35:57 MDT - Msg ID: 15731)
FRANCO NEVADA
FROM Kitco ..... yesterday

Date: Wed Oct 06 1999 08:41
Mo in To (PARDON THE CAPS!) ID#347205:
All,
Further to my last post re:FN, I just got off the telephone with the CFO of Franco Nevada, Mr. Ron Binns, to clarify the situation re: hedging. FRANCO NEVADA IS ABSOLUTELY NOT HEDGED. He also says I can quote him on that. I advised him of the Globe&Mail article and advised him he should demand a retraction, a news release would also probably help as the share price will fall due to this misinformation. So much for the accuracy of the press!!!!!
MoinTo
el St.One
(10/07/1999; 04:53:22 MDT - Msg ID: 15732)
Agnico-Eagle Mines Ltd
agnico-eagle.comNo hedge here.......




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been sold forward.

A low gold price environment can be a time of opportunity for those gold companies with
the desire and ability to grow. Our experience over the years has taught us to build when
gold prices are low so that we are well positioned to take advantage of higher gold
prices. Our former President, Paul Penna, was a great proponent of this strategy and, as a
result, his vision of the LaRonde Mine as a world-class gold deposit is now being
realized.

Agnico-Eagle has been fortunate to enjoy the tremendous confidence of a loyal
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TownCrier
(10/07/1999; 05:03:52 MDT - Msg ID: 15733)
BOJ's Yamaguchi cancels Paris conference trip
http://biz.yahoo.com/rf/991006/2v.htmlThe trip we mentioned yesterday...it's off. Wonder why?
TownCrier
(10/07/1999; 05:15:43 MDT - Msg ID: 15734)
INTERVIEW-Suzuki sees �6-7 trillion stimulative spending, BOJ move
http://biz.yahoo.com/rf/991007/bg.htmlWhen interest rates sit at zero and the population still won't borrow money into existence, you can't really push on that string any more effectively. So what do you do? You turn to the government itself to spend the money into circulation...an act the US government has already mastered.
ORO
(10/07/1999; 06:35:50 MDT - Msg ID: 15735)
Plat lease rates
Ad absurdum
Some at 50%.
Either some expect platinum to magically appear out of the Russian blue, or SWC insiders buying their own stock like crazy for 3 months really do know something.

Plat has done as well as Au.
elevator guy
(10/07/1999; 07:07:08 MDT - Msg ID: 15736)
Previous days total volume, signifigance?
Dear Knights,
It seems that as the price of an option goes up, there is less and less "Previous days total volume".
My take on this is that the more expensive it becomes, the harder it is to sell. (At least in the current conditions in paper gold)
And so, it may become impossible to sell, even when it has time value?
Am I correct on this? Any comments would be appreciated.
goldgal
(10/07/1999; 07:08:22 MDT - Msg ID: 15737)
Media Corrections re:FN and Viceroy
All,
Further to the hubbub yesterday re:FN, please note that Globe & Mail has printed a correction in this a.m.'s edition. Franco Nevada does not hedge, nor does Viceroy.
goldgal (aka mointo)
Chicken man
(10/07/1999; 07:16:54 MDT - Msg ID: 15738)
ORO - 3 stars for platinum...!
First of all thx for sharing your "thoughts"....about the "3 stars"....I looked up the limit on platinum...$25 and "3 stars"....so I put on my specticals and started to read the fine print in the legend at the bottom of the page.....ooo-wheee....3 stars is "no limit" front month...charts look great for a breakout on the upside...

T-bonds are flirting with some unknown territory this a.m.....could Wall Street handle a "111" handle on bonds...?
Chicken man
(10/07/1999; 07:28:00 MDT - Msg ID: 15739)
elevator guy...Options....
It all has to do with leverage....when options get in the money they are a "1 to 1" play.....no leverage....but as long as the buyer can "exercise" the option and make a buck,they will buy....only thing is sometimes the buyer wants to make more than a couple bucks.....but that is the way the "game" is played

Hope you have "buckets" of fun on this "leg"......teehee...chicken man is a farmboy....or should I say "was"....foreclosure in '81
elevator guy
(10/07/1999; 07:33:54 MDT - Msg ID: 15740)
@Chicken Man
Thank you for your response! I've been having fun ever since $262! But now we are going to unload our Dec and Feb 270 calls, God willing.
I appreciate the advice on this forum.
I grew up next to a farm, and baled hay in the summer. Twine used to cut my palms, and the hay dust would stick down inside my shirt. Made some money for school clothes, for the fall.
FOA
(10/07/1999; 07:40:11 MDT - Msg ID: 15741)
Comment
Central Bank Cheating!

Central bank policy is never offered to the public in it's true context. They can't afford to! Open directives that involve "historic" changes are usually never interpreted successfully until their "real life" effect is truly seen.

When the ECB, Swiss and BOE all made their announcement, it was publicly taken in the current context of falling gold prices. When I posted "it's all over people", my response was in reply to the future. A future that evolves an escalating gold price environment, the very conditions that the ECB statement would create and was aimed at controlling.

This agreement was more of a commitment to "continue" a certain amount of gold supply "even as the prices rise". Understand that; When an important body states that they are ready to slow an approaching forest fire, every else immediately starts preparing for a fire. Even if it's not in view yet. It should have been obvious that during a surging price period, most (if not all) CBs would stop selling gold and call in lease guarantees! Such a move would lock "all" the markets instead of creating a "controlled burn" of the dollar.

Watch these events as they unfold. True, there will be cheating! However, that cheating will take the form of "CBs buying gold" (and hiding the transaction as well as able) to balance their sales. If the Swiss do sell, we can bet their selling will be delta neutral. Their most likely move will be to commit their gold into the EMCBs in exchange for Euro type derivatives (even if sold for dollars). If anything, the effect on the markets will be to cut physical supplies, in complete contradiction to the ECB / BIS directives.

Mosel, our problem today is not so much a rising price, rather the lack of physical to close outstanding contracts! You are right, dollar liquidity can and will be expanded to cover "bookkeeping defaults", but it will only "extreme" the physical defaults as private lenders demand their gold back! Your deep mind will burn in overdrive as this plays out. I'll keep the fire extinguisher ready to cool off the grey cells (smile).

FOA


Hipplebeck
(10/07/1999; 07:57:20 MDT - Msg ID: 15742)
FOA
You're right.
If humanity is going to insist on seeing gold as money, the solution is to get it all
ORO
(10/07/1999; 08:00:34 MDT - Msg ID: 15743)
FOA $ Death spiral control
So you are saying the ECB expected the opposite reaction?
They were saying "here is the fire extinguisher, only one" in the crowded theater? Why the emphasis on refraining from further action on the paper side?
The statement came across as we will stop this dangerous game before the whole thing blows. We don't want everything to get blown to smithereens, we want to keep stability by blowing it now, when we can still handle the consequences.
I do believe they want a slow transition so as not to kill the financial markets and get a chance to cash in some $ for something, or at least in return for creation of EM obligations in Euro denomenation.
Goldspoon
(10/07/1999; 08:06:04 MDT - Msg ID: 15744)
Platinum market corner.....
Very good ORO...his observation on Platinum is a development i've been watching for a while...as everyone is so preocupied with gold, a corner is being set up in platinum...gold is a natural diversion (smoke screen for this event).... Had this been tried without the furror going on in gold it would have been easily spotted.... Where did i hear this from?.....why,..from "horse with no name's mouth of course".....we've developed quite a frienship....

Look for a similar thing in silver...it's just farther along in platinum....

FOA's Gold Truth is real....thanks ole buddy, that sure is a fine horse you ride...feels good don't it?

These corners were set up by those in the know about gold and were waiting for this to develop to take advantage of the situation.....WB..for one....
FOA
(10/07/1999; 08:13:47 MDT - Msg ID: 15745)
Reply
ORO,
Like this: "The time has come to support our own currency system. Let any other CB that wants to work with us, also announce this agreement. (I think Japan did also?? Were they hoping against hope??) We are going to stop this thing before it infects our economic system. Tell everyone we will now limit our lending and allow it to shrink through payment liquidation. In addition, we must offer this supply to keep it from burning out of control."

I would have added: "it all over people"! Somehow that would have been seen as gasoline on the fire. No?
Hipplebeck
(10/07/1999; 08:18:33 MDT - Msg ID: 15746)
FOA, Oro etc.
I think some of you are missing the point of what is really happening here.
The leasing from central banks creates an obligation that must be repaid.
There is no way that the Fed is going to let the system crash. They will flood with liquidity until all the arrangements are made. The gold + will return from whence it came eventually. Leasing is a win/win situation for the lenders. The gold vacuum will suck up all the gold eventually, because they can give any amount of paper for it that they want. Believe me, these big bankers are going to someday have it all in their vaults. It may take a long time, but it is the way to complete control. (something they would have had anyway if they could have decoupled the idea of gold as money)
FOA
(10/07/1999; 08:28:36 MDT - Msg ID: 15747)
(No Subject)
If that "horse with no name" passes me, I'll lose all credibility! I can see it now, my head in a chock in town square with the villagers throwing stones and melons (especially Koan). Don't worry for old FOA, he will just smile through it all. A little later others will spend time on display and I have kept some eggs on the back porch for the occasion. (big smile).
Goldspoon
(10/07/1999; 08:33:19 MDT - Msg ID: 15748)
****FOA............Hippleback...******.
FOA is very close to this thing...Another is on the inside..
Listen to the man....yes, as i've said before USA won't go down without a fight and has known about this slow evolving process.... a deal may already have been struck as to how the USA will play their hand and the outcome assured.... Remember, the financial ties to the UK the US has....

FOA may know what the compromise the US and Europe have come to agree upon.... lets ask him....FOA?
FOA
(10/07/1999; 08:38:17 MDT - Msg ID: 15749)
Comment
Hello Hipplebeck,
Each of us will follow our spirit as this unfolds. If you hold gold in your hand, count it as one ounce they will not posses. Come what may, their contracts are only good if someone delivers gold against them. In like view, Libya never delivered oil to the Hunts. Even though the Texas boys had a contract for it. We shall see! FOA
Hipplebeck
(10/07/1999; 08:42:20 MDT - Msg ID: 15750)
FOA,
What if they offer you $30,000 for an ounce? Will they then get your gold? They will get mine.
FOA
(10/07/1999; 08:47:31 MDT - Msg ID: 15751)
(No Subject)
Goldspoon (10/07/99; 08:33:19MDT - Msg ID:15748)
****FOA............Hippleback...******.
FOA is very close to this thing...Another is on the inside..

Goldspoon,
I'm just a dog on an Alaska sled team. Look closely and you'll see me close to the back. I'm so small that my barking is all most people notice. The "big huskies" are up front, in the lead. As such I am Truly "on the road",,,,"in the footsteps of giants"!

Can say no more.......FOA
Goldspoon
(10/07/1999; 08:49:49 MDT - Msg ID: 15752)
Hippleback... think just a minute....
Which will be of more value at that time? $30,000 or 30,000 peices of tolit paper... answer that and you've answered your question...Gold will be dollars... not the paper dollars we think of now...
RossL
(10/07/1999; 08:53:20 MDT - Msg ID: 15753)
Dollar monetary crisis
Will the USA go down without a fight? Who is "the USA" ? Is it mom and pop on Main Street or Greenspan and Wall Street? I agree with some of what is said in the Batra-Taylor interview, and I disagree with some of it too. Batra calls "crony capitalism" as going down, and I will be glad to see that. I believe "crony capitalism" is a misnomer, as it is really a political system that has been corrupted my fiat money. I believe mom and pop on Main Street will survive as they always have.
FOA
(10/07/1999; 08:53:37 MDT - Msg ID: 15754)
(No Subject)
Hipplebeck (10/07/99; 08:42:20MDT - Msg ID:15750)
FOA,
What if they offer you $30,000 for an ounce? Will they then get your gold? They will get mine.


Hipplebeck,
You will do this because of your great wealth. Myself? As a poor man, I can afford either gold or currency. A dollar will always be as affordable as one dollar's worth of gold! Yes?

Thank you all,,,,,,,,,,,,,,must go now FOA
Goldspoon
(10/07/1999; 08:55:04 MDT - Msg ID: 15755)
FOA.....
OK..i get ya..(wink) {;-)
Hipplebeck
(10/07/1999; 08:55:45 MDT - Msg ID: 15756)
Goldspoon
What's the point of having real money if you never spend it?
When gold reaches a high enough level, I will sell it and pay off my house. I may never sell it all, but for everyone there will reach a price.
Goldspoon
(10/07/1999; 09:05:34 MDT - Msg ID: 15757)
Hippleback
Understood....(me too) just don't sell before the dollar is as toilet paper.... or you may have sold to soon...that was what i was trying to say...love ya man...
Cavan Man
(10/07/1999; 09:24:38 MDT - Msg ID: 15758)
FOA
Darn. I missed you. Cavan Man here. I am not interested in "timing" but, time frame or range of time would be helpful. Thanks.
USAGOLD
(10/07/1999; 09:33:03 MDT - Msg ID: 15759)
Today's Market Report: London Dealer -- "There Are Rumours about People in Trouble."
MARKET REPORT (10/7/99): Day Nine of the Big Breakout....Gold came back nicely
at session end yesterday after retreating in the early going -- a good sign.....In today's early
going, the yellow metal tracks sideways......Difficulties with the hedge books at Canada's
Cambior Mines and Ghana's Ashanti Goldfields fed the rally off lows yesterday. Cambior
has sold in the form of forwards and calls double its production for 1999. Ashanti defaulted
on its forward positions unable to make the margin calls. Both are in trouble because they
laid heavy bets that the gold market would continue to fall. Both were wrong. Both watch
as the value of their shares plummets and gold stubbornly clings to the $325
range................... The difficulties at these two companies could be signaling problems
with hedge books all over the mining industry. It will be interesting to see how the bullion
banks respond. Can they assume the risk and/or bail out a good chunk of the industry?
Would they?.................... Reuters reports that Fiji's Emperor Mines Ltd is also in hedge
book trouble...............Lease rates are tracking down indicating either a pause in leasing
demand or new supply. Where's the gold coming from?:..........................Some
interesting insights from this morning London Reuters report on the gold market: "While
many remained delighted by gold's reversal of fortune, some in the bullion banking,
mining, fund investment and fabricating sectors were counting the cost of having been
resolutely bearish on gold's prospects. 'There are rumours about people in trouble. The
market's quiet out of fear and that's fear about jobs rather than the price,' said a London
dealer. 'People could easily turn around and say 'Why are we in this game?' he added in
reference to bullion operations. Bullion desks represent boutique business worth hundreds
of millions of dollars to banks versus the billions at stake in debt, foreign exchange and
equities operations."......................Bridge News is giving the last of the gold bears,
Andy Smith, full play today. Says Smith: "The recent euphoria in the gold market cannot
mask the underlying erosion of gold's role in official reserve portfolio management,
according to a presentation prepared for the Nikkei Gold Conference by Andy Smith,
analyst at Mitsui Bussan Commodities. The paper, titled "The Fall of the Golden Wall",
argues the philosophy behind holding gold, is doomed, like the Berlin wall, to collapse
"under the weight of its own contradictions.".........Speaking of contradictions, perhaps
Andy Smith has not had time to read the joint declaration signed by 15 central banks on
September 26, 1999 in which they insisted that gold does play a significant role in the
international monetary system. And far from being doomed, investors around the world are
adding gold to their individual portfolios at a record rate.............By the way, the only
Berlin Wall I have seen with respect to the gold price (and an apt analogy) is the one erected
by the bullion banks to keep the financial world from discovering what is now becoming all
too clear in this past week's revelations with respect to the mining industry. Talking gold
down with the threat of central bank gold sales was a necessary ingredient in keeping the
gold carry trade from imploding. Now the European central banks in one fell swoop have
eliminated those sales and leases as a deterrent to higher prices, ignited worldwide physical
demand and threatened the massive short position built up over the past several
years................Gold has responded with a nearly $75 increase in value from 20 year
lows as many short the market have scrambled to cover..............That's it for now, fellow
goldmeisters. Have a good day. MK

The October edition of News & Views will be ready early next week and we invite all
our visitors to take advantage of a free trial subscription to one of the most popular, widely
read and quoted gold newsletters. Last month we predicted an explosion in the gold price.
This month we deal with the nettlesome subject of paper assets in this tenth month of the
penultimate year. And we all know what that means. October brings with it our annual
Halloween issue. Here's an excerpt: "And this October could very well foreshadow a most
fateful stroke of midnight only two months away. October. When markets crash and assets
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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.
Journeyman
(10/07/1999; 09:35:01 MDT - Msg ID: 15760)
Swiss Gold Riots -- Judas! (Economy, that is)
Just ran across the following two news items from January 14,1998 (about 1.75 years ago) while looking at some old links.They've taken on new meaning for me since I've been followingthis forum. The items were on the same "page" but separated byseveral other items in between: 'The Judas Economy' ... Recent events in Switzerland point to its currency, the lastpegged to gold, as about to become unchained. An article in NewAmerican magazine suggests that lurking behind recent outrageover Jewish Holocaust-era gold hidden in Swiss banks is a subtleplan." "The mass media manipulators have not suddenly becomeconscience stricken about victims of the Holocaust, horrible asthat was. Rather, it is a cloak for undermining Swissindependence. The Swiss franc stands as the last impediment tothe worldwide debauching of currencies now in progress. The Swissmoney, at present, is a roadblock to the planned world bankingmonopoly. The master plan, now in high gear, is "theestablishment of a "world" central bank which could create acommon paper money for all nations and then require them toinflate together at the same rate." The Judas Economy," is thetitle of a book just published by an editor at Business Weekmagazine. [Actually that Business Week editor is CNBC "ChiefCommentator" Bill Wollman. -Journeyman] The global corporationsprofit from the labor of the producers they employ, but ratherthan reward these workers for their contribution to corporatewealth, the corporations throw them out in the street and hirecheaper-costing Third World employees." 'Riots' Riots in Indonesia, riots in Switzerland. ("In Switzerland, wherefive banks have already gone bankrupt over the past three months,people have begun converging on supermarkets, pharmacies andhardware stores, buying up canned food, medicines, bottled waterand other necessities. There has been rioting in Bern andGeneva." Weekly World News. Near-riots in France. And this iswith the "good economy." What happens when the "bad economy"arrives? ... -Jan. 14, 1998Regards, Journeyman
Broken Oak
(10/07/1999; 09:56:13 MDT - Msg ID: 15761)
Hipplebeck
At a certain point people will not sell their gold until they know the upper band of trading. They want to maximize their take in the market vis a vis their dollar denominated obligations. They will wait so as to trade as little gold as possible to settle the debts or to maximize the purchases of performing assets (such as businesses which pay a good dividend, etc).

When we think that $xxx price is high enough to sell then we must also compare this with the entire context and situation. Right now you think that you would easily sell your gold for $10,000 per ounce. Possibly not at that time though.
ORO
(10/07/1999; 09:56:59 MDT - Msg ID: 15762)
Reposts + Mozel
Date: Thu Oct 07 1999 06:54
ORO (@Mozel - bankers-oil pricing) ID#71231:
Copyright � 1999 ORO/Kitco Inc. All rights reserved
The banking system would more likely be protected by Fed issued $ settled calls that will not supply gold, but may very well protect the balance sheet. The gold will be extracted one way or another from the hapless depositors in $ settlement, and from the hedged miners through bankruptcy proceedings- whether chap 11 or 13. The rest will be either leaked from the IMF, Fort Knox ( if it is still there ) , or from increased production at much higher prices. The Fed giveaway of options would cool down the urgency of demand, while lowering the concern of the BBs for the price reached if they bid for the gold to fulfill their obligations.

The Arab oil and gold pricing issue comes out to their putting away a certain ammount of gold in proportion to the price - they value the oil at say 200 bbl/oz ( see old calculation ) so at $20 oil, they have to buy 0.005 oz of $400/oz gold per barrel or $2 - leaving $18 for whatever they need for current consumption. In this way they have the irreplaceability value of oil restored to them ( just as the gold was irreplaceable-can't be mined again ) . If US oil production to replace all imported oil is possible only above $30/bbl ( I think the actual figure was $40 for coal conversion, and $30 for tar sands and shale ) , that brings the associated gold price to $6000/oz - one of the magic numbers we bandy about.
This issue is also the issue of short term vs long term pricing. Say the cost of oil extraction is $2 for the first bbl, $10 for the median bbl and $200 for the last 10%. How should oil be priced? or say Arab oil can be extracted at $2/bbl, the next level is Venezuelan oil at $5/bbl and then north sea and gulf of Mexico oil at $11/bbl. But oil's value for convenient use ( before people start sitting in cold houses and commuting 5 per car and bus lines get reestablished ) is at $60/bbl. How then should oil be priced? If all the Saudi $2 oil is consumed at $2 + a bit, what do they get to keep from the world's consumption of their patrimony? nothing? what would the world do with $2 oil? use 2 gal/mile cast lead convertibles with 20000000 cc engines and built in spas - fly helicopters to school? It would be wasted big time. No one would enjoy the greatest use from oil, then the world would be shocked when that oil was gone. If the world would price oil at a reasonable utility value, then the oil may be used efficiently.
The Arab reasoning would have been the irreplaceability issue. If they are letting go of one irreplaceable thing of concrete value, then they would need to replace it with an equally irreplaceable item at the proportion of rarity.

PS Thanks for replying yesterday, didn't have time to reply

Date: Thu Oct 07 1999 05:27
mozel (@Thoughts From Mozelland @RB) ID#153110:
Copyright � 1999 mozel/Kitco Inc. All rights reserved
What is the relationship between paper gold discounted to $6,000 per ounce and the exchange value of an ounce of gold in hand ?
None.
The first is a creditworthiness of the promise valuation. The second is not.
**********
A theory of the FOA & A Team is that the greenback "market" for gold must fail. Because there are more promises for gold delivery than can be delivered upon. Hmm. Well, let's look at it. First from the miner problem.
The Ashanti trouble is the kind of trouble farmers have gotten into when the farms finances don't look good to the banker on paper. Even if the farm is making money and the payments are up to date, if the collateral valuation falls below the loan exposure, the banker will foreclose. For the option writing miner the problem is not delivery of gold on the option, at the moment anyway, the problem is that volatility of the option price, which is his liability from the banker's on paper view of things, puts the miner's balance sheet underwater. Well, as was seen in the case of Ashanti, if the banker carries the miner's option price volatility liability, things go on. And if the Federal Reserve allows the banker to do so, things go on swimmingly so long as the miner has the gold in the ground and can mine and deliver the gold.
In the case of miners who have written options beyond their resources or reserves, it's curtains. The Big "B" as in Bankruptcy and Bre-X. Is that the end of the gold market in greenbacks ?
I don't see it yet. Maybe I'm not seeing something, but the gold market in greenbacks is, compared to say, the budget for Medicare, a mini-market. I just can't stop hearing those words of Greaseman in my head about how every two or three generations the taxpayers have to bail out the banking system. Because when you analyze the flow of consequneces from the gold loan debacle, they always end up back at the banking system, which as we all should know, was made Federal Reserve System, a.k.a. Lender of Last Resort, for just this sort of debacle.

The banking system can defend itself. It can simply make a rule that the liability for delivery of gold will be a ) reported off balance sheet b ) reported at the original option valuation when issued. Or something even more creative. It doesn't matter then if gold goes to Big Number. The banking system has immunized itself.

Another exposure is through hedge funds that are short gold. Hmm. Well, who have the lenders been ? We are told 50% are private parties, like uptick's clients. Ooops. Lender's risk. The other 50%, the European central banks, have announced their five year work out plan. So, they get whole.

Well, won't these defaults sap liquidity from the system ? Yes, but won't a rise in the greenback exchange rate for gold add it back ?

Maybe, the IMF and the IMF greenback are toast. It wouldn't surprise me. But the USA is a different corporate going concern in bankruptcy altogether.

The only thing to hang your hat on at the moment is that unit of account in .0whatever ( where is SDRer ? ) grams of gold in the euro, which if there is no legal tender 100 euro coin doesn't mean a whole lot except at international transaction settlement time.

In gold terms, the Arabs have oil overpriced. It takes a whole lot more work to get gold out of Mother Nature than to get oil. The last time the Arabs OPECed the world ( and created HIPC of the oil poor who had to have greenbacks to get any oil ) , the problem soon became how to recyle "petro dollars" into productive use. Demand for oil is elastic. Maybe this time somebody will realize the better solution is really, really to increase gold production. Like with tax and enviro exemptions instead of punitive taxation and regulation of gold production.
People say $600 per oz. is the equilibrium greenback exchange rate for gold. Where do they get that figure ? It's not high enough to attract a rush of investment funds. But, it's too high for the Indian jewelry market. I don't think anybody has a clue about what a new international monetary agreement will finally be.
Orca
(10/07/1999; 09:59:09 MDT - Msg ID: 15763)
(No Subject)
The Economist .. Peter Drucker says it all I first encountered Peter Drucker about 30 years ago as a new manager learning my profession. He was profound to me then... and he still has sage advise for those willing to listen. In the last edition of The Economist, Mr. Drucker puts forward a very good dialogue on the central bankers and their management or mismanagement of currencies et al.... I would encourage those who have an interest in this aspect of monetary systems to read it as it is most enlightening. The date of this issue is September 25.

I want to take one small part of Mr. Druckers piece and relay it to all... (very prophetic given the events of the last two weeks in the gold trade). From Druckers piece.....

"Every financial-services firm has to do some trading for its own account. It is a routine part of managing the firm's own finances and is aimed at minimizing risk. e.g., by bridging gaps between the maturity dates of what the firm owes and what is being owed. Beyond this a certain amount of trading for the firm's own account can and should be profitable with minimal risk; it exploits the firm's knowledge of the markets. But when trading becomes a big activity, it ceases to be 'trading' and has become 'gambling'. And no matter how clever the gambler, the laws of probability guarantee that he will eventually lose all he has gained, and then a good deal more.

This is already happening to the leading financial-services firms. Almost every big firm has now reported substantial 'trading losses'. In several cases the losses have been so heavy as to kill the firm. One example is Barings, the world's oldest and most respected London private bank; what is left is now owned by a Dutch financial group. Similar trading losses forced New York's Bankers Trust - not so long ago one of the most respected international banks - to sell itself to Germany's Deutsche Bank. Several Japanese financial giants survived their trading losses (e.g. Sumitomo speculating in copper) only because Japan Inc came to their rescue. But even Japan Inc could not save Yamaichi, one of the largest Tokyo stockbrokers, from losses it incurred by trading in property for its own account.

In every single one of these trading losses, the firm's top management has claimed that it knew nothing of the gambles, and that the gambling trader violated the firm's rules. But in the first place there is a limit to coincidences. Such widespread breakdowns cannot be blamed on 'exceptions'. They denote systems failure. But also, in every single on of these 'scandals', top management seems carefully to have looked the other way as long as the trader produced profits (or at least pretended to produce them). Until the losses could no longer be hidden, the gambling trader was a hero and showered with money."

Mr. Drucker in a related article describes the bubble in which Mr. Greenspan now finds himself trapped.

Read it if you can. Those that have been gambling in the gold trade will now realize the wrath the markets are about to inflict.

A most fascinating and timely set of articles. Thank you Mr. Drucker where ever you are.
PH in LA
(10/07/1999; 10:19:40 MDT - Msg ID: 15764)
The Wealth of Nations




"It restores the best aspects of the gold standard in trade and in the settlement of debt, but it will enslave the countries that do not have their own gold and are net debtors." ORO (10/06/99; 23:44:47MDT - Msg ID:15721)

The element we know as gold, while more plentiful and therefore easier to extract in some locations than in others, can be found virtually anyplace on earth. In this sense, it is a more equitable basis for use as "the wealth of nations" than oil, which really is specific to some nations over others. The fact that gold is easier to extract in some places than others is like human survival itself... Much easier (allowing for more leisure) is some places on earth than in others. At the same time, each place on earth has its own advantages over all others, and the expoitation of this through human effort is what holds humanity ever more and more together. Yes, we will have a "one world" currency. We have always had one: Gold! The "Wealth of Nations".

PS. Fantastic discussion last night and this morning! Thanks FOA, SteveH, ORO, Mozel, and all who contributed. Just by reading we all find ourselves "In the Footsteps of Giants".
Journeyman
(10/07/1999; 10:23:46 MDT - Msg ID: 15765)
Greenspan on TIMEing
Several posters, particularly Elevator_Guy, are concerned withtiming, trying to get the last little bit of advantage before theprognosticated financial armageddon. Well, good luck, but youmight want to heed Alan Greenspan:

"As I testified before this committee in the midst of the Mexicanfinancial crisis in early 1995, major advances in technology haveengendered a highly efficient and increasingly sophisticatedinternational financial system. ...But that same efficientfinancial system, as I also pointed out in that earliertestimony, has the capability to rapidly transmit theconsequences of errors of judgement in private investments andpublic policies to all corners of the world at historicallyunprecedented speeds." -Alan Greenspan to House BankingCommittee, 16 September, 1998

Here are a few examples of some of the "historicallyunprecedented speeds" Mr. Greenspan may have had in mind:

- The DOW transportation average jumped 75 points, about 7%, inabout half an hour starting about 12:30, a "startling move,"apparently in response to news that Northwest Airlines wasincreasing fares. -Bob Pisani, CNBC, 29 Jan 1999

- The South Korean Won has depreciated 40% in the last four days,down 10% in the first three minutes of trade last night... and itis predicted that the won will likely drop another ten percent,the limit, again tonight. -CNBC, December 11, 1997

- The dollar at its low was down 11 yen, at 120.3 yen per dollarfrom 132 yen per dollar yesterday. This is better than an 8% dropin the dollar, the bulk of this happening in about three minutesin the middle of the night. This is an "astounding drop" in theworld's largest currency. -MSNBC etc., 7 October, 1998 -"This isthe biggest one day dollar drop in 25 years." -Kathy Jones,Prudential Securities, 7 October, 1998

Regards,
Journeyman
ORO
(10/07/1999; 10:41:22 MDT - Msg ID: 15766)
Reposts - monetary thread
Date: Thu Oct 07 1999 04:33
ORO (@Eldo @Cap Kirk) ID#71231:
Copyright � 1999 ORO All rights reserved
The fixed thing is a distortion, it is not the pure barter money system.

Captain Kirk - The printed paper/electro money relies for its value on legal tender laws. These are a form of enslavement through the force of a gun at your back if you refuse to get payed in it. The second element is unrelenting indebtedness through taxation or bank loans ( expanding money supply so that savings are impossible and the only way to buy something of value for most of us is to burden ourselves in debt ) . Also the value of slavery money is extracted from us through the collections departments of police and private repo-men. The enforcement of debt repayment is ultimately a govie function. Once indebted, one allways returns MORE than was given. The government has softened the support for the creditor through limited liability laws and bankruptcy proceedings that end in our being debt free. But the basic issue is still there - there would be no demand for paper money if we did not borrow it, have to pay taxes in it, or just plain forced to take it.
So, though undefined, the fiat has a value as both cash and debt settlement media. The cash value is derived from your enslavement, the debt settlement demand is something that the real effects of the existence of fiat forces on you.
Also, the govie supports the fractional reserve banking system by not forcing banks to disclose that they are insolvent by definition. i.e. they are banks because they tell you you have your money as they lend it to someone else who pays it to you in return for, say, your cake. Thus they have your money, and your cake was payed for with your own money. In reality, you still have your money in hand, but you have lost your cake in return for a promise.
I would prefer a fund structure, where you know you are buying and selling securities, and the money you deposit in an account is yours and the bank can't lend it.

Date: Thu Oct 07 1999 04:33
Captain_Kirk (Nicodemus@sheeple) ID#339203:
Copyright � 1999 Captain_Kirk/Kitco Inc. All rights reserved

You make a good point, and the present dollar scheme must have a semblance of order for it to work at all, and to a certain degree it is working. Of course when you build a 100 foot tall dam which will only hold 50 feet of water but not 100 feet, you can go along quite nicely with your 50 feet of dry season water. After a long dry spell, maybe even for years or generations, you get to believing your dam would hold the 100 feet just like the builders told you it would, but you have never tried the dam at 100 feet. Of course, when the 100 year flood hits, the lake fills to the 100 foot level and the dam busts. Everybody downstream is killed, and the original builders are gone. Who are you going to blame? Just yourself, for not checking out the dam before you decided to build in the flood plain below it. Now was it the water that killed you or the dam that killed you, that is the question? Likewise, will it be the financial chaos that bleeds you dry, or will it be the defective money system that bleeds you dry, that is also THE question?

Date: Thu Oct 07 1999 04:14
Captain_Kirk (ORO@grabbers) ID#339203:
Copyright � 1999 Captain_Kirk/Kitco Inc. All rights reserved


Sad but true, what you say, it does seem. The bankers' commodity is his dollars, and if no one takes his dollars, he still has a bunch of grabbed gold. One small group of people possessing large bunches of gold is no problem for the free market. The build themselves a bunch of castles, but they PAY OUT THE GOLD, putting it into circulation, which keeps the money function of gold operational. Or they sit on it, and commerce happens with the available gold. They can't dump the gold like they can today, because they would have to spend the gold which would not affect the money property. The gold prices of things would not change by very much, the market would adjust. Free market exchange value ( price ) is only established at the moment of exchange, therefore value is only established at the moment of exchange. The gold is not the wealth, money is not the wealth, labor is the wealth. Money is the mechanism for adding efficiency to the exchanges of goods and services. The banker's scheme is a simple mechanism which is used to direct the exchange of wealth according the desires of the banker's. But it is never a free market mechanism, which is the most efficient mechanism available, but most often it is a mechanism which misdirects exchanges so that the efficiency of the wealth producers is retarded. Using our present scheme is just plain retarded. No sane man could accept such a plan, if he undersood what was going on.

So it is not the fact that the bankers have a bunch of gold which is bad for the markets, it is the fact that they have the dollar scheme which is bad for the markets.

Date: Thu Oct 07 1999 04:11
auger (Eldorado) ID#264134:
Copyright � 1999 auger/Kitco Inc. All rights reserved
Your 3:27 & 3:29, We are definitely on the same side here. I agree that the main problem of the hard backed currency right now is volume and I think additionally ( incredibly ) acceptance.
The Bimetalic standard just made it easier for the common person to engage in some of the manipulation for his own benefit ( much fairer ) . Some time in the 1900 to 1910's there was a money panic, as I understand just not enough to go around. Those that had it ( very few ) basicly had a monopoly on the money and most people suffered economicly regardless of the skills or productive ability they possessed. This is the type of manipulation to which I was refering, and it can happen with a single metal backed currency. Of course the timing of the money panic seemed to set the stage for the introduction of the federal reserve act in 1913. Tah Daa WE will solve all your problems, trust US! Today, it looks like the cure was worse than the disease. The pendulum of history ( repetition ) swings back and forth through time. As for me, I looking for some honest money. Even if it can be manipulated, it has to be done through a marketplace rather than government back room, good ole boy, backscratchin, bribe takin, etc overseers. I suppose the greed is the same ( gov vs market ) but the market has to be honest about it.

Date: Thu Oct 07 1999 04:08
Eldorado (@the scene) ID#226299:
If you want to use paper currency, fine. Just imbed a grain of gold in it and call the paper 'One Gold Grain', or 'One Silver Grain'. Whatever. Keep the 'Bravo Sierra' away from it!
Date: Thu Oct 07 1999 03:58
Eldorado (@the scene) ID#226299:
Captain kirk -- The dollar is a 'contrivance'. A supposedly fixed one at that, in that time. Who needs it but the money changers? Screw it! Go gold; Go silver; And nevermind the supposed 'certificates'!

Date: Thu Oct 07 1999 03:54
Eldorado (@the scene) ID#226299:
Captain Kirk -- Let me add that you cannot get an exchange through medium ( gold/silver ) if that medium has for some reason gotten TOO expensive/valuable to use. It then is not a 'medium of exchange', but a 'rare painting'! That happens when a so-called 'fixed value' is put upon it. That has happened in this country in the past. that can easily be avoided.

Date: Thu Oct 07 1999 03:54
Stone-Gold (@Thin) ID#274315:
What I mean is, here we are fixing gold to a currency value, which
isn't fixed to anything. Like Captain_Kirk said, the cart is before the horse. Your foot might be fixed inside the ice-skate, but put that iceskate wrong and you ain't going the way you wanted to go.

Date: Thu Oct 07 1999 03:53
Captain_Kirk (Eldorado@revaluation revamped) ID#339203:
Copyright � 1999 Captain_Kirk/Kitco Inc. All rights reserved

Is the dollar the gold or is the dollar the number. Logical inconsistancy to call a number something, it is just a plain ol number. You can have natural numbers, and fractional numbers, and transcendental numbers, but their definitions are logically consistent within the realm of numbers. You can count some THINGs or you place some THINGs in an order, but you have to have a definition of the THINGs so that the action of counting is reproduceable by a third party. Going around counting angels that only you can see, does not allow for communication and commerce. The problem with the post-1933 dollar is that NOBODY can describe what it is. It can't be a type or class of numbers because, then it can only be defined within the logical mathematical system of numbers. If it is just a word, then to have 5 dollars you have to have the word "dollars" printed 5 times. No, dollars must be defined. And to say that dollars are "value"...., well you see where you end up with that, sorta "out to lunch", were talking psycho ward time here.

Date: Thu Oct 07 1999 03:41
Eldorado (@the scene) ID#226299:
Copyright � 1999 Eldorado/Kitco Inc. All rights reserved
Captain Kirk -- In a general barter scenario, is one of the items fixed ( except in your own mind of course ) ? Think in those terms. You should know that in a world where supplies in everything fluctuate on a daily basis, as well as wants and needs, that NOTHING remains static, and there really is no way to keep a medium of exchange somehow static according to all that. Don't even try! You'll only create congestions in one manner or another. We've seen that crap happen in this country! I think the ONE real thing you want to see in a common medium of exchange is that it is NOT necessarily important to hoard, as it is no more important or valuable than anything else on the market. Thus, except for perhaps savings in one form or another, why keep it?
Right now, many of us see a particular value in 'hoarding' or keeping metals because of all the pitfalls of paper and what it will undoubtedly be undergoing. It only makes sense. But in a 'real' world, we would treat it as we have done with paper; spend what we need to and save a slice for a rainy day and retirement.
Boats float, and so should everything else!

Date: Thu Oct 07 1999 03:37
ORO (@Captain Kirk - demize of the grabbers) ID#71231:
Copyright � 1999 ORO/Kitco Inc. All rights reserved
Once the $ goes back to its spiralling decline, halted by the institution of a debt trap for the US, then the future chaos in the $ world will find the grabbers with empty hands as 99% taxes on miners start in SAf, SAm, and anywhere else.
Without the artificial $ strength, the US soon looses all its' strengths - first the liquidity of its banking, then credit from the world, then its economic prestige, then cheap oil to transport goods over its sprawl, then loose attractiveness to high tech immigrants both old and new, these will return home to build new silicon valleys compeeting with ours, then we loose credibility, then the high tech military edge and the ability to field a large army alltogether.
It just all blows away.....

Date: Thu Oct 07 1999 03:29
Captain_Kirk (Eldorado@revaluation, or devoid of value.) ID#339203:
Copyright � 1999 Captain_Kirk/Kitco Inc. All rights reserved
Fixed revaluation is one thing, floating revaluation is something else entirely. You see the fiction here? My dollars are somehow based on this here gold I have, because I have a fixed value of dollars for a fixed amount of gold. This is where the cart got put before the horse. First you had the note which was a note for a fixed weight of the gold, then you had the gold which was the gold for a fixed number on the note. It sorta works out in peoples minds because, well, something is FIXED, which somehow fixes value. But if nothing is fixed then either the special numbers and special papers are the money, or the gold is the money, but not both, cause we need something FIXED. Now, if the special numbers/paper is the money, then why do you need the gold, and more importantly, why do you DESERVE the gold? They ain't going to be able to answer that question. This is why ANOTHER don't make no sense to me. He is just some old man with dreams of having all the GOLD in the world. Hell, we all have dreams, but it ain't going to happen the way we dream, don't you see.
Date: Thu Oct 07 1999 03:29
Eldorado (@the scene) ID#226299:
ORO -- Not that they have no value, but they have no volume. That's a BIG key in a common currency!

Date: Thu Oct 07 1999 03:27
Eldorado (@the scene) ID#226299:
auger -- As you will notice, it was the price ratio fix between gold and silver that caused the problem. Thus, let the suckers float. End of problem...


Date: Thu Oct 07 1999 03:24
ORO (@Eldorado- El debto is there with full Louis Viton Luggage) ID#71231:
The debt is allready there. It is ready to drive repricing in all shiny metals. Industry will just have to learn to deal with it. The slightest surge in investment or Jewelry demand will send the prices moonwards. The plad, plat, rhodium, iridium have all the properties of gold save maleability for some, they are mostly more rare, and have industrial uses besides, and free markets to boot - with no govie stock overhang to mess things up with. They have allways traded at or above gold prices, which will serve as a floor even if gold skyrockets above them initially.
Whaddaya say

Date: Thu Oct 07 1999 03:13
Captain_Kirk (ORO) ID#339203:
Copyright � 1999 Captain_Kirk/Kitco Inc. All rights reserved

Quick scan of your Another monetary system post. Much food for thought. Will ponder more tomorrow.

I have read most all of Anothers stuff. I prefer my directed linear approach where fraud is fraud, and ownership of private property is respected. Gold is just a form of property. Today, the gold grabber bunch who wish to be Kings of the world, are pushing for ALL the gold, even the gold in the ground. Maybe even the word "Gold". Pretty clear open and shut scam, this gold grabbing scam. Today, gold is the money, and people have always wanted to get their hands on all the money. There is nothing new under the sun, just different shades of grey excuses for common thievery.

Date: Thu Oct 07 1999 03:12
Eldorado (@the scene) ID#226299:
Copyright � 1999 Eldorado/Kitco Inc. All rights reserved
ORO -- Platinum and paladium are about totally used in industry. I don't see them playing a role in monetary affairs anymore than 'barter'. Silver, on the other hand, is, or can be, plentiful enough to make for common currency to a large extent, even though it too is an industrial metal. The key is that their 'price' is not controlled; that their own value may fluctuate amongst everything else out there. Only then do you have a free market, and given that, actually anything can be used as a medium of exchange, but as you know, it is the most common and most familiar across the world that makes a 'medium of exchange'. Gold and silver have respectively and respectfully filled that bill. Perhaps someday, something else can/will come to the fore, but it MUST do so without 'debt' attached!

Date: Thu Oct 07 1999 03:01
ORO (@Eldo - the Scrip) ID#71231:
If govies do not give up the scrip, there will be a new "gold bubble".

Can you see any other way?
I think silver plat and plad will figure into this sceme in some odd way too. I think they are going to be future sources of chaos.
Date: Thu Oct 07 1999 03:00
Eldorado (@the scene) ID#226299:
THC -- Grains!

Captain Kirk -- They've 'revalued' it before, and I think they want it to rise to the point that not only makes it 'logistically' possible to do it again but absolutely mandatory that they do. Times have changed and we are now at the VERY beginning of that transition. It'll easily blow up on 'em if they aren't VERY careful! Got physical???

Date: Thu Oct 07 1999 02:52
Eldorado (@the scene) ID#226299:
ORO -- The control of money/currency is seemingly power. That is ONE thing they will NOT easily concede

Date: Thu Oct 07 1999 02:50
Captain_Kirk (libett@revalue USA gold) ID#339203:
Copyright � 1999 Captain_Kirk/Kitco Inc. All rights reserved

This revalue thing is a key thing, which must be studied. We need comment from mozel, ORO, and others on this very important possibility. There could be far-reaching legal law basis import to any USA treasury revaluation. How can IMF revalue and not USA/FED revalue and visa versa? Which gold is the USA treasury's, and which gold is the FEDs, published disinformation figures, are one thing, actual ownership another. My sense is that if USA treasury gold is revalued, the legal fiction USA corporation mother will crumble and fall. The cat will have jumped the bag, and there will be no turning back. Even the color of law form for post-1933 dollars will crumble, thereby exposing them for the actual fraud they are. Or is my information faulty?

Date: Thu Oct 07 1999 02:48
ORO (@Eldorado) ID#71231:
Yes indeed.
If govies were just willing to let go of the concept of currency and let it die off completely, we could have free markets.
Note that the ANOTHER scheme causes gold immobilization in the hands that have it as long as govies insist on having the power to print their multiple zero scrip ( a.k.a. slavery money ) .

Date: Thu Oct 07 1999 02:05
ORO (The ANOTHER monetary system) ID#71231:
Copyright � 1999 ORO/Kitco Inc. All rights reserved
The form of ANOTHER's expression is appropriate to a Saudi official. It is very consistent with someone with a very heavy interest in the relative value of gold being as high as possible. ANOTHER's currency system is being put in place as "revaluation" ( by the IMF ) of gold, and its' marking to market ( in the ECB ) proceed to increase its value as a reserve asset, even if not a penny of interest can be gained.
The thing most of us miss most of the time, is that the simple fact that everybody's interests, save the governing class in the US, are stacked up towards this new format for floating currencies and gold reserves. It puts everybody on an equal footing and opens the possibility of a level playing field for both banking and trade. It also eliminates the segnorage of the US in printing the world's medium of trade and debt settlement and has a chance of revaluing the debt of the EMs into insignificance - freeing them from the trap the US bankers sprung on them. ( see Mozel post ) One more issue is that the gold accumulated in Europe, Asia, and Arabia through trade, and in the US through payments for services in war is given its original weight as the representation of a whole nations' past financial achievements. ( again a good Mozel point )
The US elite is very much like the elite of Johnstown before the flood, enjoying the night in a cocktail party as the engineer tells them of the near certainty of the collapse of the dam if the storm outside continues, and even if it stops. As the custodians of the dam run for their lives, having seen water coming through the cracks, the elite continue talking of the new library they will have built, the wives talking of the benefits to the poor, the husbands organizing their conspiracy to rig the bidding. Notice that even the engineer, convinced of the impending disaster and its ramifications - including the high probability of his own death - still comes to the party. ( This account is partly fictional - so take no offense )
The working mechanism of the new currency system ANOTHER foresees and is involved in implementing is very straightforward, though only somewhat less fictional than what we have today. It just happens to artificially favor gold.
The manner of strengthening a currency is the main difference from the current system. Each country, and the IMF as well, strengthens its currency by bidding for gold within its borders. As the price of gold increases locally, the backing of the currency has both increased in quantity and in price - and therefore in percentage of backing. Other countries respond according to their need for a stronger or weaker currency for domestic or international political or economic purposes. Through the importation of gold, there is something gained for a net exporter. Through the import of goods, one's currency is necessarilly weakened as it is eventually used to buy gold by the exporter, strengthening their currency relative to the importer. It restores the best aspects of the gold standard in trade and in the settlement of debt, but it will enslave the countries that do not have their own gold and are net debtors. Countries that are US creditors but have no gold will be left with whatever the gold value of the $ would be relative to the Euro, SF and other major currencies.
The gold price in this system has no cap. All have a vested interest in keeping the gold price high. In the meantime, the gold miners will be taxed at incredible rates and gold holders will be picked at as the capital gains taxes on their gold sales are raised over and over. Initially, there would be a strong push to have the gold holders spend the money unhindered, to jump start a shocked economy. After the initial spring time for the gold owners, there would be the atmosphere of growing taxation of gold profits ( inducing people not to spend their gold ) .
Monetary policy would ammount to the throwing of unbacked paper into the market, which would cause the decline of the currency and a surge of exports. The exports will garner a large chunk of gold coming in, and would either displace the currency ( if gold is not bought to increase its backing ) or will be used by the governmnet to support the currency.
Contrast this with the current system, where one needs to devalue the $ in order to strengthen one's currency, by throwing $ into the market and buying one's own. Thus the $ gained in trade are lost in defense of a currency in what is a sure defeat if you are a debtor nation - the US Fed/banks can invent as many $ as are necessary to borrow your own currency from your banks and dump it on the market. As you raise your interest rates, your economy grinds to a halt and as you supply more of your currency to your creditors as a result of higher interest rates, you are either more in debt, or the funds fall into the market where they eventually lower the value of your currency. If this attack on your currency was accompanied by a rush of hot money out of your financial markets, your economy would be destroyed. Your $ denominated paper would be defaulted, and your debts rem
elevator guy
(10/07/1999; 10:55:12 MDT - Msg ID: 15767)
Thanks for your input, Journeyman!
I'm just a little guy, who is just now climbing out of the financial ignorance of my upbringing.
I risked a little discretionary income, and now have a small wad with which to re-invest in things that will go up!
Without this forum, and a few others like it, I never would have been alerted to this opportunity.
Obviously, real gold is where its at. Looks like the dollar will never be the same.
Please forgive my feverish exuberance, as I try to time my exit from options with the greatest advantage.
We sold the Dec 270s, and the Feb 270s, because as the price of the option goes up, it becomes increasingly illiquid. Didn't want to be left with paper, with no buyers.
(Did I get that right?)
Our objectives now are-
Store earned value of wealth in a form that cannot be manipulated, or corrupted, ie; accumulate physical gold.
Gold stocks, silver stocks, go long.
Short the DOW, as the dollar burns.
Thank you everyone for sharing your thoughts.
ORO
(10/07/1999; 10:57:03 MDT - Msg ID: 15768)
Internets
Internet index soaring you might think they were gold stocks...
Great rejoicing over Yahoo's managing to "surprise" the street in generating the few pennies of profits that will make for a next year PE of 250 - 300.
Great investments at the end of the 20th century.
Stock goes bonkers after going bonkers in expectation of going bonkers...

Belinda
(10/07/1999; 11:35:43 MDT - Msg ID: 15769)
gold
http://www.usagold.comdoes anybody know which Gold stocks are not hedged/ sold forward?
JCS
(10/07/1999; 11:42:01 MDT - Msg ID: 15770)
Reply to auger, re money panic in early 1900's
auger, et al

This is an excerpt from an article sent to me and I am trusting in its reliability and historical significance:

"By the end of the 19th Century, American industrialists and bankers, through the Industrial Revolution, had
achieved great wealth. An excellent account of this is Matthew Josephson's 1934 book, entitled "The Robber
Barons: The Great American Capitalists 1861-1901" - (by Matthew Josephson, Harcourt, Brace and Co. New
York, 1934: available secondary market).

The industrialists were known as "Big Business" and the Wall Street bankers as the "Money Trust". The most
prominent of these was banker J.P. Morgan.

It was Morgan, working with the European banking dynasties, who created the "Financial Panic of 1907".
This was an effort to manipulate Congress to approve of a central bank.

In 1912, Woodrow Wilson became President. His chief advisor and administrator was Col. Edward Mandell
House, who was a proponent of world government, a representative of the European banking dynasties, and
had close ties with the Morgan interests.

In 1912, House wrote a book, wherein he laid out a plan to bring America into a world government. ("Philip
Dru: Administrator", by Col Edward Mandell House, 1912; available at General Birch Services, P.O. Box
8040, Appleton, WS 54913-8040). On page 222, he wrote:

"...our Constitution and our laws...are not only obsolete, but even grotesque."

His plan, and, to use his own words, "a conspiracy, " would seek to achieve:
1. The establishment of a central bank;
2. A progressive graduated income tax; and
3. Control of both political parties in the U.S.

What was House's goal? "Socialism as dreamed by Karl Marx". House, who called himself the "unseen
guardian angel" of the Federal Reserve Act, in concert with the Wall Street and European bankers, convinced
President Wilson of the central bank concept.

The Federal Reserve Act was passed on December 23, 1913 (by a vote of 298 to 60 in the House of
Representatives, and 43 to 25 in the Senate).

After the vote, Congressman Charles A. Lindberg, Sr. (father of the famous aviator) told Congress:

"This act establishes the most gigantic trust on earth...When the President signs this act, the invisible
government by the money power, proven to exist by the Money Trust Investigation, will be legalized...The new
law will create inflation whenever the trusts want inflation..."

You will never find them listed in phone directories under "government offices". It is a private corporation
owned by approximately 300 Class A Stockholders. These people own the Fed by owning the stock of the
largest member banks in the New York Federal Reserve Bank, which, for all practical purposes, is the Federal
Reserve.

The controlling interest is held by less than a dozen international bankers, whose names, until recently, was
one of the best-kept secrets of international finance:

1. Rothschild Banks of London & Berlin
2. Lehman Bros. Bank of N.Y.
3. Lazard Bros. Bank of Paris
4. Kuhn, Loeb Bank of N.Y.
5. Israel Moses Sief Banks of Italy
6. Chase Manhattan Bank of N.Y.
7. Warburg Bank of Hamburg & Amsterdam
8. Goldman, Sachs Bank of N.Y.

The most influential of the European interests is the Rothschild family in London. Each of the American
interests is, in various ways, connected to this family, including the Rockefellers, who are by far the most
powerful of the Fed's American stockholders (primarily through the Chase Manhattan Bank).

Thomas Jefferson issued this warning: "If the American people ever allow private banks to control the issue of
currency, first by inflation, then by deflation, the banks and the corporations that will grow up around them
will deprive the people of all property until their children wake up homeless on the continent their fathers conquered."

******************
I sent this article to Bill Murphey and his reply was: "Thanks Claude, That is all part of it, for sure. Bill"

The fact is, the Fed is a private corporation, not affiliated with or controlled by, the United States
Government. The NY Fed is, effectively, the Federal Reserve Central Bank, and it can do whatever it pleases. It has never been audited and only with the help of people like Murphy is there any likelihood of the "real facts" being exposed.
JCS
(10/07/1999; 11:45:51 MDT - Msg ID: 15771)
Re: financial panic article
Sorry for the poor paste job.
Also, its "Murphy" not "Murphey"
watcher
(10/07/1999; 12:53:49 MDT - Msg ID: 15772)
ORO
THANKS for all your work

Could the fed try to settle many gold contracts in off market transactions with the overseas dollars now being bought back and monetized. Also to stop a falling dow could they also not use these monetized dollars to prevent a steep collapse in the markets.I think greenspan was quoted as saying he believes that in stocks that the money goes to money heaven , never to be seen again. In options ,he believes it is a zero sum gain(which I don't completey buy)
With this in mind,When the markets (stock) retreat the money disappears accept those who have options or are short which is a zero sum gain,one winner and one loser.The tranfer of wealth goes to those on the positive side of the option trade . Those who also sold at the top of the downward moving market also benefit but that is just a Function of current pricing and subsequent liquidity at that snapshot in time in the market. If there was all sellers liquidity would be zero and no pricing possible in the extreme. So in this scenerio , the fed adds liquidity and the real place to be is in options as they maintain a semblance of liquidity and then therfore a floor on the market where the place to be again is on the other side of the option trend as the fed buying pushes up the market.
These overseas dollars being monetized then find their way into the bubble allowing the game to continue with the traders making most of the money .
This I thought would be a good way to supply monies to those parties at risk in the trading houses (banks)
without being obvious.
This still might bring inflation but might stop a total collapse in the markets and the dollar.
Does this make sense at all.
ORO
(10/07/1999; 13:17:22 MDT - Msg ID: 15773)
watcher
The Fed has been using the exchange stabilization fund for direct intervention and was using directed loans through the banking system to allow the trading desks to save themselves, not by hedging but by countering the trend that puts them at risk.
If you are a bank's trader and you sold puts on the OEX you know you do not need to hedge, all you need to do is have a credit line with near-direct feed from the fed. The moment your puts are largely underwater, instead of delta hedging (what one should be doing theoretically) which moves the market further against you, the bank buys futures in order to move the market. This is the PPT activity.
In gold, up till the ECB made its move, the gold market was treated the same way. If the shorts were under water, then more was borrowed and dumped into the market, or more futures were sold to squelch the rise and bring the POG within the company profit bands.
Now this does no work under tight liquidity as we see today.

The money one looses in the stock market is the size of your margin credit line and your feeling of wealth.

The monetization at the window is done without the money hitting the markets unless directed otherwise.
gidsek
(10/07/1999; 13:17:44 MDT - Msg ID: 15774)
FN .. for JCS.. from Kitco
Date: Thu Oct 07 1999 14:53
Mo in To (James (Mo in To@ I see ) ID#347205:
Hi all,
Just popped back to see what's happening. James, the correction was printed in the Globe this a.m. in a teeny tiny box on page two of biz section, correction stated that FN and Viceroy are NOT hedged. I think the damage was done....!
MoinTo
----------------
gidsek
gidsek
(10/07/1999; 13:19:22 MDT - Msg ID: 15775)
OPPS Re message below, for Canuck
Yellin' of troy
(10/07/1999; 13:29:49 MDT - Msg ID: 15776)
leigh
For an amateur, at least. More than I should, I suppose.
nummus aureus
(10/07/1999; 13:36:51 MDT - Msg ID: 15777)
Sirs SteveH & Oro #153110 & #15766
Gentle Sirs;
I observe you both have reposted this day a treatise by a Lord Mozel of the House of Kitco, in the land of Papergeldt.
I have no intention to split hairs, or demean what ever the point the Gold Lord took 500 words to make in his address, but I find the fruit of his statement tainted, with his opening analogy and justification based on a plebeian and inaccurate agricultral financial portrayal. I realize we are closely allied with the Papergeldters in the current campain, but this old centurian cannot take on faith the council of an outlander remiss in facts.
Gentle Sirs, I bear no blade against any in this struggle. Who among us can claim his coin purse is to heavy? I only suggest that the words of the other lands stay in those lands, with perhaps, a simple link to show the way. I remain, kind Sirs;
nummus aureus
Yellin' of troy
(10/07/1999; 14:15:20 MDT - Msg ID: 15778)
ORO's monetary thread
A dollar can be readily distinguished from a non-dollar, and
so can be valued separately. Its value is whatever the market says it is, based on its uses, supply, and demand,
just like any other item; no ultimate, foundational source
of value is needed. The dollar is useful, and so has value,
because it is money, currency: You can buy a cup of coffee
for .xx dollars at much lower transaction costs than a pur-
chase for gold or whiskey would entail. It's the de facto
standard. That dollars are valuable is no more unbelievable
than that a Microsoft product is more valuable than its technical merits might suggest. These things can be quite
conventional and weird; e.g., note the difference in price
between a 1.00 carat diamond and a .99 carat diamond. Use
for paying taxes and loans (legal tender laws) can help to
launch a currency and give it a floor, give people confidence in it, but that's hardly the whole source of the
value.
ss of nep
(10/07/1999; 14:16:19 MDT - Msg ID: 15779)
RRSP


RRSP =
Reserve Resources for the Socialist Parasite

fox
(10/07/1999; 14:21:58 MDT - Msg ID: 15780)
fox
the Ashanti goldmine is in troubleand the vaultures and the eagles are waiting;
Ashanti sames a good deal and for anglo and for gold fields
fox
(10/07/1999; 14:26:19 MDT - Msg ID: 15781)
fox
http://news.24.com/English/Business/Companies/ENG_151120_705957_SEO.aspsorry, forgot the link
gold night to everyone especially to my overworked brother in law Fred
Goldspoon
(10/07/1999; 14:33:56 MDT - Msg ID: 15782)
**Comex Close Winner***
Sorry..don't know having 'puter problems on my end....are you there...can you hear me?? no seriously... Congrats, i know it wasn't me....won't hear from me for a couple of days...Leigh, quit cheering that's not nice... i know you all are tired of Gold treading water ...i've become my own contrary indicator....so in the intrest of everyone my guess for tomorrow is...$292.63.....
Yellin of Troy...welcome, thanks for the horse input!
Gandalf...(thanks)....for what?...think a minute....
Leigh
(10/07/1999; 14:48:51 MDT - Msg ID: 15783)
Goldspoon
We'll miss you, Goldspoon! You brighten up the Forum a lot! Are you travelling on Horse with No Name? He's faster than the Concorde!
PH in LA
(10/07/1999; 14:54:21 MDT - Msg ID: 15784)
Kind and gentle Centurian, Nummus Aureus:
Could you please be more specific in your claim of "plebeian and inaccurate agricultral financial portrayal" in the writings of Lord Mozel, by more clearly explaining your meaning?

Also, your request that "the words of the other lands stay in those lands," needs more careful consideration. Those words are sorely needed here in this land. Unfortunately, for some unknown reason, some knights and lords choose not to bring their words directly to us. However, even as Another's Thoughts were always meant "for all", words "uttered in other lands" must eventually be considered here, if we are to unravel the mysteries facing us all. The service of Sirs SteveH & Oro in bringing those words to us is helpful to many. Access to the other land is, at times, difficult if not impossible and having those "other words" posted here greatly simplifies life in this land, leaving more time to ponder and understand the topics discussed in those other lands as well as in this land.
TownCrier
(10/07/1999; 15:04:28 MDT - Msg ID: 15785)
U.S. buying on credit surged in August
http://biz.yahoo.com/rf/991007/s6.htmlThis unsecured, revolving credit increased by $10.8 billion in August, the largest gain in 7 months. Wall Street economists had expected a $6.9-billion rise.
AEL
(10/07/1999; 15:09:55 MDT - Msg ID: 15786)
Hathaway
http://www.kitcomm.com/comments/gold/1999q4/1999_10/991007.163242.sauleeeee.htmDate: Thu Oct 07 1999 16:32
saul (ABSOLUTELY MUST READING FOR VERYONE _ LATEST FROM JOHN
HAHAWAY - Tocqueville Asset Management) ID#93123:
Copyright � 1999 saul/Kitco Inc. All rights reserved

Simple Math & Common Sense:
A $66 Billion Problem
By John Hathaway

Don't be confused by self-serving outcries from various parties trapped in the gold short squeeze. I am amazed to hear reports that so-and-so has restructured their hedge book or that this or that group has covered its short position in gold. Such statements are misleading, if
not false. What is happening is that the self-made victims of the growing gold short squeeze are passing the hot potato back and forth among themselves in a desperate attempt to wriggle free. This activity amounts to little more than frenetic paper shuffling. The gold market is in the
throes of a spreading credit crisis. . . . .

(go to link for the rest of the story......)

(if you are in a desperate attempt to wriggle free,
go elsewhere....... :) )
TownCrier
(10/07/1999; 15:13:46 MDT - Msg ID: 15787)
Fed pre-announces 90-day tri-party system repos
http://biz.yahoo.com/rf/991007/s2.htmlThis may be in addition to the Fed's normal operation expected for Friday. Today, the Fed added nearly $14 billion of reserves to the banking system through a dual operation of overnight and five-day fixed system repos. The five-days totaled $7.515 billion, and the overnights totaled $6.155 billion.
USAGOLD
(10/07/1999; 15:18:27 MDT - Msg ID: 15788)
The Monetary Triangle
http://pacific.commerce.ubc.ca/xr/plot.htmlFOA, Another and All....
FOA, I read your post with a great deal of interest. If you are the Delta dog barking toward the back of the pack, then our friends Spot and Spike must be the Alphas leading the way and I the straggling Omega trying to make sense of a wild two week run. On we go.......

From reading your most recent thinking as summarized in Msg#15713, I get the distinct impression that you believe that the Europeans have mandated their version of closing the gold window, thus making gold dear for any purpose, the settlement of gold carry trades being the most severely affected. Some have said that this event of September 26th by the European central banks ranks in the annals of monetary economics with Nixon's closing of the gold window in 1973 and letting yellow metal seek a free market price.

Following the Nixon decision, we had ten years of dollar devaluation. On the other hand, the European closing of the gold window could lead to ten years of euro appreciation against the dollar -- the exact opposite of the 1970s U.S. experience.

At the same time, if you superimpose a chart of gold in euros over a chart of gold in dollars, a startling observation can be made -- one that graphically shows how much the world of international money has changed. The movement of gold in both currencies is nearly exactly the same!

Having watched the Asian contagion unfold and run the graphs on several sick currencies, there was one relationship that always held true -- as the currency depreciated against in gold, so it depreciated against the dollar. This led me to believe that once the euro was established as an international reserve competitor to the dollar that when the euro went up against the dollar, it would be able to buy more gold. I waited to see if this would be the case and am somewhat surprised to see a new phenomena -- as the dollar has depreciated against the euro, both have depreciated against gold.

My question is for both, or either, of you:

How do you interpret this new phenomena -- this new and to my knowledge unique triangular relationship? Does it not give Europe the opportunity, to issue bonds to finance whatever Europe would like to finance including the military, public works projects etc without damaging the euro's credibility or injuring its market? And by this, do not the Europeans solve a sore problem -- getting their new currency into circulation (something you and I have discussed before). If so, this could be a clever political/economic move indeed and might answer the questions why Europe made the September 26th Gold Sunday announcement as they did when they didn't have to. In other words, at the beginning of 1999 EU launched the currency. Now EU is going to get it into circulation internationally in the form of bonds held in national treasuries. The next step will be make it stick. At that point, I would agree with you -- Europe could become a gold buyer unloading unwanted dollars perhaps through the unwinding of the gold carry trade.

Wouldn't it be a total irony, if the gold carry trade turned out to be little more than a detour that brought us the back way to the same place....gold being used in international settlements as the currency of last resort?

All.....the link above can be used to draw your own euro and dollar gold charts, etc. Have fun. And thank you to the Pacific
USAGOLD
(10/07/1999; 15:24:52 MDT - Msg ID: 15789)
The Monetary Triangle
http://pacific.commerce.ubc.ca/xr/plot.htmlI wanted to add to the bottom of my last post a note of thanks to Professor Werner Antweiler at University of British Columbia for his wonderful Pacific Exchange Rate Service. It has shortcut many hours of research that would have taken a great deal longer to conclude without its availability.
TownCrier
(10/07/1999; 15:37:26 MDT - Msg ID: 15790)
Fed operations--The Tower has been corroborated...first time in print!
http://biz.yahoo.com/rf/991007/hy.html"(Rising) currency in circulation is the main factor draining reserves from the banking system and that will be the main factor draining reserves through yearend, especially with Y2K." --Dana Saporta, economist at Stone & McCarthy Research Associates.

Saporta estimated that during the current bank reserve maintenance period the daily add need by the Fed is $15.3 billion. The highest we remember previously was near Labor Day at $11 billion per day. It's hitting the fan already, but the blades are turning slowly...
watcher
(10/07/1999; 15:45:03 MDT - Msg ID: 15791)
ORO response
Thanks for your quick response and I follow what you said.
I have been trying to figure out what they might try to do next seeing that the previous action as you stated is no longer working. Is there a way that they could funnel the money from overseas (USD's) in a way that it would convince those from overseas that the market will not totally collapse because of this intervention. Maybe similar to Japanese holding up their markets. If they don't come up with something and all foreign money leaves that will be I believe the bell that will ring for the end of USD as we know it.
TownCrier
(10/07/1999; 15:55:46 MDT - Msg ID: 15792)
Tea leaves
http://biz.yahoo.com/rf/991007/w0.htmlHEADLINE: IMM currency futures end mixed in light trade
Some up, some down, and best guesses why are given.
(Isn't that how it always is? The absolute truth is simply not explainable in this format.)
SteveH
(10/07/1999; 15:59:25 MDT - Msg ID: 15793)
nummus aureus
Thanks for your thoughts and I agree a link SHOULD do but unfortunately, kitco, can be 10's or 100's of pages of posts in one day. To link and then make a reader find said significant posting is work that might force a miss of thought. Convenience in the face of links in the case of kitco save us all time. You may note that the link to Mozel referenced beaucoup other relevent posts and an invite to read them. Kind regards.
TownCrier
(10/07/1999; 16:15:46 MDT - Msg ID: 15794)
�383 a pint? Pull the other one
http://news.bbc.co.uk/hi/english/business/your_money/newsid_467000/467742.stmOne hundred years ago, a pint of beer cost one penny, and if prices continue to rise as they have, a pint will cost �383.57 by the end of the next century according to this BBC article. A survey showed the average price for a pint of ale to be �1.64 today.

This speaks more about the money than it does about the ale. You'd best get your solid and liquid gold now while the prices are still so favorable.

*Ching-ching*...gulp, gulp... AAaahhhhhhh!
PH in LA
(10/07/1999; 16:34:10 MDT - Msg ID: 15795)
Kitco Reposts
SteveH:
By opening Kitco in Short Text mode the link that appears to open the whole post can be brought here intact and will continue to function. I, for one, do not object, however, to your cut & paste as it saves time, especially when Kitco access is restricted. Also, ORO's technique today of pulling together the whole thread so that numerous posts do not have to be searched for, was much appreciated for the same reason.
FOA
(10/07/1999; 17:11:21 MDT - Msg ID: 15796)
comment
Orca (10/07/99; 09:59:09MDT - Msg ID:15763)
(No Subject)
The Economist .. Peter Drucker says it all

Hello Orca,
Just wanted to say thank you for that article. Every investor needs a base perspective when listening to all this modern input. All of us should hear things spoken in different ways as no one person can ever make the best point for our individual ears. FOA
FOA
(10/07/1999; 17:13:01 MDT - Msg ID: 15797)
Comment
SteveH (10/06/99; 22:20:05MDT - Msg ID:15718)
To a friend Leroy,

SteveH,
Leroy is in for some show if he only follows this trail with us. With this crowd getting much larger it increases the chance we won't miss anything. Even if one does not invest, it's worth walking from a historical view point. "we watch this new gold market together, yes?",,,,,, Yes! Thanks for writing FOA
FOA
(10/07/1999; 17:15:32 MDT - Msg ID: 15798)
Comment
ORO (10/06/99; 23:44:47MDT - Msg ID:15721)
SteveH - Your letter - a mechanism

Oro,
With that fine post! You have opened up the "essential concept" for viewing. This is indeed where we are going on an "official basis". It will be one great chess game to watch. Thanks FOA

Also:

Simply Me (10/06/99; 23:59:12MDT - Msg ID:15722)
Thank yoo, Sir FOA.
Your words of encouragement are needed now more than ever.
Many of us are "in" gold to the hilt...according to our means

Hello SM,
If you are "to the hilt" in gold bullion, "according to your means": Then you stand square in the middle of the preferred "real security" holding through out our history. Come what may, if the price rockets or plunges, all paper moneys have failed as society returns to gold. Believe it! FOA


FOA
(10/07/1999; 17:17:32 MDT - Msg ID: 15799)
Comment
Cavan Man (10/07/99; 09:24:38MDT - Msg ID:15758)
FOA
Darn. I missed you. Cavan Man here. I am not interested in "timing" but, time frame or range of time would be helpful. Thanks.

Hello C Man,
For anyone that wishes to hedge their other wealth with a portion in gold bullion: We are on the road NOW! FOA


Also:

AEL (10/07/99; 15:09:55MDT - Msg ID:15786)
Hathaway

AEL, very good link, sir!




Canuck
(10/07/1999; 17:29:06 MDT - Msg ID: 15800)
gidsek and ss of nep
FN
gidsek,

Thanks for your message 15776, noticed today that FN did not take the hit that ABX and PDG did.

ss of nep,

Caught your message yesterday re: phone call to FN.
Thanks. P.S.: Have been to Carling Ave. often this week.
As I approached the wicket today the sweet young lady said,
" ... another onze sir...?"
SteveH
(10/07/1999; 18:50:16 MDT - Msg ID: 15801)
It works (the short list on kitco with a URL)
http://www.kitcomm.com/comments/gold/1999q4/1999_10/991007.201544.sauleeeee.htm***
Here is where Oro and I find the FOA track holds. For example, either Hathaway is a secret admirer of A/FOA or they have the same conclusions and or the same information. In essense, gold leasing resulted in the greatest distribution of wealth to the masses ever seen and made the folks who knew when to unwind early rich in the process. To those holder's on, well...that is another story still in the telling, eh?

snippet:

The Great Gold Fire Sale

It is axiomatic that the way to create a shortage of a particular asset is to under price it. The US government has proved this beyond doubt across a wide assortment of commodities. There are various ways to set prices such as ceilings or price supports. These methods have been applied to gold with stellar results. Gold�s special characteristics, which include a large above ground inventory and monetary attributes, subject it to other forms of price fixing. As with paper currency, gold�s value is affected by the cost of interest, or the lease rate.

The mis-pricing of gold credit has been a central cause for the late stages of the gold bear market. The development of deep forward markets has only occurred in the last decade. The gold pyramid that we have described is nothing more than a conduit for the divestment of central bank gold into the physical markets. Gold in the vault has been replaced by phantom "gold receivables." If the lease rate were comparable to market rates for paper currency, the gold derivative pyramid could not function. The carry trade would blow up and the arbitrage between paper currency and gold, which is the foundation for mine hedging, would not exist.

Pierre Lassonde, President of Franco and Euro Nevada, recently wrote in the Northern Miner: " The single greatest damage caused to the gold price has been indiscriminate leasing, by central banks, of their gold reserves at giveaway interest ratesS.These suicidal rates are a gift to the speculators, hedge fund managers and producers who hedge." Low lease rates of 1%/year, he observes, represent an inappropriate 75% discount to US T-bills.

If gold leased by central banks totaled 10,000 tons as of June 30, the interest differential exceeds $2 billion. Since the new age central bankers view their institutions ( incorrectly ) as profit centers, sub-market lease rates appear to be a glaring departure from their mission. The ill-conceived leasing trade has depressed the value of a major reserve asset, and it has also transferred an embarrassing level of wealth to non- citizens.

What is the correct interest rate for gold? No one can answer the question. Interest rates set by committee lead to distortions and miscalculations. While the interest rate on gold has not been set by a committee, it does reflect the collective negative attitudes of central bankers towards a reserve asset they inherited from the previous generation and a willingness to trust in paper assets, which they did not inherit. In reality, the rate is based on nearly unanimous acceptance by central bankers and mining executives of the bullion dealers� sales pitch, in short, a virtual committee.

Who is benefiting from the fire sale? Financial speculators and bullion bankers are high on the list. Even higher up, however, are the world- wide consumers and investors who form the physical markets into which central bank gold is disappearing. Thanks to the gold pyramid, they are able to acquire vast quantities of the precious metal at prices well below the cost of production: present, future, and probably past, if inflation adjusted. Recent dispatches on gold consumption show very positive trends. For example, India, the largest consumer, reported 80 tons of imports in June, on a pace to shatter last year�s record. Other Asian economies show similar patterns. The US is minting golden eagles at an annual rate of 365 tons, a record pace. Jewelry consumption worldwide is showing strong positive trends. According to the World Gold Council, consumer demand rose 16% in the first half of 1999. Refineries, which melt down central bank gold bars, are as heavily backlogged as any time in history.

Consumer demand for gold is breaking all records. Thanks to the depressed gold price, consumption for jewelry and investment exceeds sustainable sources of supply, mine production and scrap by a wide margin. Without the giveaway engineered by the bullion banks, there would be a shortage and the gold price would be much higher. As with the US dollar, there are twin deficits. The first deficit is the short interest arising from the mismatch between gold derivatives and physical gold. This is a technical market condition, which will be resolved at some point by short covering. The second deficit arises from the growing appetite of world gold consumers, fed by artificially low prices. This chronic, fundamental market deficit will be closed only by much higher gold prices, over a period of years. At some point, frenzied short covering will crowd out consumer demand. Perhaps the grass roots owners of gold will oblige the shorts by melting down their holdings. Issuers of gold derivatives choose to ignore these facts in pursuit of ever greater profits in their risky business, girded in the belief that they have the staunchest of allies in the witless compliance of nouveau central bankers and death-wishing gold mining executives. Few of these players are receptive to a wake up call. Denial is still in high gear.

The recipe for a shortage has been carefully followed. A few finishing touches may be required before a market epiphany. There is no known reconciliation between paper and physical positions, and none will be attempted until after the squeeze. The weakness of credit analysis and supervisory oversight, as well as the many ambiguities in the linkage between paper gold and physical can flourish only if there is supreme confidence in gold�s permanent downtrend. The trust and confidence essential to balance the gold derivatives pyramid depends on three critical errors: that mine reserves = physical gold; that gold receivables = gold on hand; and that financial markets will enjoy smooth sailing indefinitely. Trust is nothing more than a state of mind. When this levitation is finally exposed and its illusions shattered, it is ludicrous to think the imbalances can be corrected by a small rise in the price and within a comfortable time frame. Expect the resolution to be swift, furious, and uncomfortable for those caught short.

John Hathaway
August 20, 1999

***
SteveH
(10/07/1999; 19:02:01 MDT - Msg ID: 15802)
Butler
www.kitco.comDate: Thu Oct 07 1999 20:20
ted butler (APH) ID#317184:
Copyright � 1999 ted butler/Kitco Inc. All rights reserved
Two things. One, I wanted to post something the other day about you but lately, sometimes you just can't get in, and later, it's not the same. But, for the record, for those who might not know, APH is the best technical trader I've ever seen ( save oldman, it's a tie ) . I'm not a technical analyst, but I can tell you, you won't get rich betting against him. He is as good as it gets.

Having said that, I want kill two birds at once. I'd like to warn APH and everyone. This market ( gold and silver ) is really starting to scare me. I think we're on the verge of out of control. I think even the slightly hedged miners could face real problems. I think one day ( don't ask me which day ) we could come in 50-100 higher in gold and 5 in silver. I would hate to see anyone here get hurt. Yeah, we could go down first, then up - but so what? - down 20 in gold, then up 200? Down 50 cents in silver, then up $20? There is no ulterior motive. Take a clue from the miners - don't do what they did wrong - selling calls or open liability exposures. Don't be short. If you must bet the downside, buy puts. Let's be careful out there.
FOA
(10/07/1999; 19:12:16 MDT - Msg ID: 15803)
Reply
USAGOLD (10/07/99; 15:18:27MDT - Msg ID:15788)
The Monetary Triangle

------------From reading your most recent thinking as summarized in Msg#15713, I get the distinct impression that you believe that the Europeans have mandated their version of closing the gold window, thus making gold dear for any purpose, the settlement of gold carry trades being the most
severely affected. Some have said that this event of September 26th by the European central banks ranks in the annals of monetary economics with Nixon's closing of the gold window in 1973 and letting yellow metal seek a free market price. Following the Nixon decision, we had ten years of dollar devaluation. On the other hand, the European closing of the gold window could lead to ten years of euro appreciation against the dollar -- the exact opposite of the 1970s U.S. experience.--

Hello USAGOLD,
To the above---- "Absolutely"!!
I don't know if the timeline will be that long (ten years). The dollar will most likely fully collapse into some form of controlled inflation with exchange controls and all. ORO (#15721) wrote a good outline using Another's, trying to conceive the form of a new currency structure without the current dollar system. Today, in the middle of all of this, the pressure is indeed on to increase the value of gold "in all currencies". Make no mistake, no one wants this, but the majority has accepted that this is the only way out from under the dollar.

You write:

----At the same time, if you superimpose a chart of gold in euros over a chart of gold in dollars, a startling observation can be made -- one that graphically shows how much the world of international money has changed. The movement of gold in both currencies is nearly exactly the
same! Having watched the Asian contagion unfold and run the graphs on several sick currencies, there was one relationship that always held true -- as the currency depreciated against in gold, so it depreciated against the dollar. This led me to believe that once the euro was established as an international reserve competitor to the dollar that when the euro went up against the dollar, it would be able to buy more gold. I waited to see if this would be the case and am somewhat surprised to see a new phenomena -- as the dollar has depreciated against the euro, both have depreciated against gold.

Michael,
Continuing from my above: It's going to be a two phase operation. For the Euro to continue gaining credibility against the dollar, it needs a rising gold price in both currencies to build the Euro perception. In this stage they don't want the dollar exchange rate to collapse, but rather draw trade flow settlement into the Euro. It's expected that a steady interest rate policy and the lack of aggressive intervention will place them in a better light. But, most importantly, a rising gold price will detract from the dollar on a world basis more so than it will the Euro on a Euroland basis. Using points we have covered many times, the ECB will have more than enough resources (read that dollars on hand) to keep a firm bid under gold. This act of bring in gold as Euro reserves (not currency backing) and cannot help but undercut the dollar's world position. Especially now that the world dollar gold market is "on the ropes" and about to drive the dollar gold price to the sky.
Their item about commiting gold supply to 2,000 tonnes was a farse. Yes, the supply is needed to controll the burn, but a gold rush will cause much greed to retain the bullion. The BOE may continue, but all of them will cut and run when the gold price starts to rise. I bet they still sell for show but hold a backdoor deal to retain the metal.

Your words,

----How do you interpret this new phenomena -- this new and to my knowledge unique triangular relationship? Does it not give Europe the opportunity, to issue bonds to finance whatever Europe would like to finance including the military, public works projects etc without damaging the euro's credibility or injuring its market? And by this, do not the Europeans solve a sore problem -- getting their new currency into circulation (something you and I have discussed before). If so, this could be a clever political/economic move indeed and might answer the questions why Europe made the September 26th Gold Sunday announcement as they did when they didn't have to. In other words, at the beginning of 1999 EU launched the currency. Now EU is going to get it into circulation internationally in the form of bonds held in national treasuries. The next step will be make it stick. At that point, I would agree with you -- Europe could become a gold buyer unloading unwanted dollars perhaps through the unwinding of the gold carry trade.
Wouldn't it be a total irony, if the gold carry trade turned out to be little more than a detour that brought us the back way to the same place....gold being used in international settlements as the currency of last resort?-----

Yes sir to all of it!
This will process over one to two years. Or does it work out into the new 5 year plan of the ECB? We shall see. The dollar crisis should be worked over by then. Perhaps our much needed time frame to work gold into the thousands?
Once the Euro begins to see a run for it's currency (next year or so?) the gold price in Euros will stop rising as fast as the dollar gold price. Simply stated, the dollar/Euro exchange rate will halt most of the depreciation of Euros against gold. This is the second phase that Another spoke of long before the Euro was even born. Here we see gold at perhaps several thousand Euros, yet in the many many thousands of dollars. This is why it was so important for them to hold ECB committed gold paper. Euroland could later lock a low oil price using high gold as partial settlement. It will be a spectacular boom for their economy.

Michael, it's world class history in the making, Yes? Thanks FOA



TownCrier
(10/07/1999; 19:15:20 MDT - Msg ID: 15804)
After the Close: the GOLDEN VIEW from The Tower
http://biz.yahoo.com/rf/991007/vv.htmlLast month the Bank of England's Monetary Policy Committee surprised the markets by raising its base rate by 0.25% to 5.25%. Today, however, the MPC chose to leave the UK interest rates unchanged, a decision that was welcomed by business leaders and unions which claimed that another rate rise now would damage UK industry and lead to job losses. Isn't it apalling...the degree to which our level of existence is now determined by borrowed money and the ease with which more may be borrowed and repaid? The world has only one permanent money supply (gold), but with the current high level of outstanding gold loans, even this most stable of all money has been artificially inflated, creating an artificially low value. So when you look at gold as in the same boat as the pound, if the prospects of a 0.25% rate hike would cause such "trauma" to the borrowing masses, imagine what damamge has been done within the gold world with annualized rates rising from 1% to nearly 10%, and currently hovering near 4%. (see table below)

Gold lease rates (expressed as an annualized rate)
1-month 3.9160%
2-month 4.1120%
3-month 5.1760%
6-month 4.9360%
12-mnth 4.8188%

When this sorts itself out following "the mother of all bank runs for gold," the boys here in The Tower would like to see future lending operations limited to national currencies only. Gold must be left uninflated in order to function globally as the immutable standard against which all currencies may be fairly compared. "Paper gold" must become a thing of the past. Somebody please phone the BIS and get to work on this right away. The Tower thanks you, and our children's children's children will surely thank you, too.

On Wall Street, the DOW lost half a percent while the Nasdaq finished even. NYSE decliners outnumbered advancers 17 to 12, and new 52-week lows totaled 124 while only 44 reached new highs.

The 30-year Treasury Bond lost 4/32 in price, pushing the yield to 6.18%. Traders had a hard time explaining the morning volitility in pricing for the bond, but rumors circulated that data from tomorrow's employment report had somehow been leaked. Focus is certainly in that direction for tomorrow's official release of payroll and employment data. Traders were also somewhat disappointed that the BOE and ECB independent decisions to leave intrest rates "as is" didn't translate into stronger price action for the US bond given the "weakening aspect" of those decisions to their respective currencies. The ECB refinancing rate was held steady at 2.5%. Analysts weren't widely expecting rate hike by either entity today, although ECB President Wim Duisenberg said the bank's tightening bias was still present "in full force."

Staying with currencies, the dollar gained 0.24 yen to close at 107.55 yen. The euro gained .45 cents against the dollar, closing at $1.0734 (and 115.09 yen).

In the gold trading arena, today was another one of those types we described yesterday wherein a "price correction" was entirely accommodated within the day's trade. The London markets briefly took the price down to $314 before buyers promptly returned it to within $1.70 of yesterday's closing mark in NY. Spot gold was last quoted at $322.30.

Reuters reports that the world's gold industry is currently sifting through the wreckage brought to the balance sheets of bullion bears to assess the extent of the destruction from the recent and sudden price surge. (A $70 rise is child's play when you consider the global potential, and not just a COMEX-driven phenomenon...in fact, you've already seen the oversees markets take the lead in price run-ups. For example, here's something you'll never see on the COMEX trading floor: Taiwan's gold imports totaled 6.741 tonnes in September, compared with 4.063 tonnes in September one year ago--a 67% increase.) Reuters says much of this damage won't be revealed directly, but will emerge annecdotally in Q-3 financial statements, or as players simply drop from sight.
+
A chief dealer at a bullion bank said, "Months from now you are going to see people restructuring departments and getting out of the business. But you are not going to know anything until these things happen." Another bullion bank dealer said, "Everbody is talking about people getting hurt in this market. I think there have been people that have probably gotten hurt, like people who have credit exposure (to these gold customers). But nothing is crystalized yet so nobody really knows what the damage is going to be." A bank analyst chimed in, "All that stuff they keep fairly close to the vest for competitive reasons." You can read more at our featured link.
+
So while some of these hardship cases will disappear quietly into the night to lick their wounds and never be heard from again, others prefer to make their exit kicking and screaming all the way...
Bridge News--London--Oct 7--The recent euphoria in the gold market cannot mask the
underlying erosion of gold's role in official reserve portfolio management,
according to a presentation prepared for the Nikkei Gold Conference by Andy Smith,
analyst at Mitsui Bussan Commodities. The paper, titled "The Fall of the
Golden Wall", argues the philosophy behind holding gold, is doomed, like the
Berlin wall, to collapse "under the weight of its own contradictions."
+
Well, well certainly defer that call to you, Mr. Smith, as the undisputed master of contradictions. Wasn't your last quote something to the effect that gold was money, and it was the central banks' duty to step in and reliquify the market? And the day before that you were quoted as saying gold was a tiny market traded by locals, and was fundamentally no different than copper. You're only succeeding in drawing unnecessary attention to yourself, dear friend. My we suggest you try the "quietly fading" option?

Here's how Bridge News put the wraps on today's action among the gold bookies...

NY Precious Metals Review: Dec gold dn $1.70 amid choppy trade
By Mary Powers and Tina Petersen, Bridge News
Washington--Oct 7--COMEX Dec gold futures settled down $1.70 at
$324.30 per ounce amid quiet, range-bound trade. Traders said the market
is consolidating after gaining $26.50 since Oct 1 as players stood by to
see whether the short-covering rally would continue.
Traders said the markets are using these quiet days as an opportunity
to consolidate recent gains, but most remain bullish on the precious
metals markets.

Trade buying helped Dec gold to come off its lows in the morning, but
the funds were said to be largely absent from the market today.
The gold market remains volatile, trading in a broad range, with
support at $315 and resistance at $330. Leonard Kaplan, chief bullion
trader at LFG Bullion Services, said "the market keeps moving in that
range but it is my strong feeling we will be moving higher. Short-covering
has not been fully accomplished," he said.

If other producers such as Cambior Inc.--which Wednesday said it has
hedging positions for 2.7 million ounces of gold at an average price of
$318 per ounce through 2007--have oversold their production, "then there
is still a lot of short-covering to be done," said Kaplan.

In the near term, many said they are waiting to see if the recent
price moves in gold will work their way through the market. Traders said
that the fact that the market closed above $320 was relatively positive.
"The moves that we saw above $320 were made on fresh long buying as
opposed to short-covering, so that means there is more short-covering to
be done," a trader said.

One trader said he expected the market to open lower Friday morning
then to be pushed higher ahead of the weekend. "Friday tends to be a
sell-off day, but with the type of momentum we've had, some players might
take advantage and push prices up for the weekend." He said there is
strong buying in the mid teens.
***
(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
---
In a FWN alert with no attendant story, "ECB's Duisenberg rules out EU gold-selling agency." We'll keep an eye open for any elaboration on that, as it would have some significance regarding whether the LBMA was expected to survive widespread balance-sheet carnage as described above, or not. Here's a tip for whomever is left standing to pick up the gold market pieces...you can sell it all you want. Just don't lend it. Ever again.

During yesterday's COMEX futures trading, 69 new October contracts were established, bringing the open interest at day's end to 140. Over 11,000 December contracts were settled, open interest there closing at 115,682. The total OI for all COMEX gold contracts stood at the end of Wednesday's trading at 204,535 contracts.
Today there were delivery intentions given on another 40 of the October contracts, the total so far for the month is now 2,504 contracts (nearly 8 tonnes.)

Within the COMEX gold depositories, today marked the first day this week that gold was moved in or out. It was in fact moved...out. 2,986 ounces of Registered gold was withdrawn from the ScotiaMoccata vault, marginally reducing total COMEX inventory to 924,634 ounces.

Having more than doubled in price over recent months, the Fifth Horseman has kicked off his shoes and is walking barefoot in the grass these days. November crude settled down 82c at $22.45 on the release of surveys showing that OPEC compliance with production-cut agreements had slipped in September. The going concern is that these higher oil prices are encouraging some oil producers to increase production. Here's what the survey reveals: September compliance for all of OPEC was 87.9% compared with 89% in August. Hardly anything to worry about. Looking closer at the numbers, OPEC's September oil output (excluding Iraq, of course, who is pumping all that they can in a bid to become the 51st state) was 23.50 million bpd, up 60,000 bpd over August output. That 60,000 barrel daily rise over August is one-quarter of one percent of daily OPEC (sans-Iraqi) production. You can't even measure that reliably, let alone justify an 82c drop in price per barrel on the news.

Meanwhile, Jordan's King Abdullah II, travelling now to the United States, has been accused of "passing notes in class" by the tattle-tale kid in the back row, as one report claims that Iraqi Deputy Prime Minister Tariq Aziz passed a message to the Jordanian prime minister (allegedly for delivery to the US administration) when Mr. Aziz arrived unexpectedly in Amman to give "a thorough account (of the situation in Iraq) to allow the Jordanian leadership to see things clearly if it [Jordan] wants to raise Iraq in its Arab and international talks." Jordan has often been seen as a promoter of peace for the region, and these meetings with Iraq are seen to be business as usual. At any rate, the denials on both sides are officially in: Jordan has not been given any specific message to deliver to Washington on Iraq's behalf. And now, if the King is caught chewing bubble-gum on the plane ride over, we sure hope he brought enough for everyone to share.

And that's the view from here...after the close.
TownCrier
(10/07/1999; 19:23:45 MDT - Msg ID: 15805)
To anyone interested in the full text of Mr. Hathaway's commentary excerpted by Sir SteveH
http://www.usagold.com/HathawayPyramid.htmlIt has been available at USAGOLD's Gilded Opinion page since the end of August. Click the link and enjoy your reading. It does mesh well with all that has been laid out here at the Round Table and Hall of Fame.

Enjoy your reading experience, and hurry back with your thoughts.
flierdude
(10/07/1999; 19:31:37 MDT - Msg ID: 15806)
FOA and others.
I am quite worried about my investments because of the FOA postings.

At this time I have 100% of my investment funds in one form or Another in Precious Metals. I am presently diversified as follows. 38% in physical silver, 32% in BMG , DROOY , and CALVF gold stocks, 20% (value at this time) in December 310 and 320 gold calls , and 9% (70 ozs.) in physical gold.

I would appreciate any opinions as where I should change my position. Do I have enough time to ride out the Dec Calls? Should I unload the stocks? If so by when? Should I take the proceeds and put it only in physical gold? I like silver only because of Buffett, Soro's and Gates position.

Thank You
TownCrier
(10/07/1999; 19:36:05 MDT - Msg ID: 15807)
Fed Says Y2K Could Affect Bank Reserves
http://dailynews.yahoo.com/h/nm/19991006/bs/yk_fed_2.htmlFed Vice-Chairman Roger Ferguson said Wednesday the Fed was storing cash around the country "to allow banks to meet any sudden or unexpected spikes in the currency needs of their customers." He warned against complacency, adding, "No one can say with certainty that there won't be any problems or disruptions during the century changeover."

Thanks for the honesty, Mr. Ferguson. We love you for it.
TownCrier
(10/07/1999; 19:39:50 MDT - Msg ID: 15808)
U.S. executives leery of Y2K bug - poll
http://biz.yahoo.com/rf/991006/oa.htmlA poll released Wednesday revealed that most executives responsible for corporate Y2K planning will stockpile cash and stay off airplanes at year's end.
Bonedaddy
(10/07/1999; 19:44:54 MDT - Msg ID: 15809)
Flierdude
I too worry about such things from time to time. It is good to trust ones instincts. Find the investment mix that allows you to worry less, and sleep more. Which is the bigger problem, missing some price appreciation on a mining share or losing it all in one of the various paper crash scenarios? Gold, it's the money you get to keep. Keep enough in cash to pay several months bills. Godspeed, Bd
au49
(10/07/1999; 20:04:12 MDT - Msg ID: 15810)
retrace
just went short gold.
Al Fulchino
(10/07/1999; 20:11:46 MDT - Msg ID: 15811)
FOA? What does this ounce in my hand buy if....?
Forgive my intrusion, but just what does this $30,000.00/oz.of gold purchase? I see so many, almost stammer at what 10,000 and 20,000 and 30,000 dollar gold means to their portfolio. But does this ounce that buys a suit then buy 92 at 30k? My view is no, that gold has been undervalued. Simple? Yes , of course, but at the same time, I do not believe that I will be buying 92 suits with the ounce. FOA, how do see the purchasing power of that ounce? Thank you in advance should you have the time.
Golden Calf
(10/07/1999; 21:08:12 MDT - Msg ID: 15812)
A drop in the markets is due
It looks like me may be in for a bit of the down
side. Markets are poised for a drop, and may take
oils, PMs along for the ride.

Are you ready emotionally...it may be a shaker!
elevator guy
(10/07/1999; 21:08:35 MDT - Msg ID: 15813)
How does one go about "shorting" the dollar?
Does any one know what investment vechicle, or financial product can be traded so as to "short" the dollar?

Thanks!
au49
(10/07/1999; 21:32:32 MDT - Msg ID: 15814)
elavator guy
buy another countries money and you are short the $usd. the euro is best bet-- maybe.
Golden Truth
(10/07/1999; 21:38:24 MDT - Msg ID: 15815)
GOLD DOWN $6.05
Looks like someone is starting to "shoot" back.
Thats o.k you're still not going to get my GOLD!!!
Also i can ride this downturn to hell and back and not even be out of breath.

How does it feel MR.SHORTIE to be losing money hand over fist? Get real used to it,you slime buckets have caused alot of grief around the World and now its your turn to die!!!!!!

P.S Good Luck you're going to need it! BAAAh HAAAAh HAAAAh! Baaaaah haaahaahaah you fools.
nugget0
(10/07/1999; 21:40:48 MDT - Msg ID: 15816)
FLIERDUDE
re your investments...I think what FOA has been hinting at..paper is paper is paper is paper......
gidsek
(10/07/1999; 21:48:29 MDT - Msg ID: 15817)
shorting the dollar
You can simply sell dollars and buy another currency, easily done but I sense that you are after leverage. Comex has Futures contracts based on currencies and CBOE, Chicago Board Options Exchange offers currency options I think.

Taking a look around though and seeing the damage done to hedge funds (LCTM and others) and the gold shorts by holding the wrong derivatives at the wrong time it seems to me that there are much better ways to make money. My experience was limited to a few DOW and S&P put options and it wasn't a happy one. It's rude I'm sure to offer this advice but in your interest.. if you have to ask how to go about "shorting the dollar" that's a very strong clue that perhaps you shouldn't be playing that game. Derivatives haved creamed a couple of Nobel winners after all..

IMVHO

gidsek
Gandalf the White
(10/07/1999; 21:52:38 MDT - Msg ID: 15818)
OK Spot , -- time to wakeup !
Jump Spot JUMP ! (317.10)
<;-)
16-penny
(10/07/1999; 21:57:07 MDT - Msg ID: 15819)
purchasing power
an oz of gold will buy as many goods and services as you need or want. as opposed to currency say $50 for milk
Tomcat
(10/07/1999; 22:08:07 MDT - Msg ID: 15820)
flierdude

Regarding your portfolio:

What are your objectives? The fact that I am very very heavy on the physcial side should be of no help to you because I have my own personal objectives that holding physical satisfies for me. For example, I have a very long term wealth transfer program for my kids to be executed when I do my final act. For this, physical works. A friend is a Las Vegas entertainer/gamble/womanizer who would croak before adopting my plan.

We are a long way in our understanding of the PM scene. What conclusions have you drawn about gold and silver? Where to you stand on the scale that goes something like:

Weath Preserver
Investor
Speculator

Most important, where do you stand on the current short situation.

We know have tons of direct and circumstantial evidence to help us draw our own conclusions. I would bet that if you spend some time working it out, then you'd be suprised at how strong an opinion you hold about the future POG, POS, and paper gold and silver.

megatron
(10/07/1999; 22:13:05 MDT - Msg ID: 15821)
gold worriers
Worrying about this or that seems to me to be pointless unless your a fully involved day trader. Gold isn't the investment for day traders though. NEVER will be IMHO.
It's a position to be held in physical ownership and not lost sleep over or traded away like the idiots in our gov'ts. You and I and EVERYBODY knows inately that money is going to be worthless and it's the timing that's critical.
Like the smart man said, it's in the 'you'll find out dept'.
jinx44
(10/07/1999; 22:14:32 MDT - Msg ID: 15822)
The "ED Spread"
jinx44I think the euro and dollar rise in gold (I will call it the "ED Spread") will widen as the velocity of circulation and concomitant increase in monetary aggregates in euros occurs through more widespread usage. Perhaps a way to speculate on this phenomenon would be to purchase an insurance annuity in euros using dollars now. Lock in the rate at 107, almost parity , but pay out in euros in 10 years might see the rate at $US20=1euro, or 18 to one.

The rise of the euro against gold will slow as the dollar rise in gold starts to roll hard. The euro may be a near gold substitute that could stabilize at perhaps 1oz.Au=500euros=3500$US. Just speculation.
ORO
(10/07/1999; 22:31:54 MDT - Msg ID: 15823)
FOA the new Monetary order
As the commentary in the thread has shown there are problems in this conception. Which, in some years into its establishment, will cause a disaster no different from that of the $. Gold would then suffer severe discredit.
The main flaw in the system is the insistance of governments on issuing scrip bearing their dead personages of history and the continuation of the banking farce without converting the bank structure into an honest capital pooling mechanism. The latter will occur anyway, eventually.
The secondary flaw is the imposition on the markets of a preference to gold that is not of the market's own choosing. So far, my thinking indicates that this will cause the junior, but more rare, PMs to push gold out of the marketplace and replace it with these surrogates for which the governments do not bid. Again, a gold bubble would form since that is what this system is all about, then the markets will find retribution through the other metals.
Has there been any thinking in this regard?
jinx44
(10/07/1999; 22:33:05 MDT - Msg ID: 15824)
Al--your 15811 on a new suit
I like your question about what do you get for an ounce. I think if the $ price rise in gold is your 100:1, I would say that suits will go for 10:1. There will alway be suits, but only so much gold. I think an added zero after each $bill would just about do it. If gold goes to $US3000, the suit may actually go down in price. Who knows??
Black Blade
(10/07/1999; 23:06:59 MDT - Msg ID: 15825)
Slow night
Au down $4.80, someone better check on the chart guy at Kitco. He must be asleep or worse! Kitco shows a flashing light and is flat-lined. Poor guy might need an ambulance!

Flierdude, I wouldn't advise anyone on their investments, only that in the last couple of weeks since my return to the US, I have adjusted my portfolio to 35% PM's. This includes Stock (HGMCY, PDG, FN, SWC, etc.), and physical PM's. I think about what I could have gained in options but "chickened out" before the big move. I'm waiting to see if the "hedge-fund" miners are going to drag down any innocent bystanders along with them. Obviously "bean counters" have no business trying to lead the PM business. Most CEO's, CFO's, and directors in this business are inept. They come from other industries or are from industries outside of mining and they haven't got a clue about the unique dynamics in this industry. Some companies have begun to notice this "small detail". One case in point...The new CEO to be at PDG, Jay Taylor, this guy has quite a bit of background in this business. Finally a logical move by a Au producer! I would expect some good leadership at PDG, whereas I tend to avoid companies such as ABX, ASL, and even DROOY where they have no confidence in their product (ie. forward sales, hedging, etc.). This of course is my opinion only, but I am sure each of us could give you a different line of reasoning why each invests the way he/she does. I can only say do the research, see what your risk tolerance is, and invest accordingly. My personal rules are quite simple: (1)Safest - Physical PM, (2) Ivestment - Stock (for longterm), and (3) Spculative - paper trades such as options (all types and strategies). As the so-called experts say "will you be able to sleep at night?" So have fun.

ET, where you been guy? with Townies Y2K posts and links, I thought that you would be all over this forum like "flies on dog....". What new Y2K info do you have?
Chris Powell
(10/07/1999; 23:21:06 MDT - Msg ID: 15826)
A feast from GATA
Enjoy a feast from GATA.

John Hathaway of the Tocqueville Gold Fund
on the inevitable and deadly math of the
growing short squeeze in gold.

http://www.egroups.com/group/gata/240.html?


GATA Chairman Bill Murphy says the European
central banks are holding firm in support
of gold.

http://www.egroups.com/group/gata/241.html?


A good Reuters article on the shorts.

http://www.egroups.com/group/gata/242.html?


Disclosure of Goldman Sachs as the largest
creditor of the now-ruined Ashanti Gold.

http://www.egroups.com/group/gata/243.html?


Reg Howe on the Cambior catastrophe and
a very GATA-like way out of it.

http://www.egroups.com/group/gata/244.html?


ORO
(10/07/1999; 23:45:23 MDT - Msg ID: 15827)
Yellin' of troy
Wellcome to our discussion.

There is an issue to be thought through in the soiled paper we use for exchanging goods and services. History, as FOA and ANOTHER have shown, repeatedly shows that a concept can not replace the reality, only represent it. Your acceptance of $ in electronic or paper form as payment for your work is doubtless a function of your expectation to be able to purchase someone else's production or service. You see in a $ a representation of your work, but not its embodiment. The embodiment of your work would easilly be found in your refrigerator, your seat and the room you are in.
If I were to print up new thallers you would not be interested in them at all, you might take them because they are so much prettier that printed $ are. If these were reciepts for say a gallon of 92 octane gasoline, redeemable on demand at a local gas station, wouldn't you take them as payment for your goods and work? If you had full confidence in my ability to supply value (gasoline) you would take it any day.
As a bank would do, I could print up more gas thallers than I ever intend to cover by purchase of gasoline, knowing that people will trade them rather than redeem them all. Yet if people knew that that was what I was doing, they would readilly discount the thallers relative to gasoline at hand.
Taking this one step further, I could make the issue of further gas thallers solely on condition of their return with interest. At first, there would be a boom in thaller creation as people need not trade anything but their good name in return for them, and they would trade at some significant discount to gasoline since it would be obvious to all that I have printed more than there will ever be gasoline. Later, however, as loans come due, the thallers would have to be returned, and more thallers than were issued would need to be returned, particularly if I raised the interest rate upon each loan rollover. And one day I would just say that gasoline would not be an acceptable replacement for thallers. This would create the necessary demand to have them trade at a premium to gasoline after some time. Or at least so the thinking goes.
In reality, I would be faced with a bank run as people rush to pick up gasoline in return for my discounted notes as I start to rev up the lending. I would then be faced with the need to supply gasoline. Where would I get a sufficient supply if I had issued so many more notes than the gasoline on hand? Answer - I won't. I will call up my friendly government and tell them that the whole economic system will fail if they force me to put my gas where my printing is. The distraght government would then declare that the notes are no longer redeemable for gas, but they now have the full faith and credit of the government to back them, and the government now takes upon itself the control of further issuance of thallers by ORO and other gas bankers. And if you don't trust us, we have the blessing of the Academy of Motion Pictures, MGM, Bill Gates, Gregory Peck, The Beatles and even the local Rabbi and priest, and printed their representation on the note, see "in celebrities we trust". And just in case you don't, you will surely trust the gun at your back if you don't accept this at the going rate.
Through the coordination of all the bankers (now they can just be called bankers because their actions no longer have anything to do with gas), I and the government can assure demand and supply of thallers, and prevent their redemption in any particular item. A sufficient number of people is in debt, and at least a minimal demand would be there. If I am not too greedy in printing the thallers up, and only print them up as debt, then the demand will always be sufficient.
This has happened many times in history and in many places.
The thing to remember is that banking (the second oldest profession and just as repurtable as the first) is an unnecessary deciet that can be restructured to avoid these situations by not allowing anyone to issue more obligations than can be redeemed at the date of the note. "On demand" was where the lie was hidden, and should have included in it the disclamer "if we have it" in big letters.

So, in order to create value in any concept money, you need it to have gone through a step in which it was actually redeemable in something, when it was a representation. The maintenance of value is through artificial demand of debt or taxation. If these are missing, there would be no value whatsoever. If people did not take loans or just went bankrupt, there would be no further demand for a concept currency. See Ludwig Von Mises for the fine study and analysis of the history and reality of money.

As the process of elimination of $ denominated debt around the world continues, whether naturally, or through force of EU and Japanese policy, you will see how the $ erodes. This decade of fun in America is a direct result of a policy intended to put the US in a debt trap. We are all in it. Face it.
elevator guy
(10/08/1999; 00:06:07 MDT - Msg ID: 15828)
gidsek Msg ID #15817
Thank you for your response! One of my family members had posed the question, imitating my foppish mannerisms.

We can all learn from our mistakes, and need not be enshrined in our ignorance. I'm thankful for a forum where all feel welcome to ask questions of the more experienced, without fear of belittlement.

This is truly a forest of gracious giants.
ET
(10/08/1999; 00:11:42 MDT - Msg ID: 15829)
BB - y2k

Hey BB - I just returned from a trip to Michigan. The hardwoods are looking great and it is getting very crisp at night. I've spent the last few hours catching up and watching the ball game. I did run across Mike Hyatt's piece at World Net Daily and it's worth the read. As far as I can tell, the y2k situation is a done deal - baked in the cake - so to speak. Not much point in spending a great deal of time reading the latest opinion as the opinion hasn't changed in months now. A bunch of systems aren't going to come close to making the deadline and that's about it. As to what effect this is all going to have on the overall economy is still open to question but I'm still of the opinion it will be devastating. Of course we may not notice it much if the ongoing deflation picks up speed. I find it interesting that this monetary change is occuring at precisely the same time as the countdown to the rollover. I don't think it is any coincidence. The fear of illiquid markets come the end of the year because of y2k is likely precipitating the current move into hard assets. I think the realization is setting in amongst the big players that the 'lender of last resort' does not in fact actually exist and it's going to be every man for himself in the 'new' monetary system. It seems to me that y2k is just the trigger that is setting into motion the situation that A/FOA/Aragorn/ORO/Mozel and others have laid out. My thanks to all of them for the time they've spent filling us in.

Y2k is and will be the ultimate confidence killer. There still seems to be time to prepare both financially and personally but as the events of the last couple of weeks have shown, the exits are closing rapidly. Hope this finds you prepared partner.

ET
TownCrier
(10/08/1999; 00:38:37 MDT - Msg ID: 15830)
Mining Cos. Burned by Price Surge
http://www.washingtonpost.com/wp-srv/aponline/19991007/aponline170146_000.htmA billion-dollar irony...

"I think clearly there will be a large number of companies whose hedge books are underwater."
Simply Me
(10/08/1999; 02:26:05 MDT - Msg ID: 15831)
The Peasant's View from the Edge of the Village
FOA to SteveH..Msg ID #15797..."With this crowd getting much larger it increases the chance we won't miss anything."

Thank you, again, Sir FOA, for showing me a way to contribute to this fine forum. Admittedly, the language of high finance and economics is a foreign tongue to me. (Thank you all for helping me to learn.) So, ordinarily, I'm silent. However, I can report on trends I'm seeing from the street level on a daily basis. And what I see makes me sad.
Joe Six-Pack hasn't the slightest idea of what's going on with gold/currency/markets. They walk in the door of coin shops every day to sell their gold and silver with only the foggiest notion of what it's worth. The last they heard, gold was at twenty year lows and it's not an investment that performs, so get rid of it. I know of only TWO people in this past MONTH who've been converting every dollar they could get their hands on into physical PMs. And it's no use talking to them; their minds are made up, one way or the other, before they walk in the door.

And to my surprise, the coin and bullion dealers of a size that I think should know better, are spouting the same "drivvel" as the media gold bears! If I bring up gold shorts..they bring up central bank sales. If I bring up the Euro...they bring up the Fed and look at me as though
I'm delusional. They're not stupid people, which leads me to two possibilities. Either they're not hooked up with the internet and are being fed this garbage by larger bullion dealers who are looking to pull some of that cheap "street level" gold up the pipeline.
(Sorry, MK...present company excepted from this tirade.
You are FAR above the folks I'm referring to, in both moral and business stature.)
OR...they DO know better and are lying through their teeth in the hopes of hooking themselves into the aforementioned pipeline. The latter being the most likely case.

To put it another way: This peasant from the edge of the village is seeing "gold" wolves come out of the woods to scavenge fallen Gold Eagles (they're weakened and easy game) in the streets. Though the tingling chill of Fall has barely touched our pleasant valley; it must be bleak and barren winter in the deep woods these wolves haunt, for them to come so close to town. Keep watch from the castle towers!
And tell the other villagers to guard their flocks well. If you only hold a piece of paper that says you are owed a "Golden Eagle", better claim it before the wolves do. There are bigger, smarter wolves in the deepest woods...and the worse the winter gets, the smaller the prey they will settle for.

At the risk of mixing metaphors: to paraphrase wise old Ben Franklin, "A golden bird in the hand is worth TWO in the paper bush."

Believe in holding only physical Gold?...I sure do!
Thanks All,
Simply Me






ORO
(10/08/1999; 04:06:26 MDT - Msg ID: 15832)
Earthquake
Taiwan suffered an earthquake recently. As a result of the earthquake, such large high tech companies as Intel, HP, AMD, Apple etc. have announced delays in shipments and diminished earnings in the near future due to the shutting down of their supply chain. At this point I found the last piece of the puzzle of the illusion of a new economy projected from the thin LCD screen overlaying the decrepit bulk of the old economy, now doing worse than ever.
The great productivity increase of the last years is discussed in the Economist of 24th July 1999, "Work in progress" and there, the new economy skeptic economics Nobel laureate Robert Solow, is quoted "you can see the computer age everywhere these days except in the productivity statistics."
Indeed the sentiment is repeated in the work of Robert Gordon at Northwestern University, who is quoted : "the productivity performance of the manufacturing sector of the United States economy since 1995 has been abysmal rather than admirable. Not only has productivity growth in non-durable manufacturing decelerated in 1995-99 compared to 1972-95, but productivity growth in durable manufacturing stripped of computers has decelerated even more."
As I have argued before, the rise in apparent productivity is predominantly a result of imports of manufactured components and finished products. These are finished, assembled, marketed and retailed at a markup significantly greater than their cost upon entering the country. Thus Chen/Woods theory rises to the fore with the technology sector as well.
The key is the massive transfer of the bulk of high tech component manufacturing off shore, to Korea, Malaysia, Singapore, Taiwan, and elsewhere. Open up your PC, and check the components. You will find very quickly that the components are not made in the US. Yet the markup on these components through their made to order assembly at Gateway, Compaq and Dell is tremendously larger than the ocmponents themselves. I had my current computer assembled in a garage of a local computer whiz, who took the components and assembled them for a flat fee. The difference in costs for me was 30% not including software. Including the fact that I could keep some components of my previous machine and all the files and software, lowered the price paid by 60%. The computer assembler does not have access to bulk pricing, but he will soon enough. In that case, his savings for me would have come to 75%.
Thus the computer industry's 17% productivity growth and its contribution of 39% of the US economy's growth is simply another manifestation of the Chen Woods paradigm. It is simply that imports raise GDP per capita more so than do exports or local manufacturing. It is part of the gearing of the US towards imports. It is no more a new economy than any of the other new economies of the past. It is "fabless" chip foundaries, furniture makers without woodworking equipment, energy companies without energy production capacity.
This is the economy of Rome of the Ceasars. It is the economy of plunder. Our New Rome is as healthy as that of old. As we mortgage 125% of our future and bid for internet companies at 2500% of the net present value of their future income (if it ever shows up), we loose the last of manufacturing capacity and replace it with computers telling us where the plunder is on its' route to our house.
The Barbarians of finance are massed outside New Rome's borders, ready to cut the supplies from the provinces as they cut through our remaining $ forces. Soon the "high value added" operations will find that they are the product of insane-nomics. They have no more value than the manufacturers of the components in Korea or the Phillipines. As Old Rome grew insane on lead laced water, we in New Rome have grown insane on a foreign debt laced stream of money.

Note: An important number.
Weighting our imports on a Purchasing Power Parity bassis from where they come, our "actual" annual trade deficit can be estimated as almost $700 Billion if not greater, rather than the $250 billion everyone is sweating about. This contributes a large chunk of our merchandise economy.

PH in LA
(10/08/1999; 04:26:46 MDT - Msg ID: 15833)
Another View: "Through the Lens of the Golden Sextant"
http://www.goldensextant.com/commentary.html#anchor743240"...if the Cambior and Ashanti examples are at all representative of current gold banking practices in general, the over-the-counter gold derivatives market is almost certainly in far more parlous (perilous?) condition than all but a very few imagined; and (4) by extension, all paper gold must now be deemed suspect...

...were I directing Cambior's affairs, I would have my lawyers hard at work. ...an international bullion bank dealing with a relatively small gold mining company owes it a fiduciary duty of full disclosure of all material facts relating to a proposed loan transaction and associated hedging. Does it (not) then follow that the bank, if it had any knowledge thereof, must disclose any facts relating to the manipulation of the gold market by itself or others? My lawyers would probably tell me that the arguments could be made, but that it would be hard to prove knowledge of manipulation. Smiling like the Cheshire cat, I would then suggest they talk to Bill Murphy at GATA. And... I would get ready to take off the gloves." REGINALD HOWE at the Gold Sextant. (Reginald Howe is a lawyer who has argued cases involving constitutional monetary issues in courtrooms including the US Supreme Court.)

FOA/Another have been so far out in front of the curve since their appearance in late 1996 that it is truly scary. So scary, in fact, that they have been properly villified and ridiculed for uttering the unthinkable. We have noted many examples in the past, but as events unfold, and "we watch this new gold market together" the coincidences between what they have postulated and what transpires keep accumulating. One of the latest trends towards fulfillment of their predictions can surely be seen above, at the Golden Sextant. Has FOA repeatedly stressed that the gold derivatives market is in "perilous condition"? And hasn't he said that lawyers for the bullion banks, the miners and investors will be fighting for years over whatever is left after "all paper gold (has been) deemed suspect"?

The signs are everywhere. These guys really do know what they are talking about!
PH in LA
(10/08/1999; 04:41:43 MDT - Msg ID: 15834)
Earthquake
ORO: Fantastic post!

Lynden LaRouche, who calls himself a trained professional economist has been making somewhat the same point for years. What you point to (with impressive documentation) as the sickness in American manufacturing he calls a turning away from the "American economic model built on innovation in the machine tool sector". Too bad he has been so drastically discredited that the very mention of his name brings forth epithets as "far-out thinking in the fringes of sanity..." etc.

Watch out! It can be dangerous out there, ahead of the curve.
SteveH
(10/08/1999; 05:00:57 MDT - Msg ID: 15835)
Dec. gold now $321.50
www.kitco.comInteresting. Only problem is that the premium may be high now, Nor'wester believes the premium will drop. IMO, the premium may drop but the price will rise, and as the expression goes, "better a year early than a day late."

My buddy the coin dealer keeps talking about a rise in premiums. He is selling silver eagles at $11.00, but Silver maple leafs cheaper, but he says Canadians are raising their premiums as well. Could it be that the premium is owing to silver shortages and not press shortages?

Date: Fri Oct 08 1999 01:22
Nor'wester (themine. . . .concerning Silver Eagles. . . .) ID#335196:
Copyright � 1999 Nor'wester/Kitco Inc. All rights reserved

When the U.S. Mint announced about a month ago that they were going to cutback production in October and stop production by mid-November, premiums JUMPED from $1.38 over spot to $2.85 and now as high as Spot + $3.25 ( dealer to dealer ) .....Your local dealer may have taken the attitude we did -- why sell his customers overpriced Silver products which are likely to be much cheaper in January?...As it is now, it would take a $3.00+ rise in silver prices for a buyer to "break even" on his costs....By mid-January, there should again be quite a bit of Silver Eagle products on the market again -- at logical price levels!
ss of nep
(10/08/1999; 05:34:48 MDT - Msg ID: 15836)
GOLDGAL - - - MsgID# 15737
I hope you don't mide my having copied your post
from Kitco to other day.
IMO, you know the most I have seen about FN.
SteveH
(10/08/1999; 06:46:17 MDT - Msg ID: 15837)
Dec gold now...
http://www.kitcomm.com/comments/gold/1999q4/1999_10/991008.084606.gollumeee.htm$320

Job report steady (see above).
Tomcat
(10/08/1999; 07:25:43 MDT - Msg ID: 15838)
The silver street premium

IMO, the rise in the silver premium is partially due to "street demand" rather than investor demand. It is the result of a less sophisticated buyer. Ask any "street coin dealer" about the difference between silver buyers and gold buyers.

I used to be a silver street buyer. It never once dawned on me to buy gold. Why?

Because I came from the streets, that's why?

Now, if that answer doesn't make sense to you it's because you weren't raised in the streets. When a street person looks at gold he doesn't see what you see. He sees something like a diamond. Something he can't have. It's not a conscious thing. It is something beyond his grasp; even if he has money.

Yes, even if he has the money! Many won't believe this but it is true. There are many people who have considerable wealth who live in run down neighborhoods and still live the street life. Why don't they move to a nicer location? It never enters their mind.

To a street person, gold and the suburbs are for those other folks who you'd rather not think about because to do so is going to cause you to feel a pain in your soul that you neither understand nor want to experience.

Being in business for yourself is not part of a workers paradigm. Making an honest living is not part of a thief's paradigm. And owning gold is not part of the street paradigm.

Despite the fact that I broke away from the street; despite the fact that I got more degrees than anyone needs; despite the fact that I became a business owner with plenty of money; despite the fact that I hob-nobbed with the very wealthy; despite all this, it took me years to break the street paradigm and own gold.

The silver street premium is rising because the silver street demand is rising. Something is changing on the streets. Any ideas as to what it migh be?

Leigh
(10/08/1999; 07:37:35 MDT - Msg ID: 15839)
Tomcat
Dear Tomcat: That's where Farfel's and Golden Truth's messages about EDUCATING people come in. It would never have occurred to me to buy gold either, before I began reading about Y2K. I kept hearing advice to "buy gold, buy gold," and I had no idea of what that meant or how to go about it. One day I had an opportunity to buy a basic book on gold buying, and within a couple of hours it not only seemed a possibility, but a necessity.

The message needs to get out! We need to be talking up gold to our friends, neighbors, co-workers (in a discreet way - don't want them showing up for loans later on!). Give gold and silver coins to people as gifts. I recently bought a bunch of silver Eagles for my kids' allowances (when they're older), thank-you gifts, and so on. Buy up a bunch of copies of MK's book on gold buying and send them to people.

We've been blessed on this Forum to have the counsel of Another and FOA to guide us through troublesome times ahead. We ought to repay the favor by passing the word along.
Diewarzu
(10/08/1999; 07:41:26 MDT - Msg ID: 15840)
Warning: DROOY's hedge-lite program could spell T-R-O-U-B-L-E
Comment from John Hathaway of Tocqueville Asset: "...even those companies that will soon be proudly proclaiming their "HEDGE-LITE" position stand to be shocked at the degree of risk they have undertaken. Officers and directors should understand the potential for shareholder suits from investors who bought shares as a play on higher gold prices..."

My comment: DROOY is 25%+ hedged (looks to me like they have nearly 1 million oz hedged at LOWER than market prices over the next year and a half!!!...sheesh) through both June 2000 AND June 2001. Will DROOY end up suffocating their profits as well and end up having their stock price TRASHED to a lesser degree than Ashanti? I don't mean to be overly pessimistic, but after having been personally burned on ASL in a big way just thought I might pass this info along so everyone can see the actual numbers (please repost as seems useful). Check out their official table of hedging under quarterly reports: " http://drd.co.za/". I have tried to recreate the
table for ease of reference as follows:

Through 06-30-99...based on approx 700,000 oz annual production:

Year Ending---Type of Contract---Oz of Gold---Price per Oz
----------------------------------------------------------
06-30-2000----Forward Sales------280,000------$299.30
--------------Forward Sales-------20,000------$290.00
---------Accreting frwd sales----200,000------$316.87
--------------Call Options--------79,200-----$303.10

06-30-2001----Forward Sales------244,000------$322.03
--------------Forward Sales-------11,000------$297.25
---------Accreting frwd sales----200,000------$316.87
--------------Call Options-------106,100------$319.50

06-30-2002----Forward Sales-------78,000------$335.21
--------------Forward Sales--------7,000------$304.65
---------Accreting frwd sales-----50,000------$316.87

06-30-2003----Forward Sales-------48,000------$410.00
and onwards---Forward Sales-------12,000------$316.20
FOA
(10/08/1999; 07:55:38 MDT - Msg ID: 15841)
Comment
http://www.fiendbear.com/guestpg1.htmPH,
Have waited for the day when I could lean back and read these events in the words of others. We are all riding a new "bullish investment trend line" called "understanding"! It's great to see so many at this forum (and others) cutting through the fog and seeing a new world of "gold bullion".
Not just the trader world of paper profits.

Look at this new item: "The Debacle in the Gold Market" and it's link above. Here are a few pieces of it:

-----History has shown us that this type of activity always ends in a disaster of sorts for theplayers and indeed for most market participants. ---------

---We have stated before that in some ways there were two markets, one running on the back of the other. ------

----What was being created here was the mother of all debacles, simply because the paper market was deemed to be real, when, in fact it was as illusory ----------------

---------All the players in this paper market are at risk, and in fact were at risk the moment the made their first foray into it. The extent and ramifications of that risk will become clear over the next several months but it carries far greater implications than most commentators are awareof. ----------

-----Currently most aspects of the gold market (one notable exception being ownership to physical metal purchased prior to this latest rise in price) including gold stocks are at best a pool of very muddied waters and will remain so until this artificial paper gold market ceases to exist and we are some time away from that event. --------------


PH, ORO, ALL:

This along with all the other "finds" here tell us we are well into a "changing of the tide".

FOA
Tomcat
(10/08/1999; 08:04:10 MDT - Msg ID: 15842)
Liegh

Great idea. With Thanksgiving and Xmas coming up and Y2k right on their coat-tails, gold will make a very appropriate gift. Your point about education is also well taken. MK's book on gold woudl also be a good gift.
TownCrier
(10/08/1999; 08:10:12 MDT - Msg ID: 15843)
Sept. Unemployment Rate Unchanged at 4.2%, the Lowest in Nearly Three Decades
http://biz.yahoo.com/apf/991008/economy_4.htmlAverage hourly earnings grew by 0.5 percent (to $13.37), exceeding the 0.2 percent increase for the previous month.
Leigh
(10/08/1999; 08:10:59 MDT - Msg ID: 15844)
Tomcat
Thanks, Tomcat. Most of us used to be sheeple, and we have a duty to help pull other sheeple out of the pit before it's too late!
TownCrier
(10/08/1999; 08:20:11 MDT - Msg ID: 15845)
Steps BOJ Policy Board may debate on Wed
http://biz.yahoo.com/rf/991008/by.htmlThe Japanese government is pressuring the Bank of Japan to print more money with the stated objective to keep long-term interest rates from rising. Is it just me, or does this defie logic? Shouldn't so much extra cash put more pressure on interest rates such as we see in various latin american countries?
FOA
(10/08/1999; 08:32:54 MDT - Msg ID: 15846)
Comments
TownCrier (10/07/99; 19:15:20MDT - Msg ID:15804)
After the Close: the GOLDEN VIEW from The Tower
"ECB's Duisenberg rules out EU gold-selling agency."

Town,
You can bet they are well into creating a Euroland based gold market expressley denominated in Euros. The day will come that even MK will check the price of gold in Euros first before a sale is made. Believe it!


ALSO:

Leigh,
Good point about helping others learn. Most Americans have grown up with a Western viewpoint. They have little background of the true reasons for gold. Their knowledge comes from stock broker reasoning that sees the entire gold market as the 70s thru today. It will be a costly
mistake. You are right, MKs book would help many, if only they knew it was "out there". I thing the changing gold market (bullion way up as ALL gold paper falls behind) will make people curious. Even flierdude (10/07/99; 19:31:37MDT - Msg ID:15806) would benifit from a call to
MK.

Thanks FOA
FOA
(10/08/1999; 08:37:15 MDT - Msg ID: 15847)
Reply
Al Fulchino (10/07/99; 20:11:46MDT - Msg ID:15811)
FOA? What does this ounce in my hand buy if....? Forgive my intrusion, but just what does this $30,000/oz. of gold purchase?-------

AL,
Intrusion is the reason this forum exists. (smile)
The old concepts of "one ounce buys a suit" was never honest. It just so happened that during that timeline of "relatively" free markets the value worked that way. Today, gold's value in no way comes even close to reflecting all the technological advancements that have impacted our buying power. Yes, in currency terms a suit is priced well, but our buying power was robbed from currency inflation. Here is where the years of money "overproduction" have taken their toll. Because of manufacturing advances the cost of goods
should have been far less than today. In reverse terms, if the true dollar inflation was evident, a suit would cost several thousand. This is how we can see gold in the many thousands even before dollar price inflation impacts it's price. We will live to see gold gain value in "very real terms" against every form of wealth. Gains that will become evident well in advance of the dollar price inflation that is to come. Holding physical gold today is a "real value" asset, far in excess of what the current trading
proclaims it to be. You have but to walk this trail a little further to witness "nature in full bloom".

Thanks FOA







FOA
(10/08/1999; 08:47:06 MDT - Msg ID: 15848)
Reply
ORO (10/07/99; 22:31:54MDT - Msg ID:15823)
FOA the new Monetary order
Has there been any thinking in this regard?

ORO,
It's not as cut and dry as your post displays it. Yourself and Michael have just recently embarked us into the complicated world of "money management politics". I can take us very deep with this but fear we will all come up dry with "understanding". With so much happening now with the changing perceptions of the gold markets, I want to stay current in this area. Post your excellent works as you will, I read every thing sent to me. Yet, I hold back for now. Thank you so much for all you offer as your writings are the best wine before and after dinner. FOA
TownCrier
(10/08/1999; 08:51:06 MDT - Msg ID: 15849)
Government Reports Two Y2K Failures
http://www.washingtonpost.com/wp-srv/aponline/19991004/aponline192529_000.htmSmall but real glitches that reared their ugly head and were fixed after the malfuntion. Simple annecdotal evidence that Y2K is potentially more than unwarranted "hype."
FOA
(10/08/1999; 08:56:14 MDT - Msg ID: 15850)
(No Subject)
PH in LA (10/08/99; 04:41:43MDT - Msg ID:15834)
Earthquake

PH,
HA!! Very good, I love it:
"far-out thinking in the fringes of sanity..."

I'll be back a little later. FOA
USAGOLD
(10/08/1999; 09:02:01 MDT - Msg ID: 15851)
Today's Gold Market Report: "Gold looks like winner...under a number of different scenarios," says financial guru
MARKET REPORT (10/8/99): Day Ten of the Big Breakout....Gold rebounds nicely in
New York after a rough night overseas........Gold lease rates consolidate at 4% level, then
head back up..................FWN says in its pre-opening report that it expected gold to
trade down $4 to $4.5.....instead it surprisingly moves up $1.80 in the early going--
another example of the market's extreme volatitility and uncertainty. FWN also reports that
the consensus opinion among traders is that we are going to $330 soon..........September
payrolls unexpectedly come in down 8000 jobs (instead of the predicted 218,000
gain)...................Reuters Alden Bentley writes: "The world gold industry is anticipating
huge losses after the long-depressed metal's recent price jump but it will take time to sift
through the damaged balance sheets of bullion bears to see if the worst fears are borne
out."..............One dealer is quoted as saying: "Everybody is talking about people getting
hurt in this market. I think there have been people that have probably gotten hurt, like
people who have credit exposure (to these gold customers). But nothing is crystallized yet
so nobody really knows what the damage is going to be.''.......................Please see
"Gold mart awaits industry fallout from price surge" for a detailed account of what's going
on behind the scenes in the gold market -- a situation described in the article as a "melee".
...............This articles offers some good reasons why traders have been aggressively
buying the dips for the past three days.....................Republic New York Corp. is being
sued by a shareholders who charges "the U.S. bank failed to disclose its brokerage's
dealings" with Princeton Economics' Martin Armstrong who is accused of a massive
securities fraud. The suit also claims that Republic is misrepresenting the liability exposure
that might arise from the case......................."Gold looks like being a winner under a
number of different scenarios for the world economy, including the bursting of the financial
bubble in the United States, according to Dr Marc Faber, markets guru and author of the
Gloom, Boom and Doom report.".............. So starts an article this article that makes for
interesting reading at AFR headlined "Gold shines through global
gloom"....................... Says Dr. Faber: "If there is a bust, the Americans will do what
they have done when there has been a problem in the past and that is let the dollar depreciate
by printing money."........... That's it for now, fellow goldmeisters. Have a good
weekend. This could be an interesting Friday............MK

The October edition of News & Views will be ready early next week and we invite all
our visitors to take advantage of a free trial subscription to one of the most popular, widely
read and quoted gold newsletters. Last month we predicted an explosion in the gold price.
This month we deal with the nettlesome subject of paper assets in this tenth month of the
penultimate year. And we all know what that means. October brings with it our annual
Halloween issue. Here's an excerpt: "And this October could very well foreshadow a most
fateful stroke of midnight only two months away. October. When markets crash and assets
go bump in the night........." We think you will gain by taking advantage of our
offer...........

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.
TownCrier
(10/08/1999; 09:09:05 MDT - Msg ID: 15852)
Wallets likely will be loaded -- just in case for Y2K
http://orlandosentinel.com/news/100399_y2kcash03_19.htmA financial planner/stockbroker in Orlando, Randall Deane said, "I've talked to some who say they'll accumulate large amounts of cash and consider serious liquidations. But I've never talked to someone who has actually done it. Of course, it's a natural tendency for people to procrastinate about making big decisions."

However, recent surveys reveal a quarter of the population planning to stash away significant cash reserves. It seems the risks are high under such an altered state of affairs among the collective consumer psyche that the dollar could easly go the way of the peso, with price inflation wiping out the purchasing power of this stashed cash. For each dollar held as cash, it would be prudent to put ten or twenty others into gold.
goldnbones
(10/08/1999; 09:24:55 MDT - Msg ID: 15853)
Hegding and Ashanti
Good morning everyone. This morning I recieved an email from my broker (Canaccord), which discussed a conference call that Ashanti had held yesterday. They go into some detail discussing the hedges etc, but I have found it a little difficult to follow. I guess my understanding of how hedges work is way to simple. I have posted the relevent part of the email below and ask for any simple explanations you can give.

MESSAGE
Ashanti held a conference call last night to try to clarify its
position regarding the hedge book and margin calls. The result seemed
to give some further information, but still leaves many questions
unanswered. The major points from the call are summarised below.

* The company reached a standstill agreement with its counter-parties
on the hedge book;

There are apparently 17 counterparties to Ashanti's hedge book. The
standstill agreement means that these counterparties will not push for
payment of margin calls while the standstill is in place. The total
level of margin calls as at October 6, with gold at US$325/oz., was
US$250 million. This is considerably higher than we had estimated
yesterday and shows the liquidity problem facing Ashanti.

Mark Keatley, Ashanti's CFO, would not give an exact period for the
standstill agreement, but when asked whether it was days, weeks or
months he replied that "it is not days or months". This seems to
suggest several weeks, possibly to around the end of November?

In answer to a question, Mr. Keatley also stated that so long as the
standstill agreement is in place, there is no problem with possibly
breaking any covenants relating to the revolving credit facility. It
was also pointed out that 75% of the hedge book counter-parties were
also involved in the revolving credit facilities, and these
counter-parties would not want to see anything done to reduce
Ashanti's operational viability.

* The 'replacement cost' of Ashanti's hedge book has risen to US$572
million;

On Tuesday, Ashanti stated that the replacement cost of the hedge book
was US$450M with gold at US$317.50/oz. Yesterday, the company stated
that the replacement cost was US$572 million with gold at US$325/oz.

This suggests that a considerable level of gearing to the gold price
remains, despite the restructuring over the past few days. The total
net hedge book covers 10 million ounces of gold. A move of US$7.50/oz.
on 10 million ounces would give US$75 million-but the replacement cost
moved by US$122 million, suggesting gearing of approximately 1.5 times.
However, in further questions, it seemed that if gold ran to US$350/oz.
the replacement cost would be around US$800 million, which implies no
gearing (US$25/oz. on 10 million ounces equals US$250 million, added
to US$572 million replacement cost today equals US$822 million).

* The replacement cost is not a cash loss;

Mark Keatley stressed that the replacement cost of the hedge book is
not a cash loss, as it has not been crystallised. With the average
price of the hedge contracts at US$375/oz., Ashanti's intention is to
deliver physical gold into these contracts as it is produced.

The problem is one of liquidity-but now that a standstill agreement is
in place Ashanti has a breathing space which will allow it to arrange
a more permanent solution. The company is now valuing the hedge book
on a daily (possibly even hourly?) basis, helped by a team of
analysts, supplied by the counter-parties, that have built a highly
detailed model of the complete hedge position.

Mr. Keatley admitted that in 'stress tests' that Ashanti had
previously conducted on its hedge book, it had looked at a 'worst case'
scenario of a rise of US$50/oz. in the gold price over a "longer time"
Mr. Keatley did not define the time frame, but we would not be
surprised if it had been a month). The company was taken completely
by surprise, and had no time to react, when gold rose US$75/oz. in
just four days.

* The balance sheet remains okay for normal business;

Mark Keatley stated, in answer to a question that there had not been
much change in the balance sheet since the end of June, that it is
okay for normal business. Gross debt now stood at just over US$500
million (long-term borrowings were US$489 million in June), while net
debt was around US$440 million, implying cash on hand of just under
US$60 million (cash was US$109 million in June). The swing of around
US$70 million is accounted for by spending on capital projects, such
as Geita. For normal business purposes, therefore, Ashanti's balance
sheet is fine-but it cannot stand margin calls of US$250 million or
more.

* The value of the operations hasi with the higher gold price;

Mark Keatley stated that Ashanti has modelled the value of future cash
flows from its operations. Using a discount rate of 6%, the value of
these cash flows with spot gold at US$255/oz. (the level a couple of
weeks ago) was US$1.3 billion; with spot gold at US$325/oz. the value
has risen to US$2.5 billion. This is consistent with the gearing
effect on Ashanti's margins, as its cash costs are around US$215/oz.
giving a margin of US$40/oz. at US$255/oz. gold and US$110/oz. at
US$325/oz gold. Allowing for the higher revenues received from the
gold that is hedged, the discounted value has approximately doubled.

* The company has been in discussions with Lonmin for several months;

The company apparently began discussions with Lonmin regarding a
possible merger as long ago as October 1998. The current crisis has
accelerated the talks. Ashanti also stated that the Ghanaian
government, which holds 20% of the company, would vote in favour of
such a merger.

Overall, the conference call gave some comfort (mainly from the news
of the standstill agreement), but reinforces the fact that Ashanti's
liquidity problems are significant and will get worse if the gold
price rises.

Nonetheless, as we pointed out on Tuesday, the overall value of the
company should be higher today than it was 2 weeks ago when the shares
were trading at US$6.00. The discussions with Lonmin are likely to
lead to a bid, and if this is seen as too low/opportunistic by the
likes of Barrick Gold, Anglogold, Gold Fields, Normandy, etc., there
could well be one or more competing bids. We therefore consider that
at the current level, around US$4.25, Ashanti Goldfields is
undervalued. However, with the immediate liquidity problems still
hanging over the company, we can only recommend a SPECULATIVE BUY.
END MESSAGE

ok, so you may or may not want to ignore the buy/sell advice at the end, the message does come from a broker afterall!!!!!
TownCrier
(10/08/1999; 09:37:20 MDT - Msg ID: 15854)
Y2K: Think Global, Stay Local
http://www.intellectualcapital.com/issues/issue308/item6731.aspOfficial warnings about what will surely happen in their neighborhoods but not in ours.
Yeah, right. Do yourself a favor...'cause no one else is standing in line to help you.
ORO
(10/08/1999; 10:06:21 MDT - Msg ID: 15855)
FOA - New Monetary System
Though a question of detail, I think the concept is flawed at its root. The structure itself is still as dangerous as any paper structure. The mispricing of gold as a result of the arbitrary decision to use it as money backing for an inflated currency with heavy interest in strength, has way too much economic damage and dislocation built into it.
Is it better than the current system? Yes, that's easy. But it will have its' own quirky ways to make sure the distortion is obvious.

I understand you don't think we can get far discussing this at this stage, as things are so much in the air.

Thanks again. You allways open my eyes to something new.
Simply Me
(10/08/1999; 10:32:59 MDT - Msg ID: 15856)
Gold Premiums
Tomcat and SteveH: The high premiums also reflect the high volatility of the market. In effect, the bullion dealers are hedging their prices against sudden rises in the POG. The store inventory is kept at a steady or (hopefully) growing dollar amount. As gold is sold, you pick up the phone and order more to replace it, locking in the "buy" price as close as possible to the "sell". Profits are very slim to begin with. If every time you pick up the phone to order, your dollars buy less and less inventory, your bullion business is going down the tubes.

Also, you may be porportionally right about the sentiments of "the man on the street" and gold ownership. And I'm sure, the meaner the streets, the less gold you would find there.
But you also might be surprised at the level of gold trade in lower-middle to middle class America. The farmers, the factory workers, the small business owner, and the retail salesperson....folks with a little income to put back, but not enough to play the stocks. Unfortunately, many of them are also not very knowledgeable about markets in general and have few other resources to fall back on...so when a financial set-back hits, they sell the gold first.

The gold coming out from under the mattresses these days is indicator that the economy is getting worse from the bottom up. No matter what the DOW says.

PH in LA
(10/08/1999; 10:51:08 MDT - Msg ID: 15857)
On The Street
Al Fulchino:
I was thinking about your question (10/07/99; 20:11:46MDT - Msg ID:15811) "What will a $30,000-ounce buy if...?" before arising this morning, and even though I would never hope to add much to FOA's answer (FOA -10/08/99; 08:37:15MDT - Msg ID:15847), please let me try to put an idea or two out there. This is a very fundamental question for all who hold gold (and even more for those who don't) and well worth considering even now.

We have already seen a tremendous and long-awaited initial wake-up call to our journey "on the road". POG literally exploded out of the blocks in a paroxysm that has caught the gold world's professionals flat-footed. From mine executives to bullion bank board rooms, many are suffering from "sticker-shock" and "reality-shock", as they reel in disbelief. At the same time, what has the greatest professional of them all, the great, all-knowing helmsman, A Greenspan seen fit to do to control the situation? Why, just this week he shifted to a "tightening bias", while refusing as "too radical?" the widely expected take-back of his final 1/4% interest rate reduction (one of three) that he had applied back when the international financial system was on the verge of collapse in the wake of LTCM. The world's financial system verges on collapse and interest rates go up .75% on the street! How ponderous and resistent to change the street economy can be! Gold explodes $75 in a few days and AG shifts to a "tightening bias".

Getting back to suits:

In Shakespeare's time, a suit of gentlemen's clothes was a marvelous thing. "The clothes make the man" they used to say. And rightly so. That suit was a hand-made creation, a masterpiece crafted from fabrics imported from far places (at great expense) by a master craftsman who labored over a considerable time to bring his creation into being. It was nothing to be taken lightly... and it wasn't! Not just anyone could afford one! You had to "deserve" such a thing. An ounce of gold was just about right.

Today, it is no longer the "clothes that make the man". No! Especially here in California, and all across America... "We are what we drive" we are told by Madison Avenue. Yes, the car we drive is now considered an expression of who we are. The American dream... The symbol of our personal freedom. And a marvelous creation it is! "Crafted from materials imported from far places (at great expense)", it is the result of the efforts of not just one, but many craftsmen, from the design engineer, to the factory worker, many of whom can't even afford to live in America and so are conscripted in every far corner of the world; it is a masterpiece. $30,000 is not considered too much to pay for such a thing. Not just anyone can afford one. You have to "deserve" such a thing. No, the clothes no longer "make the man". "We are what we drive!" And an ounce of gold ought to be just about right.

Getting back to the ponderous street economy:

Those who foresee gold rising to $30,000/oz have warned that the US dollar will have to fall drastically in value. But the artificial nature of the dollar, built as it is, mostly on confidence, means that most of its value adjustment will have to take place on the street, where the confidence is held. Even as the populous has no hint of the explosion in gold that has already occurred (let alone that which comes), they will be "way behind the curve" with respect to their confidence in the dollar. Sure, goods imported from abroad will become immediately more expensive. Like, for example, oil. Oil has more than doubled lately yet there is virtually no sign of that on the street. Oh wait! That's right! I almost forgot! Gasoline went up over $.20/gallon for a while, there. On the street. (It's almost back to normal, now.) Maybe some of the things made abroad will be made here again. And maybe some corporate CEOs will have to forego their profit-sharing bonuses. Future generations will call this "a time of historical change".

And that's how much of this will play out. The dollar will adjust rapidly on the currency markets. Governments will drag their feet to keep the brakes on (currency controls, taxation, new laws... etc.) and things will change on the street. Slowly! Hopefully (from the governings' point of view) so slowly that hardly anyone even notices. "Too bad we doesn't haf enny of thet gold, Mabel," Billy Joe Sixpack will say over dinner. "Yeah! Fry mah hide!" Mabel will answer. "But mebbe we'll win th' lottery this hyar week. Shet mah mouth! How's yer dinner?" "Fine." Billy Joe will say.

And maybe Alan Greenspan will raise interest rates another 1/4%, too. Out here, on the street!
Hill Billy Mitchell
(10/08/1999; 10:58:20 MDT - Msg ID: 15858)
We the street people
Tomcat:

re: Something is changing on the streets. Any ideas as to what it might be?

We the "street people are not telling. You'll have to rub shoulders with us again to find out. (smile) only kidding
PH in LA
(10/08/1999; 11:05:19 MDT - Msg ID: 15859)
"No-Name" Horse
What's with the "Horse with no Name" today? Lease rates at 75% in the near month. Has anyone called his trainer this morning? Maybe he is about to escape. Was his stable door left open?
AEL
(10/08/1999; 11:06:31 MDT - Msg ID: 15860)
PH: LaRouche
"Too bad he has been so drastically discredited that the very mention of his name brings forth epithets as "far-out thinking in the fringes of sanity..." etc."

I agreee, it IS too bad. LaRouche -- if you really get down and read his stuff -- is a major intellectual force to contend with. But LaRouche really has only himself to blame for that "fringe/kook" perception. He can write the most outstanding, scholarly and incisive article (on whatever)... and then completely trash his own credibility by making some clearly ridiculous point, and hammering on it; e.g. such as that Alan Greenspan is certifiably, clinically insane. (Yes, he actually said that!) It is embarassing that a man of his intellect and erudition would sabotage himself in this way. Ah, well. I still enjoy reading his stuff. It is a treasure-trove of clear thinking and historical understanding and provocative ideas... if you can ignore those occasional(kooky/psycho) outbursts. :)
Hill Billy Mitchell
(10/08/1999; 11:37:09 MDT - Msg ID: 15861)
flierdude # 15806
Your reasons for liking silver are worthy. IMO you are out of balance though. You should have less in silver and more in gold, physical that is.

What is your reason for having 55% of your holdings in paper. Seems a little risky. Why not move your gold stocks into physical and keep your calls.

You would greatly reduce the risk of paper destruction and put your gold into a better balance with your silver without having to reduce your physical holdings.
Farfel
(10/08/1999; 11:58:41 MDT - Msg ID: 15862)
The Complete Text of Randy Andy Smith's Comments about GOLD
I am always amazed at how the mainstream media censors news items. Fortunately, I obtained a complete text of Mr. Smith's latest piece of propaganda and thought I would share it with USA Gold's visitors:

MITSUI ANALYST RANDY ANDY SMITH SAYS GOLD "WALL" WILL FALL DESPITE RECENT RALLY OR "I WILL HAVE TO SELL EVERYTHING I OWN AT A SWAP MEET, GODDAMMIT TO HELL!."
London--Oct 7--The recent euphoria in the gold market cannot mask the
underlying erosion of gold's role in official reserve portfolio management,
according to a presentation prepared for the Nikkei Gold Conference by Randy Andy
Smith, renowned anti-gold storyteller at Mitsui Bussan Commodities.

Mr. Smith, relying heavily upon anecdotal evidence provided by his senior advisor, Marty "Cook the Books" Armstrong, shocked his Japanese audience with the virulence of his anti-gold statements, not to mention the gross stupidity of his various maleducated pronouncements.

The paper, titled "The Fall of the Golden Wall or These Blasted Golden Showers are Raining on My Parade", argues the philosophy behind holding gold, is doomed, like Marty Armstrong's whiny plea of innocence, to collapse "under the weight of its own contradictions."

"Let me assure you there will be even more negative news concering gold in the future," Randy Andy declared, "And I expect to provide you timely reports since Marty will be allowed visitors at his prison facility between 1:00 and 3:00 P.M. once a week...and I intend to be there, taking notes!!" ( Story .13436 ) :-)
Tomcat
(10/08/1999; 12:06:20 MDT - Msg ID: 15863)
Why hasn't the POG risen faster as of late?

In USGOLD's report today he quoted someone saying: "Everybody is talking about people getting hurt in this market. I think there have been people that have probably gotten hurt, like people who have credit exposure (to these gold customers). But nothing is crystallized yet so nobody really knows what the damage is going to be."

...so nobody really knows what the damage is going to be."

My take is that the bullion banks, the mines, and the hedge funds know very well what the damage is. They live with these numbers by the minute. This is arithmetic; not advanced calculus. These folks don't want to let out the truth! They're stalling.

The damage could be very deep and spread very far amongst many mining firms, bullion banks, and hedge funds. If the truth were let out and understood by the investment community then we might see many stock prices fall and the POG rise rapidly.

If 5,000 tons of gold have been sold short or forward then we still have 5000 tons of facts to be laid at the alter of truth.

If one holds physical gold, then you have tons of facts, about to be revealed, on your side. Every day more and more bits of truth (pieces of the puzzle) will come out. Soon the puzzle/picture of losses will be clear to all and the POG will rise accordingly.

Then, it will take even more time for a particular truth to sink in; that there is just not enough gold to fill the needs of the shorts. The price will then continue to rise as more and more see that their isn't enough gold to go around.

If all investors saw this immediately then the POG would rise immediately. But, but the revelation of facts and truth is a much slower process because it takes time for people to believe an "unbelievable" story that they about about to hear.

If you remember, it took many of us a long time to put the picture together. And we had time and many great teachers! Many investors don't have all the help we have had so it will take them more time. But as sure as the sun rises they will see the truth and the truth will drive the POG toward the stars.
PH in LA
(10/08/1999; 12:07:55 MDT - Msg ID: 15864)
LaRouche
AEL:
Agree completely, except that the "kooky outbursts" are even more kooky when seen out of context. I remember the "certifiably insane" passage and seen from the point LaRouche was making at the time, it was almost valid. PS. He doesn't like A.Gore at all, either. Is he "talking his book" and seeing him as a rival? You know he does consider himself a presidential candidate. Another case of being way too far out in front of the curve? For a while his economic vision seemed very close to Another's. Hasn't had much to say lately, though. Probably afraid in light of his presidential fantasies. Almost believable, too, his version of how and why he was framed. What a shame!
ORO
(10/08/1999; 12:08:03 MDT - Msg ID: 15865)
LaRouche
The guy is simply a hot head and he lets his anger get ahead of him.
Until a couple of months ago I only saw him on a couple of TV shows where he had some controvercial things to say, but the words got lost in an outburst. So he just behaved like a crackpot. Today, after reading 2 or 3 articles on education and banking, I came to the conclusion that the guy is not a crank and I should look at more of his stuff. Besides, his information gathering team seems very effective.
DD
(10/08/1999; 12:10:47 MDT - Msg ID: 15866)
ORO/Earthquake
ORO - I think this post may be one of your most powerful. It's oh so true. I'm going to turn more than a little philosophical for just a moment. Please bare with me. I started and owned a manufacturing company for over 20 years. We had over 200 employees, most of them highly skilled. We were a leader in our industry in technology, quality and customer satisfaction before these terms became popular. At one point in my career I was sort'a rich, at least on paper (sounds like a lot'a people I know today). I hired a president and semi-retired. He ran the company into the dirt with me asleep at the switch. We lost millions. I came back into day-to-day management to attempt to save a company with a significat negative net worth. It wasn't pretty. We held off the banks that wanted to forclose and rallied our customers, suppliers and people. We were back to profitability within 10 months. Knowledgable people called it a small maracle. Over 3 years, we paid back everything we owed with interest. That's the good news. The bad news? we weren't able to invest in upgrades to the plant in a capitol intensive business. However, through the dedication and energy of our people, we were still able to build complex products to higher quality standards than most of our competitors. With the restructuring of the Aerospace Industry (our customers) in the late 1980s, it became a battle of the balance sheets as programs were cut and work dwindled. I closed the doors in 1990, losing everything both personally and professionally. So, what's the purpose of this sad story? I believe we've missed the boat big time on productivity because we've looked almost exclusively at technology as its source. We've forgotton about PEOPLE! Work, for the most part, is more like a prison sentence for most people than an experience of growth, contribution and adventure. In our chase for the almighty dollar, quarterly earnings and stock price, we've lost an important piece of ourselves, our humanity. This loss has translated into difficult to measure reductions in energy, creativity, responsibility and caring in the people who do the real WORK. People ARE business and they ARE the businesses in which they work. Technology, without well trained, motivated people may actually reduce productivity. OK, now for the point of this ramble. The main reason we're in this Y2k tar baby is that "leaders" have focused on the same short term factors that caused them to discount people as important to productivity. A potential wake up call is coming on 00. Nearly every Y2k contingency plan has many manual (people) elements. Are these people trained for manual workarounds? Do they care? Will they do whatever it takes to keep things going? All this for organizations that have shown little regard for their personal well being? I doubt it. People's alienation in the workplace maybe a show stopper in holding the fort and putting the peices back together when our globally interconnected systems of systems fails in the next year. A friend called me last night to inquire as to if I would be on a forum to address a large group on Y2k. I said no. I've been on a number of these things and nothing comes of them (except I piss off the establishment with hard questions). He asked if I would advise the moderator what questions to ask the panel or any advice I would give? I said sure. There's only one question that has any relevance now. ARE YOU PREPARED?? The advice? GET PREPARED!! Just like the gold bears, time is very short in this end game, too.Keep up the great work all. Best, DD
Twice Discipled
(10/08/1999; 12:21:38 MDT - Msg ID: 15867)
DD
Amen! I will cut and paste your post on my cubicle wall.
DD
(10/08/1999; 12:30:39 MDT - Msg ID: 15868)
FOA - Just a thought
FOA- I felt compelled to say something to you. There's something powerful in your posts. They seem to serve as reminders of the bigger picture. We, at least I, need that. It easy to get caught up in daily "noise". Thank you for all you do. Best, DD
YGM
(10/08/1999; 12:32:23 MDT - Msg ID: 15869)
DD
Yours was a powerful message from a view w/ experience. I sincerely hope the Gold upswing will bring back some of those lost riches. Regards to you & thanks for your warning.--YGM
ORO
(10/08/1999; 12:34:24 MDT - Msg ID: 15870)
DD
Aug 1971
Laffer comes out of the oval office, having discussed with Nixon the closure of the gold window, and Nixon's mind was made up, is heard to say "The conection between effort and reward has been severed".
TownCrier
(10/08/1999; 12:45:39 MDT - Msg ID: 15871)
headline: Will Roaring 2000s jazz up Dow to 41,000?
http://biz.yahoo.com/rf/991008/n3.htmlThis fantasy-land scenario is what is currently being priced into the market. Brokers have been sold the story that the baby boomers will be passing through their most productive years over the next decade and it is their economic influence that will drive up the DOW. The often overlooked downside to this same fantasy is that it would be followed by a bear market lasting over a decade.

If the dollar were devalued against all things by only 75% (to begin to adjust for the current trade deficit and overhang of dollars in foreign accounts), then the DOW would be priced at over 40,000 today. Or for that matter, they could tweak the formula a bit and make the DOW index whatever number they choose...be it 10 or 10 million. That doesn't exactly help you pay the rent, though, does it?

Real people will come back to their senses and see the value in real things when the purchasing power of the dollar begins to fall against real goods. Real money for real people to meet their real purchasing and savings needs...Got gold?
AEL
(10/08/1999; 13:06:28 MDT - Msg ID: 15872)
larouche
Right, ORO, he is NOT simply a crank; a very complex guy, nothing simple about him. Here are a few relevant URLs, for your reading pleasure:

LaRouche on Post-Collapse Reconstruction & Global Development
http://www.larouchepub.com/lar_oberwesel_2631.html

Lyndon LaRouche: Christian Humanist Intellectual, Philosopher, Economist
http://www.larouchepub.com

Against Oligarchy (Webster Tarpley, Christian Humanist; LaRouche compadre)
http://www.tarpley.net/

Readings from The American Almanac (Christian Humanism; LaRouche et al)
http://members.tripod.com/~american_almanac/

The Schiller Institute in Denmark
http://inet.uni-c.dk/~sch-inst/


Yellin' of troy
(10/08/1999; 14:15:47 MDT - Msg ID: 15873)
ORO -- money
Ned Block once criticised Julian Jaynes for making an ele-
mentary use/mention error, confusing the concept of consci-
ousness with consciousness itself. Daniel Dennett replied
that some phenomena and institutions are so dependent upon a
concept that you can't have one without the other; e.g., you
can't have baseball without the concept of baseball. And
you can't have money without the concept of money. All full
fledged money *is* "concept money." True, there is a cont-
inuum from no-money (a pure barter economy) to full fledged
money, running through popular, widely acceptable items, and
you also need to develop the ideas of multi-party deals and
asynchronous deals. Money and the concept of it develop
gradually. But once they are here, the value of money comes
in large part from the concept; the value of particular mo-
ney comes largely from the fact that it *is* money. This is
just as true of gold as of dollars: Gold is as valuable as
it is because, while it is not at present actually currency,
it is intrinsically *good* money, suitable for use as money,
and hence retains a value as secondary money and a potential
for restoration to primary status.

A reliable receipt/note for something valuable, like gold or
gasoline, has a derived value, and since paper is much more
suitable as money than something heavy or explosive, it can
serve as money, in effect combining the intrinsic usefulness
of gasoline and paper. But once it is money, it gets addi-
tional value from that use; and in fact actual, physical gas
will acquire *derived* value from the fact that it is used
(indirectly, through its paper representation) as money. If
the system of receipts is managed fraudulently, if the sup-
ply of paper-gas is (even openly) inflated, knowledge of the
fact will affect the value and perhaps even destroy the use
of paper-gas as money, if there are decent substitutes at
hand. But this is merely the fact that prices change with
changes in knowledge, or that the discovery of fraud is a
*big* change in knowledge. The inflated, or even easily-
inflatable paper-gas money isn't such *good* money as was
thought, and certainly isn't as scarce as was thought, or as
it used to be, so it loses value. This is an argument a-
gainst fraud or inflation; it is not an argument against
"concept money."

The receipt system is a good way to introduce a new form of
money, as you say, and historically it has been much abused,
as you say, and becomes worthless, *eventually*. But only
eventually. When the receipts cease to be receipts and turn
into mere paper, they do not on that account become worth-
less, because by then their value is in part their value as
money rather than their derived, physical-commodity value.
When the dollar was severed from gold, people did not stop
using dollars, and dollars did not become worthless. I'm
not arguing in favor of inflation or excusing governments
that renege on their obligations or defraud people. But my
point was that in figuring out how much a dollar is worth,
or should be, one has to realize that the value of a dollar
lies in the fact that it is a dollar, the standard American
money, rather than in the fact that it used to be redeemable
for gold, or that it no longer is.
Yellin' of troy
(10/08/1999; 14:17:55 MDT - Msg ID: 15874)
ORO -- money
Ned Block once criticised Julian Jaynes for making an ele-
mentary use/mention error, confusing the concept of consci-
ousness with consciousness itself. Daniel Dennett replied
that some phenomena and institutions are so dependent upon a
concept that you can't have one without the other; e.g., you
can't have baseball without the concept of baseball. And
you can't have money without the concept of money. All full
fledged money *is* "concept money." True, there is a cont-
inuum from no-money (a pure barter economy) to full fledged
money, running through popular, widely acceptable items, and
you also need to develop the ideas of multi-party deals and
asynchronous deals. Money and the concept of it develop
gradually. But once they are here, the value of money comes
in large part from the concept; the value of particular mo-
ney comes largely from the fact that it *is* money. This is
just as true of gold as of dollars: Gold is as valuable as
it is because, while it is not at present actually currency,
it is intrinsically *good* money, suitable for use as money,
and hence retains a value as secondary money and a potential
for restoration to primary status.

A reliable receipt/note for something valuable, like gold or
gasoline, has a derived value, and since paper is much more
suitable as money than something heavy or explosive, it can
serve as money, in effect combining the intrinsic usefulness
of gasoline and paper. But once it is money, it gets addi-
tional value from that use; and in fact actual, physical gas
will acquire *derived* value from the fact that it is used
(indirectly, through its paper representation) as money. If
the system of receipts is managed fraudulently, if the sup-
ply of paper-gas is (even openly) inflated, knowledge of the
fact will affect the value and perhaps even destroy the use
of paper-gas as money, if there are decent substitutes at
hand. But this is merely the fact that prices change with
changes in knowledge, or that the discovery of fraud is a
*big* change in knowledge. The inflated, or even easily-
inflatable paper-gas money isn't such *good* money as was
thought, and certainly isn't as scarce as was thought, or as
it used to be, so it loses value. This is an argument a-
gainst fraud or inflation; it is not an argument against
"concept money."

The receipt system is a good way to introduce a new form of
money, as you say, and historically it has been much abused,
as you say, and becomes worthless, *eventually*. But only
eventually. When the receipts
Yellin' of troy
(10/08/1999; 14:17:57 MDT - Msg ID: 15875)
ORO -- money
Ned Block once criticised Julian Jaynes for making an ele-
mentary use/mention error, confusing the concept of consci-
ousness with consciousness itself. Daniel Dennett replied
that some phenomena and institutions are so dependent upon a
concept that you can't have one without the other; e.g., you
can't have baseball without the concept of baseball. And
you can't have money without the concept of money. All full
fledged money *is* "concept money." True, there is a cont-
inuum from no-money (a pure barter economy) to full fledged
money, running through popular, widely acceptable items, and
you also need to develop the ideas of multi-party deals and
asynchronous deals. Money and the concept of it develop
gradually. But once they are here, the value of money comes
in large part from the concept; the value of particular mo-
ney comes largely from the fact that it *is* money. This is
just as true of gold as of dollars: Gold is as valuable as
it is because, while it is not at present actually currency,
it is intrinsically *good* money, suitable for use as money,
and hence retains a value as secondary money and a potential
for restoration to primary status.

A reliable receipt/note for something valuable, like gold or
gasoline, has a derived value, and since paper is much more
suitable as money than something heavy or explosive, it can
serve as money, in effect combining the intrinsic usefulness
of gasoline and paper. But once it is money, it gets addi-
tional value from that use; and in fact actual, physical gas
will acquire *derived* value from the fact that it is used
(indirectly, through its paper representation) as money. If
the system of receipts is managed fraudulently, if the sup-
ply of paper-gas is (even openly) inflated, knowledge of the
fact will affect the value and perhaps even destroy the use
of paper-gas as money, if there are decent substitutes at
hand. But this is merely the fact that prices change with
changes in knowledge, or that the discovery of fraud is a
*big* change in knowledge. The inflated, or even easily-
inflatable paper-gas money isn't such *good* money as was
thought, and certainly isn't as scarce as was thought, or as
it used to be, so it loses value. This is an argument a-
gainst fraud or inflation; it is not an argument against
"concept money."

The receipt system is a good way to introduce a new form of
money, as you say, and historically it has been much abused,
as you say, and becomes worthless, *eventually*. But only
eventually. When the receipts
Yellin' of troy
(10/08/1999; 14:20:52 MDT - Msg ID: 15876)
oops
Sorry for the double post -- I went back to erase my pass-
word, for security, and hit the post button by accident.
DD
(10/08/1999; 14:23:24 MDT - Msg ID: 15877)
ORO/Laffer
ORO - I think Laffer probably said it as well as any of us. Makes one wonder about the definations of "work" and "productivity". I'm particularly facinated by zero sum games. If I make a mint driving the price of gold down while the miners and LDCs losing their shirts, is that productive? The "good o'l boys" would say sure. It's a free market and if the miners can't compete, the market will weed them out. Tough luck. I'm not sure exactly how a miner and his family compete with GS big shots who never factor in the misery caused to others in their never ending quest for more. However, I think what goes around comes around, many times in ways that seem worlds apart and mostly invisible. Karma? I don't know, but something like that. Best, DD
Journeyman
(10/08/1999; 14:49:27 MDT - Msg ID: 15878)
ORO, Yellin' -- MONEY
Lord John Maynard Keynes, archetect of "Keynsian Economics,"explains just how badly he thinks paper (or megabyte) currency,whether marks, yen, dollars --- or even "thallers" can "safely"be abused: "It is evident that so long as the public use money at all, the Government can continue to raise resources by inflation. Moreover, the conveniences of using money in daily life are so great that the public is prepared, rather than forego them, to pay the inflationary tax, provided it is not raised to a prohibitive level . . . Recent experience everywhere seems to show that it is possible to inflate 100% every three months without entirely killing the use of money in retail transactions, but that a greater rate of inflation than this can only be indulged in at the peril of total collapse." He's WAY too conservative -- evidence in a later post. Regards, Journeyman
TownCrier
(10/08/1999; 15:12:06 MDT - Msg ID: 15879)
Y2K to be chronic but not acute - key expert
http://biz.yahoo.com/rf/991008/s6.htmlBruce McConnell, director of the International Y2K Cooperation Center suggested "Y2K-caused effects on daily life will be complex and more chronic than acute." He further predicted, "a growing slowdown in commerce as capacity is reduced by a confluence of degraded infrastructure performance and shaky consumer confidence. Performance degradation, potentially exacerbated by non-Y2K factors, may cascade from one infrastructure to another."

When confidence is low, fiat money suffers because it is built on confidence and very little else. Gold is the only money on earth that will be immune, and will actually thrive in an atmoshere of shaken confidences. Get real. Get gold. Get going.
CoBra(too)
(10/08/1999; 15:22:40 MDT - Msg ID: 15880)
After all those great posts of today ...
Including some very wise "newbies", I'm at a loss to go into any other discussions, be it the Austrian School of economics - which never happened, because the guys have run off to Washington -at a time when they've conceived the old continent toast - and toast it was.

I would only like to stress - and stress is where the shorts are now - that PoG is in the eye of the hurricane. The real devastion is to be expected after the lull. As a BIS official stated some time ago, this coming gold (bull) market won't take any prisoners.
Amen CB2
fox
(10/08/1999; 15:27:35 MDT - Msg ID: 15881)
fox
http://news.24.com/English/Business/Companies/ENG_152129_709007_SEO.aspDrooy and his hedging position
phaedrus
(10/08/1999; 15:34:22 MDT - Msg ID: 15882)
words of wisdom
"Stocks have reached a high and permanent plateau."

-Irving Fisher, noted Yale economist, 1929
Montana Hiker
(10/08/1999; 15:45:03 MDT - Msg ID: 15883)
And that's the truth
http://www.usagold.com/cpmforum/tools/post.htmlHi guys, here's another first poster. Many times when my 6 kids were little, they would give me a subject and I would develop a story. The other day while hiking with my lovely wife this story appeared.
In the beginning God created the universe. In his creation he wanted many beautiful things,thus the Gold Bug was created. In time creatures followed by humans occupied the earth. The Gold Bug had a very special placed with the humans and was considered very beautiful with it's radiant glow. Humans greatly desired to possess this earth's treasure.
In time, humans decided to create their own Gold Bug but it turned out to be a Green Bug. But it also became very desirable to possess. The humans found that they could feed the Green Bug and it excrete beautiful green stools that were sweet smelling and very valuable to own. The more they feed the Bug the bigger it grew and also more abundant were the green stools. The stools allowed humans to buy anything they desired
Meantime, the Gold Bug was ignored and felt lonely. Gradual he became smaller and lost his glowing luster. However, there came a time when the Gold Bug started to regain the feeling that he was important and desirable and thus his luster was restored.
At the same time the Green Bug began to take on a slight brown color which was not noticed by his owners. Then one day a human noticed that the sweet smelling excetement had a foul smell to it not unlike the droppings of four legger animanls, however since the stool was valuable he didn't tell anyone. And that's how the bull sh-t got into the banks and monetary system. And that's the truth!
Gandalf the White
(10/08/1999; 15:58:53 MDT - Msg ID: 15884)
Welcome MT Hiker
The Hobbits love stories !! This looks as if you may fit right in with the other story tellers.
Attention PeterA -- Monday will be another one on the markets! -- My crystal ball is painted BLUE!!
Come on in you Lurkers, the TableRound has lots of chairs.
AND finally, I hereby nominate the Goldfly song "16 Tons" for inclusion into his music room in the HoF! Seconds onlyone?
<;-)
Gandalf the White
(10/08/1999; 16:00:34 MDT - Msg ID: 15885)
Dumb Ol'e Wiz
That should end -- "Seconds ANYone ?"
<;-)
beesting
(10/08/1999; 16:33:19 MDT - Msg ID: 15886)
Opening statement of Rep. Ron Paul on Russian money laundering.
http://www.house.gov/paul/committeework/bankingtrans/99 9 22.htm2nd for Gandalf's nomination of Goldfly's version of 16 tonnes!

On Sept.28th my PC developed a case of," euphoric Golden overload" and crashed, this is my first post since,hope it works.

Click above for full news release:
When Allan Meltzer,head of the (U S)Congressional Commission on the IMF, asked recently weather the use of IMF funds could be traced,Joint Economics Staffer Chris Frenze replied that someone,"would have to be rather an incompetent criminal to cunduct their affairs in such a way that it could not be traced." We cannot justify taxpayer money going to an organization(I.M.F.)with such a lack of accountability.

The end of the IMF???....Bank of New York is also mentioned in article.......Go Go Gold.....beesting
beesting
(10/08/1999; 16:42:18 MDT - Msg ID: 15887)
Try this URL on previous message
http:www.house.gov/paul/committeework/bankingtrans/99_9_22.htmGood news release by Congressman Ron Paul of Texas...beesting
beesting
(10/08/1999; 16:48:06 MDT - Msg ID: 15888)
SSHHEEEEEESHH!!
http://www.house.gov/paul/committeework/bankingtrans/99_9_22.htmSORRY!!
Al Fulchino
(10/08/1999; 16:52:53 MDT - Msg ID: 15889)
FOA/jinx/and PH in LA
Thanks to all for your comments and words to ponder. I see that I would be very happy to have a "STORE OF WEALTH". And that should be our primary goal. How many times have we seen elderly people in Russia who cannot pay their bills, or we remember when COLA's had to be instituted in the 70's to prevent inflation from eating up too much of the elderly's or the poor's benefits.

However, because of the way gold etc has been beaten down, I do believe that we also stand to gain new wealth beyond what the nornal "STORE OF WEALTH" would be. SO for the "ride" I do go. Warily! I also believe that a ROAD TO $30,000 is foaming with peril for those on the train and off the train, for those OFF the train may be throwing rocks up as we pass them by. I will just assume from all II have learned here, that any gold worth $30,000 will not buy me a $30k vehicle but it will still purchase a much better vehicle than what $325 buys. MUCH BETTER!

Thanks to all for your comments.
Tomcat
(10/08/1999; 16:53:55 MDT - Msg ID: 15890)
Cobra(too), TC, Journeyman, DD, AEL, PH, Simply Me, Diewarzu, FOA, ORO, Al, Yellin

Cobra(too): Eye of the hurricane it is! For the shorter that is.

TC: If McConnell is right then we're headed for some really rough times.

Journeyman: You can see why some bankers just love ole John Maynard.

DD: Very touching communication. I hope you know that in the future all zero sum games will be outlawed. Thus, gold will have to go to the black market. ;).

Yellin' of troy: Bankers and criminals have proven that is possible to only have one, but not both, at the same time of conscience and consciousness. If they were conscious and aware of what they were doing they could not have a conscience. If the had a conscience the would have to eliminate the consciousness to block out what they were doing.

AEL and PH: I believe La Rouche is claiming that the CBs and the PTB are literally making a transfer of gold from the people to themselves. In the seventies he exposed the drug trade of governments. He was later proven correct. He People thought he was nuts and he was thrown in jail on, what I understand, were trumped up charges.

Simply Me: I agree with your insights about the middle class and gold. I think my comments about the street were a bit extreme and I did not want to give the impression that all folks from the street are like that.

PH in LA: Great analogy with a the suite and the modern day auto. BTW, are you a professional writer?

Al Fulchino: Thanks for getting that discussion going on what $30K will buy.

FOA: If the general public understood what you wrote about the purchasing power of gold we would be at $30,000 in no time at all.

Diewarzu: Thanks for posting the info on DROOY. Hedge-lite. Great euphimism. Too bad it will only cover up the truth for a little while.

ORO: That earthquake post was something else. There is a parallel with what you said about productivity and what Batra is saying in is recent book. Somehow this nation has convinced itself that its productivity has gone through the roof. It will be an unpleasant surprise for many when they find out its actually crashing through the floor. When you use the word plunder it really woke me up to the truth of our parasitic exploitation of good folks on this planet doing the real work and creating the real wealth on this planet.
mx6764
(10/08/1999; 17:12:58 MDT - Msg ID: 15891)
DROOY only hedges 7% of 3 year production
Excluding Australian gold production, DROOY hedges 25% gold production for 3 years. If taking into account of the purchases of Hargraves etc. and call options, DROOY hedges less than 10% of production. An expert in South African gold stock said in an interview that DROOY only hedges 7% of gold production.
RossL
(10/08/1999; 17:20:35 MDT - Msg ID: 15892)
Durban Roodeport Deep (DROOY) hedge-lite
We will see... The hedge-lite statement has the familiar ring of the Ashanti Goldfields statement just before the truth came out. However, DRD does have something like 80 million ounces reserves in the South African soil that will keep their stock attractive. My gut feeling is that they now are an even higher leverage play. They may under perform the un-hedged gold stocks until POG gets to $450 or $500 and then they may outperform the crowd. Anyone making investment decisions based on my gut instincts deserves what they get !
PH in LA
(10/08/1999; 17:23:40 MDT - Msg ID: 15893)
Reply
Tomcat: No! Not exactly, but thanks for asking.
AEL
(10/08/1999; 17:34:20 MDT - Msg ID: 15894)
irving fisher and etc.
phaedrus (10/08/99; 15:34:22MDT - Msg ID:15882)
words of wisdom
"Stocks have reached a high and permanent plateau."
-Irving Fisher, noted Yale economist, 1929

..... hahaha! Right! We'll all keep that in mind, Irving.
For an array of goodies like that one, see the new section on my Golden Bear page:

http://www.provide.net/~aelewis/gold/goldbear.htm#BlastsPast

Generally, you might want to check out my (newly-refreshed/updated) Golden Bear page -- as irreverent and sassy as ever... something to offend everyone:

http://www.provide.net/~aelewis/gold/goldbear.htm
K Golden
(10/08/1999; 17:42:28 MDT - Msg ID: 15895)
The Federal Reserve
Greetings and Help! I am under the impression that the following is incorrect, but anyone with knowledge who is willing to comment and post corrections on the details of the following post (by a former Federal reserve employee)
are appreciated, as I am new at this. (thank you!)

The Federal Reserve was chartered in 1913 by an act of the U.S. Congress in order to replace J.P. Morgan as the lender of last resort for the U.S. economy. It set up shop in 1914 and is "owned" by its member banks in the U.S. (not all U.S. banks are members) who are required to keep a minimum percentage of their reserves on account with the Fed. The reserves usually take the form of U.S. government bonds, but there are other assets like U.S. and foreign currency and gold which are acceptable as reserves as well.

The reserves are the primary means through which the Fed "makes" money. No the Fed does not print money. This is done through the Treasury department which works VERY closely with the Fed and causes it to be "quasi-governmental". For example, I had to have an FBI background check to work there, my fingerprints are on file as a result, etc.

The Fed makes money in two different ways and for two different purposes. The first way for it to make money is by using the reserves of its member banks without having to pay interest on the reserves. That's right, it's like an interest-free loan to the Fed by you, or me, or anybody who is a depositer at a bank which is charted through the Fed. The Fed can use the reserves as collateral to purchase or in exchange for government bonds or foreign currency. Whatever money the Fed makes while making these trades goes to cover their operating expenses (except for the check-clearing they do in NY which I think still pays for itself). Typically, there are several million dollars left over every year, and the remainder is paid to the Treasury and "reduces" the government debt.

What happens when the Fed buys and sells these assets? Well, this is the other way that the Fed "makes" money. Because our banking system is based on fractional reserves (and no this is not inherently evil), when the Fed buys government bonds on the open market, it injects cash into the banking system. This either allows the economy to grow at the same price levels or leads to inflation depending upon how much they buy and how much the banks loan out. Selling bonds has the opposite effect.

Why do we have government bonds? Because the federal government for years has run deficits which means they have to borrow money so that they can run the bureaucracy which oppresses the people, pays the military, and hands out the entitlements. Every 10 or so weeks the Treasury has an auction and the big banks and bond brokers line up to see which of their clients want to lend how much to Uncle Sam in exchange for those interest payments. It's actually pretty easy to do this directly through the Treasury now, although you have no influence on the interest rate you get.

Now, to your question. Where does the interest on the government debt go? Well, since the Fed owns some government bonds, they get some of the interest, but not much. Many foreign countries own government bonds, and they like to get paid. Many pension funds (perhaps yours) own the bonds and receive interest payments. And of course the banks still hold them, just like they hold your mortgage. You pay your mortgage, the taxpayers pay the interest and everyone is happy, right?

Well, the Fed is supposed to be able to set interest rates, but they cannot do this in a vacuum. They have to respond to market forces as we all do. Whatever they do to interest rates can have an effect on inflation. They're not quite as powerful as some would have you believe.

What do we get for all the money the Fed makes? Well, we are supposed to get a lender of last resort which will prevent another Great Depression from happening. Wait, didn't the Fed exist then too? Yes, and they unfortunately made matters worse because they didn't understand the economy very well. Personally, I think they made a HUGE mistake in bailing out LTCM. They have contributed more to the current stock bubble than most people realize. When the bubble bursts, it will be ugly, and some of the ugliness can be laid at Greenspan's feet. He learned the wrong lesson from 1987.
Trader_vic
(10/08/1999; 18:14:00 MDT - Msg ID: 15896)
The Second Shoe to drop is being hidden from the public!
Isn't it strange that NO ONE has talked about the BANKS that are going to be effected by the fallout in defaults from the bullion dealers and defaulting mining companies....As I see it, we are going to start to see bailouts of major banks because of 1) their own hedge (derivative) book and 2) from those mining companies that are on margin call and could default to the toon of Billions of dollars!!! What do you think that that will do to THEIR balance sheets!!! I see the next disaster in the banking system to happen before the end of the year right in time for Y2K!...even though it won't come from a Y2K accident!!! If you watched the bank stocks today they traded as if nothing was wrong.......and the gold stocks got smashed, when in reality, it should, and will be, the other way around!!! IMHO, my suggestion to you is either get rid of your bank stocks that are involved in the mining sector or buy put options on the BKX (philadelphia Bank Index)to protect your position... When the story comes out, it has to create a panic in the banking sector....
PH in LA
(10/08/1999; 18:17:30 MDT - Msg ID: 15897)
Typo!! Reader Beware!
Beestings quotation from Rep. Ron Paul's remarks should read: "would have to be rather an incompetent criminal to conduct their affairs in such a way that it could be traced."
Note: "that it could be traced" instead of "NOT be traced".
RossL
(10/08/1999; 18:17:54 MDT - Msg ID: 15898)
The Federal Reserve
The fractional reserve system is inherently unstable. Instability in systems (in general) are a exponential result of positive feedback.
Leigh
(10/08/1999; 18:25:55 MDT - Msg ID: 15899)
Farfel
Dear Farfel: Thanks for the balanced news report of Andy Smith's remarks. I'm very glad you post here now - I like reading your stuff! Do you plan to visit Mr. Armstrong in prison? He might enjoy getting some company!
Leigh
(10/08/1999; 18:34:54 MDT - Msg ID: 15900)
Trader-vic/FOA
This morning I was going through some papers and found FOA's post #13085 of September 8th. In it he said, "Y2K will be something to behold, but it will be a side-show when the modern gold market breaks!" That sentence has always stuck in my mind, and I've always assumed he meant approximately what you said, about banks failing. FOA, is that indeed what you meant?
Journeyman
(10/08/1999; 18:42:26 MDT - Msg ID: 15901)
KEYNES WAS AN INFLATION WIMP!
I mentioned in an earlier post that I'd provide evidence that Keyneswas conservative in his estimate of "only" 100% inflation every threemonths -- or perhaps Brazillian & Russian policy makers simply aren'tfamiliar with the man. More examples later. "Inflation last year [1992] was 1,202% in Russia and 1,038% in Brazil." -CNN Factoid, 20 Aug. 1993 - The Russian government is re-valuing the ruble. They're going to knock two zeros off the paper ruble. Starting next year, for example, 50,000 Ruble bills will read 500 rubles. This is merely a psychological move, says an expert in Russian investing. -CNBC Inside Opinion, 25 Aug 1997, ~12:26:30 PM EST - Russians try to pull their savings out of the Russian banks. The ruble lost 5% of its value yesterday and 10% today. It has lost 41% of its value over the last week, and 83% of its value over the last year. -CNBC, 08-26-98, 9:08am ESTRegards, Journeyman
Journeyman
(10/08/1999; 18:47:05 MDT - Msg ID: 15902)
Help!!
Sorry, but I can't get any whitespace (empty lines) to separatemy posts into paragraphs, etc. They all get run together, whichis even confusing to me. For example, when I sent this, this line had two empty lines above & two below!Any suggestions?
YGM
(10/08/1999; 19:01:25 MDT - Msg ID: 15903)
Conversion To Euro Dollars.
Would someone enlighten me as to whether or not one of the present 11 member Nations currencies would be better to hold for later (Jan?) conversion to the Euro? If so which one. Thanks--YGM.

**I'd just like to think I had a head start in the race coming
soon- IMHO.
Goldfly
(10/08/1999; 19:04:37 MDT - Msg ID: 15904)
Journeyman

What verion of your browser are you running?

Maybe you need to upgrade?
TownCrier
(10/08/1999; 19:29:28 MDT - Msg ID: 15905)
After the Close: the GOLDEN VIEW from The Tower
As they would say in Europe, "psychopaths" ruled the day on Wall Street, so we won't even go there...there's too much other news to be covered in its place anyway.

The People's Bank of China raised its price for selling gold today in accordance with the overseas price of gold. This is a recent (but ongoing now) operation under a pilot plan for the reform China's domestic gold market--with imports purchased through Hong Kong. This reform plan is surely unrelated to the recently opened BIS branch office in Hong Kong, wouldn't you agree?

Here are some interesting comments from a Merrill Lynch economist...excerpt taken from a Bridge report from Johannesburg today:
The Bank of England threw the trend and sent the gold price
plummeting when it announced it would sell its gold reserves to finance
debt relief for poorer countries.
It was put back on track when 15 European central banks, including
the Bank of England, announced a surprise five-year moratorium on all new
sales of gold held in official reserves. Gold rose to a high of US $338
per ounce.

[By the way, Greece announced today that they have no plans to change their policy on gold reserves--they were not a signatory to the moratorium because they were not invited to play along.]

"Is it a flash in the pan? No, not in the immediate future. As long
as commodities rise, gold will rise and we could see it up to $400 next
year," Jos Gerson, an economist with Merrill Lynch, told a seminar on the
economic outlook in Johannesburg today.
He said gold has always moved with, and sometimes led, commodities.
"Commodities are doing well because the world is waking up. Asia and
Europe are running again and the US is showing no sign of cooling. The
world is suddenly firing on all four pistons."

Gerson predicted, however, that the Dow Jones industrial average will
crack next year.
"This is the major problem we face next year. What we have is one of
the most classic bubbles of the century," he said, although he believes
there isn't the remotest chance of a 1930s type crisis.

[That's right, where deflation was the problem. Can you say INFLATION? I knew that you could.--TCrier]

Central banks have the ability to react to a crunch in ways that they
did not before.
He says it's difficult to predict the timing of a bubble bursting,
but believes it may happen before the middle of next year.
"When the Dow goes, all markets will correct," he says. "We must
expect a roller coaster ride, but ride the curve for the time being."
***
Reprinted at USAGOLD with permission. For details please go to:
http://www.crbindex.com/
No further reproduction without written permission
---
Gold contracts were sold down today in some pre-holiday paper(profit)-taking action by those licking their chops over these recent and rapid gains...the December contract price losing $2.60. The spot market took notice, but lost only $2.30 to end with a $320.00 quote in NY.

The already high short-term gold lease rates rose today by over half a percent, demonstrating the continuing difficulty among bullion banks in striking a balance between those willing to lend gold and those engaged in desperation borrowing. Today's numbers:
1-month 4.4375% +0.5215
2-month 4.5313% +0.4193
3-month 5.1875% +0.0115
6-month 4.8938% -0.0422
12-mnth 4.5000% -0.3188

The Tower cautions everyone to the writing on the wall. Look at it this way...if a standard bank suddenly started offering you interest rates on cash savings accounts that were many multiples higher than the norm of only a few months ago, would you risk your cash for that investment return (not to mention the return of the principle, too), even as the exchange rate markets revealed your cash's value to be climbing on its own? That is to say, your net value increases without the risk of depositing it for lending to others. Such a high interest rate as an enticement should be seen as the warning sign that it is...that something is terribly amiss. An asset that will grow while in your own hand is worth much more than the promises of others to make it grow for you if you'd only be willing to let them try.

Russia apparantly agrees with this "bird in the hand" assessment of value, or else they are putting on a world-scale demonstration of Gresham's law. From Bridge we learn that the foreign exchange and gold reserves of the Central Bank of Russia as of Oct 1 totaled $11.212 billion. Looking closer at the breakdown of assets, the foreign exchange reserves ($6.634 billion) were dropped by $190 million, while the gold reserves were up $172 million ($4.579 billion). Spend the junk and hold the good stuff. It's that easy.

Once again, we'll let Bridge News walk us through the thoughts of traders.

NY Precious Metals Review: Dec gold down $2.6 on profit-taking
By Tina Petersen, Bridge News
Washington--Oct 8--COMEX Dec gold futures settled down $2.60 at
$321.70 per ounce on profit-taking amid choppy, range-bound trading.
Traders said the gold market also was pressured lower on a stronger stock
market and a firmer dollar versus the euro.
Traders and analysts said the precious metals markets are seeing
typical profit-taking ahead of the weekend. They said there is little new
news moving the markets. An analyst said the fact that the markets eased
off from their highs "gave everyone reason to take their profits before
the weekend."

Dec gold continues to range trade amid choppy conditions. Dec moved
lower at the opening to a low of $317.5 following overnight Chinese
selling, then moved up to a high of $326.5 in the mid-morning session on
fund buying. It then continued to drift lower throughout the afternoon
session on profit-taking.
Traders said the market saw good 2-way business.

"It continues to be stuck in a range of $315-330," said a trader.
"People are buying at the lower end and selling at the upper end. It seems
to have good support at the lows and resistance at the highs." He said
that "if Dec breaks higher, the shorts will cover and if it breaks lower,
the longs will sell off."
Traders said they continue to see support at the $315 level and
near-term resistance at $330.
Many said they viewed today's downward pressure as a consolidation
before the next move higher on continued short covering over the next
couple of weeks.

"There's still a lot of short covering left to be done," one trader said.
Traders and analysts said pressuring the market lower was the fact
that the unemployment rate remained unchanged. "It confirmed
that the Fed might have been right in leaving interest rates unchanged,"
said an analyst.
"It's good for the stock market and good for the dollar, but bad for
precious metals."
Dec silver continues to follow gold, but without the underlying
bullish fundamentals that gold has. Dec settled down 4.5 cents at $5.55
per ounce.

[there was this report also by Bridge:]

New York--Oct 8--The New York Mercantile Exchange said today it will
increase the margins on its gold futures contracts to $2,000 from $1,600 for
clearing members, members and hedgers; and to $2,700 from $2,160 for
speculators. The changes are effective as of the close of business Monday.
***
(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
---
One month gold lease

The commitments of traders in COMEX gold futures was released today for postions as of Oct 5, 1999. (Changes given are from Sept 28)
Among the non-commercial traders with only long or short positions (no spreads), 20,646 new long postions were added for a total of 47,881. On the short side, only 2,881 short postions were closed, leaving 62,196 contracts held short among this same classification of traders.

Due to Monday's bank holiday (Columbus Day...can you believe anyone gets that off??) the COMEX delivery intentions notices were not available today.
The results of yesterday's trading gave us the following changes to open interest in these notable futures contracts.
Oct . . . . 110 . . dn . . 30 (as of yesterday, delivery intentions for Oct totaled 2,504 contracts)
Nov . . . . .12 . . dn . . 350
Dec . . 124,308 . . up . . 8626
ttl . . 217,896 . . up . . 13361

There was modest movement again today in the ScotiaMocatta vault, one of COMEX's two active gold depositories (Republic National Bank of New York being the other.) Nearly 1/8 tonne of gold was withdrawn from Scotia's guardianship...3,997 troy ounces, to be exact. Of that total, 2,187 ounces were taken from the Eligible stock (of which 86,404 oz remain), and 1,810 ounces were withdrawn from Registered stock (leaving 834,233 oz.)

As news made wider rounds today of the survey we reported yesterday showing that OPEC compliance with production cuts had slipped in September, yesterday's loss of 82c was extended today by another $1.55. The November crude contract closed at $20.90 by the time the dust cleared on a flurry of fund liquidations. Adding weakness to the price was comments by America's Chief Executive regarding the possibility of selling off some crude oil stored in the Strategic Petroleum Reserve to help keep oil prices from rising too much as the winter heating season arrives. (And to think that you thought only gold suffered these bouts of "official interference" in the marketplace!) One broker said of the prices, "Basically we got a little overdone and funds wanted to take some profits so right now we're at a nice medium compromise. But I think that in the long term, we will go back up."

Well, it all depends...on what the dollar will buy. Oil is oil. Gold is gold. A dollar is a concept wrapped in shifting confidence.

So, did the King chew bubble-gum on the plane yesterday, and was he "guilty" of passing love letters back and forth between the leaders of Iraq and the U.S? Well, we don't have any reports about the gum, but King Abdullah II of Jordan arrived in Washington and confirmed he had a message from Baghdad for Washington but refused to discuss the contents. Whatever the contents, the King assured that he would not be arguing Iraq's case in planned meetings with President and Secretary of State, that the message would have to speak for itself.
+
The message is reportedly from Saddam Hussein to Bill Clinton offering proposals to end sanctions against Baghdad, promising major political reform based on a multi-party system and respect for human rights, and providing help in advancing the Middle East peace process.
+
Those of us gathered in The Tower exchanged glances upon receiving this news, and drew the same conclusion...he saw the movie "Three Kings" and then recognized the error of his ways.
+
President Saddam has ruled Iraq for the latest 20 years in a 30 year reign of the Ba'ath Party. The London-based Al-Hayat newspaper reported that the Iraqi leadership was ready to begin political reforms, which would include adopting a new constitution based on a democratic multi-party system. Ever since the Gulf War Iraq has faced sanctions and two no-fly zones (one north and one south) which are reportedly intended to protect Iraq's Kurdish and Shi'ite Muslim populations. These groups attempted to rebel against the regime amidst the Gulf War and then suffered greatly at the hands of Baghdad. (If you see "Three Kings" you will have a better grasp on that affair.)
+
This latest offer by Baghdad to break the deadlock would seem to be a result of the UN sanctions taking their toll. Hah! What kind of "sanction" is an oil embargo that occurs under an oil-for-food program? The real sanction would be if they had to settle for our paper bills of credit in exchange for as much oil as they can pump. While the rest of OPEC is in agreement to limit production, Iraq says "Nuts to that!" It was no big surprise, then, earlier this week when the UN Security Council decided to increase the amount of oil Iraq can sell during the current 6-month phase of the deal. Still on track to become the 51st state. And if you find that hard to swallow, maybe a plastic CD case would help (a reference to the movie that will mean nothing until you see it.)

And that's the view from here...after the close.
TownCrier
(10/08/1999; 19:41:02 MDT - Msg ID: 15906)
K Golden...great name!
http://www.usagold.com/AllWorkandNoPay.htmlA pair of eyes in The Tower gave your post a quick scan to the extent that time allowed at the moment (we'll give it a better read later,) and the first cut impression is that it is accurate. Believe It Or Not.

There are many new readers that may not have yet discovered the treasure trove of information available at The Gilded Opinion which can be accessed from the HomePage.

The link above is to one of the commentaries found within the Gilded Opinion wing of this Castle, and is recommended reading for anyone trying to gain a more complete understanding of the nature of modern money, where it comes from, and where it goes. A very enjoyable bit of reading if you have time for a light weekend project.
gidsek
(10/08/1999; 19:44:40 MDT - Msg ID: 15907)
Trader Vic
http://www.bog.frb.fed.us/releases/H41/Current/ glenn, on Kitco noticed the the Feds' holdings of gold certs has jumped markedly lately. Perhaps if certain banks are catching cold the Fed is relieving them of gold certs of dubious worth.

gidsek
Journeyman
(10/08/1999; 19:51:08 MDT - Msg ID: 15908)
Thanx Goldfly!
I'm running an "off brand" browser called Arachne, coded by a Checzh fellow. It has it's faults, & I'm afraid you may havenailed the problem. I guess I should have asked if anyone elsehas to do anything special to get whitespace. No? Ah oh! Regards, Journeyman
Journeyman
(10/08/1999; 20:21:10 MDT - Msg ID: 15909)
INFLATION FOR DUMMIES
For any of you that don't know, the law of supply and demandapplies to currency, and an increase in it's supply is whatcauses intentionally mis-named "inflation." "Currencydepreciation" is a much more honest term. Anyway, in light ofincreasing supplies causing so-called "inflation," the followingclip is particularly ironic. Clearly CNN doesn't understand whatcauses inflation. Jimmy Carter didn't know what caused inflationeither. So don't completely rule out stupidity as a major causeof the world's intersting economic state. Brazil is exchanging its current currency for the "real" supposedly pegged one to the dollar. This is the biggest currency exchange in history and will take two weeks. Current Brazilian inflation is running at 50% per month. This will be the sixth new Brazilian currency in a decade, but nothing can seem to get the inflation under control. The shop keepers just seem to keep raising prices. Buyers are urged by the president to report any price increases to store inspectors in an effort to stop prices from increasing. -CNN HEADLINE NEWS, 07-04-94 12:40am ESTRegards (and apologies for print density), Journeyman
Black Blade
(10/08/1999; 21:59:37 MDT - Msg ID: 15910)
Whining little shorts!
Interesting to read that the bankers, investment houses, etc. are now whining that people are being hurt because of the sudden rise in POG. Considering that many more in the mining industry and PM investors were hurt with the manipulated decline in POG, I feel no sympathy for them. "What goes around, comes around". I see families in this mining business every day who have suffered. I've seen those who put their faith in PM's. So let the sheeple and manipulators suffer now, because I don't really care what happens to them and their families. They brought this day of reckoning on themselves. The cap on POG is coming off, and the POG still has plenty of upside yet. Maybe I'm a little harsh, but "business is business" as the manipulators would say.
Black Blade
(10/08/1999; 22:06:10 MDT - Msg ID: 15911)
PH and Beesting
I've followed Ron Paul for some time. It refreshing to acutally find an "honest" politician. Let's face it...most politicians are "crooked as a dog's hind leg" I find that it should be no coincidence then that he ran as the Libertarian presidential candidate a few years ago. Harry Browne who is another friend of Au, also ran as a Libertarian presidential candidate. Is there a Au relationship here? hmmm....
ET
(10/08/1999; 22:24:44 MDT - Msg ID: 15912)
AREM

Hey Arem - sorry about the tardy response. I was going to reply last weekend but ran out of time. Regarding Ron Paul and the Libertarian party; I used to follow the party activities quite closely but haven't done so much in the last several years. I think I've just gotten burned out on politics in general. It seems the libertarians will have to wait for the implosion before anyone pays any attention to them. It's remarkable to me that people are now running off to the Reform party as if their protectionist agenda hadn't been tried in the past. Wasn't that what went down during the last depression? People never learn, or maybe they only learn the hard way. At any rate, the libertarians have the right idea as far as I'm concerned but they'll never be a potent force until the money is taken out of government. As long as special interests have something to go after, they will. Maybe a return to sound money will dissolve much of the current focus on special interest politics as practiced around the world.

It is nice however to follow Ron Paul's quixotic journey through Washington's political sewer. He is definitely a one-of-a-kind. I wish I could vote for someone like him here in Kansas but we seem to be stuck with nothing but socialists disguised as Republicans. Voting here is a useless exercise. When some candidate actually stands up and claims a desire for sound money and free markets I might get excited again, but we seem to be going the other way at the moment. Thanks for your thoughts Arem.

ET
gidsek
(10/08/1999; 23:01:13 MDT - Msg ID: 15913)
Kitco Repost
I posted this on another site but I'd like all of you to see it too, and the message at the top applies here as well.

nite all..

gidsek

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

Date: Sat Oct 09 1999 00:31
gidsek (From an Ashanti chat thread) ID#423377:
Copyright � 1999 gidsek/Kitco Inc. All rights reserved
Poor buggers didn't do their homework. It's very sad, and makes me appreciate you lot very much.

http://www.ragingbull.com/mboard/boards.cgi?board=ASL

------------------------------------------------------------------------
By: jackokomo
Reply To: None Monday, 28 Sep 1998 at 1:50 PM EDT
Post # of 36

Testing the water;

I just bought into Ashanti Goldfields today.

Why gold?---It's a no-brainer, really, when you think about Willie,
Wall street, Asia, etc.

Why Ashanti?---PE ratio is 16, book is $4.78, profit margin @10%,
float is only 9.80 million, shares out is 109 million.
AND the price is @8-1/2.

Asian's could be returning to their old habit ( pretty good )
of keeping gold at home. If I were living in ###an, I know for
sure that I wouldn't trust any bank!.

Come aboard, let's all have fun.

LOL---Jack

( Voluntary Disclosure: Position- long; ST Rating- strong buy; LT Rating- strong buy )
-------------------------------------------------------------------------By: reggiehammond
Reply To: None Tuesday, 5 Oct 1999 at 11:28 AM EDT
Post # of 36

Why is ASL going south today?
It has dropped 3 full points ( 33% ) since the open.

( Voluntary Disclosure: Position- Long; ST Rating- Hold; LT Rating- Strong Buy )
-----------------------------------------------------------------------
By: billou
Reply To: None Wednesday, 6 Oct 1999 at 3:12 PM EDT
Post # of 36

Trading halted!!!!I bought in 5 minutes before halt. I guess I just burned my money. Talk of bankrupt. Anyone know
the latest news?

( Voluntary Disclosure: Position- Long; ST Rating- Hold; LT Rating- Strong Buy
-------------------------------------------------------------------------
By: Realityman
Reply To: 24 by Handpicker Tuesday, 5 Oct 1999 at 2:16 PM EDT
Post # of 37

I read the news on Yahoo, and I can't make heads or tails out of it. What's it mean?!

( Voluntary Disclosure: Position- Long; ST Rating- Hold; LT Rating- Strong Buy
------------------------------------------------------------------------
By: workoutman
Reply To: None Tuesday, 5 Oct 1999 at 8:04 PM EDT
Post # of 36

Goldman Sachs biggest shortsellers of Gold in the world advising Ashanti! We're dirt!

( Voluntary Disclosure: Position- Long; ST Rating- Hold; LT Rating- Strong Buy
-----------------------------------------------------------------------

stay in school..

gidsek




Journeyman
(10/09/1999; 00:04:25 MDT - Msg ID: 15914)
BLACK BLADE: Libertarians & Gold
Is there a relationship between the Libertarian Party and gold? You better believe it. Highly regarded Austrian Economist MurrayRothbard ("For A New Liberty," etc.) was on the LP National Committeefor years, and a strong Austrian hard money strain runs clear throughthe whole organization. Check out their platform!Regards, Journeyman
Peter Asher
(10/09/1999; 01:02:10 MDT - Msg ID: 15915)
All's Quiet on the Western Front

Two weeks ago Sunday, just moments before the World entered the New Gold Paradigm, I received this message from Leigh. >>> Hey, Peter, have your guests gone home? Did you guys have fun? What did you talk about? Do they live far away? <<<<<

Well the First Assault Wave has taken the beachhead with only 20 points casualties after a firm entrenchment in the 315/320 strike zone. The battlefield is quiet for the moment.

In these past two weeks much has been said around the globe about the cause of the sudden outbreak of Gold. It is an absolute fact that the decision of the Central Banks was the Force Majeure. However, WHY the CB's did this is still occluded data. Here now is the truth.

When the CB agent in charge of monitoring all Gold communication on the Internet, discovered that the USA Gold Forum People were MEETING IN PERSON, the CB's realized that the jig was up! As Michael had cleverly ordained that all communication regarding this event was to be kept on private lines, the CB's were not aware that only a few of us were actually gathering. They presumed, due to the incredible morale and fortitude of this elite group, that a massive conference was underway here at "Hidden Falls Retreat" and expected a momentous onslaught of truth on Monday morning. Believing they had no choice, they made their peremptory announcement Sunday night. Nevertheless, we here on this site know the extent that our Golden Diogenes Lantern has brought light to the world and helped launch the Long Range Artillery CB assault that enabled gold to establish this solid foothold on enemy territory.

At this point, the enemy are fully occupied with setting up bullion hospitals to treat the wounded, they are burying their dead, imprisoning their incompetents and they are scrambling everywhere to find fiat medicinal supplies. But, even the Fed may have been reluctant to help them with this. Contrary to mainstream opinion, there is no cure for fiduciary gangrene. We shall soon see what amputations will have to be performed.
--- ----
Now that we are again gathering for a 'normal' weekend of communication, I can finally answer Leigh's questions.

Did we have fun? Well, if a stranger had dropped by, he would have assumed he was witnessing a gathering of friends who had known each other for at least half a lifetime. And why not? Not only would most of us get along famously in person, but it is also natural that our wives (and husbands) would share similar interest in truth, justice, health, children and all the other 'real' things in life.

What did we talk about? Oh, some of the time we talked about Forum subjects. Some of the time we talked about forum people! We talked about our work, our home towns, our homes and herbal medicine. I heard a lot of recipe talk in the kitchen and I would like to publicly thank Richard and Gandalf's wives for all the help in that area.

We hiked around the property, searched for scarce ripe blackberries, and when everyone left Sunday afternoon, we parted, I believe, as permanent friends.

And, no Leigh, not far. One five hours away, and one under two.

----

Does anyone know of any other Internet site that has built as much friendship, commonalty of thought and purpose, and comradery as this one?

Thanks again to Michael, for bringing this all about. ---- Peter A.


Peter Asher
(10/09/1999; 01:04:29 MDT - Msg ID: 15916)
test
??
Peter Asher
(10/09/1999; 01:10:31 MDT - Msg ID: 15917)
Access
Got in via Archive to yesterday, the clicked on "todays post"
Peter Asher
(10/09/1999; 01:12:08 MDT - Msg ID: 15918)
Now working normal again
!!
Black Blade
(10/09/1999; 01:28:19 MDT - Msg ID: 15919)
Journeyman and ET
Others LP names: Milton Friedman (nobel economist), Andre Marou (LP Pres. candidate) who as Alaskan legislator shamed demopublicans or is it republicrats into oil dollars to the people, and David Bergland (LP Pres. candidate) who is Au bug and respected free marketeer. Remember Ed Clark (LP Pres. candidate) who gained about 5% of the popular vote? Since then, election night results are posted on television only for the demopublican party. Actually I've been libertarian since 1972 (the beginning). It is no wonder the message from the current social and political regime "gold bad, FRN good" is accepted since the other side is rarely heard.

The third-party message of free-market economics and self determination is usually drowned out by "...and in this corner Jesse Ventura", or "...tonight from the Mirage Donald trump". The sheeple want entertainment, not good government. The demopublican candidate Al Gore looks to be in trouble because a former basketball player (Bill Bradley) wants the nod! Geo. Bush, the other demopublican candidate may get the nod since there no celebrities running against him. It is all about entertainment ....that's it!

Sorry about the ranting, but the gold message will fall on deaf ears as well.....so prepare yourselves and your families. Get your Au/Ag insurance while you can. If Y2K really hits hard, then hunker down and watch the carnage.

Boy, I really need to cut back on my brew consumption!
The Invisible Hand
(10/09/1999; 01:42:10 MDT - Msg ID: 15920)
*** ALARM *** Tues Oct. 06, 1999: $ 362.25 ***
http://www.tijd.beI don't believe my eyes but former BBL-guru Roland Leuschel is writing today (Saturday, October 09, 1999) in Belgium's De Financieel Economische Tijd that gold reached $ 362.25 (three six two point two five) on Tuesday October 06 in London.
I don't think this is a typo because, he's writing that it's an increase of 45 % vis-a-vis three weeks ago..
Looks like the invisible hand is working since gold has been set free by the Duisenberg gang.
There we go, there we go, there we go!

Black Blade
(10/09/1999; 05:31:34 MDT - Msg ID: 15921)
Tiger Fund and Normandy Mine hedging link?
Just a thought to carry into the weekend. If Tiger Fund is short a significant amount of Au as some believe, then that is bad enough. Tiger Fund also holds a fairly large position in Normandy Mining as well. I am not sure of their hedge position, but I thought that it is roughly 11 million ounces. If this is true, and depending on how the hedge is structured, it appears that Tiger Fund could be hammered "coming and going". If they believe that their position in Normandy is offsetting any Au short position, they may be setting themselves up for further financial disaster. Considering the margin calls and hedge position problems over the last few days concerning other miners such as Ashanti, Cambior, Lonmin, and possibly Sons of Gwalia, these next few days/weeks could be interesting. Comments?
Leigh
(10/09/1999; 05:39:33 MDT - Msg ID: 15922)
Peter Asher
Peter, what a great story!! The gold manipulators shaking with fear over a meeting of the Pacific Northwest Goldhearts! It sounds as though you had a beautiful time, and the rest of us really missed out. I hope someone will take the initiative to have another get-together very soon! We nouveau riche goldbugs can fly there in our private planes and complain about the difficulty of spending all of our money once gold is $3,000+/oz. Ah, life will be tough!
MidEastGold
(10/09/1999; 05:44:28 MDT - Msg ID: 15923)
Transparancy Does Not Always Include Secrecy
I have not been a contributor to this forum, but I enjoy ALL of the posts that are posted. One word of caution to those who boast of holding physical, internet activity can is often monitored. I am not one who is into conspiracy theories, but I know about internet "traces" from first hand experience. So, be careful about even admitting to holding phyiscal on line.
Leigh
(10/09/1999; 06:53:13 MDT - Msg ID: 15924)
MidEastGold
Dear MidEastGold: Thank you for the warning! I believe what you're saying. Do you know how monitoring is done, and by whom? Thanks!
Canuck
(10/09/1999; 07:16:05 MDT - Msg ID: 15925)
Employment report
http://cnnfn.com/1999/10/08/markets/bonds3p/Part of above report:


NEW YORK (CNNfn) - Treasury bond prices ended mixed Friday after a government report on September employment painted a puzzling inflation picture.
The Labor Department said Americans' average hourly earnings, a key inflation gauge, rose at a faster-than-expected rate last month. But the nation unexpectedly shed jobs in September, signaling a possible slowdown in the sizzling job market.
The news confused the bond market, which moved erratically for much of the day as analysts offered differing takes on the data's significance.
"Even Clint Eastwood could not have written a better script that would pit the bulls and the bears against each other over the meaning of today's payroll report," said Tony Crescenzi, bond strategist at Miller Tabak & Co. "The winner, however, may not be known for a while longer since the data is sufficiently murky."
In the end, the price of the benchmark 30-year Treasury bond fell 7/32 to 99 during a shortened, pre-Columbus Day trading session. The bond's yield, which moves inversely to the price, rose to 6.19 percent from 6.18 percent Thursday. Shorter-dated Treasuries finished higher.
Ahead, the Bond Market Association recommends a complete market close Monday.
In the week's most closely watched economic indicator, the nation's unemployment rate held steady at 4.2 percent in September, a 29-year low. But the economy shed 8,000 jobs, the first loss since January 1996. Average hourly earnings rose 0.5 percent, higher than expected and their biggest jump in 16 years........
-------------------------------------------------------

Re: The last paragraph.

I'd like to know how a 'biggest jump in 16 years' translates to no inflation and why the markets went up yesterday?

I'd like to know how many jobs shed, and in last months case many jobs added, translate to the same unemployment rate? (4.2%)

These reports and even moreso, the intepretations of them get more bizarre by the day. The 29 year record unemployment which has been going on for many months IS causing a tight labour market. After years of high unemployment whereby the employer can choose an employee from a large pool at his price, the shoe is now on the other foot. A jobseeker now has a choice of employers and can seek his price. Companies are beginning to have an increased payroll, this will trickle down to the consumer very soon. I am anxiously awaiting the PPI number this month, it could be a barn-burner.

We got our 'good' news (re:gold) Sept. 21 and Sept. 26. Gold responded extremely well and has settled in the 315-325 range. Now we need the 'bad' news, PPI / CPI. I will
go out on a limb today and in doing so invite a guessing game for all.

Sept. PPI: 0.6%
CPI: 0.5%

Cheers, have a nice week-end.

Canuck.
PH in LA
(10/09/1999; 10:04:30 MDT - Msg ID: 15926)
LaRouche: What the central banks' gold move means
http://www.eirna.com/cgi-local/alert.pl"...The Bretton Woods system, as opposed to the 19th Century-type gold standard represents a base-line of common sense, institutionally, among the central bankers. They know as the disintegration of the speculative, paper-based bubble proceeds, they have to have a certain base-line position through monetary gold, or, forget everything.

The European central bankers, led by the Bank of France and the Bundesbank, worked behind the scenes, in close coordination with the US Federal Reserve chairman Alan Greenspan, to prepare the dramatic gold reversal of last week. The fact that Greenspan is clearly, if silently, so far, backing the European central bankers is manifest from comments he made back in May, when Britain announced its policy of selling off central bank gold. Greenspan told Congress then: "We should hold our gold. Gold still represents the ultimate form of payment in the world. Germany in 1944 could buy materials during the war only with gold. Fiat money in extremis is accepted by nobody. Gold is always accepted..."

ALL:
LaRouche, while not breaking much new ground on this subject for readers of this forum, does demonstrate that he is travelling on the same curve. Too bad we can't get him (or someone from his camp) to join us here. FOA: Is he tuned in to the same people you are? Or is it just that all true journeys eventually converge onto the same curve as they approach their destination?
Twice Discipled
(10/09/1999; 11:08:21 MDT - Msg ID: 15927)
US Supreme Court upholds Gold payments for lease
http://www.dmregister.com/news/stories/c4788998/9227830.htmlHope I am not repeating this, but I saw this in the paper this morning.
Have a wonderful weekend.
canamami
(10/09/1999; 12:55:04 MDT - Msg ID: 15928)
Reply to Twice Discipled - Gold Clauses
Twice Discipled,

Thank you for the reference.

The Stranger (where are you?) first brought the case you cited to the Forum's attention, and he and I had a discussion concerning the case. However, your post brought the information up to date, and I believe the article and subject matter is very important.

If I recall, the judgement to which the Stranger referred us dated from 1996. The Federal Appeals Court remitted the matter back to the trial court, to determine if the quality and fineness of the gold coin payments referred back to 1917 gold coins, or 1990 (or 1993?) gold coins. Obviously, that judgement was subsequently rendered (I'd like to know what year was chosen), and appealed, and leave to appeal was denied by the Supreme Court.

The judgment posted by the Stranger set out a good history of gold clauses, and the rendering illegal of gold clauses in the 1930's ,
and their subsequent re-legalization by Congress in 1977.

The legal framework permitting the use of gold coin in commercial contracts is in place. All that is needed now is pressure on the government to mint coins of such nature, quantity and quality to make this option viable. Also, commercial men must be made aware of the benefits of using gold clauses as anti-inflation protection. For example, current anti-inflation clauses are generally tied to the government's inflation, cost-of-living statistics. The accuracy or veracity of the Clinton administration's statistics have been challenged, and those figures also do not take into account asset inflation. Thus, gold clauses are an old but new tool to protect parties to long-term contracts from inflation. Here, the payments have increased from $23,000 per month to over $300,000 per month, but the lessee will continue to keep the property - thus, I infer the property is still profitable to the lessee at $300,000 per month. Here, the gold clause played its role as a form of inflation protection.

If gold advocates persuaded the business to start using gold clauses again (and the government to mint sufficient coin), such clauses could indirectly impose discipline on the government to suppress inflation - both asset and price inflation. There probably isn't enough gold extant to effect a return to the gold standard, but gold could exercise indirect discipline through such gold clauses, if they were used.

This one contract could impact slightly on the price of gold. A one-time need to purchase 8000 ounces (4 tonnes) of gold, plus the monthly gold payments.

If gold clauses are legal and enforeceable, could the Comex impose cash settlement on a party who wished gold settlement? Perhaps the spectre of Comex-imposed cash settlement is merely a bogeyman.
Bonedaddy
(10/09/1999; 13:16:28 MDT - Msg ID: 15929)
An ode to Kindred Spirits

The Appraisal


If I had to brave a raging flood,
And grasped my bag to hold,
Which would pan out in the mud,
The paper or the gold?
If I were tossed out in a fray,
where none but angels would be bold,
which would I see blown away,
the paper or the gold?
If fate should deal me war and fire,
and I wake up tired and old,
which will have lasted on the pyre,
the paper or the gold?
If I draw breath a hundred years
and my story then is told,
what shall they have left, my heirs,
the paper or the gold?


Bd

Jon
(10/09/1999; 13:19:45 MDT - Msg ID: 15930)
Msg # 9224 dated 7/19/99
The present status of the gold market reminded me of a message I saw some time ago predicting a huge rise in POG and a corresponding correction of the stock market. You may want to check it out. Any comments?
YGM
(10/09/1999; 14:05:23 MDT - Msg ID: 15931)
Bonedaddy
You along w/ Goldfly (16 tons) share a touch of artistic talent. Well done! ---YGM (a kindrid spirit)
Leigh
(10/09/1999; 14:48:43 MDT - Msg ID: 15932)
To Anyone
Does anyone remember something that either Another or FOA said once (I think) about the price of gold and the dollar rising at the same time? Right now the price of gold is rising, but the stock market is chugging along just fine. Is this what they were referring to? Am I actually remembering this correctly?
Leigh
(10/09/1999; 14:48:46 MDT - Msg ID: 15933)
To Anyone
Does anyone remember something that either Another or FOA said once (I think) about the price of gold and the dollar rising at the same time? Right now the price of gold is rising, but the stock market is chugging along just fine. Is this what they were referring to? Am I actually remembering this correctly?
SteveH
(10/09/1999; 15:33:04 MDT - Msg ID: 15934)
Dabchick
www.kitco.comDate: Sat Oct 09 1999 10:31
Dabchick (Sharefin........A weekly candlestick of my gold index index) ID#258195:
Copyright � 1999 Dabchick/Kitco Inc. All rights reserved
Thanks for your 12:56 last Saturday 02 Oct. Regarding candlestick charts, I see them as essentially short-term. The recent action shows up particularly well in a weekly candlestick of the index. It shows a pronounced Key Weekly Reversal for the week ending 24th Sept, heralding the sharp rise in the index. The subsequent rise, ( which was sparked by the ECB announcement on Sunday 26th ) shows up as two spectacular Breakaways this week and the one before.
If the US dollar is going down the tubes, as some think, then a weekly indicator of the index could provide a useful picture of Gold's shorter-term movements independent of the dollar.
If a weekly candlestick chart could be produced with a time base of about 12 months, I think it could be a help at major turning points .............i.e. turning points which might not show up on a chart of gold expressed in US$ at a time when the dollar itself was falling sharply.

If you feel able to use them, here are the data of the index weekly high-low-close back to 1st January 99.
Jan 99
High- | 67.08 | 66.78 | 66.50 | 67.07 |
Low--| 65.53 | 65.46 | 65.86 | 65.77 |
Close | 66.82 | 66.11 | 66.28 | 66.88 |

Feb 99
High- | 67.58 | 67.48 | 68.23 | 68.94 |
Low--| 66.14 | 66.51 | 66.96 | 68.21 |
Close | 66.91 | 67.35 | 68.14 | 68.37 |

Mar 99
High- | 70.04 | 70.92 | 69.63 | 68 23 | 67.68 |
Low--| 68.00 | 68.57 | 67.22 | 67.24 | 66.60 |
Close | 69.62 | 69.96 | 67.37 | 67.40 | 67.25 |

Apr 99
High- | 67.99 | 68.12 | 68.46 | 68 84 |
Low--| 66.55 | 67.40 | 67.83 | 67.36 |
Close | 67.97 | 67.85 | 67.92 | 68.59 |

May 99
High- | 68.91 | 66.68 | 66.75 | 66.17 |
Low--| 66.62 | 65.93 | 65.92 | 65.01 |
Close | 67.21 | 66.31 | 66.18 | 65.34 |

June 99
High- | 65.16 | 65.10 | 63.91 | 63.71 | 64.32 |
Low--| 64.23 | 61.95 | 62.48 | 62.90 | 62.69 |
Close | 64.56 | 62.23 | 62.88 | 63.07 | 64.25 |

July 99
High- | 64.40 | 63.33 | 62 22 | 61 15 |
Low--| 62.59 | 61.77 | 61.00 | 60.36 |
Close | 63.03 | 62.20 | 61.46 | 60.67 |

Aug 99
High- | 61.06 | 62.26 | 62.22 | 60.93 |
Low--| 60.10 | 60.78 | 60.51 | 59.81 |
Close | 60.60 | 62 18 | 60.80 | 60.29 |

Sep 99
High- | 60.22 | 60.36 | 59.92 | 62.57 | 70.90 |
Low--| 59.19 | 59.76 | 59.23 | 58.73 | 65.08 |
Close | 59.74 | 60.02 | 59.46 | 62.18 | 70.37 |

Oct 99
High- | 78.61 |
Low--| 71.28 |
Close | 75.09 |

Best wishes to you Sharefin, and thanks again for all your good work.
Regards.........Dabchick


Date: Sat Oct 09 1999 10:28
Dabchick (Valuing gold independent of fiat currencies) ID#258195:
Copyright � 1999 Dabchick/Kitco Inc. All rights reserved
Here are the Dabchick Gold Index figures for the past week ( calculated from the London Bullion Market figures published in the F.T. ) . All figures refer to the London close.
These figures are intended to show changes in the True Value of Gold relative to its value in January 1982. Because these values are independent of debased fiat paper currencies, they are also independent of the inflation caused to all other prices by governments that indulge in fiat currency debasement.
Date... | Close | . High. | .. Low .. |
04 Oct | 72.43 | 72.66 | 71.28 |
05 Oct | 76.07 | 78.61 | 74.46 |
06 Oct | 74.65 | 75.69 | 72.46 |
07 Oct | 74.72 | 74.88 | 72.88 |
08 Oct | 75.09 | 75.32 | 73.36 |
( Basis : Jan 1982 = 100 ) .
The further dramatic up-move in the index this week confirmed the evidence of the previous week's signals that the long bear market is in its death-throes.
The hesitation 10 days ago at the 70 level turned out to be a useful bottom step from which to reach this weeks next step up at the 72-73 level.
Regards.............Dabchick
SteveH
(10/09/1999; 15:44:28 MDT - Msg ID: 15935)
repost
www.gold-eagle.comTo GoldenArt re COT
(noula) Oct 09, 14:54

I've been getting this info from www.goldminingoutlook.com (great site!)although it is published and available from the CFTC at their site.

Basically, every 2 weeks the CFTC does a survey of the positions of the participants in the various futures markets. These are broken down into Hedgers, Speculators and Small Speculators. The CFTC then produces statistics on the total long and short positions for every market.

I believe these are important stats as they give the contrarian types (like myself) a guide as to level of speculative emotions in a given market as reflected by the various participants. Tyically, at major turning points in a market, speculators have large positions that are the opposite of the equally large positions of the hedgers. Usually, the hedgers will always win out as their net long or short position better reflects the demand for a given commodity.

Gold IMHO, has been a heavily manipulated market. The COT for gold remained extremely bullish during its decline from the $290 level to the bottom at $252. In other words, Hedgers were heavily net long, while speculators were heavily net short. Eventually, the hedgers won out as would be expected, it just took an awful long (and frustrating) amount of time.

In a big rally, the hedgers will be net sellers and the specs are forced to cover. Afetr a $65 move, one would expect the hedgers to be net short and the specs net long. Friday's report is so very very bullish because after a $65 move in gold, the hedgers are still considerably net long and the large specs bet short.

This reflects the following probable situation:
1. the Hedgers are seeing real demand for gold and continue to buy or sell less than would be expected.
2. The specs are trapped and many have yet to cover
3. A great bulk of the buying of futures has been to delta hedge the option market makers books (make them delat neutral).

In other words, very few had a chance to react to the gold price rally.

In addition, I believe there is gonna be a delivery squeeze on the December contract. Open interest in Dec is balooning and word is out on the street that there is no physical gold to make a massive delivery of the physical in late December.

This combined with the high lease rates (shortage of supply), an impending stock market crash (should start this coming week) and bullion dealer, hedge fund and producer hedge books in disaster all add up to sharply higher prices in the near future.

$500 by Christmas - I've been saying this all year.

noula abu dahhab

Bonedaddy
(10/09/1999; 17:10:58 MDT - Msg ID: 15936)
Saw this at Gary North, what a riot!
http://www.garynorth.com/y2k/detail_.cfm/6436Hope the link works.
Cassius
(10/09/1999; 17:29:37 MDT - Msg ID: 15937)
@ORO and/or FOA or anyone who wants to take a shot at this
The following is a post at the G-E Forum, and I've been thinking about it since I saw it, and I need some help in interpreting its message. Your opinions on the author's conclusions, please.
I've been an active viewer of this forum for over 18 months, but haven't felt sufficiently erudite to post. All of you do help me a great deal in determining my "pro-gold position, and to all of you I offer my sincere thanks.
The post I mentioned above is....."Possible and feasible reason for Gold Margin Increase"
(GOLD.com) Oct 08, 14:01

We all know many bullion banks and gold mining companies have taken years to
build up their SHORT POSTIONS. Numerous expert sources have estimated the
short position in the neighborhood of 14,000 to 20,000 tonnes. One must put
this great amount into perspective.

The entire world's annual gold production is about 2,600 tonnes.
Consequently, the short position is equivalent to 5-8 years of total annual
world mine production. Logically, what took years to build will demand time
to unwind. By NO STRETCH of the imagination can anyone believe many shorts
were covered in the last couple weeks of trading, where the POG rose
dramatically by 25%. Indeed, only the nimble Spec Traders were able to
frantically cover their SHORT butts. The vast majority of institutional
SHORTS are still outstanding. This fact has been voiced and CONFIRMED by
several gold experts on CNBC - including John Hathaway (portfolio manager of
the Tocqueville Gold Fund), Bill O'Neill (Merrill Lynch's Senior Precious
Metals Analyst) and the $1 billion Precious Metals Investment Trust Manager
in London (belonging to Merrill Lynch International), among others.

In short, the shorts remain outstanding.

It is reasonable and logical to believe the Fed and the COMEX are very
cognizant of this fact. It is also known, sooner of later ALL SHORTS must
cover before the Gold Bull rips their financial guts out - which would cause
financial panic worldwide in a domino-like institutional failure... one
after another. And whereas the Fed last year was able to save the $5 billion
LTCM from bankruptcy (due to gold shorting), it will be totally helpless to
aid a slew of bullion banks and gold producers going belly-up if gold goes
orbital due to panic buying.

THEREFORE, in a preemptive move the COMEX (with the support of the Fed)
decided to put a "governor" on wild speculation - with a goal to slow down
the unbridled advance in the POG.

This is both bad news and good news for goldbugs. The bad is that the POG
will not advance 25% every two weeks - like it did recently. But increase it
will. The good news is that the Equilibrium Price to clear all the
outstanding shorts will inevitably be much greater with the higher margin
requirement.

For long-term gold investors, higher COMEX margins is recognition of A NEW
GOLD BULL MARKET, and 'insurance' of a more orederly market - albeit much
higher gold prices in the future.
(end)
Your reactions, please. Cassius






Leigh
(10/09/1999; 17:56:35 MDT - Msg ID: 15938)
Cassius
As I read your post, I remembered another quote of FOA's (I remember a lot of his stuff, because I have to think about it for a long time before I understand it). He said that he had been given a view of the approaching storm, and even he (FOA) could not move that fast. So perhaps something is going to happen to upset this nice, orderly transition that COMEX cannot control. It would certainly serve those sniveling shorts right. But if the unwinding of their greedy, reckless speculation causes harm to any innocent person...well, there is NO punishment harsh enough for them.
jinx44
(10/09/1999; 18:03:14 MDT - Msg ID: 15939)
Cassius first...........then Hathaway
Cassius,
I will be very interested to see how the FED will manage the COMEX to maintain an "orderly market". This is one of those rare times that a Big Player like Soros can rake a market. Look how he played the Sterling market in 1992?. When governments take a side in a market-particularly a thin one like gold it can offer great opportunities to a smart and savvy manipulator. Maybe Georgie will pull his tricks again in the market. It worked in London for about a billion. Hope the USTreasury gets slammed.

and the Hathaway...................

Simple Math & Common Sense:
A $66 Billion Problem
Don't be confused by self-serving outcries from various parties trapped in the gold short squeeze. I am amazed to hear reports that so-and-so has restructured their hedge book or that this or that group has covered its short position in gold. Such statements are misleading, if not false. What is happening is that the self-made victims of the growing gold short squeeze are passing the hot potato back and forth among themselves in a desperate attempt to wriggle free. This activity amounts to little more than frenetic paper shuffling. The gold market is in the throes of a spreading credit crisis.
The short squeeze will be over when, and only when, there has been a full repayment of the bullion deposits owed by dealers to the central banks. These deposits are the foundation of the Golden Pyramid described in our recent Themes Express article. Ex repayment of central bank gold, the massive short squeeze we forecast when gold was trading around $250/oz a few weeks ago will continue even if distribution of risk among various players changes slightly with their desperate maneuvers.
Let's do the simple math. At 6000 tons, a conservative estimate based on the usual reputable sources, the mark to market value of the short interest in gold at $330/oz is approximately $66 billion. That doesn't sound like a very big number in today's financial markets with flows several multiples of this amount, until you consider how concentrated the exposure is relative to the thin financial resources of the participants.
For example, a 1% increase in the cost of carry equals $660mm. When most of this business was put on the books, the cost of carry was around 1% per year. Based on current lease rates, there has been a negative swing of $2.6 billion. By the way, as the price of gold moves higher, so does the interest burden. A $10/oz increase in gold equals $1.9 billion. In the last two weeks since the ECB announcement that lending would be capped, the $60 adverse swing has added over $11 billion to the shorts' obligation to repay. Who's paying the price?
What is the equity of the gold mining industry, hedge funds and bullion desks involved in this position? The world gold mining industry's equity on a very rough basis is only $20 to $25 billion. The equity of the ten or so major bullion traders is very likely less than $1 billion, even though the resources of the institutions that stand behind them is far larger. The depleted equity of the hedge fund community may stand at $30-$50 billion. Only the bullion desks are committed to trading gold. Hedge funds of course have no generic interest other than to make a profit. Even the mining companies have other things to do with their capital than trade bullion.
For example, Chase Manhattan reports gold derivative notes outstanding of $20 billion. These are "structured" notes where the obligation of the issuer varies, possibly quite dramatically, with the spot price of gold. Chase was among the most aggressive of the bullion banks, doubling its gold derivative position over the last 18 months, at the same time gold prices were plummeting. The book value of Chase was $23 billion as of 6/30/99. One of their clients, Ashanti Goldfields, is suffering severe margin calls on their gold hedge, which stands at 10mm ounces. Each $10 increase in the gold price costs Ashanti and/or its bankers an additional $100mm of pain. Ashanti's stock has declined by more than 50% in recent trading, despite the sharp run up in gold prices. Ashanti seems likely to disappear as a freestanding entity, and their shareholder equity could easily vaporize despite valuable, world-class assets.
Ashanti is not alone. Several other companies suffer from hedge book troubles at current prices. A further $100 run up in the gold price would raise questions on even more. Since the liquidity and financial resources of the gold mining industry are limited, the financial exposure to higher gold prices will inevitably pass through to the bullion dealers that were so eager to put this business on the books in the first place.
In a conference call, Ashanti management characterized the relationship with their 17 bullion banks as "orderly and stable," yet another misleading statement emanating from the current mess. In reality, the only step that will spare Ashanti and its bankers further misery is a 10mm oz buyback and delivery of physical gold to satisfy the credit. Of course, a $3.2 billion purchase order for physical gold cannot be filled for the time being. More likely, Ashanti will be carved up and its credit subsumed by that of Barrick, Anglo, the government of Ghana, or some other better balance sheet. The price of a rescue will be high both to the existing Ashanti shareholders and the bullion dealers. The risk profile of the bullion desks will then deteriorate in return for the appearance of "business as usual," awaiting the next disaster. As the gold price rises, the credit position of the bullion dealers and producer hedge books will deteriorate further. The process could well accelerate, and possibly culminate in a divine intervention by the central banks in yet another spectacle of "too big to fail." By then, the good name of gold should be restored.
Expect to see a retreat of capital from gold hedging and short selling in the coming months. Within the gold mining industry, a witch-hunt mentality towards hedge book risks is certain to commence. Pressure for buybacks will grow. The speculative blood lust for shorting gold among the hedge funds is a thing of the past. If anything, hedge funds are likely to line up on the buy side to attack the short position. We doubt whether risk managers of financial institutions will favor additional allocations of capital to the trading of paper claims based on gold in the bullion trade. Essentially, credit has seized up in the paper gold market.
Once the initial shock has been absorbed, the paper gold market should enter a protracted workout mode in which producers buy back hedges and speculators steer clear of the short side. Issuance of equity shares to fund hedge book buybacks, in other words, outright purchases of gold, would not be surprising. There is just one problem. If the gold producers all act simultaneously, as they did in herd-like fashion on the way down, the gold price will skyrocket. Reason: there is no physical gold to buy, other than from the central banks, and the only if they choose to sell or lend additional quantities.
This short squeeze has the potential to send gold hundreds of dollars higher. It took years of stupid collective actions by many very clever people to set this trap. A miscalculation of this magnitude is unlikely to be rectified in a few short weeks or with just a proportionally small change in the gold price. We have a long way to go before the market is correctly balanced. In the meantime, the squeeze has the potential to threaten the health of some major financial institutions. It certainly has the potential to disrupt the earnings and finances of mining companies who have hedged excessively or foolishly. The degree of "excessive" hedging will rise with the gold price. Even those companies that will soon be proudly proclaiming their "hedge lite" position stand to be shocked at the degree of risk they have undertaken. Officers and directors should understand the potential for shareholder suits from investors who bought shares as a play on higher gold prices. Without hedging and short selling over the last several years, the gold price would be several hundred dollars higher based on the short fall of mine production relative to consumer demand. Panic short covering could drive the gold price well above any theoretical equilibrium.
The existing and potential exposure of this massive trade gone wrong must be frightening to those trapped in it. Still many others have no grasp of what is happening and regard themselves as secure. Time will tell who's holding the bag on basis risk and lease rate exposure. For now, it is safe to say that nobody knows or is telling the truth.
John Hathaway
October 9, 1999
Mr. Hathaway is a Senior Portfolio Manager at Tocqueville Asset Management L.P. and portfolio manager of The Tocqueville Gold Fund.
http://www.tocqueville.com/funds/tgold.htm
Goldspoon
(10/09/1999; 18:13:47 MDT - Msg ID: 15940)
****Speculation news flash*****
****After going through the desert on a Horse with no Name...i heard this from his mouth.... Platinum is being set up as a tool to push gold to the $400+ level and kill the shorts at $390 DEC....How? by first locking the back door on platinum (raising the lease rates to 75%) while at the same time selling into the spot market on platinum to hold the price down. Now that the platinum shorts are trapped inside the house, set it on fire by buying platinum heavily....WHY?? Platinum is a thin market and can be easily manipulated in this way...Why?? to cash in on the Gold Market...Say What?? ... A huge price run in platinum would stampeed the whole herd... Thus set fire to the tender dry brush of gold and force the shorts of DEC $390 to cover.....CLEVER NO? ....The Platinum end game Gambit brought to you by those clever Swiss Gnomes...and European alies.....Think now... remember how platinum acted before gold began to move...and how gold moved just before the big anouncement??? Why has the platinum lease rate skyrocketed while the prices of Gold, Platinum, Silver has tracked sideways??.......

Just Remember Where.. you first read this....
Leigh
(10/09/1999; 18:16:54 MDT - Msg ID: 15941)
Bonedaddy
Dear Bonedaddy: You are an AMAZING writer with incredible wit and insight! We are HONORED to have you writing your observations here so we can read them. Thank you -- and please post more of your essays and poems.
Leigh
(10/09/1999; 18:27:56 MDT - Msg ID: 15942)
Goldspoon
Goldspoon, that horsie of yours has been taking it easy on the racetrack (down 8.3 yesterday). What are you saying -- that he's going to make a big spurt forward soon? Do you have a time frame? Will Golden Sun and Silver Moon overtake him, or will he stay $100 ahead forever? Glad you're back!!

Where is The Scot? We haven't heard from him in a few days. Cavan Man, are you all right? Is Mrs. CM well again?
SteveH
(10/09/1999; 18:51:03 MDT - Msg ID: 15943)
Too much going on to be handled, imo...
http://www.vny.com/cf/News/upidetail.cfm?QID=118228The Prez is considering selling Oil reserves. FYI.
SteveH
(10/09/1999; 18:53:39 MDT - Msg ID: 15944)
Inflation dragon looks serious
www.gold-eagle.comrepost from above site. Looks like my daughters exponential math problems.

Inflation dragon is breathing on the FED's neck
(goArmy) Oct 09, 18:45

Max broke out of his barn at the worst time for the FED.
Go to these statistics and you will see how bad it is.
If you are not in gold � you will not catch Max any more.

Go to the link below, Click on Non-Manufacturing and then on Manufacturing Business Activity icons on the left and read all the indicators below. Almost all are rated "Increasing Faster" or "Growing Faster".

http://www.napm.org/

Also go to Economic Calendar and Forecasts and see what is coming soon to the theater near you.

http://cbs.marketwatch.com/news/current/econ_calendar.htx

Also go to Economic Data for 1999 to see the developing pattern.

http://cbs.marketwatch.com/news/current/econ_data.htx?source=htx/http2_mw

Pay attention to NAPM prices paid: NAPM is the FEDs favorite i.e MAPM is the: Diffusion index of companies paying higher prices, monthly, from National Association of Purchasing Management.

NAPM numbers for 99 are
Jan..32.5
Feb..35.9
Mar..43.2
Apr..49.9
May..52.2
Jun..53.5
Jul..54.7
Aug..59.8
Sep..67.6

Do you see what I see? I see classical inflation pattern. Go get em Max!


FOA
(10/09/1999; 19:21:08 MDT - Msg ID: 15945)
Where gold is now going, no other investment can follow!
http://www.decisionpoint.com/DailyCharts/00goldDXY.htmlTomorrow, this trail will begin an incline that few of us will make. After we make camp, consider this before the sun rises on our worst expectations:

Leigh and ALL,
I just had a glass of wine to quiet my apprehension of what is to come. It is my belief that the "Gold wars" are about to begin. Please consider this "a very open viewpoint".

I think it's now to late for the dollar to "initially" surge with gold during this crisis. As an old, indebted currency, the dollar will have to share any flight to quality with the Euro. I say this in the same light that Michael stated in his: USAGOLD (10/07/99; 15:18:27MDT - Msg ID:15788) The Monetary Triangle.

------------From reading your most recent thinking as summarized in Msg#15713, I get the distinct impression that you believe that the Europeans have mandated their version of closing the gold window, thus making gold dear for any purpose, the settlement of gold carry trades being the most
severely affected. Some have said that this event of September 26th by the European central banks ranks in the annals of monetary economics with Nixon's closing of the gold window in 1973 and letting yellow metal seek a free market price. Following the Nixon decision, we had ten years of dollar devaluation. On the other hand, the European closing of the gold window could lead to ten years of euro appreciation against the dollar -- the exact opposite of the 1970s U.S. experience.-------------

The ECB/BIS declaration was little less than an announcement that the dollar will now have to stand on it's own. The implications of this are awesome for all of us! Look at the link above and look slowly at the charts. I expect a type of currency war to now begin. No, not one of competitive devaluation's or tit for tat interest rate changes, rather a war about "long term viability " and "ability to weather the coming storm". The rules of engagement have changed and now include "real reserve values" in the battle. Truly the race to increase the value of gold has started. Review the words of Mr. Greenspan as given in PH in LA's 15926: (Note: There was rumour in Washington in the spring that the major powers were rethinking gold. I think PH's quote was made in that time!)

----------Greenspan told Congress then: "We should hold our gold. Gold still represents the ultimate form of payment in the world. Germany in 1944 could buy materials during the war only with gold. Fiat money in extremis is accepted by nobody. Gold is always accepted..."--------

If one stands high upon a hill and views the future battle scene, we wonder how in the world the hapless gold shorts could have wondered into the middle of this. Couldn't the entire gold industry see that this could not end without an asset war? They will be cut to shreds in the early attacks. Not unlike this first shot fired. Mines, the finance houses that support them, dealers that must cover their risk,,,, all of them must feel the rumble of heavy CB armour as it approaches. Make no mistake, the valves that control the flow of lent gold "guarantees" are being closed. In addition, from what I have just understood, I now fully well expect we will not see the 2,000 tonnes of gold sold into this coming crisis. In an earlier post I felt they would at least stay with the spirit of the agreement and
sell some of it. The hard line I hear now is "damn the implications"!

The thousands and thousands of contract derivatives that now are outstanding today, cannot possibly be covered now with delivered gold at any price. This situation is going to "seriously" escalate.

When people say that they will gladly sell gold at $5,000, I counter that they must have never experienced war, "up front and personal". Remember, battles don't become "HOT" because everyone is "gladly" selling their "now in demand weapons" to the highest bidder! Gold will cross
$1,000 because everyone is buying it at $1,000 and asking for more. Trust me, when your neighbours are buying 1/32 ounce wafers with whatever money is in the house, you won't be unloading bars to buy a new house. Nor will any strong spirit trader be selling short a ten lot on comex !
Believe it!

This same dynamic is not lost on the human controllers at the CBs. Yes, they breath and feel the same media vibrations you take in. During the events directly before us, any and all contracts will be swept along on this raging river of economic turmoil. Be they contracts for, gold, currencies, bonds, stocks or commerce, all of them will lose credibility as the worlds massive trade settlements shifts from one medium to the next. Just as in Greenspan's line of thinking, when the armies invade the grab the rare coins, art work and gold. Forget the currency!

As these events progress real assets don't devalue. No, just your ability to profit from their ownership comes into question. Like this: If a forest fire suggests that all forest owners may be at risk, then any gold miner will share the risk of his "rooted gold" being burned also. The currency that is at risk of change today is the dollar. Therefore we can be assured that any company that owns what has become a "currency war weapon" (gold) will own "questionable assets", especially US assets. With England now running into Euroland, the Anglo/Euro mines in South Africa may be less in play? The risk of a plunging American stock market is enough for US mines without the influence of the "gold money" issues that now impacts the dollar. Outside of the "Gold Fields" play for bullion being in the best interest of all bullion owners, I feel all world mines are at risk. However, for ones that must hold a portion in these asset areas, consider what I have said. Choose your
holdings well!

All of this sounds a bit extreme, yet what I see directly ahead is extreme. Look again at the above chart and follow the gold lines. Unless the Dollar/IMF forces place several billion dollars of margin at risk to sell tens of thousands of contracts, gold just may run off that chart in the next week or two. Or less! Truly, the world has changed and I believe most of the gold industry is now caught
up in this financial change. A realignment of epic proportions. As of today, I see the money for rescue is not coming. This market is about to be fed to the lions because this battle involves something much larger and important than the industry. The new gold valuations alone will negate
the need for fresh supply and therefore lower the strategic need to maintain the owners value in these assets.

In addition, the two engines of wealth that were so long the saving force in the American economy are about to react to this major change of world value perceptions. Watch the chart above as the US stock markets parallels a failing currency. The next month or so may indeed make history. We shall see.

PH, you are right, in time perceptions of real events overcome a persons fear to react.

In time,
"""all true journeys eventually converge onto the same curve as they approach their destination"".

Rest well my friends, soon we will run like the wind blows! FOA

FOA
(10/09/1999; 20:04:37 MDT - Msg ID: 15946)
Comment
Hello Cassius,
The Comex margins increase will hurt the shorts as bad as the longs. It is different this time. Most of the big trade houses are going to be carrying a ton of defaulted gold paper. In this new environment they can't cover their commitments with real bullion either. Because there isn't enough around at "any" price or lease rate, period! So, they need the Comex speculators now more than ever as these BBs will also be buying long to at least "paper hedge" the bookkeeping side of their position. This is why the option OI and the futures OI are about to go ballistic (at least until they shut down the market). Some people hear me say this and they think a $100 or $200 move won't close anything. I agree, but that is far from what is coming. Like this:

"HK opens up $35. London AM fix +$97. Comex opens lock/limit +$75 on far out months and trades only front month. London PM +168. Comex front month trades "one contract" +$223 then no floor person will move. The exchange closes for the day. HK opens +354, on about 1,000 ounces and closes. Next day, London doesn't open at all, no fix possible. Indications +1,500.""

Now, my friend, do you really think anyone will be settled? This is the type of market that is coming. After a few months to a year or so, somewhere a gold market will reopen. All the while, "street gold" will work at (use your best imagination)?

Can't happen you say? It already has. The markets just don't reflect the corner in place. They will!

thanks for writing FOA


Leigh
(10/09/1999; 20:53:52 MDT - Msg ID: 15947)
Goldspoon
I think FOA's title "Where gold is now going, no other investment can follow!" means that Golden Sun's about to overtake you. You and your platinum horse will get sent back to the mines in Siberia. (Just kidding, Goldspoon! Good night!)
The Scot
(10/09/1999; 21:04:11 MDT - Msg ID: 15948)
LEIGH
Hi, I'm here. Been very busy this weekend. The wife decided to have a giant estate sale and raise more money for Gold.
Our living room looks like a skating rink. She has finally come around to our thinking. I sure hope we have not misguided her. I won't enjoy sleeping in the yard.
The Scot
AREM
(10/09/1999; 21:10:46 MDT - Msg ID: 15949)
To All

As I read the posting on this forum, I feel like a kindergarten student would feel when sitting in on a graduate course in rocket science. I am bombarded by the unbelievable complexity of the seemingly unlimited ways of formulating investments. It is all Greek to me.

I have understood just enough to realize that gold is the way to go in this phony fiat money world. Consequently, thirteen months ago, I put all of my investment capital into the Fidelity Gold mutual fund. Recently, I was convinced that gold was pretty much at the low end of its range, so I bought some gold coins. That turned out to be very good timing.

As of right now, my gold mutual fund is up almost 43% from where I bought in. It was up almost 56% a few days go, but then it fell back.

What worries me is all the talk about "hedged" mining companies and how they are going to be hurt by these actions. I simply just don't understand enough about this business to make an informed judgment about what is going to happen to my gold mutual fund as gold continues to rise. My original simplistic concept was that as gold rises, mining companies should make more money and their stock should rise accordingly. I don't feel very confident in that concept anymore.

I would really appreciate the opinions of you more sophisticated members of this highly esteemed round table. Should I sell my fund now and take a profit, or just hang in there. Your thoughts will be greatly appreciated.

AREM
Peter Asher
(10/09/1999; 21:12:48 MDT - Msg ID: 15950)
Margin
Increases in margin are basically a common event when there is a dramatic surge in volatility. The potential for prices to move faster and further than margin calls can cover, requires a higher percentage up front to prevent outright loss to the market makers.

This would not inhibit shorts from covering, as they are closing out open positions. New shorts however need more cash per trade as do new longs. The empirical effect is that more money is now required for each transaction and therefore fuel for the speculative fires is reduced in both directions.

This is not a bad thing. Gold will get to where it is going to go in any event, just in a (relatively) more orderly fashion. --- "Time wounds all heels"
Black Blade
(10/09/1999; 21:46:38 MDT - Msg ID: 15951)
AREM and all
I don't know if gold mutual funds would invest exclusively in hedged miners. I would look at the last annual report to see where the funds allocate among gold mining companies. If FOA and others are right in their assumptions, then the massive rise to come would favor unhedged miners to such a degree that some of the unhedged miners could go out of business, yet the unhedged miners would more than compensate for the losses of the hedged miners. I have 2 gold mutual funds as well as a silver fund. I also have holdings in individual mining stocks. I am not worried about the recent calamities that have and will befall hedged miners. It would also depend on how those hedges are structured. Not all hedges are structured the same. In fact some are quite beneficial whereas others can be quite devastating such as those involving Ashanti (ASL). I have stated before that many gold companies are headed by "bean counters" who have no business in the gold industry. This business is unique in that those with experience elsewhere are like children lost in a world of predatory sharks. Therefore I have concetrated lately into companies such as Harmony (HGMCY) and Stillwater Mining (SWC). Do the research and invest accordingly, we are approaching "interesting times" possibly even perilous times. Meanwhile the Black Blade will slash through the clutter of financial reports. BTW, you can't go wrong with physical, through you may lose out on leverage. The world is getting crazier all the time isn't it?
flierdude
(10/09/1999; 22:07:15 MDT - Msg ID: 15952)
Black Blade
What is your take on Durbin Deep (DROOY) and Battle Mountain Gold (BMG).

Thank You.

Mike
Black Blade
(10/09/1999; 22:29:07 MDT - Msg ID: 15953)
Flierdude......You fly? single or twin, etc?
I tend to like BMG, though their Fortitude deposit is about played out, the Pheonix deposit (nearby and part of the same system) has potential (Battle Mountain, NV), especially in a rising Au market. They also have some good prospects with their Bolivian properties (low cost). There has been some profit taking lately, but I like them though I don't have any of their shares.

As far as DROOY is concerned, I don't know. They are one of the "hedge-lites". I don't know how their hedges are structured, but apparently they have about 25% of their current production hedged at anywhere from $290 to $320. I was about to scoop up a few thousand shares last month and then the introduced a secondary offering of shares. I thought that this would dilute things a bit and went with HMGCY instead. I think that DROOY still has some superb leverage potential though. If you are interested in HMGCY, you could buy shares through their direct stock purchase program through B. of NY. Check out http://www.netstock.com and enroll (it's free) and search for HMGCY. You can buy the shares for less than through a broker and request certificates if you like (probably not a bad idea with Y2K). Also a few (very few) other Au shares listed. Overall I think that DROOY can overcome these hedge concerns because if AU rises, they can ramp up production rather quickly, though short term there can be some pain. Good luck!
flierdude
(10/09/1999; 22:50:05 MDT - Msg ID: 15954)
Black Blade
Thanks for your input. I fly ultra-lights only. Its a hobby. I just finished a FP-606 kit from Fisher Flying. Its a one seat replica of a Cessna 152.

Mike
elevator guy
(10/09/1999; 22:54:00 MDT - Msg ID: 15955)
Treading water?
If you invest in un-hedged mining companies, you pay a price denominated in dollars, yes?

As the economic power structure of the world shifts towards gold and the Euro, in the FOA/Another insight, the dollar will be undergoing a vicious devaluation.

And when you hopefully sell that mining stock, you are paid in dollars. But the value of that dollar is not the same as when you purchased the stock.

So how do you tell if you have stored earned value and wealth, or how do you tell if you have increased your wealth? If you spend "x" amount of dollars to buy, and the stock's value increases, you get paid back, e.g.; "2x". That sounds great, because it is two times the numerical value of dollars you spent to buy. But meanwhile, rampant dollar devaluation have been hammering on the door, as the world dumps dollars in favor of the new one world currency, (which, by the way, was prophesied some 2000 years ago, in the Book of Revelation)
To tell if you have gained anything, as the dollar becomes devalued, you need a constant measure of value with which to evaluate your position. Unless your leverage is great enough to overcome the devaluation that looms over the horizon, there is no point in investing in gold stocks, un-hedged as they might be. FOA has said tonight that there might not even be those 400 tonnes of yearly sales in the ECB agreement.
Those who have manned the wheel of our monetary ship have at least a little insight, colored by greed as it may be. And its reasonable to assume that they have by now come to grips with the fact that the ship is in serious trouble. It seems likely, then, that the USA might do something drastic to support the dollar, and the dominant paradigm of imperialistic tyranny that has been foistered on the world's economic stage. And what action could they take, to avoid going "out of business" War?
And so it may be that the ECB has decide not to "control the burn" of the dollar, with small credibility/liquidity injections of the 400 tonnes per year. Perhaps they are playing hardball, in an effort too decisively win the battle for the title of the "heavyweight reserve currency champion of the world".
Now our lives are burning faster, and there is little time to do anything but brace for the future. (With real physical gold, that is)
But I still have one foot in the leveraged derivatives of our economy, and still have an interest in diversifying into unhedged gold stocks, silver, as well as physical gold.
If the dollar doesn't disappear entirely off the face of the earth, and the extant financial systems survive the re-alignment, then our investments become a numbers game, where we try to race against horrific inflation, with highly leveraged paper this or paper that.
Gold stocks should perform better and faster upwards, than the dollar slides downwards, do you think?
More and more, as I read the Thoughts of Another, and FOA, I am amazed at the long range insight we have been blessed with. The rest of the world occupies itself with the more mundane affairs of life, and may not give more than a passing notice to the price of gold, thinking that everything will stay the same in a linear fashion. But life is full of non-lineararities, such as floods, earthquakes, wars, conquests, et al. We now seem to be in a once-in-a lifetime, sea change of events, as the world gels into alignment with Biblical phophecy.
Golden Truth
(10/09/1999; 22:57:09 MDT - Msg ID: 15956)
TO F.O.A
Hello F.O.A those last to posts really lit my fire!
May the battle be a victorious one! You have my full 110% backing in spirit and in strength.
Let us combine our minds as one and annhilate all quickly and forcefully!
May you live long F.O.A to see the Glorious Victory at hand and may God bless you to the highest!!!

Thankyou as always, your "brother in arms" G.T :-)
ET
(10/09/1999; 23:37:42 MDT - Msg ID: 15957)
e man

Hey e man - how ya doing? Great thoughts you just expressed!

"If you invest in un-hedged mining companies, you pay a price denominated in dollars, yes?

"As the economic power structure of the world shifts towards gold and the Euro, in the FOA/Another insight, the
dollar will be undergoing a vicious devaluation.

"And when you hopefully sell that mining stock, you are paid in dollars. But the value of that dollar is not the
same as when you purchased the stock."

Yes, the operative word is 'hopefully'. Hopefully you can sell your stock and hopefully the dollar will still buy something.

"So how do you tell if you have stored earned value and wealth, or how do you tell if you have increased your
wealth? If you spend "x" amount of dollars to buy, and the stock's value increases, you get paid back, e.g.; "2x".
That sounds great, because it is two times the numerical value of dollars you spent to buy. But meanwhile,
rampant dollar devaluation have been hammering on the door, as the world dumps dollars in favor of the new
one world currency, (which, by the way, was prophesied some 2000 years ago, in the Book of Revelation)"

It seems the world has decided gold is that currency, yes? Any currency can only find value in it's acceptance by the public. No other way. I could quote you some Mises here on that subject but I'll leave it for another time. At any rate, the much prophesized 'One World Currency' will only be accepted if 'people' consider it valuable, not governments. The Euro, a hopeful proxy for gold, may end up being the currency of choice supplanting the dollar as the 'One World Currency' (aka - reserve currency).

"To tell if you have gained anything, as the dollar becomes devalued, you need a constant measure of value with
which to evaluate your position. Unless your leverage is great enough to overcome the devaluation that looms
over the horizon, there is no point in investing in gold stocks, un-hedged as they might be. FOA has said tonight
that there might not even be those 400 tonnes of yearly sales in the ECB agreement."

Yes, we must understand that dollars are also a promise to pay and it is unlikely that when you sell those stocks there is some small print in your contract allowing you to choose the method of payment. The buying and selling of any of these stocks traded in the US are dollar contracts first and foremost. Indeed you may get your dollars but the purchasing power (objective value) of those dollars may be disappointing.

"Those who have manned the wheel of our monetary ship have at least a little insight, colored by greed as it may
be. And its reasonable to assume that they have by now come to grips with the fact that the ship is in serious
trouble. It seems likely, then, that the USA might do something drastic to support the dollar, and the dominant
paradigm of imperialistic tyranny that has been foistered on the world's economic stage. And what action could
they take, to avoid going "out of business" War?"

As FOA has pointed out, it is a war. It seems they have lost but are unwilling to admit it, especially publically. You will never be told about the war or it's outcome. You will 'see' it however. I don't remember the government telling me about the last currency war.

"And so it may be that the ECB has decide not to "control the burn" of the dollar, with small credibility/liquidity
injections of the 400 tonnes per year. Perhaps they are playing hardball, in an effort too decisively win the
battle for the title of the "heavyweight reserve currency champion of the world"."

Yes - so it would seem if FOA's info is correct. Perhaps other deadlines have cropped up necessitating a faster timetable to have things in place.

"Now our lives are burning faster, and there is little time to do anything but brace for the future. (With real
physical gold, that is)
But I still have one foot in the leveraged derivatives of our economy, and still have an interest in diversifying
into unhedged gold stocks, silver, as well as physical gold."

Remember the old trading axiom - only invest money you can afford to lose!

"If the dollar doesn't disappear entirely off the face of the earth, and the extant financial systems survive the
re-alignment, then our investments become a numbers game, where we try to race against horrific inflation, with
highly leveraged paper this or paper that."

I don't think leveraged paper will last any time at all. I do anticipate hyperinflation as dollars return home and the Fed attempts to maintain some liquidity. It will be interesting to see the US awash in dollars but at the same time money will be hard to come by. A paradox few can imagine, but the likely outcome of the situation.

"Gold stocks should perform better and faster upwards, than the dollar slides downwards, do you think?
More and more, as I read the Thoughts of Another, and FOA, I am amazed at the long range insight we have
been blessed with. The rest of the world occupies itself with the more mundane affairs of life, and may not give
more than a passing notice to the price of gold, thinking that everything will stay the same in a linear fashion.
But life is full of non-lineararities, such as floods, earthquakes, wars, conquests, et al. We now seem to be in a
once-in-a lifetime, sea change of events, as the world gels into alignment with Biblical phophecy."

Prophecy aside, the average Joe never has any idea what is going on around him because he has been taught to trust his government to implement his security. He will get burned again like he has throughout history. He has sacrificed his self-reliance for his perceived security, the goal of any socialist program. Once again, average Joe has bought into the idea that free markets and socialism can somehow co-exist.

Thanks for your thoughts e man.

ET
elevator guy
(10/09/1999; 23:47:36 MDT - Msg ID: 15958)
Thanks for your response, ET !
I appreciate the opportunity to bounce ideas around in this forum, and you have honored me with your response.

Thanks for sharing your thoughts!

And what directions are you taking to survive, and to thrive?
Chris Powell
(10/10/1999; 00:01:57 MDT - Msg ID: 15959)
Ted Arnold whistles past the graveyard
http://www.egroups.com/group/gata/246.html?And look at all those new tombstones:
Ashanti Gold, Cambior, hedge funds,
gold brokers....

Latest GATA dispatch.
ET
(10/10/1999; 00:31:22 MDT - Msg ID: 15960)
e man

Hey e man - I wish I had more time to participate here. I thought your last message had some great insights in it concerning the value of things. It is sometimes difficult to sort out the true value of investments when the yardstick, as you pointed out, is changing in size. I think FOA and Another have it right regarding the fact that these changes generally only happen once in a lifetime, if that, and that is why they are so difficult for one to see. They, as well as others here have done a fine job of pointing out why one of these changes is likely to happen in the very near future.

In FOA's message he stated that the die has been cast and the run to gold has started in earnest. This brings up an interesting point about markets in general. Unlike futures markets which clear everyday, equity markets actually take some time to clear. If you were to sell stocks say Monday morning, I don't believe the trade would clear until late in the week. This presents a problem in a 'fast' market. Another concern might be the counterparty that purchases those equities. Generally small lots are handled by the floor specialists. We might see something like we saw the last couple of weeks in the options markets where trades do not clear because of liquidity problems with either the specialists themselves or their financiers. We could see all kinds of 'lock-up' type problems in stocks with normally low volume levels.

You asked what I've done to prepare for this and I suppose you know I consider y2k a great problem also, but primarily from an economic point of view. If all of this currency stuff wasn't enough to worry about, you've got serious economic ramifications likely to come from y2k. I guess you could say I've been prepared for years for the currency problem as I suspected it could happen at any time. As far as y2k, I've prepared as if I could lose my means of income for some indefinite period of time. I've gotten out of debt and have stocked up on enough stuff to see my family through some economic hard times. Just common sense stuff. I don't think the general infrastructure is in any great danger longterm but I do feel most people underestimate the interconnectiveness of the economic system, particularly from the monetary side. I expect banks to stay open and commerce to go on but at a greatly reduced pace. I had a discussion with some friends last night about taking money out of the bank and hiding it at home. I can't see how this will do much good as it's purchasing power will be the same in either place. The only way actual cash will do any good is if we get a temporary collapse of the infrastructure with power and telcoms going down. For a few days it might help in that scenario but frankly I consider that scenario rather unlikely. If the whole grid goes down, it would likely stay down for quite awhile and I don't see how any fiat money would buy anything. I'm leaving most of my bucks in the bank and taking enough home to get by for a couple of weeks. I guess we'll see if this proves correct.

ET
Black Blade
(10/10/1999; 00:49:18 MDT - Msg ID: 15961)
ET and e man
Indeed, I too have a bit of the physical as well as PM shares. First, one should get out of debt, and second, prepare for any emergency such as unemployment, natural disaster, economic collapse, etc. with food, water, fuel, firearms, PM's, etc. I do howevr like to play the paper-game. If anything, investments in the right defensive plays such as PM's should hold up well through most any scenario, short of a Mad Max doomsday event. As always, take care of your base survival needs first, then have fun.
AEL
(10/10/1999; 05:22:37 MDT - Msg ID: 15962)
ET: cash
"The only way actual cash will do any good is if we
get a temporary collapse of the infrastructure with power and telcoms going down. For a few days it
might help in that scenario but frankly I consider that scenario rather unlikely. If the whole grid goes
down, it would likely stay down for quite awhile and I don't see how any fiat money would buy anything. "

.... I do. Just by long force of habit. Many people know and have known, in their lives, nothing BUT fiat money. In fact, most people have no conception of what real money is or might be. This is a major learning curve, and it will not happen overnight, or in 2 weeks. Meanwhile greenbacks and clad coins will retain or perhaps even increase in trading value. It could take many months or even a year or so before fiat money (I am talking about the *physical* stuff, here, not the electrons on the screen) came to lose value. Bear in mind that the ratio of the physical stuff to the electrons (the PS/E ratio?) is similar to the physical gold to paper promises ratio.... perhaps in the neighborhood of 100:1. Gary North's massive deflation scenario (with respect to physical cash) is still a real possibility; not likely, but possible. I would expect that in that context the metals would go thru the roof as well. Indeed, *anything* tangible would go thru the roof as well.
AEL
(10/10/1999; 05:28:01 MDT - Msg ID: 15963)
oops! PS/E ratio
... of course I meant 1:100, not 100:1
Hipplebeck
(10/10/1999; 06:58:23 MDT - Msg ID: 15964)
future currency
Currency wars or currency cooperation?
1 dollar=1 yen=1 euro
Someday, it will appear to be 3 currencies, but will, in reality, be one world currency
Hipplebeck
(10/10/1999; 07:16:25 MDT - Msg ID: 15965)
carnage
Yes, there will be carnage.
All those crazy people who shorted gold are going to suffer and have to make good, somehow, on their commitments.
Go bankrupt? Mostly not. They will be given time and liquidity. And who is going to be on the receiving end?
Who steered them into this mess? Who offered this wonderful deal where they could all get rich? Who baited them, hooked them, and is now reeling them in? The great gold scam of 2000. Take a little time, we will give you all the paper you need, but in the end you will return all of it to us.
Neo
(10/10/1999; 07:34:08 MDT - Msg ID: 15966)
A question for FOA
I really enjoy reading your posts, as do many of us, and am constantly gaining in knowledge. On your proposal for Gold to reach $30000, could you please give me a value in Euros, which you feel Gold could reach. I ask this, as I feel the answer will allow a greater understanding on my part, of your thought process. Much appreciated.
Hill Billy Mitchell
(10/10/1999; 08:01:01 MDT - Msg ID: 15967)
AEL (10/10/99; 5:22:37MDT - Msg ID:15962)
You said to ET concerning cash:

" fiat money (I am talking about the *physical* stuff, here, not the electrons on the screen)"

I thought that phrase was quite amusing as well as provocative. I hadn't heard the phrase, "the physical stuff", applied to fiat money before.

I am mostly a learner and a lurker and have very little to contribute. It would be good if you and others could expand on fiat money in the sense of the different types, ie physical, paper proxies such as checks. It would be interesting to hear some comments on the possible scenarios concerning the physical stuff:

1) Federal Reserve notes
2) Paper checks
3) Pre 1982 pennies
4) Clad coins and Zinc (post 1981 pennies)

I believe that some of this could be classified as quasi-fiat or quasi-hard stuff

There was a time in the distant past that 90% silver and 40% silver was quasi-fiat money due to the fact that the intrinsic value was there but that intrinsic value did not equal or exceed the monetary value assigned to it. The same could easily happen to pennies, nickels, and clad coins and who knows what else should we experience an inflationary depression, ie copper could go out of site and a penny would be worth more than a penny (pre-1982 penny). The same could be true for nickels and clads.

I plan to have some paper money on hand to purchase last minute goods, which I may have forgotten to stock. I expect that the window for such purchases will be open for 3 to 48 hours max. I also plan to have some this potential quasi-fiat money in case it becomes acceptable as a medium of exchange when the paper FRN is worth zero. This quasi-fiat money would be the lowest grade of double play or triple play if you will.

Possible order in which quasi-fiat becomes real money or a commodity with intrinsic value in excess of its monetary value or even a numismatic item.

a) pre-1982 pennies
b) post 1970 Kennedy halves
c) Eisenhower dollars
d) Nickels
e) Clad quarters
f) Clad dimes
g) Zinc pennies

Any one?
SteveH
(10/10/1999; 08:15:14 MDT - Msg ID: 15968)
Protecting gold
As you recall our discussion of Strict Scrutiny -- it is the courts ability to overrule the government or a regulation when one's rights are infringed.

The Emerson court (US v. Emerson, July 1999, Texas) ruled the Second Amendment to be an individual right. Previous to that the only Federal case to rule on the Second Amendment was to say it was a state right. Hence, many CCW (concealed carry) cases ruled in favor of the state as Strict Scrutiny didn't kick in since no individual right was infringed, rather a state right. The effect of one notable Fed case (US v. Miller) has been used time and again to strike down CCW carry cases. Now that has changed. Emerson' court unequivaclly states "...But there is no need to deceive ourselves as to what the original Second Amendment said and meant. Of course, properly understood, it is no limitation upon arms control by the states."

"Thus, concerns about the social costs of enforcing the Second Amendment must be outweighed by considering the lengths to which the federal courts have gone to uphold other rights in the Constitution. The rights of the Second Amendment should be as zealously guarded as the other individual liberties enshrined in the Bill of Rights."

In another section, "...even if there would be 'few tears shed if and when the Second Amendment is held to guarantee nothing more than the state National Guard, this would simply show that the Founders were right when considered essential, and so sought to protect those liberties in a Bill of Rights. We may tolerate the abridgement of property rights and the elimination of a right to bear arms: but we should not pretend that these are not reductions of rights.'"

The fight for the Second Amendment is much like the fight for a free gold market. Both are manipulated, both represent a return to the basics, and both confirm our heritage as Americans or as others remember Americans to be. The Emerson case is a significant stride forward that re affirms what all Americans and those who have emulated the US Constitution have always known the Second Amendment to be: an individual right and not one that only works at home, at work, or while hunting. No it is a 24-hour per day right that belongs in all places, not just where is socially acceptable. The right to bear arms far exceeds the right of the state police power (an often used defense against the Second Amendment in court cases) because it is an individual right that invokes Strict Scrutiny for law-abiding citizens who desire to carry concealed weapons anyplace and anytime as a manifestation of their Second Amendment rights, which they have understood all along and somewhere the courts (until Emerson) seems to have forgotten.
ET
(10/10/1999; 09:08:20 MDT - Msg ID: 15969)
AEL

Hey AEL - how's it going? I've read North's piece several times and I'm left unconvinced. I don't have it in front of me but if I remember right, he claims that physical cash will retain much value as a trading medium if banks close because of y2k problems. His view is that certain paper, FRN's, because of their longstanding usage, will retain value as the common medium of exchange because no other money would exist to fill this function in the public eye.

First, since all money they use is fiat, there is no reason for them to close because of possible insolvency problems. I've always questioned North's argument that banks will go bankrupt because the concept would only apply to a system where tangible assets could not cover tangible debts. Neither of these would be an issue with banks in this system. The Fed can reliquify an institution with the stroke of a pen. The more likely scenario is that the value of each piece of fiat would plunge in value.

Second, although most banks use computers, they are not necessary for the bank to perform its main function, the clearing of commercial transactions. The banks can process checks and plastic by hand if necessary, just like they used to, although at a relatively slow pace when compared to today. There is really no reason for banks to close other than if their employees can't get to work or civil unrest makes it difficult to operate. If either of these events were to happen over a long period of time I would posit that all fiat, whether electronic or physical would have little value in commerce because it carries no intrinsic value with it and would no longer represent a promise to pay. Some may still use it as a medium but it's purchasing power relative to real assets would plunge.

Third, a bank run today is not the same as a bank run of yesteryear. During the 30's a bank's paper did represent something tangible, gold. Today that is hardly the case as the paper today just reflects someones debt. Since the Fed is the final guarantor of that debt, it would seem they would find it in their best interest to guarantee people will not lose any money. So far, that is what they have done and I'm sure they will continue to do so. It seems to me the issue is not the return of any depositors money because that can be guaranteed, but what that money may purchase in the marketplace. The issue with a bank run today is the 'perception' of one losing his money, TV images of lines in front of banks, and a general loss of confidence. They are all perceptions of trouble when actually no trouble exists because the banking system can give you your money, guaranteed, because they are the ones that manufacture it. What they can't guarantee is purchasing power. A bank run of today would manifest itself as a run away from the banks and their fiat to hard assets. This is the run I think we are starting to see.

Regarding the above comments, I see little difference whether I leave my money in the bank or take it home. It will purchase the same. North's argument that the fiat money market would become two-tiered I believe is incorrect. If his scenario were to hold water, it would rest on the assumption that banks would close leaving clearinghouse operations down but other commerce intact. I fail to understand how this could take place for any longer than a few days before supplies at vendors ran out and couldn't be replenished because of the lack of a clearinghouse.

Let's look closely at this part of his argument. If the banking system were to shutdown for any length of time (lets say a month), would supplies last that long? I doubt it. But his claim is that cash would be more valuable as a medium. How could this be? I can't see my local gas station being able to buy gasoline from Texaco for cash. How would the cash get to Houston? No, it would require credit or the banking system to clear a check. Since the banking system is down, checks won't clear and credit would be useless as no method for final payment would exist. The result would likely be no gas for the station equaling no gas for me. This is just one example, but it shows that most business is not local and without a way to move money about the country and the world, commerce for the most part will stop.

Are computers necessary for banks to operate? In today's world, yes, but only to the degree that the volume of transactions remains this high. An economic depression could slow overall transactions down considerably making transactions clearable by hand but the more likely scenario is that those in the banking system will find computers that will work and clearinghouse operations will continue but perhaps at a much slower volume. Legacy systems might fail but all systems will not. The system on my desk could clear transactions if it had to. It only requires a working telcom and electricity.

In the end, I fail to agree with Dr. North. His vision of a world of commerce clearing with cash is farfetched. If the meltdown he envisions were to take place, the better medium to have would be gold despite the public's lack of knowledge. At any rate, the gold would at least insulate one from fiat currency depreciation which is no doubt in the cards with or without serious y2k disruptions. The banking system may be forced to go back to a gold standard just to insure its own viability in the public eye. We can only hope, eh?

Thanks for your thoughts as always AEL. BTW, Linux installation has gone well and is functioning flawlessly. My only need right now is a browser with a better cut and paste function. The browser inherent with Linux and Netscape's version leave something to be desired. Maybe its the operator.

ET
AEL
(10/10/1999; 09:10:40 MDT - Msg ID: 15970)
hill-billy
I, too, am more a lurker and learner than anything else!

I like the designation "quasi-fiat". It is of course fiat, but it (physical cash) has a different kind of existance than the electrons on the screen. Remember that the really great inflation has taken place in virtual bucks -- electrons on the screen -- not in physical currency. It is the electrons that will (or at least can) vanish suddenly in great number.

And whether we like it or not, the association of physical currency with "value", as "money", is deeply embedded in the popular consciousness. This way of thinking will not disappear overnight. It is possible that there could develop a disconnect between physical cash and electronic cash, in the same way that there might develop a disconnect between physical gold and paper gold. I find the idea that physical cash could lose its value inside of 48 hours to be inconcievable, short of sudden mass (divinely-inspired?) epiphany.

I agree that clad coins are worth stockpiling. In a big currency devaluation, clads would probably do better than paper. What would be a good guess at the installed base of coin-operated machines of various types? 100 million? 200 million? 500 million? too big to change, too big to fail.
My guess is that my 5 clad quarters will buy me one cycle at the laundromat even after the collapse of the buck.
FOA
(10/10/1999; 09:54:23 MDT - Msg ID: 15971)
Reply
Neo (10/10/99; 7:34:08MDT - Msg ID:15966)
A question for FOA
On your proposal for Gold to reach $30000, could you please give me a value in Euros, which you feel Gold could reach.

Hello Neo,
I use this big gold figure because that's the best reference to understand just what the dollar is going to do. Another's group understood this some time ago and projected a trend line into this area. Basically the concept stated, in gold terms, just how far the world trading/economic system would withdraw from using dollar reserves. Obviously, it will take some time and a grinding realignment to reach anything in that level. Never the less, it has now started and will initially run into the thousands before anyone knows what happened. All currencies (the Euro included) will fall against gold at first. The turmoil will be too great to suggest otherwise.

The big difference in the Euros favour is that they are a closed economic system. Their economy can work running a trade surplus or a neutral position. Initially, any increase in gold reserve values will balance their new "financial" exports as the the crisis creates a run to hold Euros. They will not be exporting inflation, as the US does, rather external foreign holdings should balance increased gold reserves. Especially as they cover some of their portion of gold commitments by paying out currency or issuing treasury debt. This is the real reason gold will initially rise so quickly, this massive reserve build-up is exactly what will make the Euro work as the world's reserve. Instead of
selling debt based upon the taxing power of the state as the US has done for so long. Instead of trying to hold the dollar price of gold, the ECB will let the Euro price run. There is no need to worry that gold will drive out the currency from use as we have become too advanced to operate without a digital settlement. That function alone creates a new "value" function for paper currencies that never existed in days gone by.

Today, one can hold a Euro account at any Euro bank. It's there now for the taking. True, gold will outrun this currency, but even major bullion holders still must hold a digital currency for trade. And by the very nature of the present market, not everyone can own bullion to the full extent of their holdings. Physically, it can't happen for years (or until gold hit's the high numbers above). Most
big hedgers will own "allocated" gold and Euros, waiting for whatever mix their remaining " Euro paper gold" will be paid in (in a year or so?). We can all expect gold to be broken into very small trading vehicles as it's price rises. I doubt we will ever use it in actual trade outside the Middle East Dinar arena. Yet, even there paper money will still be used for international settlement.

I think few investors truly realize the "knife's edge" this dollar based gold market is on. Most of them cannot see that it cannot be "played" using paper. We must look past the "currency war scene in the valley" to grasp where gold will be valued after this transition works out.

Currently people talk about the US selling gold in some form of options or physical. Clearly they did not hear Greenspan's words (see PH's post) about the need for our gold to be totally "uncommitted" at this time. The only thing the present banking structure can do is throw more
money at the paper gold markets. In as much, they use cash margin bookkeeping to create more "gold-less" contracts to drive the price down. That's all, nothing more. For the paper player (most mine stock owner included) such a move would crush them. Yet, it can only end with a defaulted
gold delivery and a closed marketplace. Investors say the officials will never do that, but how will they continue to function this market? Presently, virtually all lenders are calling for their gold back or at the very least converting to a self liquidating schedule. As this first round of defaults roll in the managers are frozen to borrow gold so they stay off the bid side of the lending rates. Yes, they are using options, futures and the world OTC arena to cover their "bookkeeping", but it has the effect of building the eventual amount of physical cover needed.

England has done all they can do to help and now even they have signed on to the Euroland arena. Truly, this gold market is being sacrificed in the face of a major transition of world financial dealings. Perhaps the ECB will reconsider and cover some important people? No, I doubt it as gold has just been placed squarely in the middle of this realignment and the LBMA is in trouble, big time.

Besides, even the dollar/IMF faction are clearly behind a big rise in the gold price. They don't have to choose between making the industry whole or not. That decision has already been made, right there in Washington. They know the dollar price of gold is going way up because the oil/gold
connection disappeared with the Euro. You know they took the crude oil rise seriously now, because they are buying time by selling off the strategic reserve. If they do, we will look back on that move and see that the reduction of this "emergency" holding plays right into the hands of the oil
producers. We shall see.

On the Road..............
thanks FOA
AEL
(10/10/1999; 10:13:05 MDT - Msg ID: 15972)
ET: banks, money, etc.
Agreed, largely. The G North scenario is unlikely.
But his scenario is only one of several ways in which a massive evaporation (or huge intersecting delays/screwups) of electrons might take place -- stock market crash, bond default, y2k-related glitches, etc.

"The Fed can reliquify an institution with the stroke of a pen." ---- yes, assuming that telecommunications, electricity, etc., etc., are all working normally or near-normally, which is likely, but far from certain.

"although most banks use computers, they are not necessary for the bank to perform its main function, the clearing of commercial transactions. The banks can process checks and plastic by hand if necessary, just like they used to, although at a relatively slow pace when compared to today." ---- if banks were so crippled (and that WOULD be a crippling hit, to have to go back to manual like that) then all the more reason to believe that physical cash would have a BIG premium over bank-mediated transfer.

"There is really no reason for banks to close other than if their employees can't get to work or civil unrest makes it difficult to operate." <---- neither of which is all that difficult to imagine (in my twisted imagination, at least!)

"If either of these events were to happen over a long period of time. I would posit that all fiat, whether electronic or physical would have little value in commerce
because it carries no intrinsic value with it and would no longer represent a promise to pay." ---- agreed. The key phrase is "over a long period of time". I think that period would have to be 6 months at bare minimum, and that physical cash would likely have greater longevity than virtual bucks. Also, we gold-hearts must keep in mind that neither does gold, ultimately, have "intrinsic" value; its value is extrinsic, existing in perception as money (like greenbacks) -- objects which can be exchanged for things of use value -- rather than the (use-value) things themselves.
I am simply saying that the extrinsic value of greenbacks (the concerted, persistent perception of value across populations of 100s of millions of people) has a degree of momentum... less than gold, more than electrons.

"It seems to me the issue is not the return of any depositors money because that can be guaranteed, but what that money may purchase in the marketplace. The issue with a bank run today is the 'perception' of one losing his money, TV images of lines in front of banks, and a general loss of confidence. They are all perceptions of trouble when actually no trouble exists because the banking system can give you your money, guaranteed, because they are the ones that manufacture it." ---- they can give everybody all the greenbacks they want, whenever they want them? no way! not even close! that is, without an all-out 24x7xmonths effort to print scads of 100s and other big denominations.

"What they can't guarantee is purchasing power. A bank run of today would manifest itself as a run away from the banks and their fiat to hard assets." --- yes, and again, I look at physical currency and clad coins as a sort of semi-hard (firm?) asset, and one that could come in awfully handy in the (rocky and no doubt fitful) transition to a real money system.
Chris Powell
(10/10/1999; 10:16:02 MDT - Msg ID: 15973)
A vengeful gold has come back from the dead
http://www.egroups.com/group/gata/247.html?Latest "Midas" commentary
by GATA's Bill Murphy.
FOA
(10/10/1999; 10:19:23 MDT - Msg ID: 15974)
Comment
ALL,
One last thing then I'll be away for a while.
I often hear about ABX having hedged with "spot deferred contracts" that allow them to defer the delivery of gold to cover. Perhaps for ten years! During this time they mine and sell gold at whatever high price comes along.

One thing they never offer is how they are going to cover their additional margin (do they need margin??) as these contracts are deferred. Are we to believe that the gold lenders are just going to sit back and allow the company to sell off gold in the thousands, making tons of money as they deplete their reserves? I don't think so! I would think that all the money ABX could make would be needed needed to cover margin in a big gold rise?? In addition, in the event of market disruptions (read that long term market shutdown) real gold would be "forced diverted" by the lenders to cover contracts. And let's not even think of the massive "inflationary" price pressures a dollar decline would bring to the operating cost of their US based assets. Just something to consider while we are "On the
road...."?

Good luck this week,,,,,,,,,,,,,,,,,,,,,FOA
aunugget
(10/10/1999; 10:22:44 MDT - Msg ID: 15975)
Barrick Gold
Have any members determined what the total forward sales/dirivitives are for Barrick Gold? Ist time user.
Thanks,
GW
elevator guy
(10/10/1999; 10:30:44 MDT - Msg ID: 15976)
@aunugget
Barrick (ABX) is 100% hedged, but they say they have the option of deferring for 15 years, if the spot price is good, as so they can profit from the increase in the POG in the interim. See FOA's post below, to learn the fallacy of their claims.
To all experts here, please forgive any innacuracies.
FOA
(10/10/1999; 10:40:41 MDT - Msg ID: 15977)
Comment
Chris Powell (10/10/99; 10:16:02MDT - Msg ID:15973)

Hello Chris,
What a great read from Mr. Murphy! Ph is right, all trails lead to the same end! thanks
FOA
(10/10/1999; 10:41:51 MDT - Msg ID: 15978)
(No Subject)
ALL,
FOA
(10/10/1999; 10:41:51 MDT - Msg ID: 15979)
(No Subject)
ALL,
FOA
(10/10/1999; 10:41:53 MDT - Msg ID: 15980)
(No Subject)
ALL,
FOA
(10/10/1999; 10:41:55 MDT - Msg ID: 15981)
(No Subject)
ALL,
FOA
(10/10/1999; 10:41:57 MDT - Msg ID: 15982)
(No Subject)
ALL,
FOA
(10/10/1999; 10:44:17 MDT - Msg ID: 15983)
I'm sorry, I'm trying to run out the door!
ALL,
If you want to learn something about ABX, just read Bill Murphy's below. What an eye opener!!!

Gone now FOA
elevator guy
(10/10/1999; 12:56:44 MDT - Msg ID: 15984)
A question for Mr FOA
Does Gold Fields have a better prospect of weathering out the coming shift towards the Euro, and devaluation of the dollar, because they hold bullion? Did I hear that right?
elevator guy
(10/10/1999; 13:05:43 MDT - Msg ID: 15985)
A question for FOA
First, let me say, that from your insights, it is clear to me that the only place to stand against the downstream devaluation of the dollar is with the rock of real physical gold ownership.
Now concerning the "salmon" of leveraged investments, gold stocks, jumping upstream with "7 league boots", am I to understand that Gold Fields is uniquely positioned to weather the onslaught of dollar devaluation, due to some bullion holdings?
Or am I delusional, thinking that any paper investment could outperform gold, as the rug is ripped out from under our world of financial instruments?

Thank you!

elevator guy
elevator guy
(10/10/1999; 13:07:26 MDT - Msg ID: 15986)
post follies
That first post didn't go through, so I re-posted, and re-worded, hence the redundancy.
HLime
(10/10/1999; 14:36:11 MDT - Msg ID: 15987)
Two hours till showtime
G'day Aussies, give em hell.
Go silver go. Lets do $6.50 by Firday.

Harry
jaydeevee
(10/10/1999; 15:49:16 MDT - Msg ID: 15988)
Aussie reply to HLime
http://www.usagold.comIn Aussie & Asian trading last Friday SPOT dropped all day. SPOT recovered in N.Y. , but did not hold up in the last few minutes of Comex trading on Friday night & finished down $2-30; though, luckily, still finished at $320. Still that $2-30 drop does nothing for sentiment here in OZ on this Monday morning. Gold shares in Australia, across the board, and in quality Aussie 'little hedged' mining companies continued their fall of the past few days. The way these shares have fallen, you would start to begin to wonder where 'the bottom is?' ; and you'd believe that POG was more around $285 rather than $320. It's SO STRANGE to see POG holding and quality 'little-hedged' mining shares continue to fall. On what basis do you believe? hope? that we Aussies can 'give 'em hell'? This is a serious question. Welcome any confidence inspiring replies.
Gold Power
(10/10/1999; 16:06:21 MDT - Msg ID: 15989)
Gold in the Ground
I want to distinguish between types of paper gold because I think the shares of mining companies are getting short-shrift in much of the discussion here.

When you say "paper gold will burn like other paper investments," I can understand that in relation to futures, options, and other paper-gold derivitaves. But the shares of a mining company that owns gold in the ground is in a much different category of paper gold, in my view.

Shares of a mining company represent ownership in the mine and the gold the mine contains.

If the financial system of paper, fiat money blows up and disintegrates, this doesn't necesarily destroy all contract law. The shares of the mining company will still represent ownership in the mine, unless there is complete societal disintegration and the legal system is completely overthrown.

So stocks are a much different type of paper than derivatives.

I don't know exactly what the end of the highly leveraged fiat money system will bring. But let's suppose for a moment that society and civilization remain in tact. After all, society and civilization pre-date leveraged deriviatives. I imagine it will still be here after they are gone.

So gold settles at $30,000 an ounce. We don't know what other things will cost at the time, although we do know the relative value of an ounce of gold -- figuring its cost of production -- versus other items that people use in their lives.

There will still be a need for computers, automobiles, military equipment, furniture, housing, food, etc. The figure of gold at $30,000 per ounce is a statement about what will happen to the dollar, more than it is about what will happen to the mining industry.

There will still be a mining industry. The companies that own gold in the ground will have a commodity of great value. The shares of those companies, which represent ownership will also be a thing of great value.

The situation today is that the paper-money system, with its leveraged derivatives have given the perception that gold is unnecessary for a modern economy. $30,000-per-ounce gold means the paper-money derivative system has been destroyed and that gold is no longer unappreciated or under priced.

It has resumed its rightful place at the center of the economic universe.

So I think shareholders of companies with reserves of gold in the ground are sitting pretty. The market still does not believe the current upmove.

Go back a few years when gold traded around $380-$390. Reserves in the ground were capitalized for around $70 per ounce. When gold sold for around $280 earlier this year, there were a couple of company buyouts, where the buyout price came in at around $25-$30 per ounce.

With gold at $450, it would seem reasonable to value gold in the ground at $100 per ounce. So if a company had two million ounces of gold reserves, its market cap would reasonably be measured at $200 million.

Even at today's price of $321, it would be reasonable to value gold in the ground at $40 per ounce. Still, many companies on the Toronto Stocks Exchange are selling for half of that amount or less.

They can be picked up for pennies on the dollar of their intrinsic value. And if you believe gold will move higher, the value of the shares has nowhere to go but up.

Whatever replaces the dollar, the value of the companies with gold in the ground will be real and will be highly valued when gold is no longer artificially held down by the perception of success for the paper-money system.

So I can't buy into the theory that physical gold is the only way to go. Shares of mining companies with gold reserves will do quite well as well.

Gold Power
Goldfly
(10/10/1999; 16:26:58 MDT - Msg ID: 15990)
Hnnnnnn....Hnnnnnn......HNNNNnnnnnnn

Hey Spike! What is it boy? What are you looking at?

Hnnnnn....Hnnnnn

OOhhhhh, yeah. That new dog that moved in down the street. A Golden Retriever.....

Hnnnnnn....Hnnnnnnnn.....Hnnnnn

Spike, do you mind? You're drooling all over the windowsill. Let see..... Eura, I think her name is. Hey Spot! Don't you want to see? Quite a dish!

Ooorrrrooopht!

Eh? Well no accounting for taste, that's what I always say. Hey Spike, want to go for a walk? Hey?

Haahaahahhahhhaaahaaaha......

Yeah I thought so. How bout you spot?

Ooorrrrooopht!

Alright then, but remember, I'll have to tie you up in the back yard..... You know how those Bear children love to tease you through the fence when you're tied up!

Come on, Spike. Let's go!


Spot, somnambulistic. $319.70
CoBra(too)
(10/10/1999; 16:41:33 MDT - Msg ID: 15991)
@HLime - is your handle derived from the "3rd. man"
If yes, you may know postwar Vienna very well- though mostly from the underground or better sewage system (I don't mean it in any derogatory way) - It was a great flic - and if you believe in the land of OZ (again dow under)to further the golden case - please don't: Read again the Vancouver mystery of Midas (Bill Murphy)trying to meet up with Mr. Champion de Crespigny CEO of Normandy, the 'well' hedged # 1 producer of OZ for AU oz's, who didn't feel the urge of discussing his co's position in a more positive PoG scenario - at this particular point ( as an afterthought, maybe the champion of the cretin's can at least show some generosity and reemburse
Bill M. for his troubles) - As another afterthought, his companiy's margin calls won't even alllow him this kind o kind generosity.`
@FOA - @ABX - I've stated my feelings and analysis towards P.M.'s (sorry Peter Munk's) Co. as being a hedge fund - happily bedding down with the BB's (Best Bets - now Bovine Beasts)- 13.5 moz short! leased! forwarded! sspot deferred! or whatever you guys call your "premium option strategy" - IMO, PLEASE EAT YOUR CAKE -but leave some of the cream to your -frustated- shareholders.

I've said that before, but I do fear it is too late to even contemplate this outcome, as I suspect Peter's company is long reposessed by his friendly BB's. If that's to strong a postulation I'd be happy to argue about certain and other facts - with pleasure, but still facts!

Die Moral der Geschichte - don't ever again trust hedgers, cretins (-no, not Chretiennes- either,- beside the point) and under no circumstances ever trust CNBC - except as the leader of contrarian (NO- Maria Bartolomo) opinion.Heavy? N0 metal! Virtually yours CB2


RossL
(10/10/1999; 16:46:03 MDT - Msg ID: 15992)
The winds of change
Bill Murphy sez:

"I do not know exactly how all these deals work, as they
are very complicated. But I can't believe that a
responsible CFO of a gold producer could make a
statement like this. If I owned Barrick shares, I would
freak out."

Jim Ray sez:

"'As everyone on this list is surely aware, there is a
screwy situation in the precious metals (especially
gold) markets. The published spot price for gold does
not seem to be the market clearing price for actual
physical bullion. The prices published in the financial
press are for PAPER gold -- that is, for promises
purportedly payable in gold. But anyone who attempts to
buy large quantities of actual physical bullion for
immediate physical delivery/allocation is likely to be
stonewalled. From our vantage point it appears that
there is already a de-facto holiday involving the gold
bullion banks. Slow delivery and rationing differs
little from explicit default.'"



When I read this, I'm getting the same feeling that I had
that one day a few years ago. That day I read in the WSJ
about the geologist from BRE-X who "accidentally fell"
from a helicopter.
These are the marks of a sea-change in the market.

Al Fulchino
(10/10/1999; 17:06:32 MDT - Msg ID: 15993)
SteveH/Thanks for #15968
I have a couple of scenarios for readers to think about.

#1 Man has accumulated gold for trade in case of extreme political and economic turmoil. He approaches a vendor of food, with his *money*. The vendor says, "tell u what will you trade me something I need such as gasoline or clothing.Don't need your gold maybe some other time. Thank you."

#2 Man offers gold to a vendor in times that are not as bad as the first scenario, but currency has been revalued and precious metals DO have an audience, since political environment is safe, and the vendor KNOWS that IF he takes your gold in exchange, he will find an audience for that gold to make other purchases. So you have a deal.

#3 Either of the first two scenarios prevail, this time you also offer gold, he declines and asks for some trade....you pull out your gun and say "bullets for your bread", he says
yes or no depending on his courage or whether he has a gun and is faster than you.

Always! Always! Always! Guns beat GOLD, especially when moral authority is on the side of the gun owner. So while we pray for safe political times, we never know, and cannot play it too safe.

Got your guns????

Goldspoon
(10/10/1999; 17:53:00 MDT - Msg ID: 15994)
**Leigh...FOA***
You asked me...What are you saying -- that he's going to make a big spurt forward soon? Do you have a time frame? Will Golden Sun and Silver Moon overtake him, or will he stay $100 ahead forever? Glad you're back!!

****After going through the desert on a Horse with no Name...i heard this from his mouth.... Platinum is being set up as a tool to push gold to the $400+ level and kill the shorts at $390 DEC....How? by first locking the back door on platinum (raising the lease rates to 75%) while at the same time selling into the spot market on platinum to hold the price down. Now that the platinum shorts are trapped inside the house, set it on fire by buying platinum heavily....WHY?? Platinum is a thin market and can be easily manipulated in this way...Why?? to cash in on the Gold Market...Say What?? ... A huge price run in platinum would stampeed the whole herd... Thus set fire to the tender dry brush of gold and force the shorts of DEC $390 to cover.....CLEVER NO? ....The Platinum end game Gambit brought to you by those clever Swiss Gnomes...and European alies.....Think now... remember how platinum acted before gold began to move...and how gold moved just before the big anouncement??? Why has the platinum lease rate skyrocketed while the prices of Gold, Platinum, Silver has tracked sideways??.......

Just Remember Where.. you first read this....

****Leigh.. Gold Sun is the Star of this Show!! The fate of the worlds economy rests with the fate of Gold Sun in this race!!
**Now for the next leg of the race....Horse with no Name has been loaded into a Circus Cannon with me on his back...and is about to be launched swiftly ahead in this race!! When??
October 1999 on a Monday morning 3:00 AM USA eastern time...(when the platinum markets open in Zurick)....(tomorrow morning?)...
This will be the next shot in the Great Gold Wars Of 1999..and will start a World Economic War... The fate of Horse with no Name and Silver Moon will be tied to the fate of Gold Sun after that....If Gold Sun wins the WAR then Horse with no Name will enjoy his Moment of Glory in second place with Silver Moon Third.... If Gold Sun does not win the war then all three will be losers with Gold Sun... DEAD last.....
***Good Luck FOA!! ....ride as the Wind!!!
SteveH
(10/10/1999; 17:53:08 MDT - Msg ID: 15995)
Dec gold now...
$322, up $.30 in overseas trading.

Are the markets open Monday in the US?
Goldspoon
(10/10/1999; 18:18:01 MDT - Msg ID: 15996)
Steve H
http://www.mrci.com/qpnight.htmThe markets are trading futures for Mondays US markets open.
Here is a neat link
jaydeevee
(10/10/1999; 18:18:13 MDT - Msg ID: 15997)
OZ calling! this volatility is killing me!
http://www/usagold.comThis morning & a few days ago, I posted that in Australia, I believed Acacia Resources was the best of the little-hedged gold stocks. I watched and puzzled as its share-price tumbed over the past few days as POG held! On Friday the share price closed at $2.66. This morning, ANGLO somethingorother has issued a takeover bid valued at some $3.30. At last,
the market seems to be distinguishing between hedged & unhedged producers. YIPPEEEEEEEEEE!!!!!!!!!!!
SteveH
(10/10/1999; 18:34:35 MDT - Msg ID: 15998)
Goldspoon
I'm on it. Thanks.

Steve

Chicken man
(10/10/1999; 18:37:26 MDT - Msg ID: 15999)
Gold Power @ Gold and Power....
Nice thoughts......I can see only one factor that you might be overlooking......in all your pencil pushing the price of "power" remained a constant.....Power is a large part in the process of finding one ounce of gold in a semi trailer of rocks.....all these rocks have to be crushed to very little rocks so the chemicals work......this whole process to get one ounce uses a lot of power(electricity,desiel fuel, etc)

If the price of energy goes up (doubles),would not that make some of those reserves to expensive to mine....? the day may come when mines can not make a profit @ 500....
Gandalf the White
(10/10/1999; 18:42:19 MDT - Msg ID: 16000)
Jump SPOT ! -- Jump!
Ok --- Au is now taking off ! Wakeup Spike Goldfly ! OR is he off with Eura ?
<;-)
Journeyman
(10/10/1999; 18:57:37 MDT - Msg ID: 16001)
ALALN GREENSPAN PUTS Y2K BANK FAILURES, G NORTH SCENARIO IN PERSPECTIVE
"The trouble is that there is a perversity of incentive in this type of problem in that you can be extremely scrupulous in going through every single line of code in all your computer operations, make all the adjustments that are required and get essentially a system, whether you're a BANK or an industrial corporation, and say 'we've solved the 2000 problem,' and then find that when the date arrives, all the interconnects [to other (banking) organizations] that are now built-in start to break down. ...YOU CAN END UP WITH A VERY SMALL NUMBER OF NON-COMPLIERS AND HAVE A VERY LARGE PROBLEM." ...I mean for example, WE HAD A VERY MAJOR BANK IN THE CITY OF NEW YORK A NUMBER OF YEARS AGO -- COMPUTER WENT OUT. AND THE NEW YORK FEDERAL RESERVE BANK HAD TO LEND THEM OVER 20 BILLION DOLLARS OVER-NIGHT. Now if we [the Federal Reserve] weren't there, I can tell you that the system would have been in VERY serious difficulty. So part of what we're trying to do is figure out what we can do to assuage whatever problems might arise. And it's a difficult exercize because there's such a huge element of uncertainty in the nature of the problem itself, but we're trying to come to grips with it the best we can." -Alan Greenspan to Senate Banking Committee, 25 Feb 1998 [caps & bolding emphasis added.] Regards, Journeyman
Whacked
(10/10/1999; 18:57:55 MDT - Msg ID: 16002)
Gold & Power
http://www.usagold.com/cpmforum/Power is a constant if you go by the historical trends - it is not a variable and should not be treated as such. Diesel is the prime component, at present, in the manufacture of electricity at minesites and mills. This is slowly changing in Oz to natural gas with the installation of a natural gas pipeline from Dampier through the Kalgoorlie.

Efficiency is a prime component on the Oz mining scene and the limitations that diesel present are already built into the equation. Remember that Oz leads the way in low cost production. The world generally wakes up eventually!
Journeyman
(10/10/1999; 19:34:52 MDT - Msg ID: 16003)
Al Fulchino: GOLD & SILVER TRADE ARE ALMOST IMPOSSIBLE TO SUPRESS
"It [the French ruling body, the National Convention] decreed that any person selling gold or silver coin, or making any difference in any transaction between paper and specie [gold and silver coin], should be imprisoned in irons for six years; that anyone who refused to accept a payment in assignats, [paper money not convertable to gold or silver] or accepted assignats at a discount, should pay a fine of three thousand francs; and that anyone committing this crime a second time should pay a fine of six thousand francs and suffer imprisonment twenty years in irons. Later, on September 8, 1793, the penalty for such offenses was made death, with confiscation of the criminal's property, and a reward was offered to any person informing the authorities regarding any such criminal transaction. To reach the climax of ferocity, the Convention decreed, in May 1794, that the death penalty should be inflicted on any person convicted of "having asked, before a bargain was concluded, in what money payment was to be made." -Fiat Money Inflation in France by Andrew Dickson White, p. 109...................................................................................None of these measures prevented people from trading using goldand silver, and finally on November 13, 1793, the NationalConvention , under terrifying penalties, closed the metalsexchange. The only way trade in "hard money" can be surpressed isto make the hard money unavailable, which is why Roosevelt incahoots with the Federal Reserve Corp. stole our ancestor's gold.Why are people so insistent on getting solid money for trade. Thevendors in Mr. Fulchino's examples MIGHT respond quicker to gunsthan gold, but gold is the safest and best bet. Regards, Journeyman
gidsek
(10/10/1999; 19:36:20 MDT - Msg ID: 16004)
Gold Power
A part of the "all gold paper burning" scenario is if I understand ANOTHER/FOA correctly is political risk.

In a new era in which gold backs currencies mines would be nationalized or taxed to death.

gidsek
Gold Power
(10/10/1999; 19:38:38 MDT - Msg ID: 16005)
Chicken Man
Chicken Man,

I think your statements are an argument in favor of my perspective.

You have mentioned the $500 level as one at which gold could not be mined economically. But the discussion here has pegged the ultimate price as so far above $500 that the level becomes irrelevant.

The issue is one of relativity. If the price of oil goes through the roof, gold will go with it.

It's the dollar that will tank; this is what FOA wrote earlier today.

The fact remains that there will always be a mining industry. If/when the dollar collapses, the relative value of gold will remain a constant.

It is now being unshackled from the paper trap that was laid for it. Gold will soon reestablish itself at the center of the economic universe.

Gold mines will be much more profitable -- relatively speaking -- than they are today.

The thing that will have to happen for gold mines to lose their value is for political systems, like the U.S. and Canada, to be destroyed and replaced with either nothing of substance or new political entities that do not hold the previous legal systems or contracts as valid.

Thank you,

Gold Power
Gold Power
(10/10/1999; 19:50:22 MDT - Msg ID: 16006)
mine nationalization; global tyranny


gidsek wrote: "A part of the "all gold paper burning" scenario is if I understand ANOTHER/FOA correctly is political risk. In a new era in which gold backs currencies mines would be nationalized or taxed to death."

I see. Well, if that happens then the shares of the mining companies will become worthless if the holders are not indemnified by the new governments.

We have takings' laws in the U.S. Whether or not they would apply is still open for debate.

I do remember ANOTHER saying something to the effect that this nationalization would happen. He said that's why Australia could sell its gold.

Of course, what he's predicting is that the coming economic upheaval will usher in a series of tyrannical, socialist states throughout the world wherein liberty and property are confiscated by the state at will and the individual is left with no rights.

I don't think such an event can accurately be predicted. Many have tried such a thing, but have failed.

I see something else resulting from the financial carnage about to unfold:

I think we'll see a tremendous growth in the number of countries in the world; and the country will be defined by its ethnicity and religion -- the very things the New World Order hates about countries.

What I see coming is a failure of global socialism and tyranny, and the reimposition of nationalism and a checkerboard of economic and legal sytems throughout the world.

Such is the power of gold.

Gold Power
Canuck
(10/10/1999; 20:02:27 MDT - Msg ID: 16007)
Goldpower
I am roughly 33% physical, 33% gold mining stock and 33% cash.

I like FOA's theories, the process seems conceivable; I am not 'in the know' well enough to debate. I'm running with the idea to a degree.

I like the 'unhedged' concept as well. The $30,000/oz. asset
in the ground bears little concern to the price of power. If
production goes up from $175/$200 per onze to $500/$1000 per onze who cares? It seems to me that if I have a 'piece of the action', that is, shares in a mine with thousands of onzes with no 'lien' I'm in good shape.

Comments.
jinx44
(10/10/1999; 20:49:23 MDT - Msg ID: 16008)
Goldseek and the tyrannies
I admire your cheery attitude about the future. I am at a loss to explain or understand your rationale that the phenomenon of "economic upheaval will usher in a series of tyrannical, socialist states" will not transpire. We are already there and we don't even know it. This current government in the US has no intention of allowing any meaningful freedoms to exist. Panem at circensum at all costs. We have lost.
canamami
(10/10/1999; 21:04:39 MDT - Msg ID: 16009)
POG -$319 - POS -$5.53
MCRI shows a continuation in the recent, relatively modest weakness in both gold and silver. Any idea what has caused the loss of momentum? I know it's minor, given the huge run we've had, but it would be good to see a resumption in the rally, notwithstanding the changes in margin, etc. How the game is rigged?! Why were there no changes in margin requirements when the shorts were nailing the POG to the wall?
Chris Powell
(10/10/1999; 21:27:41 MDT - Msg ID: 16010)
Milhouse on prospects for hedged and unhedged
http://www.egroups.com/group/gata/249.html?It's important to know who
is hedged and who isn't.
Gold Power
(10/10/1999; 21:40:54 MDT - Msg ID: 16011)
We have lost
Mr. jinx44,

Your conclusion on our current situation saddens me. I would have a hard time living if I thought that "we have lost" and that we are consigned to go through the rest of our lives, and that future generations are also doomed to the same fate, with liberty and freedom beyond our grasp.

Let's look at things another way for a moment: It appears to me that the socialists have lost. You might recall James Davidson's perspective in The Great Reckoning that the side of the socialist coin that allows no one to advance, the Communists, had fallen and now the side of the socialist coin that allows no one to fail, the American welfare system, would follow in its footsteps.

His timing was off, like many of us. But it appears time now for his perspective to come to pass.

It is the statist, socialist perspective that is about to be handed its just desserts.

The problem in the Soviet Union was that the people were such slaves in their hearts and minds that when they received the opportunity to construct a new and better society than the one just fallen, they didn't have what it takes.

I am hopeful that the collapse of the paper-money system of dishonesty and corruption will give some of us the opportunity to build a better system in its place.

I can never give up hope. I can never concede that "we have lost." The other side must win every time. We only have to win one time.

Thanks,

Gold Power


jinx44 (10/10/99; 20:49:23MDT - Msg ID:16008)
Goldseek and the tyrannies
I admire your cheery attitude about the future. I am at a loss to explain or understand your rationale that the phenomenon of "economic upheaval will usher in a series of tyrannical, socialist states" will not transpire. We are already there and we don't even know it. This current government in the US has no intention of allowing any meaningful freedoms to exist. Panem at circensum at all costs. We have lost.
Gold Power
(10/10/1999; 21:46:06 MDT - Msg ID: 16012)
Canuck; physical and unhedged
Canuck,

I'm with you on the mix between physical and unhedged mining shares. Personally, I'm a little light on the physical.

In the back of my mind, though, I have always thought that at some point, some of the profits from mining shares in a gold bull market would have to be converted to physical in case the entire social, economic, and political system imploded.

We've never had to face that problem before, though. But if the ANOTHER scenario comes true, we probably will.

To quote ANOTHER: "We watch together, yes?"

Gold Power
Chris Powell
(10/10/1999; 21:52:14 MDT - Msg ID: 16013)
Who's hedged and who's not?
http://www.egroups.com/group/gata/249.html?Milhouse says you have to know.
Bonedaddy
(10/10/1999; 21:58:54 MDT - Msg ID: 16014)
ET, Thanks for the post!
Your third point, that a bank run today is not the same as a bank run when money was backed by something, really hit home with me. What your message has made clear to me is that it will almost certainly have to be inflation in the price of necessities.
(While, it may mean deflation in the price of other goods.) I have read about countries where store shelves have been stripped of necessitities because the currency was losing power so rapidly that people bought what they could barter with. What happens when the Fed dumps $200 Billion cash into the economy because of percieved Y2K problems? Are people going to act rationally and just deposit the money back into their savings accounts? Will they buy stocks? No, I think they will rush out and by essentials until there are spot shortages of the items and then of course the prices skyrocket. If they were going to save the money, there would have been no need to distribute the extra money in the first place. I have understood that there would be a huge distruction of "wealth" if stock portfolios plummet in value, but this is not the household "butter and egg money". If "invested" dollars, which are currently salted away in funds and accounts, were replaced by only half of their value in circulation out on Main Street, the inflation could be awesome. Got Milk?
Bonedaddy
(10/10/1999; 22:15:58 MDT - Msg ID: 16015)
Leigh,YGM, and kindred
Your kind thoughts are like oil poured on those rusty little wheels turning in my brain.
Black Blade
(10/10/1999; 22:16:05 MDT - Msg ID: 16016)
all
It would seem that any severe collapse of society and the economy that gold and silver would be an acceptable way to preserve wealth over time. Perhaps storing food suffs and ammunition would be a good barter tool as well. Personally I don't see a "Mad Max" scenario here, but if one is concerned about this kind of scenario, then these items would appear to be the direction to go. Meanwhile I will continue to acquire PM's, stock, and physical goods.

SteveH, I heard a snippet on the news that Colt was going to suspend orders for personal orders of firearms at the end of the month. They announced a layoff of 300, all this due to the the lawsuits brought by local governments. Do you know if this is a growing trend? I still have several firearms, loading equipment and ammo about, even the evil "assault weapons", but it would be strange if most companies were scared off because of this. The 2nd amendment would mean little if firearms were unavailable.
Black Blade
(10/10/1999; 22:21:37 MDT - Msg ID: 16017)
Goldspoon
Horse with no name is charging out of the gate (+9.00) while the other horse appear to be hung up in their stalls tonight. We may have to wait until the Europeans take over the reins for the next leg down the backstretch, eh?
Golden Truth
(10/10/1999; 22:31:08 MDT - Msg ID: 16018)
GOLD DOWN $2.75?
Looks like more selling of paper GOLD contracts.
SPOT NOW $317.50 :-(
I think they are slowly lowering the paper price as a way to grind us down $2/day and to not attract any attention by a sudden move back down to the $250/oz-$280/oz range.

As F.O.A said this is a paper price and could go straight down, oh well i guess it will be time to buy more then. :-)
When is the action going to start again? I say "Lets Get It On"
G.T
Black Blade
(10/10/1999; 22:33:04 MDT - Msg ID: 16019)
Goldspoon.....oops!
Sorry, wrong chart! All the horses are hung up at the gate, in fact they are having trouble getting them out of the barn.
Black Blade
(10/10/1999; 22:39:14 MDT - Msg ID: 16020)
Close out sale in the bargain basement!
It doesn't matter too much if POG goes down...It will mean that I can do more bargain hunting! Au and Ag at fire sale prices! This won't last for long. Fortunately I sold some tech stocks last week before they dropped, I think I will pluck a few flowers from the gold/silver patch this week. I will gladly trade one currency (FRN) for another (Au/Pt/Ag).
Golden Truth
(10/10/1999; 22:39:57 MDT - Msg ID: 16021)
TO BLACK BLADE
Where are you getting your spot prices from? Can't be from Kitco i don't know why they even bother, I say if you can't get it right, fix it, or leave it, but don't torture everyone else!!

So if you wouldn't mind could you please post your link for all our sanity! T.I.A
G.T
Bonedaddy
(10/10/1999; 22:40:33 MDT - Msg ID: 16022)
Blade
I too believe that total chaos is not likely. I also heard the news about Colt. Although I don't personally own any firearms, I hear things from friends in the gun culture. My friends say, "A man is not armed because he owns a gun, any more than a man is a musician because he owns a piano." Most firearms in America sit unused in closets or lockers. Fifty years ago, there were many less firearms per capita, and many more "shooters". I understand that the Samurai developed total mastery the staff and sword, the weapons of their era. Do you suppose there are any of those types left lurking around in the civilian population today? Scary thought for a bunch of bad guys, huh? Anyway, as far as the number of guns goes, I think there will be "enough".
Black Blade
(10/10/1999; 22:50:50 MDT - Msg ID: 16023)
GT and Bonedaddy
GT, I was mistaken by an errant chart. However, the kind folk here at the forum and elsewhere led me to a site where futures prices are available. Actually I knew of the site but had forgotten since I had used Kitco so often. Try http://www.mrci.com

Bonedaddy, Yeah, I dig that name. I just happen to be a collector of firearms as a hobby. I don't live in an urban area (thank God!), but I do hunt and fish often. When in SE Asia I had/have the priviledge to live with several families in villages in the country-side. You would be surprised how many AK's, granades and RPG's I have seen stashed near the farm lands, "just in case". I also have seen similar items in S. America. I suppose my question is, Should we be any different? and why?
Golden Truth
(10/10/1999; 22:56:42 MDT - Msg ID: 16024)
KITCO DOWN!
Looks like Kitco's discussion or chat room is down also.
GOLD gets its biggest move in 20 years and Kitco chokes!
We're all Doomed! :-(
G.T
Black Blade
(10/10/1999; 23:04:35 MDT - Msg ID: 16025)
GT, my apologies for the errant info...
Yes indeed, kitco seems to be down. I have noticed that lately they have failed us. Maybe this may be partly due to the increased traffic. I don't follow their discussion group too aften as it seems to be more of a "free for all" mess. I continually look for additional gold sites with regards to recent PM price action. Do you have any sites to recommend?
HLime
(10/10/1999; 23:09:09 MDT - Msg ID: 16026)
jaydeevee & cobra(too)
Do you believe in black Mondays? The gold shorts have had all weekend to
stew in their own juices and cry on their margin calls. Perhaps not
this Monday, but one Monday soon Oz will lead the charge. They are the first
to act on weekend news or building panic.

Cobra(too) - yes I am an Orson Wells fan.

Later,
Harry
HLime
(10/10/1999; 23:54:53 MDT - Msg ID: 16027)
Differing quotes
Well it looks like it could be MY black Monday.
Bridge has Ag down 3 coppers to $5.52 while Kitco
has it off to $5.40. 12 cents is quite a price gap.
I still HOPE that Ag gets to $650 by Friday.

HLime
gidsek
(10/11/1999; 00:04:49 MDT - Msg ID: 16028)
Kitco Discussion Group
http://www.kitco.com/backupIP address of the main board has changed, upgrading perhaps but the discussion is as alive and well, and occasionally bizarre as always. .. at the link above.

gidsek
SteveH
(10/11/1999; 04:44:51 MDT - Msg ID: 16029)
'Tis strange
Black Blade,

It is a sad day when the courts are used by special interest to have their way with a whole industry. What are the unintended consequence of that in the firearm business? Only time will tell. It is quite simple, the Second Amendement. If you don't like it, propose another one. Otherwise, leave it alone and abide by it.
The Scot
(10/11/1999; 05:20:26 MDT - Msg ID: 16030)
Steve H
Steve, I for one, on this forum, share your fear of what our government is allowing to happen to the firearm industry.
England disarmed it's "free" people and then disarmed the Australians. As socialisum marches forward it cannot allow an armed citizenry to stand in its way.

The liberals in America "Love" the 1st Amendment. They chearish the freedom it gives them speak out. They do not realize that the only thing that guarantees that freedom is the 2nd Amendment. When we loose the 2nd, the whole Constitution and the hope of freedom will be lost. I hope the liberals enjoy slavery, they will deserve it.
Sincerely, The Scot
Hipplebeck
(10/11/1999; 05:44:10 MDT - Msg ID: 16031)
to my friends on the forum
I just read what Bill Murphy said on Sunday, and I am more and more convinced that I am right.
These big bankers are not stupid. This gold manipulation scheme was done for a reason. The goal is to eventually take possesion of the physical gold of the world.
When the price of gold goes up because the shorts are covering, who do you think is on the very end of the receiving line? When the mining companies have to make arrangements to cover their hedging, who is on the controlling side? They gladly watch as the price rises, because it is not them paying the high price to get it back. They are the beneficiaries. The price will rise, arrangements will be made as in LTCM, gold will come back into the market at these higher prices and be returned to the central bank vaults. They are wringing it out of the system. This will not be a sudden, explosive event. They have plenty of time. Sure there was a sudden jump when the trap was sprung, but it will take time to unwind everything.
The central banks will have made a profit. These guys are acquiring gold in a very sophisticated scheme.
I will say it again, If the public insists that gold is valuable as money, then the way to total control is to get the gold.
The Scot
(10/11/1999; 05:46:28 MDT - Msg ID: 16032)
STEVE H
Steve,
Another thought, Are Americans different?
When the government of England disarmed it's sheeple, they gave up their fireams without much fuss. The same with Australia. Are American different, will we resist? There are enough firearms in the hands of civilians to "take a stand" but will the people have the courage?
Let's not kid ourselves, when the government tells the military to disarm the people, they WILL follow orders. Why?
In every society, the military has always sided with the politians initially. Their survival in the new society is guaranteed if they obey the command. Are our men in military different? I hope so, but I'm am not sure.
The Scot
SteveH
(10/11/1999; 06:25:30 MDT - Msg ID: 16033)
The Scot
Dec. gold now...$320.20. It hit the bottom bollinger band (nipped it, in fact) and is now rising towards the upper band, which on the 60-minute chart is $324.50. Seems to be trading in range now.

Regarding fighting for the Second. Not a good idea, per se. Best thing to do, imo, is to write Congress and let people know what you believe and why. Can't take away the second and expect the rest to be sacrosanct(sp?). Perhaps even join the NRA, sue if necessary. Rights are rights, and that's why we have the BofR. They protect gold and guns.
THX-1138
(10/11/1999; 07:10:49 MDT - Msg ID: 16034)
Gov't gun confiscation thoughts
Hey, if the Feds and liberals want guns confiscated, then the arms industry should fight back. Stop producing ammo for M-16s (reduce bullets for military and police force), 20mm ammo for aircraft, and 50 cal cannon ammo for tanks and APCs. Either that or start raising the prices that the gov't has to pay to get them. Start putting gold clauses in the contracts. That would do it.
TownCrier
(10/11/1999; 07:18:55 MDT - Msg ID: 16035)
Hear ye! Hear ye! There are new additions for your monetary education at USAGOLD!
http://www.usagold.com/thegildedopinion.htmlClick the link above to visit the growing index of educatinal commentary to be found within the halls of The Gilded Opinion. You do not want to miss the latest arrivals provided courtesy of The Foundation for the Advancement of Monetary Education. After reading these excellent essays, you are invited to visit F.A.M.E.'s website to learn more about joining the Fight for Honest Monetary Weights and Measures.
TownCrier
(10/11/1999; 07:23:09 MDT - Msg ID: 16036)
THE GILDED OPINION: Whither Gold? by Antal E. Fekete (Courtesy of FAME)
http://www.usagold.com/whithergold.htmlA sample of a much larger text to be found at this link:

"Mainstream economists...insist that, with the advent of the new millennium, gold has forever lost its former productive power to the irredeemable bill of credit. "Gold has become sterile again. It can earn no return -- only irredeemable bills of credit can." It is important for us to realize that every word of the doctrine on the sterility of gold is an outright lie. Not only can the owner of gold earn a return in gold on his holdings even under the regime of irredeemable currency, but gold is the only form of tangible wealth that can be lent out at interest and that is in constant demand as such. There is a lively gold loan market in the world: gold is put out in loans and is borrowed at interest on a regular basis. It is used in financing great capital projects as well as trade -- in the same way (although not on the same scale) as it always did under the gold standard.Under these loan contracts both principal and interest are payable in gold. Nor is this something new: gold lending has continued uninterrupted in countries where the necessary legal protection of contracts involving gold loans has not been abrogated. `Demonetization' did not succeed in abolishing the lending and borrowing gold at interest, it only abolished the truth about it. Even students of economics are deliberately kept in the dark about the existence, functioning, and extent of these gold loan markets....Under the regime of irredeemable currency interest is merely bribe-money, trying to persuade reluctant holders of irredeemable promises to hang on awhile longer. The maturity structure of the U.S. public debt is contracting. Clearly this process cannot continue indefinitely. ... When the dispersal of gold reaches a certain threshold (nobody knows where exactly this threshold is), a metamorphosis of money will take place. Gold will reclaim its throne as constitutional monarch in the monetary and credit system of the world."
TownCrier
(10/11/1999; 07:25:09 MDT - Msg ID: 16037)
THE GILDED OPINION: What the President Should Know about our Monetary System by Lawrence Parks / FAME
http://www.usagold.com/parkspresident.htmlA sample of the complete text to be found at this link:

"The monetary system of the United States is inherently a fraud upon people, both at home and abroad. Essentials of our money are being misrepresented, and crucial information is not being disclosed. The beneficiaries of the fraud are mostly those in the financial sector of the economy, very large corporations, and the politicians they finance. The victims are everybody else, but especially ordinary people who are dependent upon the integrity of our monetary system for their savings, their pensions, and their jobs. Already, fraudulent monetary systems modeled after our own have wiped out the savings, pensions, and jobs of hundreds of millions all over the world, including in Russia, the Philippines, Mexico, Brazil, South� Korea, Malaysia, and many other countries."
SteveH
(10/11/1999; 08:11:50 MDT - Msg ID: 16038)
Final thought re: protecting gold
As long as Anti-gun proponents say we have no rights under the Second Amendment, then they have no right to say that under the 1st Amendment.
TownCrier
(10/11/1999; 08:17:07 MDT - Msg ID: 16039)
ECB's Duisenberg on Euro Region Money Supply
http://quote.bloomberg.com/pgcgi.cgi?T=markets_newsfeat99.ht=&ptitle=EMU%20Top%20Stories&touch=1&s=7eb0c94cdbed57120cfd59b5d2f6a752From European Central Bank President Wim Duisenberg's speech "The Eurosystem's Monetary Policy Strategy: The First Year's Experience":

"There is little doubt that monetary aggregates in the euro area exhibit a close relationship with inflation...
we don't think we should be overly activist and react to any news that comes in. Monetary policy is ill-suited to fine-tune cyclical developments in the short run. However, we will not hesitate to act should this be necessary to maintain price stability in the medium term. ...
Monetary policy alone cannot address all the economic challenges in the euro area. One cannot reduce the unacceptably high level of structural unemployment."

He also said that stock prices, while important indicators, couldn't dictate monetary policy (to maintain the lofty prices) because that would raise the danger of imparting a moral hazard onto the markets.
canamami
(10/11/1999; 08:47:11 MDT - Msg ID: 16040)
POG/POS - Continued downward momentum
I know it seems silly to complain about the last 4 days' weakness given the recent rally, but I'm starting to get concerned about the downward momentum. The POG just can't pick up any upward steam. We need a positive day to to keep the right "psychology" in play; otherwise things may turn negative.
ET
(10/11/1999; 08:50:09 MDT - Msg ID: 16041)
AEL

Hey AEL - thanks for the response. Yes, we are in agreement but I think perhaps you misunderstand my thinking on banks guaranteeing people their money. Yes, you are correct that banks will never be able to hand over physical cash to people equal to their account balances, but I doubt they would want to either. My point was more that people would have access to their cash through the usual indirect manner, checks and plastic. There is no reason why anyone would not be able to get their money as long as the banking system continues to function. The same would apply to the government promises such as Social Security and pensions. Because of the ability of governments and banks to debase the currency as needed all promises can be kept. What that money might purchase in the marketplace is another matter but no promises have been made in that regard. This is the reason I believe that money in hand or money in the bank will have equal value in most circumstances. There could be exceptions as you note but I think we agree that all this money is of questionable value in the marketplace during an economic crisis.

ET
USAGOLD
(10/11/1999; 09:10:34 MDT - Msg ID: 16042)
Today's Gold Market Report: Some Interesting Numbers on Ashanti
MARKET REPORT(10/11/99): Day Eleven of the Big Breakout....Gold down in the
early going on profit taking -- that means the brokers are having to make good on those
calls..........................This is Columbus Day in the United States and Centennial
Precious Metals' offices will be closed. Japan is also on holiday...............Britain's
Lonmin Plc offered to acquire Ashanti Goldfields after the Ghana-based mining company
defaulted on margin calls with a consortium of counterparties -- among them some of the
largest banks and brokerages in the world. The banks agreed to forestall margin calls in the
hundreds of millions to keep the mining company from going under. Reuters reports this
oddity in financial history: "Ashanti is a victim of a leap in gold caused by European central
banks' decision to cap official sales of the metal. That flipped its derivatives book, designed
to protect it against a fall in prices, from profit into loss." To my knowledge, Ashanti is the
first gold mining company in history to attribute its demise to a bull market in
gold.................................The potential Ashanti/Lonmin merger helped drive gold
down in London this morning as it appears that couterparties, at least with respect to
Ashanti, are temporarily taken off the hook. I emphasize the word "potential" because
Lonmin has made its acquisition conditional on Ashanti resolving its hedge book crisis. To
put the situation in some kind of meaningful perspective, the Lonmin offer valued Ashanti at
$600 million. If Ashanti had been forced to close its hedgebook, the loss would have been
$570 million, according to a Reuters article this morning. The margin call was put at $270
million. This is more than a simple liquidity squeeze; Ashanti is deep under water. With
Lonmin asking for resolution on the margin call issue before acquisition the unresolved
question remains: Who's going to bail Ashanti out? And what happens the next time the
gold price ratchets up? And this merger talk might buy time for Ashanti, but it might not end
in happy resolution...............Says one London dealer: "One assumes there will not now
be panic buy backs. There was talk last week that if one of the counter parties wanted to
push through (with margin calls) there could be buy backs and that everyone would be a
buyer.".........At least until the next Ashanti style debacle surfaces..........London traders
put support at $315....................Since Britain announced the sale of gold from its
central bank, the pound has been in near free fall. Now the other shoe has dropped,
wholesale prices are up 1.7% -- that translates to a 20.4% annualized rate. Inflation nearly
always follows currency depreciation -- a relationship not lost on American investors. We
have registered our concern on these pages in months past that Britain might end up the first
G7 victim of the Asian contagion style inflationary depression. Watch out for higher interest
rates in Britain and their consequent effects on the equities markets. As is the case with your
American counterparties, I would advise our British friends to make their way to the nearest
gold dealer's for a conversation about adding a little gold to your portfolio mix..
Unfortunately, we, as yet, do not do business in UK though we can establish safe, insured
storage for you in the United States....................... FWN reports "Friday's Commodity
Futures Trading Commission Commitments of Traders report appears to have raised more
questions than answers. The report showed virtually no change in speculative shorts, a
highly unlikely scenario given a 24.5% rally in gold prices over the reporting period. This
has spurred the CFTC to review the data."............ If the report is accurate, I would have
to say that there is plenty of built up price potential still in this market for the short-run.
More bad news on the mining, hedge fund front and the scramble for metal could begin in
earnest..............That's it for today, fellow goldmeisters........Have a good day.

The October edition of News & Views is on its way to our readers and we invite all our
visitors to take advantage of a free trial subscription to one of the most popular, widely read
and quoted gold newsletters. Last month we predicted an explosion in the gold price. This
month we deal with the nettlesome subject of paper assets in this tenth month of the
penultimate year. And we all know what that means. October brings with it our annual
Halloween issue. Here's an excerpt: "And this October could very well foreshadow a most
fateful stroke of midnight only two months away. October. When markets crash and assets
go bump in the night........." We think you will gain by taking advantage of our
offer...........

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
(10/11/1999; 09:11:56 MDT - Msg ID: 16043)
Quoteable Quote by SteveH....
"As long as Anti-gun proponents say we have no rights under the Second Amendment, then they have no right to say that under the 1st Amendment"-SteveH

"Those who say give up some of our Freedoms for the sake of peace and safety, deserve neither"- Ben Franklin
ET
(10/11/1999; 09:19:17 MDT - Msg ID: 16044)
Bonedaddy

Hey Bonedaddy - thanks for your kind words. It has been my experience that what has been missing from much of the discussion on currency machinations and possible y2k induced economic problems is the actual mechanics of money and credit in today's marketplace. In some of Another's early writings I noticed he mentioned the coming transition to a new monetary system as needing to be done in a way that doesn't crash the entire system as that wouldn't benefit any party. The main thrust of Dr. North's argument has been that y2k threatens the worldwide division of labor. Both are correct in my view. The confluence of these two views and how a solution to the problem of economic change in the world might manifest itself is what brought me to this group. I don't know what is going to happen but I believe that government and banks will resort to the policies that have kept them in business up to this point. Keynesian money creation is what they know. As Mr. GoldPower pointed out, we seem to be seeing the last vestiges of socialism attempt to stay on top. I agree with him that they are destined to fail. All I'm trying to do is walk the path and observe the roadsigns. I don't think any of us know what is around the next corner but we probably do know what governments and banks reaction might be.

ET
ET
(10/11/1999; 09:23:08 MDT - Msg ID: 16045)
From the Newsmax site
http://www.notforpublication.com/serial.html
Interesting piece about current US foreign policy.

ET

fox
(10/11/1999; 10:59:49 MDT - Msg ID: 16046)
fox
anglogold is doing buisiness
11/10/1999 ANGLOGOLD has announced that it has launched a bid to acquire
ACACIA RESOURCES, listed on the Australian Stock Exchange in
1994 when SHELL AUSTRALIA floated off its mineral assets - gold
assets including four operations:SUNRISE DAM (100%
owned);BODDINGTON (33.33%), PINE CREEK (100%) and TANAMI (40%),
and one of Australia's premier gold mines. The offer an exchange
of 3.5 ANGLOGOLD shares per 100 ACACIA and free from all
conditions following the dispatch of ANGOLGOLD's offer to
shareholders plus SARB and FIRB approval. The offer representing
a premium of 24% on the ACACIA price, and a value of A$3.30 per
ACACIA share - the transaction a value of A$832m (US$546m).
Publisher: ANGLOGOLD
AEL
(10/11/1999; 11:03:22 MDT - Msg ID: 16047)
north/hathaway
http://www.garynorth.com/y2k/detail_.cfm/6457http://www.garynorth.com/y2k/detail_.cfm/6457

Gold Bears Are Now Trapped; John Exter's 1974 Prophecy Is Coming True

http://www.tocqueville.com/brainstorms/brainstorm0031.shtml

Back in 1974, former Citibank VP John Exter predicted what began
three weeks ago: the search for liquidity. I did not believe him
then. I did not see y2k. For the past two years, I have believed him.

Exter said that the world's monetary system is an inverted pyramid of
debt. At the bottom is gold. When men search for liquidity in the
face of defaults in the top layer, they will sell the higher layers
of assets and buy the next lower layer. . . .

(Gary North's comments, followed by another lengthy and interesting
Hathaway commentary...)

beesting
(10/11/1999; 11:57:12 MDT - Msg ID: 16048)
Ashanti--How did this happen?(see USAGOLD report for today 10/11/99)

Gold Power,enjoyed your#16006 #15989 on share holders equity in Gold mining operations.
Canuck #16007, I too have a balanced diversification of assets including some Gold mining shares.

On Ashanti---In my opinion the worldwide rules concerning "spot"pricing of Gold changed in Feb.1996 when "spot" rose to $417 per ounce.I think a relativity few BIG players( CB's & Bullion Banks)at that time started a concentrated effort to lower the world "spot" Gold price slowly, to avoid panic, by dilution of paper Gold contracts(supply & demand--by flooding the market with paper Gold contracts).It turned out they were very successful,over a 3 year period lowering "spot"from $417 per ounce to just over $250 per ounce.

What were the consequences of this action??
Prior to Feb.1996 Gold mines were mostly owned by shareholders who exchanged money for partial ownership of the mines(as explained by Gold Power #15989)...Now when price of product(Gold)declined to the point where it took more borrowing to keep the operation running smoothly(operating expenses) forward selling of Gold in the ground(hedging)between Gold mines and buyers of large amounts of Gold(Bullion Banks)started to flourish.

Which brings us to Ashanti....Because the Bullion BANKS supplied the cash, and made the rules concerning the hedging contracts,they have preemptive rights(first priority on assets)....BEFORE SHAREHOLDERS!

Therefore if a mine defaults(Ashanti) known assets(Gold in the ground) are divided among lien holders(banks shareholders..etc.) by priority....most of the time shareholders get nothing!
Iv'e been there more than once!

Sooo..IMHO even tho paper Gold investments may bring tremendous profits at todays depressed prices,it's still....BUYER BEWARE....whenever you spend money!

Physical Gold the safest and surest preservation of untaxed long-term wealth,the world has ever known....beesting

Dorchester
(10/11/1999; 12:23:10 MDT - Msg ID: 16049)
physical gold and RRSP's
http://www.gordonpape.com/lri90.htmlIt's been months since I posted, since whenever I had unanswered questions, inevitably one of the regulars would address my concerns. I am grateful to all here for their level-headed assessment of global finances, for whenever I had my doubts about the pro-physical position, inevitably there would be an intelligent and convincing argument returning me to my own pro-physical bias, which now of course I am exceedingly grateful for.

One of my favourite Canadian investment advisors, Gordon Pape, has a chapter on gold in his latest book, which can be found at the above link. There are two issues in this chapter which I hope can be addressed by the knowledgeable posters here. One is of general interest to gold investors, the other of particular interest to Canadians with investments in registered retirement savings plans.

Pape points out that Canadians may not hold physical gold in their RRSP's, and so it seems to me that the only way to get around this would be to invest in a mutual fund that is heavily invested in physical. Does anyone here know of such a fund, and whether Canadians would be eligible to buy it? Alternatively, does anyone know of another way to use one's RRSP savings to invest in physical? It seems a shame to have the very money that is supposed to cushion us in our old age be beyond the reach of investment in bullion.

Secondly, Pape also points out that it is possible to have one's broker make one's physical purchases, and store them in the institution's private vaults. One never gets to personally hold the gold in this arrangement, but gets a certificate for the gold held on one's behalf. There are certain tax benefits, and conveniences, to operating this way. Having the kind of job that often makes it impossible for me to handle the transactions personally in a timely way, this is quite tempting. But, I am wondering if there are any real risks that one might be caught in a paper trap, i.e., not being able to get one's hands on the physical gold one has bought. Could a broker default on giving you your physical gold, or selling it for you on your behalf?

Here's an exerpt from Pape's book (Low Risk Investing in the '90):

"Certificates and storage accounts: The best way to own bullion or gold coins directly is through a certificate or storage
account. You get a piece of paper recording your holdings instead of the actual gold, so it's not quite as satisfying, but
it's quick, cheap and easy.

A storage account operates in much the same way as a stockbroker's account. Once you've opened a storage account,
you simply call the dealer and place your order for wafers, bars, or coins -- whichever you prefer. The dealer makes the
purchase for you and places your gold in insured storage in a bank or trust company. You receive twice-yearly
statements, showing exactly what you own.

If you want to sell part or all of your holdings, you advise the dealer accordingly and it's taken care of -- much the same
as a stock transaction. You can also take delivery of the gold itself at any point if you wish, although there will be
additional charges for doing that."

(snip)

"A gold certificate is the equivalent of a share certificate. It confirms ownership of a specific quantity of the metal."

Dorchester
(10/11/1999; 12:40:39 MDT - Msg ID: 16050)
p.s.

Thanks in advance for any light that can be shed on the matters in my last post. Dorchester
Jon
(10/11/1999; 13:37:29 MDT - Msg ID: 16051)
Info for Dorchester
Central Fund Of Canada, symbol CFA, Amer. Stock Exchange, holds solely precios metals.
nugget101
(10/11/1999; 13:42:08 MDT - Msg ID: 16052)
RRSP and gold?
Dorchester.
Why do you care about a paltry tax savings (if any)? You are trying to substitute paper for paper. The Canadian dollar has fallen quite a bit, how do you know that it will be viable when you retire or that those investments that you are counting on will have value? Physical gold is your safety net and has true value.
During 1929 many saw their life savings vanish as their investments lost value. It took a world war and 50 years before the market regained what it had lost. As in '29, the market is speculative and "overly exuberant". (Also, did you know that a money market doesn't have to maintain the $1.00 share price? So how safe is that government paper?)
IMHO a economic shakeup is occuring, I've put my bet on a horse that once plodded but will soon race the wind. Grab the reigns and at least buy some physical.
JCTex
(10/11/1999; 13:49:53 MDT - Msg ID: 16053)
SteveH
Many moons ago, I was on the state drug commission. Willy and "that woman" had just been elected president. One of my fellow commissioners was talking to a young druggie [around 17 or 18 years old]. He laughed and said that he hoped gun control would pass. When asked why, he replied, "because then I will have a gun, and you won't."

Folks had better really think about that one: when trouble comes, the cops can't help [in time], and the lawyers won't.

Enjoy all of your posts and efforts. Thanks
YGM
(10/11/1999; 13:53:29 MDT - Msg ID: 16054)
@Dorchester
http://www.centralfund.com/Here is the link and the books (financials) are open to viewing. Good idea for RRSP's------YGM.
Al Fulchino
(10/11/1999; 14:11:18 MDT - Msg ID: 16055)
Journeyman and Steve H
Journeyman, If I understood yoru example of French persuasion. It was too actually encourage a fiat currency alongside a precious metals currency. Is that correct? If so, then I would add that my example was to point out that in times of serious instability, any type of currency would be *not* of first importance. And that the might of a gun would be of more persuasion than gold, no matter its buying power.


Steve H, I admire you for your concern about our Second Ammendment.
Goldspoon
(10/11/1999; 14:19:32 MDT - Msg ID: 16056)
***Platinum Volcano Pressure****
http://www.kitco.com/lease.rate.htmlPlatinum has become a volcano, whose eruption is eminent..the internal pressure of platinum rose again today the 1 month lease rate is so high it is no longer quoted.. The two mnoth lease rate is as of today 65.5100% +9.9787.
The total warehouse stocks @www.nymex.com is 1,357.
The number of contracts open for JAN 2000 is a whopping 13,821!!

***Caution every one... Stand Back!!! she could blow anytime now!!!!! and take Gold with her!!!

All she needs is just a
SteveH
(10/11/1999; 14:26:18 MDT - Msg ID: 16057)
Al
It isn't just the Second, it is all. Where do you draw the line. OOps.

Goldspoon,

Why will Platinum make gold rise? Aren't gold fundamentals good enough?
SteveH
(10/11/1999; 14:51:54 MDT - Msg ID: 16058)
Margins again!
www.kitco.comrepost:

Date: Mon Oct 11 1999 16:13
AzusaGold (Nymex Raises Margins on Gold Futures for Second Time in 2 Weeks) ID#255250:
Copyright � 1999 AzusaGold/Kitco Inc. All rights reserved



New York, Oct. 11 ( Bloomberg ) -- The New York Mercantile Exchange said it will raise margins for gold
futures by 25 percent after the close of trading today, the second increase in two weeks.

Margins on gold will increase to $2,000 from $1,600 for clearing members, members and hedgers and to $2,700
from $2,160 for speculators. The increase comes as gold futures climbed 19 percent in the past two weeks after
European central banks agreed to limit their gold sales and lending over the next five years. Gold futures have
risen 6 percent since margins were doubled on Sept. 29.

Margins are deposits traders must make when buying or selling futures contracts to help ensure their obligations
will be met.

Gold for December delivery fell $1.40 to $320.30 an ounce on the Comex division of the Nymex.

Oct/11/1999 16:01

For more stories from Bloomberg News, click here.

( C ) Copyright 1999 Bloomberg L.P.
watcher
(10/11/1999; 15:04:39 MDT - Msg ID: 16059)
gold
Hi all .Looking at the list of NY bankers holding Loans on ashanti is revealing. For the past several years as gold declined the bankers pressed the mining co's to sell forward to protect risk to the downside while loaning them money to get them further and further in hock just to keep operations running during the bear market.Bear is a good name for it as the weak are or have been eaten by the strong bear. The on going bull market will ironicly destroy many of those that should have benefitted the most.
As they sort out this mess the deals that will be forced upon the unfortunate gold companies that tried to survive (many were to weak or vulnerable not to hedge )will be seen to benefit the lenders . Truly, the proverb " The borrower is servant to the lender" is being played out in this gold market today.
I put forth some conjecture a few months back that this was being perpetrated by the fed to get control of as much gold as possible before the price would be allowed to go up.
If this is what is happening then we will not see any significant pull back ,accept to shake out traders and weak longs along the way. The trap was set the last few years and to have a pullback of significance and length would allow the shorts and mining companies to cover which would not be their desire.

A bailout of bullion banks will then be the next major piece of this plan. Its only paper that the will be offered
and not gold.That gold has been sown up by the central banks for many years to come.The bailout will not hurt the price of gold because much of the gold has been spoken for
for years to come and their will truly be a supply shortage.

The price of gold will escalate to heights not seen as the perception change and the truth manifests itself thru time
Also in this scenerio a high price will exclude most from benefitting if they are not in already.

We may also surmise that the mining companies that have not fallen into this trap will benefit greatly as this market goes forward. If the govt's decide to tax the profits of these companies such as in the oil sector there will still be unimaginable profits.
The exploration discoveries will be rewarded even above the majors as this bull market will give new meaning to speculation.Even in this last bull market 95 to 97 when a promising drill program was started the stock would move up 25 to 150 percent just on the possibility of a discovery.
The new pricing of gold will make even small discoveries profitable which will feed this frenzy which has been similar in the past to the internet mania as investors find an easy market to make money .The difference being that there will be real profits and real earnings to be had which is inherent with gold from this time and on

Hope so, for all those here will be way ahead of the pack which will come very soon. Count on it. Go gold.
Goldspoon
(10/11/1999; 15:21:11 MDT - Msg ID: 16060)
SteveH
http://www.kitco.com/platinum.graph.htmlSteve, yes! Gold's fundamentals are excellent.. there is a very nervous herd of gold shorts hoping and waiting for a correction in gold so they will excape having to cover...and are trying to influence the price of gold with all means necessary....

The Gnomes in Zurick Know this.. Platinum's explosion in it's price will be the thunderbolt that stampeeds the nervous shorts to cover in Gold!! Gold is the big volume money prize the Europeans are after..and platinum is the tool they have chosen to push the next move up!!

Platinum/Gold/Silver is sometimes refered to as the "Wolfpack"... and travel together..WHY? Speculators lump them together as a "sector group" and treat them as such..just as sector stocks move together in the S&P....

It takes less money to drive or manipulate platinum so if your intrest is to change world currency dominance via Gold/Euro... you can give gold a boost by driving platinum... After having cut of the gold supply... The Europeans do not own all of the worlds gold and an embargo of gold is leaky... But Platinum!!! with a little money (a few billion) you could drive it to the moon!! and help pull gold along in the draft... Again, their intent is not to corner platinum (which they will) it is to set fire to the "Wolfpack" and thus... gold shorts and force them to cover... Via forcing them (the BIG MONEY shorts) to dump dollar securites to chase gold higher...and make FOA/ANOTHER's Prophesy correct....

The general publics attention on gold is via Y2K... the perfect oportunity... Many of the masses will blame the fall of the dollar and the rise of Gold on Y2K..This they can grasp... The Europeans want to fast forward events so the Gold Wars play out in the Y2K window of oportunity thus excape some measure of blame for staging an economic attack on the US....

Look at the link ...Zurick is where the Platinum pressure is coming from not NY..... But everyones hand will be forced Platinum is a metal so important to defence that the US has a defence stockpile..industry as we know it would grind to a halt after a prolonged shortage....

Platinum.. the perfect weapon in the GREAT GOLD WAR OF 1999..............
TownCrier
(10/11/1999; 15:45:36 MDT - Msg ID: 16061)
Camdessus says crisis well behind, focus on growth
http://biz.yahoo.com/rf/991011/l8.htmlInternational Monetary Fund head Michel Camdessus reaffirmed the IMF's improved outlook for global growth in a speech at the Konrad Adenauer Foundation:
"In most countries, there seems to be no immediate threat to one of the great achievements of the 1990s: continued low inflation underpinned by sound macroeconomic policies. In these circumstances, it seems appropriate for the balance of policy decisions in most countries to be slanted in favour of growth, so as to sustain the global recovery as the United States slows."

Essentially a thinly veiled plea to world to continue borrowing money into existence.

And in regard to efforts aimed at reform of the international financial and monetary system, he said the progress so far was geared toward alleviating the plight of the world's poorest countries.
Leigh
(10/11/1999; 15:48:42 MDT - Msg ID: 16062)
Goldspoon
Hey, Goldspoon, how do you know all this stuff? Platinum 101....
TownCrier
(10/11/1999; 15:50:00 MDT - Msg ID: 16063)
Tea leaves
http://biz.yahoo.com/rf/991011/mj.htmlWith half the world on holiday, most currency futures end up against the buck (except Australia's dollar) on GLOBEX trade.
Canuck
(10/11/1999; 15:59:18 MDT - Msg ID: 16064)
PPI / CPI
Does anyone have the dates for upcoming numbers?
Canuck
(10/11/1999; 16:01:24 MDT - Msg ID: 16065)
To: Steve H.
Inflation
Saw your NAPM post a couple days ago; thank you.

Interesting note, each month has increased.

Canuck
apdchief
(10/11/1999; 16:19:50 MDT - Msg ID: 16066)
CPI/PPI
due friday morn at 0830 eastern. forecast cpi =0.5%, core rate +0.4%...we'll see.....
Goldspoon
(10/11/1999; 16:26:49 MDT - Msg ID: 16067)
Leigh...
Hey, Leigh! hope your feelin better! That's funny..Platinum 101...snicker...snicker...
TownCrier
(10/11/1999; 16:29:13 MDT - Msg ID: 16068)
Snapshot of Global Currencies
http://quote.bloomberg.com/pgcgi.cgi?T=markets_newsfeat99.ht=&ptitle=EMU%20Top%20Stories&touch=1&s=f6e30e87f95b2a48163c68c907d8c171A small point can bring international currency into sharp focus when it touches your own experience.

Traveled through Mexico not quite a decade ago, and the peso was valued at 3 per dollar. Haven't been back since, and have had no reason to monitor that particular exchange rate, but jumping out of this report was the current exchange rate...nearly 10 pesos per dollar. And consider this: the same dollar today doesn't buy nearly the basket of goods that it did that many years ago, so those poor peso-holders have experienced double losses...with losses against a "standard" that has also experienced losses in purchasing power. Think about it. How much interest would you have to earn on a Mexican bond to truly be getting "richer" in peso terms? And if this were possible, why wouldn't everybody do it instead of working for a living? Eternal prosperity thanks to the modern miracle of high interest rates on irredeemable currency! A one-year treasury bill will get you 23%. Retirement, here we come.
Gold Dancer
(10/11/1999; 16:41:40 MDT - Msg ID: 16069)
I have a concern...
about lease rates and gold. When Buffett bought silver there was a rush to buy and lease rates went way up. Silver went up but then came back down. I suspect Buffett leased his silver back to the market at those high rates.

What is to keep the FED from leasing to the market several
thousand tonns of gold at, let's say 15% interests rates.And how about the private owners of gold. At the right lease rate they will loan out gold also. The only people to benefit from the silver rise was Buffett and maybe a couple of day traders if they were lucky.
Could this happen to Gold? Over in a flash with only the Fed and Private holders and those in the know benefitting?

Gold Dancer
Leigh
(10/11/1999; 16:51:48 MDT - Msg ID: 16070)
Goldspoon
Sir Goldspoon! Don't snicker at my question! It was a SERIOUS question, asked with the GREATEST respect. You probably know stuff that very few of the rest of us do, and I was expressing AWE. I guess your sources are classified.
TownCrier
(10/11/1999; 16:59:47 MDT - Msg ID: 16071)
Tiger's Robertson Overhauls Hedge Fund to Reverse Losses
http://www.bloomberg.com/pfc/moncol.html?s=646c457eb390d050a645d7fb602fe1cbNot only can the government change the investment rules on you, but so can the fund you invest in. After the world's second-largest hedge fund, Tiger Management LLC, saw its net assets dwindle over the past year from $22 billion to $8 billion, starting in March Tiger will no longer let investors make quarterly withdrawls of money in its largest funds, limiting their opportunity to exit to only twice a year. And according to one of Tiger's original investors, it would seem that the "performance" of an investment in Tiger itself is not so much based upon the performance of the individual investments that Tiger makes, but rather upon the willingness of investors to invest in Tiger. "Most of the short-term money has run off and that was one of the things causing poor performance."

What a supreme example of non-productivity. If you get out in time, you're rich; if you don't, the public institutions will see fit to bail you out. That era, thankfully, appears to be coming to an end.
andrew the kiwi
(10/11/1999; 17:01:35 MDT - Msg ID: 16072)
a junior miner to watchon the ASX
http://www.helix.net.au/helix resources NL is an unhedged australian junior explorer with the largest holdings of platinum exploration licenses in Australia. Having been in a 50/50 joint venture with Acacia Resources, helix also has some significant joint venture activities with BHP Resources. Their share price the last time platinum was 'in play' was $A10, currently at $A0.31c. The last run up in interest three years ago on the back of a significant gold discovery in the gawler region saw its share price rise to $A4.99.
The company's web site is shown above. A recent share reduction scheme reduced the no. of shares by 20% to 38 million. They also have cash in the bank. Perhaps one to watch in the Australian market.
flierdude
(10/11/1999; 17:31:13 MDT - Msg ID: 16073)
CPI/PPI
CPI Friday 15th

PPI Tuesday 19
flierdude
(10/11/1999; 17:33:16 MDT - Msg ID: 16074)
CPI/PPI
Reverse that PPI on the 15th, CPI on the 19th
flierdude
(10/11/1999; 17:33:36 MDT - Msg ID: 16075)
CPI/PPI
Reverse that PPI on the 15th, CPI on the 19th
Goldspoon
(10/11/1999; 17:47:50 MDT - Msg ID: 16076)
Leigh...
Sorry M'Lady.....
i'm laughing sooo hard i can hardly type.... i mistook your meaning....

It's all just a jigsaw puzzle i'm just extrapalating basic info avalible to everyone...to its logical conclusion...

Example... if one takes the info(last six months) provided by FOA to be true....and put all recent price moves of Platinum/Gold/Silver including lease rates, controled news releases (reading between the lines) consider history (look where we've been to understand where we are.....

As a kid i made up a game that i called "Rules" that me and my brother would play..The game went like this... 1. Make up a game but don't let anyone know the rules (using a deck of cards or whatever..doesn't matter) 2. You are the only player of this game. 3. The other people (my brother) vice/versa (myself) HAS to discover the rules of the game being played by observing the other play the game....When the rules of the game being played are discovered then...you switch places....and play again...

Scientists do this all the time with nature to discover its laws.(rules)....once a law is thought to be discovered you test it....Science 101
Example "If this law be true... then if i do such and such then this should happen" If your predictions come true based on the law then it is viewed as conformation of your law. (You know the rules).....This is all i'm doing....playing an old childhood game "Rules"...........

Think about watching someone playing Solitare and you don't know the rules...Watch what they do with each card...See a pattern??? Ask your self... What was the rule? Assume then you know the rule until a card played violates your assumed rule...Then take this new information observed and formulate a new rule... repeat this process until no cards played violate the rules and you have formulated and you have won the game!!!

The game is being played right before our eyes...taking FOA's thoughts at face value and all of the other info i can find..... i am just playing "Rules" and stating what i think (intuition also plays a big role) what will happen next based on what i've already seen .... if this doesn't happen as stated.... i then know i have yet to know the rules and will take the new info and formulate the new rule.....etc....

By the way!!! Anyone, what does IMHO mean???
Canuck
(10/11/1999; 17:49:14 MDT - Msg ID: 16077)
T.C. : #16036
'Not only can the owner of gold earn a return in gold on his holdings even under the regime of irredeemable currency, but gold is the only form of tangible wealth that can be lent out at interest and that is in constant demand as such...'

This statement sounds like the writer condons the 'lending'
of gold?
Jade
(10/11/1999; 18:00:22 MDT - Msg ID: 16078)
The Buldge at the Dec 390 Call Contract.
As most of us know, there is a rather large buldge at the Dec 390 Gold Call that ranged at about 60,000 contracts prior to the melt-up. Its rather interesting that the buldge came down about 5,000 contracts for the next two days after the melt-up and another 5,000 contracts over the next couple of days. The buldge stands at about 45,000 contracts right now. Now I would think that a greater number of these contracts would have been sold, but thats not the case. Someone thinks that these contracts will see more upside or they have been traded off to some sorry bullion bank or miner. Whoever bought this bulkey 390 position must be a rather big player with the same insight that brought Goldman to grab the 20 plus tonnes of physicaal from Comex prior to the "event".
Canuck
(10/11/1999; 18:08:07 MDT - Msg ID: 16079)
Dorchester
Physical within RRSP
Please do not quote this post but I have heard (I think from other 'Canucks') that by Canadian RRSP law physical cannot be held within a RRSP.

canamami may be able to elaborate.
FOA
(10/11/1999; 18:13:17 MDT - Msg ID: 16080)
Events
http://www.newaus.com.au/econ137gold.htmlUSAGOLD and ALL:
I just read this link as presented above. Do my eyes deceive me or is "this new gold market" now being understood!! YES! My friends, events are progressing and change is in the air! I find it all so incredible that only a few years ago most people invested in the gold industry as a clean "supply and demand" product that also offered a little "gold money" / "inflation protection built in.
Manipulation was only for those "on the fringe of reality"! Yet, a small group choose to look at it as the true "Political" metal it has always been. Michael Kosares, Bill Buckler (privateer) and a host of others understood the real realm of "gold money" and "gold power".

Strangely, it wasn't until "this new gold market" started killing the paper investments that other people really stood up and asked questions. So I ask, if the political gold manipulation had driven gold paper higher, would anyone have bothered to search for truth for the average investor? Hmmm!
Don't get me wrong, today is a good day for "understanding". Because, as "we watch this new gold market together" this "now exposed manipulation" isn't going away. Truly, what makes this such a good day is the fact that the "ECB/BIS is now going to "manipulate" the dollar market in the goldbugs favour. Nothing more, nothing less. Indeed, anyone that has read Mr. Kosares's books and seen the posts on this forum (especially the Hall of Fame site) has seen this coming for some time. Truly, we know there are several more acts in this play. It's not just about the gold industry being vindicated or a group of major gold bears losing face (and money). It's about a changing way of "Western" life and most of us are going to experience it.

Still, I must openly congratulate Mr. Bill Murphy and thank him for all his great efforts. He alone has placed himself in harms way in order to "get the word out". It's working.

I know that only a few more moves on the world economic chess board will bring Another out writing again. If what I understand is true, the most interesting part of this game lies "dead ahead".

We are on the road................. FOA




PS: ORO, I read Earthquake and had to send it to a US professor I know. He is now reading all
of your posts. Very good writing!
PH in LA
(10/11/1999; 18:15:27 MDT - Msg ID: 16081)
IMHO
Goldspoon:
IMHO=In My Humble Opinion
Also: IMVHO=In My Very Humble Opinion
etc.
TownCrier
(10/11/1999; 18:21:24 MDT - Msg ID: 16082)
Sir Canuck
http://www.usagold.com/whithergold.htmlIt cannot be recommended strongly enough that you, and all others with a desire to enhance monetary awareness, click the link associated with the passage you've questioned. You will see interest as more of a partnership fee as described...a sort of rent paid for the immediate use of wealth from someone who needs it to enhance productive income.

It is interest in conjunction with fractional reserve lending that pushes the boundaries of socially tolerated fraud. In no place does the author condone fractional reserve lending, nor does he imply that gold would be in two pockets at once.

Set aside an hour and give this one the attention it deserves.
PH in LA
(10/11/1999; 18:25:20 MDT - Msg ID: 16083)
Platinum Lease Rates
Greetings FOA.
While you are here, can you say anything about the exorbitant lease rates currently being published for platinum? Kitco doesn't even post a rate for the near month which makes me suspect that it has acquired one digit too many for Bart's chart. (ie. over 100%) Three-month rates are up over 9% to 68%(?) today. Sounds like time to start leasing out my platinum Visa card. Any takers? Yet through all this, the price has not really reacted. Is there anything substantial to Goldspoon's scientific postulations?
FOA
(10/11/1999; 18:29:33 MDT - Msg ID: 16084)
Comment
SteveH,
Tell Leroy to watch oil. We are going to know that the political game has shifted to Europe if the producers cut production again in response to opening the "strategic reserve". If that happens, from whatever level gold is trading at that time, it will explode. After that, this whole story will come out.
We watch. FOA
Canuck
(10/11/1999; 18:30:29 MDT - Msg ID: 16085)
flierdude: PPI / CPI
Thanks for info, I've got a feeling Friday is kick off day.

Might do something radical like dump some dough into a junior, some poor sole with lots of gold and no start-up capital.

Thoughts?
FOA
(10/11/1999; 18:31:20 MDT - Msg ID: 16086)
PH, in a min.
Be back
Leigh
(10/11/1999; 18:36:13 MDT - Msg ID: 16087)
Sir Goldspoon
Goldspoon, if you made all that up, then I really AM in awe! What a scientific mind you have! Wow! You've been quoted on Kitco and Gold Eagle, and they're mulling over your hypothesis. I think the European Central Bank needs to hire you as a strategist.
USAGOLD
(10/11/1999; 18:39:21 MDT - Msg ID: 16088)
FOA! From the World Gold Council: "We have now entered a new era..."
http://www.gold.org/Gra/Pr/Wr991006.htm"Do my eyes deceive me or is "this new gold market" now
being understood!!"
-- FOA

Hi FOA...For the past four days I have been working on the November (Thanksgiving issue) of News & Views -- a 12 pager!

In the course of my research, I happened on the link above -- an analysis which brought a smile to my face as I encountered a phrase I knew very well......

In bold headline:

A NEW GOLD MARKET......

"The WGC believes the Washington Agreement radically transforms the gold market for a number of reasons:"

You never know who's reading USAGOLD FORUM, FOA.

You better believe its being understood and more and more are stopping by here to find out what in the world is going on with gold.......

I know I speak for all when I say Thank You for being here, FOA. My best to Another......I think if WGC is going to use yours and Another's stuff, you ought to get credit for it.
SteveH
(10/11/1999; 18:45:22 MDT - Msg ID: 16089)
I'll let him know (Leroy) ...and...
Bill Murphy said thanks.
Canuck
(10/11/1999; 18:51:40 MDT - Msg ID: 16090)
Sir Town Crier
Thanks for the link.

In viewing the document further I obviously missed the message, I apologize.

Please allow latitude for the 'novices' amongst us.
elevator guy
(10/11/1999; 19:02:16 MDT - Msg ID: 16091)
A re-posted question for FOA. (Lets see if I can catch him today!)
elevator guy (10/10/99; 13:05:43MDT - Msg ID:15985)
A question for FOA
First, let me say, that from your insights, it is clear to me that the only place to stand against the downstream devaluation of the dollar is with the rock of real physical gold ownership.
Now concerning the "salmon" of leveraged investments, gold stocks, jumping upstream with "7 league boots", am I to understand that Gold Fields is uniquely positioned to weather the onslaught of dollar devaluation, due to some bullion holdings?
Or am I delusional, thinking that any paper investment could outperform gold, as the rug is ripped out from under our world of financial instruments?

Thank you!
FOA
(10/11/1999; 19:24:47 MDT - Msg ID: 16092)
Reply
PH in LA (10/11/99; 18:25:20MDT - Msg ID:16083)
Platinum Lease Rates
While you are here, can you say anything about the exorbitant lease rates currently being published for platinum? Three-month rates are up over 9% to 68%(?) today. Sounds like time to start leasing out my platinum Visa card. Any takers? Yet through all this, the price has not really reacted.

PH,
Goldspoon's Platinum horse is something else. I drugged it when he wasn't looking and it still ran?

We all have to look at the metals rental rates with a questioning eye. During normal conditions, such high platinum rates (and even gold rates a week back) would indicate severe "risk" in loaning out metals. Today, all of these rates are way out of any "operational contract usage". I speaking of major volume usage here, not the small dealer fabricator level. Let's call it the "money gold" arena!
Anyway, the entire metal funding market is practically frozen in low volume. The rates could just as well say 200% and wouldn't mean anything.

Right at this minute, rates aren't moving the markets because all the "workouts" to cover the exposure are concentrating on the "bookkeeping" side of the equation, paper gold and to a much smaller extent paper platinum. If the firms cash capital isn't enough to cover the "workouts', then someone must go to the physical markets and outright "buy physical" or "borrow physical". Here is where the "big sweat" is happening "right now"! For many months there hasn't been enough excess physical supply for buying to cover any "non rollovers", so they borrowed it against the firms capital base. Now, no one wants to lend "new" and everyone wants to at least convert to a "self liquidating" term. So, if you read my post (yesterday?), if "official" money doesn't come in and cover the loses or sell down the paper price, the workouts are going to fail, big time! In that event the rush will be to buy physical because even at huge rates, big risk is keeping supply small for lending.

Now to answer your question, the Platinum lending market is small and physical owners are watching gold (sorry for that Goldspoon). If gold breaks to the upside, now, it will cascade into an avalanche of wiped out lenders (the actual physical lenders and the naked short kind) and kill all
credibility of the lending market. For the next two weeks or so if gold doesn't fall , forget the rates, we have escalated far beyond any point of significance for them.

Spot buying and selling of physical is still happening. Even though some bottle necks are there. However, once we move a little further over the edge of the cliff, physical may freeze up too! Note: I saw where some mine management's are now "actively" working with the BBs to try and work out a process to get the price of gold down! I wrote that this "mindset was coming soon" in one of my posts not long ago and someone over here thought it was "out of order". In other words such private discussions would never make mainstream! It did!

On the road FOA


GD
(10/11/1999; 19:30:25 MDT - Msg ID: 16093)
test
test
elevator guy
(10/11/1999; 19:50:00 MDT - Msg ID: 16094)
An unanswered question....
Mr FOA, I hope you don't think my question was rhetorical. It was sincere. Unfortunately, I often sound kind of pompous and oratorical, which sometimes backfires on me.
FOA
(10/11/1999; 19:54:41 MDT - Msg ID: 16095)
Reply
elevator guy (10/11/99; 19:02:16MDT - Msg ID:16091)
am I to understand that Gold Fields is uniquely positioned to weather the onslaught of dollar devaluation, due to some bullion holdings? Or am I delusional, thinking that any paper investment could outperform gold, as the rug is ripped
out from under our world of financial instruments?

Hello Elevator Guy,
Gold Fields LTD. (GOLD) bid for physical at the last BOE auction. They even got some 12% of it. To my knowledge they were the first mining company to openly support the "bullion advocate" community by buying gold instead of just optioning more of it. Yes, they do have a tiny hedge. It is nothing for them. Their actions were openly out of line in the BB sector.

I purchased their stock and presented then as an example of a gold mine for "bullion advocates" to purchase. Symbolically, I burned the stock to indicate I would never sell it at any price. In some cultures, burning a property deed means you will never sell the land. I believe a good number of physical gold owning entities are and will follow this concept in support of Gold Fields. In addition, any other mining company that buys in it's hedge by purchasing gold will see the same activity. Perhaps a bit late now.

EG, sometimes we do things not to make money. Better to support what is right, no? I walk in large foot prints, come what may!

FOA


GD
(10/11/1999; 20:01:47 MDT - Msg ID: 16096)
Newmont Hedge Position
Hi all,
I have not been able to post since Labor Day but I have been reading almosts all of the posts every day since Memorial Day. Boy what an education!!

Yesterday in Bill Murphy's Midas he stated that he heard a rumor that Newmont was holding a surprise conference call for today. As a shareholder I was interested if it was to address their hedge positions. I talked to Jodi at NEM Investor Relations this a.m. (she sounded like she was up all weekend). She said (perturbed) that the conference call was just a rumor. So I proceded to ask if she had any info published about their hedge positions. She pointed me to the 10K. She then asked if she could fax it to me . I agreed. The fax looked more like a press release than an accounting report. Judge for yourself.

I hope their 5 percent exposure to downside gold prices is the extent of it.

Also, I emailed Bill Murphy regarding the factthat there was no conference call. He suggested that the shorts may have started that rumor. In addition, the McCovey referred to in the Newmont letter was one of the Hannibals.

Well I am glad that I finally have something to contribute to this grand forum. Please accept this as a token of my appreciation to you all and the great education provided here.


"We have entered three transactions; lets look at the impact

First, we entered a prepaid forward sales contract, essentially a gold
loan, in which we agreed to deliver 161,100 ounces of gold per year in years
2005,2006, and 2007. For this we received $137.2 million, which was used to pay
down our revolving credit debt. Furthermore, we will receive a minimum of
$300 per ounce plus all additional revenue up to $380 per ounce at the time
of delivery. Yes, that means we have capped you upside on a small fraction
of our production should the gold price exceed $380 five years from now.
If we are fortunate enough for that to happen, you'll be making so much money
on
the rest of the gold we produce that this should not be a concern. We
reduced our total outstanding debt by 11 percent by committing less than 1
percent of our reserve. The imputed interest on the gold loan is LIBOR +
134 basis points, which is 200 basis points lower than we could have achieved
in the bond market. So we termed out the debt in the most efficient way
possible.

Secondly, we purchased puts for 2.85 million ounces to be delivered over
the next two years at a strike price of $270 an ounce, which is essentially our
break-even gold price. This is the price protection that McConvey is addressing.
Puts do not involve forward sales and we could have purchased
them for cash. However, it seemed more prudent to finance the puts through
the issuance of long-term call options, which is a hedge.

Thus, our third transaction, the issuance of call options for 250000 ounces a
year in 2004 and 2005 at $350 and ounce; 500000 ounces in 2008 and 2009 at
$380 and ounce, and 50000 a month for 17 months beginning in March, 2008 at
$392 and ounce. If the gold price reaches these levels in those years, we
have the option of rolling the contracts over into a spot deferred
contract.

The put/call contracts create a floor price for one-third of our production
over the next two years while potentially committing only 4 percent of our
reserves. All three transactions therefore involve the commitment of only
5 percent of our reserves, leaving us the most leveraged of any company to
the gold price.

I hope this gives you a better understanding of what we are doing and
reaffirms our desire to maintain the upside potential in our stock.

Jack Morris,
Vice President, Investor Relations"


GD
FOA
(10/11/1999; 20:06:08 MDT - Msg ID: 16097)
(No Subject)
USAGOLD (10/11/99; 18:39:21MDT - Msg ID:16088)
FOA! From the World Gold Council: "We have now entered a new era..."

Michael,
Thanks. If only a few more parts of the puzzle come into view this will be all over the media. Anyway, I say Congratulations to the USAGOLD FORUM and all who post and read there. This is truly a one of a kind.

Have to leave now. Thanks all FOA
ORO
(10/11/1999; 20:07:45 MDT - Msg ID: 16098)
Platinum and Oil - Goldspoon
Platinum is a necessary element for the production of refined oil derivatives. It is also necessary for most food hydrogenation processes (margarine, modified starch), practically all electro separation, car exhaust, and more.
The first thing an oil cartel would think of as a secondary element for an oil squeeze to retaliate against the opening of the strategic oil reserve is the stopping of the platinum supply, not by physically removing it, but by buying it off the market. The plat market is completely a Swiss and Japanese market.
Will Plat push gold? actually, ANY commodity has within it the possibility of wrecking the US banks. They operate on the rocket principle. They do not cover their positions directly and are allways short commodities in order to capture the assured decline of the time premium. They believe they can print up as many contracts as they wish, to drive the price in the desired direction. They do this in the stock market with individual stocks and the indexes themselves. There is allways a rise in the stock market because of this interference of the "masters" and there is allways a decline in commodities. The typical business of the bank masters is printing out commodity calls and stock index puts. They are allways short commodities, and allways long the SPoos. The modus operandi is this: if the stock market drops, borrow money, buy futures. The Fed is guarantor to the lending bank. In commodities, short some more if it goes up. The buyer wants price protection and buys calls. The producer sells futures for the non contracted production. Very often, knowing that there is going to be increased demand in a shorted commodity, the banks will short further while simultaneously buying calls from hedge funds attracted to the extra implied volatilities. The main point is to minimize the payout on the options, and be short time premium.

This, for the most part, is why large moves happen in both commodities and stocks right after option expiration, and why these markets are perpetually pushed in opposite directions.

Banks abhor buying options and being long commoditty futures, because it is like paying interest. Therefore, they only cover when in extremis. Often they would deal with each other to palm off risk through "netting", or borrow more money to maintain their positions.
It is like saying
"Hey, this noose is tight, give me more rope"
SteveH
(10/11/1999; 20:18:53 MDT - Msg ID: 16099)
repost -- a good one.
www.lemetropolecafe.comrepost:


Le Metropole members,

In my opinion, the following news stories are,in toto,
explosive news for the gold market. I will explain after
you have read them. In essence, they validate what Midas
du Metropole has been telling you all year!

October 11 - UBS turns screw on gold firms

Swiss bank acts on debts as hedging contracts go sour
By Dan Gledhill

UBS, the Swiss investment bank, is thought to have
tightened the screw on struggling gold producers by
calling in debts on outstanding derivatives
contracts.

Many mining companies took out these complex
derivative positions earlier this year in order to
hedge themselves against further falls in the gold
price. However, gold's sudden recovery in the last
fortnight means that these contracts are now heavily
in the red.

The concern about the ability of gold producers to
make good these losses is believed to have prompted
UBS to take the unusual step of requiring early
margin payments. Among the companies affected is
thought to be Ashanti, whose derivatives exposure is
reported to total $450m (�270m). UBS's credit
exposure to Ashanti alone is said to be $61m. Other
investment banks affected by the malaise in the gold
market are Goldman Sachs, JP Morgan and
Credit Suisse First Boston.

Fears that the gold sector has suffered enormous
losses in the derivatives market drove the share prices
of producers sharply lower last week. Ashanti,
the Ghanian producer which has entered into merger talks
with Britain's Lonmin, fell heavily, as did Canadian
miners Cambior and Barrick Gold. There is also concern
that a number of hedge funds, which had sold gold
short to prosper from lower prices, have been caught
out by the sudden rally.

Gold's recovery, to close on Friday $70 above this
year's low at $320.15 an ounce, was prompted by the
decision of European central banks two weeks ago
to suspend the selloff of their reserves. It brought
to an end four years of almost continuous decline,
which saw the price of the precious metal plummet
from $415 to $250 an ounce. Analysts believe that many
gold producers, assuming gold would continue to
depreciate, took out derivatives positions
so large that they would actually profit from
lower prices.

One derivatives specialist said: "I think that,
judging by the events that have unfolded in the market,
the reasonable explanation is that some mines
have aggressively over-hedged."

It is unclear whether the banks that took out such
positions with mining companies and hedge funds decided
to cover their risk elsewhere, or chose to
leave their books open in the belief that the gold
price would come back. UBS declined to comment on
its exposure.

Most analysts believe that gold's current strength
will continue as customers with bearish derivatives
positions are forced to buy gold to square their books.
However, they remain convinced that by the end of the
year the commodity's downward spiral will resume.

"Gold won't subside suddenly," said the derivatives
specialist. "It is possible that we will see further
rallies, but I think we will still find that when it's
all over, gold will move below $300 before the end
of the year."

Lonmin, formed from the old Lonrho mining company,
already owns 32 per cent of Ashanti and announced on
Tuesday that it is negotiating to acquire the
remaining 68 per cent. End.

The disinformation crowd just won't quit. How can anyone
who knows anything about the gold market say that reigning
in gold loans will eventually be bearish for gold?



London (Dow Jones) October 11 -- Central Banks are
selling gold in order to prevent a further sharp rise
in prices from causing a major financial crisis,
according to Ted Arnold, analyst at Prudential Bache
Securities Ltd.

Many funds and banks sustained heavy losses over the
past two weeks as gold surged after 15 European central
banks stunned the market by saying they would cap
sales of gold for the next 5 years.

If gold prices continue to rise sharply they could
cause major losses at U.S. and European investment
and bullion banks and cause a domino effect that
could lead to a major financial cisis, Arnold said.

"Central banks, according to our sources, have acted
swiftly to prevent a repeat of an LTCM-type of crisis
by making sure that gold prices remain in a tight range.
Enough selling is done by agents of the monetary
authorities involved to cap gold...around the $330 area
basis spot London while the floor is very solid in
around the $315-$316 (a troy ounce) area basis spot,"
Arnold said.

Central bank "regulation" of the bullion market always
seems very far fetched to most observers, but it is a
"cheap" option compared with the potential cost of
bailing out banks and generally injecting liquidity
into an economy if there were a full-blown financial
crisis, he said.

A relatively small amount of gold would be needed to
sell towards the top end of a range and then buy back
at at the lower end. The one thing that is absolutely
certain, however, is that no central banks is going to
annnounce that it is acting in the market to achieve
stable and range-bound prices, said Arnold. End.

A quote from highly regarded Barry Riley in Saturday's
London Financial Times:

"A gigantic short position - some say 10,000 tonnes
in aggregate - has been built up during the past few
years and it has created a new threat of instability
related to derivatives."

Lordy, Lordy! This news is a horror show for the
shorts. The conservative FT has a columnist who is
now touting the gold loan numbers of Frank Veneroso.
They are more than twice the GFMS numbers that gold
producers, hedge funds and the general media have
acknowledged to the investing world.

The Swiss are so concerned about the gold loan
situation that they are turning up the heat on the
producers over them. The European central banks
have already told the world that they were going to
curtail their gold lending. Now this statement.

Then, we have the Abby Joseph Cohen of the gold
industry - "the bear of bears" the past few years -
telling the gold world that the floor for the price
of gold is around around $316. What happened to all
his $220 bearish forecasts? This is staggering information.

Think on these things. If you are a producer and the
"bear of bears" suggests $316 is where the central banks
will buy, why not cover all your forward sales? Why stay
short for a $2 downside? Makes no sense at all not too. If you
are a hedge fund, why stay with your gold loan at 4%
to 5% gold lease rates with the understanding that
the central banks can lose control of this situation?
The manipulators already have!

This is bombshell news. Since it makes no sense for
producers or hedge funds to stay short, most should
now begin to cover. Ted Arnold is one of the most
visible "Hannibal Cannibal" apologists of all. He
now admits that the gold market situation is so
explosive that $315-$316 is the downside. Gold closed
today around $318. That is the MEGA BEAR talking.
What do you think the MEGA BULLS like me are saying tonite.

GATA has been talking about market manipulation since
January. The Ted Arnold type's mocked us over and over.
Now, he comes out and says the market has to be manipulated
or there will be financial havoc. What crap! It is his
ilk that has caused financial havoc on the gold industry.
miners out of work, gold company bankruptcies, gold
shareholder's investments wiped out, etc.

I have said over and over that before this all ends, one
of the biggest financial scandals in the history of
the United States will reveal itself. How clear can it get?

The manipulating crowd has lost control of their collusion
game and now they are crying to Daddy for help. What a
bunch of wimps! This is disgusting and calls for a
full scale Congressional investigation.

On April 26, I met with James Saxton, Chairman of the
Joint Economic Committee, and told him that this was
going to happen. I also met with Chris Frenz, his
staff director and their chief economist, Bob Kelleher.
I then met with Jim Clinger, Senior Counsel of The
House Committee on Banking and Financial Services.
Also there was Greg Wierzyski of the Capital Markets
Committee. I invite all of the Cafe to contact them
to find out if what I am telling you is so

I told them exactly what Ted Arnold is telling the
world now. The difference is that Ted Arnold is trying to
tell you that the gold maket will be capped. He
obviously was told to put this out by the "Hannibal"
camp that is scared to death that the gold price could
explode and wipe them out.

This is crazy. Oil just doubled in price. Did we have
to hear of nonsense like this? What is wrong about
gold doing the same? I cannot stress it enough. The
gold market was manipulated by the bullion dealers.
They told their clients the fix was in. The clients
believed them. The "Hannibals" were using wrong
supply/demand information and now have lost control
of their gold market cartel. They listened to the
discredited GFMS and not Frank Veneroso.

I can't say what the price of gold will do tomorrow,
but the dye is cast. Uptown we go. Shareholders
around the world will demand producers cover their
hedges. Hedge fund managers that have borrowed gold,
will have to come to grips with the "new" reality
and cover too.

Just curious. What central bank wants to just throw
away its valuable gold reserves at these prices?

Rock and roll time.

When the general investment world understands this,
there will be a STAMPEDE to buy the shares of gold
companies that have not overly hedged. The junior
golds and top quality exploration gold and silver
companies are going to go bonkers. In my last Midas,
I just suggested that soon the little gold companies
that have been given up for "mortsville" will
begin acting like internet stocks. This news could
do it.

Just look at what is happening to my biggest holding -
Golden Star Resources. A few days ago I brought it
up to you as my favorite. It was 15/16. Today it closed
at 1 7/8.

Does that seem impressive? Not to me. When I owned
it at 21, Paul Stephens, renowned portfolio manager
of the Conrarian Fund, said in a Forbes article
he thought this stock could go to 50 to 100. That
was him saying that - not me.

He made that statement because GSR has found so
many exciting gold resources and may have done
what no other exploration company in history did.
At least, that is what Frank Veneroso thinks.

What is important here is there are many great
junior gold companies and gold exploration companies
out there that will go ballistic in price when "The
Maddening Crowd" realizes the price of gold will
inevitably skyrocket. The bears even admit that
now. When central government takes its foot off
the breaks, bye bye.

Support your favorite small gold company. Tell your
friends about them "Now" before they go to the moon.
Their is easy money on the Table here.

Within 2 weeks, The Cafe will open its Chat room. In
the Chat Room, we will have various Conferences
(threads to some) in which you will be able to
learn and talk about your favorite gold and silver stocks.
You will be able to get answers to many of the questions
you might have from knowledgable investors around
the world.

Janet Whitman of Dow Jones did a great story today for
her wire service called, "Gold Gains In One of Biggest
Gold Rushes in History." Janet mentiones
www.LeMetropoleCafe.com. This is a big breakthrough
for us in the mainstream press. The Cafe is growing
by leaps and bounds. And as I reiterated often, we
are being fed the best information in the world on the gold
market going because gold family people want
GATA to succeed.

I urge all of your friends to read my last Midas and
the two pieces by Reginald Howe and John Hathaway that
are up at the Kiki Table and Dos Passos Table. In my
opinion, that is the gold market story in a nutshell.

"Vox Populi Vox Dei"

All the best,

Bill Murphy
Le Patron
www.LeMetropoleCafe.com
Goldspoon
(10/11/1999; 20:20:35 MDT - Msg ID: 16100)
FOA..ORO..Leigh
Thanks for your input...a hungry mind is a terrible agony if left unfed.......
GD
(10/11/1999; 20:25:48 MDT - Msg ID: 16101)
Hot off the press
This just in from Bill Murphy:

Subj: BULLETIN!! - EXPLOSIVE GOLD MARKET NEWS/ GOLDSHARE STAMPEDE COMING
Date: 10/11/1999 9:58:04 PM Eastern Daylight Time
From: LePatron@LeMetropoleCafe.com
To: gdomka@aol.com


Le Metropole members,

In my opinion, the following news stories are,in toto,
explosive news for the gold market. I will explain after
you have read them. In essence, they validate what Midas
du Metropole has been telling you all year!

October 11 - UBS turns screw on gold firms

Swiss bank acts on debts as hedging contracts go sour
By Dan Gledhill

UBS, the Swiss investment bank, is thought to have
tightened the screw on struggling gold producers by
calling in debts on outstanding derivatives
contracts.

Many mining companies took out these complex
derivative positions earlier this year in order to
hedge themselves against further falls in the gold
price. However, gold's sudden recovery in the last
fortnight means that these contracts are now heavily
in the red.

The concern about the ability of gold producers to
make good these losses is believed to have prompted
UBS to take the unusual step of requiring early
margin payments. Among the companies affected is
thought to be Ashanti, whose derivatives exposure is
reported to total $450m (�270m). UBS's credit
exposure to Ashanti alone is said to be $61m. Other
investment banks affected by the malaise in the gold
market are Goldman Sachs, JP Morgan and
Credit Suisse First Boston.

Fears that the gold sector has suffered enormous
losses in the derivatives market drove the share prices
of producers sharply lower last week. Ashanti,
the Ghanian producer which has entered into merger talks
with Britain's Lonmin, fell heavily, as did Canadian
miners Cambior and Barrick Gold. There is also concern
that a number of hedge funds, which had sold gold
short to prosper from lower prices, have been caught
out by the sudden rally.

Gold's recovery, to close on Friday $70 above this
year's low at $320.15 an ounce, was prompted by the
decision of European central banks two weeks ago
to suspend the selloff of their reserves. It brought
to an end four years of almost continuous decline,
which saw the price of the precious metal plummet
from $415 to $250 an ounce. Analysts believe that many
gold producers, assuming gold would continue to
depreciate, took out derivatives positions
so large that they would actually profit from
lower prices.

One derivatives specialist said: "I think that,
judging by the events that have unfolded in the market,
the reasonable explanation is that some mines
have aggressively over-hedged."

It is unclear whether the banks that took out such
positions with mining companies and hedge funds decided
to cover their risk elsewhere, or chose to
leave their books open in the belief that the gold
price would come back. UBS declined to comment on
its exposure.

Most analysts believe that gold's current strength
will continue as customers with bearish derivatives
positions are forced to buy gold to square their books.
However, they remain convinced that by the end of the
year the commodity's downward spiral will resume.

"Gold won't subside suddenly," said the derivatives
specialist. "It is possible that we will see further
rallies, but I think we will still find that when it's
all over, gold will move below $300 before the end
of the year."

Lonmin, formed from the old Lonrho mining company,
already owns 32 per cent of Ashanti and announced on
Tuesday that it is negotiating to acquire the
remaining 68 per cent. End.

The disinformation crowd just won't quit. How can anyone
who knows anything about the gold market say that reigning
in gold loans will eventually be bearish for gold?



London (Dow Jones) October 11 -- Central Banks are
selling gold in order to prevent a further sharp rise
in prices from causing a major financial crisis,
according to Ted Arnold, analyst at Prudential Bache
Securities Ltd.

Many funds and banks sustained heavy losses over the
past two weeks as gold surged after 15 European central
banks stunned the market by saying they would cap
sales of gold for the next 5 years.

If gold prices continue to rise sharply they could
cause major losses at U.S. and European investment
and bullion banks and cause a domino effect that
could lead to a major financial cisis, Arnold said.

"Central banks, according to our sources, have acted
swiftly to prevent a repeat of an LTCM-type of crisis
by making sure that gold prices remain in a tight range.
Enough selling is done by agents of the monetary
authorities involved to cap gold...around the $330 area
basis spot London while the floor is very solid in
around the $315-$316 (a troy ounce) area basis spot,"
Arnold said.

Central bank "regulation" of the bullion market always
seems very far fetched to most observers, but it is a
"cheap" option compared with the potential cost of
bailing out banks and generally injecting liquidity
into an economy if there were a full-blown financial
crisis, he said.

A relatively small amount of gold would be needed to
sell towards the top end of a range and then buy back
at at the lower end. The one thing that is absolutely
certain, however, is that no central banks is going to
annnounce that it is acting in the market to achieve
stable and range-bound prices, said Arnold. End.

A quote from highly regarded Barry Riley in Saturday's
London Financial Times:

"A gigantic short position - some say 10,000 tonnes
in aggregate - has been built up during the past few
years and it has created a new threat of instability
related to derivatives."

Lordy, Lordy! This news is a horror show for the
shorts. The conservative FT has a columnist who is
now touting the gold loan numbers of Frank Veneroso.
They are more than twice the GFMS numbers that gold
producers, hedge funds and the general media have
acknowledged to the investing world.

The Swiss are so concerned about the gold loan
situation that they are turning up the heat on the
producers over them. The European central banks
have already told the world that they were going to
curtail their gold lending. Now this statement.

Then, we have the Abby Joseph Cohen of the gold
industry - "the bear of bears" the past few years -
telling the gold world that the floor for the price
of gold is around around $316. What happened to all
his $220 bearish forecasts? This is staggering information.

Think on these things. If you are a producer and the
"bear of bears" suggests $316 is where the central banks
will buy, why not cover all your forward sales? Why stay
short for a $2 downside? Makes no sense at all not too. If you
are a hedge fund, why stay with your gold loan at 4%
to 5% gold lease rates with the understanding that
the central banks can lose control of this situation?
The manipulators already have!

This is bombshell news. Since it makes no sense for
producers or hedge funds to stay short, most should
now begin to cover. Ted Arnold is one of the most
visible "Hannibal Cannibal" apologists of all. He
now admits that the gold market situation is so
explosive that $315-$316 is the downside. Gold closed
today around $318. That is the MEGA BEAR talking.
What do you think the MEGA BULLS like me are saying tonite.

GATA has been talking about market manipulation since
January. The Ted Arnold type's mocked us over and over.
Now, he comes out and says the market has to be manipulated
or there will be financial havoc. What crap! It is his
ilk that has caused financial havoc on the gold industry.
miners out of work, gold company bankruptcies, gold
shareholder's investments wiped out, etc.

I have said over and over that before this all ends, one
of the biggest financial scandals in the history of
the United States will reveal itself. How clear can it get?

The manipulating crowd has lost control of their collusion
game and now they are crying to Daddy for help. What a
bunch of wimps! This is disgusting and calls for a
full scale Congressional investigation.

On April 26, I met with James Saxton, Chairman of the
Joint Economic Committee, and told him that this was
going to happen. I also met with Chris Frenz, his
staff director and their chief economist, Bob Kelleher.
I then met with Jim Clinger, Senior Counsel of The
House Committee on Banking and Financial Services.
Also there was Greg Wierzyski of the Capital Markets
Committee. I invite all of the Cafe to contact them
to find out if what I am telling you is so

I told them exactly what Ted Arnold is telling the
world now. The difference is that Ted Arnold is trying to
tell you that the gold maket will be capped. He
obviously was told to put this out by the "Hannibal"
camp that is scared to death that the gold price could
explode and wipe them out.

This is crazy. Oil just doubled in price. Did we have
to hear of nonsense like this? What is wrong about
gold doing the same? I cannot stress it enough. The
gold market was manipulated by the bullion dealers.
They told their clients the fix was in. The clients
believed them. The "Hannibals" were using wrong
supply/demand information and now have lost control
of their gold market cartel. They listened to the
discredited GFMS and not Frank Veneroso.

I can't say what the price of gold will do tomorrow,
but the dye is cast. Uptown we go. Shareholders
around the world will demand producers cover their
hedges. Hedge fund managers that have borrowed gold,
will have to come to grips with the "new" reality
and cover too.

Just curious. What central bank wants to just throw
away its valuable gold reserves at these prices?

Rock and roll time.

When the general investment world understands this,
there will be a STAMPEDE to buy the shares of gold
companies that have not overly hedged. The junior
golds and top quality exploration gold and silver
companies are going to go bonkers. In my last Midas,
I just suggested that soon the little gold companies
that have been given up for "mortsville" will
begin acting like internet stocks. This news could
do it.

Just look at what is happening to my biggest holding -
Golden Star Resources. A few days ago I brought it
up to you as my favorite. It was 15/16. Today it closed
at 1 7/8.

Does that seem impressive? Not to me. When I owned
it at 21, Paul Stephens, renowned portfolio manager
of the Conrarian Fund, said in a Forbes article
he thought this stock could go to 50 to 100. That
was him saying that - not me.

He made that statement because GSR has found so
many exciting gold resources and may have done
what no other exploration company in history did.
At least, that is what Frank Veneroso thinks.

What is important here is there are many great
junior gold companies and gold exploration companies
out there that will go ballistic in price when "The
Maddening Crowd" realizes the price of gold will
inevitably skyrocket. The bears even admit that
now. When central government takes its foot off
the breaks, bye bye.

Support your favorite small gold company. Tell your
friends about them "Now" before they go to the moon.
Their is easy money on the Table here.

Within 2 weeks, The Cafe will open its Chat room. In
the Chat Room, we will have various Conferences
(threads to some) in which you will be able to
learn and talk about your favorite gold and silver stocks.
You will be able to get answers to many of the questions
you might have from knowledgable investors around
the world.

Janet Whitman of Dow Jones did a great story today for
her wire service called, "Gold Gains In One of Biggest
Gold Rushes in History." Janet mentiones
www.LeMetropoleCafe.com. This is a big breakthrough
for us in the mainstream press. The Cafe is growing
by leaps and bounds. And as I reiterated often, we
are being fed the best information in the world on the gold
market going because gold family people want
GATA to succeed.

I urge all of your friends to read my last Midas and
the two pieces by Reginald Howe and John Hathaway that
are up at the Kiki Table and Dos Passos Table. In my
opinion, that is the gold market story in a nutshell.

"Vox Populi Vox Dei"

All the best,

Bill Murphy
Le Patron
www.LeMetropoleCafe.com

Bedtime in the mid-west. Good Nite All. Sleep tight and hope the Goldbugs are right.

GD
TownCrier
(10/11/1999; 20:27:38 MDT - Msg ID: 16102)
After the Close: the GOLDEN VIEW from The Tower
This might be a brief report with many markets closed on holidays, but we never know until we go to hit the "send" button. In the U.S., the bond market and banks were closed for Columbus Day so that everyone could get out there and celebrate, or whatever Columbus Day calls for. Japanese financial markets were also closed today for a national holiday, and the Canadian financial markets were closed for their Thanksgiving Day.

In a fitting gesture, the American markets served up a big turkey...the Nasdaq closed at a record high (2915.95 +29.38 (+1.02%)) on moderate volume , and nobody cheered. The number of advancing issues narrowly edged out decliners, but the DOW lost a point-and-a-half on the day with new 52-week lows on the NYSE outpacing new highs 113 to 42.

While the stock market was caught up in its own little world on Wall Street, Fed Chairman Alan Greenspan gave a speech in Arizona before the American Bankers Association on the evolution of bank supervision. (Well, I guess now we know how those party-animal bankers celebrate Columbus Day.) The Chairman began his remarks with a reminder that the economic landscape is continually evolving, and the physician's admonition "First do no harm" might as well apply to bank supervisors, too.

Mr. Greenspan said, "significant changes are in the pipeline. Today I would like to sketch the framework that is now being developed, growing out of work at the Federal Reserve, at other U.S. banking agencies, and by our colleagues abroad. The outline of this framework was presented in a consultative document released by the Basel Supervisors Committee in June. The details are preliminary, but the concepts are beginning to congeal and deserve your close attention, especially if you wish to influence the eventual outcome of the deliberations."

"The desirability of limiting moral hazard, and of minimizing the risks of overly burdensome supervision and regulation, has motivated those of us associated with the Basel exercise to propose a three-pillared approach to prudential oversight. This approach emphasizes, and seeks to strengthen, market discipline, supervision, and minimum capital regulation."

"In addition to emphasizing more effective market discipline and making supervisory assessments of bank capital adequacy more risk-focused, the June consultative paper highlights the need to make regulatory capital requirements-the third pillar of prudential oversight-more risk-focused as well. In recent years, it has become clear that the largely arbitrary treatment of risks within the current Basel Accord has distorted risk-management practices and encouraged massive regulatory capital arbitrage. That is, our rules have induced bank transactions that have the effect of reducing regulatory capital requirements more than they reduce a bank's risk position. Consequently, the fundamental credibility of regulatory capital standards as a tool for prudential oversight and prompt corrective action at the largest banking organizations has been seriously undermined."

"It is, I believe, important to reiterate my earlier comment that bank supervision and regulation-especially capital regulation-are necessarily dynamic and evolutionary. We are striving for a framework whose underlying goals and broad strategies can remain relatively fixed, but within which changes in application can be made as both bankers and supervisors learn more, as banking practices change, and as individual banks grow and change their operations and risk-control techniques. Operationally, this means that we should not view innovations in supervision and regulation as one-off events...We should be planning for the long pull, not developing near-term quick fixes. It is the framework that we must get right. The application might initially be bare-boned but over time become more sophisticated....We are endeavoring to develop a program that is the least intrusive, most market based, and most consistent with current and future sound risk-management practices possible, given our responsibilities for financial market stability."

The general consensus held here in The Tower that the "evolution" described by the Chairman may certainly appear as a natural continuum when the history books record the events, but this has all the earmarks of a watershed event, lifting this old patchwork system out of the primordial ooze to the golden dawn of a new day. We shouldn't hesitate to inform our new readers that Alan Greenspan has been a long-time advocate of monetary gold. We hope you have yours in hand.

Speaking of gold, it did trade today around the globe in spite of the holidays. Having been taking down in price when trading opened on the Hong Kong market, buying support kept a floor under gold at $315. It traded sideways through London in a $4 band to close near the top of that band in NY. Spot prices were last quoted at $318.20, demonstrating resiliance to trading pressures in this eleventh market day following the huge percentage move in the wake of the European central bank announcement of a moratorium on gold sales and leasing programs. As we continue to accumulate gold here at The Tower, we are thankful that the world remains slow to stir to this wakeup call.

We'll turn things over to Bridge News for their comments by traders on the scene, and interject as we deem necessary...

NY Precious Metals Review: Dec gold dn $1.3 after London sales
By Tina Petersen and Ross Allen, Bridge News
Washington--Oct 11--COMEX Dec gold futures settled down $1.4 at $320.3
per ounce amid quiet holiday trading. Traders said gold moved lower
following London and continued rangebound throughout the day in thin
trading conditions.
With Japan on holiday, and some US financial markets closed for the
Columbus Day holiday, today's session was very quiet. "Most of the
customers and financial guys are out for the holiday," said a trader. "The
large players have not been active today. With the banks shut, trading
volume is very mild."

Dec gold had traded as low as $317.5 in Access trade but recovered as
spot gold was able to hold support at $315 early this morning in London.
The early selling was said to have come from specs. "We just took what
London gave us and we stayed with it," said a trader.
Sentiment in the gold market is becoming more ambiguous after the
initial reaction seen immediately after the "gold-sales moratorium,"
announced Sep 26 by European banks at the IMF meeting in Washington. Most
said they expect gold to continue in its consolidation phase then increase
steadily to $360-380 by the end of the month.

Leonard Kaplan, chief bullion trader at LFG Bullion S ervices, said that
there is still significant short covering that needs to be done.

One bullish trader said he expects Tuesday to mark the beginning of
the next break out to the upside. He said it "would be easy" to have
another $20-30 rally, possibly bringing gold up to $350. "That number
would make sense if gold makes another leg up," said a trader. He said
$340 is a long-term chart support level.

Most said they don't expect continued downward pressure since the
market has been well supported on the dips. "Gold has held its ground
well," said a trader.
One-month lease rates on gold remain strong at over 4%.

1-month 4.1080%
2-month 4.2100%
3-month 5.1740% [...in an interesting development, quotes were not provided for longer-term lending...the 6-month and 12-month rates. A glitch, or is something afoot?]

Friday's Commodity Futures Trading Commission Commitments of Traders
report appears to have raised more questions than answers. The report
showed virtually no change in speculative shorts, a highly unlikely
scenario given a 24.5% rally in gold prices over the reporting period.
This has spurred the CFTC to review the data.

[Anyone who thinks gold can only rise on futures short-covering is gravely mistaken, and is missing the bigger story...the unravelling gold-loan operation. Pricing based on futures requires no involvement of gold supply, but instead responds to the buying or selling pressures on these same contracts. We'll keep beating that dead horse until people realize it is not the beast to be riding...depending upon your objectives.--TCrier]

Many market players said they were surprised there was not more short
covering during the rally. One trader explained that there was "an awful
lot of good call buying done in the market, which offset a majority of the
shorts. Traders were stuck not knowing what to do, and they rushed to buy calls
and held their shorts to see what would happen."

Under this scenario, the net-short fund position in the futures ring
would have been hedged somewhat in the options ring; if true, Tuesday's
Commitments of Traders report for futures and options will show a
significantly lower net-short position than that revealed by the
futures-only report.
By purchasing call options to offset a pre-existing short futures
position, a trader would hold an essentially flat total position above the
options strike, while remaining short below the strike. This would be
accomplished for only the cost of the option premium.

For example, if a short-positioned trader could have purchased Nov
calls to offset his or her upside risk on Sep 20, the day before the
present rally started gathering momentum, these calls would have closed at
$1.20 per ounce and the short position would still stand below the strike.
This options position would have been worth $61.70 per ounce at the
settlement today and would have offset the significant losses on the short
futures position.
David Meger, senior metals analyst with Alaron Trading, noted that the
report only details futures market activities, not the cash market trading
which accounts for a large portion of the gold market.
This cash market is key importance, "so the futures commitment report
is not all that revealing," he said.

Most of the short positions in the gold market generally were created
in the lease market, and hence would not be shown in the commitments of
traders report as these lease shorts must be offset in the cash market. He
said the cash market is not nearly as transparent, so "the problem is we
don't know whether we are getting all the data."
***
(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.
---
Delivery intentions were announced this morning for two additional October gold contracts, bringing the total so far for the month to 2,506. The month began with only (approximately) 2,000 contracts in open interest, and this relative level of delivery intentions makes us raise an eyebrow. Stats from last Friday's trade reveal that open interest in October contracts stood at 113 going into the weekend. By contrast, open interest in the December futures contract was 117,650. Total OI in COMEX gold futures through June 2004 is 213,028.

With the Columbus Day banking holiday, it should come as no surprise that there was no movement of metal into or out of the ScotiaMocatta or Republic National Bank of New York vaults which serve as the official COMEX depositories. Total gold inventory stored there is 920,637 ounces.

In our Fifth Horseman watch, the ride continued in a late short-covering rally that helped the November crude contract settle up 37c at $21.27 to end a span of several consecutive losses, and Friday's steep sell-off. A senior US Energy Department official poured cold water on recent comments by President Clinton in regard to the possibility of the U.S. selling crude oil from the Strategic Petroleum Reserve to counter rising heating oil prices. Also adding support to today's prices were comments by Iran's OPEC governor, Hossein Ardebili, who expressed confidence oil prices would "hold stable and even improve." He expected oil stocks will fall by 2 million barrels per day in the fourth quarter of 1999 and by 3 million bpd in the first quarter next year, and dismissed reports which suggested Iran was producing over its OPEC production ceiling. Further in that regard, on Sunday Iranian Oil Minister Bijan Namdar Zanganeh stated "OPEC will even extend its current production ceiling beyond March 2000 if the fundamentals of the market warrant (it)." Bridge News reported a source today as indicating the Saudi Arabia was also open to the possibility of an extension of the production cuts beyond March.

And that's the view from here...after the close.
GD
(10/11/1999; 20:28:55 MDT - Msg ID: 16103)
Hot of the press times two
SteveH, I guess great minds think alike.

GD
Richard, Oregon
(10/11/1999; 20:38:58 MDT - Msg ID: 16104)
Peter Asher (10/09/99; 01:02:10MDT - Msg ID:15915)
Peter - First I want to apologize for the tardiness of this post. If it isn't one thing it's another.

I wanted to respond to your message regarding our little get-together at "Hidden Falls Retreat".
In retrospect, we had a great time! To me, much more precious that I realized at the time. The hours went by like minutes. You were right in comparing the relationship to that of old friends. Yes, and we found that we have much more in common with our fellow Goldhearts. Friendship, family, children, grandchildren, and good health. These were golden minutes in time. We each have the opportunity to acknowledge or swish away these little nuggets. I'm now choosing to enjoy more of them, but it's not easy for me. Work, work, work! Life's going by real fast these days and I don't see a slow down in my future, just more occasions to hug my daughter and grand-daughter (she's so sweet) just one more time. My son's are more of a challenge, but I'm learning. Robin's and your hospitality was most gracious and the Gandolf family enjoyable. We must do it again. Thank you.

Oh, by the way. . . . this Oregon weather is a treat. Minimal rain and still the nice warm sun to make outside work a joy. Enjoy the sun, the rains a comin'.
Richard, Oregon
(10/11/1999; 20:45:39 MDT - Msg ID: 16105)
Hill Billy Mitchell (10/10/99; 8:01:01MDT - Msg ID:15967)
Hill B - please tells me more about pre-1982 pennies that are worth more than one cent. I have six rolls of uincirculated 1964's starring me in the face. I was about to just exchange them with my regular coinage, that I magically turn into gold each month. Please comment.
Goldspoon
(10/11/1999; 21:06:24 MDT - Msg ID: 16106)
They must have liked my strategy on platinum or ORO's ???
http://www.kitco.com/platinum.graph.htmlNote the time of the rise in platinum..if this continues..gold will watch and follow...eh FOA?.....Platinum + a bunch!
Al Fulchino
(10/11/1999; 21:18:37 MDT - Msg ID: 16107)
FOA///Post War Gold?
FOA? When you get a chance, I feel it is always appropriate to look further along in the chess game. I am nowhere near your understanding, yet I am also so much further along than I was. I wonder what strategies you see, or scenarios that will unfold, ***after*** this war. You and others may say to me, that I am jumping the gun, not having even engaged the enemy yet. I respect that view. However, it is never to early to realize that there always is another game or series to play. Thank you.
megatron
(10/11/1999; 21:19:55 MDT - Msg ID: 16108)
gold
I love all this rebellious talk!! After just reading Machevelli's The Prince, and Thoureau's Civil Disobedience,
I can't wait to see some SOB at a bullion bank get it good.
It seems the layers are being converted faster and faster.
Al Fulchino
(10/11/1999; 21:24:22 MDT - Msg ID: 16109)
Excuse this post///But I know this group values a good deal
www.alladvantage.comIf you go to the above link, you can sign on and start getting paid to surf the net. Currently, you can get paid 50 cents per hour and you can get more money by referring friends. All you must deal with is an ad banner at the top or bottom of your screen. Now you can tell your spouse that these hours spent online are bearing fruit :) Also I am not giving anyone my ID number, not because I do not want you as a referral, but I because I wish you to see the offer at its face value.

Best Wishes

PS Hope you do not mind M.K.
Bonedaddy
(10/11/1999; 21:35:13 MDT - Msg ID: 16110)
Black Blade
Now you've got a great handle! I'd love to see SE Asia in my lifetime. The rural folks sound a lot like Montanans. I feel that I really shouldn't stray too far from the topic of gold, but guns and gold seem to go together like milk and cookies. I can understand a man who collects weapons. Holding an Oberndorf Mauser gives me much the same feeling as holding a gold coin from the same era. Boy, if only this thing could talk.
Gold Power
(10/11/1999; 21:43:21 MDT - Msg ID: 16111)
COT Report -- Gold
The Town Crier writes: "Friday's Commodity Futures Trading Commission Commitments of Traders report appears to have raised more questions than answers. The report showed virtually no change in speculative shorts, a highly unlikely
scenario given a 24.5% rally in gold prices over the reporting period. This has spurred the CFTC to review the data."

This shows that "no one" believes this rally. Mining companies, CNBC, the public, and even gold investors. I talked to one gold investor today whose stocks have gone up and who has made a pile of money on gold options already. He wants to sell and take his profits.

He doesn't believe this rally.

I talked to a mining company today to find out its hedge position. They said they are "fine until gold hits $385 and long before that happens they will make a new arrangement with the bank."

I told them that we may already be past the point of long before that happens. I also said that "having the bank make decisions" is exactly what the shareholders don't want.

They don't believe this rally. (I implored them to buy call options to hedge their hedges.)

"Things are not as before," said ANOTHER once upon a time. And from what has taken place so far, it looks like he is right on the money.

Another $70 rally in gold will throw many segments of the gold mining industry into complete chaos. The execs are sitting there hoping it won't happen.

They don't believe this rally and don't want to believe it, either.

My message for all the companies with hedged positions is this: "You had better know the answer to the question of `what happens to your company if gold hits $450 by Christmas.'"

Many don't and hope it won't happen.

The COT report also showed the Commercials to be net long. This is unprecedented after a rally of such magnitude. Perhaps the Commercials, the shrewdest players in the game, do believe this rally.

Widespread denial and disbelief in the face of what is manifestly a new reality is typical of human behavior.

I know that when the Dow made it to 1,200, I thought it would fall back soon. I didn't believe that rally. And, boy, look what happened.

If the CFTC reviews its data, I imagine it will find that its numbers are accurate. The masses don't believe this rally.

Gold Power
Black Blade
(10/11/1999; 21:55:51 MDT - Msg ID: 16112)
GD and Bonedaddy
GD, I've found that Ted Arnold is nothing more than a charlatan posing as a gold analyst. He used to work for M. Lynch as a gold analyst. He was let go to "pursue other interests". So he ended up at Prudential, eh? It is interesting that Lynch and their metals analysts are now pro-gold after Ted's departure. I wonder how long before he leaves Prudential to "pursue other interests" This guy has rarely got it right, so I wonder how it is that he is taken seriously. He predicted gold as low as $150 to $200. Come on now, that is well below the average total cost of production! I like this euphemism "to pursue other interests". I'm sure we all know what that means. On a side note, I have many friends who work for Newmont, they don't call it "Screwmont" for nothing.

Bonedaddy, nice! Since I returned from SE Asia, I have returned in time for deer season. I bagged a 4 point day before yesterday in my backyard with a nice little .257 Roberts, gift from an aunt who passed away a fews back. I used to live in Montana before the "beautifull people" arrived and took it away from us, all so they could make it their private play ground in summer before they returned to NY and CA. I've seen a couple of interesting bumper stickers lately, "Thanks for visiting Montana, now go back to California" and "Don't Californicate Utah!"

Gold Power
(10/11/1999; 21:57:36 MDT - Msg ID: 16113)
Newmont Hedge Position
If I understand what's being said correctly, I see a real problem in NEM's hedge position. Here's what they say:

"Secondly, we purchased puts for 2.85 million ounces to be delivered over the next two years at a strike price of $270 an ounce, which is essentially our break-even gold price. This is the price protection that McConvey is addressing.
Puts do not involve forward sales and we could have purchased them for cash. However, it seemed more prudent to finance the puts through the issuance of long-term call options, which is a hedge.

"Thus, our third transaction, the issuance of call options for 250000 ounces a year in 2004 and 2005 at $350 and ounce; 500000 ounces in 2008 and 2009 at $380 and ounce, and 50000 a month for 17 months beginning in March, 2008 at
$392 and ounce. If the gold price reaches these levels in those years, we have the option of rolling the contracts over into a spot deferred contract."

It appears to me that instead of buying put options, the company wrote call options. This in order to save money (the premium on the options.) The problem is that once the options are in the money, the company has unlimited liability. If gold goes to $1,000, NEM has to pay up to the party that bought the call.

The company says it can defer the contracts several years out. This is a statement of faith that the price of gold, if it spikes up, will certainly come back down at some point in the next several years.

Good luck.

This is my understanding of what was said by NEM. I am no expert in this field. Like others, because of what's happened the past two weeks, I am trying to get a handle on it and become an expert.

If there's someone here who sees a flaw in my understanding or explanation, will you be so kind as to show that to us.

Gold Power
ORO
(10/11/1999; 22:09:24 MDT - Msg ID: 16114)
GoldPEC and PlatPEC
Russia and South Africa are major Plat producers. FOA and others pointed out the gas for Euro deal with Russia.

The recent talk of the South African's "GoldPEC" and the above are, no doubt, the indications needed for the conclusion that ZA and Russia are on board with the BIS, though they are still allowing the IMF camp some slack and dangle the occasional carrot. Russia is probably angling for a "debt forgiveness for gold loans" deal, and is selling itself to the highest bidder.
I like pointing out that Russia changed its gold policies when their spy at the LBMA was exposed. I also like pointing to assasination of the ZA mines minister. The deliverers of IMF lies that sold their countries into debt will most likely be burried in simillar retribution all over the world. Watch for it. When these types of assasinations occur methodically throughout the third world. We will be able to see the progression of conversion to the side of the BIS.
Why must they be assasinated? Because they are internal scapegoats and the prospect of an inflaming public investigation that endangers all the power structure and may put the politicos in a posiiton of choosing between having to blast at the US and taking cooperative action with the rest of the fleeced, or facing severe internal turmoil. The assasination is in the way of giving a non-ignorable signal to the rest that there is a power shift.
Black Blade
(10/11/1999; 22:15:55 MDT - Msg ID: 16115)
Bonedaddy
I don't know if you are from Montana, but I used to hunt elk in the Pintlar's south of Anaconda and at Lolo Pass depending on what tag I drew. I'm originally from Missoula. If you wish to see some great historical sites in the gold mining community you might want to check out Virginia City, with it's small placer mine museum, and Nevada City, east of Alder, Montana. Another place is Bannock (ghost town) south of Dillon, Montana. There is still a small placer operation at barton Gulch, south of Alder, Montana. All these places are near each other,and I might add that "blue ribbon" trout fishing streams are abundant. Wonderful country and great place to visit!
Black Blade
(10/11/1999; 22:24:02 MDT - Msg ID: 16116)
ORO
I'm not sure what ZA is, is this Zambian? I know that there were assasination attempts on SA officials. Also, I thought that Russia by-product PGM stockpiles were nearly depleted and therefore that was the reason that deliveries were postponed. BTW, you have presented some great posts. Enjoy reading your thoughts.
canamami
(10/11/1999; 22:39:10 MDT - Msg ID: 16117)
Physical Gold-RRSP's-Apologies to Forum
There were various posts today concerning whether physical gold could be placed in an RRSP. I had posted at one time that putting physical gold in an RRSP was legal, provided the policy of your RRSP trustee permitted this. However, I checked at the Revenue Canada site today, and I must advise my previous statement was wrong. According to Revenue Canada, precious metals are not a "qualified investment", nor is real property, though a mortgage on real property is ok. I apologize for misadvising the Forum; I thought I had read otherwise in a Revenue Canada publication. Another "gift" law from the tyrants who run Social Fascist Canada.

The POG is off to another poor start. Things better turn around soon, or negative sentiment will start driving the POG down, barring of course further events, or short covering, or massive dollar decline, etc., turning things around.
Chris Powell
(10/11/1999; 22:54:31 MDT - Msg ID: 16118)
Stampede into gold shares imminent
http://www.egroups.com/group/gata/250.html?Latest dispatch from
GATA's Bill "Midas" Murphy.
onlychild
(10/11/1999; 22:56:01 MDT - Msg ID: 16119)
Richard, Oregon (10/11/99; 20:45:39MDT - Msg ID:16105)
Richard, Oregon I believe that Hill B was referring to the fact that prior to 1982 pennies were solid copper. When copper reaches around 90 cents a pound the pre-82 pennies are worth more as scrap than as money. In 1982 pennies were made in both solid copper and in copper clad zinc. All post '82 are copper clad zinc. Your '64 UC may carry some numismatic value above their face value but it would be minimal at this time. Still, I would put them back for later. With copper at present levels (55 cents) pennies are worth more at face value than scrap. All the same I keep the pre-82's and ship the rest. You never know......
elevator guy
(10/11/1999; 22:59:42 MDT - Msg ID: 16120)
@canamami
Take heart, there is much shake up out there in financial land. Mines out of business means less supply, ECB announcement means less supply, great demand out there, all those lease rates didn't go up for nothing, and the bulge of calls are being held, until the dam breaks. $66 billion in losses will create attention, and don't forget Bill Murphy is still gunnin' for victory.

There are still some big chunks left that will hit the blades soon, so take heart!
gidsek
(10/11/1999; 23:19:46 MDT - Msg ID: 16121)
from Kitco
Date: Tue Oct 12 1999 01:18
2BR02B? () ID#12079:
-
PRECIOUS METALS: Commitments: Gold data questioned

Oct 11--2211 GMT/1811 ET

.................................................................
BRIDGE UPDATE--
TOP STORIES:

REPEATS: METALS COMMITMENTS ANALYSIS: GOLD DATA QUESTIONED
New York--Oct 8--Today's Commodity Futures Trading Commission Commitments of Traders report for gold futures showed virtually no change in speculative shorts, a highly unlikely scenario that has spurred the CFTC to review the data.
Silver shorts were nearly slashed in half while silver longs increased. Copper saw liquidation of both shorts and longs. ( Story 2099 )
-----------------

gidsek
TEX
(10/11/1999; 23:21:14 MDT - Msg ID: 16122)
Now......It All Makes Sense
For a newcomer in the GOLD investing scene, the North/Hathaway links provided by AEL are worth their weight in GOLD. Now, everything is really starting to come together and I'm "gettin it". These will stay in my bookmarks for a long time. You guys are great.
gidsek
(10/11/1999; 23:24:04 MDT - Msg ID: 16123)
From Bill Murphy



Subject: John D. Meyer - An Open Letter to the Gold Mining Community/ Sir Harry Schultz
Sent: 10/11/99 10:32 PM
Importance: Normal


Le Metropole members,

John D. Meyer, GATA Treasurer, has served
commentary at the Matisse Table entitled,"An Open
Letter to the Gold Mining Community."

"Several months have passed since we last wrote to you.
The months have been filled with the bitter and the
sweet. Certainly the Bank of England announcement on
May 7th was a painful period for the gold community.
The "reign of terror" intensified as June approached
and the bears' siege continued to hold us hostage
throughout the summer. Then on Sunday September
26th the world of gold was stunned by the announcement
of the European central banks. In one dramatic move
the "reign of terror" was broken. For
GATA it has been a defining moment validating our cause.
The power of the advance has furnished the clearest
evidence to date of how aggressively the
gold market has been manipulated."

Cafe members and internet,

Some public credit is coming my way. I would like you to
know what a time consuming and courageous effort that my
colleagues, John Meyer and Chris Powell, have put into
GATA.

Our credibility grows mightily every day. Much of it is
do to their efforts. We have become lifelong friends as
a result of our trench warfare like battles. They are
great guys and gentlemen of the highest calibre.

They have some company. Sir Harry Schultz, the newsletter
wizard of Switzerland and Monaco, has been one of our
staunchest supporters right from the gitgo. What a class
act he is and, boy, is he ON THE MONEY!

The following is from Sir Harry's latest newsletter.

Gold

Glitters a Gain!

Oh, how sweet it is! After years of immoral & illegal
manipulations by bullion dealers, bullion banks &
bullion brokers, aided bycertain govts, gold broke
loose. The price-fixers haven't given up; they still
don't want a free mkt for gold, but they know they're
in for a battleroyal. There is so much to tell I'm in
the same position as with Y2Kreports. I've got 1000
pages of notes, but limited space, so (as with Y2K)
I'll suggest (below) how U can get more info & how
to keep up on the dailygold in-fighting. It's a very
exciting, bloody battlefield I assure U. Thestage was
being set for a price breakout before the Euro central
banks (CB)made their dramatic announcement that CB's
would freeze/limit gold sales &halt gold loans for 5
yrs. The news ricocheted around the world in minutes
& bullion burst its 20-year shackles. But, as Sunil
Madhok, of UAE, says on http://www.gold-eagle.com ,
"The CB's didn't do this to help gold bulls. But
they didn't want the bears slain (so they permitted
some sales). They had no option. Speculators (eg, NY
bullion banks & the anti-gold mafia) were hammering
gold with no regard to the massive supply/demand gap.
If CB'shadn't acted, the imbalances would have proven
catastrophic (in light of the huge short position)."
Pressure was also being brought to bear on Euro govts
by developing gold-producing nations. And GATA was
revealing the illicit tactics of the dealers/bankers.
UK's fluky gold sale was being exposed as a political
favour. Blair was in hot water.

Gold mines who hedged (sold gold forward or bought
puts) heavily, found themselves in trouble, as we forecast,
& we don't bleed for them; we said it was like eating
your young. Some were "forced" into it by bullion
banks who threatened them with lower credit rating
if they didn't. Blackmail! Shows how vicious the
greedy price-fixers are. Ashanti Gold was example.
Gold rose $8, but stock fell $4 same day. Margin
calls killed them, only avoiding bankruptcy, so far,
via the bankers "Red Cross." Goldman Sachs was
Ashanti's "brilliant" dealer who got them short
over their head. Barrick is another over-hedged mine
& stock is under-performing non-hedgers. Stockholders
screaming for true mkt exposure info.

The price-fixers keep feeding the press & producers
misinformation about the size of the gold short
position, hoping to jawbone the price down. Ted
Arnold apparently gets paid for trashing gold, as
he has for years. Other mistaken info (intentional
or otherwise) comes from Chase, Deutsche Bank,
JPMorgan, AIG, Goldman, says Bill Murphy of GATA
(Gold Anti-Trust Assn) who calls this "one of the
great financial scandals of all time." CNBC/CNN give
lots free airtime to gold bad-mouthers, but won't
let Murphy speak. Of course, TV is owned by insiders.
Freedom of the press has always meant freedom for
insiders to press their case. For true stats on gold
mkt, contact John Hathaway at the Toqueville Gold
Fund & Caeser Bryan at Gabelli Gold Fund.

For daily update on the gold war, download free at
popular http://gold-eagle.com , & subscribe to GATA
website, the attack force for gold freedom at
Lemetropolecafe.com or US fax: 413.528.6903. GATA
also needs contributions for its anti-trust fight
against price-fixers. 2 Hslms sent big cash last mo.
Thank U. Need more. If U want goldfreedom &
goldhigher, send $. �Murphy foresees $600 gold a bit later.

Says Fed is biggest worry; the price-fixers want Fed to
intervene; report is they already have, selling gold
futures. But gold genie is out of bottle, & aside from
setbacks, it's unlikely the gold bull mkt can be
stopped. As a chartist I note, basis London PM fix,
a pullback to 289 would be a 50%normal technical
retracement of recent up-swing & a great buy-more spot.
But U'd have to place orders now, not after the event.
Traders hope for pullback to 300-310. One day soon
U'll wake up to a $100 overnight rise, so don't be
naked out. Producer buy-backs are coming. �As with
Y2K, I've only used 10% of my notes, so please
access gold fax/web sites. The gold war has barely
begun. We'll win/lose battles, but win the war &
get a free gold price.

PS:

Bill Gates bought 10% of a silver company. Silver
will be exploding also.

Harry Schultz
http://www.ihsl.com
hsl.mentor@skynet.be
Tel +32 (for Belgium) 16 533 684 --
Fax +32 16 535 777
Postal address: HSL, PO Box 622, CH-1001
Lausanne, Switzerland
12 October 1999



All the best,

Bill Murphy
Le Patron
-------------------

gidsek






ORO
(10/11/1999; 23:30:59 MDT - Msg ID: 16124)
FOA
Thank you for passing on my posts.

I have been looking for professional criticism before I put them together as a publishable article series.

Which reminds me, I need to reply to Yellin' of Troy.

Black Blade, it may be the case that the Russian stockpiles have been depleted, but I think that stockpiles are whatever size the Russians need the buyer to believe them to be.



el St.One
(10/12/1999; 02:58:39 MDT - Msg ID: 16125)
POG DEC Futures
3:30 to 4:15 EST Straight up From 318 1/2 to 325 in a fast 45 Minutes London must know something new.
ORO
(10/12/1999; 03:03:43 MDT - Msg ID: 16126)
Yellin' of troy - IOU the treasure of Troy
Let me start by saying that the argument here begins by separating the forced demand portion of the determinant of money, and the concrete issues involved in concept money vs. commodity money. I state outright that the value of concept money is 0. The value of the concept OF money, is great and imesurable.
Stright concept money is devoid of value of convenience, devoid of any value but that provided by its forced demand. It is exclusively the ability to settle a debt, a specified transaction, or pay taxes denominated in it. i.e. as the equivalent of shorting Amazon.com, only Amazon.com shares will settle the debt. If the central banks of the West come to an agreement to denominate oil and gold transactions in Amazon.com stock, one must buy it (directly or indirectly) if one wants either of them, at least outside the country of production. Taxes denominated in a particular currency forcibly put one into a denominated debt. These are the sole sources of value of a currency outside of the power of
the legal tender laws. Ultimately, for one not indebted and not in need of the denominated items, the latter is its only source of value.
A reciept money is just as easy and convenient as backing free paper or electronic money. All debts, taxes and transactions may be settled in a money chosen by the markets rather than forced upon them. The ultimate value of money must reside in the cumulative effort put into its production and its scarcity. Otherwise it is either a debt or a fraud. Legal tender laws make sure that it is both.

The final abstraction of the concept of money as that which buys things and services, and settles debt is the abstraction of the concept of money into meaninglessness. Here, Julian Jaynes is as wrong as ever and applying Daniel Dennett's reasoning is wrong as well. A common barter item accepted by most in trade is money, whether one is aware of it being so or not, the concept is there implicitly, but the thought of a theoretical pure concept money is not necessary at all. Quite frankly, the pure abstraction money is exactly the error of mistaking the mention for the use. It is ignoring the practical, historical, and conceptual significance of the issue of value in money. The ultimate issue in the VALUE of fiat concept money is that it is a claim against all FUTURE individual labor (or its products, or accumulated assets), a claim FORCED upon all for collection. In its core, it relies on the concept of slavery.
In the short or long term, when holding pure concept money you are penalized in inflation and granted a windfall in deflation. Though the banking system is built arround the creation and destruction of debt in what may be claimed to be a free market, its medium is the claim for a note issued by a government related agency, and its credibility is based on the ability of that agency to supply infinite ammounts of notes to cover the bank's obligations to its depositors. The note in itself has value only because of the obligations denominated in it, and most of all, by the government decree of the use of government sponsored violence against any who would not accept it as payment.

Asynchronous deals involve the creation of a deferred obligation, a.k.a. debt, or the short term use of money as a store of value, until the second part of a deal is concluded. The multiparty deals are indeed another part of the usefulness of money. But one thing should be remembered; the concept money may actually provide for these just as well as a commodity money (in the form of a receipt or in physical form). However, the big difference is in the labor of its creation and replacement. Commodity money is produced through labor and will trade at the value of the labor (including accumulated labor in the form of capital) necessary to replace it in the quantities needed for its use as money. Concept money is just printed out or electronically produced with an indirect input of government police, courts and military held for the purpose of forcing its acceptance. Beside the need to pay taxes, settle debt, and buy products available only in exchange for the particular currency (as decreed by government), the concept money has no intrinsic value deriving from its actual use as money. Any attempt by the poppulace at large to redeem the concept money in goods and servaices, quickly reveals its value.
The only times this sort of money has ever managed to survive have been those in which a carefully adjusted chanism kept it from being challanged. The mechanism is controlled by the Central Bank of the issuing country and its allies, adjusting supply and demand for the currency to achieve stability in some financial or economic indicators. The tools of the trade for the balance of the volumes of debt and the economic activity that services it, are the regulated interest rates (interbank and at the Central Bank window), the supply of reserves, as well as the determination of the level of reserves required. Fiscal policy is used to balance the supply of money from economic activity. Various choices in the regulation of the economy and selective taxation of particular activities can also be used to assure the desired balances. The degree of apparent success in this manipulation of economic and financial activity, and the longevity of the success, dictate the size, scope and duration of the failure. But fail it must. It is not IF, but WHEN.
In simpler form, the fact of apparent success is a measure of the scope of the failure during the unwinding.

Why must the system fail? There is no way, known or knowable to humanity, to adjust the various tools of the trade without forming gargantuan economic distortions on the scale of billions of people spending their life digging ditches while another set of billions fills them in, providing nothing of value. The simple presence of the fiat money is the main distorting force. Anything done to correct the distortions creates new ones, the effort to correct these creates others. The longer the system survives, the deeper and more elusive the distortions. Finally, two things happen approximately simultaneously (1) the people bearing the weight of the distortions either buckle or revolt, (2) the people benefitting from the distortions try to turn their "money". into things.

Some numbers later.
Aragorn III
(10/12/1999; 03:20:29 MDT - Msg ID: 16127)
Some questions and comments
canamami:
In your post (10/09/99; 12:55:04MDT - Msg ID:15928) you commented "There probably isn't enough gold extant to effect a return to the gold standard".

Putting aside the issue that this is not to be the gold standard of recent memory, how many more grams would be required for you to reevaluate "not enough"?

And also, you have expressed recently a concern surely shared by others "The POG is off to another poor start. Things better turn around soon, or negative sentiment will start driving the POG down".

Take note when FOA says "we are on the road" for truly, we have been run over by a Brinks truck (in a good sense), and to trouble over sentiment at this time is to worry whether it is crows or eagles that come to pick your bones. Either way, you are borne away on wings. With or without points for style on method of arrival is of small consequence, for the destination is the same.

YGM:
You said in your post (10/08/99; 19:01:25MDT - Msg ID:15903):
"Would someone enlighten me as to whether or not one of the present 11 member Nations currencies would be better to hold for later (Jan?) conversion to the Euro? If so which one. Thanks--YGM. **I'd just like to think I had a head start in the race coming soon"

The legacy currencies are fixed, so the choice is no more consequential than deciding whether quarters or dimes make the better change for later conversion to a dollar. Introduction of euro tender is not planned until January 2002, but why buy euros for a "head start in the race" when you may yet buy (or work your Yukon mine) for gold which will put you already at the finish line? You may then sit back while others run, and your value will be delivered on wings (crows or eagles?) far ahead of euros.

ORO:
You offered these ideas ORO (10/07/99; 22:31:54MDT - Msg ID:15823)
"...there are problems in this conception. Which, in some years into its establishment, will cause a disaster no different from that of the $. Gold would then suffer severe discredit."...
"The secondary flaw is the imposition on the markets of a preference to gold that is not of the market's own choosing. So far, my thinking indicates that this will cause the junior, but more rare, PMs to push gold out of the marketplace and replace it with these surrogates for which the governments do not bid. Again, a gold bubble would form since that is what this system is all about, then the markets will find retribution through the other metals.
Has there been any thinking in this regard?"

Perhaps you could discuss with canamami the point at which rarity becomes a burden or an asset in monetary use. On the point of the PGM's as a pure alternative for which the governments do not bid, could that advantage, as you see it, be rendered undone quickly and easily with one bid at any time...by government?
And also your related follow-up post:

ORO (10/08/99; 10:06:21MDT - Msg ID:15855)
"Though a question of detail, I think the concept is flawed at its root. The structure itself is still as dangerous as any paper structure. The mispricing of gold as a result of the arbitrary decision to use it as money backing for an inflated currency with heavy interest in strength, has way too much economic damage and dislocation built into it.
Is it better than the current system? Yes, that's easy. But it will have its' own quirky ways to make sure the distortion is obvious."

In each post you seem to say that the monetary value of gold would be a fiction, propped up by the will of government, and doomed to eventual collapse. Consider by way of contrast the value the marketplace puts on identical 15.8 cm x 6.6 cm paper slips by Crane & Co. printed with green and black ink, differentiated only by the numbers printed thereon...1's, 10's, or 100's. Or more bizarre, consider the similar value placed on intangible digital records of the wider scope of lending and transactions. One might easily make the argument that both these "dollar commodities" are mispriced, yet who are we to argue with the market which has found these to be useful and valued as such?

The dollar is to collapse in value because its global use is to be replaced by a superior (more stable, "fair", etc) method of "keeping the world score". Gold will be rewarded for its perfection accordingly; with high value no more bizarre than that conferred on paper or electrons. The threat of collapse to this new gold value would come only on the heels of a score-keeper better still. There is no such replacement that my simple mind can imagine, though I am content to leave that distant future to those who strive to make that distant future a better place to live upon that day's state of the art.

ORO, I believe you will enjoy the thoughts found in the link given above as first provided by the TownCrier. It may give you additional thoughts on the notion of a government "arbitrarily" deciding to force gold upon mankind...a mankind that demonstrates a willingness take it all with open arms.

got gold?
Aragorn III
(10/12/1999; 03:28:58 MDT - Msg ID: 16128)
This was the link I referred to
http://www.usagold.com/whithergold.htmlORO, perhaps you've addressed some of the elements raised in this post to Yellin of Troy...I have only read the first lines when realization hit that the link was omitted from my post. I will read further, but must leave the computer for a time. Your thoughts on this link would be welcome.
ORO
(10/12/1999; 03:35:14 MDT - Msg ID: 16129)
Modern econ
It takes years of professional training to shed one's common sense.

Applying basic principles and avoiding the pitfalls of arguments made for the purpose of obfuscation and self promotion, one can go through the current cloud of smoke filling the academic texts and minds of the students, the practitioners, and their teachers.

The bottom line is that most economists would be working today in microeconomic analysis and would not deal in macroeconomic issues if the principles of Austrian economics were practiced. There would be no Central Bank, almost no fiscal policy to be determined by treasury, no World Bank, no IMF, no OECD etc...

The whole business of being an economist dealing with monetary policy and financial tracking would disappear, simple as that. Modern economics is more a matter of finding an excuse for people getting hired than it is a matter of finding out how economies work. In a way, it is the buying of support from the academic community to for the government's policies and its interest in expanding its powers or benefiting one group or another.

Aside from economists at the Fed and treasury, most every financial company employs teams that try to guess what fiscal and monetary policy are going to be, and how certain events will change them, and then figure out the impacts and where money is to be made.
ORO
(10/12/1999; 04:12:42 MDT - Msg ID: 16130)
Aragorn III
Thank you for the link, I'll read it.
It is a pleasure to see your comentary on my writing. An honour.

The main point is this. The gold standard was the closest we have come to a pure market derived money. However, the bimetalic standard would have been better if the government let a gold $ and silver $ compete in the marketplace rather than try to fix their ratio. Why? because the markets would have one more degree of freedom in choosing their money.

Some things have changed.

1. The silver hoards of old are gone, but will be built up again. Silver will compete with an inflated gold.
2. The PGM metals, having similar properties to gold will rise with it as alternative money. These were barely known to exist, not to speak of the technology of extracting them in quantity, during the heyday of the gold standard.
3. The interest of the ECB and other paper printers in getting something for nothing through this gold backing scheme is a strong driver for the distortion of the markets. Most likely, it would start with a world scamble to pick out and develop gold deposits. 3-8 years later, gold will be supplied into the economies of the world at a rate that would swamp the CBs at the $30k level (if they allow it to come near that) with a $ devalued to 20% of its current value.
3.1 The movement of resources into gold production would cause the price of production competing for these resources to move up tremendously at the initial stages.
3.2 The issue of further paper to chase after the gold to maintain its price (and hence % backing of the currency) will cause further price inflation as the extracted gold hits the markets and is absorbed by the CBs.
3.3 The private gold owner, having borrowed heavilly currecy against his gold, in a reversal of the current pyramid, would be crushed upon the collapse of gold values. A deflation to follow the inflation.
3.4 The wildcards - PGM and silver (copper?) or surrogate commodity basket reciepts. The preference of the one medium over these without accepting market determined exchange rates between them as equivalent to gold would be a distortion. To avoid it, the CB must give up its existence altogether, and give up the power to choose what money is. Choosing the top 3-6 items chosen by the markets as acceptable substitutes for gold could do the trick, and avoid the market's vengeance when these are ignored.
4 Immobilization, which I argued before, and ANOTHER had alluded to as well, would result from the preferred method of cashing in gold when it is in flight, by borrowing against the holding rather than using it (just as in real estate), till the CBs stop sucking gold in.

There is much more to discuss. But that's it for now. Got to take a break.

I'll come back later in the afternoon.
RossL
(10/12/1999; 04:40:06 MDT - Msg ID: 16131)
ORO
Quote

Some things have changed.

3.2 The issue of further paper to chase after the gold to maintain its price (and hence % backing of the currency) will cause further price inflation as the extracted gold hits the markets and is absorbed by the CBs.

3.3 The private gold owner, having borrowed heavilly currecy against his gold, in a reversal of the current pyramid, would be crushed upon the collapse of gold values. A deflation to follow the inflation.

4 Immobilization, which I argued before, and ANOTHER had alluded to as well, would result from the preferred method of cashing in gold when it is in flight, by borrowing against the holding rather than using it (just as in real estate), till the CBs stop sucking gold in.

Unquote

Could you spend a moment to clarify a point? You seem to be calling for a switch from paper money inflation to deflation in a few years after gold production gets ramped up. A gold holder will suffer if he has borrowed paper against his gold. But in item 4, this is stated as the preferred method?
ORO
(10/12/1999; 04:41:48 MDT - Msg ID: 16132)
one more, Aragorn
There is no problem in getting enough gold to supply liquidity.
Some Indian ladies will buy washing machines, and get the house fitted with new water and cooking fixtures and appliances.
This force in revaluing gold makes the worst of the known reserves mineable. If, in real terms, the $ price would be equivalent to $6000 of today, then viable reserves will more than tripple and more exploration will be conducted.
Gold production will grow as autoclaves and mining equipment are produced instead of everything else.
The real questions are (1) how long will it take, (2) how far will the ECB go, (3) will any of the gold actually hit the market, or (3a) get absorbed into the producer countries' CBs, or (3b) be kept by the miners and expenses just borrowed against it. (3c) Would you actually let go of it? would you just borrow against it?
The latter is what bugs me most. If it is predominantly used as collateral like Tokyo real estate used to be, then the whole thing will become as much a bubble as anything that preceded it. Again, Immobilization through the self-fulfilling expectation of continuous price increase till it all crashes. I shudder just to think of it.
The Invisible Hand
(10/12/1999; 04:44:58 MDT - Msg ID: 16133)
question: Margin Calls?
A margin account is an investment account whose assets are used as collateral to secure a loan. An investor might borrow money against his investments in order to purchase a greater quantity than would be possible on a cash basis, or to raise cash without selling investments. (Harry Browne)
But what's a margin call? Or what are the margin accounts in the gold carry trade?
I apologise for my ignorance.
ORO
(10/12/1999; 04:45:33 MDT - Msg ID: 16134)
RossL
Faced with a steep long climb before, it is our nature to expect it to continue. It is further in our nature to hold on to that which served us so spectacularly well while still trying to cash in some of it. Immobilization through leverage is the great danger. Like so many tech stocks held on margin.
ORO
(10/12/1999; 04:56:41 MDT - Msg ID: 16135)
Clarification
It is currently not known to me what treck would be followed, how transparent or artificial the inflation of gold would be, and how people would actually respond.

I can say that Joubert's study of market volumes in sharp price swings indicates that during the major portion of a price rise volume is very low, though it may be high at the beginning and high towards the end. (see recent pickup of volume on the dow)

As told above, the markets include only the most reluctant of sellers on the way up, and the most reluctunt of buyers on the way down. These limit volume despite high demand, and bring about the market's search for a price to induce the unwilling to move their stuff.
SteveH
(10/12/1999; 05:35:00 MDT - Msg ID: 16136)
Dec. gold now...
$324.40, up $4.20!
RossL
(10/12/1999; 05:42:19 MDT - Msg ID: 16137)
question: Margin Calls?
Your broker and The COMEX currently require $2000 margin to long or short a 100 ounce gold futures contract. If I shorted one contract when gold was $260 and it is now $325, then I have lost $6500. Since I started with $2000, I now owe $4500. That phone call from my broker telling me to pay up is a margin call.
SteveH
(10/12/1999; 05:43:20 MDT - Msg ID: 16138)
repost
www.kitco.comOro, you have been working overtime. Keep it up (but get some sleep too).

from kitco:

Golden Sails (Worth a repost: Fed gives green light to gold!!! (IMHO)) ID#374132:
Copyright � 1999 Golden Sails/Kitco Inc. All rights reserved
Golden Sails ( It seems as clear as a bell to me ) ID#374132:
Copyright � 1999 Golden Sails/Kitco Inc. All rights reserved
I believe the Fed is FULLY SUPPORTIVE of the U-turn move to allow gold to float in a free market, to realign itself in price relative all the fiat paper
out there. ( Recall AG's recent affirmation of gold being respected worldwide and supporting a country's currency. Also recall RR's vote for the IMF to
sell gold, and his subsequent departure... Dissention in the ranks? AG, true goldbug, won out, me thinks! ) The US Fed has been buying gold hand over
fist -- not to mention the Japanese who are holding all that US paper --with the purpose of lending support to the dollar ( to the extent that it can be
supported ) when gold reaches $2,000 to $3,000 per ounce. They see this as the end of the road, i.e. the end game of the paper trail and are taking the
only viable ( and least painful ) option available to them, by allowing gold to move higher in a newfound free market. Return to the gold standard of
yore, I surmise.

Opinions, anyone??


from GATA:


Le Metropole members,

John D. Meyer, GATA Treasurer, has served
commentary at the Matisse Table entitled,"An Open
Letter to the Gold Mining Community."

"Several months have passed since we last wrote to you.
The months have been filled with the bitter and the
sweet. Certainly the Bank of England announcement on
May 7th was a painful period for the gold community.
The "reign of terror" intensified as June approached
and the bears' siege continued to hold us hostage
throughout the summer. Then on Sunday September
26th the world of gold was stunned by the announcement
of the European central banks. In one dramatic move
the "reign of terror" was broken. For
GATA it has been a defining moment validating our cause.
The power of the advance has furnished the clearest
evidence to date of how aggressively the
gold market has been manipulated."

Cafe members and internet,

Some public credit is coming my way. I would like you to
know what a time consuming and courageous effort that my
colleagues, John Meyer and Chris Powell, have put into
GATA.

Our credibility grows mightily every day. Much of it is
do to their efforts. We have become lifelong friends as
a result of our trench warfare like battles. They are
great guys and gentlemen of the highest calibre.

They have some company. Sir Harry Schultz, the newsletter
wizard of Switzerland and Monaco, has been one of our
staunchest supporters right from the gitgo. What a class
act he is and, boy, is he ON THE MONEY!

The following is from Sir Harry's latest newsletter.

Gold

Glitters a Gain!

Oh, how sweet it is! After years of immoral & illegal
manipulations by bullion dealers, bullion banks &
bullion brokers, aided bycertain govts, gold broke
loose. The price-fixers haven't given up; they still
don't want a free mkt for gold, but they know they're
in for a battleroyal. There is so much to tell I'm in
the same position as with Y2Kreports. I've got 1000
pages of notes, but limited space, so (as with Y2K)
I'll suggest (below) how U can get more info & how
to keep up on the dailygold in-fighting. It's a very
exciting, bloody battlefield I assure U. Thestage was
being set for a price breakout before the Euro central
banks (CB)made their dramatic announcement that CB's
would freeze/limit gold sales &halt gold loans for 5
yrs. The news ricocheted around the world in minutes
& bullion burst its 20-year shackles. But, as Sunil
Madhok, of UAE, says on http://www.gold-eagle.com ,
"The CB's didn't do this to help gold bulls. But
they didn't want the bears slain (so they permitted
some sales). They had no option. Speculators (eg, NY
bullion banks & the anti-gold mafia) were hammering
gold with no regard to the massive supply/demand gap.
If CB'shadn't acted, the imbalances would have proven
catastrophic (in light of the huge short position)."
Pressure was also being brought to bear on Euro govts
by developing gold-producing nations. And GATA was
revealing the illicit tactics of the dealers/bankers.
UK's fluky gold sale was being exposed as a political
favour. Blair was in hot water.

Gold mines who hedged (sold gold forward or bought
puts) heavily, found themselves in trouble, as we forecast,
& we don't bleed for them; we said it was like eating
your young. Some were "forced" into it by bullion
banks who threatened them with lower credit rating
if they didn't. Blackmail! Shows how vicious the
greedy price-fixers are. Ashanti Gold was example.
Gold rose $8, but stock fell $4 same day. Margin
calls killed them, only avoiding bankruptcy, so far,
via the bankers "Red Cross." Goldman Sachs was
Ashanti's "brilliant" dealer who got them short
over their head. Barrick is another over-hedged mine
& stock is under-performing non-hedgers. Stockholders
screaming for true mkt exposure info.

The price-fixers keep feeding the press & producers
misinformation about the size of the gold short
position, hoping to jawbone the price down. Ted
Arnold apparently gets paid for trashing gold, as
he has for years. Other mistaken info (intentional
or otherwise) comes from Chase, Deutsche Bank,
JPMorgan, AIG, Goldman, says Bill Murphy of GATA
(Gold Anti-Trust Assn) who calls this "one of the
great financial scandals of all time." CNBC/CNN give
lots free airtime to gold bad-mouthers, but won't
let Murphy speak. Of course, TV is owned by insiders.
Freedom of the press has always meant freedom for
insiders to press their case. For true stats on gold
mkt, contact John Hathaway at the Toqueville Gold
Fund & Caeser Bryan at Gabelli Gold Fund.

For daily update on the gold war, download free at
popular http://gold-eagle.com , & subscribe to GATA
website, the attack force for gold freedom at
Lemetropolecafe.com or US fax: 413.528.6903. GATA
also needs contributions for its anti-trust fight
against price-fixers. 2 Hslms sent big cash last mo.
Thank U. Need more. If U want goldfreedom &
goldhigher, send $. �Murphy foresees $600 gold a bit later.

Says Fed is biggest worry; the price-fixers want Fed to
intervene; report is they already have, selling gold
futures. But gold genie is out of bottle, & aside from
setbacks, it's unlikely the gold bull mkt can be
stopped. As a chartist I note, basis London PM fix,
a pullback to 289 would be a 50%normal technical
retracement of recent up-swing & a great buy-more spot.
But U'd have to place orders now, not after the event.
Traders hope for pullback to 300-310. One day soon
U'll wake up to a $100 overnight rise, so don't be
naked out. Producer buy-backs are coming. �As with
Y2K, I've only used 10% of my notes, so please
access gold fax/web sites. The gold war has barely
begun. We'll win/lose battles, but win the war &
get a free gold price.

PS:

Bill Gates bought 10% of a silver company. Silver
will be exploding also.

Harry Schultz
http://www.ihsl.com
hsl.mentor@skynet.be
Tel +32 (for Belgium) 16 533 684 --
Fax +32 16 535 777
Postal address: HSL, PO Box 622, CH-1001
Lausanne, Switzerland
12 October 1999

Le Metropole Cafe

All the best,

Bill Murphy
Le Patron
www.LeMetropoleCafe.com


12:40p EDT Tuesday, October 12, 1999

Dear Friend of GATA and Gold:

Today I met with my U.S. representative, John B.
Larson, D-Conn., to express my concern that the U.S.
Federal Reserve Board and the U.S. Treasury Department
are intervening surreptitiously in the gold market to
rescue the financial houses that have been manipulating
the price of gold.

I asked him to try to get answers to the following
questions from the Fed and the Treasury. He said he
would.

Since a bailout by the Fed and the Treasury along the
lines of last year's bailout of Long-Term Capital
Management is now the greatest threat to the
restoration of gold to its rightful place in the world
monetary system, I urge gold's friends and all gold
share investors to put the same questions to their U.S.
representatives and senators. We must put the spotlight
on the Fed and the Treasury and force them to operate
in the open. In secret they can get away with anything.
But not in public.

Please post this as seems useful.

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

* * *

Questions for the Federal Reserve Board
and the U.S. Treasury Department

1) Do the Federal Reserve Board and the Treasury
Department have a policy toward the price of gold? If
so, what is it?

2) Do the Fed and the Treasury trade in gold or in
securities, futures contracts, or options related to
gold, or otherwise influence trading in gold? If so,
how?

3) Do the Fed and the Treasury trade in any financial
instruments besides U.S. government bonds? If so,
which ones and what do the Fed and the Treasury try
to accomplish with their trading?

4) Do the Fed and the Treasury have or control
brokerage accounts? If so, with which brokers?

5) Do the Fed and the Treasury try to influence the
stock and commodities markets? If so, how?

6) Do the Fed and the Treasury lend or lease gold? If
so, to whom, for what national purpose, and under what
terms?

-END-



The Invisible Hand
(10/12/1999; 05:54:01 MDT - Msg ID: 16139)
Margin Calls
Sorry, I didn't catch up with yesterday's discussion before posting my question. Steve quoted Bloomberg in # 16058 and this said:
"Margins are deposits traders must make when buying of selling futures contracts to help ensure their obligations will be met."
RossL
(10/12/1999; 08:11:56 MDT - Msg ID: 16140)
Platinum
Kitco charts show platinum up to $430 in Zurich this morning, but now back to $405.50 in New York. Is that a real move or a figment of the chart wizard over there at Kitco?
elevator guy
(10/12/1999; 08:14:47 MDT - Msg ID: 16141)
Look at the DOW this morning!
http://www.quote.com/livechartscom/I you look at quote.com/livecharts/ you will see that the DOW is tanking this AM.
Anyone know why? Something must have spooked the herd, or maybe its just the morning after a holiday, or what?
Goldspoon
(10/12/1999; 08:31:19 MDT - Msg ID: 16142)
RossL- Platinums Moves
You said...
Kitco charts show platinum up to $430 in Zurich this morning, but now back to $405.50 in New York. Is that a real move or a figment of the chart wizard over there at Kitco?

Ross this is exactly the price action to which i have been refering to in my posts of late.... notice the rise in gold began after the jump in platinum not vise/versa.... The powers that be in New York are merely acting as fire fighters and are trying to contain the fire the Swiss Gnomes keep setting... The New York crowd have a lot at stake....

i will change my "rule" when my rule is violated by the game being played......else continue to watch and learn...
JCTex
(10/12/1999; 08:43:32 MDT - Msg ID: 16143)
Re: FOA comment about watching oil: "London Oil Surges..."
"Oct.12-FWN--London crude oil rose sharply today--the second straight day--as the market continued to retrace last week's steep losses.

Prices for November Brent crude were up as much as 57 cents a barrel earlier in the session, after having risen 53 cents Monday.

N.Y. crude oil futures are expected to trade higher, following London's price gains.

Traders noted that the bias is upward on sentiment follow through.

News that the oil ministers of Iran and Saudi Arabia planned to meet at a gas summit early next month, is expected to underpin today's rebound.

Last week's sell off came on a survey that revealed a 180,000-barrell-per-day rise in well output in September. The survey also showed a dip in compliance with production cutbacks among members, excluding Iraq, to 81% in September from 84% in August.

Special to FWN by the editors of CapitalistEdge.com.
Transmitted: Tue Oct 12 09:12:13 1999


Goldspoon
(10/12/1999; 08:47:35 MDT - Msg ID: 16144)
Platinum/gold's indicator
Platinum went up last night gold then followed...Platinum was sold off this morning in New York gold soon followed..
The powers that be go into a huddle and decide it is time to sell off (push the PM markets down) the buy up or sell down will show up first in the platinum market. WHY? Because it is so thin it is affected first... Want to know the very next move in Gold?? Watch Platinum the BIG MONEY telegraphs their intentions VIA their actions with Platinum!!
USAGOLD
(10/12/1999; 08:50:22 MDT - Msg ID: 16145)
Today's Gold Market Report: Short Side of the Market a Financial Minefield for Big Speculators
MARKET REPORT(10/12/99): Day Twelve of the Big Breakout....Gold went into
recovery mode this morning up as much as $5 in the early going, up $2.30 as we go to
fetch this over to the server........News of the Ashanti merger talks with UK's Lonmin
dampened expectations for gold yesterday as traders felt that Ashanti's $570 million short
position would not have to be unwound. Ashanti, a company valued in total at about $600
million, is also facing a $270 million margin call with the prospect of that going even higher
if the metal continues to rise. Since then a closer look at the numbers and a realization that
Lonmin will back off if the hedge book situation is not resolved has lit a fire under the
yellow metal again. Beyond that, the market is beginning to wonder how many Ashanti's
are out there making the short side of the market a financial minefield for big
speculators..................... Conspicuously absent from lists of counterparties damaged in
the fallout of mining companies and hedge ablaze in the gold carry trade inferno: London's
N.M. Rothschild, the centuries old gold trading firm usually thought of as the center of the
gold universe. Conspicuously present on that list: Wall Street's Goldman Sachs and
Morgan Stanley along with Union Bank Switzerland.........................Says one London
dealer this morning: "What's driving gold is still the fear of further moves to the upside.
There are still positions that have to be adjusted as they are not going to go away unless
gold dips back $40, which it's not going to do. The higher it goes, the more some will have
to focus on what they have to do." ...Oh, the life of the London gold
trader!..................Gold was up $5 in Europe overnight on bullion bank buying
presumably to cover their short positions associated with the carry trade. Bullion banks are
the guarantors of gold loans to the central banks. If Ashanti, for example, bellies up, their
bullion bank counterparties will have to make good on the gold loans..........By the way,
trading has been halted in Ashanti shares ostensibly because of the merger talks, but in
reality so investors don't drive the price through the floor............Gold lease rates are
down again this morning but clinging stubbornly to the 4% level...................... Euro up
three quarters of a cent today........ Treasuries, dollar getting hammered across the
boards...........Dow down 91 as this is written..................'Tis October after all -- when
securities howl and markets go bump in the night.......................Speaking of
conspicuously absent: Avid Yankees fan, Hillary Clinton, whose photo in a Yankees' hat
appeared in every newspaper in the country recently, has yet to be seen at a Yankees playoff
game, according to this morning's New York Post. Reason:
BronxCheerPhobia...................That's it for today, fellow goldmeisters. See you back
here tomorrow.

The October edition of News & Views is on its way to our readers and we invite all our
visitors to take advantage of a free trial subscription to one of the most popular, widely read
and quoted gold newsletters. Last month we predicted an explosion in the gold price. This
month we deal with the nettlesome subject of paper assets in this tenth month of the
penultimate year. And we all know what that means. October brings with it our annual
Halloween issue. Here's an excerpt: "And this October could very well foreshadow a most
fateful stroke of midnight only two months away. October. When markets crash and assets
go bump in the night........." We think you will gain by taking advantage of our
offer...........

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
(10/12/1999; 08:56:46 MDT - Msg ID: 16146)
FOA
Let me make one thing clear...i beleive what FOA says, if he says watch oil you had better watch oil... FOA is connected..... i also beleive my own 4 eyes... as to price actions of platinum fortelling the near term fate of Gold!!.....How many times does an apple have to drop before you beleive in gravity??? When gold violates the platinum rule i will formulate a new rule....ie until the apple falls up gravity still stands....
Goldspoon
(10/12/1999; 09:19:43 MDT - Msg ID: 16147)
Metals price snapshot + curriences
http://www.metalsman.com/masterprices.htmGift from ole Goldspoon...now you can't say Goldspoon never gave you anything but a hard time...
AEL
(10/12/1999; 09:47:32 MDT - Msg ID: 16148)
TEX
http://www.provide.net/~aelewis/gold/goldbear.htmTEX (10/11/99; 23:21:14MDT - Msg ID:16122): welcome to the party! In case you missed it, above is my money page URL -- lots of essential links for metals people.
RossL
(10/12/1999; 10:03:59 MDT - Msg ID: 16149)
Interesting hypothesis from the Gary North Site
http://www.garynorth.com/y2k/detail_.cfm/6466This is from Joel Skousen's latest WORLD AFFAIRS BRIEF (Oct. 8).
* * * * * * * * * *
RESURRECTION TIME FOR GOLD--BUT MOSTLY FOR INSIDERS
After years of central bank gold sales, artificially driving down the price of gold, the establisment has suddenly switched strategies and is allowing the price to rise. This deserves some analysis since none of this has happened by accident and is still the subject of heavy manipulation. I will give a very brief analysis at this time, and hope to have a more complete picture later on this year. I am indebted to my good friend, Steve Tomczak for doing the extensive research and analysis on this. The big players in this manipulation of gold have been US and European central banks, Russia, Middle Eastern Oil countries, the IMF, bullion banks/brokers, and the big mining companies. It's much more complex than I have room to explain, but here is a capsule version: US and European central banks, in collusion with Russia (for unknown secret promises--probably future cash and loans to the elite), began dumping gold on the market several years ago in order to drive the price down. This, we now believe, was intended to negatively impact the gold mining industry and put them in distress. Geo-politically, it also destabilized several African nations who were highly dependent upon gold production and sales in order to finance internal military and economic stability. But unknown to the general public, a huge market developed among insiders to "short" the gold market and make millions of dollars as the price went down. Giant hedge funds, all closely connected with the PTB, also got into gold short contracts in order to profit from what they knew was a guaranteed downward direction of gold prices. Because of the phenomenol profits in gold short contracts, central banks and bullion banks (who broker and store the physical metal for producers) began leasing out the physical gold to insiders, as well, who then would sell at a markup, counting on their ability to buy back the physical gold later, at cheaper prices, when demanded for repayment. This only works as a profitable strategy as gold is going down. If gold rises, they have to buy it back at a higher price, which is disasterous financially. Gold market watchers began to observe last year that the total amount of gold leases and short contracts (a difficult quantity to ascertain without insider connections) actually exceeded the total supply by many fold. So it became obvious that whenever the price started to rise, those insiders shorting gold and leasing gold were going to be unable to recover. When the price of gold started to rise dramatically (biggest one day rise in history) following the announcement of European banks and IMF to stop gold sales for the next five years, I knew that this was the death knell for those insiders shorting gold. The central banks have also agreed not to increase their gold lending arrangements and derivative operations above current levels for the next five years. Never before in history have the big boys been told what they were going to do in advance. Their openly giving out the five year date guaranteed a bull market in gold. It wasn't meant to benefit those who would now buy gold, but rather to destroy those who had been induced to short the market. Not only would the price of gold rise, but there wasn't enough gold available at any price for them to pay off their contracts.

Steve and I went back and forth for days trying to figure out why the establishment would let their buddies (whoever they were, and who had been encouraged to short the market) get caught in a no win situation. Steve may have found a major part of the answer in analyzing WHO the actual players were who were shorting the gold market. By and large, it was the big mining companies themselves, coupled with hedge funds connected to mining interests. Apparently, the big mines were induced by bullion bankers to enter into the hedging game (shorting the market, and selling future production forward) as a means of surviving the downward market in gold. Little did the big mines know that they were being set up for bankrupcy by these insider bullion banks/brokers when the price of gold would finally rise. Since the number of short contracts outstrips even the mine's production, there is no way the mines can pay back the gold that shorted. Rather than be able to take advantage of the increasing price to recover (as the public thinks), the mines are now in BIG trouble. Steve's analysis is that the PTB have set them up intentionally so as to be able to buy them out and control the world's biggest gold mines. If this is true, it is a very important prelude to depression and war. When the insiders go out to control most of the world's gold, you can bet that the inflation of paper currencies is not far off.
Quabbin
(10/12/1999; 10:55:18 MDT - Msg ID: 16150)
TEST
TEST
Strad Master
(10/12/1999; 10:56:18 MDT - Msg ID: 16151)
test
test
TownCrier
(10/12/1999; 11:02:24 MDT - Msg ID: 16152)
Richmond Fed--labor supply "extraordinarily" short
http://biz.yahoo.com/rf/991012/ku.htmlRising prices in the wind...
"The unemployment rate in some areas is below 2.0 percent. There is some suggestion that very low rates of unemployment, unavailability of workers, is pushing wages up. We are looking at pronounced worker shortages in some areas." --Richmond Fed's senior economist Raymond Owens
Gold Power
(10/12/1999; 11:03:35 MDT - Msg ID: 16153)
Gary North Scenario
I am very unimpressed with Gary North's analysis. He talks as if he is sure of what he's saying, but he actually admits that he and his buddy worked together for days -- after the fact -- trying to figure out why the insiders were doing it.

If North knew what he was talking about, he would have been able to tell us before time what the insiders were doing.

As it is, he's just taking a set of events, attributing motives to unnamed persons, and selling it to the public.

His "insiders" are about as realistic as Sherlock Holmes' "Moriarity." Anyone can concoct some mythical set of conspirators and then -- after the fact -- attribute certain events to their operations.

If North knows of their existence, then he should be able to predict what they will do before they do it.

Gold Power
TownCrier
(10/12/1999; 11:16:55 MDT - Msg ID: 16154)
Tea leaves: Most IMM currency futures higher in early trade
http://biz.yahoo.com/rf/991012/lb.htmlNot a good day for ANY type of dollar currency futures so far...
December
yen up $0.000097
euros up $0.0056
sterling up $0.0042
Swiss francs up $0.0044
Mexican pesos up $0.000150
Canadian dollars down $0.0008
Australian dollars down $0.0008
Gandalf the White
(10/12/1999; 11:25:41 MDT - Msg ID: 16155)
Come on Strad Master and Quabblin !
Jump into the TableRound, before Goldspoon falls off his horse! Good to see you're back A3, the Hobbits missed you.
<;-)
TownCrier
(10/12/1999; 11:26:45 MDT - Msg ID: 16156)
Fed ads $13.29 billion to banking system thru tri-party repos
http://biz.yahoo.com/rf/991012/i8.htmlThe Federal Reserve said it injected reserves to the banking system Tuesday through a round of tri-party overnight system repurchase agreements that totaled $8.29 billion, which followed an earlier operation of 90-day tri-party repurchase agreements that totaled $5.0 billion.

Are the banks now depleted of their "best" collateral, or making use of these tri-party operations simply a natural extension of Gresham's law?
Strad Master
(10/12/1999; 11:39:16 MDT - Msg ID: 16157)
Huh?
GANDALF THE WHITE: Did my post of a few days ago go through? When I posted it I got the message that my password was no good. Subsequently, I e-mailed the home office for clarification. As of yet, no response so I was going to e-mail again when I saw your message. This is an experiment. Hope it works.
Mr Gresham
(10/12/1999; 11:45:29 MDT - Msg ID: 16158)
TC: Reserves?
http://www.bog.frb.fed.us/releases/H3/Current/TC -- Thanks for your regular postings on reserve injections, a crucial stat to monitor in the months ahead.

Now, to understand it. (ORO & any -- appreciate your help.)

As per the link above, banking system required reserves seem to be in the $40B+ range. This must be what they're trying to maintain as required level.

Are the amounts you're bringing us from Yahoo cumulative?
(So, do they show up on Fed balance sheets? Or on Fed's banking system stats? I haven't seen it under borrowed reserves -- but then, isn't that what repos are designed to hide?)

Are they rollovers from prior repos come due?
Or are they replacements for reserves that have gone out into cash-hungry public hands? (Which I think is the import you have been giving it -- if so, refresh us on the mechanism this goes out by.)

I'm also searching on the link to the BEP's currency-printing order for this year -- a press release I think it was on Reuters or some such. Was it GN who had the link to it originally? (Couldn't find on BEP site. I'll do some more looking before I come back to this again.)

Thanks to all for the stimulating high-power educational symposium you've created together here. (Still catching my breath!) There is brilliance here at all levels.

It has been an HONOR and a PRIVILEGE to be in your company these past two weeks!
TownCrier
(10/12/1999; 11:45:50 MDT - Msg ID: 16159)
Is $25 Oil Too High? Not By Some Inflation Measures
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Commodity%20Spotlight&touch=1&s1=blk&tp=ad_comspot&T=markets_fgcgi_content99.ht&s2=blk&bt=blk&s=108c109a7bdc5592aad6e9a75314b94cEven priced at $25 per barrell, when adjusted for inflation, oil costs the same as it did October 1973, just PRIOR to OPEC's oil embargo which set off the first oil crisis and price shock of the 1970's.

An economist elaborates that given the current U.S. economic boom of nine years of growth, oil prices would have to reach $72 before the impact would be felt to the degree it was following the 1970's.
Strad Master
(10/12/1999; 11:47:39 MDT - Msg ID: 16160)
It woked!!!
ALL: Hey, I'm back in business! Hi PH! Now Goldspoon won't fall off his horse. Yippee!
TownCrier
(10/12/1999; 12:04:57 MDT - Msg ID: 16161)
Schroeder Says Germany Must Meet 2% Deficit Goal
http://quote.bloomberg.com/pgcgi.cgi?T=markets_newsfeat99.ht=&ptitle=EMU%20Top%20Stories&touch=1&s=b796dd4442e69d4b3522714357b3499cGerman Chancellor Gerhard Schroeder on the need to reach budget targets: "In February this year, the then Finance Minister Oskar Lafontaine agreed with the European Commission that the German deficit in 2000 would not exceed 2 percent [of GDP]. If we now allowed a higher deficit we would come into the same situation as Italy this year."
"If it weren't Italy but Germany there could be a real crash. There is no alternative to budget consolidation."

In regard to the situation faced when the EU finance ministers' had to come to terms and allow Italy extra leeway on its 1999 budget, Mr. Schroeder said it "weren't pretty."

Sounds like they're taking this Maastricht stuff for real.
Tomcat
(10/12/1999; 12:34:35 MDT - Msg ID: 16162)
Repost: Ted Butler. Is The Gold Game Fixed?

Date: Tue Oct 12 1999 10:54 ted butler (@the moment of truth) ID#370209: Copyright � 1999 ted butler/Kitco Inc. All rights reserved

Another day and still no one fessing up to owning a part of the $30 billion short gold loss. This is serious folks. It has never happened in history before that a loss of
such magnitude has been so blatently contained. I don't see how it's possible that Goldman, AIG, Chase, UBS, and the Morgans, could hide such losses ( over a billion each, in my estimation ) without overt Fed involvement.

In a day or so, Barrick will report earnings. It is not legitimately possible for them not to show a big hit. They had the lowest real mining profits for the quarter in their history - look at the prices for the third quarter. Their hedge book was clobbered by the rise in gold and the fall in fixed income securities. What could go wrong, went wrong. If they report decent earnings, all it will prove is that
the accountants were also got to by the Fed. I know these are serious charges, but I've made serious
charges and accusations all along and not one of the vermin from Barrick or the Banksters will stand
up and refute them. I stand by everything I've said. What should that tell you? It should tell you this - if Barrick reports everything is allright - the game is fixed at an unbelievably high level. In that case you should run, not walk, and buy as much physical gold and silver as you can afford and take it home and put it in a safe place and keep quiet. Do not let anyone hold it for you. It pains me to
write this. Hopefully, Barrick and the accountants won't lie. bbl
CoinGuy
(10/12/1999; 12:48:04 MDT - Msg ID: 16163)
Gold Power
Not to dig, but I got a different conclusion from the GN article. First of all, GN didn't write it. If you look at the top line he states, "a Joel Skousen article from The World Affairs Brief". I think the stab at GN was uncalled for. Also, Joel Skousen has an impeccable reputation.

To all: The shorts have covered? The price is being manipulated again? Heck, spot and spike, are on vacation.
What's going on?

Coinguy
elevator guy
(10/12/1999; 13:30:30 MDT - Msg ID: 16164)
Keep up the good work, GATA army!
No one claims to have stopped the manipulation of the POG. All Bill Murphy has been trying to do is sound the alarm, to alert those in mining and government as to the fix in the POG.
Re-post his Midas commentaries to your senator, and congresman.
We must continue to be vigilant, before the shorts find a way to recover, by Fed selling paper, or whatever.
The more universally the collusion is known to the public and governments, means the less the shorts will be able to duck and cover.
As FOA pointed out, the manipulation still goes on. The more we scream foul, the more likely the ref will be forced to put his glasses on. Our government counts on the sheeple to know nothing, and do nothing. Lets get the crowd cheering!
Phos
(10/12/1999; 13:33:42 MDT - Msg ID: 16165)
Gold markets
There is a Ted Butler piece reposted earlier on USAGOLD. In it he agrees with what Another/FOA have said before. The paper and physical markets seem to be coming to a parting of the ways. GATA is trying to get some answers from Congress on what is going on in the gold market. Are we in some kind of endgame here? I have read on the internet that the price of physical has now risen above the quoted spot price if you want to buy some. If that is the case, what meaning does 'spot' have? I would be very interested to hear other's views on Ted's assertions. Do others feel the Fed is manipulating the market now to protect the shorts?
Journeyman
(10/12/1999; 13:39:42 MDT - Msg ID: 16166)
GRESHAM'S LAW IN CONTEXT (TownCrier @ MID#16156, etc.)
"Gresham's Law," as normally stated only operates when so-called "legaltender laws" are enforced. Otherwise the inverse happens, that is, goodmoney drives out the bad: .............................................."If the paper is the least bit shakey, which do you think will betendered when there are legal tender laws, paper or gold? Ifyou've ever gotten a check you thought might bounce, what do youdo? Obviously basic strategy is to always keep the gold andalways trade the paper --- and as soon as possible. If there wasa "legal bread law," you can be sure you'd always get stale breadat the store if they had any. You'd also try to avoid the store. If there were legal tender laws, you would find only the "bad"paper curency offered to you in trade. If you know that $20 goldpiece is really worth $31 but if you spend it, you'll only beable to buy $20 worth of goods, what would you do? People keepthe valuable gold safe at home; they "hoard" it. Thus WHEN THEREARE LEGAL TENDER LAWS, bad money drives out the good."........... ................................................................. "An English financier, Sir Thomas Gresham, was given creditfor first formulating this observation, and it bears his name,Gresham's law. It is odd that it is never stated as part ofGresham's law that it applies only to situations where legaltender laws are in effect. As a result, it is incorrectly butcommonly assumed to apply to honest money circumstances where thecomplement (good money drives out the bad) applies instead."...................................................................... Gresham's law [after Sir Thomas Gresham (1519-79), Eng financier, formerly thought to have formulated it] the theory that when two or more kinds of money of equal denomination but unequal intrinsic value are in circulation, the one of greater value will tend to be hoarded or exported; popularly, the principle that bad money will drive good money out of circulation. -WEBSTER'S NEW WORLD DICTIONARY OF AMERICAN ENGLISH................................................................. "At any rate, legal tender laws had NEVER worked well whensame denomination "hard money" and paper were in circulation atthe same time. Symbols alone do not value make. The value ofpaper notes ALWAYS began to deteriorate relative to gold --- thatwas inherent in the purpose of the paper notes. Thus peoplewould charge higher prices if paper were tendered. This was thelogical thing to do." -L. Reichard White, MONEY, (Brownsville,Penna: WhiteINK, 1996) ........................Regards,Journeyman
arlen
(10/12/1999; 13:52:24 MDT - Msg ID: 16167)
"THE CRASH OF 1999...1929 Revisited & Magnified"
http://www.angelfire.com/ok3/oz/index.htmlThis is a prdiction, a forcast, a augery and an intro into
a UNIQUE body of research work available only from the
author. It is UNCENSORED and entitled:

"MILLENNIUM FINANCIAL FORCASTING"
-------------------------------

visit the link plus the following
website:
http://www.viettexas.com/myhome/OZ.html
arlen
(10/12/1999; 14:00:02 MDT - Msg ID: 16168)
"THE CRASH OF 1999...1929 Revisited & Magnified"
http://www.angelfire.com/ok3/oz/index.htmlThis is a prediction, a forcast, a augery and an intro into
a UNIQUE body of research work available only from the
author. It is UNCENSORED and entitled:

"MILLENNIUM FINANCIAL FORCASTING"
-------------------------------

visit the link plus the following
website:
http://www.viettexas.com/myhome/OZ.html
Mr Gresham
(10/12/1999; 14:20:39 MDT - Msg ID: 16169)
G's Law, Applied
Thank you, Journeyman. It is so hard to keep up with everything that is written about one over many centuries, esp. if one must push aside the (genuine copper) pennies from one's eyes to do so.

And so -- Phos, AEL, ET, HillBilly -- what happens when the "paper" dollar market separates from the digital dollar?

We use the term "paper" loosely here, especially as colored by the paper gold markets. But gold IS a physical element. The Crane Co. paper printed on by USTsy is as "physical" as the "dollar" does get.

What happens when people with dollars decide to "get physical"? Yes, OK. And then what? Hmmm-hmmm, and after AG does that, THEN what? Not as before, indeed.


Scrappy
(10/12/1999; 14:41:54 MDT - Msg ID: 16170)
Thanks for the education; some asks
Living at the bottom of the pile-single mom, two kids, no welfare or child support. Kids now in college. Looking for ways to help through college if things continue 'as is'. also looking for ways to survive if the 'worst' occurs. Have a very small egg. Questions. Should I put it all into physical metals? Should I put it all into herbs and food? Quarters and dimes? Egg was a surprise. Am now at sea-have sudden hope and no experience and it's the eve of 2000. Practical advice, please, if you care to.
USAGOLD
(10/12/1999; 15:10:47 MDT - Msg ID: 16171)
Holtzman's Latest....
Holtzman here,

Hello, Gold Power. I'm pleased to find someone else who feels that not all gold mining stocks are doomed. Inasmuch as owning different classes of assets tends to make one's portfolio safer, I find myself hoping that you and I are correct.

Having said that, there remains the nightmare of wondering if you've successfully identified and acquired the mining stocks which will survive, and successfully identified and avoided the stocks which will collapse. True, come what may economically, a million ounces of proven reserve in the ground will remain a million ounces of proven reserve in the ground.

But several things may conspire to deny you possession of that future value. Stockholders are generally last in line when creditors begin demanding their money. Banks as creditors tend to foreclose on assets with no inclination to sell them for any more than the banks themselves are owed. Governments haven't abandoned their penchant for acting capriciously, taking what they can lay hands on. There's most likely at least one more Bre-X out there in some other guise, its creators stringing everyone along until the last possible minute.

And never forget that well-intentioned but inept managers are a highly efficient destroyer of stockholder value (my sympathies DD, that story you told in (10/08/99; 12:10:47MDT - Msg ID:15866) is frightening close to a bad memory in my own past).

Still, even with those risks, I cannot completely abandon mining stocks as an asset class to be owned. I own more physical than I own shares, and I own more fiat currency than both of the others combined.

Although I'm quite confident at least one of those asset classes is going to become worthless faster than I can abandon it, I cannot say with the slightest confidence WHICH class it will be.

To my mind, it is no less likely that, come *500 POG, mining production will come out of the woodwork and double the above ground supply in even fewer than the 30 years it took to most recently double.

Yet, if FOA and Another are right, remaining entirely in mining stocks is just as dangerous as remaining entirely in physical or entirely in dollars. To illustrate:

--------------
Welcome to 1491
--------------

I'm an Aztec citizen, and I have a significant portion of my wealth invested as a 1/25th stake in my nation's largest privately held gold mine (Holtzman will quickly admit to having no notion of whether Aztec mines were private or national during this period, but play along with me for a moment).

It's become increasingly apparent that my nation is tearing the heart out of its relations with neighbouring states. Seeing as how my mine is near the border, should this risky policy continue, it may place a cap on the capital gain I expect I'll be able to demand when someday I sell my domestic mining shares.

Not wanting to keep all of my eggs in one basket, I've diversified my investments by becoming a 1/17th owner of a distant international stock, the largest privately held silver mine in the Inca Empire. I've even bought (at an incredible bargain) a 1/4th stake in a long-abandoned mine in the former Mayan Empire. Worst case scenario, I can move down there and mine the site myself.

Barely a year on, my carefully selected investments have become vulnerable in a way I never imagined. But even when I begin hearing about marauding bands of Christian extremists raping and burning everything in their path, still I think that my civilisation can hold against them.

Several months later, the Christians discover the gold mine to which I claim 1/25th ownership. Do the heathens consult me for purchasing rights, even at a "distressed" price? Not a word of it. They simply seize the hole in the ground, post guards with odd sticks which throw invisible arrows, and my investment isn't mine anymore.

Ah, but I still have my other stock investment safely tucked away at high altitude in the Andes. The Christians probably haven't even heard of the Inca anyway: they're approaching from the East after all.

Barely two months later, I receive a message from the Inca mine's CEO: "Does the name Pizarro mean anything to you?" The next day, I realise my bargain investment in the Mayan jungle was, from its inception, a pyramid scheme.

Depressed beyond all hope, I volunteer to be a sacrificial victim in my religion's last-ditch effort to bring our gods to bear against the invaders. As I tumble down the temple stairs following the ceremony, I catch sight of the man who sold those stock certificates to me, running towards the city limits lugging a large purse full of something heavy. Sigh. I just don't have the heart to chase after him.

--------------
Look before leaping
--------------

This message is for Granny, and for anyone else reading here who feels dollar overweighted and gold underweighted.

Numismatic gold coins (including pre-1933 U.S. issues) should be bought for a different set of reasons than bullion gold coins such as modern U.S. gold Eagles. They are dramatically different assets which rise and fall somewhat independently of one another. Both can be excellent investments, but the knowledge needed to profit from the one is different from that of the other.

I would recommend that you buy gold only from reputable dealers, seeking out a dealer who takes the time to help you identify your investment goals.

I would also strongly recommend that you NOT go entirely into gold, or entirely into gold mining shares, or entirely into euros, or entirely into stocks, or stay entirely in dollars. Have some of many things.

But most importantly, make your transitions from market to market based on calm consideration, not knee-jerk "I've got to do this quickly else I'll miss it" reactions. Please heed this advice: on the one very unpleasant occasion I mentioned above to DD, I lost more dollars than you own, precisely because I leapt without looking.

Humour me for a brief moment: point your browser to http://www.usagold.com/cpmforum/archives/1619997/default.html and then Find the word Lynch. Please read that paragraph and the next dozen or so before you act, and my best wishes on your balanced and safe financial future.

--------------
Downs and Ups
--------------

One additional thought to everyone here: don't panic. Gold took two decades to drop from $800+ to $250+, and it did not get there by anything approaching a straight line. So while the past few weeks have been simply brilliant, it is by no means going to be gentle sailing during the coming two decades. Rumours of pending massive POG drops are the result of a very real expectation: the ECB & Friends' announcement dealt a painful wound to the gold bear's rear leg, but the bear is by no means going to roll over and submit.

Whiners such as Andy Smith aside, there are significant vested interests who still wield enough resources to throw good money after bad in attempts to force POG back under various psychological (and paper-triggering) barriers. While I was impressed at POG's first managing to hold above $300 then rebound from $299 to close the first week at $304, don't believe for a minute that the bears have given up.

Especially since the United States Government has every reason in the world to prevent its dollar from plummeting in value in the footsteps of Indonesia's rupiah (or even giving the slightest appearance that it might). And the time to try stopping such a trend is in its beginning, before it can build momentum.

We may yet see a rocket down below $280 on Spot POG, much like an upside-down version of the initial leap towards $330. The bears may even be able to hold it down there for a time. Whether the Street POG (Krugerrand) follows Spot at that stage is anybody's guess at the moment.

So far, though, the various reported futures POGs, Spot POG, and Street POG have remained relatively in proportion to one another. There have been moments of slight backwardation, and many dealers now purchase Krugerrands at a few dollars above Spot. These are noticeable but not overly dramatic differences from months past. Until and unless the various POGs strongly diverge from one another in public, the system as a whole will be seen as maintaining an orderly (if volatile) outside appearance.

And yet, Another's $10 POG may have already come to pass in the various panic unwindings which have occurred (and which are quite likely to carry on occurring). The German citizen who held a 100 deutschmark bill in his hands in 1920 watched that note devalue to nearly nothing within three years, but at no point did it become Less than nothing.

By contrast, various derivative and margin investments are perfectly capable of first losing all of their original investment value then worsening into a debt against the unfortunate investor. In such instances, a man who placed $256 per ounce on a paper gold bet may be grateful for the chance to sell his paper at Positive $10 per ounce, considering that the alternative (holding and praying) might result in it quickly becoming a Debt of Negative $50 per ounce. Such a transaction would hardly be reported to the public as a $10 POG sale, but a rose by any other name can still make one bleed.

Those of you who have been buying and holding physical gold patiently should not suddenly change your plans as the storm rages outside your doors. Those of you who are wondering when to jump in should first seek the advice of someone like Michael who's navigating that storm on a moment by moment basis. But all of you in both camps should not panic and make sudden moves in either direction. On that path lies danger.

Survey the situation as it applies to your world, plan a strategy which benefits you, and only then act on that plan.


Yours,
I.V. Holtzman
Scrappy
(10/12/1999; 15:24:03 MDT - Msg ID: 16172)
Thank you, M. Holtzman
From a little guy, thank you for a voice of calm in all this raging sea of overthinking and zealousness.
TownCrier
(10/12/1999; 15:36:23 MDT - Msg ID: 16173)
Sir SteveH, you re-posted a comment by Golden Sails who claimed...
"The US Fed has been buying gold hand over fist -- not to mention the Japanese who are holding all that US paper --with the purpose of lending support to the dollar."

Can this claim be substantiated?

For example, here are the latest figures on U.S. Reserve assets (up $187 million) released by the Treasury Department. This 8,000+ tonnes of gold have not changed materially for ages.

Oct 8 Oct 1 (Week ending)
_____________________________________
73,226 73,039 Total U.S. reserve assets (values expressed in millions of $)
=====================================
11,046 11,046 Gold stock (Note: gold stock valued at $42.22 per troy ounce)
10,250 10,284 Special drawing rights
16,000 15,857 Exchange Stabilization Fund
16,003 15,860 Fed open market account
19,927 19,993 Reserve position with the IMF

The Fed's own books are yet another story, but like I said, some substantiation of the claim would be nice to see if available. If Golden Sails offers something, please be sure to keep us informed. Thanks for your continuing efforts, Sir SteveH.
canamami
(10/12/1999; 16:18:35 MDT - Msg ID: 16174)
Bad Day for POG & Reply to Aragorn III
Today: The Dow took a major hit on inflation concerns, crude oil futures were up substantially, the yen rose against the dollar, which fell against most currencies, all the other PM's were up....yet...the POG gets smacked around like a speed-bag at the close of the day, landing seven dollars off its high. Anyone care to speculate as to why?

Aragorn III, I was referring to the traditional definition of the gold standard - i.e., x dollars per ounce of gold. The world has not been on a gold standard for over 25 years, and thus there has been a correlative decline in the increase of supply. Thus, there is not enough gold to match outstanding dollars, pounds, etc., at a reasonable and usable price or exchange level. That's why I looked to encouraging the use of gold clauses, and the encouragement of government to mint sufficient gold coins so that the use of such clauses would be viable. For example, if all long-term government contracts contained a gold clause, there would be a palpable incentive for the government to act to suppress inflation, lest the other party to the agreement make demand for payment in gold coin of the same quality and fineness that existed at the time of the contract. This way, gold could indirectly act to suppress inflation in the manner it did directly under the gold standard.

Reply to your second point: Sentiment is important to the POG, and gold's role. If enough people are convinced the POG will go down, and act on that belief, the POG will go down. So too, if everyone decided tomorrow that gold were worthless as money, it would be worthless as money. It is because gold possesses certain characteristics that it has been and continues to be viewed as store of value and also, to an extent, a unit of exchange. A useful albeit imperfect analogy: Think of Rand's secular parable about the 20th Century Motor Company. It wasn't the mere company mark that made the motors valuable (as the Starnes heirs thought), but the useful characteristics the motors possessed. When the motors were poorly manufactured under the Starnes' heirs' socialism, they couldn't give the motors away. Let us use a hypothetical: If mountains of cheaply mined pure gold were discovered tomorrow, such that supply was so great that any scarcity value or use for gold were wiped out, gold would be worthless.
Jack
(10/12/1999; 16:21:22 MDT - Msg ID: 16175)
How Long?
What I wonder is... How long will the US Treasury, CBs and other institutional gold hoarders give away their gold at these prices?

It's just not like them.

God they must be in a royal fix! It must cause them PHYCICAL pain to let mere people, (Asians, Americans, Europeans) get such a good deal.

I feel a little sorry for them, knowing how much they LOVE their precious gold, and to have to watch as the demand for hard, phycical, shiny, heavy, real, permanantly elegant gold demand skyrocket, and their treasured reserves walk out the door and go bye bye FOREVER at $319/oz! What conflict they're in!

Went and bought 30 Eagles today (took a while to find a dealer that had some) and I couldn't believe how cheap they were. Only $337 ea. YES!

Picked up a thousand $ face silver US coins too. Had to lug all that REAL money out to the car. Whew!

The dealer's store was packed! Says he's been swamped!

Well, just another great day, nearer the end of the century, USA.
PH in LA
(10/12/1999; 17:09:39 MDT - Msg ID: 16176)
Gold: Putting a Price on Its Head
"Thus, there is not enough gold to match outstanding dollars, pounds, etc., at a reasonable and usable price or exchange level." CANAMAMI (10/12/99; 16:18:35MDT - Msg ID:16174)

This familiar misconception carries its only morsel of truth in the words "reasonable and usable". For certainly, gold can be divided until its measure is counted in grains, and the numerical concept of value can be denominated in whatever numbers chosen. The truth of this is apparent the moment one steps out of the box of conventional thinking and realizes that there need be no upward limit placed on the value of gold whatsoever. Only if Sir Canamami feels bound by the number of digits on his calculator can any measure be given to "reasonable and usable". Any other limits one places on the value of gold versus fiat can be solved by simple arithmetic. There is plenty of gold on our fair planet, both above and below the ground to serve as real money. It only depends on the price placed on its head.
canamami
(10/12/1999; 17:25:56 MDT - Msg ID: 16177)
Reply to PH in LA
PH in LA,

Assuming arguendo that the POG went to $U.S.30,000 an ounce. Would the cost of "production inputs" increase correspondingly? Probably not. Hence, the excessive valuation of gold would lead to excessive production, creating inflation, just as the influx of excessive gold into Spain in the 16th century led to inflation. Attempts to go back onto the gold standard have failed in the past (e.g., after WWI) when the "peg" was inappropriate. It is doubtful that such an effort now, after 25 years off a gold standard, would be successful. My understanding, however, is that FOA/Another are proposing a different use for gold - i.e, the use of gold reserves to lend credibility and discipline to a digital currency. I stand to be corrected if I'm wrong re FOA/Another's theories. Such a modified use for gold, or perhaps the other alternative of using gold clauses to provide indirect discipline, could work because getting the "peg" right is not as important as in the traditional gold standard.
Viper
(10/12/1999; 17:55:25 MDT - Msg ID: 16178)
Hello
I have been reading this forum for a couple weeks. I find it very interesting. After what seemed like a
L * O * N * G wait, they finally sent me a password to allow me to post. I will begin by asking, What in the world happened with Gold today? Started out pretty good, only to settle down again today.
Thoughts & opinions appreciated.
Viper
PH in LA
(10/12/1999; 18:07:53 MDT - Msg ID: 16179)
Reply to a Reply
Canamami:
Thanks for your prompt reply. Granted, if you assume that the return to a gold standard would take place more or less in the same environment that we find around us now, there would be many dislocations. However, if the maintanence of this present environment is not assumed to be included in the "return to a gold standard" there could be plenty of gold to go around, merely by adjusting the price (which could easily be allowed to be defined even by the market place. Since you mention Another/FOA, I believe they have spoken of severe restrictions that would probably be put on mines since the privilege of digging "money" out of the ground (or thin air) has long been reserved to government. This could be accomplished in many ways, including windfall profits taxes, outright confiscation (nationalization) of mines and/or a myriad of other ruses and tactics that could be invented as the need arises.

As far as "having been tried before" goes; a return to a gold standard would find many more supporters after a crash of the greatest stock market bull run in history, the seizure of the gold market, a severe Y2K experience, a repudiation of the world reserve currency and a hyper-inflationary depression than it does now.
Canuck
(10/12/1999; 18:24:58 MDT - Msg ID: 16180)
canamami and all
Does anyone recall the 58 page report,(about 3 or 4 months ago) I'm trying to remember, it was in pdf. format, I think from a high US government department outlining the CB intent to control the POG, bankrupt mines and then take over all physical gold.

I seem to recall many posts scoffing at the report and today
Gary North's site/link depicts a possible similiar scenario.

Thoughts?
megatron
(10/12/1999; 18:44:16 MDT - Msg ID: 16181)
Viper
As you may have observed, many strange things happen in the world of gold, and lately wild swings are one of them. Today's drop was caused by Hillary Clinton shorting contract's to buy playoff tickets to the Yankee's.
All seriousness aside, can anyone tell me of a metals dealer in the Vancouver area who does NOT ask for picture ID when buying gold or silver? Thanx.
Alchemist
(10/12/1999; 19:06:21 MDT - Msg ID: 16182)
Vancouver Dealer Megatron
Try Benny Lee on Hastings street. They haven;t asked for ID when I purchase Maple Leafs
megatron
(10/12/1999; 19:11:10 MDT - Msg ID: 16183)
alchemist
Hey thanx for the info!! But I guess I worded my question ambiguously. I meant to say when They BUY from YOU. Please reply soon. Thank you!!
Phos
(10/12/1999; 19:33:10 MDT - Msg ID: 16184)
@Canuck - Fed Reserve Gold Paper
The paper you are looking for is at:
http://www.federalreserve.gov/pubs/ifdp/1997/582/ifdp582.pdf
SteveH
(10/12/1999; 19:42:48 MDT - Msg ID: 16185)
TownCrier
Your question. No I have no proof, but pass it through as it was an interesting comment. I do have this from ORO, though:

It may interest you to peek at this report, Table 3.13 and note the loss of foreign gold deposits in the Fed's custody.
http://www.bog.frb.fed.us/releases/bulletin/pagea51.pdf
End of 95, 277 M oz
96, 265 M oz
97, 255 M oz
98, 245 M oz
May 99, 245 M oz
There was a 1000 tonne drawdown during this period. Some 300 tonnes per year supplied to the markets? repatriated?
USAGOLD
(10/12/1999; 19:49:10 MDT - Msg ID: 16186)
Cannuck....
One of our lurkers forwarded me a document for you. Please e-mail me and I'll send it to you.
Chris Powell
(10/12/1999; 19:54:12 MDT - Msg ID: 16187)
Writing to Congress made easy
9:30p EDT Tuesday, October 19, 1999

Dear Friend of GATA and Gold:

If you're a U.S. resident and are willing to
join the campaign against further
manipulation of the gold and stock markets by
the U.S. Federal Reserve and U.S. Treasury
Department, please adapt the letter posted
at...

http://www.egroups.com/group/gata/251.html?

... and then send it to your U.S.
representative and U.S. senators.

You can identify your congressmen by typing
your ZIP code into a form at the Project Vote
Smart site on the Internet. Just close up any
spaces below:

http://www.vote-smart.org/ce/congresstrack/c_index/c_index.phtml?category=Congress&titlehead=Current+Members+of+Congress✓ing=

Or you should be able to find their names and
addresses in your local telephone directory.

Give their offices a week or so to respond to
your letter or email and then don't be shy
about following up with phone calls to their
offices in Washington or back home.

We have to let the government know that we're
watching and want answers.

Please post this as seems useful.

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

-END-

Alchemist
(10/12/1999; 19:54:44 MDT - Msg ID: 16188)
Megatron
Last time I sold I don't remember about I.D.; too long ago to remember. I have only been buying the last number of years
megatron
(10/12/1999; 19:55:34 MDT - Msg ID: 16189)
alchemist
Hey dude! What happened to ya? I hope your still around. I really need that info about PM buyers that don't take ID when they buy from YOU. thanx.
canamami
(10/12/1999; 19:56:04 MDT - Msg ID: 16190)
Various Replies
Canuck, I see some other posters have already replied, and provided you with a copy of the document. I never had the opportunity to read it closely.

I'd also like to thank Aragorn III and PH in LA for having responded to my earlier posts.

I now have to take a posting holiday for the rest of the month. A prosperous rest of the month to MK, TCrier, all the Knights and denizens of the Forum, and all goldbugs in general.
megatron
(10/12/1999; 20:00:31 MDT - Msg ID: 16191)
alchemist
Just missed you! 2 big local dealers, not Benny Lee, told me they need picture ID and then it is sent to the RCMP, every day! And forwarded/filed for god knows who! I absolutely refuse to do this. Can anyone make a sugestion?
megatron
(10/12/1999; 20:06:56 MDT - Msg ID: 16192)
anyone.
The problem is this. If gold hits $500 how could one bleed it off for Sw.Frncz without an observable capital gain? Very serious.
Leigh
(10/12/1999; 20:21:58 MDT - Msg ID: 16193)
Goldspoon
Goldspoon, quick! The Kitco chart is saying that platinum is up $25.50!! No kidding!
elevator guy
(10/12/1999; 20:26:00 MDT - Msg ID: 16194)
@canamami
Have a nice trip, and keep your chin up!

Gold will have its day!
FOA
(10/12/1999; 20:32:26 MDT - Msg ID: 16195)
My turn to Comment!
canamami (10/12/99; 16:18:35MDT - Msg ID:16174)
Bad Day for POG Anyone care to speculate as to why?

Hello Canamami,
Yes, I'll have a word. But first to all.
I found an old Another post(see below)written for him in Dec. 1997. In it he described what may be about to happen today or perhaps during tomorrow's tomorrow. Surely it is a council given to high profile people of means. Entities that can't turn on a dime what it took a lifetime to build. Yet, even us regular people must walk the same road of reason.

My purpose for showing it was to point out the longevity of gold and how it transports wealth better than paper. Anyone that purchased bullion around the $360 or $370 range at the time that post was written, is only down some $30 to $40 and is currently in an atmosphere that may even erase those loses. Yet during this past time span, gold options, futures and leveraged contracts savaged an investor's account. In addition, most all mine shares were crushed and some disappeared all together. Ironically, some mine shares may now suffer if gold does rise. Insult heaped upon misery?

All the while, a bullion holder was in total control, never waiting for the annual report or the unsettling news. Truly, they were holding an asset that could "run like the wind blows" when the storm clouds gather. With a full understanding of gold money dynamics, they were all the while expecting a greater real return with less risk. You see, for most conservative investors and portfolio hedgers, gold only needs to make one real run in a lifetime. Indeed, in some crisis circumstances, even running in place will win the race and be more than one could ask for! Gold works, because the history of paper money has shown that the timeline of every "extended family" suffers through at
least one such world crisis. During these times wealth holdings of most every other asset is lost or impacted beyond one's years to repair!

Today, I believe we stand right at the edge of one of those moves. A gold move that will more than justify ten, twenty or thirty years of bullion accumulation. Unfortunately, most Western minds will not or cannot imagine gold ever running so far, so fast. So they grasp for leverage in every form of gold paper, even extending that reach into Platinum and Silver. I, and a few others of "Western mind" now fully see this storm and anticipate it's unruly effects on all asset classes.

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

Canamami
If we look at the last few days, Dec. gold trading during comex hours has bottomed right at $318:
Low
10/12 $318.00
10/11 $318.20
10/08 $318.00

It has done this as oil has crashed from liquidation of paper traders. Yet, gold does not fall as it should. It doesn't fall because the supply of crude is being cut further and the oil futures are about to reverse this drop. This is a public statement that goes far beyond OPEC considerations. It points to a transition of economic structure such as we have never seen. The risks to world wealth that this change will bring will now drive major portfolio adjustments.

I think massive physical gold buying has arrived in the form of "full allocation" demands from all gold depositors and lenders. Those demands will now fracture our modern gold markets. Be they from Hong Kong, The Middle East or Europe, these present bullion holders are buying more gold by recalling their paper derivatives. Truly, a gold run of world class proportions laid upon the steps of a failing price fixing arena. These demands constitute the "exercise of a corner" on gold that has long been in place.

This demand will now not only make an end run around the carry trade, it will gun the price so fast that most all "working gold contracts" without "official guarantees", will fall into negotiations and litigation. This corner will crack the markets because the ECU/BIS has said "make it so". These effects will now be seen in our entire financial structure.

Is this a good viewpoint to hold? We shall see!

So today was a good day for gold, if you are a bullion holder, that is. A good day, indeed!

thank you FOA




Date: Sun Dec 07 1997 18:45
ANOTHER (THOUGHTS!) ID#60253:
Will we have "Deja-vu" again?

Some people have followed the gold market from 1970. Some have followed it all their lives, depending on when you were born. Some say they were right, as the market has fallen and they held "no gold". They council from experience and a short life.
But, some have traded gold from times before. Those who trade with the sun know we will never have "Deja-Vu" again. This market is unlike anything from the past. And those with a "short life" of investing will learn from this coming future as gold will show their knowledge was limited to where they stood on the mountain!
Unlike the past, this market has an end. And this end will not be for those who have waited to buy! They see this bottom at $100 or $200 or $250, and they will buy at the turn as no fool should have held from $360! But, I say they will buy only paper if lucky!
All should make ready and be holding metal only, as the turn will move $100+ the first day and $200 the second day as comex is closed! It will trade no more from the 3rd day on! The gold market of your youth will be no more! For those who were smart from experience not to buy at
$400, will look at $600 as "the deal of a lifetime".

To close,
Try to live in this outcome and see how different the world will be. It will not be the end of all things, only the changing of most things in "western thought". The "Digital Currencies" will still trade, but we will value them as not before. Anyone who has sold gold they do not have will not be allowed to cover that position. Anyone who has brought gold they do not have will not be allowed to cover that position. Many will lose all they have in a world without honor! Looking back , one will ask, "how could I have thought that noone wanted gold, when more of it was being brought than existed"?
Indeed, more gold than exists or will be produced in the next ten years! And some say, "only a fool would say the market was cornered". During that time, a gold stock in the hand will not trade on an open market! And the government of the country, of the land, of the mine, will no doubt speak with you of new taxes on GOLD!
A year has passed as the winds of change have started to blow. Waste no more time on paper gold, you have suffered enough. Play paper games no more, as the future of your family waits a decision.

FOA
(10/12/1999; 20:58:20 MDT - Msg ID: 16196)
OIL
NEW YORK ( CBS.MW ) -- Oil futures on Wednesday are poised to rally for a second straight day after the latest inventory data revealed a drop in crude oil supplies more than three times market expectations, restoring market watchers' faith in OPEC's promises to control supplies.

"This is going to be a shocker!" exclaimed
Phil Flynn, vice president and senior
market analyst at Alaron.com.

The data on crude oil will "catch
everybody off guard" and make investors
think the recent selloff was probably
overdone," Flynn said. The market
appears to have hit its low and could test
the highs. On Sept. 29, the November
contract hit an intraday high of $25.12 a
barrel, only to plunge to a low of $20.55
only nine days later.

After the markets closed on Tuesday, the
American Petroleum Institute reported a
7.14 million barrel decline in crude oil
inventories. Analysts had expected
supplies to fall less than a third of that
figure, with estimates averaging around a
drop between 1.5 million to 2 million
barrels for the week ended Oct. 8.
Supplies now total 298.9 million.

"So where's all this cheating by OPEC?" asked Flynn. The enormous drop in crude oil supplies could renew the market's confidence in OPEC's attempts to keep a cap on global oil production levels, after weaker-than-expected compliance last month, shook investors' faith.

Ahead of the news on the New York Mercantile Exchange, November crude gained $1.03 cents to $23.30 a barrel by the close. As soon as the API data was released, however, November crude exploded, jumping 50 cents in overnight trading.

Canuck
(10/12/1999; 20:59:14 MDT - Msg ID: 16197)
pdf. paper
Phos,

Thanks for link, will have to re-read, 3 months ago it seemed to be hysteria. After reading Gary North today I
wonder what is up the CB shirt sleeve. I still don't follow
the BOE 'announced' sale in May. 'We're selling, we're selling, we're selling ... Sept.26, we're not selling.'
Is it the intention to screw the 'majors', take them over and run the gold in the ground. We know they want and do run the gold above ground. If I read the 'pdf' document correctly the first time the intention is for CB's to control ALL gold (above and below ground) and squash this gold thing once and for all.

USAGOLD,

Please thank your e-mailer.

canamami,

If you have the chance try to scan the doc. Personally, I don't understand the gold business at all. One day I'm super-bullish (ie this am. bought $2,000 in a junior), the next day I'm thinking the CB's have more power than all other collective souls and their wishes will be the outcome.
Does the positive sentiment outweigh the other? Have the CB's or whatever the collective negative forces 'allowed'
gold to reach 325? The 'forces' brought the POG down to 250,
co-incidentally just above production cost, to scare mines to 'hedge/forward sell' themselves into their own graves. The CB's then for reasons that certainly I do not understand
reverse (on a dime) their gold policies. The supply/demand thing is not running the POG at this juncture. I'm waiting until the Comex contract closure (I think Oct.27?) to pass judgement. If a) we get a high PPI/CPI in the next week and
b) if we get Comex hysteria in the next 2 weeks and gold does not respond then I will be quite convinced that CB intervention is still at play and we may not see $600+ gold.
On the other side of the golden coin is that the pdf. document alludes to my theoretical dissention of gold and I would be playing right into their hands.

How do you like that, bearish to bullish in one minute, fickle or what?
YGM
(10/12/1999; 21:02:06 MDT - Msg ID: 16198)
Aragorn
Yes point made and taken. Just thinking aloud again. Thanks for reminder.----YGM
TownCrier
(10/12/1999; 21:10:30 MDT - Msg ID: 16199)
After the Close: the GOLDEN VIEW from The Tower
Well...it IS October. And things out there are getting pretty surreal. Bullion dealers are saying that due to industry-wide hedging practices, more gold producers will face serious financial problems as the price of gold rises. Reuters quoted one dealer "There are a lot of bad things to come out, especially if gold goes higher. If it went to $350 and held there, it would cause.... the same problems as Ashanti. If it goes to $400, it would bring more people in." So today we see stock and bond markets tank, a military coup occur in a nation with nuclear arms, oil surging, and gold finishes at the lower end of its recent trading range. Woof.

How did we get here? Here's a guess. US Treasury prices opened weaker this morning in sympathetic selling from the sell-off in european bonds. After the European Central Bank left rates unchanged at its meeting last Thursday, investors are beginning to fear the ECB will announce a tightening as soon as its next meeting on Oct 21. Bundesbank President Ernst Welteke recently commented on a favorable outlook for the euro zone, but that the ECB had to watch money supply and credit expansion.
+
Then following that start, morning reports that an army-led coup ousted Pakistani Prime Minister Nawaz Sharif, helped partially lift bonds and the dollar from their worst levels earlier in the day (in a flight to safety?), though the news added further insecurity to an already unsettled equity market.
+
There had been reports of a rift between the army and the civilian government in recent weeks, particularly after Pakistani Prime Minister Nawaz Sharif ordered militants to withdraw this summer from Indian territory in the Kargil region of Kashmir, ending a bitter 2-month border dispute that teetered on the edge of escalating into full-fledged war with nuclear rival India. The withdrawal allegedly did not have the support of military chief Pervez Musharaff who reportedly orchestrated the takeover of Indian territory in Kargil. Musharraf's term as army chief was set to expire April, 2000, but Sharif ordered him replaced by the head of the country's secret service (Gen. Zia Uddin) who was considered a close ally of Sharif's. Here was the progression of FWN headlines to summarize the events...
+
09:19:18 --Martial law imposed in Pakistan, official sources say
09:44:23 --Military sources say Pakistani PM Sharif under house arrest
09:56:15 --Govt sources say fired military chief now back in Pakistan
10:20:19 --Army surrounds Pakistani Punjab governor, premier's homes
10:41:23 --Eye-witnesses say shots fired in Pakistani capital Islamabad
11:08:02 --Officials: Pakistan's new army chief besieged by rival troops
11:25:42 --Govt sources say Pakistani troops surround President's House
12:20:07 --Pakistan's PM and government dismissed, state TV says
+
So why did gold close at the lower end of its trading range? Perhaps speculators thought a renewed threat against India might eventually lead to aggression that inhibits their future performance as the world's biggest gold buyer. Just grasping at straws...

The DOW steadily tanked (-231.12 (-2.17%)) throughout the day, as did the Nasdaq (-43.49 (-1.49%)). In New York Stock Exchange trading, declining issues beat advancers nearly 3 to 1 (Nasdaq loser beat advancers by 2 to 1), and new 52-week lows topped new highs 196 to 32 on the Big Board.

On their fresh return from a three-day weekend, the bond traders seemed to have had a change of heart over the implication of Friday's jobs report, and on top of the sell-off in European government bonds, the US 30-Yr Bond lost 14/32 in price to drive the yield to 6.226%.

In currencies, the dollar lost 0.47 yen, while the euro gained 0.74 yen, leading to a closing increase against the dollar of 1.16 cents.

All has not been smooth under the sudden onslaught of volume as speculators and "firefighters" place bets on the dirtections of gold's future price. In response to complaints from customers who were unable to get their gold option orders executed on the COMEX division, the New York Mercantile Exchange announced plans to spend several million dollars to revamp its COMEX futures and options order execution procedures.

In that same arena of trading gold derivatives, Bridge News reported that the US Commodity Futures Trading Commission is confident that Friday's Commitments of Traders report for gold futures is correct. The COT report surprised some market participants because it showed virtually no change in the overall speculative short position despite the huge rally in the gold price. The COT report covered the 2 weeks up to and including Oct 4, when COMEX Dec gold futures traded at $318.00 per ounce, up from $261.80 at the end of the previous reporting period on Sept 21. Market participants had expected the non-commercial total short position to have declined during the reporting period, assuming that short covering by these large speculators was what had fueled the massive rally. However, the gross short position decreased by a only 126 contracts during this runnup.

As we've beat the drum before, the pricing on these markets has more to do with the level of aggression of one side or the other than it has to do with volume traded or the presence of real gold. It would appear that given the central bank news, the buyers were simply much more urgent than the sellers were for these futures contracts. This comment by a trader would tend to confirm that notion: "Traders were stuck not knowing what to do, and they rushed to buy calls and held their shorts to see what would happen." The Bridge report ellaborates:
By purchasing call options to offset a pre-existing short futures
position, a trader would hold an essentially flat total position above the
options strike, while remaining short below the strike. This would be
accomplished for only the cost of the option premium.
Under this scenario, the net-short fund position in the futures ring
would have been hedged somewhat in the options ring; if true, today's
Commitments of Traders report for futures and options, due out after 1530
ET, will show a significantly shorter non-commercial position when
compared with the futures-only report.

For your own conclusions, here's that report, though the columns will shelled out after posting:
non-commercial . . . . . . . . . .Long . . . Change / / /\ Short . . . Change
long or short only_______59,567 -4,091 / / /\ 31,672 -9,396
long or short spread____150,927 37,950 / / /\ 150,927 37,950
commercial___________188,456 16,130 / / /\ 281,702 20,158
Total________________398,950 49,989 / / /\ 464,301 48,711
non-reportable position__113,657 -11,977 / / /\ 48,306 -10,699
Total open interest______512,607 38,012 / / /\ 512,607 38,012

While the contracts for December settled $2.1 lower on the day, spot prices were quoted down only $1.70 in NY at $316.50 to end the day. Gold lease rates remain above 4%...
1-month 4.0060%
2-month 4.1100%
3-month 4.7730%
6-month 4.7820%
12-mnth 4.6100%

Bridge Offered this review with comments by those in the trenches...
NY Precious Metals Review: Dec gold down $2.1 on dealer sales
By Tina Petersen, Bridge News
Washington--Oct 12--COMEX Dec gold settled down $2.1 at $318.2 per
ounce on late dealer sales amid choppy, technical trading conditions.
Dec gold vacillated throughout the day between $317 and $323. Gold
opened higher following overnight short covering, which brought Dec to a
high of $225.3 per ounce. Mid-morning local selling and profit-taking cut
those gains as traders said gold's failure to break through the overnight
highs spurred the sell off by the trade who were long at the opening.
Mid-session bank and dealer buying brought Dec back into positive
territory, but gold closed lower following light dealer sales just before
the close.

Traders said the selling was sparked after Dec broke through the $320
level in the afternoon.
One trader said the market continues range trading, "and part of that
is profit-taking." While most are bullish on the market, a trader said he
expected gold to trade within a $10 range "until someone has to make a
major move in their portfolio."

Dealers said technicals continue to drive gold's performance today, as
there is little in the way of fresh news. Gold has seen 3 straight days of
retracement following its powerful rally which started in late September,
and some believe the metal has seen enough of a pullback from its highs
and further upward progress may be attempted in the near term.

Traders said they continue to be bullish on the market and many expect
further short covering in the near term. "We should see a fair amount of
short covering yet to come through the market," said a trader. Traders
said gold remains caught in a range of $315-325 in very technical trading.
Support lies at $317-318 and resistance at $326-329.
***
(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.
---
In our watch of gold futures delivery intentions, in what apeeared as a carbon copy of yesterday, another 2 contracts were called for physical settlement to bring the October delivery intention total to 2,508 contracts. October futures open interest fell yesterday by 2 contracts to 111, December open interest rose by 1616 to 119,266, and total open interest in COMEX gold futures increased by 4316 to 217,344.

COMEX Registered gold inventory was drawn down by small withdrawals from both depositories totalling 1,809 ounce, leaving 832,424 oz of Registered stock and 86,404 oz Eligible inventory.

Blurring our lines between gold news and oil news, the Iranian government has decided to expand its economic opportunities by opening its mining and metal industries to foreign investors, including from the US. Deputy minister for mines and metals Mohammad Javad Assemi-Pur stressed that US firms were among those invited to Tehran to take part in an international conference on Oct 19 and 20 aimed at attracting investment in Iran's mining industry. Assemi-Pur was reported by FWN to say at a press conference, "We want to replace oil little by little because Iran is extremely rich in minerals." He said 4 contracts would be signed at the end of the conference, including 2 for gold-mining with South African interests.
+
For several years Iran has been seeking foreign investment and aid to exploit its mineral wealth, with the aim of boosting exports and countering a fall in revenue from oil. Last year administrative formalities governing mineral exports were abolished, including the prior authorization required from the mines and metals ministry. Assemi-Pur said "We want to reassure our foreign partners that there is security for investment in Iran," adding, "Foreigners can invest in Iran up to 100%, but we prefer them to establish joint ventures with Iranian firms." Representatives of 67 foreign companies, mainly from European countries like Britain, France and Germany, are expected to attend.
+
FWN reports that Iran currently earns 85% of its foreign currency from oil, ranking third highest in the world with proven reserves at 90 billion barrels. Iran is currently the second highest producer among OPEC, with output of 3.7 million barrels a day.
+
On the political side, Washington accuses Tehran of sponsoring terrorism and has therefore banned trade and investment deals with Iran. However, D.C. is under great pressure from US companiesto ease these sanctions, particularly US oil firms concerned at seeing lucrative drilling contracts going to rivals in Europe. In a foreshadowing of the likely policy direction, the United States has recently eased the restrictions on giant US food companies trading with Iran.

Stepping more fully into oil news, NYMEX energy futures rose sharply reportedly in short covering and new fund buying ahead of the release of American Petroleum Institute data, which were expected to show a drop in crude stockpiles of 1.5-2.0 million barrels last week. November crude futures settled up $1.03 at $22.30. After the markets closed, traders were floored by the data...

15:38:27 --API: US crude stocks down 7.139 mln barrels in latest week

As a result, NYMEX energy futures surged an additional 62c in overnight Access trade. One broker said, "There's nothing but buying on Access after these supportive numbers. These numbers look so good that they are almost hard to believe, so we will be waiting to see on Thursday if the DOEs will confirm this large crude (stockpile) drop." Normally the Dept of Energy data would be available Wednesday, but the Columbus Day holiday has pushed the release of that data back a day.

The horses are on the track...it's October, Y2K is growing nearer, the Stock market is running low on momentum, oil is finding new footing (with a Bloomberg report saying the current price, when adjusted for inflation, is at values that predate the first oil crisis price shocks of 1973), the dollar is slipping against other currencies, and premiums charged on gold are rising. What other things will we find to go bump in the night in addition to our collection of Horsemen?

And that's the view from here...after the close.
Bonedaddy
(10/12/1999; 21:34:59 MDT - Msg ID: 16200)
Black Blade
Somewhere near N42 15' W105 30' Not terribly far from Big Sky Country. (pronghorn in the yard instead of mulies)
I said Montana because, when people mention hardware, we always try to divert attention to our better known neighbor to the north. None of that stuff around here. I had a handgun once, but it was evil and tried to get me to do bad things. So I turned it in at a buy back program. Now I just pick wildflowers and eat only organically grown vegetables. (But, If I did someday get a sporting rifle, a .257 would be very fine indeed!)
TEX
(10/12/1999; 22:00:18 MDT - Msg ID: 16201)
AEL - Link
Thanks for the link! So much so, I have set it up as the opening page on my browser. Just about everything I need to access once I warm my computer up to the net. Sorry I take so long to respond......I'm a late night owl and don't get on until after 10:00 pm MDT (yep, I am one of those "ugly Texans" living in Colorado).
Black Blade
(10/12/1999; 22:04:01 MDT - Msg ID: 16202)
All, Leigh and Bonedaddy
last time I checked s&p futures down -9.80, could tomorrow be a continuation of the "October surprise"? The talking heads are saying "all is well". I think that alone should give one pause to think.

Leigh, platinum at $25.50. You don't supose that Kitco has gone haywire again do you? Did you see the near month lease rates on Platinum? WOW! Goldspoon.....Saddle up!

Bonedaddy, got ya! I had a girlfriend once from that general area...now I'm addicted to granola!
Goldspoon
(10/12/1999; 22:37:50 MDT - Msg ID: 16203)
FOA said.....Watch OIL!!!
The man said "watch oil".....
OIL indeed!!! i'm pullin Horse with No Name to the inside of the track so as not to get run over as you go by....
Ride as the Wind FOA!!!!
Gold Power
(10/12/1999; 22:44:54 MDT - Msg ID: 16204)
Coinguy and Gary North
CoinGuy, from your 16163, I stand corrected. You are right, GN printed an article from someone else.

So my statement: "As it is, he's just taking a set of events, attributing motives to unnamed persons, and selling it to the public" was inaccurate and uncalled for.

No blood, no foul. I'll try to be more careful next time.

Gold Power
Hill Billy Mitchell
(10/12/1999; 22:45:30 MDT - Msg ID: 16205)
Platinum spot
Overseas = 432.50
Gold Power
(10/12/1999; 22:58:54 MDT - Msg ID: 16206)
Holtzman & (Which Mines?)
Holtzman, there is a science to knowing which mines in the world should be able to produce gold profitably in the future. Such things as grade, depth of mineralization, geographic location -- and surrounding politics, management, etc. You don't have to go into a situation blind.

As for Bre-X, that never could have happened without us first having the big legitimate hit with Diamondfields (C$3.50 to C$140.00 in 11 months). This created such a mania that the entire industry became blinded by the fear of not catching the next "big one." Normally rational and expert mining analysts were completely overwhelmed by the story surrounding Bre-X.

If you recall, Placer Dome offered to merge with Bre-X, one share for one share.

That was the result of a mania worse than the one now taking place on Wall Street.

Back to mine investing, Town Crier wrote: "Reuters quoted one dealer "There are a lot of bad things to come out, especially if gold goes higher. If it went to $350 and held there, it would cause.... the same problems as Ashanti. If it goes to $400, it would bring more people in."

This has me moving more and more toward stocks of deposits with no current production. Mining companies I have talked with in the past week still see no chance of gold rising above $400 and staying there for the next two years. They think their spot-defered contracts will let them get out when the price comes back down.

Companies with a deposit and no production, have no hedge book. This is not a solicitation to buy, but you might check out GGFI:CDN, LYDX:CDN, LLL.M, MFL.T, KIT.T, and AZS.V . They fit the bill nicely.

Besides this, maybe we should stay with companies that have an announced policy of no hedging.

Gold Power

Reuters quoted one dealer "There are a lot of bad things to come out, especially if gold goes higher. If it went to $350 and held there, it would cause.... the same problems as Ashanti. If it goes to $400, it would bring more people in."
Gandalf the White
(10/12/1999; 23:04:27 MDT - Msg ID: 16207)
Jump SPOT ! -- Jump!
Goldfly, did you not tie up the dogs? Looks as if Spot the Dog and Spike are doing their thing tonight! -- 1 AM in NY and the world's Goldhearts are restless.
GO GETUM Spot !!!!
<;-)
Gold Power
(10/12/1999; 23:06:25 MDT - Msg ID: 16208)
Banks Selling Gold?
Ted Arnold and OthersOn Monday, GATA distributed an article in which Ted Arnold said the central banks were selling enough gold to keep the price from spiking up further.

This seems ludicrous to me for if the banks know the price pressure is upward, then why would they sell their assets now?

Anyway, on Tuesday I was talking to a mining company in Toronto and the guy told me that he was privy to his company's dealings with the bank, and that the banks' European trader told him that the European banks were selling some gold to keep the price from soaring again.

I got no insinuation this guy had heard of Ted Arnold's article.

He went on to say that the European Bankers were flabbergasted at the forces they had unleashed. They didn't want the mining companies to all go out of business. So they were letting out enough gold to occasion a gradual climb in the gold price, not an explosion like we saw the past two weeks.

Now I don't vouch for the accuracy of this, it just held more credibility to me because of the T. Arnold article and the seemingly angry response to it from GATA.

I welcome comments on this. I'm trying to find out what's going on with gold myself.

Gold Power
Gandalf the White
(10/12/1999; 23:07:41 MDT - Msg ID: 16209)
Keep Jumping SPOT --- HIGHER !
Spot at $321.30 at 1:06 NY time.
<;-)
CoinGuy
(10/12/1999; 23:14:10 MDT - Msg ID: 16210)
Gold Power & Plat
Gold Power,
Thought you probably didn't see that small tribute to Skousen at the top. I've read your posts with great interest in the past, look forward to repeating same in the future.

Platinum is looking strong in overseas trading; trading up $25.50, looks like the yellow metal is gaining ground as well. Up 3.00 @ 19.50 bid.

So long and go long...

Coinguy
CoinGuy
(10/12/1999; 23:17:16 MDT - Msg ID: 16211)
OOPS..
make that $319.50.

It's late, what can I say?

go spot go,

Coinguy
Gandalf the White
(10/12/1999; 23:26:57 MDT - Msg ID: 16212)
Stop counting those coins -- Coin Guy!
Spot the dog is 322.10 at 1:25 NY time !
<;-)
Journeyman
(10/12/1999; 23:38:53 MDT - Msg ID: 16213)
DOES THIS HOLD WATER?
There now seem to be indications (Tomcat Msg ID 16162, etc.) thatSOMEONE is intervening to keep POG from an immediate moon shot.If I understand the situation as it has been presented here, theshorts are in a "tragedy of the commons" / "prisoner's dilemma"bind. .........................................................................................................................One of the classic commons tragedy situations wasgrazing of cattle on the open range. The range had a limitedgrass capacity, but so long as all ranchers using the same rangearea showed judgment and restraint in how many cattle theygrazed, things worked OK. But as soon as a few started increasingthe number of cattle they had, the other ranchers did too,destroying the range completely for grazing in rather shortorder. As long as that 1st rancher didn't break ranks, thingscould be controlled.....................................................................................................................................If the shorts all hold the line and don't try to cover by buyinggold, etc., then they may prevent a further sudden run-up, maybeprevent some defaults, etc. Otherwise...................................................................... ................................................................................In the case of LTCM (Long Term Capital Management) Greenspan gotgrilled pretty thoroughly by Congress, and maintained that theFed had provided only office space for a meeting and guidance,nothing more (no money, etc.). Combine that with Goldman Sachsagreeing to not pull the plug on Ashanti, and you have part of apossible strategy for the shorts and their allies, holding themtogether and perhaps inhibiting a panic buying spree....................................................................................................................OPEC might provide a model of the difficulties of such anattempt. But OPEC developed over decades, so it seems unlikelyto me that gold shorters could develop even the cohesion of thatoil producing cartel over just the last two weeks........................................................................................................................................................How much influence would the FED have and could it even locateenough of the potential panic buyers and calm them? What aboutthe rest of the world's shorts? How many would have to hold inorder to prevent the "melt-up?" How many different organizationsworld-wide would have to be involved? What tracks would such aneffort leave for 'us' to follow?.......................................................................................................................FOA/Another would have anticipated the possibility of such a movewouldn't they? ................................................................................Regards, Journeyman
Hill Billy Mitchell
(10/12/1999; 23:39:07 MDT - Msg ID: 16214)
RUMBLE
I think I'm catching a faint sound like a distant rumble in the night. Could it be thunder?
Hill Billy Mitchell
(10/12/1999; 23:42:00 MDT - Msg ID: 16215)
Journeyman
You are on to something? Your brain functions better than most.
Strad Master
(10/12/1999; 23:48:43 MDT - Msg ID: 16216)
Questions for everyone - especially FOA
The "conventional wisdon" holds that gold will now languish around this level and eventually drop back into the high $200's with an eventual drop into the high $100's. It seems quite clear that the "conventional wisdom" is not all that wise. My first question, though, is this: If gold should rise to , say, $30,000 per oz as FOA predicts, how, at that time could one's gold holdings be unwound? For what? $30,000 in paper money? Or would the actual gold buillion become the only negotiable currency? If so, what good would a one oz.buillion coin be? It can't be cut apart into small pieces with a pair of garden shears. Beyond that, Goldbugs are notorious for holding onto their phsical holdings long past the time of maximum return. In fact, I'm sure that some older people who post at this forum have held gold through several (albeit relatively minor by comparison) upmoves in gold only to kick themselves for not having sold at or near the top.
Question two: I have a bit of physical gold and a much smaller portion of physical silver and even smaller still - platinum. Platinum is on the move up as is silver to a lesser extent. Is the consensus here that it is better to sell off platinum at some point soon to obtain more gold or is the diversification I describe likely to prove useful?
Question three: Is it not true that Mr. Greenspan and several other Fed personages are connected to Goldman Sacks in some way? That would seem to make the recent rise in the POG particularly troubling since their buddies are directly involved with the first wave of big losses. Comments?

For the information of anyone interested, I tried to post something here on Sunday night but it failed to go through. The "Test" that appeared today (yesterday?) was done in my name by USA Gold. What follows is the text of the posting I had attempted earlier:

ALL: I've recently started lurking here at USA Gold. Perhaps some of you will remember me as an old-time poster from the Kitco site. Finally, my dear friend and musical colleague, PH in LA (who lives just round the corner) got me visiting over here and I must say that the level of erudition with regard to gold and finances is truly awesome, especially when compared to the (now somewhat degraded) Kitco site. (Apologies to a selected few of my old buddies over there!) Despite the fact that the PM market practically bankrupted me (that's another story for another time) I did manage to get a nice little stash of physical PM's - mostly gold (bought around $308 in the summer of last year) with a bit of silver and platinum thrown in. It will be difficult for one like myself, who is a musician, to know the best moment to unwind those holdings but by frequenting here, maybe I'll have a better chance. I must say it is fascinating to read extraordinary postings such as the ones by FOA yesterday (Saturday), and compare them with the general market understanding of gold. I was speaking with one person today who said "Oh yeah, gold has gone up, but CNBC just reported that it was merely a 'dead cat bounce' and so I won't have anything to do with a preposterous investment like that." Old perceptions die hard, no? The complacency out there is truly staggering.
Anyway, I rarely have much time to post these days - minding three kids and all. Even as I finish this it will be time for logging off. Nevertheless, I just wanted to make my presence known and will try to post whenever I have something of interest to write. Best to all of you.
Strad
Goldspoon
(10/12/1999; 23:49:40 MDT - Msg ID: 16217)
In 1hour and 30 minutes .......Platinum lift off!!! in Zurich
Platinum once again rallied hours before golds revival...
Platinum is already and pumped before nocking the door off of it's hinges going into Zurich...and Launched into a whale of a London fix....New York will be stunned....be there......when the warm up band (Platimum) turns the stage over to the Star of the Show.....Gold!!!
Black Blade
(10/13/1999; 00:05:13 MDT - Msg ID: 16218)
Strad Master, why gold?
I would would ask, what it is that you want gold to do for you? Is it for investments or insurance? I buy PM's for portfolio insurance, if it turns out to be an "investment", then it may not necessarily be so good if you wish to trade gold into currency, especially an inflated currency at $30,000/oz. I veiw PM's as a transfer of accumulated wealth through transitory markets. If there is an economic crisis, currency crisis, etc., then PM's are "insurance" to transfer wealth into a more stable period. I presume that you have health insurance, auto insurance, life insurance, home insurance, etc. Why not financial insurance? Just a short thought on this matter.
Strad Master
(10/13/1999; 01:19:32 MDT - Msg ID: 16219)
Black Blade
Sure, I have all the aforementioned insurances and you make a good point with regard to gold being one such "insurance" against financial turmoil. Still, it would be nice to use the gold for something other than its just sitting around gathering (gold) dust while the price soars to unimaginable heights and then back down again - maybe even to an eventual ultimate loss. (Where is the insurance then?) Gold going to $30,000 per oz. is still something of a wild appearing dream. If it does, many of my family and friends will be hurting badly since they don't take out the kind of "insurance" policyy you describe. It would be nice to be able to help out in such an instance. Beyond that, it also would be nice to be able to use all gold to purchase goods and services for myself and my family should the need arise.
Anyway, thanks for your reply. It does provide an interesting perspective.
Black Blade
(10/13/1999; 02:11:23 MDT - Msg ID: 16220)
Strad Master
If you are looking at PM's as an investment, then perhaps you could allocate more toward acquiring physical as well as PM mining stocks. I hold both physical and stocks with a goal of using the physical as a portfolio hedge against come what may. I hold the stocks with the goal of financial gain in currency (hopefully a lot of currency), provided that the relative value of the currency is not overly diminished when I cash out. I hope that I have accumulated more than enough for insurance purposes, so that I can provide for the needs of myself and family, and any excess for trade or investing, etc. Of course it would be just as difficult to time the PM markets as it is to time the equities markets. However, you could always call the master of the "castle" and discuss your investment needs and goals. At least that is a start.
SteveH
(10/13/1999; 02:59:51 MDT - Msg ID: 16221)
letter to a friend
Leroy,

Looks like FOA is getting right to the point again. Also, his repost of an old post of ANOTHER is showing the early predictive powers or 'inside' position he held even two years ago. Interesting. Opec production cuts are three times more than analysts thought they would be. Longer term bond closed above 6.22% yield yesterday. Things are heating up, eh? And rumors are rampant that the Fed is bailing out major bullion banks for their manipulative ways and rewarding their manipulation through removing responsibility from shorting activities. Add to that Ashanti and Cambior having difficulties in a rising gold market and you have the makings of a real mess (bullion banks told many mining companies they would lower their credit ratings if they didn't hedge gold product, which means that they believe it wouldn't rise. Ultimately when it rose $65.00 this put these mining companies at financial risk because they can't produce enough gold, quickly enough to meet their margin calls on the gold market's rise -- seems like fraud by the bullion banks to me because they forced the hedge and then benefit from the negative impact that coercion caused. Not moral busines practice.) Ted Arnold is calling for Fed assistance because the rise in gold may force closure of bullion banks (cake and eat it too syndrome). Now who would have thought gold would have been driven to $0? At some point this short-selling game of gold manipulation had to end. Now that it is ending, the major benefactors are crying foul. Give us a break!

SteveH

***

Welcome Strad and other new folks. Things are heating up, eh? The pace is most scary too. Definitely snails have been left in the dust, the way things are progressing. This all started off very slow but now the crescendo builds to finale(sp?).
SteveH
(10/13/1999; 03:01:34 MDT - Msg ID: 16222)
look at oil go (gold too)
www.mrci.comGold(CMX) Dec 318.5 323.2 316.9 322.0 +3.8 10/13/99 1:48 322.1 321.4
Silver(CMX) Dec 556.0 558.5 555.0 556.0 -0.7 10/13/99 1:40 558.0 556.5
Copper(CMX) Dec 78.70 78.80 78.50 78.70 10/12/99 23:54 78.70 78.40
Platinum(NYM)(Access) Jan 408.7 412.0 408.7 408.7 10/12/99 21:20 412.0 407.7
Market Mth Open High Low Last Change Date Time Ask Bid
Crude Oil(NYM)(Access) Nov 22.40 23.00 22.33 22.90b +0.60 10/13/99 1:48 22.98 22.92
Crude Oil(NYM)(Access) Dec 22.35 22.94 22.33 22.90b +0.58 10/13/99 1:48 22.92 22.85
Heating Oil(NYM)(Access) Nov 57.80 59.60 57.80 59.25b +1.35 10/13/99 1:36 59.40 59.10
Heating Oil(NYM)(Access) Dec 59.00 60.50 59.00 60.15 +1.56 10/13/99 1:21 60.15 59.95
Unleaded Gas(NYM)(Access) Nov 63.00 64.25 63.00 64.00b +1.00 10/13/99 1:44 64.20 63.80
Unleaded Gas(NYM)(Access) Dec 62.45 63.60 62.45 63.40 +1.01 10/12/99 22:49 63.70 63.40
Natural Gas(NYM)(Access) Nov 2.919 2.987 2.919 2.987 +0.060 10/12/99 16:00 2.988 2.984
Natural Gas(NYM)(Access) Dec 3.110 3.170 3.110 3.170 +0.052 10/12/99 15:59 3.175 3.168
Market Mth Open High Low Last Change Date Time Ask Bid
Soybeans(CBOT) Nov 498.00 498.25 497.25 498.00 -1.50 10/13/99 1:11
Soybean Meal(CBOT) Dec 156.20 156.20 155.70 155.90 -0.30 10/12/99 21:09
Soybean Oil(CBOT) Dec 16.79 16.79 16.72 16.73 -0.15 10/13/99 1:49
Corn(CBOT) Dec 200.00 201.00 200.00 200.50 -0.75 10/13/99 1:46
Wheat(CBOT) Dec 257.50 258.25 257.50 257.75 +0.25 10/13/99 1:28
Oats(CBOT) Dec 10/12/99 11:35
USAGOLD
(10/13/1999; 09:05:55 MDT - Msg ID: 16223)
Gold Market Report: Gold Surges Higher on Short Covering
MARKET REPORT(10/13/99): Day Thirteen of the Big Breakout....And
coincidentally October 13, 1999.....Gold up $5.90 in the early going on
short covering.........Oil is surging with crude oil inventories
dropping and the realization sinking in that winter looms and OPEC means
business on the production cuts..............In the gold market, we are
starting to see reports of mining company position squaring. Also,
though talks are under on the Ashanti/Lonmin merger, the whole deal
rests on whether or not Ashanti's hedge book problems can be resolved
before the merger. From what I can gather, that appears to mean that
Lonmin wants someone to bail out Ashanti before they will proceed.
Trading restriction have been lifted on Ashanti stock............Leonard
Kaplan, chief bullion dealer for LFG Bullion Services, is quoted on FWN
this morning as saying "the gold market is forming a positive technical
formation and a temporary break out spike to as high as $360-380 is
likely in the next 30 days.".......FWN also reports what many in the
gold market have suspected in recent days: "A key report by the US CFTC
Tuesday showed that speculators and funds have whipsawed a considerable
net-short futures position with a more massive one in COMEX options
during the latest price rally.".............In other words, it appears
the big speculators were attempting to defend their short positions by
going in even deeper ala Nick Leeson, Martin Armstrong, Sumitomo. Once
again, this implies that if the restraints were removed, gold would
skyrocket. The big question among gold traders on Wall Street. Who's
going to be shown the door first?...................In an opinion piece
headlined Gold Market Unleashed J. Moeller, Senior Economist at
Germany's Dresdner Bank, makes the bullish case for gold in light of the
recent decision among European central banks to restrict supplies:
"Overall, prospects have improved significantly on the gold market.
Uncertainty over sales by the central banks, as powerful market players,
has given way to a manageable assessment of the supply side. Given the
ongoing improvement in world economic activity and the general tendency
towards brighter commodity markets, the demand side looks quite
positive. Even in a largely inflation-free environment, i.e. without the
classical incentive from a threat to the monetary value of the major
currencies, gold could still gain further ground."... We also find the
following from Deutsche Bank's daily report via Reuters: "Gold lease
rates and option volatility remain high, suggesting that recent strength
in the gold market is likely to be sustained until such time as the
initial damage and aftershocks driven by recent official sector
announcements have run their course."................ That's it for
today, fellow goldmeisters. See you back here tomorrow.

The October edition of News & Views is on its way to our readers and
we invite all our visitors to take advantage of a free trial
subscription to one of the most popular, widely read and quoted gold
newsletters. Last month we predicted an explosion in the gold price.
This month we deal with the nettlesome subject of paper assets in this
tenth month of the penultimate year. And we all know what that means.
October brings with it our annual Halloween issue. Here's an excerpt:
"And this October could very well foreshadow a most fateful stroke of
midnight only two months away. October. When markets crash and assets go
bump in the night........." We think you will gain by taking advantage
of our offer...........

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.
Skip
(10/13/1999; 09:14:33 MDT - Msg ID: 16224)
CALVF and other small gold stocks
Although I've enjoyed significant moves up in GSR, DROOY and HGMCY since late September, CALVF (Caledonia Mining) still sits around 6 cents per share...in spite of the fact that it reached over $8.00 per share within the last five years. Caledonia Mining has property in Africa larger than the country of Switzerland, so they seem to have potential.

Is there some reason why investors have not yet discovered CALVF? Truly it appears to be a realistic 100-fold shot for investors, so what am I missing here? Is CALVF a home-run waiting to happen? Educated comments welcome.

--Skip
TownCrier
(10/13/1999; 09:46:10 MDT - Msg ID: 16225)
BankOfJapan statement on Y2K lending policies
http://biz.yahoo.com/rf/991013/go.htmlPartial text of the BOJ's official statement on Y2K policies:
"...the Bank will respond flexibly such as by providing ample funds ...the Bank of Japan intends to respond in a timely and appropriate manner through its lending in case an institution experiences a temporary liquidity shortage..."

Makes you consider that all other central banks have similar policies, and makes you wonder if the carnage among the gold lending markets isn't being temporarily treated with regulatory kid-gloves in the name of Y2K.
elevator guy
(10/13/1999; 09:46:15 MDT - Msg ID: 16226)
CALVF hedged or unhedged or hedged lite?
When I get time, I'll see if it has quarterly reports on the web.
Mundane duties beckon me away-
beesting
(10/13/1999; 10:25:28 MDT - Msg ID: 16227)
Skip#16224 CALVE (Caledonia mining)
http:www.bfanet.com/cgi-bin/bfaweb.exe/bfamemo?file=sens&page=STHSkip please give more info on mine statistics.(balance sheet etc.)

I have been following a small well established South African company,which has been paying great dividends for many years. St.Helena Gold mines(sgoly) 54% owned by Gold Fields(the guys that bought 12 1/2 tonnes of Gold at the BOE auction Sept.21) St. Helena has only issued 9,625,000 shares of which Gold Fields owns 5,217,151. Current U.S. price about $3.00 per share.

The South African Government recently lifted "ring fencing", which means:NO TAXES ON GOLD MINING OPERATIONS!!

Here is a release by Mr. Chris Thompson, Chairman of Gold Fields:
Aug.26,1999..."The South African Gold mining industry is experiencing one of the most difficult times in its history(written a few weeks ago, before the Gold Blastoff)and the opportunities which have been created through this decision will certainly have a positive impact for stakeholders, we applaud the Government for its industry support in approving our application",he said. Gold Fields is now in a position to create a mega mine.More at above URL.

Way back, St. Helena reached $50.00 U.S. per share I got real lucky on timing and made a great profit.

Our portfolio is currently heavy into physical Gold also.....good luck in your investing.....beesting
beesting
(10/13/1999; 10:34:17 MDT - Msg ID: 16228)
Why can't I post accurate URL's??????
http://www.bfanet.com/cgi-bin/bfaweb.exe/bfamemo?file=sens&page=STHTry this!!
TownCrier
(10/13/1999; 10:40:23 MDT - Msg ID: 16229)
Camdessus says US economy could stand Dow setback
http://biz.yahoo.com/rf/991013/f6.htmlYou will notice that IMF Managing Director Michel Camdessus mentions this DOW setback, but makes no statement about whether the US economy could withstand a Martian invasion. That's because they only bother to talk about the troubling things that will likely come to pass. Think about it.

Additionally, he praises the ECB for having managed their monetary policy without being influenced by the past swing in the euro's exchange rates.

Now consider this...if it is praiseworthy to have monetary policy independent of influences by exchange rates, then why is Japan being leaned on so hard to stem the tide of the rising yen? Because under the historical arrangement utilizing the dollar as the reserve currency, an appreciation of the yen against the dollar weakens the very foundation upon which it stands. Then all bets are off and it becomes "every man for himself" in the currency world. Maybe that's why the BOJ has been reluctant to do the government's bidding--to act quite liberally under an easy money policy. It could be that the BOJ already sees the dollar as doomed, and they are acting (to the extent possible with hands that are tied) in such a manner to best position the yen for the day the dollar sinks (and wipes out their foreign assets.) When it becomes every man for himself, it would seem that the BOJ doesn't want the yen to have become so tied to the dollar that it has to go down with the ship.

Bottom line: The fortunes of the yen and the dollar have become nearly as one.
JCS
(10/13/1999; 10:46:35 MDT - Msg ID: 16230)
Murphy's Latest Email
Just received this from Bill Murphy:
Subject:
BULLETIN!! - MIDAS - BULLETIN!!!
Date:
Wed, 13 Oct 1999 11:45:17 -0400
From:
LePatron@LeMetropoleCafe.com


Le Lemetropole members,

The CRB is up over 4 points and trading over 209.
Yesterday, it was up almost 4 points too. The bond market
cannot rally for diddly even with the threat of a
sharp stock market sell off. Inflation signs are
everywhere.

This just in from Cafe member SteveH:

Date: Wed Oct 13 1999 03:28

"nuggets (you wont hear this on CNBC Squawkbox USA...)
ID#386129: but on the same program, EURO version..just
had guest , James Mckay from Nat Aust Bank on..he says
that Fed is helping out major co who are short on gold...
one major investment bank is in deep doo doo...he
expects volatile trading, gold reaching $375..."

Expect the gold producers to continue to buy in their
forward sale positions. Management is under great
pressure from shareholders to cover hedges and
minimize exposure from the "structured deals"
dealt to them by the "Hannibal Cannibal"
bullion dealers.

All the best,

Bill Murphy
Le Patron
http://www.LeMetropoleCafe.com






RossL
(10/13/1999; 11:04:07 MDT - Msg ID: 16234)
Caledonia
http://www.caledoniamining.com/They have a big debt load. A higher POG could help them pay it off and then earnings would raise the share price.
Hill Billy Mitchell
(10/13/1999; 11:15:33 MDT - Msg ID: 16239)
Jack
Not much room on this site for Jack???
Simply Me
(10/13/1999; 11:24:42 MDT - Msg ID: 16240)
Jack
Why don't you go run a few miles, and come back to post when you can express yourself without so much vulgarity.
onlychild
(10/13/1999; 11:34:33 MDT - Msg ID: 16241)
Jack
You'll have to play nice, or go home.
Gandalf the White
(10/13/1999; 11:48:01 MDT - Msg ID: 16242)
Where is Goodspoon ?
I'm betting that he fell off the horse with no name !
<;-)
EMSAEMSA
(10/13/1999; 11:59:43 MDT - Msg ID: 16243)
GOLDBONHOLDERS
IS THERE GOLD IN THESE GOLD BONDS STILL OUTSTANDING SINCE THE 18TH CENTURY......GOLD BONDS OF UTILITIES OR RAILWAY CO.... THEY PAY THERE INTEREST WITH GREENBACK... (NO GOLD AS PER CONTRACT BETWEEN PRIVATE PARTIES.) THE JUDICIARY SYSTEM DO NOT PERMIT PRIVATE CONTRACTS TO BE RESPECTED BUT, POLITIC CAN CHANGE THE LAW AT WILL???? IN THE FORBES MAGAZINE DATED 6/2/97 PAGE 47 THE LAW WAS CHANGE IN FAVOR OF THESE GOLD CLAUSES BUT REVERSED .... AND POLITIC CONTRIBUTION WAS MADE BY THE RECEIVING PARTY.....OTHERS MAGAZINES HAVE ALSO POSTED INFORMATION ON THE SUBJECT....FOR THE AUSGOLD READERS'S KNOWLEDGE CAN ANYBODY GO TO THE LIBRAIRY AND POST THE FALLOWING: FORBES MAGAZINE 6/2/97 PAGE 47....WASHINGTON POST 8/30/97 PAGE A 27....ROCKY MOUNTAIN NEWS 8/25/97 PAGE 8A.... DES MOINES REGISTER 2/21/97 PAGE A1....DES MOINES REGISTER 7/27/97 PAGE B1....THANK YOU....EMSAEMSA
megatron
(10/13/1999; 13:01:43 MDT - Msg ID: 16244)
Gold dealerz
Can anyone post the name of a PM dealer in Vancouver or Seattle area who does NOT ask for ID when buying PM's FROM you? Is this the law only in Canada or is it the law? Asked if ID was required to sell to my local guy and he said yes, you need picture ID and that it's faxed to the RCMP every day!! I refuse to do this. Names, I need names!!!
Gandalf the White
(10/13/1999; 13:11:53 MDT - Msg ID: 16245)
Seattle PM dealers! re Megatron's question !
Come on down --- I have yet to find a dealer in Seattle that looks beyond your paper dollars. Seattle Coins is my favorite. Talk to John D.
<;-)
Gandalf the White
(10/13/1999; 13:17:29 MDT - Msg ID: 16246)
GC9Z = Dec Au on COMEX
Closed at $321.80 today Wednesday 10/13.
Hey PeterA -- Blue enough for you ?
<;-)
CoinGuy
(10/13/1999; 13:36:13 MDT - Msg ID: 16247)
Gandalf
Gandalf,
Gold and "THE HORSE WITH NO NAME" did look good today, if Goldspoon fell off this wild beast, we won't be seeing him for awhile.

The Nasd and the Dow are dumping...

Dow: -164
Nasd: -79

The bond yield looks strong at 6.29...

Things seem to stay interesting these days.

Coinguy
Yellin' of troy
(10/13/1999; 13:38:46 MDT - Msg ID: 16248)
ORO
I find it remarkable that you recommend Mises to me (perhaps only for some history?) and then reject what I take to be the Austrian school's main contribution to economics, the subjective theory of value, in favor of what sounds for all the world like a Ricardian/Marxian labor theory.

Sure, if a kind of money costs almost nothing to produce and anyone is free to churn it out, it will be overproduced and lose its value. But if it has a monopoly issuer, who derives seignorage from producing it, but only so long as it stays money, and who therefore has an interest in keeping it reasonably sound and thus acceptable as money, why can't supply be controlled? I fail to understand the inevitability of collapse. No doubt if the issuer is a government, a bunch of politicians with short time horizons and no interest in or understanding of economics, they can be expected to screw up the money, but that's a political problem, not an inherent economic feature of concept money.

More later. I am planning a long post for tomorrow, complicated enough that I want to write it offline.
TownCrier
(10/13/1999; 14:01:33 MDT - Msg ID: 16249)
-"Godfather" of euro wins Nobel economics prize
http://biz.yahoo.com/rf/991013/mq.htmlRobert Mundell has been named the 1999 Nobel Economics Prize winner for "his prophetic theory on common currencies which formed the foundation for Europe's single currency, the euro," according to this Reuters article.

The Nobel officials said "The world has caught up with Mundell's idea. The world has changed and he foresaw this change...and had some very revolutionary ideas about how one should restructure economies to manage the world we live in right now." In forming his theories, the secretary of the prize committee, Torsten Persson, told a news conference that Mr. Mundell first "asked what effect monetary and fiscal policy might have in a situation where exchange rates were floating and capital perfectly mobile. At a time when a national currency was considered a must, he asked under what conditions a country should give up its monetary sovereignty and enter a monetary union. This turned out to be highly significant."
Click this link for a further introduction to the concept of "optimum currency areas," a reagion in which the willingness to migrate will ensure full employment if one subarea experiences economic shocks. Sortof a macroscopic extension of what occurs in a city. If your business goes under, you'll generally seek employment elsewhere within that region rather than wallowing in despair within the empty halls of your former employer.
TownCrier
(10/13/1999; 14:22:28 MDT - Msg ID: 16250)
EU set to spread east
http://news.bbc.co.uk/hi/english/world/europe/newsid_473000/473541.stmSlovakia, Latvia, Lithuania, Bulgaria, Romania and Malta have been upgraded from second-tier status to join with Poland, the Czech Republic, Hungary, Slovenia, Estonia and Cyprus in European Union negotiations to join as early as 2003.

European Commission President Roman Prodi expressed that this oportunity to unite Europe is the first since the fall of the Roman Empire--but done on the basis of shared ideals and common rules.
Tomcat
(10/13/1999; 14:51:18 MDT - Msg ID: 16251)
Repost on the availability of silver
Date: Wed Oct 13 1999 16:44
chzcake (Availability of Physical Silver) ID#159259:
Copyright � 1999 chzcake/Kitco Inc. All rights reserved

Local coin dealer says very strong interest in gold and silver these days. Says supplies of '99 Silver Maple leafs are finished -- kaputsky. Confirmed by M-nex broker who claims they have the last of the '99 Maples that were minted. Looks like that's it for further production of Eagles and Maples for the next 3 months as both the US and CDN mints concentrate on their higher margin millenium collector sets. BTW, dealer says he is having trouble getting silver bars in. M-onex still has lots of
bags of the 90%.

With a move in silver over $6, we should see the premiums increase sharply. Premium on Silver Eagles @ M-nex is 55% at present. They apparently have some in stock, if broker knows what hes talking about.
beesting
(10/13/1999; 14:54:45 MDT - Msg ID: 16252)
Stocks going down worldwide!
http://finance.yahoo.com/m2?uIs what's happening in stocks worldwide a correction or a collapse? 38 stock exchanges worldwide show losses in the last 24 hours, 4 show gains.They're all following the dollar based U.S. exchanges down.
Oct. 1999 soon to be history, Gold up 'stocks down, T-Bills .0622 interest.....all of us watch together.....beesting
Goldfly
(10/13/1999; 15:03:07 MDT - Msg ID: 16253)
Yo, Townie!!! - The "100 Lat"
http://www.bank.lv/naudas/english/Coins/mLs100.html
This came to us courtesy of Aragorn a few months back.

The pieces of the jigsaw puzzle fall together so much easier when you know what the picture is!
TownCrier
(10/13/1999; 15:04:05 MDT - Msg ID: 16254)
Pakistan closes its banks
http://news.bbc.co.uk/hi/english/business/the_economy/newsid_473000/473047.stmPakistan's financial institutions are now closed and the central bank ordered the suspension of foreign exchange transactions in response to frantic depositors seeking to withdraw their foreign exchange depositis.

The head of research at a brokerage said, "We thought we had seen the worst in May last year and that a modicum of confidence was returning... The fear is that this coup could turn out to be a bigger jolt than the nuclear tests."
mike55
(10/13/1999; 15:21:57 MDT - Msg ID: 16255)
What Year 2000 Problem?
http://cbs.marketwatch.com/news/current/poll_y2k.htx?source=htx/http2_mwA link to an article with the results of a CBS MarketWatch poll. The lack of disclosure and preponderance of spin are currently succeeding (for a while). An excerpt: "...the public has become increasingly convinced that government and corporate attempts to prevent a technological Armageddon have succeeded and that there's nothing to worry about." Hmmm...wanna' take that bet?
SteveH
(10/13/1999; 15:53:02 MDT - Msg ID: 16256)
Dec gold and more...
www.mrci.comOvernight trading. Check oil out!

Market Mth Open High Low Last Change Date Time Ask Bid
Gold(CMX) Dec 322.5 323.2 322.5 323.0 +0.2 10/13/99 14:33 323.3 322.7
Gold(CMX) Feb 324.0 324.0 324.0 324.0 +1.3 10/13/99 14:33 324.3 323.5
Platinum(NYM) Jan 407.0 411.8 405.1 408.4s -0.3 10/13/99 13:39
Palladium(NYME) Dec 10/13/99 11:11
Silver(CMX) Dec 561.0 563.0 561.0 561.0 10/13/99 14:20 562.5 561.0
Copper(CMX) Dec 79.70 79.70 79.50 79.65 +0.10 10/13/99 14:26 79.85 79.45
Market Mth Open High Low Last Change Date Time Ask Bid
Crude Oil(NYM) Nov 22.75 23.16 22.60 23.06s +0.76 10/13/99 13:36
TownCrier
(10/13/1999; 16:07:28 MDT - Msg ID: 16257)
Ron Paul For President, Again?
http://www.spintechmag.com/9910/ma1099.htmArticle says that Congressman Paul "personally absorbed Austrian economics and other subjects until he was an expert on the gold standard. When he came to office, he understood that militarism was the chief enemy of liberty, that capitalism allows for free action, and that he was going to be lonely in his knowledge."

In 1981 he served on the Gold Commission, formed to try to advise the President whether a return to a gold standard would be wise for the nation at that point.
Tomcat
(10/13/1999; 16:13:07 MDT - Msg ID: 16258)
mike55

Interesting. Just because a technological Armageddon has been avoided doesn't mean real trouble has been avoided. What a play on words. The sad part is people read this junk and believe it.

There is also a good side to it. Because of articles like this, the Y2k run on gold is delayed and you and I get more of a chance to buy PMs and bargain prices.
Gandalf the White
(10/13/1999; 16:26:40 MDT - Msg ID: 16259)
(No Subject)
A Story -- (fiction ?)The Hobbits "Lucky Day" !

I will bet that most folks did not know that "13" is considered to be a lucky number by Hobbits. Well it is indeed the favorite date of the month for the Hobbits that work for me, as it is also PAYDAY ! Well, today was no different, but having read about The Stranger's payday activities, a large group of them, (the twenty that call themselves the POG) all wanted me to take them downtown to see their favorite LOCAL coin dealer.

SOOOO, off we went, right after the COMEX closed for the day. Upon arrival, we found the dealer at his desk in the back, talking with someone. BUT no one was in the shop but us. He "buzzed" us to enter, and came up front to greet us all.

After greeting were exchanged by all, he said that he was indeed happy to see the Hobbits today, because he had a story for them. ALL the Hobbits were excited because of course, they LOVE stories and they know that the dealer tells only TRUE stories.

The dealer locked the door and motioned to the Hobbits to sit down on the floor as he went back to his desk in the back and picked up a item. Then he came back and start to tell this story.

He had this morning received a call from an older woman that wished to sell some coins as she had a need for green paper moneys to settle her debts. They (the dealer and the older woman) agreed on a price for the coins and she later that morning arrived at the shop with the coins and sold them to the dealer. The dealer did not ask the older woman for ID as she was selling less that the twenty-five oz. of Gold that the US Federal law requires data to be reported, and she left as happy as a clam. (local PNW joke)

Then the dealer had carefully looked at the coins before he bought them, but for some reason, he took them all from the
tall square plastic tube again before he put them in the safe. TO HIS SURPRISE, the coins started to speak to him ! He had spoken to coins before, but it had been a long time and he felt that he had lost the gift. He was thrilled to again speak to coins, and ask them to tell him of their travels. Well, that is the problem they all told him. EACH of the forty coins had the same story. They had been minted at the height of the last gold boom in South Africa and only taken one trip via ship to NYC and then to Seattle my train. AND they had been seasick
or stuck in a bouncy mailcar all the way to where this middle aged woman picked them up at the Registered Mail desk at the postoffice.

They then went directly into a dark drawer with perfumed thingies and never saw the light of day until today. They all were about to celebrate their 20th mintdate and they had not been able to see the world as they had all wished to do.

The dealer had hesitated to tell them that their value had decreased from over US$200. to about US$80. while they were safely kept in the drawer, but he did and as expected they all cried and felt depreciated. BUT, then the dealer saw the Hobbits coming to visit him and had a GREAT IDEA !!!

SOOO, he ask the Hobbits if they would like to each purchase one of the 1/4 oz. KRands of 1980 and give it an opportunity to travel the world and see the sights ???

WOWERS !! Did the Hobbits enjoy that idea, and soon the green paper was traded for twenty of the 1/4 oz. KRands, taken from the bottom of the tube, and the twenty Hobbits promised each brilliant piece that they would take them wherever they traveled and also promised the other remaining twenty 1/4 oz. KRands, that they would all return next month to get them too, if the dealer would save them for that period. The dealer said, "Consider it a done deal at the same price!" SOOO, everyone went home happy as a -- "you know !"
<;-)



Leigh
(10/13/1999; 16:30:10 MDT - Msg ID: 16260)
Ron Paul for President
I'd vote for Ron Paul in a heartbeat! Maybe Clinton will overdo his grab for dictator-for-life and cause a backlash. Can't you just see Ron Paul for President, America on a gold standard, our citizens treated as responsible adults by the government? Gives you hope!
Leigh
(10/13/1999; 16:34:45 MDT - Msg ID: 16261)
Gandalf the White
Dear Gandalf: Please excuse this dumb question, but what are hobbits? Are they your kids?
Leigh
(10/13/1999; 16:46:08 MDT - Msg ID: 16262)
Hobbits
Boy, those hobbits know how to strike a deal! What if gold goes up to $1,000 an ounce by next month? That dealer's going to be real sad!
Gandalf the White
(10/13/1999; 16:46:09 MDT - Msg ID: 16263)
Leigh's Question
Hobbits are the "Halflings" of the works of the GREAT author JRRTolkien from which SIR Aragorn III and others, such as I devote our earthly days to try and equal the eminent.
<;-)
PS: there are no such things as a dumb question!!
(only dumb answers.)
Angel
(10/13/1999; 16:46:09 MDT - Msg ID: 16264)
Gandalf The White
I'll bet the kids at your house loved storytime. Thanks for more adventures of the Hobbits.
TownCrier
(10/13/1999; 16:51:02 MDT - Msg ID: 16265)
Sir Goldfly...great coin. The others in the set look elegant too
http://www.bank.lv/naudas/english/index_coins.htmlI took special note that politicians' faces (dead presidents) were completely absent from the currency. Click the "Banknotes" link on this page to see the Latvian paper. I wish ours looked this nice, with the additional knowledge that it was convertible for such a handsome gold coin!

Food for thought...If America established a similar coin tomorrow that weighed one ounce and had a face value of $350, how many people might be inclined to walk to their bank and withdraw some of their deposits in gold coin to get while the gettin's good? If you were to pull out a thousand bucks for safe keeping on the front side of Y2K, would you choose paper or plastic, er, I mean gold? A no brainer! Well, that's essentially the situation that we have now, although your bank can't complete the whole operation. You need to involve a gold broker such as our good host, MK, to supply the REAL money side of the withdrawal. I'm not surprised that more and more Americans are catching on to real money, but I am surprised that the precipitating moment were they all rush in at once hasn't arrived yet. Hopefully Sir Aragorn III can give us any thoughts he might have on Latvia's banking system. If I may venture a guess, a republic such as Latvia that has recently gained its independence is more likely to act in such a way to "do right" by their citizens ahead of all others. That is, they will put the individual person's interests ahead of the corporation, big business, exporter, politician, etc. (Just look back at American history to see that our own constitution required our money to be no thing other than gold and silver.) The integrity of a nation's currency is a direct reflection on the integrity of the nation itself.

That Latvia has adopted use of convertible gold coins seems to give the Second Articles of the IMF (precluding a link to gold) a firm smack upside the head...revealing an anticipation of the direction to be taken (that being an eventual participation in the currency union), and putting their own citizens interests at the forefront in a position to easily gain personal possession of gold. You've got to admit, if getting gold here in America were as easy as simply withdrawing money from your account (as it is there,) a lot more people would probably do it.

But what do we get instead? Big business and bankers and a media rife with otherwise inexplicable anti-gold propaganda at every turn of the page or dial. Why do they bother to mention the stuff at all if it is so vile? Why should they trouble themselves to dissuade a handfull of American citizens from acting on their own intiative, implulse, or whatever, to get themselves some real gold in hand? Because once you've actually held real money as a product of your earnings, you're forever wise to the monetary shenanigans that they have been using to their advantage for years.

It's nice to see a country put their people's interests first, isn't it? Thanks for the link and the opportunity for a little impromptu expression.
Gandalf the White
(10/13/1999; 16:53:59 MDT - Msg ID: 16266)
OOPS === 2nd try
I will bet that most folks did not know that "13" is considered to be a lucky number by Hobbits. Well it is indeed the favorite date of the month for the Hobbits that work for me, as it is also PAYDAY ! Well, today was no different, but having read about The Stranger's payday activities, a large group of them, (the twenty that call themselves the POG) all wanted me to take them downtown to see their favorite LOCAL coin dealer.

SOOOO, off we went, right after the COMEX closed for the day. Upon arrival, we found the dealer at his desk in the back, talking with someone. BUT no one was in the shop but us. He "buzzed" us to enter, and came up front to greet us all. After greeting were exchanged by all, he said that he was indeed happy to see the Hobbits today, because he had a story for them. ALL the Hobbits were excited because of course, they LOVE stories and they know that the dealer tells only TRUE stories.

The dealer locked the door and motioned to the Hobbits to sit down on the floor as he went back to his desk in the back and picked up a item. Then he came back and start to tell this story.

He had this morning received a call from an older woman that wished to sell some coins as she had a need for green paper moneys to settle her debts. They (the dealer and the older woman) agreed on a price for the coins and she later that morning arrived at the shop with the coins and sold them to the dealer. The dealer did not ask the older woman for ID as she was selling less that the twenty-five oz. of Gold that the US Federal law requires data to be reported, and she left as happy as a clam. (local PNW joke)

Then the dealer had carefully looked at the coins before he bought them, but for some reason, he took them all from the
tall square plastic tube again before he put them in the safe. TO HIS SURPRISE, the coins started to speak to him ! He had spoken to coins before, but it had been a long time and he felt that he had lost the gift. He was thrilled to again speak to coins, and ask them to tell him of their travels. Well, that is the problem they all told him. EACH of the forty coins had the same story. They had been minted at the height of the last gold boom in South Africa and only taken one trip via ship to NYC and then to Seattle my train. AND they had been seasick
or stuck in a bouncy mailcar all the way to where this middle aged woman picked them up at the Registered Mail desk at the postoffice.

*****Sorry -- lost the first portion of it !
<;-(
ORO
(10/13/1999; 17:12:48 MDT - Msg ID: 16267)
Yellin' of troy
I view labor as affecting the pricing of items in demand as the major element in the cost of their replacement. The capital as labor concept of the Ricardian/Marxian labor theory is not why I look at it and not the view I take. However, the fact remains that labor was used to create capital and much of the value of physical and intellectual capital is dictated by the labor costs of its replacement.

The Austrian subjective valuation theory pretty much comes down to the fact of an individual's choices being dictated by the information available to him. That currency can be valued in context of its history and the individual's observation of it being accepted around him, does not indicate what buying power that currency has, whether it is a commodity money or fiat currency concept money.

The main contribution of the Austrian school, as I see them, are in analysis of monetary systems and the debt cycle. Part of the analysis is dedicated to the liberty in economic context. One of their observations was that fiat concept money is a tool of government power and a cause of distortion on the economy. In context of the debt cycle, the fiat money is a mechanism that tends to prolong and amplify distortions caused by the malinvestment of the late expansion phase, and prolong and amplify the debt repudiation phase. In their subjective valuation theory, the government's replacement of a multitude of decisions of market participants with one decision by government, distorts the signals available to both individuals and government decision makers. Though the distortions may not be apparent, the Austrians insist that they are there. I agree.

My thinking about the market's setting of the value of money by supply and demand views the supply and demand components as follows:
For any money at all:
(1) Demand for money to settle debt denominated in that money.
(2) Demand for money to settle taxes, which are a form of induced debt.
(3) Demand for money to purchase necessary products available solely in exchange for the denominated money, as is dictated by government decree. (In this case, gold and oil.)
For commodity money alone:
(4) Demand for the commodity as such.

On the supply side:
(1) The creation of debt money, as long as the debt is accepted as equivalent (at some exchange rate close to par or above it) to the item denominated.
(2) The issue of money by a government or by the producer of the commodity money.
(3) The acceleration of the monetary velocity has the effect of supplying more money from an increased pace of economic activity. This can usually be ignored.

The assignment of value to money because it is used as such is universal to all moneys, and can not be assigned to one over another. It is a residual value that remains when one takes out the elements specified above. It is also the erroneous to think this value to be permanent. It transfers in proportion to usage.

Concept money has no demand of its own when not tied to specified products and services. What does it mean to have a money with an unspecified backing; "full faith and credit of the ..."? When one tries to redeem fiat concept money beyond the demand elements above, one has to face the fact that it is nothing, unless there is a legal obligation for its acceptance by government decree (hence "fiat"). The legal obligations for fiat money derive from legal tender laws
that enslave us. History reveals that the instances of fiat money issued in excess of the 3 elements of demand, cause price inflation and the price controls that commonly follow, make the inflation that much worse, as they eliminate all supply of price controlled items and set a universal floor price rather than a cap. Even the most draconian of legal tender laws are, eventually, unenforceable.

The point of the discussion comes in the analysis of the demand and supply of moneys when the economy unwinds the debts of various denominations and actual "cash" money is supplied, or not supplied through commodity money production and "printing" of concept money. This is when reality sets in, and the inherent values of the commodity money and the concept money come in.

The US has refrained from large scale monetization of debt over the past two decades. However, the government has made itself legally liable for an enormous amount of debt in the form of the items covered by the CAFR ($60 trillion or so). This includes insured pensions, mortgages, government debt of all levels (municipal through Federal), FDIC insured deposits, Brady bonds etc..

Aside from monetization, the only source of money in the current global system is new debt. When new debt is either not created or not valued at par (or above) by the markets, i.e. principal is discounted. Then monetization is the only course left that would not destroy the banking system. This has already started. The size of "overnight" repos is growing rapidly, and soon will be transferred into longer term repos and into outright purchases by the Fed. Looking at the historical data, the Fed's monetization of debt, rather than its creation, is the leading cause of price inflation during low growth periods.

Because the monetization is sourced in the US and much of the debt is in the hands of foreigners (if Eurodollar deposits are included it is very much more than appears in the commonly cited statistics), the $ assets of the world are under threat of severe dilution. Well before the threat is realized, the exchange rates of the dollar against most anything will fall steeply.

As pointed out in previous posts, the US now faces a choice to balance among the following: (1) destruction of its banking system (potential for a much greater depression than the great one), (2) the severe devaluation of its currency both at home or abroad, or (3) the default of external debt, Russian style. (4) There is the option of delay by increasing indebtedness by government deficit spending, making some new rules to slow things down. Any delay in this will just exacerbate the problems as the debts grow with time, as is their nature. The cost of buying more time is now so high that very little more time is being bought.
JCTex
(10/13/1999; 17:23:49 MDT - Msg ID: 16268)
Leigh: Ron Paul for President
Nice thought, but not going to happen. Remember: this is the same electorate that is so dumbed down that they elected Slick and that woman.....twice!!
Gandalf the White
(10/13/1999; 17:26:28 MDT - Msg ID: 16269)
Keep Jumping SPOT --- HIGHER !
$322.30 at 19;25 NY time !!
<;-)
JCTex
(10/13/1999; 17:37:41 MDT - Msg ID: 16270)
Mike55: everything hunky-dory [if they only knew]
Three or four years ago, I took a look at the National Debt [the real one that includes the so-called off budget stuff]. I then assumed a standard 8%, 30 year amortization note PER TAX RETURN. My computer backlashed, and I fled to the little room with my barf bag in hand. I would give you the numbers, but have purposely forgotten them. It really gets cute and fun when you add in the taxes that those people are already paying. Fiat money has done so many wonderful things for us.
CoBra(too)
(10/13/1999; 17:52:32 MDT - Msg ID: 16271)
A short note to PPT!
It does appear you guys lost control of what to control!

Finally - CB2
Canuck
(10/13/1999; 17:56:32 MDT - Msg ID: 16272)
With the rain pouring down, wasn't it a Golden Day!
7:30pm Eastern.

Just checked my 'Online Discount Brokerage' service and my
UN-hedgeded major made a couple bucks and my UN-hedged junior has been very aggressive again today. My Physical made a couple more bucks per onze today and I am a happy camper. Please excuse my gloating, I apologize . . . . .not!

I hope everyone had a nice day, financially and emotionally.
I hope that everyone who made less money than me soon catches up and I hope to catch up to the 'bugs' that made more than me.

More than the money issue, I had a great day. A co-worker that has been bad-mouthing Y2K and gold and etc. called me today and ushered congratulations. I accepted his thanks and in the appropriate spirit of the moment offered my
condolences (sp) to his wallet. His quick wit offered this
reply, "Oh, I didn't tell you ... I moved all my internet stock into gold on the 24th" I answered, "Sure you did, pal.
Then why, for the past 2 weeks, do you look like you've sh*t
yourself."

Bonds are tanking, dollar is re-dropping, Steve's NAPM has bottomed, oil fires are burning, and PPI/CPI is lurking.

I said on Saturday, we got our good news Sept.21/26, now give us the BAD news.
SteveH
(10/13/1999; 18:12:33 MDT - Msg ID: 16273)
Kaplan
www.goldminingoutlook.comkaplan (today)-- THOUGHT OF THE DAY: The most recent COMEX traders' commitments showed commercials net long gold futures, with speculators roughly equally net short. On the surface, this would be moderately bullish. However, if one looks at the combined traders' commitments for futures and options, one discovers [thanks to Mr. Robert Doyle of Credit Suisse First Boston] that speculators have actually gone very heavily net long, but they have done so by purchasing gold call options rather than going long gold futures. Looking at options only, the speculator long position essentially doubled while the speculator short position was cut in half, while open interest increased by over 200,000 contracts. This makes the current speculator long option position equivalent to 5.0 million ounces (155.52 tonnes), up from 3.7 million ounces the previous week. This is three times the previous all-time record. Historically, very heavy call buying usually stimulates the market in the very short term but strongly increases the likelihood of a significant pullback in the intermediate term (over the course of several weeks).

***

Could be that the speculators finally have it right only to find out there are so many of them that it will cause a default of all option writers when gold goes higher. Also, note that the provider of the information (correct me if I am wrong) to Mr. Kaplan is a known gold-shorting company.
Leigh
(10/13/1999; 18:49:47 MDT - Msg ID: 16274)
New Krugerrand (Info from Flierdude)
Flierdude posted this article on Kitco a while ago. I hope he doesn't mind my reposting the first two paragraphs of it:

S. Africa launches millennium Krugerrand gold coin

JOHANNESBURG, Oct. 13 (Reuters) - South Africa launched its millenium Krugerrand gold coin on Wednesday as part of a global drive to boost demand for the metal into the new century.

"As the world's largest gold producing country, South Africa and South African gold mining companies have an obvious responsibility to support the promotion of gold..." Kelvin Williams, Chairman of Rand Refinery Ltd., said at the launch of the Krugerrand 2000 gold bullion coin.
mike55
(10/13/1999; 18:55:26 MDT - Msg ID: 16275)
Tomcat & JCTex
I've been granted computer access by the boys ("Hey, take 5 from your homework and let the old man on!"), so I'll be brief. It astounds me when talking to co-workers, even (or perhaps especially) the finance folks, how most refuse to believe that any financial slowdown can occur due to interconnectivity issues related to manufacturing, delivery of raw and finished goods/oil, financial transactions, etc. A very few, though, young and old, have moved out of equities and see the potential for problems. The fiat game is a real eye-opener once you begin to understand it. Since the rollover is the issue that brought me here in the first place a year ago, I've learned so much more than years of formal education and business experience have taught me. Starting ten months ago, I also became a holder of physical as insurance for the first time in my life. The bargain prices of PMs continue to be a blessing. Thanks to all on this forum for the continuing education. I came, I saw, I continue to learn. Oops...gotta' go -- I've used up my allocated five minutes. Hope to be back later.
Gold Power
(10/13/1999; 19:03:09 MDT - Msg ID: 16276)
Comments on Kaplan's Comments
I want to key in on one statement Kaplan made:

"... speculators have actually gone very heavily net long, but they have done so by purchasing gold call options rather than going long gold futures."

The reason they have done this is because psychologically, they still do not believe this rally. They are willing to risk premium money, but they aren't willing to risk real money by buying a futures contract.

This shows great skepticism. The move to higher gold prices will not be over until this skepticism is gone. Any maybe not even then.

Gold Power
ORO
(10/13/1999; 19:09:40 MDT - Msg ID: 16277)
Yellin' of troy
In a pure cash economy, where (1) debt was outlawed (since it is a natural market phenomenon there is little reason to believe this law would work), (2) there are no taxes, (3) no commodities are denominated by law at any exchange rate with the currency, the cash issued by the government would have no demand and would buy nothing. The fact that a government issued a paper that says "I am money" does not make it so.

No degree of monetary and fiscal responsibility would make anyone want it. Perhaps collectors would start interest in it, perhaps paper recyclers would find a method to bleach the ink off.

As the US did in the 30s the demand for the unbacked Federal Reserve Note was created by the government's decree of it replacing the word "gold" in contracts of transaction and debt, and that where these contracts say $, these notes must still be accepted. Furthermore, FDR and his rubber stamp congress produced an avalanche of taxes that enhanced demand for the currency.
PH in LA
(10/13/1999; 19:11:17 MDT - Msg ID: 16278)
An Innocent Question
FOA, ORO, Tzdeak, Anyone Else:
So far, we have seen no connection whatsoever drawn between the collapse of the Karachi gold exchange last week and the military coup in Pakistan today. Mere co-incidence?
FOA
(10/13/1999; 20:05:55 MDT - Msg ID: 16279)
Comment
Strad Master, welcome and glad to see you here!

ALL,
Today was a good day for gold, again. It looks as if the beginning realignment of the dollar against the Euro is beginning to affect the financial markets.

I have seen several write-ups by our well paid "bold bears" Mr. Smith and Mr. Arnold. They certainly do have a good understanding about how Euroland values gold. An understanding that, in their reference of experience must span all of twenty years+/-?? Truly, their full life comprehension of assets must have never seen total loss due to war, economic failure or political injustice. Why else would they so boldly speak for an entire continent of people and the official monetary stance of their leaders.

These "paper boys" would have the EMCBs sell off gold because holding more interest earning dollars will back the Euro more effectively, right? Conversely, even a fool would see that the US should then print more of it's currency and buy the debt of any higher yielding countries. Why miss
out on all of that return by just "holding the ability to print money and not use it"? Their concept would see a printing press as an asset with no return.

Again, the "paper boys" are following a path that's made "sensible" because in their lives they have most likely not been defaulted on. Gold does not pay a return as a reserve asset because it isn't lent like the currencies. Lend it out and it's at risk, just like the currencies. Hold no unlent gold (or paper money) and you have no reserves outside of risk.

It begs the question; why not lend out all real assets? Lend out every thing that's held in quantity, the chairs, books, lights, bricks, food! Get a return on everything useful? If it's usable, someone will borrow it and pay a return. Truly, young boys always look smart until the world makes fools of them. They pretend to speak for the masters as long as followers listen to and act on their concepts. I think that, this whole group has entered a play written by oil and the BIS. What they are about to experience is "the last act".

Today, the real ECB masters have brushed aside these loud youths as concern for their Euro Gold takes precedent. As the need to hold an "unlent currency of world class" becomes undeniable, the "paper boys" will suddenly mature into "grown wise men". With new jobs perhaps? and much poorer for the ware?, no doubt, but wiser in the future, never the less.

Presently, the US holds (percentage wise) little foreign exchange currency because it's position is one of setting interest rates on the world reserve currency to effect it's value. The years of being the major trade settlement currency allows such a luxury. Negate this position in it's present economic condition and the US will have to face severe inflation. I believe, investors world-wide will attempt to run from the dollar by buying gold. This fear is manifest in the ongoing success and advancement of the Euro.
If the "paper boys" (above) even half way understood this position, they would see that it's the dollar reserve holdings of the EMCBs that are "dead assets". As the Euro ascends to the world reserve position, it will, like the present US dollar, be able to affect value through interest rates alone. Foreign currency reserves will begin to fade in importance. Indeed, what good are interest bearing dollar reserves when the country of origin is running a trade surplus? How does one use a dollar (and it's interest) if the trade flow never flows into the US? Indeed, how does one effect a "profitable interest return" on dollar reserves if it takes a major devaluation to reverse said trade flows?

If one does not buy goods from America then a further rebuttal asks; if the alternative to buying goods is buying assets, then why invest more money into a foreign country if your own is growing faster?
If Euroland begins to run as a currency transition tears apart the Dollarland, our "paper boys" will find that the only "dead asset" in the EMCBs reserves may just be Dollar!

ORO, I read your ORO (10/13/99; 17:12:48MDT - Msg ID:16267)------ and vote for a combination of (2) the severe devaluation of its currency both at home or abroad, or (3) the default of external debt, Russian style. Also add extreme foreign exchange controls aimed directly at the
Euro. One of the reasons internal "street gold" will run so far! Question, when do your posts stop getting "better" (smile).

Thanks FOA
Chris Powell
(10/13/1999; 20:11:52 MDT - Msg ID: 16280)
An appeal and some good reading at GATA
Good reading at GATA tonight

1) GATA Vice Chairman and Treasurer John D.
Meyer appeals for help from the mining
industry. Friends of gold, we really could
use your assistance here. If you endorse the
letter, please send it to your favorite
mining company with your endorsement.

http://www.egroups.com/group/gata/253.html?


2) Reginald Howe of www.goldensextant.com has
another brilliant essay, "Real Gold, Paper
Gold, and Fool's Gold." Everybody must know
the difference.

http://www.egroups.com/group/gata/254.html?


3) A major Dow Jones News Service story
distributed this week quoted GATA Chairman
Bill Murphy prominently.

http://www.egroups.com/group/gata/255.html?


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

Journeyman
(10/13/1999; 20:20:41 MDT - Msg ID: 16281)
Oro, FOA: Time horizon??
You suggest 1. severe devaluation of currency ($) and 2. adefault on external debt (Russian style.) What are the timehorizons you envision. I realize, as Yogi Berra quipped,"Prediction is very difficult, especially of the future." Butand educated guess is better than none at all!Regards, Journeyman
FOA
(10/13/1999; 20:27:47 MDT - Msg ID: 16282)
(No Subject)
Goldspoon,
I was just thinking. (smile) Perhaps you should switch to a fine Arabian horse? Like Golden sun,no? They are proven winners from long before your entry was ever seen. They even run strong during economic storms. Just a thought, my friend.

PH,
Karachi?
Call your bank and say "get me ten tonnes".
Yes sir Mr. PH, it will be on your statement next month.
(30 DAYS LATER)
Hey, my gold isn't on the statement?
Well sir, we have a little problem. Let's talk? Can you come
down here and....................

Time, PH, time. FOA
THX-1138
(10/13/1999; 20:39:26 MDT - Msg ID: 16283)
BILDERBERG GLOBALISTS TO MEET IN WASHINGTON D.C.
http://www.jvim.com/cgi-bin/update.cgiThis came off the Jack Van Impe website.
October 12, 1999

WorldNetDaily reported: "The secretive Bilderberg society, a group some believe conspires semi-annually to foster global government, will hold a steering committee meeting in Washington next month, WorldNetDaily has learned. The Nov. 4-5 conference, featuring invited guests such as Vice President Al Gore and presidential candidate John McCain, is scheduled for the Library of Congress in the nation's capital and is sponsored by the American Friends of Bilderberg. The U.S. group is directed by Henry Kissinger, David Rockefeller, Paul Allaire and Richard C. Holbrooke. Since 1953, the Bilderberg group has convened government, business, academic and journalistic representatives from the U.S., Canada and Europe with the express purpose of exploring the future of the North Atlantic community. The international steering committee includes Conrad Black, publisher of newspapers throughout Canada, the U.S. and the London Telegraph and Jerusalem Post, Vernon Jordan, George Mitchell, Kissinger and Rockefeller. On the agenda for the November meeting is a panel discussion of the U.S. presidential elections and an exploration of the national security requirements for the 21st century. Among those involved in the discussion of the latter subject will be former U.S. Sens. Gary Hart and Warren Rudman, former Speaker of the House Newt Gingrich, journalist Leslie Gelb and Secretary of Defense William Cohen. McCain, at the special invitation of Kissinger, will speak at breakfast Friday morning..."
TownCrier
(10/13/1999; 20:49:52 MDT - Msg ID: 16284)
After the Close: the GOLDEN VIEW from The Tower
Canadian-born Robert Mundell, a Columbia University economist, was named today as the 1999 Nobel Economics Prize winner for his pioneering role in laying the foundation for Europe's single currency, the euro. Today it was also announced that six additional countries have been elevated to negotiation status for EU membership, bringing the total to 12 potentially new members as early as 2003. It is only fitting, therefore, that the euro closed trading in NY up 0.4 cents against the dollar and up 0.83 yen from its previous close. The dollar had a tougher day with a sell-off in equities in full swing, however, and itself lost ground against the Japanese currency by 0.32 yen. The dollar somehow managed to give back its overnight gains which came on news that the Bank of Japan would take steps to add to its money supply to stimulate economic activity through outright purchases of qualified collateral. Anyway, The Tower sends "Congratulations!" out to Mr. Mundell who long ago set out to discover "what effect monetary and fiscal policy might have in a situation where exchange rates were floating and capital perfectly mobile." In a special side note to The Tower from a respectable gold broker who had recollections of past dealings with Mr. Mundell, his memory was that the man had "a 'golden' view."

The Dow Jones Industrial Average was anything BUT gold, falling well beneath its 200-day moving average of around 10,385. The DOW closed at 10232.16, down 184.90 (-1.77%) on the day. Declining stocks outnumbered advancers 2,142 to 904, and new 52-week lows creamed new highs by 317 to 15. The Nasdaq lost 71.16 (-2.48%) where losers topped advancers by 2 to 1.

TheStreet.com quoted Randy Billhardt, co-head of block trading at PaineWebber who described today's action like this. "It was more of a slow death than an immediate kill [but] volume did sneak up to 800 million which is not like holiday trading. I put more credence [to a move] as volume creeps up. I didn't feel like it was a disaster but I think some of the fundamentals people are starting to see are frightening." He said that trading itself is getting difficult..."liquidity in individual stocks is not high," further elaborating an example that IBM traded nearly 15 million shares, but the average sized trade was 1200 shares.

Seems fitting...you can't SELL stocks in size without tanking the market just as you can't BUY gold in size without springing the price.

In the credit market, the 30-Yr Bond's effective yield was pushed to a new high for the year (nearly reaching the 2-year high) at 6.288% as it cheapened by 20/23 in price. Traders were spooked as the Bridge/CRB Index rose 2.1% to 209.37, its highest close since July 20, 1998. Tony Crescenzi, chief bond market strategist at Miller Tabak Hirsch, said of this pickup in commodities "It's really a global phenomenon. There's a global economic upturn under way, particularly in industrial production, and that's pushing commodity prices higher." Also pressuring prices lower was a large amount of offered corporate and agency debt, together with apprehension of key economic reports due out tomorrow and Friday -- the September retail sales report and Producer Price Index. The PPI is expected to match or exceed its previous gains of the past year. Bond traders were clinging to hopes that these expectations were already priced into the market.

The year's span of gold lease rates have almost fallen into a normal looking bond-type yield curve, though still abnormally high for this monetary precious metal.
1-month 3.6060%
2-month 3.7080%
3-month 4.3770%
6-month 4.4086%
12-mnth 4.4130%

The Tokyo commodity Exchange gold contracts were said to have firmed yesterday due to the demands on "the overseas spot market," according to dealers. Imagine that...Americans must be buying gold. The masses are waking up. Well, they might actually be still in bed, but at least one eye was opened, and spot prices were last quoted in NY up $3.30 today, at $319.80. As this report is being written, spot gold has climbed further in overseas trading, topping $323 per troy ounce.

As long as Bridge News can deliver objective market reviews, we'll keep passing them along (and also to give the fingers a chance to recover!)
---
NY Precious Metals Review: Gold up $3.6 on short covering
By Darcy Keith and Tina Petersen, Bridge News
Washington--Oct 12--COMEX Dec gold cut some of its morning gains after
late session bank sales, settling up $3.6 at $321.8 per ounce. Gold posted
strong gains this morning after rallying more than $6 in overnight ACCESS
trade amid short covering, hitting a high of $325.3.

In gold, a lot of the morning buying activity was said to be coming
from hedgers and there continued to be talk of large producer buybacks.
"Producer buybacks after the Asian selling lent support to the market,"
said a trader, "but the follow through did not hold. It was basically just
another sideways day." Traders said most of the activity occurred in
London in the morning, with very light activity in the afternoon.
"I still think we're seeing lots of short-covering, especially for
positions off of the exchange," said Jim Steel, analyst with Refco.

Traders said there was not any particular news driving today's gains,
attributing the move to technicals and range trading. "It's just a lack of
selling around the $320 level," said one trader, adding that the lack of
selling interest extends to producers as well.
Another trader said the market "is very volatile and just seems very
skittish" following its big rally over the last few weeks.
Leonard Kaplan, chief bullion dealer for LFG Bullion Services, said
the gold market is forming a positive technical formation and a temporary
break out spike to as high as $360-380 is likely in the next 30 days. He
said shorts are getting increasingly nervous as it becomes more apparent
that the higher gold trading ranges are likely to be sustained.

Another dealer disagreed with Kaplan's assessment that the market is
going higher. He said most of the short-covering should be over at $335,
and then Dec will head back into the $275-300 range. "This might take a
month," the dealer said. "I think this is just a short squeeze and when
all this is unraveled gold will gravitate to $300, plus or minus $20."

[Doesn't this particular trader with the dissenting view have any appreciation for what will happen to his understanding of "technical trading fundamentals" when it becomes clear that there is an unfillable (at these prices) requirement for metal to satisfy the outstanding gold LOANS? That is a realm completely outside of the contract and hedging world that he is apparently too close to. So close, in fact, that he can't see anything at all...like having your nose against the bark of a tree. You certainly can't see the forest until you step back.
+
The European decision didn't rock the pricing world because it made these simple futures contracts for hedging and speculation on prices any more difficult to enter and exit. It didn't. It put the kibosh on the musical chairs of gold loans...that is, paying old loans (or simply the gold interest) using newly borrowed supply. Game over. The derivative boys, like this anonymous trader, have a mouthful of bark and no grasp on the forest. Well, that's probably understandable, as sorting out the aftershocks of the various bets that went tremendously bad for short-side specs or producers in this first price jump has no doubt kept them pretty close to the tree. So much for resting the fingers! Back to Bridge...]

A trader said one factor that might push prices up in the near term is
that traders are trying to get their customers that hold short positions
to cover those positions and square up. "That should put gold on tack to
take out the old highs," he said.
He said that while prices might slip in the near term to $295-305 on
profit-taking, " I don't see it going below that range. I think prices
likely will rise in long run." He said he thought prices would have come
off by now, "but we're seeing aggressive buyers at the $320 level."
A Commitments of Traders' report by the US CFTC on Tuesday showed that
speculators and funds have whipsawed a considerable net-short futures
position with a more massive one in COMEX options during the latest price
rally. The report also eased concerns that a similar, futures-only one
Friday was incorrect.
***
(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
---

For the third straight day, 2 hapless October futures contract holders received notification from their counterparties this morning that delivery of metal would be the expected form of contract settlement, bringing the total for October to 2,510 contracts (251,000 ounces.)

Final figures for yesterday's futures trading on the Commodity Exchchange divison of the New York Merchantile Exchange reveal that there was no net change in the level of open interest for the October contract (111 contracts), four rookies teamed up to add 2 contracts to November's whopping 14, and the truly eye popping open interest of 117,885 contracts for December expiry had dropped by 1381 from the previous day. Total open interest on COMEX gold futures thru June 2004 stand at 216,938 (as of yesterday's close, that is.)

The Republic National gold depostory for COMEX saw their Registered inventory fall by one contract worth. This 99 ounce withdrawal leaves 918,729 brethern ounces sittin' on the shelves, shakin' in their shoes, worried about their fate come December. From this vantage point, there is no knowing how much of this gold is in place as simply enough to satisfy margin requirements on open contracts, how much might be fully backing an open interest contract, or how much is simply sitting there in safe storage without contract attachments--and therefore not at risk to a future change in ownership via a counterparty's announcement of delivery intentions.

After a textbook coup, there now seems to be a lot of standing around and blinking as the dust settles in Pakistan. The down-but-never-out, back-from-retirement, tanned-rested-and-ready-for-"reelection" military chief General Pervez Musharraf put off until Thursday any official policy statement since seizing power on Tuesday. Pakistan's economy had been in the dumps, and businessmen had actually been eyeing with envy the liberalized markets that had been growing across the border of their "rival" India. In a report we posted earlier today, the central bank ordered a bank holiday and the termination of all foreign exchange transactions as concerned depositors rushed to access their accounts. (Should have had some gold at home, eh?) Depending on the type of government chosen to replace the one now ousted, further IMF "assistance" is in jeopardy. Government sources say it is not clear whether a caretaker government that might replace parliment would be exclusively civilian or include military officials.

In another textbook example, but this time focusing on the economics of supply and demand, November crude futures rose more than 3% as traders had a chance to fully react to Tuesday's after-market release of American Petroleum Institute data which showed the massive decrease in crude oil stockpiles that we briefed you about in yesterday's GOLDEN VIEW. November crude settled up 76c at $23.06, and traders will be now be poised to see if tomorrow's 9:00 release of Dept. of Energy data confirms this sizable drop. In the past, it has not been uncommon for the two sources to differ significantly, sometimes one showing a decline while the other shows a rise. That's modern science for you, folks. It's no wonder our last Martian probe crashed and burned...poor thing.

Price seems to be of less concern to the producers these days...almost like they've got an ace up their sleeve. In two FWN headlines, we learn that an energy official in Mexico says "Recent oil drop no cause for alarm" (referring to price, not supply), meanwhile a UAE oil minister say while "Unconcerned on prices," they want "better compliance." Call me simple, but I'd be willing to settle for just a cheeseburger about now.

And that's the view from here...after the close.
ORO
(10/13/1999; 21:02:43 MDT - Msg ID: 16285)
FOA
Thanks, I don't know if they are getting better because I rarely have time to read what I write. Yellin' of Troy challanges me to try my best at clearing up my explanations and checking my reasoning. Hopefully this improves the writing.

Thanks again.

How "cut and dry" is the current ECB vision of their new fangled floating gold standard? Any mechanical details that can be disclosed?



SteveH
(10/13/1999; 21:18:16 MDT - Msg ID: 16286)
Howe
This is such a powerful article from Howe reprinted by GATA that I had to repost it here. See if you agree. I sent it to Leroy and posted these comments to him:

SteveH

Leroy,

If you were a person of wealth living in 1928 and you read this article one year before the stock market crash of 1929 you would probably discount it as pure rubish of a doom and gloomer. But, what if it turned out that it was true and that you were able to make investment decisions built around a foresightful article that saw it coming and for which everyone else yelled chicken little, chicken little, don't listen to him? Well, I have a feeling this is just that article and you are reading it before any market crash (question: can the market crash as in 1929?). It explains much and does so very well. This is a must read, if only from a stand point that at least if what he fortells does occur and you didn't do anything then you will at least be able to say, "I knew it was going to happen." The other person, of course, would think, "Yeah, so why didn't you prepare?"

It isn't Y2K that will be the big deal, it will be what Mr. Howe discusses below. So pretend it is 1928 and read this, it might actually be true (I hope not)and if it turns out that truth lies elsewhere then so be it. But it is no coincidence that the Internet and freedom of information arrived at a time when the very sharing of information may have truly exposed the financial problems of today in a way that those fortunate to read and discern truth from fiction may actually have a leg up. Truly every man's opportunity, eh?

Here are indicators I see as adding basis to Mr. Howe's words:

Gold price surge and 14,000 ton short position.
Long term bond yield above 6%.
Bill Gates, Soros, and Buffett with large positions in Silver or Silver mines.
Largest negative feelings on gold in history.
Largest stock market bubble in history wherein pundits say it is a new paradigm.
Stock market finding it difficult to make new highs.
New lows to new highs in a 3:1 ratio.
Tech sector only sector holding markets up right now.
Introduction of Euro as a competitive currency to the dollar.
Secret oil for gold deal in place since at least 1976, if not earlier (Jamaica Accords), which kept oil down in price in dollars.
Most everyone is in the stock market.
Negative savings rate.
Virtually no people for jobs.
No physical gold available in quantity to deliver against any future contract.
Price of oil doubling with room for higher prices yet.
Alan Greenspan Jackson Hole speach with over 100 powerful and negative words.
The list goes on....

SteveH

9:05p EDT Wednesday, October 13, 1999

Dear Friend of GATA and Gold:

Here is another brilliant essay by Reginald Howe,
Harvard-trained lawyer, financial analyst, and former
mining company executive. I think it belongs in the
same rank as the recent prophetic essay by John
Hathaway of Tocqueville Asset Management, "The
Golden Pyramid."

Howe easily beats 99 percent of the people writing
about economics and investment. You can review his
other essays at www.goldensextant.com, from which I
copied this one.

Please post this as seems useful.

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

* * *

Real Gold, Paper Gold, and Fool's Gold:
The Pathology of Inflation

By Reginald Howe
www.goldensextant.com

October 10, 1999

There was a time when, as someone recently said,
everybody and his cat knew the difference between real
gold and paper gold. But today's kool cats, if they own
gold at all (which few do), are too smart to pay
storage or insurance on allocated gold, too
sophisticated to tie up funds in stodgy old coins or
bullion bars with no yield, and too greedy to forswear
the allure of maximum leverage.

On the other hand, gold investors know gold first and
foremost as a portfolio anchor to windward, a shelter
in a monetary storm.

Ashanti and Cambior are examples of apparently good
hooks that dragged badly at the first stormy blasts.
Why?

The nub of the problem is to recognize that while the
line between real gold and paper gold is quite clear,
the line between paper gold and fool's gold can be a
moving target.

Paper gold is all paper instruments credibly repayable
in, or otherwise linked to, gold. Fool's gold is paper
gold that lacks credibility. Typical examples include
unallocated gold in unsound banks, options or futures
on gold from parties that may not be able to deliver,
and mining shares in companies whose ore deposits or
finances are questionable.

To appreciate the potential force of the coming
monetary storm, a basic understanding of gold, gold
banking, inflation, and deflation is essential. Forget
the Consumer Price Index and other such price indices.
They are generally lagging indicators of prices in
certain sectors of the economy. What is more, the CPI
is now subject to so many "adjustments" that its
usefulness except perhaps as a tool to reduce
government expenses tied to it (e.g., Social Security
payments) is suspect.

Forget as well most blather about whether gold does
better in an inflation or a deflation. Gold is
insurance against severe currency or credit
destruction, whether its precipitating cause be
inflation or deflation.

Inflation and deflation are, respectively, expanding
and contracting credit relative to some reliable
measure of money. Historically, the monetary measure
was gold, which does not do well in periods of
controlled or hidden inflation precisely because more
credit can be built on less gold without arousing
widespread public alarm. Measuring inflation today is
difficult because what passes for money -- unlimited
paper currency -- is itself so intermingled with credit
as to make the two virtually indistinguishable. A money
market fund is nothing really but short-term credit
obligations aggregated to look like what was once a
bank account backed (in a sound bank) by a 40 percent
reserve in gold coin or bullion resting in the vault.

Measuring the amount of real money in the world is no
more difficult today than a century ago. It is the
total above-ground physical gold stock, now somewhere
around 120,000 metric tons (excluding the double-
counting of gold leased by central banks but still on
their balance sheets). Going off the classical gold
standard and the quasi-gold standards that followed has
not change gold's inherent nature as real, permanent,
natural money. What it has done, besides changing for a
time at least general public perceptions about gold, is
to reduce to a small but elite group (international
financial institutions like the Bank for International
Settlements and the International Monetary Fund,
national central banks, bullion banks and their
customers, and the gold markets themselves) that
portion of the international currency/credit structure
directly tied to gold.

The short gold position created by the bullion banks
with leased gold mostly from the central banks is a
fractional reserve position. This physical gold sold
short must at some point be replaced, either by
purchase in the market or new production. Be this short
position 6,000 metric tons, 10,000 tons, or higher, it
is a significant multiple of annual new production of
around 2,500 tons. Some portion of this short position
represents forward sales by gold mining companies; the
remainder is largely borrowed gold used in the so-
called carry trade.

Accordingly, counting forward sales by gold mining
companies as existing gold (which they really aren't)
and assuming these contracts cover approximately half
of the total short position (as good a guess as any),
the gold banks are operating with fractional reserves
not far from the minimum safe level of 40 percent
sanctioned by historic experience. Half the physical
gold they owe to their lessors must be obtained on the
market. What is more, the other half is not really in
the vault. It is underground, but in an ore deposit,
where it must be dug out, processed, and refined before
it can be delivered.

On top of this shaky reserve position the bullion banks
have created gold derivatives, principally options and
futures. Cambior's hedge book shows how the gold banks
have created options for gold in amounts that far
exceed the amounts already sold forward by producers.
What is more, they have done so primarily in the over-
the-counter market out of public view. The gold banks'
exposures particularly as they relate to the gold
mining industry are detailed in an excellent article by
John Hathaway of the Tocqueville Gold Fund entitled
"Simple Math and Common Sense: A $66 Billion Problem."

(www.tocqueville.com/brainstorms/brainstorm0041.shtml).

All that is reported about the activities of the London
Bullion Market Association is its monthly average daily
clearing volume, a figure that will be quite
interesting to watch in the months to come. The LBMA
dwarfs the two best-known public markets, the COMEX and
the TOCOM, which, though smaller, are more transparent.
They offer gold futures contracts where open interest
now exceeds warehouse stocks by multiples of 20 or
more. On the COMEX open interest is north of 600 tons
(200,000 contracts x 100 / 31250 = 622) against
warehouse stocks of some 30 tons. On the TOCOM, where
the percentage of coverage appears even lower, open
interest has very recently shrunk from over 500 tons to
400 tons on Oct. 7. Fear, perhaps, is hitting the TOCOM
a bit before it hits New York.

As I have discussed before, TOCOM futures, which are
priced in yen, are in backwardation. But the degree of
backwardation is more than accounted for by interest
rate differentials between the dollar (in which gold is
almost universally priced internationally) and the yen.

In other words, the implied yen forward rate is not
what the difference between gold lease rates and yen
interest rates would suggest, but less (that is, a
smaller negative percent or discount) than on
dollar/yen futures. But as a result of the
backwardation, open interest on the TOCOM is mostly in
the further-out months, although this too is beginning
to shift.

The COMEX also offers options on futures contracts,
where the call open interest at strike prices between
$310/oz. and $335/oz. running from November to February
exceeds 500,000 contracts, representing futures on
another 1,500 tons. Including options, the two public
futures markets could be asked to deliver about one
full year's production within a year, mostly in
December and next spring. This potential obligation has
been assumed on the erroneous assumption that because
gold is just another commodity, there is no possibility
of ever having to make actual delivery of the total
outstanding open interest.

With another quick $60 on the gold price, all the
options will be well in the money, and futures on gold
will almost certainly be fool's gold.

But what is most alarming about the strained condition
of the gold banks is the larger world financial picture
of which they are a small but very important part. At
the macroeconomic level, not only are there eye-popping
figures on credit creation, derivative exposures, and
stock market valuations, but the potential collapse
last year of a single hedge fund, Long-Term Capital
Management, threatened sufficiently dire consequences
for the entire international financial system to
warrant a bailout orchestrated by the Federal Reserve
and backed by three discount rate cuts.

Determining what paper gold is credible and what isn't
is difficult enough under ordinary circumstances. Far
harder, and in extraordinary times much more crucial,
is gauging the external factors -- macroeconomic,
geopolitical, cultural, whatever -- that paper gold and
even real gold may have to survive.

The bullion banks and their customers were not caught
wrong-footed by a free gold market. They were caught
out of position by the first attack in a monetary war
they they didn't expect and on terrain they thought
they controlled. The full story of how British-American
manipulation of the gold market led to a counterattack
by the European central banks is yet to be told, but
Ashanti, Cambior, and their shareholders are among the
first victims.

Before the gathering monetary storm is over, there will
be many more casualties, caught in the crossfire as
nations fight a currency war the likes of which the
world has never seen. Governments that try to wage this
war with the weapons of old -- foreign exchange
interventions, interest rate changes, currency
controls, gold restrictions, competitive devaluations,
etc. -- are likely to be overwhelmed by the very free-
market principles that they have recently preached if
not always followed. For in a truly free market for
money, one with no legal tender laws, gold wins.

In the United States the legal and cultural settings
are vastly different from the 1930s or 1970s. As a
matter of law at least, gold is in a free market,
hugely complicating the legal basis for any effort at
confiscation. Trust in government officials, starting
with the president, has never been lower. So turned off
to their government are Americans that nearly half the
eligible voters no longer participate. So offended are
they by the shenanigans of the two major parties that
third-party or otherwise apparently independent
candidates arouse astonishing levels of interest and
support.

And then there is the Internet, giving freedom of
speech and debate rein to affect public policy as never
before while restraining the power of the mass media.
What is more, the Internet is now as international as
gold, giving gold bugs worldwide their own web in which
to catch miscreant officials and expose official scams.

So-called "gold clauses" were a standard feature of
many private contracts from the "greenback era" of the
Civil War to the midst of the Great Depression, when
the monetary measures of the New Deal made them invalid
by government fiat. Thus fell at a blow supposedly
certain protection against the gold devaluation of the
dollar, catching off-base the most prudent and best-
advised lenders of their era. For ordinary American
citizens in that particular financial cataclysm, mining
shares proved a much better refuge than physical gold
or gold dollars, ownership of which was made illegal on
the ridiculous theory that government gave gold its
value by making it money.

So too in 1971 not even an international treaty, the
Bretton Woods Agreements, could protect those nations
that had placed their reserves in U.S. dollars from a
second unilateral gold devaluation by the United
States. Only the French, by redeeming dollars in gold
"avant le deluge," gained a partial measure of
protection. The monetary history of the 20th century,
for both individual nations and the world at large, is
a story of swift and devastating discontinuities, not a
linear progression of events.

Today the evidence points to an impending conjunction
of macroeconomic and geopolitical events that will
almost certainly sweep from the scene the entire
monetary and credit structure erected on floating
exchange rates with the U.S. dollar as the key reserve
currency. This lopsided international structure --
imposed by and so favorable to the United States that
it has for years run balance of payments deficits of
truly gargantuan proportions -- is hopelessly
dysfunctional, often placing smaller economies at the
mercy of forex market speculators. As this structure
disintegrates, gold will retake its accustomed place at
the heart of the world monetary order not so much by
official choice as by international necessity enforced
by free-market principles that will be virtually
impossible for free governments at least to resist.

To ask at what price gold is to misunderstand both the
problem and gold. No one could foresee in 1929 that
gold, then $20.67/oz., would be $35/oz. in 1934?
Similarly, no one could could tell in 1971 that gold,
then $35/oz., would rise as high as $800/oz. within a
decade. What a few could and did predict in the months
and years immediately preceding these devaluations was
that the world would soon be forced to confront the
effects of then unprecedented credit inflation built
with far too little regard for the underlying amount of
gold available to support it. What they also could and
did predict was that the existing dollar/gold exchange
rate (or price) was too low and would have to rise
substantially to offset what would otherwise be
devastating credit deflations.

As they say, history repeats though never in quite the
same way.

Eight years ago in The Golden Sextant I discussed the
problem of setting a new official gold price in the
context of an orderly return to an international gold
standard. Today 40 percent gold cover for U.S. currency
in circulation would require a gold price above
$800/oz., almost twice the figure of eight years ago.
Yet we are constantly told that this is the decade when
inflation was vanquished. When gold was at $800/oz., in
January 1980, one ounce would buy the Dow Jones
Industrial Average, as it would have done in 1932 if it
had been fixed at $35/oz. two years sooner.

If you must guess a future gold price, ask yourself
what will be the price when next one ounce, two, or
even three will buy the Dow.

Eight years ago I also held little hope of an orderly
return to a gold-linked dollar. By then American
officials of both political parties and all three
branches of government had decreed by their actions
over many years that any formal return to gold would
come, if at all, only under almost unimaginable crisis
conditions, when the golden lifeboat was the only
lifeboat.

What historians may call "The Great Gold Scandal" and
Americans may call "Moneygate" did not begin just a few
years ago only to surface with the Bank of England's
gold sales. It began in 1971 when President Nixon
closed the gold window and for the first time in U.S.
history cut the dollar free from any meaningful link to
gold.

Compared to what is coming, Watergate was a bagatelle.

It is no accident that Moneygate began with the first
president to be driven from office and will likely end
with the first in this century to be impeached. Scandal
-- indeed, the most egregious breaches of public and
private trusts -- are part of the pathology of all
great inflations, a pathology not unlike that of the
drunk or the addict.

Nowhere is this pathology better described than in
today's addition to my reading list: "Fiat Money
Inflation in France" by Andrew Dexter White, founder
and first president of Cornell University. This essay,
written in 1876 and read by its author to members of
the House and Senate in connection with the debate over
returning to the gold standard after the Civil War,
tells the story of the French assignats of the 1790s.
This great paper money inflation, originating in the
French Revolution, ended "in the complete financial,
moral, and political prostration of France -- a
prostration from which only a Napoleon could raise it."

The tragedy for today's America is not just that the
looming monetary shipwreck could have been avoided by
more honest policy decisions, but that it would have
been avoided if mostly well-intentioned but misguided
officials had stuck to the letter and spirit of the
monetary provisions of the Constitution. Its framers
knew when they met in Philadelphia in the hot summer of
1787 what the French were about to prove to themselves
the hard way despite their inflationary experience 70
years before in John Law's Mississippi Bubble.

Nobody can predict with certainty or in detail the
consequences of a hundred-year storm, be it financial
and monetary or meteorological. Gold will more than
survive; it will prevail as it always has.

Gold mines will prosper, though certain mine owners may
fail. With clear thinking, preparation, nerve, and
luck, gold investors will survive; some may even
prosper.

As for the nation, let's hope that aided by their
ability to speak directly with each other on the
Internet, exercising their good judgment and common
sense, the American people will demand for themselves,
their children, and their Constitution -- as is their
right in accordance with its exact terms -- early
passage on the golden lifeboat.

-END-
SteveH
(10/13/1999; 21:27:11 MDT - Msg ID: 16287)
rhody
www.kitco.comDate: Wed Oct 13 1999 22:17
rhody (@chzcake: If you have silver certificates or a bullion) ID#410367:
Copyright � 1999 rhody/Kitco Inc. All rights reserved
account with a certain position of silver, I would advise that
you take delivery. I was down at Scotia Mocotta in Toronto
on Tues pm, and got the impression that the 100 oz bars were
in short supply. They seemed to have 1000 oz bars, but few
people take delivery of silver in that form. If you have paper
that says the bank owes you silver, this paper will be honoured
only if the silver is still there. In a full scale financial
crisis, the government is likely to freeze bullion accounts, and
again you would not be able to take possession. If you leave
your metal with a bank, I fully expect they lease it out and
give you nothing of the interest. This is the real problem.
One of these days, that leased silver will not be returned.
DD
(10/13/1999; 21:49:21 MDT - Msg ID: 16288)
Systems, Vibrations, & Reorder
Hi All -

Is it me or is there a vibration in the air? I don't think it's me. The brilliant chemist Ilya Prigogine won a Nobel Prize for his Theory of Dissipative Structures. In essence, he showed that everything is a system which becomes stressed as it grows and becomes more complex. In order to keep the system from going out of control, more and more energy is required to maintain the system's increased complexity. However, all systems have only a finite capasity to dissapate energy. At the end game, it take very little additional energy to push a system into a new state. When the system becomes too stressed and no additional energy can be brought to bare to maintain the status quo, the systems go into a process Prigogine called a "reorder". The stages of a reorder begin with "chaos" followed by the formation of a completely new system that can handle the increased energy. The chaos stage may take years or decades. Once a system goes into reorder, nothing can stop the process. An example of a system currently in this process is the former Soviet Union. It's still going deeper into in the Chaos stage. The new system that forms there will not be similar to any of the old ones or a bigger version of the old one. There's no way to predict what the new system will look like. OK. So what?

Well, here's so what. Look at what is happening with many of our old systems. Fiat dollar money. Gold games. Croney capitolism. The IRS. Education. Healthcare. Criminal justice. I could go on and on. These and many other systems are stressed to the point of breaking. It probably won't take much to push them into a reorder. Oh. And I forgot one other little item. Y2k! We have never in our history had an event like Y2k. I believe Y2k could very well inject huge energy and stresses into our already over-stressed systems. If so, can you spell the word C-H-A-O-S? At this late date, I'm now recommending only two actions for my family and friends. "Please, dear hearts", I emplore. "Prepare for almost certain disruptions in basic systems and buy gold coins. I'll even help you find the best sources for your Y2k preparation and I know a high intregrity and wise coin dealer who just happens to host the finest round table of golden knights on the planet. However dear ones. Time is short. The clanking of the chain which raises the draw bridge surely does not bode well for those who terry"
Carpe Diem. Best, DD
Richard, Oregon
(10/13/1999; 21:50:38 MDT - Msg ID: 16289)
Gandalf the White (10/13/99; 16:26:40MDT - Msg ID:16259)
Gandalf - How are you these days? Hope your trip went well. I often reflect on our meeting @ Peter's and enjoyed your and Velma's company much. Now - your story today - great. You have our (Carol and mine) interest up in the Hobbits and we wish to meet them. Is the "The Fellowship of the Ring" the proper starting place or?
Gandalf the White
(10/13/1999; 22:25:18 MDT - Msg ID: 16290)
Thank you Richard, Leigh, Angel and the tens of email acclaims!!! <;-)
Richard -- I quote from the front and back flaps of the dust cover on my First American Edition of JRRTolkien's book titled "The Silmarillon" which was published posthumously.
" J.R.R. Tolkien, known to millions as the author of 'The Hobbit' and (the trilogy) 'The Lord of the Rings', was also known as a distinguished scholar in the field of English Language and Literature, which he taught at Oxford for many years. "

The Trilogy was madeup of (in order) "The Fellowship of the Ring" -- "The Two Towers" -- & "The Return of the King".

So not to bore too many here, I shall send you an email related to the best starting point. BUT, let me warn you that some think that the writing styles of Tolkien are matched by the one called ANOTHER !! IF you make it through the Trilogy -- then try the "The Hobbit" and then you are ready for "The Silmarillion" !!!

<;-)
Tomcat
(10/13/1999; 22:39:50 MDT - Msg ID: 16291)
DD

Hey DD that was a great post on complex systems. Let's apply it to an economic system like our entire planetary system. What would be the energy that the system needs: Perhaps profits reinvested into functional captital or perhaps production? What would be the dissapation: consumption?

Is there a simple example/model that has been published that allows one to get the hang of the theory? Perhaps a scientific American type of article would help?
elevator guy
(10/13/1999; 23:44:49 MDT - Msg ID: 16292)
Complex systems!
The Earth is a complex system! How can energy gathered from the sun ever escape? I'm not a physicist, but it seems that nothing can radiate away through the vaccum of space, since open space lacks any matter for which heat to radiate into and through. But then there is light, so I guess there is a very small amount of energy disapated there, but that is reflected from the sun, so it doesn't lessen the energy level any.
Seems like the Earth can only receive energy from the sun, but not radiate it away. How is this possible? I mean forget about ultra violet for now, and forget about the ozone layer for just one minute, and just think about the zillions of watts of heat in the visible light spectrum, that is bad enough without going off into ultra-violet light and global warming. I'm having trouble just imagining how it is that we absorb so much energy during the day, with no way to release it into space.

Maybe the absorbed energy just kind of slows down, as the heated molocules of matter bang against each other, losing velocity internally.

Now to make this post gold-related, imagine a big meteor of gold smashes into the earth, quadrupling the supply. What effect would that have on currencies?

Ok, Ok, I know I'm off the wall tonight. Feel free to dis-regard this message. *^)
YGM
(10/14/1999; 01:13:55 MDT - Msg ID: 16293)
Late Nite Musings--Reginald Howe & FOA had the same Professor??
Anyone besides me see many parallels in the paper of Reginald Howe and events postulated by FOA & Another??
Seems to me we should be seeing more of these views expressed soon. Most after the fact, unfortunately for many!

http://www.goldensextant.com/commentary.html#anchor674427
YGM
(10/14/1999; 01:17:11 MDT - Msg ID: 16294)
Link from last nite- Reginald Howe
http://www.goldensextant.com/commentary.html#anchor674427Helps to insert in right space--Sorry
Strad Master
(10/14/1999; 01:55:08 MDT - Msg ID: 16295)
FOA and SteveH
Thanks for your warm welcome to this site. I am honored.

I was speaking to a friend today about gold, the markets, and the possiblilty of a meltdown in stocks. Basically he is asleep at the wheel, financially, as so many seem to be. To his credit, he couldn't undertand why there would even exist a gold carry trade - the leasing of gold, etc. The whole concept made no sense to him, just as it has never made logical sense to me. Therefore, I assume he is a potential goldbug - albeit a bit late to the party. Of course, all his assets are tied up in Mutual Funds, which he is now debating whether or not to get out of. I hope there is time for him if, indeed, he is embarking such a radical step at all, but with my dismal track record I hesitate to offer any trading advice.
Yesterday, being the anniversary of the '29 crash made my conversation with him all the more eerie. As I write this, the S & P, Dow, etc. are substantially up in Globex trading. Wonder if the dipsters are out in force to pick up "bargains".

STRAD
Goldsun
(10/14/1999; 04:30:29 MDT - Msg ID: 16296)
Simple Systems
Elevator Guy
Thinking about how other things work is a natural product of, and good training for, thinking about gold.
Mother Nature has some unresolved emotional issues with vacuum, but radiation does not share her intolerance.
Try thinking of light as visible radiation.
Goldsun
Goldspoon
(10/14/1999; 05:06:15 MDT - Msg ID: 16297)
FOA ...Arabian Horses....
FOA (10/13/99; 20:27:47MDT - Msg ID:16282)
FOA said...

Goldspoon,
I was just thinking. (smile) Perhaps you should switch to a fine Arabian horse? Like Golden sun,no? They are proven winners from long before your entry was ever seen. They even run strong during economic storms. Just a thought, my friend.

Goldspoon says..
Scriptures say not to covet another man's horse... i must say.... your horse makes one's purity difficult....

It is sad to be afraid of a "free democratic" government..that is why i own a stable of different horses... My government covets your horse also... and their honor and purity is questionable...

i was drawn here to learn from you...You my friend.. are teaching me to ride!!...i will repay you by losing in the end...meanwhile the race apears to be mine ....
Goldspoon
(10/14/1999; 05:32:07 MDT - Msg ID: 16298)
The race at this moment in time...
GOLD 322.50 323.50 +2.70 +0.84%
SILVER 5.65 5.68 +0.03 +0.53%
PLATINUM 437.00 442.00 +9.00 +2.10%

Horse with no Name has extended his head start of $100 to $120.....
Leigh
(10/14/1999; 05:42:22 MDT - Msg ID: 16299)
Gary North
Gary North has really been pushing gold lately! He has three gold articles already on his list this morning, and a number of others have appeared this week.
SteveH
(10/14/1999; 05:49:24 MDT - Msg ID: 16300)
Robert Mundell
http://www.columbia.edu/~ram15/LBE.htmThese are two paragraphs found on the last page of Mr. Mundell's 1997 talk. Note the reference to Mr. Greenspan using gold as an inflation indicator. I guess the Fed figures inflation is 20% right about now. And if they or someone holds gold down (not allowing a free market, which contradicts the first paragraph) then there must not be any inflation. So when gold goes above $1000 from this level, that would mean inflation is 300%. Ah, the web (pun intended) we weave....

"But I do not think that we will see the time when either of those two great economic powers, the United States and the European Union, will ever again fix their respective currencies to gold as they have in the past. More likely, gold will be used at some point, maybe in 10 or 15 years when it has been banalized among central bankers, and they are not so timid to speak about its use as an asset that can circulate between central banks. Not necessarily at a fixed price, but a market price.


The more countries start to think about gold as an index, as a warning signal of inflation, the more the monetary authority will try to keep the price of gold from rising. Imagine that tomorrow the price of gold rises form $350 to $400. Don't you think that immediately the Fed will see that as a signal of an increase in inflationary expectations and the need to tighten? Europe has already done that. There are long periods when it appears that Europeans have been stabilizing gold whenever the dollar has been depreciating against gold. This will be a major factor in moderating the exchange rate fluctuations between these two great blocks. This is vital to Europe, because nothing could make Europe more uncomfortable than to have big fluctuations in the Dollar-Euro exchange rate. Looking at gold would be one way to circumscribe these fluctuations."

RossL
(10/14/1999; 05:53:44 MDT - Msg ID: 16301)
Gary North
http://www.garynorth.com/y2k/detail_.cfm/6497I have to hand it to Gary North. Despite his increasing end-of-the-world shrillness on the Y2K issue and his bias to look for conspiracies, he has accomplished a major feat by getting millions of ounces of gold coins into the hands of the people.
RossL
(10/14/1999; 06:01:42 MDT - Msg ID: 16302)
Mundell, Greenspan
SteveH,
I remember a Wall Street Journal editorial page article written by Greenspan several years ago. The subject was a proposal to use the POG to target monetary policy along the same lines as the Mundell link you provided. I will try to dig it up if I have the time.
SteveH
(10/14/1999; 06:02:43 MDT - Msg ID: 16303)
Must have left the Greenspan reference in the text of the speach
Feel free to check out at least the last few pages. The reference to the Fed using gold as an inflation indicator is in there.
SteveH
(10/14/1999; 06:06:24 MDT - Msg ID: 16304)
RossL
www.mrci.comFirst thanks for using your real first name (a bias on my part). Next, that link you look for would be nice to read.

Here is pm's and oil this morning. Gold just jumped over $1.7 in the last 10 minutes on my 20-minute-delayed mrci link:

Market Mth Open High Low Last Change Date Time Ask Bid
Gold(CMX) Dec 322.5 324.9 322.5 324.9 +2.1 10/14/99 4:49 324.9 323.8
Silver(CMX) Dec 561.0 567.5 560.0 567.5 +6.5 10/14/99 4:47 567.5 566.5
Copper(CMX) Dec 79.70 79.80 79.00 79.65 +0.10 10/14/99 4:49 79.80 79.50
Platinum(NYM)(Access) Jan 408.5 411.7 408.5 411.7 +3.3 10/14/99 3:34 414.0 408.5
Market Mth Open High Low Last Change Date Time Ask Bid
Crude Oil(NYM)(Access) Nov 22.92 23.01 22.78 22.78 -0.28 10/14/99 4:47 22.78 22.76
SteveH
(10/14/1999; 06:37:52 MDT - Msg ID: 16305)
Article in N.P.
http://www.nationalpost.com/financialpost.asp?s2=columnists&s3=bloomfieldexcerpt:

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Thursday, October 14, 1999

What's keeping gold afloat?
The long and the short of price prospects

Patrick Bloomfield
Financial Post

After many years in the doghouse, them golden markets continue to lead the rest these days -- as they did yesterday.

Why should markets in this barbarous relic stay aloft while others sink? The simple answer continues to be that too many players were selling it short. And the aggregate of all those shorts continues to provide the "longs" (the people who buy the call options the shorts have been selling) with ample incentive to keep the party going.

The fact is that, if one should be rash enough to believe all one is told, we may well have a more serious imbalance than that caused by currency plays of that unhappy hedge fund that goes by the name of Long Term Capital.

At any rate, that is the view of one Larry Jeddeloh, the globetrotting consultant and portfolio manager who is advisor to the Toronto-based University Avenue World Fund.

Both his numbers and his past prescience lend him credibility. The fund he advises is ahead more than 28% in the first nine months of the year and has put on 39.4% over the past 12 months. And some of that gain speaks for his conclusion back in January that Japan was going to be a good place in which to invest, a conclusion repeated in this column at the time.

Mr. Jeddeloh and his team in Minneapolis, who are responsible for the global market review The Institutional Strategist, estimate global gold markets are short 3,500 to 8,500 tonnes.

More than that, he elaborates on the story going the rounds of one major Wall Street investment dealer having failed to deliver a big hunk of gold to the buyer of a call or calls. In a chat last week, he cited a short-wave radio broadcast item from South Africa to the effect that the amount of gold involved was 10 million ounces -- and that, wait for it, the U.S. Federal Reserve came to the rescue and made the delivery.

transparent
(10/14/1999; 06:51:02 MDT - Msg ID: 16306)
Will a rise in oil prices bring inflation/rise in POG??
What happens to the price of gold if oil rises?? Will war in the middle east cause oil to go ballistic? Could the following scenario unfold?.
Koenigs international news (www.watch .org) reports Kelly Pagatpatan
Source: Randal from WeekEnd Discussion Group

Friday Aug 27,1999 -- Joseph de Courcy, editor of the
well-respected "Intelligence Digest," says in a mailing delivered
to subscribers this week: "While NATO congratulates itself on
bombing the Serbs into submission, Israel's Mossad and other Middle
Eastern intelligence sources have discovered that Kosovo was one
humiliation too many for Russia. Now Moscow has agreed to back
Saddam's secret plan of revenge.

With this all-important Russian backing, Saddam is joining with
hated Iran and Syria to launch one final war against Israel.
Amazingly, Saddam will allow Iranian troops to cross Iraqi
territory to join the attack on Israel. And to keep America from
interfering, Moscow has given Osama bin Laden and other terrorists
the means to attack American population centers with weapons of
mass destruction. The threat is real...and the implications
terrifying..."

On Monday I read that there are massive war preparations going on in Russia see this link :

http://www.worldnetdaily.com/bluesky_nyquist/19991011_xcjny_dark_rumor.shtml

Are there y2k glitches in the weapons systems of Israels enemies that have them thinking use it or lose before January first?? Is this the Ezekiel 38,39 scenario on the horizon? Only time will tell.
Jon
(10/14/1999; 06:56:05 MDT - Msg ID: 16307)
Msg. For Steve H re: Institutional Strategist
Would like to see a copy of their newsletter. Am unable to find them on the web. Do you have a phone number or web site for them? Thanks.
Goldspoon
(10/14/1999; 07:04:59 MDT - Msg ID: 16308)
Dittos to this post...as Townie would say couldn't have said it better my self!!
Horse With No Name is feelin' spry today...this is good news for Golden Sun... Gold lease rates are lookin leaky though....wonder where the supply is commin from?? FOA??

SteveIS (Nymex is giving away money right now.) ID#297380:
Copyright � 1999 SteveIS/Kitco Inc. All rights reserved
There is a simple commodity trading proverb, "Cash is King". The cash or spot price is the real price. When the spot price is over the future price ( backwardation ) there is strong demand.

The precious metals don't usually go into backwardation because they have to overcome the loss of interest that future delivery implies. Platinum is in major backwardation. There is a major shortage in platinum right now.


There is an interesting way to take advantage of this on the Nymex. Last I looked spot platinum was trading at 437. January platinum is trading at 411. The January 420 calls were trading at $12 yesterday. You can probably by them today for $14 bucks. If you add 420 to 14 you get 434. which is less than the spot ( cash ) price. The SPOT price is the real price. Its like they are giving you three dollars to buy the January $420 platinum options.


Besides the price of platinum is heading north bigtime.


We aren't in Kansas anymore.

TownCrier
(10/14/1999; 08:07:33 MDT - Msg ID: 16309)
Mexican peso plunges on U.S. interest rate fears
http://biz.yahoo.com/rf/991014/ke.htmlOut of the frying pan, into the fire. Traders were said to be bailing into the dollar and "heading north" where the investments were less risky. Why the urgent NEED to be invested somewhere? It's October, the bubble markets are looking shakey, and Y2K is less than 80 days away. They should be holding pure money...gold.
Leigh
(10/14/1999; 08:15:50 MDT - Msg ID: 16310)
Two Dollar Rule
Is anyone feeling as though we're back under the "Two Dollar Rule," where gold couldn't go up or down more than two dollars a day?
mike55
(10/14/1999; 08:28:31 MDT - Msg ID: 16311)
Why, It's a Revelation!
http://www.computerworld.com/home/news.nsf/all/9910133overseasMy gosh, might there in fact be some basis to this date rollover thing? See what our friends at the CIA have to say. And the article even mentions gold!
elevator guy
(10/14/1999; 08:48:50 MDT - Msg ID: 16312)
Sharp drop in POG, well, ok only $2 drop.
http://WWW.quote.com/livechartscom/Does anyone know why the Dec futures contract took a little dive there?

Outside forces at work?

Someone selling a bunch of paper contracts to depress the price?

Seems like the powers that be are trying to reduce volatility, and hold the line, until the mass of Dec 390 calls expire?

Anyone?

USAGOLD
(10/14/1999; 08:54:45 MDT - Msg ID: 16313)
Today's Gold Market Report: Gold Driven by Physical Demand Overseas
MARKET REPORT(10/14/99): Day Fourteen of the Big Breakout....Gold
stubbornly trudges upward and was as much as $6 higher (at $325) in the
overnight access market before falling back to current levels... The
story in the paper market is no longer short covering but fresh long
positions taken by speculators betting the price will go higher. Traders
report some very large outstanding short positions that could spark
another big rally when covered.....In the physical markets, gold dealers
are reporting mine company buying to square forward and call
positions........Standard Bank of London makes the same observation we
did a few days ago: "Gold appears to be developing a daily pattern of
strength in Hong Kong and London followed by a weaker tone in New
York."....The overseas markets are being driven by a demand for the
physical metal and paper players in New York are trying to offset the
effects of that demand by shoring gold in the options' markets.........
Standard also says that "There is possibly a cloud on the horizon for
the gold bulls � an unconfirmed rumor that Russia is about to scrap its
5% export tax on Precious Metals. This would bring into play potential
new supply with gold that has been stockpiled over the last 12 months
coming on to the market" ......My thinking is that Russia could offer a
one or two day jolt to this market but that about it. They simply do not
have enough metal to make any impression beyond a psychological
one......... Investor demand at Centennial Precious Metals/USAGOLD
continues to run very strong -- a continuation of a trend which started
late last week when the heated activity calmed somewhat giving investors
a chance to assess the situation.....The PPI comes out on Friday.There
could be fireworks......The UK government has given in to the age-old
practice of talking down wages and prices to combat inflation. Some of
us recall the old Whip Inflation Now nonsense of the 1970s when the U.S.
government attempted to convince Americans that the results of monetary
inflation could be constrained with the right rhetoric and wearing WIN
(Whip Inflation Now) buttons. In that slightly absurd tradition, our old
friend, British chancellor of the Exchequer Gordon Brown "appealed to
employers to restrain wage increases, as a sharp jump in average
earnings added to pressure for further rises in interest
rates."........It's always the employers' fault, or the peoples', but
never the government's or the central bank's.................Gold lease
rates continue to ease. We are beginning to wonder if this does not have
to do with the sidelining of most of the big players while the Ashanti,
Cambior and associated messes are sorted out by the
participants..............Poor Newmont Mining. It no sooner joins the
hedging game than gold rises $70 the equivalent of a left hook to the
jaw. The U.S. mining company reported late on Wednesday "hedging
activity in August would result in a non-cash, pre-tax charge of $63
million against third quarter earnings under the company's present
interpretation of U.S. accounting rules," according to a Reuters report
this morning. At the time of Newmont putting on its hedge, the talk in
the industry was that their friendly neighborhood gold banker forced
them to do it. Some friends......................Along these lines,
Ashanti stock re-opened for trading yesterday and sold at a worrisome
discount to Lonmin's conditional merger offer........... Question of the
Day: If the World Gold Council is correct that signatory selling rights
cannot be transferred to another central bank, what will happen to the
price if Swiss voters fail to pass a referendum to sell 1300 tons of
their gold? Only 2000 tons can be sold over the next five years and 1300
of it is supposed to come from Switzerland.................. That's it
for today. See you here tomorrow. Have a good day, my fellow
goldmeisters.

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.
MidEastGold
(10/14/1999; 09:00:01 MDT - Msg ID: 16314)
Interesting Post that I picked up at Kitco Discussion
http://www.dowguru.com/99crsh.htmWorth viewing.
Leigh
(10/14/1999; 09:04:36 MDT - Msg ID: 16315)
MidEastGold
There you are, MidEastGold! I've been waiting for you to come back so you could elaborate on your post of Saturday. Can you tell me (because I'm not at all computer-savvy) who you think might be monitoring websites such as this, and how they would do it? Are there ways to protect ourselves, like encryption? Thank you!
TownCrier
(10/14/1999; 09:15:05 MDT - Msg ID: 16316)
Hear ye! Hear ye! An update at USAGOLD...
http://www.usagold.com/wgc.htmlTHIS WEEK IN GOLD has now been updated for the past week of October 4 - 8 with the weekly gold market commentary of the World Gold Council...recounting the second week of market action as the gold price reached a new plateau.
AEL
(10/14/1999; 09:19:12 MDT - Msg ID: 16317)
relations
RossL (10/14/99; 5:53:44MDT - Msg ID:16301)
"I have to hand it to Gary North. Despite his increasing end-of-the-world shrillness on the Y2K issue and his bias to look for conspiracies, he has accomplished a major feat by getting millions of ounces of gold coins into the hands of the people." .......... is it not possible that the one is related to the other? Perhaps "because" is more appropriate than "despite"... :)
FOA
(10/14/1999; 09:20:06 MDT - Msg ID: 16318)
Comment
Strad Master (10/12/99; 23:48:43MDT - Msg ID:16216)

---- My first question, though, is this: If gold should rise to, say, $30,000 per oz as FOA predicts, how, at that time could one's gold holdings be unwound? For what? $30,000 in paper money? Or would the actual gold bullion become the only negotiable currency? If so, what good would a one oz.buillion coin be? It can't be cut apart into small pieces
with a pair of garden shears. Beyond that, Goldbugs are notorious for holding onto their physicalholdings long past the time of maximum return. ----

(((NOTE: Strand: I find it interesting that goldbugs have become "notorious" for bad moves when their present universe has only existed some 20 years? and the lady has not sang the song yet?)))

You continue:
---In fact, I'm sure that some older people who post at this forum have held gold through several (albeit relatively minor by comparison) upmoves in gold only to kick themselves for not having sold at or near the top.----

(((Note: I know people that have been buying through this entire span of time! True, they have timed their buying on a cost averaging basis, but that concept has made then almost even today. In the believe it or not department. Ask MK about "cost averaging" using a fixed dollar amount. Then
I suggest you see the show "Rollover" with Jane Fonda. You would not believe how true it is!)))

Hello Strad,
I'm going to ramble on a bit, so I hope this helps your perspective.

Back in the early oil days I was very close to some of the largest oil men in the country. When in Texas we would visit at the country club and shared a lot of our perceptions. Usually over a poker table. Looking back, I find their (and mine) viewpoints had much in common with the gold outlook today.

When oil went from around $3.00 to $5.00 everyone that had local reserves thought they had made a fortune. You wouldn't believe how many sold off not only their storage barrels but their best (lowest cost production) reserves for cash. The feeling was that oil had just zoomed in price
and would quickly go back down. The percentage gain on those leveraged assets was simply huge.

Then oil went up to around $8.00! Good god, we were so stupid to have sold. What a bunch of buying fools out there. Those idiots buying $8 are going to get killed. Everybody knows the major producers can pump for $1.00. Oh well, it just a political thing.

When oil hit $15, some of them knew they had missed out on a train to $20. But they still thought oil would one day return to around $5.00. So as not to miss out completely many of the early sellers jumped on the Natural Gas wagon, using everything they had gained from their first sale. At first this new move made money, big time. Then something funny happened, oil soared and later returned to a more normal $18 to $25 range, but gas plunged from the higher supplies. The "oil boys" turned "gas boys" lost it all. Even into today, gas has never returned.

Truly, they used the silver vs gold concept, thinking the more leveraged natural gas would out run oil and regain their fortunes. It made sense as gas (like silver) was more industrially useful and "CHEAPER". You might even say it was the "poor mans oil" (smile)! Also: Just like silver, gas
proved to exist in much larger amounts that the "statistics" demonstrated. As it's price "coat tailed" oil, it brought out the massive increase in production that wasn't needed as long as oil was available. Incredibly, this was the exact same story for silver. All the stories about people buying silver as gold went up saw them sell the silver and keep the gold because people just didn't need both of them. The same will happen when gold runs this time. People will keep the high unit cost gold in their vaults, use the digital currencies for trade and sell the silver as it floods out of the woodwork.

Onward:

You see, oil in the early 70s is like seeing the prevalent gold concept today. The perception was that oil could never go up from the $1.00 production range into the $20s (just an unimaginable increase to those in the business) because such a price would flood the world with production. It was thought that there was so much unfound oil in the world that every home owner would have an oil drilling rig in their back yard at $20+. Just as $10,000 gold will have people taking gold from sea water.

Here is where reality gets in the way of concept based on perceived conditions. Yes, the $20 and $30 oil did bring out the rigs and production soared. But, even at the higher prices, the world found uses for this great new gusher of oil. The same human traits that dictate that "you can never
have enough money in the bank" also said "we can never use too much oil"! If all the oil reserves in the world could produce at $2.00 then the price would return to $2 plus a profit. But, we want and use all oil produced from fields that pump from $2 cost on up to $30. Gold and oil are not like any other commodity, because under the right circumstances, people find both of their qualities useful
and can never get enough of them at any price. It seems we accumulate assets until we die?!

The "paper boys" try and paint a picture of gold like "old oil men" looked at values "back then". They were wrong and so are the "paper boys" today. The Smiths and Arnolds of the world try to convince us that the supply of gold is never used up and creates a glut as it grows. They say that
unlike oil that is consumed, gold holdings have become a stockpile that refining cannot use up. I bet these guys would have also sold their oil reserves in the mid 70s also.

Where they miss the boat is in their assumption that people will get enough gold. Not if it's money, they won't! People do consume money just like oil, rather it's just in the form of "savings consumption". Gold, just like money has an "unlimited demand". Again, have you ever seen anyone
that said "I have too much money and have no more use for it". "No, don't give me any more of that cash, I've got a glut of it now, go away"! Yea, right!

Often, we read where people say, "oh what am I to do with all this gold if it hits, $30,000?". Funny how Bill Gates never says "what am I to do with all these MS shares". Well, you too will act like anyone with to much cash or assets, just stash it away until you need to spend it. The old "what will I do with all this high priced gold I can't get change for" logic just doesn't compute when dealing
in reality? Ever see someone in a flea market rolling around a cart full of $100 bills,,,and frantically trying to unload it because it buys so much and they can't get change? Help me out here, am I not seeing something?

I'm afraid that even the very poorest of people have a better grasp of spending and saving value than some of the "big time investors" present about gold. (I'm talking about the brokers, Strand)

Onward:

Anyway: The amounts of gold in vaults today is no where near enough to represent the only circulating world money. It would have to be priced at $++++++ to do that. So, if mine production can continue, the world will take any and ll they can produce. Be it 3,000 ton a year or 10,000 a year because the demand for money (even a parallel supplement money) is unlimited. Personally, I would take all of it (smile) and let the rest of you keep the paper.

The reality of this is that people hold cash in banks as it is lent out and earns interest. If no one lent their cash and just saved it (like gold) to spend in later years, it would take an enormous amount of paper money. This is why the US goes to great lengths to identify gold to the public as a commodity, not money. They want you to know that it must be sold as soon as it goes up. Trade it, don't save it. Most Western investors have brought into this and are going to pay dearly because of it. Again money demand is "unlimited". The same will be true for gold. As people begin to buy gold as a currency supplement, to be spent "as needed", the price could reach enormous levels.....and
be seen just like oil............a useful asset you just can't get enough of.

On the road.........FOA


TownCrier
(10/14/1999; 09:20:52 MDT - Msg ID: 16319)
Is the UK ready for the euro?
http://news.bbc.co.uk/hi/english/business/the_economy/newsid_474000/474518.stmBritain considers five key tests for determining when participation in the EMU would be favorable.
MidEastGold
(10/14/1999; 09:32:43 MDT - Msg ID: 16320)
Leigh
First of all, let us assume that whoever is interested in tracing you down is not wanting to do so for your benefit.

Let us take a scenario where the Gov't or the Police have a "reason" to track down PMs (think about what has happened in Russia just today with confiscation of "Russian Mafia's" gold (5 kgs I think)).

Or, take my experience. I was in a position that "hate" mail had been written. It was reported to the police and within hours! they told me of the exact computer in a school that it had been traced to! So, the authorities have the know how.

There are sites that tell how to trace personal email though in a different situation than this forum. But, even this forum is not fool proof to those who have the know-how. I personally use an "encryption" that the program writers claim would take a month to decrypt. I read just a few months ago that my encryption program had been "broken" within hours by knowledgable hackers.

Let's say that one has already admitted on line to holding physical and some people even describe how much. (Remember, whatever is written is traceable, especially to those with "authority" to trace it) When I spoke of knowing first had,the following is the experience that I had.

My only point in my last post was to be careful to whom you admit holding physical to. Although, I am not as stringent as some that I've read that say you shouldn't even tell your spouse!
TownCrier
(10/14/1999; 09:48:58 MDT - Msg ID: 16321)
Y2K Horseless Carriages Bought
http://currents.net/newstoday/99/10/14/news1.htmlAfter spending $18 million to fix "all" of their potential Y2K problems, the State of Maine now has found that new 2000-model "horseless carriages" are taking over the roads!
Leigh
(10/14/1999; 09:53:03 MDT - Msg ID: 16322)
MidEastGold, FOA
Thank you for the information. One more question, please: do you think it's more likely that the government is doing this, or criminals?

FOA, that was an interesting post! When you talk about "digital currencies," it makes me wonder what you think about cash. Do you see a future for it, or are we headed fast toward smart cards?
Golden Truth
(10/14/1999; 09:53:30 MDT - Msg ID: 16323)
TO F.O.A
Hello F.O.A,
Something you said a few days ago in a couple of your posts are really "Baking my Noodle".
Item one,was that you think the "P.O.G would not be allowed to run" What do you mean by that? does that mean the the market will now fail due to implosion. Due to lowering the price of "paper gold" again?
Or do you mean the P.O.G will just explode with no warning?

Item two, what do you mean by "I now think its to late for the mines to cover?" Again to me that would imply that the P.O.G will explode before they can cover or does it have some other esoteric significance?

Thanks, as always we all really appreciate your being here. G.T :-)
TownCrier
(10/14/1999; 10:04:52 MDT - Msg ID: 16324)
CIA says Y2K may disrupt global supply chains--(and increase in demand for gold)
http://www.computerworld.com/home/news.nsf/all/9910133overseasThe CIA expects to see what they call a "'safe havening' of financial assets by some foreign governments and businesses in the U.S." due to the potential for supply disruptions taking its toll on the profitabiliity of businesses.
Nick Gogerty, an analyst at the London-based firm International Monitoring, said U.S. officials were "potentially reckless" with the optimistic Y2K messages being put forth by prompting some to disregard the Y2K risk. He agreed with the CIA's assessment, saying a flight to quality out of traditional assets could lead to increased demand for gold and the U.S. dollar.
MidEastGold
(10/14/1999; 10:11:58 MDT - Msg ID: 16325)
Leigh
My gut feelings? I think that the U.S. Gov't will turn toward confiscation once again. It may be done as an alruistic appeal at first, but then those that hold back will be looked for.

An interesting aside. As my Post name denotes, I live in the Middle East. MOST of the muslim women here wear their family fortunes. Gold coins they do have, but they are strung on a gold chain and as such they are "jewelry". Why do you think the women do this?
TownCrier
(10/14/1999; 10:14:19 MDT - Msg ID: 16326)
Hello Sir Golden Truth
I enjoy Sir FOA's posts immensely, and read them all...but I can't recall the context of the quote you've provided: "P.O.G would not be allowed to run," and on its own it looks quite puzzling.

Maybe that was a typo, and should have said "POG would NOW be allowed to run." It often helps if you provide the message ID # or a bit more info about the text. But hopefully Sir FOA will recognize such a tiny snip from his vast collection of posts, and will be able to shed more light on this for you.
TownCrier
(10/14/1999; 10:23:47 MDT - Msg ID: 16327)
Y2K: Don't Relax Yet
http://www.pcworld.com/pcwtoday/article/0,1510,13260,00.htmlThe obvious systemmic threat due to the programming shortcomings regarding year 2000 are at least a known enemy, and given enough time, attention, and resources could be diligently tested and fixed. The great unknown is a potential host of computer "viruses" waiting in the wings as hackers play at a game of one-up-manship to gain notoriety.
TownCrier
(10/14/1999; 10:39:48 MDT - Msg ID: 16328)
Tea leaves: Most IMM currency futures lower, yen sags in range
http://biz.yahoo.com/rf/991014/nz.htmlRetail sales rose 0.1 percent, U.S. Treasury bonds fall sharply in price.
Leigh
(10/14/1999; 10:44:15 MDT - Msg ID: 16329)
MidEastGold
Dear MidEastGold: It can't be that the women are afraid of confiscation, because gold jewelry goes all the way back to Bible days. Is it because the jewelry is part of their dowries? And maybe husbands would be less likely to take their wives' jewelry and sell it since everyone would know about it? Just guessing.

About U.S. confiscation -- I'm still of the opinion that what the government can't find, it can't steal. It would look foolish trying. FOA thinks gold won't be confiscated, but that owners will be taxed unmercifully. We'll probably know soon enough.

Thanks for your info!
OverHerd
(10/14/1999; 10:47:11 MDT - Msg ID: 16330)
DD Msg ID:15866
DD (10/08/99; 12:10:47MDT - Msg ID:15866)

DD, you brought up a very important point and I don't think it's has been touched on before, especially in regards to Y2k remediation and the Y2k problems that need to be fixed now or in the future. This could prove to be the biggest untold story that has implications beyond Y2k.

I may be a little biased because I work in the aerospace industry and I have experienced the stagnation of our wages and a significant drop in the standard of living of the majority of the employees. This coupled with the lack of respect and poor treatment of the workers has spawned an atmosphere that breeds apathy. This causes your job to be as you put it "more like a prison sentence for most people than an experience of growth, contribution and adventure" that I am living every day.

I am not sure that this phenomenon is limited to the aerospace industry or the service industry, yes as an aircraft mechanic I am considered to be part of the service industry just like a McDonalds � worker or a customer service worker. I would like to know if this is the case in the high tech industry and I ask any forum members for their opinions on this, ET, AEL any thoughts.

DD, sorry it took so long to get back to you. Like I said I'm not sure if this is a process of supply of workers versus demand for the services that these workers perform or if it is a new paradigm in the relationship between the employees and the employer. I know many posters here are self employed, business owners and/or retired but there are many people in this country that are in this relationship and it could have major implications for the future.

I thought that that was a very good post and thank you for taking the time to write it.
joe
AREM
(10/14/1999; 10:47:59 MDT - Msg ID: 16331)
Reminder to All
From the posting of SteveH (10/14/99; 6:37:52MDT - Msg ID:16305)
Article in N.P.

"More than that, he elaborates on the story going the rounds of one major Wall Street investment dealer having failed to deliver a big hunk of gold to the buyer of a call or calls. In a chat last week, he cited a short-wave radio broadcast item from South Africa to the effect that the amount of gold involved was 10 million ounces -- and that, wait for it, the U.S. Federal Reserve came to the rescue and made the delivery."

This kind of BS has got to stop. Bill Murphy recently submitted a list of questions that he wanted us to send to our Congressmen and Senators regarding the US government messing around with the gold market. I added a couple of sentences to his questions to work up a letter that I used for that purpose. Feel free to use my sample letter or modify it anyway that you care to.

=======================

Dear Senator (Congressman):

There is a strong suspicion that various departments of the Federal government are fraudulently manipulating the price of gold rather than letting it trade freely and openly in a democratic market place. Please research the following questions to see if this is true, and if it is, take steps to halt these illegal actions.

Questions for the Federal Reserve Board
and the U.S. Treasury Department

1) Do the Federal Reserve Board and the Treasury Department have a policy toward the price of gold? If so, what is it?

2) Do the Fed and the Treasury trade in gold or in securities, futures contracts, or options related to gold, or otherwise influence trading in gold? If so, how?

3) Do the Fed and the Treasury trade in any financial instruments besides U.S. government bonds? If so, which ones and what do the Fed and the Treasury try to accomplish with their trading?

4) Do the Fed and the Treasury have or control brokerage accounts? If so, with which brokers?

5) Do the Fed and the Treasury try to influence the stock and commodities markets? If so, how?

6) Do the Fed and the Treasury lend or lease gold? If so, to whom, for what national purpose, and under what terms?

It is vital for a free market that any clandestine action by the Federal government that constitutes restraint of trade, be exposed and stopped.

Sincerely,

Your Name
address
Phone #
e-mail
=================

If you haven't already done it, DO IT TODAY. AREM

gidsek
(10/14/1999; 10:48:31 MDT - Msg ID: 16332)
Robert Mundell
http://www.polyconomics.comJude Wanniski learned econ at the knee of Mundell and Laffer and runs a very interesting website. His book, "How the World Works" is a great read.

I believe Judes' latest opus is regarding Robert and his award.

gidsek
MidEastGold
(10/14/1999; 11:14:03 MDT - Msg ID: 16333)
Women's gold
Leigh,

One more comment and then I'll let it drop.

You're right, the women here are not afraid of Government confiscation of their gold. Their reason is entirely different. Arabs buy two things to stay off inflation...gold and housing materials. In Israel, the people went through a fast inflation period in the 1980's that was "solved" by revaluing the currency. Unfortunately this high inflation caused building prices to soar. People began buying a bag of cement (typical building supply) instead of putting it into the bank because the money in the bank was quickly devalued and the bag of cement actually went up in price. Gold was the same way. It maintained it's value through these periods and actually became more valuable.

Bedouins actually use silver and gold jewelry. The jewelry is portable, adorning and protected (by the men in the family who would use gun and knife to protect the women.)

Today, the woman's gold is sold as a last resort if the family has a critical need. I have been astonished at certain weddings to see no less than a kilo of gold on a woman!

As far as confiscation in the U.S., with the advent of GPS's, satellites that view postage stamps, car security systems that are tracked by sattelites,or even a simple metal detector, I don't think that confiscation would be too hard for the gov't if they wanted to do it. Heavy taxation sounds like a probability as well. Who knows?
Golden Truth
(10/14/1999; 11:28:23 MDT - Msg ID: 16334)
TO TOWN CRIER
MY question to F.O.A is in reference to his (10/09/99,19:21:08MDT-MsgID:15945)

To quote F.O.A "I think it's now to late for the dollar to "initially" surge with gold during this crisis. As an old, indebted currency, the dollar will have to share any flight to quality with the Euro." End of quote.

This is what my question was referring to, and i still do not understand what the above portends exactly?
Maybe you T.C can help me in this also? If not, i respecfully wait to hear from F.O.A on both my questions.
G.T

Golden Truth
(10/14/1999; 11:46:38 MDT - Msg ID: 16335)
GOLD GETTING FLOGGED AGAIN?
Spot Down $2.10 @ $317.70
Gold is being flogged today why? I tink we know why but it's the "when" will it stop? Is what i'd like to know once and for all.
Golden Truth
(10/14/1999; 11:57:34 MDT - Msg ID: 16336)
GOLD WAY DOWN!!
SPOT now $314 down $5.80
Looks like the road we're on is heading for a ditch.
Remember "SPOT" keep it between the lines!!!
PH in LA
(10/14/1999; 12:24:58 MDT - Msg ID: 16337)
FOA & Another's Meaning
Golden Truth:
Regarding your (10/14/99; 11:28:23MDT - Msg ID:16334) question to TC about FOA's meaning, maybe I can shed some light on the subject.

"To quote F.O.A "I think it's now to late for the dollar to "initially" surge with gold during this crisis. As an old, indebted currency, the dollar will have to share any flight to quality with the Euro." End of quote."

If I recall correctly, FOA was responding to Leigh's question about Another's famous quotation that one day "we should not be surprised to see gold and the dollar rising at the same time." This had been a statement that was not well-understood at the time that Another made it, several years ago. Many interpretations were offered, and it was recalled several times, always looking for a clue to the statement's meaning. It almost assumed a mythical life of its own, a mysterious mystical quality that helped garner publicity for Another's writings. In retrospect, it almost seems that this was part of Another's intention, since it caused us to focus our attention and interest on his message. FOA explains now that the "flight to quality" that benefited the dollar during, for example, the Asian Contagion should not now be expected to be a factor in the present state of evolution of events. Gold will now rise against the dollar and "flight status" will now be shared with the Euro; gold will be considered the ultimate "flight to quality".

Hope that helps.
DD
(10/14/1999; 12:25:30 MDT - Msg ID: 16338)
OVERHERD - Prisoners in the Workplace
Joe - I think I know where you're coming from. I've been a consultant and trainer for the last 10 years, primarily in high-tech and manufacturing industries. I believe that work becomes a prison for most people as companies grow. In Aerospace, most companies are large and getting larger as a way to survive. It seems like this is the case for many industries. Additionally, Wallstreet has caused executives to become so short-term focused as to be ludicrous. How do you build a company when the primary objective is to make the quarter, collect your bonus and keep your job. In essence, executives must act short term in order to survive, too. As we all know, people in survival will tend to focus on their own needs at the expense of other people, including, of course, the people who work for the enterprize. I believe this focus on personal gain or personal survival is at the root of why we have lost our humanity in the workplace. Interestingly, this focus has filtered out the recognition of the greatest asset of any organization, its people.

In high-tech, most companies tend to be small, fast paced and driven by energy and initative. Most are driven by a vision of some sort as opposed to short term numbers. Many are fun places to work. However, as numbers become more important than visions and people, high-tech begins to suffer the same prison-like problems as other industries.

IBM is, in my opinion, one of the least creative, most bureaucratic organizations on the planet. Notice how they're continuing to cut costs at people's expense. Are they as bad as Aerospace? No, I don't think so. Why not? I have my own theory.

I believe that the closer one gets to government, the more the aliveness of the companies and their people dies. I also believe that, in general, the larger the organization becomes, the more oppressive too. The root cause. FEAR!!! People are meant to be energetic, creative, thoughtful and emotive. Fear steals this aliveness. Fear steals our humanity and replaces it with false security. It takes great courage to trade ones security for ones happiness. Still, it's a worthy exchange, I do believe. Best, DD

Golden Truth
(10/14/1999; 12:26:06 MDT - Msg ID: 16339)
GOLD WAY WAY DOWN!!!!!!!!!
SPOT $312 Down $7.80 :-(
phaedrus
(10/14/1999; 12:26:30 MDT - Msg ID: 16340)
gold takes a hit today, silver crushed, but that's ok
Down 7 to 8 bucks as I write this at $314 in the December.

Just writing this to remind everyone who is freaking out right now that nothing goes straight up or down.

As an example, take a look at a chart for November crude oil. At first glance it looks like crude was just shot out of a cannon- before succumbing to the latest big correction, it doubled in price in less than eight months.

But if you'll look closer at the crude chart you'll see that before it doubled there were plenty of 5-10% along the way. For gold this is comparable to seeing it drop off ten or twenty bucks every now and then. So nobody should be committing hara-kiri or anything.



Peter Asher
(10/14/1999; 12:37:58 MDT - Msg ID: 16341)
Michael, Jeff, All
Re >>>DD (10/14/99; 12:25:30MDT - Msg ID:16338)<<<<

I would like to recommend an HOF section titled General Economics, for posts such as this superb essay.
Golden Truth
(10/14/1999; 12:44:54 MDT - Msg ID: 16342)
TO PHinLA
Thanks for clearing up the "flight status" concerning the Euro and The Dollar,yes i agree not everyone will flee to the dollar by default now that the Euro provides a choice.

Though my question to F.O.A still stands with regard to the meaning "I think it's now to late for the dollar to "initially" surge with gold during this crises."
\G.T
Peter Asher
(10/14/1999; 12:47:43 MDT - Msg ID: 16343)
Arem
The answer to all of those questions is of course, YES! Will anyone divulge the data to an investigative commitee? FAT CHANCE!

This 1999 "Washington Project" probably has the same ultra top secret classification as the 1940's Manhatten Project.

And has the equivelent explosive potential.

In this case the bomb shelter is physical gold.
Buena Fe
(10/14/1999; 12:49:33 MDT - Msg ID: 16344)
all Au correction
get a weekly chart of oil. look at the bottom in Dec....then the strong 1st move up in Jan..... then a several week decline to test everyones convictions........then a steady climb!!!!!! Markets are immensly complicated animals (especially au), after 15 years of study I'm still a student only. But I bet 6 to 12 months from now the adage "buy the dips" will apply to gold and not the dow.
Keep Well
Golden Truth
(10/14/1999; 12:55:01 MDT - Msg ID: 16345)
TO PHinLA
I think i got it now, F.O.A meant the dollar "itself" would not surge during this crises, right?
G.T
jaydeevee
(10/14/1999; 12:58:43 MDT - Msg ID: 16346)
To the guy that owns SPOT & SPIKE!!!
Make sure SPOT & SPIKE get plenty of rest tonight!!! They should be VERY, VERY ACTIVE in OZ & Asian markets tomorrow! Who was it said 'you can't fool all of the people all of the time'??? With the INTERNET, there is too much disclosure out there now!!! Methinks the world has had an absolute gutful of 'shorting' antics on COMEX; and tomorrow punters should DROOL at the opportunity to buy gold at such a lovely low price! Just watch SPOT & SPIKE GO!! when Sydney OPENS!!!
FOA
(10/14/1999; 13:24:13 MDT - Msg ID: 16347)
(No Subject)
PH in LA (10/14/99; 12:24:58MDT - Msg ID:16337)
FOA & Another's Meaning

Thank you for the explanation! Exactly right!

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

Peter Asher (10/14/99; 12:37:58MDT - Msg ID:16341)
Michael, Jeff, All
Re >>>DD (10/14/99; 12:25:30MDT - Msg ID:16338)<<<<

Peter, I agree. It's a prime example of an individuals personal experience. DD allows us to see the economy through real eyes! 2nd it!

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

Buena Fe (10/14/99; 12:49:33MDT - Msg ID:16344)
all Au correction

Buena FE, they nailed silver today. I just read where even Ted Butler (good kitco poster) is disgusted and promoting physical as the way to go.
They managed to get some margin money to throw at the paper gold markets. In a way this may be educational as we can now watch and see if some real bullion flows from this. I did all of my buying much earlier (in the spring), yet I'm about to bid this dip for physical. If I'm right, the people
that need physical the most will now be "right in there" also. I said this would not be a trading market (talking physical) because the spreads and premiums would not allow one to gain much advantage on any dips. We shall see!
Talk about spreads?? Is spot platinum wide open or what? Goldspoon, it's just you and me, silver dropped out (smile). I hope everyone knows we are just playing a game here. Anyway, lets watch the HK market later. FOA


TownCrier
(10/14/1999; 13:28:20 MDT - Msg ID: 16348)
Hear ye! Hear ye! A call to contest!
The master of the Castle, our gracious host at Centennial Precious Metals, has made it known that he will yield up gold and silver prizes--for it would please him to see the Knights, Squires, Ladies, and honest Townsmen at play upon the green fields under these golden leaves of Autumn.

Good People of the land, hear ye, and may you walk away heavier with riches than upon your arrival. Your participation, comradery, and good times is all we seek...so please step to the field of play when you have prepared yourself for the simple task at hand. To wit, one arrow each, and your best effort to strike nearest the mark.

THE RULES:

So draw forth your truest arrow, toe the line, take aim, and let fly your best prediction for the closing COMEX December gold futures contract price (as quoted that day by TownCrier) for next Friday, October 22, 1999.

All arrows (predictions) must be leap from the bow and be in flight no later than this Sunday, October 17 at midnight according to the clock kept at this Round Table.

All entries into the contest must use standard arrows in the subject line as demmonstrated here, or a reasonable replica:

*>>>>------$500.00--------+>

Contestants must ALSO provide a brief oratory (at least 30 words) upon release of their arrow explaining either the method of their aim, or a pleasing tale explaining what role gold or this Forum has played in your life. These won't be judged, but we must hear your voice as you take aim at your target.

THE PRIZES:

To the arrow nearest the mark: One beautiful French 20 franc gold coin, bearing the likeness of lovely Liberty and a bold Rooster to usher in the dawn of a new era.

To the next two nearest arrows: One silver Eagle, each.

To all first time posters throughout the duration of this contest: by simply gracing us with your voice on any gold related subject, you will receive One silver Eagle, each. But you must also e-mail the Castle (Centennial Precious Metals / USAGOLD) at cpm@usagold.com to let us know that you are a first-time poster. We will confirm the record, and the precious metal will be yours for sharing your time and interest in this most important of monetary subjects.

LET THE GAMES BEGIN!
FOA
(10/14/1999; 13:34:56 MDT - Msg ID: 16349)
ASL
I see where Ashanti Goldfields (ASL) is down and discounted from their takeover bid?? Michael, something is very wrong with this picture. I heard one of those rumours (???) that some banks could be actually buying out the gold loan package so as not to force margin. If yes, some major
backup money is being applied for free here. This could get explosive is someone decides to "cut and run"!

FOA
TownCrier
(10/14/1999; 13:54:41 MDT - Msg ID: 16350)
MUST READ by The Independant--London
http://www.kitco.com/_a/news/2075.htmThe Independant--London with a piece that bucks the trend of "standard media fodder" in a most remarkable way... "The negative wisdom of industry Cassandras like Ted Arnold of Prubache and Andy Smith of Mitsui Commodities had become conventional. In an era of low inflation and runaway equity markets, holding on to gold was a literal waste of money. The eagerness of central banks to swap their sleepy gold reserves for more energetic assets had created an overhang of supply that seemed to preclude future rallies."

And Ted Arnold hangs tough..."I still to this day do not understand why the central banks did what they did. It was like firing on their own troops. It has taken down Ashanti and Cambior and there could be a lot more. It is still a very bloody battlefield and no one is quite sure what's going on."

Well, Mr. Arnold, sometimes troops are killed in the process of winning the war. Physical gold has the best management team money can buy!

The Independant goes on to observe that many gold producers were the authors of their own downfall.
Buena Fe
(10/14/1999; 13:58:33 MDT - Msg ID: 16351)
DD (10/14/99; 12:25:30MDT - Msg ID:16338)
Great post "Fear" vs "Faith", that is what life is all about! In a sideways sort-of-a-way the movie Matrix portrayed this conflict well. I once read some where that "PERFECT LOVE CASTS OUT ALL FEAR!"
Along with gold ....get love!
megatron
(10/14/1999; 14:00:59 MDT - Msg ID: 16352)
gold drop
In the near term we will see a lot of volatility in POG, as the wheels come off. There will be desperate moves made by the usual suspects in the 2000 run-up, so hang on tight.
FOA
(10/14/1999; 14:09:03 MDT - Msg ID: 16353)
More on story rumours?
The CB of China is rumoured to be in the background to take delivery of ASL gold, without holding the BBs to further margin? Put this in the FWIW department. I won't say anything more unless this is confirmed. Perhaps their talks for WTO is involved? Oh well, we shall see.
canamami
(10/14/1999; 14:48:22 MDT - Msg ID: 16354)
Broken Pledge Not to Post - Various
This will indeed be my last post for the month. I would have kept my promise not to post (way, way too much work on the go right now) but the big drop in gold and silver has agitated me too much. Mercifully, I was doing a hearing out of town today, and missed the action. The POG was up when I went to work. When did it start tanking? When (what time of day) did the worse losses occur? Were any announcements made today to account for the pummelling (sic?) gold and silver took? What is the Forum's consensus as to cause?

Next topic: FOA has opined that the U.S. will default on its debt. The $U.S. is the world's reserve currency. Most transactions (certainly those involving U.S. firms) are denominated in $U.S. How then can the U.S. default if all it has to do is print dollars to make payment? I know individual companies or individuals may default (can't even procure enough $U.S. to pay off debt), but this is just an instance of private entities going under. However, a few weeks ago on CNBC, someone asked a "guru" about rumours the Middle East countries will ask for "currency basket" oil settlement instead of $U.S. The "guru" replied that this idea had been mooted and kicked-around for a long-time, but it would never happen. However, I submit that if oil ever went to something like "SDR + gold" settlement, or a basket such as "40% $US, 35% Euro, 20% yen, 5% gold", then the US companies or government could default, because then payment would have to be made in currencies the US could not print -i.e., the US would have to "earn" its imported oil. Even a small % of gold in the basket would cause the POG to rocket.

Finally, I was in a hearing last month. We asked a French epidemiologist a question about double-blind experiments. He replied they were the "gold standard" of medical, clinical experiments (the "gold standard", not the "dollar standard"). I guess the yellow metal still possesses a certain special cachet as the most credible, bottom-line, ultimate money.

Yellin' of troy
(10/14/1999; 15:06:48 MDT - Msg ID: 16355)
more monetary musings -- yes, relevant to gold
My exchange with ORO prodded me to think more about these issues, and I now realize that our differences aren't as academic as I had supposed, but may have interesting implications for the future of gold, dollars, and the monetary system generally. Unfortunately, I still need to lay out a lot more theory on the way to the payoff.

The problem with "concept money" is that it is vulnerable to "reverberant doubt." I accept it only because I believe others will, which requires believing they believe still others will, and so on. If the guy n steps down the argument may lose confidence for any reason, that can give #n-1 a better reason to lose confidence, and the whole thing can blow up. Actually, though, a certain amount of doubt can be absorbed in psychological inertia. (Analogy: Iterated Prisoners' Dilemma with exactly, say, 10,000 trials: In a world of perfect logicians, this unravels from finish to front and there is no cooperation at all, but in the lab it doesn't work that way, because real people don't think that way.) Moreover, even for perfect logicians, if this money, though risky enough to be lousy money, is still the *best* kind of money available, then just because there is a chance it might find no takers when I want to spend it does *not* mean I should spend it all now and refuse to take any more. For that would mean giving up *all* the benefits of holding some assets in this highly liquid, flexible form. No doubt I would get in return whatever I bought now, but the reason I was planning to hold *this* number of (say) dollars was precisely that this marginal dollar of money, of ultimate liquidity, was worth a bit more to me than what I might buy with it right now. If the liquidity of money becomes somewhat chancy, it becomes worth somewhat less (and the loss is the greater because it is a risk to the whole wad, a risk of zero effective money), but this is still only a marginal shift, much like that produced by expectations of moderate inflation. It becomes right to hold less money/liquidity, but not to hold none; *some* amount of liquidity really is *very* valuable. Only a small spending spree is called for, not all-out panic. My demand for money diminishes but does not vanish. And the same goes for #n, and in the aggregate; in fact, if the money has an issuer or other central authority who can reduce the supply as appropriate -- more likely for concept money than a physical commodity --, the price of a unit of money need not even change, and this price stability can itself bolster confidence. As long as we are in this regime, the doubt inherent in concept money does not reverberate: #n *isn't* going to reject the money as not-money, so there's no reason for #n-1 to do so either. Yet there is some threshold level of doubt above which it does become reasonable (or at least thinkable) to reject the money totally and dump all one has, or all but a small amount needed for special purposes. For there is always *some* alternative form of money available, things like cigarettes (not to mention junk silver, foreign currencies, etc.). And it is always possible -- if not as an individual then as an extended family, a church group, a business, a warlord-and-clients -- to hold one's flexibility in kind, by stocking up on whatever might be needed one day. As soon as the present money becomes so bad that such tactics seem sane, as soon as other people might plausibly dump all, then the reverberant doubt goes to work and makes doing so not only reasonable but the only sensible thing to do, for now the risk of loss from holding the money approaches 100%, the money must be expected to become worthless, worth less than anything you can get for it right now. So a monetary system needs to stay on the right side of the critical point, and needs to be designed (if only by trial and error) to do so. (The Keynes quotation posted here recently can be thought of as an estimate of such a tipping point.)

There are a couple of classic ways to keep the system in the stable region. Laws requiring payment of taxes in a particular kind of money or making it legal tender for debt and other contracts assure everyone that there will always be at least a limited, specialized demand for the money, which reduces the risk of loss from getting stuck with it when the music stops. But the main tactic I want to discuss is "commodity money": using as money something that has considerable value as non-money, for "real" use. This assures everyone that even if the money ceases to be money, you won't lose all, since you could still use it yourself or sell it to someone for physical use. So long as the nonmonetary value is high enough (net of expected transaction costs in the sale of no-longer-money) that the loss from getting stuck with it if it ceases to be money is obviously less than the loss from abandoning the money (and perhaps the money economy) now, there is no reason to do so, and the money is stable. The key point to note here is that it isn't good enough for the money to have merely *some* commodity value, it needs to have *enough*. What matters is the ratio between monetary and nonmonetary value. If demonetization would cost holders only a small fraction of the wealth they were holding in the money, the system will almost surely be stable (unless better money is at hand), but if the ratio is high enough that the demonetizing hot potato would lose a very large fraction of its value, that's not so different from losing it all, the alternative of dump-now may be attractive, and the system may tip. "Commodity money" whose monetary value is too high is, in the relevant way, hardly different from pure concept money.

Perhaps I have been speaking too loosely of non/monetary values. Of course, at any one time, the price and marginal value for commodity use and for use as money must be about the same, otherwise stocks would shift from one use to the other. The division between the two uses is cleanest on the demand axis. The point is that when a commodity becomes money its demand curve shifts, since it is now the sum of the regular, physical demand curve and an additional curve of demand for use as money. The latter is downward-sloping, since the higher the price -- the more you can get for a unit of money -- the fewer units you need to serve your liquidity needs (assuming the money is reasonably divisible). So there will be a new equilibrium, at a higher price. And at this higher price, actual physical demand will be less, as users shift to substitutes or do without or reduce their own outputs. Conversely, if money is demonetized, if the monetary demand vanishes, the price will drop, and this reduced price is what I have been referring to as the nonmonetary value. Pure concept money, having no nonmonetary use/demand to speak of (apart from a few collectors, historians, etc.), becomes (nearly) worthless if demonetized.

Now, these transitions have several interesting features. For starters, the price changes would usually overshoot or undershoot initially simply because it takes a while for physical demand and supply to adjust -- there are sunk costs to depreciate and inventing to do. So a sudden new form of commodity money, with a sharp increase in monetary demand, will start out as money at a price that is not sustainable in the long run. Which is not an attractive feature in a money, and may cause disillusionment and doubt. Similarly, upon demonetization, the price may go considerably lower, for a while at least, than it would have been if the stuff had never been money; which only enhances the fear and instability. But it's even worse than that: These transitional effects are large and always in the direction of overshooting, because of the fact that money *circulates*. Once it's established as money and the desired balances have been built up, one person's monetary demand is another's supply, so the aggregate monetary demand to be met by new physical supply is only whatever additional money is needed to kep up with a growing economy (or perhaps widespread changes in people's financial practices). But when the money first becomes money, the whole circulating balance has to be obtained, creating a much higher demand, temporarily; and the effect on price will be all the greater since suppliers know the demand is temporary and won't turn their businesses upside down to meet it. Conversely, on demonetization the whole monetary balance, no longer wanted, gets dumped into the supply side of the equilibrium, but only as a one-time thing, until it is absorbed. (Essentially, this is what was happening to gold in recent years.) These transitional effects are much less a problem for pure concept money, which can be created and destroyed by mgic wand as needed, but for commodity money they are serious, making the stuff less attractive and more risky as money, and thus perhaps preventing it from becoming or remaining money. The principal moral here is that commodity mnoney is best introduced gradually, perhaps by slow growth or accretion of communities that use it as money, rather than by any centralized decree about its monetary position; it is best as a "natural," "living" money, and doesn't mix very well with fiat status, other than official ratifications of the status quo. And a final point of some interest: The fact that the monetary use/demand is large or small compared to the physical demand doesn't necessarily imply that the key price ratio is too. It all depends on the details of the supply and demand curves. That's much less accessible information, and this uncertainty might affect the fear level.

OK, with all that background we can now finally get to some applications. Let's consider the claim that has been made around here that gold is going to $30,000/oz. When I first saw that, I wondered, like others, what those $s will buy. It appears the claim is that the change will be about equally divided between gold and dollars: The price of gold will rise by an order of magnitude and the price of dollars fall by an order of magnitude, both relative to things-in-general. Now I have my doubts about the dollars part, but that's for another day; let's talk aboiut gold. Is it at all plausible that the price could go up by a factor of ten? As I understand the claim, the proponents are not talking about a mere brief spike in the price (caused by a short squeeze or some other aberration), but about a fairly stable price level, a new equilibrium. (If I am wrong about this and the prediction is only for the peak of a spike -- coinciding with or following after the predicted plunge in the dollar --, then I would like to point out how hard it will be to take advantage of. Knowing when you are at the peak isn't easy. And even if you can figure that out, selling *physical* gold -- which seems to be the recommendation that goes insistently with the prediction -- isn't an instant process of clicking the icon or calling your friendly, idle broker. You have to pry up the floorboards and transport the gold to the dealer, and when you get there you will find no parking nearby, and the line will stretch around the block, since dealers can't add space and staff fast enough to cope with a spiky market.) Now, no one is predicting some huge technological or aesthetic change in physical demand (or supply), so the idea must be a flood of new *monetary* demand, a remonetization of gold. But what all that theory tells us is that at ten times the present price, gold will not be such good money. I don't know enough about the gold market to know what price would clear a purely physical mrket, so offhand I have no quarrel with the $600/oz figure that has been going around here. (I would like to point out, though, that for gold the "physical" and monetary demands aren't totally separable, since a lot of gold jewelry around the world is held as a store of wealth, with monetary overtones and assumptions vulnerable to a demonetization and disillusionment.) But that isn't the number in the public mind; what will come to mind when people envision a loss of gold's monetary status is the $300 it was at for so long before the New Monetary Order. To make things still worse, there's the overhang of all those official gold holdings. In the last demonetization of gold, these were mostly retained, but if gold is tried again as money and fails again, this time spectacularly and on its own demerits, won't the official rejection be more convinced and total? Mightn't all those official holdings come onto the market and drive the price into the ground for a long while? Then there's the overshoot upon monetization: If gold is to settle down at 3000, it will first go higher, increasing the potential losses. Conclusion: For someone holding newly-monetizing gold, the potential loss if the monetization fails or is reversed will be at least 80% and probably 90 or 95%. Intuitively, I don't believe most people will treat this as much different from 100%. At such prices, gold will be the softest "hard money" you can imagine. (Really quite appropriate metaphorically in view of its physical properties.) For practical economic purposes, it will be almost like concept money. And unlike pure concept money, this will represent a *change* in its economics. If people have once accepted and gotten used to money with a key ratio of infinity, a rise to twice infinity hardly seems to matter. But if you thought of gold as good money precisely because its ratio was low, because its commodity value provided security, then an effective loss of that state of affairs is an *event*, a news peg, an occasion to reconsider one's policy. I cannot believe that gold at those prices will be stable money. The system will be on the wrong side of the tipping point, and gold will cease to be money. Only, of course, thihgs will more likely never get to that stage. Monetary confidence comes with actual practice and experience and custom; it's much easier to think of something as money if "we've always done it that way." Hence, other things being equal, it's much easier to *keep* something money than to *make* it money, to introduce it successfully as a new money. So if, as I have argued, gold at those high prices would be such lousy money from the start that it would crash, then it will simply not become money in the first place. (A caveat on this later, though.) Monetized gold at $3000/oz (in constant dollars) is a mirage.

I'll admit it could make some difference if the demand comes from central bankers, based on an agreement for a New Monetary Order. They can all get together in a room and lean on each other. But unenforceable cartels are notoriously prone to cheating; think of OPEC. If every central bank is sitting on pile of gold that it could sell surreptitiously for five or ten times what it's "really worth," how long before one does? The system would require tighter international controls and inspections than for nuclear materials (which we know are *not* secure), raising howls about wounded sovereignty. And even if it could be done, that still leaves plenty of gold in private hands. It can't work.

Next application in a day or few, when I get it written. This has gotten too long anyway -- my thanks to anyone who's read it all.
Gandalf the White
(10/14/1999; 15:09:35 MDT - Msg ID: 16356)
>>>>>----------$321.0----------->
GC9Z on Fri 9/22 close.
WHY am I, Gandalf the White at the FORUM ?
BECAUSE it is the BEST webpage on the WWW! Can anyone show me a better page ? --- I have not found anything to match it in my travels of the web. --- I feel as if I am amoung friends and enjoy soaking up the wisdom of the posters. -- Time is important to me and the FORUM is my daily web home. --- Thanks MK for having me !
<;-)
FOA
(10/14/1999; 15:13:31 MDT - Msg ID: 16357)
Comment
canamami,
Thanks for taking the time to offer your thoughts. This is indeed a giant chess game that will keep everyone guessing on the sidelines. Interesting about the CNBC question.
As I said earlier, I'm going to bid on some bullion during this break (if it turns out to be a real physical one) and may add some platinum to the mix. I offered before that My mix had some silver (small amount) and now I must buy some of "the other white metal" just to keep up with
Goldspoon. If it falls some, I'll have it.
Now if only the spreads on (all) the metals will fall some, we just may find something. I have my doubts that this is a real pullback because every large player is looking to not only buy metal for cover, but to also buy time. In addition, some real long "hard hands" are into adding any physical they can get as this proceeds. We shall see. FOA
Goldspoon
(10/14/1999; 15:21:26 MDT - Msg ID: 16358)
FOA ...Horse race....
FOA, you said...
Talk about spreads?? Is spot platinum wide open or what? Goldspoon, it's just you and me, silver dropped out (smile). I hope everyone knows we are just playing a game here. Anyway, lets watch the HK market later. FOA
****
i say..... you lead awhile...after seeing the spill Silver Moon took.... the track ahead looks mighty rough...maybe a more experienced rider should lead for awhile???
Or as the Tin Man said in OZ "What's wrong with you teachin' them a lesson?"
Poker... eh?... it shows!! (smile)

All,...Remember...i said awhile back "a cornered rat would fight" ....hang on... i beleive we have him by the tail....just don't let go!!
Leigh
(10/14/1999; 15:28:45 MDT - Msg ID: 16359)
Goldspoon
Cool, Goldspoon! Now that FOA's getting a "Russian white" horse you'll have to make sure you have an Arabian. You guys can ride together into the golden sunrise of a new day of honest money.

Where's Koan, anyway?
Twice Discipled
(10/14/1999; 16:20:51 MDT - Msg ID: 16360)
It's my money! Yeh right!
Point 1 ...
Just a note to let out some of my frustration. I took out a substantial portion of $ out of my brokerage accounts today and walked the checks to my bank. I wanted to lock in some more gold today with the dip and I thought the usual 3 day waiting period would allow me to lock today. FORGET that! I called the bank and they said "3 days is the earliest. You may have to wait up to a month and a half for that amount of money to be cleared before you can spend it." UNBELIEVEABLE.
Well, needless to say I will put more of that money in gold than I had originally intended when I get access to it.

Point 2 ...
When I was talking to my local coin dealer he showed me of lot of gold which he had just purchased in the past few days from people SELLING. I couldn't believe it. It seems as though some people who have held gold for a number of years see this little spike as a chance to make up a little and get out. I really feel sorry for these people -- exchanging gold for paper that will burn.

Oh, well live and learn -- the hard way.
Twice Discipled
(10/14/1999; 16:27:23 MDT - Msg ID: 16361)
Fed Loaning money to keep US going
Today has been really interesting for me as you can see from this msg and the last one.
While cutting my hair today, the stylist proceeds to tell me that a young man she knows who just graduated from college just bought a house. The bank financed 100% of all of the costs -- this kid had nothing except a job. I think my mouth hit the floor.
This demonstrates that what many have speculated that the bankare trying desparately to lend money to keep the system going.
We are in deep trouble folks.
GOLDZAHAVGOLD
(10/14/1999; 16:32:36 MDT - Msg ID: 16362)
GOLD TO GO 'LIMIT-UP' TOMORROW ? +$75 ?
http://www.rumormillnews.comURGENT URGENT URGENT,
This website was shut down few minutes ago
so I am providing the full newsletter:
( http://www.rumormillnews.com/ )

Subject:
[RuMills] RMNews Sources say Watch This Friday!!!
Date:
Thu, 14 Oct 1999 03:24:07 EDT
=====================================================
==============RUMOR MILL NEWS AGENCY==============
=====================================================
Dateline:10.13.1999

RMNews Sources say SOMETHING is going to happen this Friday

In a telephone call that was a little more cryptic than usual, an RMNews
Source from the civilian side of Faction Three stated that something was
going to happen this Friday, October 15, 1999.

Rumor Mill News asked what we could expect. For the first time, our
Source refused to give us information which we felt pertained directly to
what we were being told.

Our Source said, "The last time we told you guys what we were doing,
you put it up on the webpage and everyone is Washington knew our plans
before we had even completed them. This time, we are keeping it under
wraps."

The Rumor Mill News webmaster confirmed that the RMNews page has
lots of hits from agencies that end in ".gov", both in this country and
around the world.

RMNews kept pressing our Source for more information.
While we never recieved an answer to our question about Friday, we did
receive information that is intersting and timely.

RMNews: "Does what is goingto happen Friday have anything to do with the
stock market?"

Source: "Indirectly, you could say it does."

RMNews: "Does it have anything to do with the biological attack on New
York City?"

Source: "No, we took care of that. They won't try that trick again. If it had
been Saddam he would have planned the attack in a three part attack. The
first wave of biologicals would resemble a bad flu season. The youngest,
the oldest and the people with impaired immune systems would die.

No one in government would pay much attention, because it would just
look like an ordinary flu season. The second wave would be a far more
virulent strain of the same flu. It would be hard to tell the difference from
the first strain, and the government would just think that it was a
particularly strong flu virus.

"By the time the third wave of the virus was loosed upon a major city, it
would be too late. Everyone would already be infected, and all infected
people will die.

"The type of biological that will be used is one that will die outside of the
host within 24 hours. You don't think we would have armed Saddam
Hussein with biologicals that would wipe out our major cities forever do
you?

"The New World Order wants the cities of the United States to survive,
they just don't want Americans living in them."

RMNews: "Have you read the report the News Hawk sent around today
regarding the Chemtrails being vaccine?" (Newshawk story inserted at end of
RMNews article)

Source: "I thought you said you had the patent to that?"

RMNews: "I have a copy of a patent that appears to be a delivery system
for an aerial vaccine."

Source: "So what's your question?"

RMNews: "Is his story about "a benevolent faction in the military" trying
to vaccinate the population true?"

Source: "What do you think?"

RMNews: "I think it's true. I have checked the story out with a researcher
in Canada plus one here in the United States, and both of them say that
what is being dropped from the tankers is consistent with the patent
formula that I have. But that is only my opinion. What do you think?"

Source: "Have you seen airplanes flying over metropolitan areas making
that criss cross pattern over major population areas?"

RMNews: "I don't remember any reports of this happening over the major
cities."

Source: "Why is that?"

RMNews: "I don't know. You've got all the answers."

Source: "Could who ever is doing the vaccinating not want the major
cities to be vaccinated?"

RMNews: "Are you saying that whoever is doing it wants part of us to live
and part of us to die?"

Source: "That's what it looks like to me."

RMNews: "Why are they doing this?"

Source: "For racial purity."

RMNews: "What? That doesn't make any sense at all."

Source: "Where are the largest groups of non whites located?"

RMNews: "Are you saying that the majority of non whites are located in
the major population areas?"

Source: "I think that's what I just said."

RMNews: "Are you saying that whoever is doing the spraying is trying to
vaccinate the white race?"

Source: "I think they prefer to call you European Americans."

RMNews: "But there are a lot of 'European Americans' living in the
major cities. Are all of these people going to be killed also?"

Source: "It depends."

RMNews: "Depends? What do you mean?"

Source: "It depends on whether the virus is one that only attacks certain
DNA patterns."

RMNews: "Are you talking about the viruses that were created under
Operation Raindance?"

Source: "I don't know. What is Operation Raindance?"

RMNews: "It was a US government directed operation to create a virus
that would target certain ethnic groups."

Source: "Bingo!"

RMNews: "So you are saying that the biologicals that will be released in
the major cities will be "race selective?"

Source: "Honey, the men who created these 'animals'.... these viruses....
are proteges of Dr. Mengele, if you get my drift. In their mind, anything
that is racially mixed, black, brown or yellow, doesn't deserve to live."

RMNews: "So you are saying that the NWO wants to kill off all the non
whites."

Source: "I didn't say that."

RMNews: "You just said that anything that is black, brown or yellow
doesn't deserve to live."

Source: "Yes, but I didn't say the NWO is trying to kill them off."

RMNews: "Well, who IS trying to kill them off?"

Source: "Let's just say that the NWO is going to kill off as many people as
they can in order to reduce the population of the planet. The men who
head the NWO could care less about who lives and who doesn't. So they
assign the project to men who will carry out their orders. These men
believe in racial purity based on an Aryan ideal."

RMNews: "That's a technicality. It is still the NWO who is killing all the
non whites."

Source: "You're missing a very fine point here. The NWO has grown too
large. It has too many factions within it. The factions of the NWO don't
agree on much. Racial purity is just one of the many little items they don't
agree on. Some of the highest born of the NWO are racially impure,
therefore, if the virus infects them, they will die. But has this little piece
of information penetrated their thick skulls yet?"

RMNews: "You're not saying that a faction of the NWO is vying for
control are you?"

Source: "Honey, they aren't just vying. They are actively plotting to pull
off a coup."

RMNews: "A coup? Are you saying that Faction One is splintering?"

Source: "After Germany surrendered, the scientists were split up into three
groups, this isn't counting the group we saved and took below ground.
One group went to work at secret bases all around the world working for
the New World Order. You should visit the island off Formosa where the
New World Order cloning laboratory is located. There are NWO labs like
this all over the world.

"These labs were started by German scientists that were working under
Hitler. Just because these men are now working for Jews, or Africans or
Asians, does it mean that they have changed their stripes? Do you think
that just because these men are being housed and fed by racially impure
people that they have given up their hatred on non Aryans?"

RMNews: "I think you are telling me that the NWO has a cancer in its
midst that is getting ready to kill it."

Source: "Bingo!"

RMNews: "But if you know this, aren't you complicit in the killings if you
don't stop them?"

Source: "We are trying to save as many people as we can. We can't stop
the biologicals. Too many terrorist organizations have been supplied by
the NWO and the NWO part of the United States government."

RMNews: "Can't you go public with the information and warn the major
cities?"

Source: "Oh yeah right. Just like that reporter for the New York Magazine
that published the article about the mosquito biological attack. Do you
know what happened to him? He got paid a little visit and was told that if
he didn't start back tracking he could start looking for a new job. And if
he tried to write anymore about biologicals, he should start looking for a
new family. You think we are that crazy? You can't warn the public. The
public would go crazy and kill themselves trying to save themselves. You
have to use other avenues."

RMNews: "What do you mean?"

Source: "Well, we have something planned for this Friday. And if the
other two groups don't agree to play along with us, then I guess we are
going to have to blow them out of the arena."

RMNews: "That sounds ominous."

Source: "God won't let us kill. Remember that. We aren't the ones that
blow the airplanes out of the air, cause the car crashes, or random acts of
violence. It's the other teams that use those methods."

RMNews: "So how are you planning to blow them out of the arena?"

Source: "There are many ways to destroy a man without killing him. You
can kill his reputation in many ways, and if you do this, he might as well
be dead."

RMNews: "Who are you going to blow out of the water?"

Source: "The people in power."

RMNews: "What people?"

Source: "The Democrats and the Republicans."

RMNews: "What do you mean?"

Source: "I mean if they don't read the handwriting on the wall and sign
the Blue Book, then they can all kiss their careers good bye. We already
have all their ill gotten gain in our bank accounts. The only money any of
them have any more is their salaries, and if they lose their jobs how are
they going to support themselves? We drained all the money they stole
from the taxpayers. They don't know how to hold down a real job, so how
are they gong to send their kids to college and keep up the payments?

"We're not asking for anything but equity for all people. Now what is so
bad about that?"

RMNews: "And if they refuse to sign the Blue Book, what happens."

Source: "If I tell you that, then the Enemy will know what we have
planned."

RMNews: "I have heard from another Source that Faction 3 is going to
crash the stock market this week. It looks like it is happening."

Source: "Yes, and it will continue to happen until they sign the Blue
Book."

RMNews: "What are you doing with the money you are pulling out of the
market?"

Source: "We are using it to free up trusts we have created."

RMNews: "What are you doing with the money from the trusts that is
freed up?"

Source: "We are circulating it."

RMNews: "What's that mean?"

Source: "It means we are returning it to the people who gave it to us, the
members of our group who believed enough in our cause to help us create
the original trust. Once we figured out how to drain the bank accounts of
government crooks, we started adding this money to the trusts. Once we
pay off the liens and free up these little trusts, we can return the money to
the people the crooks stole it from in the first place. A lot of the money
will go to the third world countries because they are the ones who have
paid the highest price."

RMNews: "Is the market going to crash this Friday?"

Source: "Is that what you think?"

RMNews: "After listening to Neal Cavuto on Fox this afternoon, it seems
like he is preparing the big boys for a "market correction."

Source: "I guess Neal must have been briefed. I hope he didn't let out too
much. Panic never does anyone any good."

RMNews: "Then you are saying that the market is going to crash this
Friday."

Source: "There is a way to stop it. But it requires that the United States
sign on to the Blue Book. It's not just President Clinton who is standing in
the way. It is the Bush family and high level Republicans and Democrats.
They can't see that the world is changing and if they don't keep up with us
they will be left behind."

RMNews: "Left behind?"

Source: "If the Democrats and the Republicans don't play ball we will
find another game to play, and we will take the field away from them.
Why do you think that all this fuss about movie stars running for politics
is causing such a ruckus? Do you think that Oprah Winfrey could be any
worse than Bill Clinton? Oprah loves people. She doesn't know how to
lie. If she were president, the American people would be told the truth
about everything. If Warren Beatty runs, he will win."

RMNews: "I don't believe that. He's a Communist. He's a joke, he'll
never get elected."

Source: "You're sure of that, huh?"

RMNews: "How can you even say that? You know he's Shirley
MacClaine's brother and you know who their father was. They were both
raised in the New World Order."

Source: "Warren doesn't get along with any of them. You can't
judge all people by their families. If you do that, you aren't giving God
and the individual soul the room to grow and be different. Warren woke
up a few years ago. If he runs, he will win. He will pull all the liberals to
whatever ticket he is heading. If he and Oprah run together, it will be a
landslide. Believe me, they have better advisors than G.W. or Al have."

RMNews: "Are you blackmailing the NWO with Hollywood?"

Source: "We aren't blackmailing anyone. We are simply stating that if
they don't sign on to our plan for redistributing the wealth of the world
that they have stolen and then we stole it back, that we will throw them
out of the game and start our own."

RMNews: "That sounds like blackmail to me."

Source: "Hardball is a better word. We have offered all of them a win win
situation. If they don't want to play a game where everyone wins, then it is
time for them to get out of the game."

RMNews: "So what is going to happen this Friday?"

Source: "If we are lucky Bill Clinton or Janet Reno will come to Houston
and sign the Blue Book. If that happens, then all the disasters that are
planned for the new year will be put on indefinite hold. If it doesn't
happen, then we will have to contend with Clinton wanting to be president
for life, and Armageddon in Israel, World War Three and possibly the
destruction of nine tenths of the population. It doesn't have to be this way.
There is another way, and it's not that third way that Bill keeps talking
about."

RMNews: "What third way?"

Source: "You haven't heard him talk about the Communist way and the
Capitalist way and that neither of them worked so he has a third way that
will work... and will make the trains run on time?"

RMNews: "Are you talking about Fascism?"

Source: "Bingo! You got it! Billy wants to turn the US into Mussolini's
Italy. And you see how successful that country is run."

RMNews: "So what is your third way?"

Source: "A world where equity rules. A world where everyone starts out
equal. A world where laws are meant for everyone equally. And anyone
who works hard and respects the laws of the land can prosper and make a
good life for himself and his family."

RMNews: "What planet is this world on?"

Source: "God didn't make certain families richer or better than others.
This royal blood nonsense is something man started by himself. Everyone
on this earth is a child of God and as such each person is a Prince or a
Princess of the Kingdom.... or Queendom for all the women who I've
offended. It is time people remembered who they are and started acting
the part. A soul is a soul. Souls don't come in colors. Do you follow what I
am saying?"

RMNews: "Yes I do, but I doubt if any bluebloods or Aryans will believe
you. I think they believe they have souls that are different than they rest of
us."

Source: "Yes, they believe they come from other planets and therefore
they aren't subject to the laws of our God. Stupid people. There's only one
God, and He happens to be in charge of this Universe and this planet. If
they are on this planet, they are playing by His rules."

RMNews: "You still have said what is happening this Friday."

Source: "No and I am not going to. There is enough information in what I
have said to let both Faction 1 and Faction 2 know what is going to
happen. Just send this out and let them start to sweat. If they will come to
our dance, everything will make the transition so easily that they won't
even know anything has happened. If they don't, then just prepare for the
end of history as we know it. There will be an entirely new game in town
and the old boys won't even be allowed to sit in the bleachers. Maybe it
will be time for role reversals. Maybe some of the people who have been
playing the roles of kings should get experience playing the roles of
beggars."

END

The conversation became too rambling from there on to continue to
transcribe it.

At one point it was said that whenever Jon Benet is brought up, realize
that something is happening that is very critical to the rest of the world. It
was compared to the OJ trial. It was related that Clinton and the NWO
entrenched their power while the people's attention was on OJ.

In the past, RMNews Sources have predicted that the market would crash
about 6000 points. It has also been said that Faction 3 needs to sell off its
stocks to pay off the lines of credit and liens that are on their trusts. It
has
also been rumored that one of the big trusts is going to be opened on the
A HREF="http://www.rumormillnews.com/"
/A 15th. I wonder if any of this has anything to do with what is going to
happen on Friday? We will all have to wait and see.

Visit the RMNews Forum A HREF="http://www.rumormillnews.com/"
The Rumor Mill News Agency /A There is some every good information up there from RMNews readers.


10.11.99
Chemtrails said to be mass inoculation against biowar

� 1999 NewsHawk� Inc.
rights of unaltered reproduction/distribution waived

A source in the New York area which we've had for longer than any other
single source has relayed to us the following information, which we've
decided to make public.

This source has significant, active ties to what claim to be anti-New
World Order factions of the U.S. Air Force--that is, they CLAIM they are

in favor of maintaining a democratic republic in the U.S.

This contact of ours is knowledgeable about the entire situation
regarding chemtrail spraying of substances from great numbers of
aircraft on a global basis.

What this source says is that he's been TOLD by elements of the Air
Force he understands are working with the so-called "Omega"/"Faction 3"
group--said to be opposed to many NWO agendas such as mass
depopulation/genocide schemes--that the contrail spraying being observed

worldwide is being done by Omega/Faction 3 elements of the U.S. military

(and apparently of other nation's military agencies) to COMBAT the
bio-war attacks NOW BEING DIRECTED against the human race as a whole by
some "force" or consortium of extensive power, which utilizes
significant numbers of terrorist organization members worldwide.

The actual bioterrorism itself is reportedly being implemented on the
local levels by terrorist groups of several nationalities--some said to
be of fundamentalist Islamic persuasion.

Although reportedly no especially hi-tech equipment or highly trained
personnel are required to strategically disperse biowar substances into
targeted regions, the extensiveness of this campaign strongly argues
that the entire scheme is being masterminded by some significantly
powerful global-wide group.

Up to 30 differing biological warfare materials are said to have been
dispersed in various locations. Because of the wide variety of
substances already released, what's being used as an inoculative
material, says this Omega/Faction 3 Air Force crowd, is a
genetically-altered SPIROCHETE--related to both Lyme Disease and
Syphilis; the spirochete has been gene-spliced so that it can inoculate
against most or all of the various biowar substances.

I asked our contact if he had reason to believe he was being told the
truth by his AF contacts. He said, "maybe".

He DID tell me that laboratory analysis of many blood samples collected
in the northeastern US DO confirm that tremendous numbers of people have
been exposed to both Anthrax AND to a genetically-manipulated spirochete
organism. These people are NOT sick with Anthrax however; yet neither
are they getting syphilis or Lyme disease. Nevertheless this inoculative
spirochete organism does not completely ERADICATE the Anthrax from the
subject's system.


What's undeniable though, is that even if our contact's AF connections
are saying what they BEL
HLime
(10/14/1999; 16:34:08 MDT - Msg ID: 16363)
Heads up Aussies
All right Botany Bay it is your turn to show those paper pushers in New York
that there is a WORLD price for Ag & Au. Lets have a little disagreement
in price between us colonials so the Mother Country knows which way to go.

Give em hell Aussies,
Harry
DD
(10/14/1999; 16:49:41 MDT - Msg ID: 16364)
Peter Asher, FOA, Buena Fe
Hi guys - Thanks for the kind words. Coming from you it is especially gratifying as I greatly enjoy and respect your ideas and opinions.

Just to finish a thought. It's been my experience that people generally don't change until forced to do so by the changing environment. This premise seems to hold up for executives, government "leaders" and, yes, manipulators of gold. I see a lot of this in businesses with problems caused by their inability to change with the environment.

Most, rather than change, tend to do more of what's not working in the new environment. I call this the "more-better-different" approach to change. People tend to do "more" of what's no longer working, or what's not working "better", or what's not working "different". I believe that, for the most part, this is exactly the strategy that most of the shorts will take. They won't see that the environment has changed in a way that makes these efforts ineffective or, worse yet, exasterbates their problems. Most will only get it when the emotional/fiscal pain becomes so great as to be intolerable. At this late juncture, escape will be impossible and the shorts will change, painful as it might be.

So, expect more of the same that we experienced on the way down. Except this time it's not going to work. Why? because it's the end game. The shorts play a dangerous game that only works if there is an ever increasing supply of paper. They will continue to throw paper at their problems. However, only physical will relieve their plite. Sadly (for them), there's not enough real gold. The jig is up.

I bring this up because we sometimes, like our executive counterparts, become too focused on the short term. Today, gold went down. I know some are concerned. However, I believe we must fall back on the bigger picture...our vision, really. The world is changing, including the world of gold. We are the pioneers. Yes, we're taken more than our share of arrows. But the environment is shifting in our direction and we shall be vindicated.

However, we must remember that there are no straight lines in the universe. Only waves. Even things that look like they're going straight only do so in a wave-like motion. Direction is much more important short term moves. The direction for gold is, I believe, UP. The shorts will fight to the death against this tide. To no avail. Their paper castles shall be swept away. It will probably be much like our fight on the way down. One step forward, two back. Twenty year direction? Down. Fourteen day direction? UP! Have faith all. The truth shall make you free. Best, DD
RossL
(10/14/1999; 17:01:39 MDT - Msg ID: 16365)
GOLDZAHAVGOLD
GOLDZAHAVGOLD (10/14/99; 16:32:36MDT - Msg ID:16362)
GOLD TO GO 'LIMIT-UP' TOMORROW ? +$75 ?

Is there anything in your post relevant to gold?
andrew the kiwi
(10/14/1999; 18:28:31 MDT - Msg ID: 16366)
put options on the dow
anyone know of a suitable web site to view strike price, month and premium data for options on the djx?

Bill, how are things with you?

i have heard 2nd hand the fed have just announced something that has sent the 24hour Dow market into a spin.....
andrew the kiwi
(10/14/1999; 18:28:33 MDT - Msg ID: 16367)
put options on the dow
anyone know of a suitable web site to view strike price, month and premium data for options on the djx?

Bill, how are things with you?

i have heard 2nd hand the fed have just announced something that has sent the 24hour Dow market into a spin.....
andrew the kiwi
(10/14/1999; 18:28:33 MDT - Msg ID: 16368)
put options on the dow
anyone know of a suitable web site to view strike price, month and premium data for options on the djx?

Bill, how are things with you?

i have heard 2nd hand the fed have just announced something that has sent the 24hour Dow market into a spin.....
FOA
(10/14/1999; 18:44:58 MDT - Msg ID: 16369)
Comment
Hello Yellin of Troy,
Nice write up in 16355. I have a question? In the minds of average citizens, what would you think the difference is between a $10,000 dollar bill and one ounce of gold at $10,000?
I know that these old "big bills" are out of use, but when they were around their buying power must have been at least equal to $30,000. Of course I'm assuming that one of these currency units managed to slip into circulation, but it was still legal tender never the less. So, do I spend it, no way it's to large, yet it's still worth $10,000. Let's say I put it under the bed with the gold piece. As a simple person, how do I come to the conclusion that gold must be sold before it loses value and not the large dollar bill? Especially if people are trading with both of them. Is one money and the other not because I can pay taxes and debts legally only with the paper unit?

I have often found that the saving of wealth is an end unto itself. The more people hold what is perceived dear, the more dear it becomes. Irrational human nature that defines the physical laws, no?

ALL:
Somehow, I believe the CB of China is playing a part in today's gold moves. They may have replaced a lenders demands for gold by not calling for delivery of some other contracts. Thereby balancing (or should I say unlocking) the market. It's not as it seems because their move may be
what was needed to force trading to continue?? Honestly, this is totally conjecture on my part coming from some items heard. I do know that demand for physical is strong now as I am "in line". We may run tomorrow if this action has free up the gears?

On the road................FOA


TownCrier
(10/14/1999; 18:45:21 MDT - Msg ID: 16370)
After the Close: the GOLDEN VIEW from The Tower
Losing 19/32 today, price of the 30-Yr Bond is plumbing depths not seen since Fall, 1997, and the yield has risen to 6.316% on losses every day since last Wednesday. The retail sales report came in just slightly higher than analysts expectations, so traders feel that an adverse release of the September Producer Price Index tomorrow at 8:30 a.m. EDT is being priced into the market. Analysts are forecasting a PPI gain of 0.5%, with the "core" PPI that excludes the staples of life--food and energy--predicted to rise by 0.4%. The universal fear among those who walk "The Street" (Wall, that is) is that strong numbers will prompt the Fed to raise interest rates at the FOMC meeting on Nov. 16.

"Enough of that financial mumbo-jumbo," you're probably saying. "What the hell happened with gold??" Well, I'll tell you. Grab a chair because you'd better be sitting down for this...gold is...(wait for it)...$60 higher now than it was 18 market days ago. That's right folks, UP nearly 25%. Surely nobody in their right mind would think that the technical traders--the "paper boys" that push derivatives around like so many leaves driven by the wind during a breezey Autumn day--would not succeed in bringing about some degree of price retracement. Again, even after this latest effort, gold remains up 25% from 18 trading days ago when the UK hosted their most recent gold give-away to help bail out beleaguered bullion banks in need of metal...no other excuse holds water.

At this pause, the weak hands (and weak minds) are uncurling their fingers to let their gold go to the willing bidders, thinking that this price runnup is too good to be true, given the various offerings of the mainstream media, spouted by those who have no reason to put anyone's interests ahead of their own. "Why be bullish?" asks Ted Arnold of Prubache. "Where's the demand going to come from? The bottom line is that there's too much gold in central bank vaults. Gold is a commodity in over-supply..." [C'mon, Mr. Arnold, wake up and smell the gold-demand reports burning. According to stats of the WGC, the last quarter was a record setter. The current one will likely set a new one, as those who suffered through the Asian contagion have learned the best lesson...taught by experience. And if that were not enough, in a report, the CIA sees forthcoming supply disruptions as a result of Y2K glitches, and as a consequence, they expect a flight to "safe haven" assets such as gold.]

So despite the uncommon wisdom found by the various visitors to the USAGOLD.com Forum, thanks to the endless spew of the media little old ladies that held gold since 1980, and kids that have recently inherited their parents' estate and gold, have each had their attention aroused by the coverage given to this price "explosion." They're using the *opportunity* to sell (on bum advice) an asset they probably hadn't given much thought to lately. Why sell? Because the media says to sell. Or, to raise cash in order to either buy this dip on the DOW, or else meet one of their margin calls on something that has gone south on them. That's right...as long as they don't think for themselves, they'll cut their winners (gold) and let the losers (mutual fund fodder du jour) run. Don't believe what you're reading? Just ask yourself where those lovely pre-1933 coins come from. Or for that matter, ANY gold coin (such as Gandalf's K-rands) with a date other than 1999. They don't come from the mines or the central banks, folks. They come from weak hands. And as gold savers, the gang here at The Tower remain thankful for their paper greed, otherwise gold supply would approach zero, and MK would have nothing for you or me.

The Street.com summed it nicely when they said, "Investors straddled the fine line between bravery and stupidity today, bidding up blue-chip stocks in the face of another big downturn for bonds." The DOW gained 54 points (Nasdaq up 5), but the fact remains, the underlying market is weak. On the NYSE, decliners led by a ratio of 18 for every 11 advancers. Stocks reaching new lows for the year outnumbered new highs, 344 to 25. Since when is walking into the whirring blades of a fan deemed an act of bravery? On second thought, The Street.com only got it half right.

So as described above, the weakest of hands will lose their gold first, and each prgressive runnup in prices will find fewer willing sellers as it becomes apparent to ever-more people that the media has sold them a bill of goods, and that gold is truly the world class financial asset to be held before all else. This is stage one. Paper will be sold aggressively to reinforce the notion that those with gold had best sell it before the price collapses again. In the meantime, they hold their breath in advance of the UK's November auction. We've already seen what a spot-overbid and an oversubscribed auction did to the price (up $13 that week.) Now with many speculators and producers staring at adverse hedge books following the announcement that gold sales and lending operations would be curtailed by 15 prominant European central banks, the next UK auction is sure to be viewed as the next chance to square many positions. Fireworks may likely follow because there, the supply and demand truth can't be hidden as within the prices established by the endless paper of the futures markets.

Today, sellers of December wager-paper were more agressive than buyers (though they matched one-to-one by definition), and the December price was brought down by $7.60. The spot markets took notice, but were grounded more in reality, being swept lower only by $6.90 to the final NY quote at $312.90. As we go to shout this report into the night sky, the spot price has already rebounded by $3.60, at $315.50 in Australian trading. A buck or two here and there over a day or two counts for little when the greater truth and laws of Nature are on your side. So relax if you're tense, grab a beer and your favorite coin, and contemplate the guy scratching out a living in a mud hut in Indonesia. He'd call you wealthy by situation, but he just might have more gold than you...an entire life's savings.

This extended period of higher interest rates offer to those willing to risk gold for lending has drawn enough new gold forth from the "mattress accounts" to facilitate an easing of the offered rate of (no)return. Gold lease rates at days end:
1-month 3.0000%
2-month 3.3100%
3-month 4.1875%
6-month 4.0950%
12-mnth 4.2450%

NY Precious Metals Review: Dec gold dn $7.6; Dec silver dn 26c
By Tina Petersen, Bridge News
Washington--Oct 14--NYMEX Dec gold extended its mid-session losses on
dealer selling, settling down $7.60 [-2.4%] at $314.2 per ounce after hitting a 1
1/2 week low of $312. Dec silver futures followed the same scenario,
settling down 26 cents [-4.6%] at $5.34 per ounce after reaching a 2 1/2 week low
on trade selling. Traders said the markets were somewhat thinly traded,
exacerbating the moves.

Leonard Kaplan, chief bullion dealer for LFG Bullion Services, said a
combination of a softening of lease rates, quiet market conditions,
unsteady long positions and the triggering of stops provided the perfect
ingredients for a softer gold market.
Stops today were triggered at the $315-318 level amid quiet rangebound
trade. "It seems everyone's turning into a seller," said a trader.
Another trader said that attempts to break through the $325 resistance
level had been failed at "too many times and there's too much range
trading.
Everyone's throwing in the towel." He said the longs at $320 did not have
the momentum to push it above $325.
One trader said large brokers offered Dec gold down near the $318
level in the morning "and there were no buyers to match it, so it just
eroded quickly." [!!!!!! see following note *] Mid-session dealer buying
trimmed some of those losses after the lows were made, but late
speculative selling brought Dec back down.

[ * ATTENTION K-MART SHOPPERS---don't you see it clearly now?...that if no one is found to buy into these future paper-wager contracts (for fear of counterparty risk or whatever), the price could fall to the floor. That has a potential psychological impact on the weak hands holding real gold, but ultimately cannot override the international supply and demand fundamentals. Especially in light of the huge "overhang" of gold lent into the market that must incrementally be paid back. Now might be a good time to read the Forum's Hall of Fame posts on this subject if you haven't already.]

Gold had been up overnight on short covering and producer buybacks,
and traders said in the morning that gold futures had been expected to see
technically-inspired buying interest today as spot gold was able to stay
above $320 support overnight.

"We continue to be stuck in a range," said a trader. "There's not a
lot behind these moves." He said profit-taking is expected in
range-trading market conditions. "We are still well entrenched in a
consolidation mode in rangebound, technical trade." Support in gold is
seen at $305 and then at $295.
Most said they still are looking for higher prices in gold over the
next several quarters. "We probably have to come back to push the
remaining shorts out of the market," one trader said. Most said range
trading at $316-325 is expected through next week.

COMEX gold warehouse stocks fell 99 ounces Wednesday to 918,729
ounces, while silver stocks were unchanged at 79,285,583 ounces. He said
gold continued to decline after if broke through the $325-226 support
area.
Kaplan said he does not see today's volatility in the gold and silver
markets as anything significant. "This is the kind of action we see in a
market that is highly leveraged. This is just an aberration and a good
buying opportunity."

Kaplan said he expects gold and silver to trend higher Friday.
Jan platinum settled up on continuing tight supplies. "The market
looks rock solid," said Kaplan.

***
(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
---

There was no movement of metal today within the COMEX gold depositories where 918,729 ounces can be found therein. Open interest at day's end yesterday was unchanged for Oct-Nov, while December futures dropped to 115,597 (down 2288). Total open interest fell by 536 to 216,402 on all COMEX gold contracts through June 2004. Delivery intentions on the October contract stood firm at 2,510.

The release of Department of Energy data today did little more than confirm Tuesday's American Petroleum Institute data showing a 7.139-million-barrel decline for crude stockpiles. The DOE data exceeded it slightly, showing a drop of 7.2 million-barrels. So when you think about it, it was non-news, and traders (out of boredom?) sold their November paper down 61c to settle at $22.45.

Pakistan's military spokesman, Rashid Qureshi, told reporters that the military would not be issuing a policy statement today. They might have something scratched up within another 24 hours, however. In very encouraging news, Qureshi told an interviewer the reason for the delay. "These are important decisions, and important decisions take time. Democracy is still intact in Pakistan despite the bloodless coup 2 days ago." The Tower wishes them well, and hopes the citizen's interests are put uppermost in any final policy.

And that's the view from here...after the close.
TownCrier
(10/14/1999; 18:52:18 MDT - Msg ID: 16371)
Yikes! A quick warning
Don't let that overly dry first paragraph throw you. The contrast was intended (you'll see if you get to the following paragraph), but I'm afraid I might have lost readers half way through before they ever get to the good stuff that follows in the GOLDEN VIEW.
elevator guy
(10/14/1999; 18:57:30 MDT - Msg ID: 16372)
@andrew the kiwi
http://www.cbot.comHello, Andrew.
I sure appreciate the perspective from your country, along with others, as it adds to the depth and worth of the discussion in this forum.
You can find futures contracts on the Dow at the Chicago Board of Trade website. Please share what you find out. I'm interested in buying puts on that bubble we call the Dow. Seems ideally positioned for a fall.
elevator guy
(10/14/1999; 19:04:29 MDT - Msg ID: 16373)
First paragraph of the Golden View
Dear Town Crier, you give me too much credit! If I were to get scared by what I read in the first paragraph, that would mean I would have to understand it first!
(But of course I jest! No, really! Ah kin read, cuz iham smart, "S-M-R-T", smart!)
TownCrier
(10/14/1999; 19:11:58 MDT - Msg ID: 16374)
Sage words from the Chairman of the (Fed) Board (of Governors)
Remarks by Chairman Alan Greenspan
Before a conference sponsored by the Office of the Comptroller of the Currency, Washington, D.C.
October 14, 1999

---Measuring Financial Risk in the Twenty-first Century---

"As I have indicated on previous occasions, history tells us that sharp reversals in confidence occur abruptly, most often with little advance notice. These reversals can be self-reinforcing processes that can compress sizable adjustments into a very short period. Panic reactions in the market are characterized by dramatic shifts in behavior that are intended to minimize short-term losses. Claims on far-distant future values are discounted to insignificance. What is so intriguing, as I noted earlier, is that this type of behavior has characterized human interaction with little appreciable change over the generations. Whether Dutch tulip bulbs or Russian equities, the market price patterns remain much the same.

We can readily describe this process, but, to date, economists have been unable to anticipate sharp reversals in confidence. Collapsing confidence is generally described as a bursting bubble, an event incontrovertibly evident only in retrospect. To anticipate a bubble about to burst requires the forecast of a plunge in the prices of assets previously set by the judgments of millions of investors, many of whom are highly knowledgeable about the prospects for the specific investments that make up our broad price indexes of stocks and other assets.

Under these circumstances, fear and disengagement on the part of investors holding net long positions often lead to simultaneous declines in the values of private obligations, as investors no longer realistically differentiate among degrees of risk and liquidity, and to increases in the values of riskless government securities. Consequently, the benefits of portfolio diversification will tend to be overestimated when the rare panic periods are not taken into account.
[Again...]
Consequently, the benefits of portfolio diversification will tend to be overestimated when the rare panic periods are not taken into account.
[Worth a third look...]
Consequently, the benefits of portfolio diversification will tend to be overestimated when the rare panic periods are not taken into account.

[TRANSLATION: You might think you are wasting your time on something such as gold if you have not considered the infrequent but inevitable financial shock.]

The uncertainties inherent in valuations of assets and the potential for abrupt changes in perceptions of those uncertainties clearly must be adjudged by risk managers at banks and other financial intermediaries. At a minimum, risk managers need to stress test the assumptions underlying their models and set aside somewhat higher contingency resources--reserves or capital--to cover the losses that will inevitably emerge from time to time when investors suffer a loss of confidence. These reserves will appear almost all the time to be a suboptimal use of capital. So do fire insurance premiums."
SteveH
(10/14/1999; 19:20:39 MDT - Msg ID: 16375)
Getting good at explaining this stuff in one sentence...
Other person, "What is this I hear about gold?"

You, "Yeah, there was some secret deal in the 70's to keep gold cheap in dollars so folks could get cheap oil; to do that, they had to borrow lots of peoples gold and sell it to drive gold lower -- about 12,000 tons of it -- and now it is pay back time. Stand by, here comes $10K per ounce."

Ok, that was two sentences with E.B. White punctuation techniques to make it so.
flierdude
(10/14/1999; 19:26:43 MDT - Msg ID: 16376)
Andrew Options Site
Try http://bohl.minot.com/

Bohl And Associates

Mike
Strad Master
(10/14/1999; 19:39:14 MDT - Msg ID: 16377)
GOLDZAHAVGOLD Re. your (10/14/99; 16:32:36MDT - Msg ID:16362)
Woah! What a fascinating and entertaining bit of "Twilight Zone" stuff that was!! I guess if the world doesn't go to hell in a handbasket tomorrow we can safely assume that Bill Clinton flew to Houston to sign the mysterious Blue Book? Boy, I sure hope he sees the error of his ways before tomorrow morning. Sweat'n bullets... Strad
SteveH
(10/14/1999; 20:09:29 MDT - Msg ID: 16378)
repost
http://www.cnnfn.com/1999/10/12/investing/merrill_survey/NEW YORK (CNNfn) - Global fund managers are betting increasingly on Europe's recovery while moving away from U.S. equities, which they perceive as risky, according to a Merrill Lynch survey released Tuesday.
SteveH
(10/14/1999; 20:13:41 MDT - Msg ID: 16379)
repost Greenspan
www.kitco.comWhat do you think the significance is of the Greenspan now having given two doom and gloom speaches in the last two months (the first in Jackson Hole, WY., and now this one below)? I read it as an omen, but then that may be overeacting a tad, eh?

Date: Thu Oct 14 1999 20:54
AzusaGold (Greenspan raises concerns about stock risks: story) ID#255250:
Copyright � 1999 AzusaGold/Kitco Inc. All rights reserved


By Caren Bohan


WASHINGTON, Oct 14 ( Reuters ) - Federal Reserve Chairman Alan Greenspan on Thursday advised banks to set aside more money as insurance against a big market downturn, a sign he is concerned about a potential bubble in equity prices.

While emphasising he was not predicting a stocks crash, Greenspan told a banking-related conference that sudden losses in investors' confidence ``will inevitably emerge from time to time'' and said financial institutions should boost their reserves to account of that possibility.

He said diversification among different types of assets -- a common strategy used by portfolio managers to guard against market risks -- may not be sufficient to account for all types of scenarios in which the value of their investments might decline sharply in value.

``At a minimum, risk managers need to stress test the assumptions underlying their models and set aside somewhat higher contingency resources -- reserves or capital -- to cover the losses,'' he said.

The Fed chairman noted that equity premiums -- the amount of return investors demand to cover the risks associated with investing in stocks -- had declined in recent years but he said it was unclear why.

``The key question is whether the recent decline in equity premiums is permanent or temporary,'' he said.

If the decline was only temporary then portfolio managers may find they were underestimating the credit risks of individual loans and could be too optimistic about how protected they were by spreading their risk.

He said investment professionals who specialise in risk management should take this factor into account and weigh carefully whether investors' were not paying enough heed to the risk associated with holding stocks.

``The decline in recent years in the equity premium ... should prompt careful consideration of the robustness of our portfolio risk-management models in the event this judgment proves wrong,'' he said.

Greenspan shocked financial markets in December 1996 when he asked whether U.S. equity prices were affected by ``irrational exuberance.'' Since then he has repeatedly questioned whether the prices of U.S. were justified by corporate earnings.

But the Fed chairman, who was sharply criticised for appearing to second-guess investors with the famous 1996 comment, has in all of his discussions of the stock market since then been careful to be more circumspect.

In Thursday's speech, Greenspan noted that economists had failed to anticipate sharp reversals in market confidence. He also repeated his line that the prices of assets were determined by millions of investors, ``many of whom are highly knowledgeable about the prospects for the specific investments.''

20:41 10-14-99

Trader_vic
(10/14/1999; 20:25:36 MDT - Msg ID: 16380)
Andrew the Kiwi - Option URL
Use this one, it is about 30 min. delay but has all the strike prices and option premiums...

http://quote.cboe.com/SimpleQuote.asp?TICKER=djx&ALL=1
Trader_vic
(10/14/1999; 20:27:40 MDT - Msg ID: 16381)
Town Crier - Thanks!
Thanks for taking the time to post "After the Close" it is my very favorite nightly read!!! I'm sure it means a lot to all here as well....once again thank you!
FOA
(10/14/1999; 20:52:14 MDT - Msg ID: 16382)
Paris, Friday, October 15, 1999
http://www.iht.com/IHT/TODAY/FRI/FPAGE/brit.2.htmlBlair Gathers Force for Battle of Euro

Cross-Party Coalition Seeks to Counter Conservatives' Anti-EU Thrust


By Tom Buerkle International Herald Tribune

LONDON - Assembling perhaps the broadest political coalition since Britain joined the European Union a generation ago, Prime Minister Tony Blair on Thursday began an all-party campaign to extol the benefits of EU membership and promote the Labour government's finely nuanced position on the euro.

The appearance of Mr. Blair and his foreign and Treasury secretaries on the same stage as two prominent pro-European Conservative politicians,Michael Heseltine and Kenneth Clarke, and the Liberal Democratic leader, Charles Kennedy, was an extraordinary event that underscored Europe as probably the defining political issue in Britain today.

With William Hague, the Conservative leader, under increasing fire within his own party for having hardened his skeptical stance toward Europe last week, Mr. Blair sought to exploit the opposition's divisions.

He labeled Mr. Hague an extremist flirting with withdrawal from the European Union and contended that EU membership was a ''patriotic cause'' vital for British jobs, investment and influence in the world.

''To be part of Europe is in the British national interest,'' Mr. Blair said at the inauguration of a cross-party lobbying group called Britain in Europe. ''The people here represent a patriotic alliance that puts country before party.''

Mr. Heseltine, a former deputy leader of the Conservative Party, sought to contrast Mr. Hague's Euro-skeptic attitude with the pro-European policies of former Tory leaders like Edward Heath, who led Britain into what was then the European Economic Community in 1973, and Margaret Thatcher, who signed the 1986 act that created Europe's single market.

"Each weighed our national self-interest and took us further, deeper and more irrevocably towards that vision'' of European integration first sketched out by Winston Churchill after World War II, he said.

He also gibed at Mrs. Thatcher, who whipped up Conservative skepticism last week by saying that all Britain's problems had come from mainland Europe. ''You can't wield a handbag from an empty chair,'' Mr. Heseltine said.

But for all the rhetoric, it was a measure of Mr. Blair's own hesitations and conservative instincts that he carefully avoided any suggestion of campaigning to join the euro, which was the original purpose for forming the Britain in Europe group. He simply reiterated that he favored the euro in principle but would make British entry conditional on several economic tests laid down by the government two years ago.

That was ''a sensible position,'' he said, while Mr. Hague's promise to rule out joining the euro in the next Parliament, and perhaps even longer, verged on ''madness.''

Mr. Hague accused Mr. Blair of hiding his real intention to abolish the pound. In an article in The Times, he promised to step up the Conservative campaign to keep the pound and to renegotiate EU treaties to allow countries to opt out of future policies. ''The battle for the soul of our country
has begun,'' he wrote.

In the short run, Mr. Blair should have little difficulty in maintaining a pro-Europe stance without becoming pro-euro. Mr. Hague's stridency and the growing opposition to it from Conservatives like former Prime Minister John Major and Britain's EU commissioner, Chris Patten, threaten to split the party or narrow its appeal to a nationalist core.

Mr. Heseltine said he saw ''some similarities'' between the Conservative turmoil over Europe today and the divisions over nuclear disarmament and nationalization that split the Labour Party in the early 1980s.

''The Conservatives are a party in the throes of a nervous breakdown,'' The Guardian said in an editorial.

''Not since the gang of four broke from Labour has a party witnessed such passionate dissent voiced, in concert, at such a level,'' it said, referring to the establishment of the Social Democratic Party by disenchanted Labour politicians in 1981.

In the longer run, however, many politicians and business leaders believe Mr. Blair will have to give a clearer commitment to the euro or risk seeing the prospects for entry recede. Some pro-euro Labour members believe it will be difficult to call and win a referendum on the euro early in the next Parliament if Mr. Blair continues to sit on the fence in the next general election, which must be called by May 2002.

Major companies also will need a clearer signal from the government in ''months, not years,'' before they will invest to prepare for the euro, said Graham Bishop, an economist at the brokerage firm Salomon Smith Barney.
Trader_vic
(10/14/1999; 21:01:28 MDT - Msg ID: 16383)
Closing price of gold on 10/22/99 contest!
>>>>>-----349.50-------->

Thanks for the opportunity to post here, I love the site! But my first concern and interest is GOLD! I have been trading gold for over 20 years and saw the rise and fall of the 1979-80 gold market, the fall of oil from $32/brl, the day that the bull market in stocks began in 1982, the crash of '87, and the MANIPULATION OF THE GOLD MARKET IN 1997-99! and the biggest breakout in gold history two weeks ago!!! I am a technician and a fundamentalist and I actively trade the gold markets.... My estimate is based upon the selloff to the lowest fib. retracement and then a spike up to the new highs/resistance. Anything below $310 will be snapped up faster than a hungry frog in a garbage can full of flies!

My all time high for gold will exceed $10,000/oz on the final blowoff....
Simply Me
(10/14/1999; 21:17:48 MDT - Msg ID: 16384)
Wecome, Trader Vic
Welcome in from the cold! It's been very cold for goldbugs outside this cozy forum.
PS. If you're from the Sunshine State, we may be business acquaintances. Your introduction sounds familiar.
Hill Billy Mitchell
(10/14/1999; 21:30:21 MDT - Msg ID: 16385)
What happened today
I have been watching the market very closely for about a year and a half in a certain way. I thought that when stocks went down and bonds went up(or vice versa) on the same day, that the manipulators were simply rotating from one to the other for trading profits and commissions.

I assumed that when this ceased to happen that the money would move into precious metals.

For the last couple of days I have seen something that I do not recall seeing during this year and a half. I did not expect to see everything go down (stocks, bonds, and metals)

I was puzzled. Where did the money flow if it did not flow into these three categories. About an hour ago a light came on. The money flowed (flew) into cash! Does this make sense. I am exposing my amatuerish knowledge of this world of money flows. Some one please comment on this. Am I on the wrong track. If the money went the parking place wouldn't that indicate that a lot of investors are freightened and are non-investors for a while until they can find the direction. Seems to be a healthy sign for we bugs who are getting overly impatient for the big turn.

I must admit that I have mixed feelings. I want the move to commence and yet I have inwardly hoped that it would wait for me to accumulate at these fire sale prices.

Too many words for such little substance. Sorry.

Hill Billy Mitchell
Hill Billy Mitchell
(10/14/1999; 21:38:11 MDT - Msg ID: 16386)
Contest
Closing price of gold on 10-22-99 $338.50
THX-1138
(10/14/1999; 21:41:50 MDT - Msg ID: 16387)
Platinum up
Kitco shows Platinum up $17.
Skip
(10/14/1999; 21:42:51 MDT - Msg ID: 16388)
TownCrier: After the Close...
Truly this is an amazing and thought-provoking forum.

Although there have been many excellent posts over the months that I've lurked here, your "After the Close" posting today stands out among the best. It belongs in your Hall of Fame postings. THANK YOU for the insights!!!

Sincerely,
Skip
she-gold
(10/14/1999; 21:51:56 MDT - Msg ID: 16389)
Quite the good read... and they reference www.gold-eagle.com and www.lemetropolecafe.com
http://www.contraryinvestor.com/mo.htmTHE END OF THE INNOCENCE

Market Observations - 10/14

The End of The Innocence...Bear markets are a process. They are a process of confidence destruction. They are the flip side of a bull market experience where confidence is continually built until risk is no longer a consideration. In bear markets, risk is a constant consideration at the exclusion of opportunity. To quite vaguely quote John Templeton, "bear markets are borne in euphoria and die in the depths of pessimism". It seems quite clear that we are witnessing the birth of a bear market. The Advance/Decline experience of the stock market speaks to the fact that a bear market was born 18 months ago. The child bear is slowly beginning to walk and talk. It won't be long before it can stand on its own two feet. We are in the midst of a process of confidence destruction. Sector by sector. Stock by stock. Day by day. Largely the destruction of confidence has been confined to the "professional" investment community up to this point. Looking ahead, it will be critical to monitor public confidence in the stock market. The public, via the mutual funds, control the keys to the kingdom. We are seeing some cracks around the edges. Mutual fund sales have fallen off this year relative to the prior three year-to-date periods. There is just about zero chance of a fund sales catch up in the months ahead as we are headed into the "quiet period" where funds prepare to distribute annual capital gains. Online trading activity is certainly slowing as witnessed by the results of the ebrokers over the last five months. As of now, index fund "lobotomy patients" have realized a year-to-date return comparable to that of a money market fund. Human greed is impatient. How much longer will the public remain confident that stocks are "the place to be" with the type of action we are witnessing in the current market?

Golden Years?...For those who have tuned in to our commentary for some time, you know we are not gold bugs by any stretch of the imagination. We've maybe mentioned gold a handful of times over the last six months. We want to spend a little time discussing the current market environment for gold and why gold may be quite important as we move ahead. We're not going to recommend gold stocks here, although we do believe the price of the metal has little place to go but up (despite the drop in price today). We'll cut right to the conclusion and then discuss the backdrop we see for what is developing in gold. The key to our current scenario for the metal is leverage. The fact that it is happening in gold is almost a moot point. Almost any asset class would do. Whenever a situation develops were excess leverage and structural demand/supply imbalance meet, trouble is eventually sure to find a seat at the head of the table. The Yen carry trade was almost an identical replay - a preponderance of bets on one side of the trade coupled with an application of excess leverage. Unlike the ability of the Bank of Japan to help manipulate Yen valuation, there is no "Bank of Gold" to which to turn for help to offset some of the pressure in unwinding the trade and the leverage. With gold, it's every man for himself. What makes the current environment interesting, is that very few mainstream "professional" investors have much experience with the metals complex. Most investors in the business for twenty years or less only know that gold goes down. Few understand the in place global structure of basic production, demand, leasing, shorting, etc. (We, clearly, are not experts by a long shot. It's the structural supply/demand imbalance and application of leverage which we hope to understand.)

We believe the ECB decision to suspend gold sales, leasing and derivatives transactions was largely borne of the need for Germany to shore up its balance sheet in order to maintain the financial dictates of ECB participation. It was an economic decision, not a market call. In a sense, it was protectionist. This decision just happens to come at a time when extreme imbalances in the complex exist. Hedge funds, banks and brokerages have used gold short sales and leasing to finance trading operations for years now. Simplistically, lease gold at 1% lease rates, sell the gold and use the proceeds to invest in higher return assets. Apply leverage, and this was almost shooting fish in a barrel. Other strategies included selling out of the money calls and using a portion of the proceeds to hedge with puts (for those who held bullion or leased bullion) or just plain old selling of naked calls. This type of strategy was really the province of the quant shops. Simple arbitrage, assuming the price of gold would continue to fall, of course. After years of suffering significant margin pressure, the producers also got in on the act in an attempt to preserve their P&L and balance sheets by selling gold forward. Poor Ashanti had about half of their proven reserves hedged - equivalent to approximately 6 years worth of production. After the close today, Barrick fessed up on a conference call that they too will take a hit due to their hedging activities. The stock will clearly react tomorrow. The unfortunate and almost unimaginable part of this scenario was that much of the leasing and short sales were done with "paper gold". Trading operations were essentially leasing and shorting gold they did not own. The pricing was tied to the metal, but their was no bullion ultimately backing the trades. Much like the Yen carry trade, when the unanticipated event happened (the spike in the price), leveraged speculators were caught off guard. We have to believe the Fed knew of this danger. Although we have zero factual information, LTCM was rumored to be massively short gold as it went into its death spiral late last year. One, or a number, of the brokerages that bailed out LTCM had to have taken on this liability. It is rumored to have been Goldman by foreign press sources, but we have absolutely no way of knowing if this is true.

Here we are in the present. The gold bullion price has spiked. Naked gold shorts have been caught on the wrong side of the trade. Those leasing gold they did not own have been caught. The producers who sold forward significant portions of their unmined reserves are stuck holding the bag. Because of the enormity of the one-sidedness of the trade and the excess leverage applied, there appears to be no way that the physical gold can be delivered to make the trades good. Imagine yourself on the other side of a short gold trade. Would you want payment in cash, or virtually undeliverable bullion? Of course you would choose the bullion, given that the lack of supply would force up the price as the short paid up to buy the bullion to deliver to you.

Sorry for what seems like tangential rambling. The point we are leading up to is that if you are caught on the wrong side of the trade, you will most likely be forced to sell liquid assets to fund the purchase of the bullion for delivery. Specifically we are referring to liquid stock and bonds. It is quite interesting to notice that we are witnessing days where stocks and bonds decline, but gold trades higher. Have we made it clear enough for you? We strongly believe that the excessive market imbalances and leverage existing in the gold market of today may have very negative ramifications for financial assets in the broader scheme of things. This has nothing to do with inflation. This has everything to do with the reckless use of leverage. The greater problem, which we unfortunately can't quantify, may make the LTCM fiasco seem minor in comparison. Unlike the problem being singularly centered in one firm, this has to involve many brokers, banks, the hedge community and the producers themselves. Although we do not vouch for the quality of research or opinions expressed, you can check out www.gold-eagle.com and www.lemetropolecafe.com (2 week free trial, otherwise a paid subscription) for more insights and commentary into what is happening in gold. For us, this is yet another example of excessive and reckless leverage in one "corner of the market" having much broader ramifications for the greater global financial markets as a whole. Moreover, there is simply no way that the Fed was unaware of the imbalance that existed and the extensive leverage used in the gold market. Clearly, the Fed simply chose to close its eyes and hope for the best. By the time you see articles in the NY Times and the WSJ describing the extent of the problem in the gold market, it will be near resolution. As you know, as of yet we've seen nothing in the domestic press critically addressing this ticking time bomb.

It is quite interesting, and possibly telling, to note that today's drop in the price of gold seemed completely driven by the gold futures. It seemed that out of nowhere today, the futures just plunged on volume. We've seen the stock market react much the same way to gaps up in futures that seem to come from thin air. Clearly this type of activity does not come from thin air. We'll leave you to speculate who may be doing this and why. Enough said.

What Gains?...It's mutual fund tax loss selling time. Everyone knows it happens between mid-September and mid-October of each year. The mutual funds close their tax books as of October 31. A lot of the market sloppiness in the last few weeks or so has been blamed on loss selling. Our only observation is that gains this year in the broader market have been subdued at best. Outside of technology and Internet related issues, year-to-date gains are rather modest in many sectors. The gain in cyclicals was largely given back. Oil service sparklers early in the year have toned down considerably in the last few months. In like manner, tech really didn't begin to be sold until just a few weeks ago. If this is truly tax loss selling, against what gains? As of today's close, the S&P is up 4.5% (not including minimal income) for the year. This sure doesn't speak to the fact that there have been massive gains realization opportunities. Quite the opposite. Our view is that not only are the mutual funds dabbling in a little bit of loss selling, but they are also raising cash in anticipation of possible near-year end redemptions by selling their losers, regardless of the loss. We are hearing that lenders have informed the mutual funds that credit will be tight (costly) in December. Rather than facing the potential of having to borrow at prohibitive rates to meet possible redemptions, the mutual funds are probably beginning to raise a bit more cash the old fashioned way - by selling. As you would imagine, they are clearly retaining their nifty 50 holdings at the expense of all else.

Stuffing the Nuclear Winter Ballot Box...Unisys is now the umpteenth casualty of the nuclear winter scenario. The stock suffered its largest ever one day drop today falling close to 40%. The company directly admitted that a Y2K slowdown is effecting them and will continue to do so into the end of the year. As you know, Unisys has really pushed the services side of the business in its illustrious turnaround. Very much along the lines of IBM. Despite the UIS news today, IBM was actually up a few points. Maybe IBM is immune from a slowdown on the services side of the business. Maybe investors have already punished IBM enough. Or maybe IBM hasn't fessed up yet. We'll have to see what happens as IBM reports soon. Until they admit it, there isn't a problem, right? Expect the Bmer to have stock buybacks up its sleeve for the quarter.

It's Not Officially a Correction (Yet)...According to the gurus on CNBC, the Dow was all of 38 points away from being down 10% from the top prior to today's open. In the CNBC dictionary, it's not a correction unless we officially close below the magic 10% number. Actually, this wouldn't be so funny if they weren't delivering the message with straight faces. The volatility continues to concern us. Admittedly, we all know tomorrow is expiration, but the up-down action over the past few weeks has been incredibly dramatic. The run from 10,200 to 10,600 last week was accomplished on negative breadth. The drop back down was accomplished on much worse breadth. The bonds just can't seem to catch a bid. They drip down every day, virtually regardless of stock market action or economic news. It appears to us that someone needs liquidity and is selling bonds (and stocks). For all of you technical aficionados, the 6.4-6.45% yield area is critical for the 30 year bond. Every chart cowboy and their brother know that the long bond breaks a 20 year yield trend line at 6.45%. You can bet Alan G and the Bubblemiesters also know this. Uncharacteristically, the Fed has been a huge buyer of U.S. treasury debt this year. All the way up, as a matter of fact. At this point, there is simply no way the Fed is going to lower rates. That's out of the question (except in a crash, of course). Likewise, the bond vigilantes may not be too pleased if rates are not raised on or before the 16th of November. The Fed as fewer and fewer choices for action as the months go by. If long bond yields do not back down, our bet is the Fed must increase rates to retain credibility. If this causes heart pains to the stock market, so be it. It's still early enough to try to salvage the financial markets in time for the election. To us, it has been many moons since an environment like this has faced the financial markets. The confluence of higher rates, an extremely overvalued market, a potential gold leverage problem, and an uncertain Y2K outcome are all coming together at once. Will the market climb another "wall of worry" or descend the slippery slope of fear? Our advice? Better check your brakes.

Pre-Mortem?...Greenspan spoke before an OCC (Office of the Comptroller of the Currency) conference today. When the speech was released, the S&P futures immediately dropped almost 20 points. As of our writing, they are down 10. Greenspan warned the bankers that they should increase reserves for loans made whose backing are financial securities (stocks, bonds). About two pages into the speech, Greenspan launched into a discussion that included the following words: panic, collapse of confidence, bubble, etc. This is what got the futures going. If you would like, read the speech for yourself at this link. Our sincere guess is that Greenspan is slowly preparing the markets for the fact that at some point he will not be able to save them.

Copyright 1999, ContraryInvestor.com
JA
(10/14/1999; 21:52:06 MDT - Msg ID: 16390)
GOLDZAHAVGOLD
What was the point of post Msg ID:16362)?
It came across to me as a poorly disguised attempt to ridicule or make light of those who attempt to expose conspiracies that not only have existed throughout history, but continue to exist in today's world.

It was a bit lengthy and I found myself saying why am I wasting my time reading such udder nonsense. But then knowing of the high caliber of posters we have at this site, I thought there must be something that I am overlooking. Please feel free to provide further enlightenment.

I did like your projection for a hike in gold tomorrow.
she-gold
(10/14/1999; 21:52:29 MDT - Msg ID: 16391)
Quite the good read... and they reference www.gold-eagle.com and www.lemetropolecafe.com
www.contraryinvestor.com/mo.htmTHE END OF THE INNOCENCE

Market Observations - 10/14

The End of The Innocence...Bear markets are a process. They are a process of confidence destruction. They are the flip side of a bull market experience where confidence is continually built until risk is no longer a consideration. In bear markets, risk is a constant consideration at the exclusion of opportunity. To quite vaguely quote John Templeton, "bear markets are borne in euphoria and die in the depths of pessimism". It seems quite clear that we are witnessing the birth of a bear market. The Advance/Decline experience of the stock market speaks to the fact that a bear market was born 18 months ago. The child bear is slowly beginning to walk and talk. It won't be long before it can stand on its own two feet. We are in the midst of a process of confidence destruction. Sector by sector. Stock by stock. Day by day. Largely the destruction of confidence has been confined to the "professional" investment community up to this point. Looking ahead, it will be critical to monitor public confidence in the stock market. The public, via the mutual funds, control the keys to the kingdom. We are seeing some cracks around the edges. Mutual fund sales have fallen off this year relative to the prior three year-to-date periods. There is just about zero chance of a fund sales catch up in the months ahead as we are headed into the "quiet period" where funds prepare to distribute annual capital gains. Online trading activity is certainly slowing as witnessed by the results of the ebrokers over the last five months. As of now, index fund "lobotomy patients" have realized a year-to-date return comparable to that of a money market fund. Human greed is impatient. How much longer will the public remain confident that stocks are "the place to be" with the type of action we are witnessing in the current market?

Golden Years?...For those who have tuned in to our commentary for some time, you know we are not gold bugs by any stretch of the imagination. We've maybe mentioned gold a handful of times over the last six months. We want to spend a little time discussing the current market environment for gold and why gold may be quite important as we move ahead. We're not going to recommend gold stocks here, although we do believe the price of the metal has little place to go but up (despite the drop in price today). We'll cut right to the conclusion and then discuss the backdrop we see for what is developing in gold. The key to our current scenario for the metal is leverage. The fact that it is happening in gold is almost a moot point. Almost any asset class would do. Whenever a situation develops were excess leverage and structural demand/supply imbalance meet, trouble is eventually sure to find a seat at the head of the table. The Yen carry trade was almost an identical replay - a preponderance of bets on one side of the trade coupled with an application of excess leverage. Unlike the ability of the Bank of Japan to help manipulate Yen valuation, there is no "Bank of Gold" to which to turn for help to offset some of the pressure in unwinding the trade and the leverage. With gold, it's every man for himself. What makes the current environment interesting, is that very few mainstream "professional" investors have much experience with the metals complex. Most investors in the business for twenty years or less only know that gold goes down. Few understand the in place global structure of basic production, demand, leasing, shorting, etc. (We, clearly, are not experts by a long shot. It's the structural supply/demand imbalance and application of leverage which we hope to understand.)

We believe the ECB decision to suspend gold sales, leasing and derivatives transactions was largely borne of the need for Germany to shore up its balance sheet in order to maintain the financial dictates of ECB participation. It was an economic decision, not a market call. In a sense, it was protectionist. This decision just happens to come at a time when extreme imbalances in the complex exist. Hedge funds, banks and brokerages have used gold short sales and leasing to finance trading operations for years now. Simplistically, lease gold at 1% lease rates, sell the gold and use the proceeds to invest in higher return assets. Apply leverage, and this was almost shooting fish in a barrel. Other strategies included selling out of the money calls and using a portion of the proceeds to hedge with puts (for those who held bullion or leased bullion) or just plain old selling of naked calls. This type of strategy was really the province of the quant shops. Simple arbitrage, assuming the price of gold would continue to fall, of course. After years of suffering significant margin pressure, the producers also got in on the act in an attempt to preserve their P&L and balance sheets by selling gold forward. Poor Ashanti had about half of their proven reserves hedged - equivalent to approximately 6 years worth of production. After the close today, Barrick fessed up on a conference call that they too will take a hit due to their hedging activities. The stock will clearly react tomorrow. The unfortunate and almost unimaginable part of this scenario was that much of the leasing and short sales were done with "paper gold". Trading operations were essentially leasing and shorting gold they did not own. The pricing was tied to the metal, but their was no bullion ultimately backing the trades. Much like the Yen carry trade, when the unanticipated event happened (the spike in the price), leveraged speculators were caught off guard. We have to believe the Fed knew of this danger. Although we have zero factual information, LTCM was rumored to be massively short gold as it went into its death spiral late last year. One, or a number, of the brokerages that bailed out LTCM had to have taken on this liability. It is rumored to have been Goldman by foreign press sources, but we have absolutely no way of knowing if this is true.

Here we are in the present. The gold bullion price has spiked. Naked gold shorts have been caught on the wrong side of the trade. Those leasing gold they did not own have been caught. The producers who sold forward significant portions of their unmined reserves are stuck holding the bag. Because of the enormity of the one-sidedness of the trade and the excess leverage applied, there appears to be no way that the physical gold can be delivered to make the trades good. Imagine yourself on the other side of a short gold trade. Would you want payment in cash, or virtually undeliverable bullion? Of course you would choose the bullion, given that the lack of supply would force up the price as the short paid up to buy the bullion to deliver to you.

Sorry for what seems like tangential rambling. The point we are leading up to is that if you are caught on the wrong side of the trade, you will most likely be forced to sell liquid assets to fund the purchase of the bullion for delivery. Specifically we are referring to liquid stock and bonds. It is quite interesting to notice that we are witnessing days where stocks and bonds decline, but gold trades higher. Have we made it clear enough for you? We strongly believe that the excessive market imbalances and leverage existing in the gold market of today may have very negative ramifications for financial assets in the broader scheme of things. This has nothing to do with inflation. This has everything to do with the reckless use of leverage. The greater problem, which we unfortunately can't quantify, may make the LTCM fiasco seem minor in comparison. Unlike the problem being singularly centered in one firm, this has to involve many brokers, banks, the hedge community and the producers themselves. Although we do not vouch for the quality of research or opinions expressed, you can check out www.gold-eagle.com and www.lemetropolecafe.com (2 week free trial, otherwise a paid subscription) for more insights and commentary into what is happening in gold. For us, this is yet another example of excessive and reckless leverage in one "corner of the market" having much broader ramifications for the greater global financial markets as a whole. Moreover, there is simply no way that the Fed was unaware of the imbalance that existed and the extensive leverage used in the gold market. Clearly, the Fed simply chose to close its eyes and hope for the best. By the time you see articles in the NY Times and the WSJ describing the extent of the problem in the gold market, it will be near resolution. As you know, as of yet we've seen nothing in the domestic press critically addressing this ticking time bomb.

It is quite interesting, and possibly telling, to note that today's drop in the price of gold seemed completely driven by the gold futures. It seemed that out of nowhere today, the futures just plunged on volume. We've seen the stock market react much the same way to gaps up in futures that seem to come from thin air. Clearly this type of activity does not come from thin air. We'll leave you to speculate who may be doing this and why. Enough said.

What Gains?...It's mutual fund tax loss selling time. Everyone knows it happens between mid-September and mid-October of each year. The mutual funds close their tax books as of October 31. A lot of the market sloppiness in the last few weeks or so has been blamed on loss selling. Our only observation is that gains this year in the broader market have been subdued at best. Outside of technology and Internet related issues, year-to-date gains are rather modest in many sectors. The gain in cyclicals was largely given back. Oil service sparklers early in the year have toned down considerably in the last few months. In like manner, tech really didn't begin to be sold until just a few weeks ago. If this is truly tax loss selling, against what gains? As of today's close, the S&P is up 4.5% (not including minimal income) for the year. This sure doesn't speak to the fact that there have been massive gains realization opportunities. Quite the opposite. Our view is that not only are the mutual funds dabbling in a little bit of loss selling, but they are also raising cash in anticipation of possible near-year end redemptions by selling their losers, regardless of the loss. We are hearing that lenders have informed the mutual funds that credit will be tight (costly) in December. Rather than facing the potential of having to borrow at prohibitive rates to meet possible redemptions, the mutual funds are probably beginning to raise a bit more cash the old fashioned way - by selling. As you would imagine, they are clearly retaining their nifty 50 holdings at the expense of all else.

Stuffing the Nuclear Winter Ballot Box...Unisys is now the umpteenth casualty of the nuclear winter scenario. The stock suffered its largest ever one day drop today falling close to 40%. The company directly admitted that a Y2K slowdown is effecting them and will continue to do so into the end of the year. As you know, Unisys has really pushed the services side of the business in its illustrious turnaround. Very much along the lines of IBM. Despite the UIS news today, IBM was actually up a few points. Maybe IBM is immune from a slowdown on the services side of the business. Maybe investors have already punished IBM enough. Or maybe IBM hasn't fessed up yet. We'll have to see what happens as IBM reports soon. Until they admit it, there isn't a problem, right? Expect the Bmer to have stock buybacks up its sleeve for the quarter.

It's Not Officially a Correction (Yet)...According to the gurus on CNBC, the Dow was all of 38 points away from being down 10% from the top prior to today's open. In the CNBC dictionary, it's not a correction unless we officially close below the magic 10% number. Actually, this wouldn't be so funny if they weren't delivering the message with straight faces. The volatility continues to concern us. Admittedly, we all know tomorrow is expiration, but the up-down action over the past few weeks has been incredibly dramatic. The run from 10,200 to 10,600 last week was accomplished on negative breadth. The drop back down was accomplished on much worse breadth. The bonds just can't seem to catch a bid. They drip down every day, virtually regardless of stock market action or economic news. It appears to us that someone needs liquidity and is selling bonds (and stocks). For all of you technical aficionados, the 6.4-6.45% yield area is critical for the 30 year bond. Every chart cowboy and their brother know that the long bond breaks a 20 year yield trend line at 6.45%. You can bet Alan G and the Bubblemiesters also know this. Uncharacteristically, the Fed has been a huge buyer of U.S. treasury debt this year. All the way up, as a matter of fact. At this point, there is simply no way the Fed is going to lower rates. That's out of the question (except in a crash, of course). Likewise, the bond vigilantes may not be too pleased if rates are not raised on or before the 16th of November. The Fed as fewer and fewer choices for action as the months go by. If long bond yields do not back down, our bet is the Fed must increase rates to retain credibility. If this causes heart pains to the stock market, so be it. It's still early enough to try to salvage the financial markets in time for the election. To us, it has been many moons since an environment like this has faced the financial markets. The confluence of higher rates, an extremely overvalued market, a potential gold leverage problem, and an uncertain Y2K outcome are all coming together at once. Will the market climb another "wall of worry" or descend the slippery slope of fear? Our advice? Better check your brakes.

Pre-Mortem?...Greenspan spoke before an OCC (Office of the Comptroller of the Currency) conference today. When the speech was released, the S&P futures immediately dropped almost 20 points. As of our writing, they are down 10. Greenspan warned the bankers that they should increase reserves for loans made whose backing are financial securities (stocks, bonds). About two pages into the speech, Greenspan launched into a discussion that included the following words: panic, collapse of confidence, bubble, etc. This is what got the futures going. If you would like, read the speech for yourself at this link. Our sincere guess is that Greenspan is slowly preparing the markets for the fact that at some point he will not be able to save them.

Copyright 1999, ContraryInvestor.com
Gandalf the White
(10/14/1999; 21:53:42 MDT - Msg ID: 16392)
THX-1138 "horse of no name" Quote
Strange things happen at that other Board !! The MRCI night quotes show Jan Plat down $2.50 !!!! Maybe that is what one gets if they jump around instead of staying at the TableRound ?
<;-)
she-gold
(10/14/1999; 21:53:49 MDT - Msg ID: 16393)
Quite the good read... and they reference www.gold-eagle.com and www.lemetropolecafe.com
http://www.usagold.comwww.contraryinvestor.com/mo.htm

THE END OF THE INNOCENCE

Market Observations - 10/14

The End of The Innocence...Bear markets are a process. They are a process of confidence destruction. They are the flip side of a bull market experience where confidence is continually built until risk is no longer a consideration. In bear markets, risk is a constant consideration at the exclusion of opportunity. To quite vaguely quote John Templeton, "bear markets are borne in euphoria and die in the depths of pessimism". It seems quite clear that we are witnessing the birth of a bear market. The Advance/Decline experience of the stock market speaks to the fact that a bear market was born 18 months ago. The child bear is slowly beginning to walk and talk. It won't be long before it can stand on its own two feet. We are in the midst of a process of confidence destruction. Sector by sector. Stock by stock. Day by day. Largely the destruction of confidence has been confined to the "professional" investment community up to this point. Looking ahead, it will be critical to monitor public confidence in the stock market. The public, via the mutual funds, control the keys to the kingdom. We are seeing some cracks around the edges. Mutual fund sales have fallen off this year relative to the prior three year-to-date periods. There is just about zero chance of a fund sales catch up in the months ahead as we are headed into the "quiet period" where funds prepare to distribute annual capital gains. Online trading activity is certainly slowing as witnessed by the results of the ebrokers over the last five months. As of now, index fund "lobotomy patients" have realized a year-to-date return comparable to that of a money market fund. Human greed is impatient. How much longer will the public remain confident that stocks are "the place to be" with the type of action we are witnessing in the current market?

Golden Years?...For those who have tuned in to our commentary for some time, you know we are not gold bugs by any stretch of the imagination. We've maybe mentioned gold a handful of times over the last six months. We want to spend a little time discussing the current market environment for gold and why gold may be quite important as we move ahead. We're not going to recommend gold stocks here, although we do believe the price of the metal has little place to go but up (despite the drop in price today). We'll cut right to the conclusion and then discuss the backdrop we see for what is developing in gold. The key to our current scenario for the metal is leverage. The fact that it is happening in gold is almost a moot point. Almost any asset class would do. Whenever a situation develops were excess leverage and structural demand/supply imbalance meet, trouble is eventually sure to find a seat at the head of the table. The Yen carry trade was almost an identical replay - a preponderance of bets on one side of the trade coupled with an application of excess leverage. Unlike the ability of the Bank of Japan to help manipulate Yen valuation, there is no "Bank of Gold" to which to turn for help to offset some of the pressure in unwinding the trade and the leverage. With gold, it's every man for himself. What makes the current environment interesting, is that very few mainstream "professional" investors have much experience with the metals complex. Most investors in the business for twenty years or less only know that gold goes down. Few understand the in place global structure of basic production, demand, leasing, shorting, etc. (We, clearly, are not experts by a long shot. It's the structural supply/demand imbalance and application of leverage which we hope to understand.)

We believe the ECB decision to suspend gold sales, leasing and derivatives transactions was largely borne of the need for Germany to shore up its balance sheet in order to maintain the financial dictates of ECB participation. It was an economic decision, not a market call. In a sense, it was protectionist. This decision just happens to come at a time when extreme imbalances in the complex exist. Hedge funds, banks and brokerages have used gold short sales and leasing to finance trading operations for years now. Simplistically, lease gold at 1% lease rates, sell the gold and use the proceeds to invest in higher return assets. Apply leverage, and this was almost shooting fish in a barrel. Other strategies included selling out of the money calls and using a portion of the proceeds to hedge with puts (for those who held bullion or leased bullion) or just plain old selling of naked calls. This type of strategy was really the province of the quant shops. Simple arbitrage, assuming the price of gold would continue to fall, of course. After years of suffering significant margin pressure, the producers also got in on the act in an attempt to preserve their P&L and balance sheets by selling gold forward. Poor Ashanti had about half of their proven reserves hedged - equivalent to approximately 6 years worth of production. After the close today, Barrick fessed up on a conference call that they too will take a hit due to their hedging activities. The stock will clearly react tomorrow. The unfortunate and almost unimaginable part of this scenario was that much of the leasing and short sales were done with "paper gold". Trading operations were essentially leasing and shorting gold they did not own. The pricing was tied to the metal, but their was no bullion ultimately backing the trades. Much like the Yen carry trade, when the unanticipated event happened (the spike in the price), leveraged speculators were caught off guard. We have to believe the Fed knew of this danger. Although we have zero factual information, LTCM was rumored to be massively short gold as it went into its death spiral late last year. One, or a number, of the brokerages that bailed out LTCM had to have taken on this liability. It is rumored to have been Goldman by foreign press sources, but we have absolutely no way of knowing if this is true.

Here we are in the present. The gold bullion price has spiked. Naked gold shorts have been caught on the wrong side of the trade. Those leasing gold they did not own have been caught. The producers who sold forward significant portions of their unmined reserves are stuck holding the bag. Because of the enormity of the one-sidedness of the trade and the excess leverage applied, there appears to be no way that the physical gold can be delivered to make the trades good. Imagine yourself on the other side of a short gold trade. Would you want payment in cash, or virtually undeliverable bullion? Of course you would choose the bullion, given that the lack of supply would force up the price as the short paid up to buy the bullion to deliver to you.

Sorry for what seems like tangential rambling. The point we are leading up to is that if you are caught on the wrong side of the trade, you will most likely be forced to sell liquid assets to fund the purchase of the bullion for delivery. Specifically we are referring to liquid stock and bonds. It is quite interesting to notice that we are witnessing days where stocks and bonds decline, but gold trades higher. Have we made it clear enough for you? We strongly believe that the excessive market imbalances and leverage existing in the gold market of today may have very negative ramifications for financial assets in the broader scheme of things. This has nothing to do with inflation. This has everything to do with the reckless use of leverage. The greater problem, which we unfortunately can't quantify, may make the LTCM fiasco seem minor in comparison. Unlike the problem being singularly centered in one firm, this has to involve many brokers, banks, the hedge community and the producers themselves. Although we do not vouch for the quality of research or opinions expressed, you can check out www.gold-eagle.com and www.lemetropolecafe.com (2 week free trial, otherwise a paid subscription) for more insights and commentary into what is happening in gold. For us, this is yet another example of excessive and reckless leverage in one "corner of the market" having much broader ramifications for the greater global financial markets as a whole. Moreover, there is simply no way that the Fed was unaware of the imbalance that existed and the extensive leverage used in the gold market. Clearly, the Fed simply chose to close its eyes and hope for the best. By the time you see articles in the NY Times and the WSJ describing the extent of the problem in the gold market, it will be near resolution. As you know, as of yet we've seen nothing in the domestic press critically addressing this ticking time bomb.

It is quite interesting, and possibly telling, to note that today's drop in the price of gold seemed completely driven by the gold futures. It seemed that out of nowhere today, the futures just plunged on volume. We've seen the stock market react much the same way to gaps up in futures that seem to come from thin air. Clearly this type of activity does not come from thin air. We'll leave you to speculate who may be doing this and why. Enough said.

What Gains?...It's mutual fund tax loss selling time. Everyone knows it happens between mid-September and mid-October of each year. The mutual funds close their tax books as of October 31. A lot of the market sloppiness in the last few weeks or so has been blamed on loss selling. Our only observation is that gains this year in the broader market have been subdued at best. Outside of technology and Internet related issues, year-to-date gains are rather modest in many sectors. The gain in cyclicals was largely given back. Oil service sparklers early in the year have toned down considerably in the last few months. In like manner, tech really didn't begin to be sold until just a few weeks ago. If this is truly tax loss selling, against what gains? As of today's close, the S&P is up 4.5% (not including minimal income) for the year. This sure doesn't speak to the fact that there have been massive gains realization opportunities. Quite the opposite. Our view is that not only are the mutual funds dabbling in a little bit of loss selling, but they are also raising cash in anticipation of possible near-year end redemptions by selling their losers, regardless of the loss. We are hearing that lenders have informed the mutual funds that credit will be tight (costly) in December. Rather than facing the potential of having to borrow at prohibitive rates to meet possible redemptions, the mutual funds are probably beginning to raise a bit more cash the old fashioned way - by selling. As you would imagine, they are clearly retaining their nifty 50 holdings at the expense of all else.

Stuffing the Nuclear Winter Ballot Box...Unisys is now the umpteenth casualty of the nuclear winter scenario. The stock suffered its largest ever one day drop today falling close to 40%. The company directly admitted that a Y2K slowdown is effecting them and will continue to do so into the end of the year. As you know, Unisys has really pushed the services side of the business in its illustrious turnaround. Very much along the lines of IBM. Despite the UIS news today, IBM was actually up a few points. Maybe IBM is immune from a slowdown on the services side of the business. Maybe investors have already punished IBM enough. Or maybe IBM hasn't fessed up yet. We'll have to see what happens as IBM reports soon. Until they admit it, there isn't a problem, right? Expect the Bmer to have stock buybacks up its sleeve for the quarter.

It's Not Officially a Correction (Yet)...According to the gurus on CNBC, the Dow was all of 38 points away from being down 10% from the top prior to today's open. In the CNBC dictionary, it's not a correction unless we officially close below the magic 10% number. Actually, this wouldn't be so funny if they weren't delivering the message with straight faces. The volatility continues to concern us. Admittedly, we all know tomorrow is expiration, but the up-down action over the past few weeks has been incredibly dramatic. The run from 10,200 to 10,600 last week was accomplished on negative breadth. The drop back down was accomplished on much worse breadth. The bonds just can't seem to catch a bid. They drip down every day, virtually regardless of stock market action or economic news. It appears to us that someone needs liquidity and is selling bonds (and stocks). For all of you technical aficionados, the 6.4-6.45% yield area is critical for the 30 year bond. Every chart cowboy and their brother know that the long bond breaks a 20 year yield trend line at 6.45%. You can bet Alan G and the Bubblemiesters also know this. Uncharacteristically, the Fed has been a huge buyer of U.S. treasury debt this year. All the way up, as a matter of fact. At this point, there is simply no way the Fed is going to lower rates. That's out of the question (except in a crash, of course). Likewise, the bond vigilantes may not be too pleased if rates are not raised on or before the 16th of November. The Fed as fewer and fewer choices for action as the months go by. If long bond yields do not back down, our bet is the Fed must increase rates to retain credibility. If this causes heart pains to the stock market, so be it. It's still early enough to try to salvage the financial markets in time for the election. To us, it has been many moons since an environment like this has faced the financial markets. The confluence of higher rates, an extremely overvalued market, a potential gold leverage problem, and an uncertain Y2K outcome are all coming together at once. Will the market climb another "wall of worry" or descend the slippery slope of fear? Our advice? Better check your brakes.

Pre-Mortem?...Greenspan spoke before an OCC (Office of the Comptroller of the Currency) conference today. When the speech was released, the S&P futures immediately dropped almost 20 points. As of our writing, they are down 10. Greenspan warned the bankers that they should increase reserves for loans made whose backing are financial securities (stocks, bonds). About two pages into the speech, Greenspan launched into a discussion that included the following words: panic, collapse of confidence, bubble, etc. This is what got the futures going. If you would like, read the speech for yourself at this link. Our sincere guess is that Greenspan is slowly preparing the markets for the fact that at some point he will not be able to save them.

Copyright 1999, ContraryInvestor.com
she-gold
(10/14/1999; 21:56:30 MDT - Msg ID: 16394)
Quite the good read... and they reference www.gold-eagle.com and www.lemetropolecafe.com
http://www.contraryinvestor.com/mo.htmTHE END OF THE INNOCENCE

Market Observations - 10/14

The End of The Innocence...Bear markets are a process. They are a process of confidence destruction. They are the flip side of a bull market experience where confidence is continually built until risk is no longer a consideration. In bear markets, risk is a constant consideration at the exclusion of opportunity. To quite vaguely quote John Templeton, "bear markets are borne in euphoria and die in the depths of pessimism". It seems quite clear that we are witnessing the birth of a bear market. The Advance/Decline experience of the stock market speaks to the fact that a bear market was born 18 months ago. The child bear is slowly beginning to walk and talk. It won't be long before it can stand on its own two feet. We are in the midst of a process of confidence destruction. Sector by sector. Stock by stock. Day by day. Largely the destruction of confidence has been confined to the "professional" investment community up to this point. Looking ahead, it will be critical to monitor public confidence in the stock market. The public, via the mutual funds, control the keys to the kingdom. We are seeing some cracks around the edges. Mutual fund sales have fallen off this year relative to the prior three year-to-date periods. There is just about zero chance of a fund sales catch up in the months ahead as we are headed into the "quiet period" where funds prepare to distribute annual capital gains. Online trading activity is certainly slowing as witnessed by the results of the ebrokers over the last five months. As of now, index fund "lobotomy patients" have realized a year-to-date return comparable to that of a money market fund. Human greed is impatient. How much longer will the public remain confident that stocks are "the place to be" with the type of action we are witnessing in the current market?

Golden Years?...For those who have tuned in to our commentary for some time, you know we are not gold bugs by any stretch of the imagination. We've maybe mentioned gold a handful of times over the last six months. We want to spend a little time discussing the current market environment for gold and why gold may be quite important as we move ahead. We're not going to recommend gold stocks here, although we do believe the price of the metal has little place to go but up (despite the drop in price today). We'll cut right to the conclusion and then discuss the backdrop we see for what is developing in gold. The key to our current scenario for the metal is leverage. The fact that it is happening in gold is almost a moot point. Almost any asset class would do. Whenever a situation develops were excess leverage and structural demand/supply imbalance meet, trouble is eventually sure to find a seat at the head of the table. The Yen carry trade was almost an identical replay - a preponderance of bets on one side of the trade coupled with an application of excess leverage. Unlike the ability of the Bank of Japan to help manipulate Yen valuation, there is no "Bank of Gold" to which to turn for help to offset some of the pressure in unwinding the trade and the leverage. With gold, it's every man for himself. What makes the current environment interesting, is that very few mainstream "professional" investors have much experience with the metals complex. Most investors in the business for twenty years or less only know that gold goes down. Few understand the in place global structure of basic production, demand, leasing, shorting, etc. (We, clearly, are not experts by a long shot. It's the structural supply/demand imbalance and application of leverage which we hope to understand.)

We believe the ECB decision to suspend gold sales, leasing and derivatives transactions was largely borne of the need for Germany to shore up its balance sheet in order to maintain the financial dictates of ECB participation. It was an economic decision, not a market call. In a sense, it was protectionist. This decision just happens to come at a time when extreme imbalances in the complex exist. Hedge funds, banks and brokerages have used gold short sales and leasing to finance trading operations for years now. Simplistically, lease gold at 1% lease rates, sell the gold and use the proceeds to invest in higher return assets. Apply leverage, and this was almost shooting fish in a barrel. Other strategies included selling out of the money calls and using a portion of the proceeds to hedge with puts (for those who held bullion or leased bullion) or just plain old selling of naked calls. This type of strategy was really the province of the quant shops. Simple arbitrage, assuming the price of gold would continue to fall, of course. After years of suffering significant margin pressure, the producers also got in on the act in an attempt to preserve their P&L and balance sheets by selling gold forward. Poor Ashanti had about half of their proven reserves hedged - equivalent to approximately 6 years worth of production. After the close today, Barrick fessed up on a conference call that they too will take a hit due to their hedging activities. The stock will clearly react tomorrow. The unfortunate and almost unimaginable part of this scenario was that much of the leasing and short sales were done with "paper gold". Trading operations were essentially leasing and shorting gold they did not own. The pricing was tied to the metal, but their was no bullion ultimately backing the trades. Much like the Yen carry trade, when the unanticipated event happened (the spike in the price), leveraged speculators were caught off guard. We have to believe the Fed knew of this danger. Although we have zero factual information, LTCM was rumored to be massively short gold as it went into its death spiral late last year. One, or a number, of the brokerages that bailed out LTCM had to have taken on this liability. It is rumored to have been Goldman by foreign press sources, but we have absolutely no way of knowing if this is true.

Here we are in the present. The gold bullion price has spiked. Naked gold shorts have been caught on the wrong side of the trade. Those leasing gold they did not own have been caught. The producers who sold forward significant portions of their unmined reserves are stuck holding the bag. Because of the enormity of the one-sidedness of the trade and the excess leverage applied, there appears to be no way that the physical gold can be delivered to make the trades good. Imagine yourself on the other side of a short gold trade. Would you want payment in cash, or virtually undeliverable bullion? Of course you would choose the bullion, given that the lack of supply would force up the price as the short paid up to buy the bullion to deliver to you.

Sorry for what seems like tangential rambling. The point we are leading up to is that if you are caught on the wrong side of the trade, you will most likely be forced to sell liquid assets to fund the purchase of the bullion for delivery. Specifically we are referring to liquid stock and bonds. It is quite interesting to notice that we are witnessing days where stocks and bonds decline, but gold trades higher. Have we made it clear enough for you? We strongly believe that the excessive market imbalances and leverage existing in the gold market of today may have very negative ramifications for financial assets in the broader scheme of things. This has nothing to do with inflation. This has everything to do with the reckless use of leverage. The greater problem, which we unfortunately can't quantify, may make the LTCM fiasco seem minor in comparison. Unlike the problem being singularly centered in one firm, this has to involve many brokers, banks, the hedge community and the producers themselves. Although we do not vouch for the quality of research or opinions expressed, you can check out www.gold-eagle.com and www.lemetropolecafe.com (2 week free trial, otherwise a paid subscription) for more insights and commentary into what is happening in gold. For us, this is yet another example of excessive and reckless leverage in one "corner of the market" having much broader ramifications for the greater global financial markets as a whole. Moreover, there is simply no way that the Fed was unaware of the imbalance that existed and the extensive leverage used in the gold market. Clearly, the Fed simply chose to close its eyes and hope for the best. By the time you see articles in the NY Times and the WSJ describing the extent of the problem in the gold market, it will be near resolution. As you know, as of yet we've seen nothing in the domestic press critically addressing this ticking time bomb.

It is quite interesting, and possibly telling, to note that today's drop in the price of gold seemed completely driven by the gold futures. It seemed that out of nowhere today, the futures just plunged on volume. We've seen the stock market react much the same way to gaps up in futures that seem to come from thin air. Clearly this type of activity does not come from thin air. We'll leave you to speculate who may be doing this and why. Enough said.

What Gains?...It's mutual fund tax loss selling time. Everyone knows it happens between mid-September and mid-October of each year. The mutual funds close their tax books as of October 31. A lot of the market sloppiness in the last few weeks or so has been blamed on loss selling. Our only observation is that gains this year in the broader market have been subdued at best. Outside of technology and Internet related issues, year-to-date gains are rather modest in many sectors. The gain in cyclicals was largely given back. Oil service sparklers early in the year have toned down considerably in the last few months. In like manner, tech really didn't begin to be sold until just a few weeks ago. If this is truly tax loss selling, against what gains? As of today's close, the S&P is up 4.5% (not including minimal income) for the year. This sure doesn't speak to the fact that there have been massive gains realization opportunities. Quite the opposite. Our view is that not only are the mutual funds dabbling in a little bit of loss selling, but they are also raising cash in anticipation of possible near-year end redemptions by selling their losers, regardless of the loss. We are hearing that lenders have informed the mutual funds that credit will be tight (costly) in December. Rather than facing the potential of having to borrow at prohibitive rates to meet possible redemptions, the mutual funds are probably beginning to raise a bit more cash the old fashioned way - by selling. As you would imagine, they are clearly retaining their nifty 50 holdings at the expense of all else.

Stuffing the Nuclear Winter Ballot Box...Unisys is now the umpteenth casualty of the nuclear winter scenario. The stock suffered its largest ever one day drop today falling close to 40%. The company directly admitted that a Y2K slowdown is effecting them and will continue to do so into the end of the year. As you know, Unisys has really pushed the services side of the business in its illustrious turnaround. Very much along the lines of IBM. Despite the UIS news today, IBM was actually up a few points. Maybe IBM is immune from a slowdown on the services side of the business. Maybe investors have already punished IBM enough. Or maybe IBM hasn't fessed up yet. We'll have to see what happens as IBM reports soon. Until they admit it, there isn't a problem, right? Expect the Bmer to have stock buybacks up its sleeve for the quarter.

It's Not Officially a Correction (Yet)...According to the gurus on CNBC, the Dow was all of 38 points away from being down 10% from the top prior to today's open. In the CNBC dictionary, it's not a correction unless we officially close below the magic 10% number. Actually, this wouldn't be so funny if they weren't delivering the message with straight faces. The volatility continues to concern us. Admittedly, we all know tomorrow is expiration, but the up-down action over the past few weeks has been incredibly dramatic. The run from 10,200 to 10,600 last week was accomplished on negative breadth. The drop back down was accomplished on much worse breadth. The bonds just can't seem to catch a bid. They drip down every day, virtually regardless of stock market action or economic news. It appears to us that someone needs liquidity and is selling bonds (and stocks). For all of you technical aficionados, the 6.4-6.45% yield area is critical for the 30 year bond. Every chart cowboy and their brother know that the long bond breaks a 20 year yield trend line at 6.45%. You can bet Alan G and the Bubblemiesters also know this. Uncharacteristically, the Fed has been a huge buyer of U.S. treasury debt this year. All the way up, as a matter of fact. At this point, there is simply no way the Fed is going to lower rates. That's out of the question (except in a crash, of course). Likewise, the bond vigilantes may not be too pleased if rates are not raised on or before the 16th of November. The Fed as fewer and fewer choices for action as the months go by. If long bond yields do not back down, our bet is the Fed must increase rates to retain credibility. If this causes heart pains to the stock market, so be it. It's still early enough to try to salvage the financial markets in time for the election. To us, it has been many moons since an environment like this has faced the financial markets. The confluence of higher rates, an extremely overvalued market, a potential gold leverage problem, and an uncertain Y2K outcome are all coming together at once. Will the market climb another "wall of worry" or descend the slippery slope of fear? Our advice? Better check your brakes.

Pre-Mortem?...Greenspan spoke before an OCC (Office of the Comptroller of the Currency) conference today. When the speech was released, the S&P futures immediately dropped almost 20 points. As of our writing, they are down 10. Greenspan warned the bankers that they should increase reserves for loans made whose backing are financial securities (stocks, bonds). About two pages into the speech, Greenspan launched into a discussion that included the following words: panic, collapse of confidence, bubble, etc. This is what got the futures going. If you would like, read the speech for yourself at this link. Our sincere guess is that Greenspan is slowly preparing the markets for the fact that at some point he will not be able to save them.

Copyright 1999, ContraryInvestor.com
she-gold
(10/14/1999; 21:58:49 MDT - Msg ID: 16395)
uh... oops
kept getting this error message ... and... so... i just kept trying.. and... uh... well...

anyway, it's a good read, i think
Gandalf the White
(10/14/1999; 22:01:40 MDT - Msg ID: 16396)
Calling JEFF !!
Please tell me that it is my magic spelled AppleII that is so slow tonight and that the FORUM is operating A-OK !!!
<;-)
CoinGuy
(10/14/1999; 22:04:47 MDT - Msg ID: 16397)
My Perspective....
>>>>>----------323.50-------------->

I've followed gold and have been a goldbug for sometime. I'm also a collector of rare numismatics. My specialties: Morgan Silver Dollars(esp. VAM's top 100), Walking Liberty Halfs, Barber Dimes, Half Dimes, and Indian head pennies. In the last few years I haven't collected anything else. I also have a substantial collection of pre-33 Gold coins in various conditions. Our Country produces the most beautful pieces.

As far as the price of Gold, I don't care how high it goes. I believe gold is the true reserve asset, and the only port in the storm for what lies ahead. I wish you all good luck, and close with my favorite writing from Thoreau.

Why should we be in such desperate haste to succeed,
and in such desperate enterprises?

If a man does not keep pace with his companions,
perhaps it is because he hears a different drummer.

Let him him step to the music which he hears,
however measured of far away.

Contrarian Coinguy
elevator guy
(10/14/1999; 22:05:26 MDT - Msg ID: 16398)
@Gandalf the White
Forum is working fine. There are some lengthy posts in Todays Discussion, that may be slowing your download time. I get it all in T1 speed, so it doesn't make any noticeable difference to me. (Brag, Brag, Brag!)
Black Blade
(10/14/1999; 22:06:42 MDT - Msg ID: 16399)
Dec. gold *----$323.00----+>
The October surprise will continue! with the s&p futures down currently at -12.20 and the widening A/D line, the scramble for safe haven will continue. As I said previously as we approach Y2K, sentiment has changed. The sheeple will look for safe haven as we approach the end of the year. October has been more and more a period of concern with tax loss selling, and an effort to "beat the other guy out the door", the sheeple will break ranks from the flock. One of those safe havens of course is the PM market. Perhaps monday or tuesday may be the "Black Day" for the markets. Watch out the thundering herd is approaching....can you hear them in the distance? I have transfered a greater portion of my investments into PM's for this reason. Will shall travel across into the new millenium together, yes? the talking heads and beaureacrats bleat louder and louder with the approach of the sleepin giant (GOLD), but their cries of "all is well" will ring hollow. As far as Y2K is concerned, computer software isn't the major problem....I'ts the embedded date sensitive chips!!!!! These are the controlling "brains" in much of our modern equipment. What happens when oil isn't pumped from the oil fields? pipelines seize up? water isn't coming from the local utility? sewage backs up? electricity grids go down or brown outs are common? Telecommunications go offline? travel is curtailed? and if government takes this as an opportunity to do god knows what? Where will the sheeple be then?

Will any of the foregoing happen? I don't know. I don't pretend to know. But I will take precautions, as I know many on this forum will. Y2K is not far off. The October surprise is on us. If the DOW drops below 10000 tomorrow or on monday....look out below, and prepare for the rush to safe havens such as gold, silver, and PGM's. Just something to think about before you go to sleep tonight! Sweet dreams!
CoinGuy
(10/14/1999; 22:19:45 MDT - Msg ID: 16400)
Black Blade
Where are you finding the S&P future's at?

Coinguy
Black Blade
(10/14/1999; 22:28:57 MDT - Msg ID: 16401)
Coinguy and s&p futures
http://www.mrci.com/qpnight.htmTry this link. Also has up to date PM numbers when Kitco is screwy. Lot's of other info as well.
Bill
(10/14/1999; 22:32:17 MDT - Msg ID: 16402)
andrew the kiwi
Sounds like we think alike. I purchased a couple of puts on the dow and s&p yesterday. Thought it would rise a little and maybey even make new highs before the tumble..... guess not. This looks like it's probably it.

Gold today... ouch! though not suprising. Looking at the charts it seems quite normal and infact it hasn't been a 50% retracement. I was trading 15-20 options on the high and lows for some decent profits.... a little nerve racking though. I didn't want to miss out on a nice jump. If price remains low at the open tomorrow, I'll buy a few more longer out. I still feel very confident we will see 400 before the end of the year. Oh yeah, bought a little physical for keepsake. Keep your chin up and good luck to you and other knights.
Black Blade
(10/14/1999; 22:38:11 MDT - Msg ID: 16403)
Essays on natural resources and GOLD, etc.
http://www.thebullandbear.comA few nice essays by some analysts on the natural resource industries (including gold and mining stocks).

And speaking of bears, where's Sir Koan lately?
CoinGuy
(10/14/1999; 22:40:41 MDT - Msg ID: 16404)
Black Blade
Thank you my fellow goldbug. I see our guesses for next weeks close are .50 in difference. Good luck

Coinguy
Black Blade
(10/14/1999; 22:52:13 MDT - Msg ID: 16405)
Trading range......maybe, but not for long!
Indeed, are guesses are close. I think that we may be in a trading range between $315 and $325 for the next few days, or at least until the sleepers (sheeple) awaken. I think that perhaps gold will become gold.com before long though. Once the traders find that they can't take delivery, all "hell" will break loose!

Leigh, sorry about my use of the "american" language. I would say "english", but having worked with Brits, they probably would take exception ;).
Black Blade
(10/14/1999; 22:58:06 MDT - Msg ID: 16406)
Coinguy and Coins!
I too should add that I collect Morgans with a leaning toward CC mintages as well as liberty gold peices. I would like to start into US Territorial gold issues and Au commemoratives, but I think that they are a bit out of my price range. Anyway...Good luck!
Golden Truth
(10/15/1999; 00:12:51 MDT - Msg ID: 16407)
TO F.O.A!!!
Just finished watching the movie "Rollover" and the account# 21215 which was used to buy GOLD with played a very important part. Actually i'd say a deadly part!

After watching this movie i don't want the P.O.G to go past $600 to $1000 dollars, if what happens at the end of the movie is even close to reality.

If this happens there will be a lot of BLOOD in the streets and for what? I remember you once saying that GOLD would go up to $30,000/oz,but that we wouldn't like it?
If this truly does happen i,am going to hate it!

Do you really think WAR can be avoided? Look at the new movie out already "Three Kings" which is basicly a movie to go out and get some gold for oneself, by taking it from someone else. I think it sets the stage for things to come. GOD Help us all!!!!!!!!!!! G.T :-(
Tomcat
(10/15/1999; 01:22:13 MDT - Msg ID: 16408)
Why is the POG going down?

Lets look at the facts.

1. There are thousands of tons of leased gold that was then sold short in the gold carry trade.
2. There is more paper gold than physical gold.
3. The recent run up in the POG has caught the shorters with their pants down and they must cover by buying physical gold.

Conclusion: Since there is not enough gold to go around the POG will be driven up and up and up.

Then why doesn't the POG keep rising?

Here is why?

The above analysis presumes that a free gold market exists and that the law of supply and demand will force up the POG.

Here's the catch: A FREE MARKET FOR GOLD DOES NOT EXIST.

The market for gold is a private insider market. It is a market that is closed, clandestine, and undercover. It is a market that you and I do not have access to. Its workings, its guidelines, its power, and its logic are not available to us.

The past fourteen days have been momentous in international finance history. Have you seen much about it in the press? Of course not.

Do you read about the gold lease rates in the WSJ? Of course not.

The press does not report on the insider world of gold.

And so we must live is a vacuum and an absence of facts. While reaching for facts that don't exist I frequently slip into the free market frame of mind. When this happens I have to force myself to wake up and snap out of my delusional stupor. Unfortunately, the free market logic is all I have. Its been with me for years and years. Its my security blanket. Its the paradigm I live with. And its also the paradigm that blinds me to the truth.

So the next time you wonder about the POG take a look aroud.
Get oriented and get a handle on where you are. You might find that you are just outside the den of the gold "insiders". And if you do, recognize that are closer than most have ever been. Stay. Look. Listen. You are at the edge of truth.

And with every fact we find we help expose the truth and reveal the lies associated with false money. With the internet and with each other the walls of this evil den will eventually fall on those insiders who perpetuate the The Evil Force of Fiat.
Farfel
(10/15/1999; 01:41:14 MDT - Msg ID: 16409)
Gold Producers' Cartel Announcement Today?????
Hmmmm?

Michael, have you heard any news? I just got a phone call and am trying to confirm.

If it's true, it's about time. The news will blow the gold shorts out of the water.

Gold producers of the world unite!
I said as much on Kitco many many times.

Thanks

F*
SteveH
(10/15/1999; 02:41:20 MDT - Msg ID: 16410)
She-gold
Good find on that post(s).

Market Mth Open High Low Last Change Date Time Ask Bid
Gold(CMX) Dec 314.2 317.1 314.2 317.1 +2.9 10/15/99 1:25 317.4 316.5
Silver(CMX) Dec 534.0 541.0 533.5 540.0 +6.0 10/15/99 1:24 540.5 539.0
Copper(CMX) Dec 78.80 78.90 78.50 78.50 -0.50 10/14/99 23:57 78.85 78.40
Platinum(NYM)(Access) Jan 405.1 410.0 405.1 408.0b -2.5 10/15/99 1:21 409.9 407.0
Market Mth Open High Low Last Change Date Time Ask Bid
Crude Oil(NYM)(Access) Nov 22.45 22.49 21.93 22.05 -0.40 10/15/99 1:21 22.07 22.05
SteveH
(10/15/1999; 02:52:48 MDT - Msg ID: 16411)
Farfel
http://www.the-times.co.uk/news/pages/Times/frontpage.html?999We had got word on that being in the works but I believe most of have forgotten. What is the reliability factor on that?

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

Tory leader puts himself at head of national campaign to save the pound in response to formation of Labour's new "patriotic alliance" on Europe
SteveH
(10/15/1999; 02:57:26 MDT - Msg ID: 16412)
repost
www.kitco.comThe gold gambit that brought on a
nightmare

by ANTHONY HILTON City Editor

Ask central bankers these days what they are there for
and they will say it is to avoid systemic risk. They may
have various responsibilities for economic management,
but what unites them is the need to stop the system
behaving in such a way as to threaten the viability of
financial institutions. Their nightmare is that the problems of
the bad will do serious damage to the good and that
contagion will spread worldwide.

It is a laudable aim and by and
large bankers do it rather well,
most notably just a year ago
when US Federal Reserve
chairman Alan Greenspan
slashed interest rates to
support the financial system in
the bloodbath that followed
the collapse of Russia. His
action restored that precious
commodity of confidence.

It is all the more ironic, therefore, that these same central
bankers seem to have created a major systemic problem
with their action two weeks ago to try to stop the slide in
the gold price. Seeing the price at its lowest for years, they
decided to bolster it by placing a restriction on gold sales.
But instead of stabilising the price it sent it soaring.

What the bankers failed to appreciate was that after years
of decline a whole industry had built up with speculators
selling gold they did not own in order to profit from further
declines. So when the price reversed overnight, huge
numbers of people were caught short. The result was a
surge in price that has caused such instability that some
long-established mines have been effectively forced out of
business.

The consequences in the financial sector are rumoured to
be even more brutal. Indeed, there was a tale doing the
rounds in London yesterday that Goldman Sachs was $2
billion in a hole. Needless to say, it is only a totally
unconfirmed rumour and not the sort of thing one would
expect them to comment on.

Nevertheless, it seems likely that some firms are in a
dreadful mess. The central bankers have unwittingly set off
their greatest nightmare. The abrupt reversal in the price of
gold poses, if not a systemic risk, something
uncomfortably close to it for a lot of firms.
Quabbin
(10/15/1999; 03:32:34 MDT - Msg ID: 16413)
Newmont Hedge Disclosure
http://www.prnewswire.com/cgi-bin/micro_stories.pl?ACCT=615675&TICK=NEM&STORY=/www/story/10-13-1999/0001043469&EDATE=Oct+13,+1999Good morning class. Time to do a little dissecting. Who would like to make the first incision?
The Invisible Hand
(10/15/1999; 03:50:49 MDT - Msg ID: 16414)
Wall St seen sharply lower on Greenspan comments
http://biz.yahoo.com/rf/991015/ec.htmlPerhaps, they'll listen today.
Good dogs!
Quabbin
(10/15/1999; 04:41:27 MDT - Msg ID: 16415)
Tice vs Tyco
http://www.smartmoney.com/smt/columns/rational/index.cfm?story=19991014Wise commentary from "SmartMoney". Isn't that mag delivered by the boy who rides by the house on a raging bull in the morning? Has the world gone topsy-turvy? Hmmm...mebbe de bull is raging from that mad cow disease.
Or maybe....hmmm...just maybe....

Greenspan: "No you idiots! You were all supposed to short Tyco and cover your gold butts!!! I gave Tice all our friggin CB gold for that report!!!"
Captains of Industry: "Well...thats confusing; we heard short and gold in the same sentence and just assumed...man, are we ever in deep chit now."
Greenspan: Ahhhhh, damned idiots!! Ok, I got one more trick up my sleeve. I'll fix it tonight at the ABA. Just short the whole market tomorrow and COVER YOUR FRIGGIN GOLD!!! You friggin idiots! Jeez!"
[j/k Mr Tice :)]

someone please pass the link on to Loomer at G-E re: his Oct 15, 00:07 post. Thanks.

(ps: due to coincedence, I haven't been able to post at either site for quite awhile. Here it turns out to have been a capital O/zero mistake. There, i still don't why.)
RossL
(10/15/1999; 04:51:55 MDT - Msg ID: 16416)
GC9Z
Gold wakes up in London this morning. $317.80
NASDAQ off nearly 1% in overnight trading.
US dollar down. Oil down.
Turbulent day ahead!
Hipplebeck
(10/15/1999; 06:19:16 MDT - Msg ID: 16417)
Tomcat
If the market is so closed and secret, how do you know facts 1, 2, and 3 are true?
Michael
Aragorn III
(10/15/1999; 06:24:58 MDT - Msg ID: 16418)
Some thoughts for Yellin' of troy for this post(10/14/99; 15:06:48MDT - Msg ID:16355)
First, a sincere apology to ORO...I have not had sufficient time (yet!) to revisit the day of our recent dialogue to read what I am sure will prove to be more of your good words. So how may this same person now sit down to address the Table with "Hello! I must be going!"? You see, I was delivered a paper copy of this referenced post which was read while away, and only now might I stop by to offer an encouraging word.

Yellin' of troy:
thank you for providing the thorough outline of your view of the monetary system, particularly as it relates to value and stability. (As should be clear to all, without stability of the system, the value would suffer in consequence.) Your words are valuable because they express the thoughts that may be on a great many minds, yet too few find the means to express them as you have. Let this be a good day for critical thinking.

For my beginning, I shall start from your ending..."Next application in a day or few, when I get it written." Before you take further strides down this path, please accept in good spirit these comments offered from one not born yesterday. You may yet choose to retrace some steps and attempt a truer line. I saw your words as they were a man walking with a thick-soled shoe on only one foot, alternately shifting from right, to off-center, and back again... Your efforts at maintaining dispassionate objectivity are apparent, yet in the end your eyes remain clouded with dollars (or other national currencies). You wrote among your conclusion of central bankers as the necessary yet hopeless avenue for high value gold to be attained / maintained:

"They can all get together in a room and lean on each other. But unenforceable cartels are notoriously prone to cheating; think of OPEC. If every central bank is sitting on pile of gold that it could sell surreptitiously for five or ten times what it's "really worth," how long before one does?"

Cheat, and sell gold for what purpose?? To gain paper? If paper is what is wanted, they might easily borrow their own, printing it into existence. They could then use this to buy other paper they might prefer. Think about this. Instead of your "Iterated Prisoners' Dilemma with 10,000 trials" you have instead a small lifeboat with the small handful of "perfect logicians" that DO unravel this from finish to front--these logicians being the central bankers.

The final demonstration that your search for a true view became clouded with dollars is found here:

"Monetary confidence comes with actual practice and experience and custom; it's much easier to think of something as money if "we've always done it that way." Hence, other things being equal, it's much easier to *keep* something money than to *make* it money, to introduce it successfully as a new money. So if, as I have argued, gold at those high prices would be such lousy money from the start that it would crash, then it will simply not become money in the first place."

Again, I offer this helping hand from one not born yesterday. Anyone with an open eye past yesterday would see in this argument that you have miscast the roles in your currency play. The paper chicken was hatched from the golden egg. What you say is true, but it applies to the gold of history, not to the paper of today. It is this paper money new on the scene that is nearly lousy from the start...if you do take the longer view.

Seeing that these concluding remarks bore the heavy taint of dollars, we must now turn to your beginning to follow the progression of logic with wariness for this troublesome predilection. In your example for the usage of "concept money" you deal with the incremental changes in confidence for a chain of "n" users. This is fine, but as you demonstrate that uncertainty regarding the future use diminishes the demand, you say:

"My demand for money diminishes but does not vanish. And the same goes for #n, and in the aggregate; in fact, if the money has an issuer or other central authority who can reduce the supply as appropriate -- more likely for concept money than a physical commodity --, the price of a unit of money need not even change, and this price stability can itself bolster confidence."

My friend, in your experience, is this not a fatal flaw? The need for a regulating authority is cause for alarm with the perfection of the system, and further...to REDUCE the supply? Again, in your experience, do we not see instead the steady increase in supply of such concept currencies? Should the business cycle lead to a natural reduction, the pain felt is such that the money makers are put on 24-hour duty. With the lending of this money at interest (as is the real world practice), the concept of a willful reduction in supply takes this example nowhere that we want to travel. We shall move on to your key point:

"There are a couple of classic ways to keep the system in the stable region. Laws requiring payment of taxes in a particular kind of money or making it legal tender for debt and other contracts assure everyone that there will always be at least a limited, specialized demand for the money, which reduces the risk of loss from getting stuck with it when the music stops. But the main tactic I want to discuss is "commodity money": using as money something that has considerable value as non-money, for "real" use. This assures everyone that even if the money ceases to be money, you won't lose all, since you could still use it yourself or sell it to someone for physical use. So long as the nonmonetary value is high enough (net of expected transaction costs in the sale of no-longer-money) that the loss from getting stuck with it if it ceases to be money is obviously less than the loss from abandoning the money (and perhaps the money economy) now, there is no reason to do so, and the money is stable. The key point to note here is that it isn't good enough for the money to have merely *some* commodity value, it needs to have *enough*. What matters is the ratio between monetary and nonmonetary value. If demonetization would cost holders only a small fraction of the wealth they were holding in the money, the system will almost surely be stable (unless better money is at hand), but if the ratio is high enough that the demonetizing hot potato would lose a very large fraction of its value, that's not so different from losing it all, the alternative of dump-now may be attractive, and the system may tip. "Commodity money" whose monetary value is too high is, in the relevant way, hardly different from pure concept money."

I wanted to present that excellent bit of thinking (though flawed) to provide the full context, but I call special attention to several points. First, as stated in the beginning, "stability" is truly the key of any successful monetary system. Next is your thoughts on "'commodity money': using as money something that has considerable value as non-money, for "real" use."

The term "considerable value as non-money" is the subtle but dangerous trap you fall into here, for any imaginable levels of "considerable non-monetary value" will be dwarfed by the monetary values. In an advanced and efficient society, the monetary use BECOMES its dominant "commodity use." That is to say, no matter what function it might otherwise play in the life of man, its use as a monetary commodity will become its most valued function within an advanced society. A society can only be as good as its money. Let us turn our eyes to gold. Sure, gold could always be fashioned into teeth and rings, but the higher value is found in its utility as money...used as a regulator, an honest standard against being cheated by the unknown future. So when you say in the passage above: "The key point to note here is that it isn't good enough for the money to have merely *some* commodity value, it needs to have *enough*" I hope you will now realize that this is impossible. Assuming we have not dipped into the theatre of the absurd (where the commodity would not be considered for currency to begin with...such as tar; good for rooftops, bad for pockets) such a **qualified** currency-type commodity would find its use as a monetary commodity to eclipse by great degrees its value for other uses. This, then, defines its new value. There is nothing "artificial" as you later imply. To conclude that text above, you say:

""Commodity money" whose monetary value is too high is, in the relevant way, hardly different from pure concept money."

I agree! Insofar as the value of anything is a concept. But there is no "too high" that market forces wouldn't quickly bring into proper adjustment. Where your comment is in greivous error, though, is that a "commodity money" provides for the "impartial regulating function" that I mentioned earlier. Your fiat (concept) money requires the interventions of a regulating authority...a source of uncertainty, to be sure!

You say:
"Perhaps I have been speaking too loosely of non/monetary values. Of course, at any one time, the price and marginal value for commodity use and for use as money must be about the same, otherwise stocks would shift from one use to the other."

NO to this! Discussed above.

Shortly thereafter you say:
"Conversely, if money is demonetized, if the monetary demand vanishes, the price will drop, and this reduced price is what I have been referring to as the nonmonetary value. Pure concept money, having no nonmonetary use/demand to speak of (apart from a few collectors, historians, etc.), becomes (nearly) worthless if demonetized."

YES to this! And let use this opportunity, Yellin' of troy, to say that there is much more in your commentary like this that is very right (walking with one shoe...every other step...), a joy to read I assure you. To save space, unfortunately, I cut the praiseworthy sections out to make progress where needed. Please understand. Each idea you've offered is speaking on behalf of thousands that share these same thoughts. Perhaps I am so wrong I do not see it, in which case I hope for civil treatment at the hands of yet another not born yesterday. ;-)

"Once it's established as money and the desired balances have been built up, one person's monetary demand is another's supply, so the aggregate monetary demand to be met by new physical supply is only whatever additional money is needed to keep up with a growing economy"

Please forgive me if I misunderstand your meaning. As I read this, it implies that the seller of a good has pricing power. I suggest that where the terms are not reached through equal participation, particularly when money supply is not being inflated, then the pricing power belongs to the money saver...the would-be buyer of the good. Monetary demand knows no limit if confidence remains that an "arbitrary regulating authority" can not facilitate the future destruction through rapid overproduction without limitation. Even central bank gold hoards know the bottom of the barrel exists. Otherwise, without limit to a flood of new money supply, the individual monetary demand would as you suggest shift to demand for goods instead. But as was said earlier, central banks would have no reason to "cheat" for paper, though they may spend out gold in the event of a need to settle budget shortfalls. Rather than national fiat currencies using each other for reserves, they would use gold. If you must see this with the dollar predilection, this same stationary gold reserve would be seen to "earn a return" as its dollar value would increase on behalf of the ever-inflating dollar supply. Better than interest, as the original asset is not risked out on loan!

You say:
"The principal moral here is that commodity money is best introduced gradually, perhaps by slow growth or accretion of communities that use it as money, rather than by any centralized decree about its monetary position; it is best as a "natural," "living" money"

Yes, though this money evolution is true for ANY money, be it "fiat concept" money or "commodity concept" money. All money finds its value in the ability to sustain its concept of utility in the eyes of the users. Gold as money has already "paid its evolutionary dues" through human history. Like riding a bicycle, it is easy to get back on. But once a paper money goes bad, the re-establishment of a viable paper currency often requires that the evolution be repeated from the gold starting point, or else use a neighbor's currency that still is held in confidence. The weening of Americans from gold to paper took many steps and many years. And it is failing. One small misstep at this point and it will "go Bolivian". The Russian Rouble must either go to the euro, or go to gold and evolve slowly back to paper, or the economy will not return. (The nation is only as strong as its currency.) I see in Russia's future they will naturally have both...euros for circulation, and gold for national reserves as needed for extraordinary expenses and deficit years.

You say in regard to cashing out of gold at the top (tainted with dollars in your vision again):
"selling *physical* gold -- which seems to be the recommendation that goes insistently with the prediction -- isn't an instant process of clicking the icon or calling your friendly, idle broker. You have to pry up the floorboards and transport the gold to the dealer, and when you get there you will find no parking nearby, and the line will stretch around the block, since dealers can't add space and staff fast enough to cope with a spiky market."

A price is only attained at any moment in time when there is a balance between buyers and sellers. Market forces bring the adjustment accordingly. I suggest some in line would be there to buy, so those in line would likely never see the broker's ante-room. They would pair up and settle in the street...the street price for gold!

You say next:
"Now, no one is predicting some huge technological or aesthetic change in physical demand (or supply), so the idea must be a flood of new *monetary* demand, a remonetization of gold. But what all that theory tells us is that at ten times the present price, gold will not be such good money." ... "To make things still worse, there's the overhang of all those official gold holdings. In the last demonetization of gold, these were mostly retained, but if gold is tried again as money and fails again, this time spectacularly and on its own demerits, won't the official rejection be more convinced and total? Mightn't all those official holdings come onto the market and drive the price into the ground for a long while?"

First point, with paper money of recent experience, have we not seen its value at *infinite* times its non-monetary price (as you are hereby suggesting rightly that gold is not now priced at its monetary value), and yet it has functioned reasonbly well...the failings owing to the presence of the "arbitrary supply regulator"--bank and government monetary and fiscal policies. Again, the history of man has been the long slow introduction and evolution of the monetary use of gold. This is natural and stable. On your last point, if it did not work on its own demerits?? What would replace it? Would we flee to paper...the sudden reintroduction of unnatural paper? Your own careful arguments alone would prohibit such a thing from occurring, even dismissing these other thoughts I have offered.

In your final analysis of gold "at such an unimaginable high price" as we have often seen discussed ($30,000 or so), you say:

"At such prices, gold will be the softest "hard money" you can imagine. For practical economic purposes, it will be almost like concept money. And unlike pure concept money, this will represent a *change* in its economics. If people have once accepted and gotten used to money with a key ratio of infinity, a rise to twice infinity hardly seems to matter. But if you thought of gold as good money precisely because its ratio was low, because its commodity value provided security, then an effective loss of that state of affairs is an *event*, a news peg, an occasion to reconsider one's policy."

Much of this has been already addressed. In your comment that our illusion of good gold money based on its high commodity value...NO! That has never been implied or presented as such by anyone at the Forum of which I am aware. TO REVIEW: All "true money" is "concept" money, my friend. If it were not, it would be called "barter" rather than "buying". The utility of the universal bartering commodity quickly elevates its commodity use to that of money, establishing a stable value on a plateau much higher than its pre-monetary use. A monetary commodity, whether it be dollars, pesos, roubles, or gold, is valued according to the perfection with which it serves the monetary purpose. Gold has no rival.

got gold?
FOA
(10/15/1999; 06:45:48 MDT - Msg ID: 16419)
comment
Trader_vic (10/14/99; 21:01:28MDT - Msg ID:16383)
My all time high for gold will exceed $10,000/oz on the final blowoff....

Hello Trader_vic,
Welcome! You sound like my kind of goldbug. As you know I don't trade and buy and hold only bullion. But, I do have close access to some very interesting simi-traders that, for lack of a better term, "trade the dealers". They see the Yen carry trade and the gold carry trade funds trying to cover today and the first of next week. This should stampede the other shorts into biding for whatever physical is out there. There is some talk that a "logjam" of sorts was broken yesterday. I think we will break "massively" to new highs, then pause for a while. This is the current assessment
because so far, the BBs have been able to contain a full blown run!
I'm offering these "ongoing" because I have the time right now. As we all know, free time doesn't last very long. These are my thoughts, your thinking?

FOA
SteveH
(10/15/1999; 06:47:09 MDT - Msg ID: 16420)
repost
www.gold-eagle.comBLACK FRIDAY, 15TH OCTOBER 1999 (Part - III)
(McIsaac) Oct 15, 08:34

Just announced. PPI came in much much worse than anticipated: +1.1% - core +0.8%.

Immediatedly, the S&P freefell 23 points!!!

it's BLACK FRIDAY, 15TH OCTOBER 1999 !!!!!!

Watch gold!!!!


TownCrier
(10/15/1999; 06:53:31 MDT - Msg ID: 16421)
Y2K Is Bugging the Markets: What's bothering Wall Street these days? Everything it can find
http://www.pathfinder.com/time/daily/0,2960,32564-101991014,00.htmlThis is a short and sassy article that's fun to read. Check it out. TIME's senior economics reporter says, "What we're seeing the past few days is the latest phase of a long, slow correction that will probably continue until spring."
SteveH
(10/15/1999; 06:57:34 MDT - Msg ID: 16422)
Holy down market, batman!
www.mrci.comMarket Mth Open High Low Last Change Date Time Ask Bid
S & P 500(CME)(Globex) Dec 1290.00 1290.30 1262.00 1263.20 -26.80 10/15/99 5:40 1264.00 1263.80
S&P 500 Futures Premium -752 -142 -2132 -1942 -1210 10/15/99 5:40
S & P 500 E-Mini(CME) Dec 1277.25 1285.00 1262.00 1264.00 -13.50 10/15/99 5:40 1264.25 1264.00
NASDAQ 100(CME)(GLOBEX) Dec 2496.00 2496.40 2435.00 2440.00b -54.50 10/15/99 5:40 2444.90 2440.00
DJIA Index(CBOT) Dec 10345 10345 10140 10140 -195 10/15/99 5:40
TownCrier
(10/15/1999; 06:59:57 MDT - Msg ID: 16423)
U.S. September PPI Rose 1.1% in September, Largest Increase in Nine Years
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=blk&bt=blk&s=1bcba093d10694351c6d1d782abe6744"Ground Control to Major Tom..."

Orbital!

That headline says it all. Analysts were expecting about 0.5%
SteveH
(10/15/1999; 07:03:38 MDT - Msg ID: 16424)
Dow down 221 already and it isn't even open yet!
www.mrci.comMarket Mth Open High Low Last Change Date Time Ask Bid
S & P 500(CME)(Globex) Dec 1290.00 1290.30 1258.00 1260.00 -30.00 10/15/99 5:50 1260.50 1260.10
S&P 500 Futures Premium -752 -142 -2542 -2342 -1610 10/15/99 5:50
S & P 500 E-Mini(CME) Dec 1277.25 1285.00 1258.50 1261.00 -16.50 10/15/99 5:50 1261.00 1260.50
NASDAQ 100(CME)(GLOBEX) Dec 2496.00 2496.40 2435.00 2439.00b -55.50 10/15/99 5:50 2440.00 2437.00
DJIA Index(CBOT) Dec 10345 10345 10110 10114 -221 10/15/99 5:50
Nikkei 225(CME) Dec 10/14/99 13:33
FOA
(10/15/1999; 07:03:57 MDT - Msg ID: 16425)
(No Subject)
This is going to be something!! I hope this forum can stay open?
CoinGuy
(10/15/1999; 07:05:46 MDT - Msg ID: 16426)
Holy Cow!!!
I'm wtching CNBC, Mark Haines is actually wearing a Red Cross battle helmet. Fair value is set a +3, that leaves the S&P futures neg almost 31...

Wow...
Coinguy
CoBra(too)
(10/15/1999; 07:07:46 MDT - Msg ID: 16427)
Markets awash in red!
AG's latest warnings on reversal of confidence, preceding the jolt in the PPI (up 1,1% core 0,8% - double street estimate) spells big trouble for equities. The slaughtering of the biggest Wall Street Bull in history is commencing. No economic cook(ing) books in Washington have any recipe's left to keep the roast tender.
Don't follow AG's advice to build up bonds nor cash as portfolio diversification- go insurance- GO GOLD - Best CB2
Black Blade
(10/15/1999; 07:10:27 MDT - Msg ID: 16428)
DOW and NASDAQ to tank today!!!
Looks as if it's going to be Black Friday allright, as per last night's post. with s&p futures down -26.80, this should be a fun day indeed. I hope that PM prices don't rise too fast this morning, as I hope to accumulate a tiny bit more. When DOW tanks below 10000, then the bear psychology will be in full swing. Can't wait to listen to the talking heads today. Wonder what excuse they will come up with today?
Quabbin
(10/15/1999; 07:13:56 MDT - Msg ID: 16429)
Cyprus Amax Minerals Reaches Agreement to Sell Kinross Gold Stake
http://www.kitco.com/_a/news/2034.htmImplications??
CoinGuy
(10/15/1999; 07:16:02 MDT - Msg ID: 16430)
(No Subject)
I sold out at 9200 July of 98, I think that is when the bear (trap) market started, anyway, that's another discussion. I'm warming up the lazy boy, this ought to be a real show...

Contrarian Coinguy
FOA
(10/15/1999; 07:22:14 MDT - Msg ID: 16431)
(No Subject)
ALL:
This big break in the US markets is going to force all parts of the carry trade to cover. If they don't, they will be "the walking dead" as their books will all go negative. Look for all the currencies to run against the dollar, big time, especially the most heavily used "carry", the yen. The run to safety will see the Euro first (as the dollar will be sold for position squaring), followed by gold. Physical gold being the most lopsided carry instrument, will be in major demand. Mostly physical because this crisis will immobilize most "bookkeeping" hedges. THis run should continue for some
weeks! We watch all these new forces together, yes!
Black Blade
(10/15/1999; 07:24:20 MDT - Msg ID: 16432)
BLOODBATH on Wall Street....or watch out for swan-diving brokers
Can you say "Short the Market?" I knew you could.
CoinGuy
(10/15/1999; 07:34:14 MDT - Msg ID: 16433)
Hard Hats
I agree with Black Blade, if you're walking down Wall Street, watch for falling brokers...

Coinguy
FOA
(10/15/1999; 07:49:09 MDT - Msg ID: 16434)
Euro surges to near 7-month high
http://biz.yahoo.com/rf/991015/iw.htmlGold bullion may come into short supply if the dollar fall forces players out of the dollar gold paper markets and inti the physical.
FOA
(10/15/1999; 07:56:53 MDT - Msg ID: 16435)
Gold Fields Limited Repurchases Its Hedges
http://biz.yahoo.com/prnews/991015/gold_field_1.htmlSome companies just know how to attract Euro money! I also saw where South Arica signed a "free trade" pact with the EU. Euroland needs a good source of mineral wealth for growth!

--------Chris Thompson, Chairman and Chief Executive Officer of Gold Fields, said: ``Having looked at the fundamentals of the current gold market and the implications of the Ashanti situation, it seems inevitable to us that higher, if not much higher, gold prices are possible. Accordingly it seemed
prudent to retrieve our hedge positions.''--------
FOA
(10/15/1999; 08:05:53 MDT - Msg ID: 16436)
(No Subject)
January platinum down $6+/- ! I brought some last night (along with gold) to save face with the forum neighbours. Goldspoon, I have a horse to sell you, cheap! (smile)

I will step away for a while.
elevator guy
(10/15/1999; 08:14:42 MDT - Msg ID: 16437)
Thanks for your thoughts, FOA
I wish I could stay home and watch the DOW tank, but you know its a sort of a twisted pleasure I derive from market meltdown. And anyway, I've still got this day job-
Viper
(10/15/1999; 08:16:38 MDT - Msg ID: 16438)
Coinguy
Ha-Ha! Yeah, I watched that too! At this point the Dow has climbed a bit to only -178. It should be interesting this afternoon when Greenspan speaks. Could we see under 10,000??? Hmmmm.
Happy Trades to you!
ORO
(10/15/1999; 08:23:03 MDT - Msg ID: 16439)
Aragorn III Yellin' of Troy a preliminary interjection
I have not yet had the time to read the posts carefully, but there is a point to be addressed on the supply side that has not been addressed.

When a RESOURCE commodity money is used, within a few years all available natural sources accessible at a cost below the purchasing power of the moment are gone. Thus, we find the natural properties of PMs and their deposits the key to the use of PMs as commodity money. The ammount accessible increases with the purchasing power of the commodity money, but declines very much more steeply with its fall.

If a large store is dumped into the market, it would be used up and the mined supply, in the meantime, would stop completely. The real cost of producing the next new oz is still as it was. The real production cost in labor and other resources only goes up over long periods. On rare occasions, like the discovery of the California gold or the Rand discovery, or the Mexican silver finds, or the heap leach process that allowed the production of hitherto inaccessible deposits, there is a one time shift in availability of supply, which over time is absorbed into the markets. The long term real production cost of the PM commodity money is a one way ticket up.
That is why the PMs have managed to keep their function as long term stores of value. Contrary to most financial assets that face declining demand when price falls, gold sees demand rise tremendously.

Dishoardings by CBs are the best assurance of a high purchasing power in the future. Were the CBs to actually dishoard, they would create the necessary conditions for using gold as the money of the people (no danger of one massive holder dumping, and the bulk of the metal being freely traded offering liquidity that is not available when the major stocks are in a few big vaults), their currencies would be completely dumped and the concept money idea would not be again revisited for a long while.

The gold overhang in the vaults keeps liquidity low and the threat of dishoarding alive. This IS the power of the CBs.

As my favorite straw man, the Fed paper regarding the gold markets, puts forward, the CBs had managed to simmulate a dishoarding's effect on market price, while holding on to most of the metal. The result is that they put their main product in danger of extiction, and the banking system they regulate and support was put in grave danger of collapse. Thus, they have to face the results of a dishoarding as well.

ORO
(10/15/1999; 08:26:56 MDT - Msg ID: 16440)
Trader Vic
Saw your books at the store yesterday, impressive.

It is an honour to have you with us.
CoinGuy
(10/15/1999; 08:47:10 MDT - Msg ID: 16441)
Dow 10,000
I see the Dow Bulls, coming in to protect their bubble. Probably will have problems closing below 10K. What happened to the Dow-Theory sell signal at 10.4K...It's probably gone out the same window as P/E, trailing earnings, Div/Earnings ratio, you know, all the normal indicators of a healthy market. Just my humble opinion.

Coinguy
USAGOLD
(10/15/1999; 08:49:36 MDT - Msg ID: 16442)
Today's Gold Market Report: Inflation Report Hammers Dollar, Equities; Gold Higher
MARKET REPORT(10/15/99): Day Fifteen of the Big Breakout....Gold up
$3 in the early going....DJIA down 185 on inflation,interest rate
fears....Dollar getting hammered across the boards but down big time
against the yen......Two big reasons cited for all this is the PPI
coming in up 1.1% for September -- the largest increase in nine
years.........Gold Fields chairman,Chris Thompson, announces that the
South African company bought back all its hedges recently because it
believes gold prices are going higher. Thompson cites the crisis at
Ashanti as a motivating factor: "...it seems inevitable to us that
higher, if not much higher, gold prices are possible. Accordingly it
seemed prudent to retrieve our hedge positions......The market is
staggered from a blow delivered by Alan Greenspan at a meeting of
bankers yesterday. He told them to gear up for a stock market correction
by liquefying the banking system to "cover losses." That's it for
today." Stock promoters were lamenting that he chose the Ocotober
framework to deliver this less than optimistic message..........Gold
finished down close to $8 in the New York market yesterday but quickly
recovered in the Asian and European markets -- a new pattern for the
gold market which has been led for years by New York trading.....
Describing the action in the overnight markets,Frederic Panizzutti, head
of strategy at Geneva-based metals refiner and trader MKS Finance says
in this morning morning's London Reuters: "Although the gold market has
a lot of gaps from the last move up, we believe that Thursday'ssharp
move was due to long liquidation in a very nervous and illiquid market.
We have not changed our bullish point of view and think buy on dips
should be on the cards again."..... Yesterday we said that there might
be fireworks associated with the PPI release. This could turn out to be
an important day for all the markets and the Plunge Protection
Team........ See you here Monday. Have a good weekend, my fellow
goldmeisters.

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.
TownCrier
(10/15/1999; 09:00:37 MDT - Msg ID: 16443)
Hear ye! Hear ye! A call to contest! *>>>>------A REMINDER--------+>
The master of the Castle, our gracious host at Centennial Precious Metals, has made it known that he will yield up gold and silver prizes--for it would please him to see the Knights, Squires, Ladies, and honest Townsmen at play upon the green fields under these golden leaves of Autumn.

Good People of the land, hear ye, and may you walk away heavier with riches than upon your arrival. Your participation, comradery, and good times is all we seek...so please step to the field of play when you have prepared yourself for the simple task at hand. To wit, one arrow each, and your best effort to strike nearest the mark.

THE RULES:

So draw forth your truest arrow, toe the line, take aim, and let fly your best prediction for the closing COMEX December gold futures contract price (as quoted that day by TownCrier) for next Friday, October 22, 1999.

All arrows (predictions) must be leap from the bow and be in flight no later than this Sunday, October 17 at midnight according to the clock kept at this Round Table.

All entries into the contest must use standard arrows in the subject line as demonstrated here, or a reasonable replica:

*>>>>------$500.00--------+>

Contestants must ALSO provide a brief oratory (at least 30 words) upon release of their arrow explaining either the method of their aim, or a pleasing tale explaining what role gold or this Forum has played in their lives. These won't be judged, but we must hear your voice as you take aim at your target.

THE PRIZES:

To the arrow nearest the mark: One beautiful French 20 franc gold coin, bearing the likeness of lovely Liberty and a bold Rooster to usher in the dawn of a new era.

To the next two nearest arrows: One silver Eagle, each.

To all first time posters throughout the duration of this contest: by simply gracing us with your voice on any gold related subject, you will receive One silver Eagle, each. But you must also e-mail the Castle (Centennial Precious Metals / USAGOLD) at cpm@usagold.com to let us know that you are a first-time poster. We will confirm the record, and the precious metal will be yours for sharing your time and interest in this most important of monetary subjects.

LET THE GAMES BEGIN!
ORO
(10/15/1999; 09:12:06 MDT - Msg ID: 16444)
TC, anyone who knows
What is the appropriate premium (in $ or %) over gold content for generic BU Roosters?
Tomcat
(10/15/1999; 09:50:42 MDT - Msg ID: 16445)
ORO, French Roosters
http://www.scpm.com/bullion.html
Buy: 5%. Sell: 11% in quantities over 100 (18.67 ounces). See the link for percents on other coins as well.

Be careful if you are going to buy BU. They might not be BU. Suggest to you speak to MK. He will clue you in how to buy these the best way. If I can't see the coins before I buy then I buy from MK. He not only provides this forum; he has great prices. His low overhead allows him to compete!

BTW, most of my Roosters and Angels are pre 1900; no extra premium for these numismatic gems and who could ever doubt the fact that are truely part of antiquity.
TownCrier
(10/15/1999; 09:54:08 MDT - Msg ID: 16446)
Sir ORO...and rooster gold coins
That would be MK's specialty. Drop him an e-mail at

cpm@usagold.com

or give him a call...the toll free number is on one of these pages somewhere. Try the HomePage. It's been my experience that it isn't significantly greater than the premiums on the fractional bullion coins. I think the roosters are among the finest looking...a Tower favorite.
TownCrier
(10/15/1999; 10:01:11 MDT - Msg ID: 16447)
Monster PPI spooks markets, stokes inflation fears
http://biz.yahoo.com/rf/991015/k0.htmlEthan Harris, an economist at Lehman Brothers Inc. said of the PPI report,"It's an unfriendly report. If you work hard enough, you can get it down to a reasonably benign number but you really have to do a lot of work. A lot of these things will probably reverse in the next months. But still, when you have to do that much work to make it look benign, the suspicion is the Fed may have to do something."

What a big fat shell game! Hide the inflation...
TownCrier
(10/15/1999; 10:15:56 MDT - Msg ID: 16448)
Dollar Plunges Against Euro
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=blk&bt=blk&s=f831132264bb8fc3c351fe5a7f86fec0Euro climbs to its highest level since March--$1.0912; dollar drops below 106 yen.
TownCrier
(10/15/1999; 10:21:09 MDT - Msg ID: 16449)
UK stocks outlook - Shades of Black Monday
http://biz.yahoo.com/rf/991015/n2.htmlAs the 12th anniversary approaches to the 1987 crash October 19 (where the FTSE lost 25% in two days), the world markets are having a bit of deja vu...a weakening dollar, strong oil prices and overvalued stocks.
phaedrus
(10/15/1999; 10:23:14 MDT - Msg ID: 16450)
gold prediction
>>>>--------$362.50------+>

I think we could be setting up for another black monday in the stock market here. Also, I think yesterday's nasty drop in silver might be explained by the fact that the Oct. 5 commitment of trader reports showed that the big funds were heavily long silver (perhaps as an offset to their gold shorts). As many of these funds are probably also long the stock market/bonds, they very well may have closed their long silver positions in a panic to cover mounting losses in stocks/bonds. If this is the case then the bullish scenario for the metals remains intact, and the action we are seeing only increases the pressure on gold shorts. The funds are getting whipsawed in a big way here. And that's no bad thing.
ORO
(10/15/1999; 10:25:15 MDT - Msg ID: 16451)
TC, and TC
Thanks for the info.

Will indeed come to MK when this small source is depleted.

Bought some at your quoted sell premium. Wanted to have a check on it before I bought the rest. Guy's OK. Coins look in better shape than my new eagles. Maybe our mint needs to upgrade its equipment to 1905 standards.


Richard, Oregon
(10/15/1999; 10:53:35 MDT - Msg ID: 16452)
Contest Entry
>>>-----$330.00----->> This table of round has been a blessing to a squire such as my self. For at this table sits 'Wisdom' and she offers herself freely to all who humble themselves and just . . . . listen. "But with humility comes wisdom". Hereto before, this wisdom has been "beyond my reach". 'I feast at the table of wisdom' so that I may 'walk in the footsteps of giants'. The sincere desire for wisdom has led me to gold and this forum.
scp
(10/15/1999; 11:07:09 MDT - Msg ID: 16453)
Inflation and Greenspan
Geoffrey Moore is head of the Economic Cycle Research
Institute.
http://www.businesscycle.com/index.html

Also, he is a confidant of Greenspan, someone
whom Greenspan consults. Moore has his own way of tracking
potential inflation and in the October letter states that
inflation is on the rise and that September shows the
largest rise in two years.
http://www.businesscycle.com/Services/archives_.html

What Moore says to Greenspan is more important than any
government stat.
canamami
(10/15/1999; 11:12:18 MDT - Msg ID: 16454)
Gold Up Only $0.50 !!!???- Today !!!!
What gives??!!

I'm too disgusted to think.
JCTex
(10/15/1999; 11:16:10 MDT - Msg ID: 16455)
canamami Gold only up 50c
Subj: BULLETIN !!! MIDAS BULLETIN !!!
Date: 10/15/1999 10:19:18 AM Central Daylight Time
From: LePatron@LeMetropoleCafe.com



Le Metropole members,

Sources tell the Caf� that there were BUY imbalances
on the major Dow stocks on the opening of the stock
market today. We strongly believe the Plunge Protection
team headed by the New York Fed's Peter Fisher is at
work supporting the stock market. It is our opinion
that they know the market is going down, but they
want it to do so in orderly manner.

They are probably doing the same with the gold market
(stopping it from going up). All they are doing is trying
to buy some time. This is good for gold bulls. Time to
buy cheap gold and cheap junior and baby gold stocks.

GATA Treasurer, John Meyer, sent me the following
from the well informed www.kitco.com website. This
post makes a lot of sense and explains why the gold
market has not taken off after such incredibly
bullish PPI figures. On that line, well informed
Caf� sources say we have another bombshell coming
soon that has to do with an upward revision in
the employment cost numbers.


Date: Fri Oct 15 1999 07:19
SteveIS (Greenspan is working with Europeans) ID#297380:
Copyright � 1999 SteveIS/Kitco Inc. All rights reserved

The Europeans want the US stock market down. They
are pissed that Greeny hasn't had the Cojones to
pop the bubble much earlier. When they made their
gold announcement it was aimed at the US bubble markets.

Greeny went to them after the gold explosion and said
help drive down gold so some of my boys can cover. So
they said only if you start to pop the stock bubble.

The timing of Greenie's annoucement is astounding.
This morning is settlements for October S&P options.
The pros are the ones short all the puts which
suddenly are in the money. Greenie is telling the
pros to back off. The PPT isn't going to help them
anymore.

The stock market is going to get real ugly real fast.
They may step in to slow the fall a little but not
to much.

The gold bull is just begining. Don't get shaken
out by little squiggles.

We aren't in Kansas anymore.

namaste'

More on this over the weekend.

More Tiger Talk: another source from within the Hedge
Fund Mafia has told the Caf� that Tiger is shutting
down the end of the month. All I can say is that is
what we are being told.

Report from the Comex gold pits: Goldman Sachs is
offering 100 lots and attracting selling. Then,
they go upstairs and put buy orders in on the
OTC market.



As reported to you previously in the Caf� and
now confirmed. This just out from Reuters:

GOLD FIELDS SAYS BUYS BACK BULK OF GOLD HEDGE
POSITION, SEES GOLD PRICE UP

"Having looked at all the fundamentals of the
current gold market�It seems inevitable to us
that higher, IF NOT MUCH HIGHER, gold prices
are available," said Gold Fields chairman Chris
Thompson.

BARRICK- get with the program. I suggest that all
Barrick shareholders inform Barrick's CFO of
Chris Thompson's remarks. Time to put some heat
on him.

Le Metropole Caf�

All the best,

Bill Murphy
Le Patron
http://www.LeMetropoleCafe.com
NORTH OF 49
(10/15/1999; 11:24:33 MDT - Msg ID: 16456)
Contest Entry
>>>>>=====327.50=====>
Perhaps the most entertaining (next to the current breakout itself) aspect of my association with gold has been the reaction of various people upon introduction of them to the metal itself. So far as I can determine, myself and my Banker neighbour are the only ones that have a clue as to what's going on in the industry. He acquired his quite by accident while on an auditing assignment in Haiti about the time Clint Eastwood and that artillary guy with the Sprint card showed up. In a hurry to unload what local currancy he had on hand, he converted it all into Kugerrands and skedaddled! He certainly hasn't regretted that move.

As for myself, I have had some very amusing reactions from some people to exposure to a Maple Leaf. Some were:

"Is it real---I mean, I know it's real, but is it real money?"

"Sure seems heavy--are you sure it's gold?"

"Fifty bucks!! (face value) Seems like a good deal"

--and my favourite--

"Last time I saw one of these, it had a chocolate center!!"

No49
JCTex
(10/15/1999; 11:35:14 MDT - Msg ID: 16457)
canamami: I'm too disgusted to think.
Would "furious" be a somewhat better description?
MidEastGold
(10/15/1999; 11:37:45 MDT - Msg ID: 16458)
COMEX >>>>>=====329.25=====>
Gold...an absolute in a world that seldom accepts absolutes. Gold...security in an economic system that seeks to destroy financial security with debt,inflation and central banks.
Gold...a way to feed my family when it all comes down.
Gold...may every decent and wise one hold enough for him and his!
Farfel
(10/15/1999; 11:53:27 MDT - Msg ID: 16459)
STEVE H, a Gold Producers' Cartel Probably Coming.
I'll place a wager on a Sunday announcement out of England. But caveat emptor...I've been wrong about these rumors in the past!

An international gold producers cartel is actually an impossibility since the Clayton-Sherman antitrust act prevents the formation of cartels in the United States. Canada also has laws against formation of cartels.

However, cartels are allowed in most other foreign countries and so that's why the Arabs were able to stitch together OPEC.

If you ask me, the Gold Field Ltd. announcement today smells like a preview of something even bigger coming up around the bend.

What the world gold producers should do is ensure they all are incorporated in offshore offices and side-step US and Canadian antitrust laws by forming a cartel based in...oh, maybe the Cayman Islands or South Africa or wherever.

If international gold producers create a cartel and co-ordinate policies...if the US gold producers can form a de facto cartel (since an explicit cartel is not allowed)... then they will no longer be at the mercy of bullion banks whispering nonsense rumors in their ears.

There is little doubt in my mind that most of the hedging done at gold prices around 260 would never have occurred if gold producers had a cartel-like association. As long as they are splintered from each other, divided from each other by the bullion banks, then the bullion banks will rule the roost because guess what....the bullion banks have their own UNOFFICIAL cartel.

You'd be a naive moron to think otherwise.

Thanks

F*

The Invisible Hand
(10/15/1999; 12:26:24 MDT - Msg ID: 16460)
Is AG publicly speaking at the moment?
http://biz.yahoo.com/rf/991015/ri.htmlThis is the title of an empty Yahoo message
Where is Greenspan speaking and to whom?
The Invisible Hand
(10/15/1999; 12:37:54 MDT - Msg ID: 16461)
Alan Greenspan speaking
http://biz.yahoo.com/rf/991015/r0.htmlFriday October 15, 2:12 pm Eastern Time
Greenspan speech delayed to 1300
EDT/1700 GMT
WASHINGTON, Oct 15 (Reuters) - Federal Reserve Chairman Alan Greenspan's remarks to the National Italian American Foundation will be made at 1 p.m. EDT (1700 GMT) on Friday, an hour later than previously scheduled, the Fed said.
A schedule issued by the Fed earlier had listed the event occurring at noon EDT. The Fed chairman is to speak to the group following a luncheon sponsored by the Italian-American congressional delegation in the U.S. Capitol.

What is he saying? "Your time is up?" like John Galt (not our Knight, but the other) spoke.
FOA
(10/15/1999; 12:41:10 MDT - Msg ID: 16462)
HONG KONG'S GOLD/SILVER EXCH CONSIDERS TRADING LOCO-LONDON GOLD
http://www.crbindex.com/news/story2203.htmlALL: I China making a play to become the world physical gold trading capital? If yes, it's in their best interest to keep our present markets fluid. There is more to this news than meets the eye.

HONG KONG'S GOLD/SILVER EXCH CONSIDERS TRADING LOCO-LONDON GOLD
Hong Kong--Oct 15--The Chinese Gold and Silver Exchange Society, the physical gold market in Hong Kong, is considering adding the trading of US dollar-denominated Loco-London gold to its existing Hong Kong dollar denominated tael-gold trading, the exchange's president Raymond Chan told Bridge News today. He said the exchange's members held a meeting Wednesday to discuss the
possibility and they will come to a decision on the matter by the end of 1999. (Story .12569)

HONG KONG FIRM TO LAUNCH 24-HR INTERNET GOLD TRADING IN JAN-MAR
Hong Kong--Oct 15--Hong Kong-listed precious metals producing and trading firm Tem Fat Hing Fung (Holdings) Ltd. plans to launch in the Jan-Mar 2000 quarter an Internet website that investors can use to trade gold around the
clock, the company's chairman Raymond Chan told Bridge News today. Besides US dollar-denominated Loco-London gold, the planned website would allow global investors to trade Hong Kong dollar-denominated tael-gold and Chinese
yuan-denominated gram-gold, Chan said. (Story .10418)

Gandalf the White
(10/15/1999; 12:49:49 MDT - Msg ID: 16463)
another story --
Years ago my son purchased a old FORD pickumup. It was firengine red workhorse and ran well. It had the word F-O-R-D in metal letters on the upper grill. -- Remember those? -- One of the first things he did was remove two letters and switch them to make his pickumup a "DORF" !!! --
He had lots of comments on the unique make of his truck and I have always smiled at the word "Dorf". -- The word does not show in the WEBSTER'S dictionary that we have, but it seems that most know what it means. -- OK, enough background !!! --- Today I see on my limited surfing the following tout for DIPPING NOW !! WHAT A CON !! and look who is touting it.
========
From Bloomberg.com
" Tax-Related Selling May Spawn Bargains"
By John Dorfman
(John Dorfman is president of Dorfman Investments in Boston. His opinions don't necessarily reflect those of Bloomberg News. His firm or its clients may own or trade investments discussed in this column.)
Natives of the stock-market kingdom are currently engaged in one of their seasonal rituals. It's called year-end tax-loss selling. People heave the losers out of their portfolios in order to record losses that offset gains on their 1999 tax returns. The effect is to push depressed stocks further into the mire.
Tax-loss selling used to be a November and December phenomenon. It has drifted earlier in the year, partly because many mutual funds conclude their fiscal years earlier. So, we're in the thick of tax-related selling season right now. As a result, many shares that lost ground in the first nine months of the year are under further pressure. Such stocks traditionally rebound in January. In recent years, the rebound has often come in December. In the next week or two, your broker or your favorite financial publication may send you a list of stocks that are depressed by tax-loss selling, and are worth consideration as buys.
---
<;-)
The Invisible Hand
(10/15/1999; 12:55:04 MDT - Msg ID: 16464)
Dorf
Gandalf,
"Dorf" means "village" in German.
Yellin' of troy
(10/15/1999; 13:03:53 MDT - Msg ID: 16465)
FOA -- the demand for gold is not insatiable
What you are missing is the distinction between wealth and money. Maybe you could never be too rich, but you can easily have too much money -- even if you're not a publicly traded corporation trying not to attract a hostile takeover --, and you cannot easily acquire more money than you have wealth if all you will do with it is gloat.

If someone offered you a ton of gold, but only on condition that you (and your heirs) can never spend it, on pain of a torturous death, would you take it? Of course not. The yellow metal would be a white elephant, merely taking up space, wrecking your floors, and enticing criminals. You want it only because you can easily trade it for nearly anything else you want. And while there is certainly considerable benefit and joy in knowing that you *could* do something, isn't the value of having gold to spend much reduced if you not only never actually spend any of it but are bound and determined that you never will? Have you sold everything you own, turned it into gold, abandoned your family, and taken to living in the gutter with your bag of gold hidden in your underpants? If not, there are things you prefer to their price in gold. And I don't imagine your present holdings of non-gold assets are unimprovable; wouldn't you buy more if you were richer? Whatever your level of wealth, you only want some of it in gold. And even if you are an incredible miser who only wants to caress his gold, there's a limit to how much you can afford. You're not infinitely rich, and you can't get richer by forgoing your dinner and deodorant for gold, and your fairy godmother will not bring you free gold every day.

All that was only the first course. Indeed, if the only things you could buy with your gold (or other money) were consumer items, you mightn't be so far wrong, psychologically at least, since as you got very rich and the pleasures of consumption ran into diminishing returns, you would hold more and more of your latest gains in money. But the catch would be, What gains? For such a world would be very poor. The key point, and the fact responsible for the wealth of the modern world, is that you can expend your money on *investments*. You can use some of your gold to build a widget factory, or buy one, or if you don't understand widgets you can be a passive shareholder or a lender in an outfit run by somebody who does, or you can lend to a banker who knows how to find and oversee such people and will spread the risk. Or you (or the banker) can lend to someone who wants to anticipate his income, for example to acquire a house, and is willing to pay for the privilege. However you do it, you can expect to get back, eventually, more money -- more gold, if that's money or if you insist -- than you started with. The whole thrust of your argument was that there is no limit to how much money you dream of, you want as much as possible. But then, if you have a huge stash of gold, more than you have any intention of spending, more than you could ever suddenly need to spend, why not apply some of it to getting more? If you would never refuse a free gift of gold, why refuse an offer of interest on gold sitting idle in your vault, for which you have no other present use (and derive no other benefit) anyway? The sensible thing to do is to keep on hand only as much money as you might actually need or want to spend (before the investments pay off) -- this is your demand for money, and it is finite and indeed rather limited -- and direct the rest to where it will be most useful, most productive, most profitable. And the people you let have it aren't going to put it all in their vaults and just revel in its glitter -- how would they be able to pay you your interest? They need your money for expenses: They can't sell any widgets until well after they have paid a lot of suppliers, secretaries, and salesmen a lot of money. They do need to keep some cash on hand, but only some; their monetary needs are limited just like yours, except that they are trying to reduce outgoing interest payments instead of increase incoming. The secretaries don't put all their wages in the piggy bank, either; they spend most of it. No one's pile of yellow is a black hole; each economic actor has only some limited target for cash on hand, and the sum of all these is some definite aggregate demand for money, not a bottomless pit.

Of course, if gold is grossly underpriced, it can be a very fine investment itself. If you believe others will soon come to understand its merits and correct its price upwards, then you can increase your buying power, your wealth, for the future by merely buying and (for a while) holding gold. In some circumstances this could be both safer and more profitable than that uncertain widget business. But this is a disequilibrium, a temporary condition, and the whole (expected) gain is in the correction. You can't perennially suppose that gold is on the verge of an upward surge that somehow never happens; such expectations would be irrational and you wouldn't make any profits. (If you believe that gold is just intrinsically always "underpriced" in the sense that the price will just keep soaring up and up forever, then I know a mutual fund in Brooklyn you might like to buy. It's ideas like that that produce bubbles, like the current stock market. People buy stocks -- or gold -- in the belief that their prices only shoot up, and as more and more people come to believe this and buy in, the price really does go up. But it's a Ponzi scheme: The gains come from new inflows, not real wealth. In the end, the supply of suckers gives out, and the bubble bursts.) Once the POG is about right, and cannot be expected to rise much further (except maybe slowly, if economic growth produces larger increments in demand than supply), you have to trade off the greater expected return in widgets against the greater security of gold. And of course gold is not totally secure: The price does fluctuate, the lock on the treasure chest can be shot off, and let's not forget that one of the great inflations in history happened in gold and silver, after the Conquistadors. In fact, at the prices you are foreseeing, gold would be not only a low-return, risky investment, but a risky, unstable money, susceptible to a near-total crash -- see my post yesterday. So the wealth will go (mostly) into more productive uses than gold. This is a case where as soon as you are proven right you have to change your strategy. It is only because gold has been manipulated by the Big Boys for so long that it has been "due to rise" for so long, has been a reasonable acquisition both as near-money and as investment. If for a long while you have been able to use the same gold for both purposes without any need to distinguish between them, you might lose sight of the distinction. But that's like forgetting the difference between a dinner plate and a floor because your maid keeps the floor clean enough to eat on.

I won't deny that there are cultural influences at work here. If you live (or your ancestors, whose ways you follow, lived) in a country where invasions, political upheavals and injustices, pogroms, and similar unpleasantnesses must be expected, factories are too easily burned or confiscated, and you will prefer concentrated, universally saleable gold, which you can run with. If your society conceives of wealth as primarily something to display to show everyone (including yourself) how rich you are, gold will serve admirably. If, furthermore, commercial activity in general is felt to be less than honorable and "money-grubbing" is disdained in favor of status-grubbing, if interest in particular is considered sinful (even if evasions are routine), then the daydream of heaping up illimitable gold will be a lot more popular than in a more Modern (and especially American) society. But even Victor XXI had to spend his gold on paying his soldiers, without whom he wouldn't have kept it long, and had to borrow more. And a society like that, or a person like that, will be, in the long run, comparatively poor and unable to afford much gold.
Golden Truth
(10/15/1999; 13:08:14 MDT - Msg ID: 16466)
DOW JUST FELL BELOW 10,000
They wore their dow 10,000 hats on the floor of the trading floor as it happened, but this time they booed on the way down below 10,000.

Clinton should of signed the "blue book"
Farfel
(10/15/1999; 13:09:01 MDT - Msg ID: 16467)
Answer to Question From ANOTHER Gold Forum
A rumor is no more than a rumor, and there are a ton of them in the gold market.

But I do know one thing and I've always speculated and written about it on ANOTHER forum over the past few years.

I think trading gold is all wonderful and good, but gold traders remain under the mistaken "delusion" that they can catch any and all upmoves in the metal.

But just as goldbugs continuously have found themselves trapped in huge downswings these past few years, then I expect that there will be many goldbugs shut out of the next big gold price upswing.

Why?

Simply because I expect that if and when truly bullish news occurs in the gold market, it will be released during a weekend. That would probably reduce the risks of insider trading activity and charges agains those profiting from it.

What that means is that you could open the gold market on a Monday with so much BUY pressure that the market shuts down for an hour or so, then re-opens with a new equilibrium price radically higher and never comes back down significantly again from that level.

Thanks

F*
Golden Truth
(10/15/1999; 13:13:39 MDT - Msg ID: 16468)
DOW IS IN A TIZZY!
Worst week for Dow since Oct 13/1989
Oh well thats how the cookie crumbles.
Go GOLD Go!!!!!!!!!!!!!!!!!!!
Hey stranger! and aristotle! where are you gentlemen??
Farfel
(10/15/1999; 13:14:37 MDT - Msg ID: 16469)
Final Caveat: Gold is still in a precarious position.
I still think, however, that gold retains great deflationary crash risk.

A price below 200 in such circumstances, either prior to or after a financial markets problem, is still a real possibility and I see nothing yet categorically preventing such a problem in the gold market.

However, if the producers are in fact finally forming a gold cartel, it's a helluva good preventive measure (inocculation?) against any big problems that could occur in the gold market before or after a crash.

Thanks

F*
nugget101
(10/15/1999; 13:17:04 MDT - Msg ID: 16470)
>>>---------- 332.10 ------ >>
I'm a newbie at all this but I feel that gold will fall in November and rise again by mid December. I base this on the selling of stocks before Dec and the desire of the powerguys to prop up the market inorder to get out. I still think that we may see one more sell-off of gold to knock the price down.
Hipplebeck
(10/15/1999; 13:25:01 MDT - Msg ID: 16471)
yellin of troy
I like you
Michael
AEL
(10/15/1999; 13:27:51 MDT - Msg ID: 16472)
change of strategy
Yellin' of troy (10/15/99; 13:03:53MDT - Msg ID:16465):
"This is a case where as soon as you are proven right you have to change your strategy." ..... is this not always the case? The alternative is decay.
ORO
(10/15/1999; 13:48:51 MDT - Msg ID: 16473)
@FOA - New Markets of Physical
FOA,

Thanks again for the update.

The point may be that Loco London, NY, Zurich, HK, Bombay, Dubai may be opening in all these locations with Euro, SF, Yen, Yuan, Rupee, Dinar "shortcuts" around the $ pricing, location of delivery, and most important of all, BB control and opacity of the London market.

It definitely is a gesture of mistrust of the LBMA on China's part. Do you think this has BIS support?




RossL
(10/15/1999; 14:13:04 MDT - Msg ID: 16474)
GC9Z Contest
>>>----------$349.60 ------>>>

A limerick:

There once were some wheeler-dealers named Shorts
They borrowed and sold metals of all sorts
But then came the day
The market flew away
And Shorts begged for lenders of last resorts
ORO
(10/15/1999; 14:24:07 MDT - Msg ID: 16475)
Yellin' of Troy
Lots to go over.

Hopefuly through this weekend or with my friends Assam and Darjeeling, perhaps tonight.

Thank you and Aragorn III for putting in the time and effort under your respective thinking caps.

If possible, please look at the supply issue and the reality (for most all PMs) of the real cost of new supply dragging just a few years behind the purchasing power of the metal product.

el St.One
(10/15/1999; 14:27:27 MDT - Msg ID: 16476)
FOA
Thanks for the bit about China widening the Gold trading hours. Do you think this will prompt the Comex to stay open longer. I have questioned why the Comex maintained short hours, compared to other major exchanges.

Sidney Open 8 hrs 6:00 PM to 2:00 AM NY time.
Hong Kong Open 8.5 hrs 9:00 PM to 5:30 AM NY time.
London Open 9 hrs 3:00 AM to 12 noon NY time.
New York Open 6.17 hrs 8:20 AM to 2:30 PM NY time.
Gap 3.5 hrs 2:30 PM to 6:00 PM NY time.

I guess when the paper market goes up in smoke, or should that be down in flames, the physical market will be open long hours at the local corner Gold Exchange.

The possibility of a 24 hour internet site for smaller bars would fill a a big gap for the small player, if they can narrow the bid ask (buy sell).

Thanks again for being here. el
TownCrier
(10/15/1999; 14:27:38 MDT - Msg ID: 16477)
ATTENTION to all would-be new Forum registrants...
I have been asked by MK in the Castle (Cnetennial Precious Metals) to please pass along this suggestion, advice, recommendation...call it what you like.

Anyone wishing to register for posting privileges must do so prior to 4:00 p.m. MDT (that is the time kept by the clock at this Round Table.) The reason is simple...the weekend is upon us, and no one will be at the office past 4:00 today to process your request and issue your password.

Sure, you can still register after 4:00...but you won't get your password (or be able to participate in this latest contest of marksmanship, with silver to all first-time posters offering their thoughts on gold) until business resumes on Monday when those bright and smiling faces return to the Castle to serve your golden needs.

TownCrier's bottom line: Register now. Just click the Register to Post link at the top of these messages.
phaedrus
(10/15/1999; 14:46:19 MDT - Msg ID: 16478)
Monday: Day of Reckoning for Ashanti Goldfields?
Note: Ashanti Goldfields has had a stay of execution as the lender banks have given it a grace period to get its books in order regarding its hundreds of millions of dollars in margin calls.

On Monday, the agreed suspension of Ashanti's margin calls ENDS. At that point we see whether Ashanti rolls, or covers, or gets bailed out, or is just totally screwed, or what.

Man...add stocks into the mix, and monday is looking like it's gonna be a BIIG day.
FOA
(10/15/1999; 14:50:00 MDT - Msg ID: 16479)
Reply
See 16465 for his full text.

Yellin' of troy (10/15/99; 13:03:53MDT - Msg ID:16465)
FOA -- the demand for gold is not insatiable

-----What you are missing is the distinction between wealth and money. ---------

Oh Yellin of Troy,
Your modern thesis comes from a viewpoint that wealth and money are different. I had the same debate with Martin Armstrong. His whole basis for de-wealthing gold was built upon the modern man concepts and how he stood higher than his brethren of old. From the beginning man traded wealth, not money! We brought things with things and found little need for a different concept of wealth. Gold became the wealth item that was most efficient to use. It was only the modern (modern for that time) bankers that said it was money. Your modern paper started as a contract for wealth in storage, then proceded to become a digital receipt for the completion of commerce. Today, it no longer holds the title of contract and is failing in it's ability to effect digital trade.

--- And while there is certainly considerable benefit and joy in knowing that you *could* do something, isn't the value of having gold to spend much reduced if you not only never actually spend any of it but are bound and determined that you never will? -------------

Cross the globe many times my friend. During your travels observe how spend able gold has become in every nation on earth. It is an old wealth/money that still buys anything. Black market, white market or no market, one can exchange gold for currency privately or officially at any time and any place. There are some on this forum that like I have run the world and know this currency well. Your pronouncement that power can prevent a peoples from maintaining wealth and spending it in gold simply does not stand-up to history, past, present and no doubt future. Even when the US stopped gold usage, most of the world continued to use it. Some of my forefathers were also "against the law" in those times. Find me a better reason than supposition?

---Have you sold everything you own, turned it into gold, abandoned your family, and taken to living in the gutter with your bag of gold hidden in your underpants? If not, there are things you prefer to their price in gold. And I don't imagine your present holdings of non gold assets are
unimprovable; wouldn't you buy more if you were richer? Whatever your level of wealth, you only want some of it in gold. And even if you are an incredible miser who only wants to caress his gold, there's a limit to how much you can afford. You're not infinitely rich, and you can't get richer by forgoing your dinner and deodorant for gold, and your fairy godmother will not bring you free gold every day.---

Indeed, I must ask the same question, for it is not I or my friends that walk your alley trail. Our gold is for the preservation of wealth in a world that is lacking "contract honour". Truly, it is the future that we defend against, not the past. Every investor gains and maintains his winnings during the here and now, not the past. Default is before us, therefore protect the family by owning real wealth now. All of the great families of old brought freedom from failure using gold a part of their wealth. We doubt they considered it as their day to day money nor do I. Our times have changed that concept. You, and humanity will continue to use the digital currencies as money for needs. Just as in the
past, the difference between retaining what you have and giving up a good portion to the fraud of currency is gold!

----------- The key point, and the fact responsible for the wealth of the modern world, is that you can expend your money on *investments*. You can use some of your gold to build awidget factory, or buy one, or if you don't understand widgets you can be a passive shareholder or
a lender in an outfit run by somebody who does, or you can lend to a banker who knows how to find and oversee such people and will spread the risk.----

-----However you do it, you can expect to get back, eventually, more money more gold, if that's money or if you insist -- than you started with. The whole thrust of your argument was that there is no limit to how much money you dream of, you want as much as possible. But then, if you
have a huge stash of gold, more than you have any intention of spending, more than you could ever suddenly need to spend, why not apply some of it to getting more? If you would never refuse a free gift of gold, why refuse an offer of interest on gold sitting idle in your vault, for which you have no other present use (and derive no other benefit) anyway? The sensible thing to do is to keep on hand only as much money as you might actually need or want to spend (before the investments pay off)

-- this is your demand for money, and it is finite and indeed rather limited -- and direct the rest to where it will be most useful, most productive, most profitable. And the people you let have it aren't going to put it all in their vaults and just revel in its glitter -- how would they be able to pay you your interest? They need your money for expenses: They can't sell any widgets until well after they have paid a lot of suppliers, secretaries, and salesmen a lot of money. They do need to keep some cash on hand, but only some; their monetary needs are limited just like yours, except that they are trying to reduce outgoing interest payments instead of increase incoming. The secretaries don't put all their wages in the piggy bank, either; they spend most of it. No one's pile of yellow is a black hole; each
economic actor has only some limited target for cash on hand, and the sum of all these is some definite aggregate demand for money, not a bottomless pit.--------------

Oh Troy,
Again I say, the demand for money is unlimited! I never said that it would not "circulate"! Into the great economies of the future will flow our gold. Yet, we will lend it or spend at our choosing to buy things. Be they investments or pleasures our wealth in gold will circulate most freely. For every person that works 10 hours instead of 8, his two plus efforts will make demand for gold. So, how much is too much? The world has never seen this end and I hope it never does.

------Of course, if gold is grossly underpriced, it can be a very fine investment itself. If you believe others will soon come to understand its merits and correct its price upwards, then you can increase your buying power, your wealth, for the future by merely buying and (for a while) holding gold. In some circumstances this could be both safer and more profitable than that uncertain widget business. But this is a disequilibrium, a temporary condition, and the whole (expected) gain is in the correction. You can't perennially suppose that gold is on the verge of an upward surge that
somehow never happens; such expectations would be irrational and you wouldn't make any profits. --------

No, no! Gold is not grossly under priced, far from it. I say that gold is grossly under used! People have been defrauded into using paper as money instead of using gold as wealth in trade. How can the price be correct when no paper money can define wealth? No person knows the true wealth of gold. It's value will increase with usage in trade not trading it for gain. The true advantages we attain from gold are found in it's transformation in use. History has shown the most stable money was always gold itself, not the modern currencies. Paper will come and go as nations persist, but gold holds the value through it's own usage, not the digital numbers we give it today.


---- And of course gold is not totally secure: The price does fluctuate, the lock on the treasure chest can be shot off, and let's not forget that one of the great inflation's in history happened in gold and silver, after the Conquistadors. In fact, at the prices you are foreseeing, gold would be not only a low return, risky investment, but a risky, unstable money, susceptible to a near total crash -- see my post yesterday. So the wealth will go (mostly) into more productive uses than gold. This is a case where as soon as you are proven right you have to change your strategy. ------

As Another said, we only limit our view by choice as our feet place us on the mountain. Consider your alternatives during the time and space these events unfolded. In context, gold would have been the choice of most every actor in the play of history. We do not look for a return that is created by accepting risk, rather gold becomes wealth of "least risk" in a world gone mad. In every war weapons must be used. I look through the pages of time and order the timeless one, gold.

-------I won't deny that there are cultural influences at work here. If you live (or your ancestors, whose ways you follow, lived) in a country where invasions, political upheavals and injustices, pogroms, and similar unpleasantnesses must be expected, factories are too easily burned or confiscated, and you will prefer concentrated, universally saleable gold, which you can run with.---

Truly, a testimony of the time of the US civil war! Perhaps a time of confusion to be revisited, yet without war?

---If your society conceives of wealth as primarily something to display to show everyone (including yourself) how rich you are, gold will serve admirably. If, furthermore, commercial activity in general is felt to be less than honorable and "money-grubbing" is disdained in favor of status-grubbing, if interest in particular is considered sinful (even if evasions are routine), then the
daydream of heaping up illimitable gold will be a lot more popular than in a more Modern (and especially American) society.------

Your description of the USA today, no doubt. I have seen your country use it'd dollar currency in this very same fashion. All the while grinding the average citizen into a more lower position. Mostly they wear their gold in the form of a house too large and a car too expensive. All the while
forsaking the debts they build and can never repay.

-----But even Victor XXI had to spend his gold on paying his soldiers, without whom he wouldn't have kept it long, and had to borrow more. And a society like that, or a person like that, will be, in the long run, comparatively poor and unable to afford much gold.----------

My friend, life goes on with or without us. We will live out time in a manner that fate prescribes. Truly I have seen my destiny down this trail we walk. And travel it we shall, as a group or alone.

On the road to $30,000,,,,,,,,,,,,,,,,,thank you so much for your most excellent works FOA


apdchief
(10/15/1999; 15:00:47 MDT - Msg ID: 16480)
GC9Z Close

>>>>-----$389.90----->X

We've seen the PPT, the FED, Ted Arnold, AG, the BOE, Marty A., and all the rest strive and connive to keep POG down. How many rabbits can they continue to pull out of their hat? At some point, soon, I believe some event will occur which blasts POG beyond the 325-340 high end of the range. From there, the sky's the limit.
SCRCS
(10/15/1999; 15:28:37 MDT - Msg ID: 16481)
comex future 22 oct 99
http://www.usagold.com/>>>----321.25----+> from a first timer. why should the price be any different than that which I have guesstimated? i could only hope to be the one with the greatest accuracy but it's only a guess at best. nothing more.
Journeyman
(10/15/1999; 15:37:47 MDT - Msg ID: 16482)
"PLUNGE PROTECTION TEAM" more than just Urban Myth??
The reference to the "PPT" from lepatron@lemetropolecafe.com via JCtexin MID# 16455 is very interesting to me.This is the first reference I've seen to the "Plunge Protection Team"that's had a little meat on the bones, particularly reference to"the New York's Peter Fisher." Does anyone have any references (URLsetc.) as to the real existence of this group, what they do or howthey do it? Yea, I know, it would be super secret. Anyway, any referenceswould be most appreciated! Thanks, Journeyman
Goldspoon
(10/15/1999; 15:38:41 MDT - Msg ID: 16483)
The hazards of short term predictions....
The finer tuned a prediction is.... the risk of being wrong escalates.... FOA's fundamental thinking is correct....buy the dips...bought ten more ounces of fine arabian stock yesterday myself....(smile)...(snicker)...(HORSE LAUGH)...FOA.... i guess we sold each other??? and fell off trying to switch horses at full gallup?? ...OUCH!!!

Inflation?? a falling dollar just makes it worse... physics 101... dollar down, gold up... watch for it!!!
Goldspoon
(10/15/1999; 15:49:14 MDT - Msg ID: 16484)
COMEX CLOSE
>>>----357.25----+>
After throwing a few chicken bones, consulting the tide schedule, Silvery Moon phases and acounting for the known and reading next Saturday morning's paper...i have graciously decided to cut those not privy to all this info some slack.... Thus giving a follow Knight an even break so as not to embarass anyone....... especially myself......
T. Remital
(10/15/1999; 15:54:43 MDT - Msg ID: 16485)
>>>>>>339.50--------> close
We were surprised at the last big move- we may be surprised again. The year end target is still 400.00 Therefore
339.50 is a logical price along the way..
Leigh
(10/15/1999; 15:55:26 MDT - Msg ID: 16486)
Journeyman
I remember seeing on the Kitco chat room back during the summer a listing of the members of the PPT. It seems as though there were about eight or ten of them, and many of them were Goldman Sachs employees. Their average age was around 40. Does anyone else remember seeing this?
PH in LA
(10/15/1999; 16:11:19 MDT - Msg ID: 16487)
!!!CALL TO ARMS!!! Basic question laid on the table.
http://www.kitcomm.com/comments/gold/1999q4/1999_10/991015.054854.rhodyeeee.htm "On Tues., with spot silver at $US5.55, Scotia Mocotta here in Toronto was quoting a price to retail purchasers of 5.75 plus exchange and bar charges. Now, they are quoting 5.75 plus exchange and bar charges, but spot has dropped to 5.35, and they quote that price too. In other words, you can now buy physical silver, but not at the spot price from Scotia Mocatta. In effect, they have raised the retail price of bar silver here in Toronto by US20 cents per oz. This is additional evidence that the COMEX spot price is not real, but a function of a paper shuffle." rhody Date: Fri Oct 15 1999 05:48

"But silver, like all markets, is a three-ring circus - there's a lot going on at all levels...This is a crooked, crooked market and must be approached as such." ted butler Date: Fri Oct 15 1999 03:08 (http://www.kitcomm.com/comments/gold/1999q4/1999_10/991015.030833.ted_butle.htm)

After watching what amounts almost to carnage, first in the gold breakout two weeks ago, and again today in the DOW, there has been talk everywhere of PPT (plunge protection team) action, Fed manipulations, etc. We have seen frequent reference on these pages to the effects of futures and options as integral parts of the pricing mechanism in the gold market. The two respected posters above refer to an underlying confusion, which if not present in their own thinking, certainly is ever-present in my own. After watching the pasting our gold & silver got yesterday, I suspect that many of us would gain much tranquility of mind by an in-depth discussion of the mechanics of our modern markets, and especially the gold market.

FOA & ANOTHER have tried to tell us that the present gold market "is not as before" and that the "1970s concept of a supply/demand driven market" is a thing of the past. Those who have followed the discussions here should have, by now, a fair grasp of leasing, bullion banking, short overhanging supplies, etc. But there is still much to be explained about the actual mechanics of trading itself. Spot market price would be a good place to start. What is the "spot market" price of gold? Does the "spot market" actually exist? Why does "strong physical demand" not translate into any consistent effect on the price of gold?

How are the BBs able to so effectively smother the price of gold? Beginning two weeks ago, we saw historically high rates of volativity in gold. Yet, in spite of reported record physical sales we saw the price swings moderate gradually (always with downward bias) until a "logjam" seemed in place. Once again we are left with the impression that only a major departure towards a new Chinese involvement or the establishment of a new cartel-like management concept will serve to get things going again. So, how do they do it? How are they preventing the price from exploding from here?

Journeyman is asking the same question. "Journeyman (10/15/99; 15:37:47MDT - Msg ID:16482) "PLUNGE PROTECTION TEAM" more than just Urban Myth??"

FOA, ORO, Aragorn, Anyone with good technical backround on this: If you can shed light on this question, we will all probably sleep better at night.

Journeyman
(10/15/1999; 16:11:49 MDT - Msg ID: 16488)
PPT found!!
Ah, blush, Google gives 17 hits to a search for "Plunge ProtectionTeam." Amazing what you can find on this here new fangled internetthing!! Humbled, Journeyman
Village Idiot
(10/15/1999; 16:16:02 MDT - Msg ID: 16489)
(No Subject)
>>>---374.20--->

I see the fear in the faces of the people in the market place. The great Wizard Greenspan has spoken and the more words he uses that I don't understand means trouble ahead I tell ye. The scramble for physical is on. Be wise like Kings and fill your vaults with gold. Your kingdom will be the stronger for it. But what do I know, I'm just an idiot.
Journeyman
(10/15/1999; 16:25:12 MDT - Msg ID: 16490)
Thanx Leigh & PH in LA
Glad I'm not alone on this. My time is limited, but I'lltry to follow-up later with a report on the PPT. Working on anotherpost though, maybe someone else would like to Rockford or Mannixthe PPT? Regards, Journeyman
Canuck
(10/15/1999; 16:28:03 MDT - Msg ID: 16491)
POG
6:00 pm eastern,

I'm sick to my stomach; I don't understand what's going on?

Dollar taking a lickin', bonds tanking, inflation out-of-control and gold sits like a bump on a log.

Why?

I checked the posts so far today, a few of us have asked why
but I did not see an answer. Why?

I'm beginning to see Farfel's logic. This is a USA-Europe war isn't it? Farfel, please add to your previous comment; I
think some logic is required. The Sept. 26 announcement at
8:00pm-ish eastern (in terms of timing) was no accident. The PPI announcement at 08:30am is no accident in my mind, it allows for careful manipulation during the course of the day. Have you seen the graph today, there was a very narrow band, it looked so boring; it resembled a Sunday. There are and were extreme forces in play today. If left unchecked gold should of skyrocketed today. The forces majeur had the 'dogs' watching the bullion each and every second from
08:30 to 16:30, in my mind there is no other alternative explanation. In this little theory I believe Farfel to be correct that an announcement may be made over the week-end.
The announcement will be made in such a timely matter as to punish the forces majeur that supressed gold today.

I have been watching individual gold mining stocks as to hints of their respective 'hedging' positions. I am assuming
'big players' in the know will drop hints. Many of the majors made a small gain but Franco-Nevada took a significant hit today (-0.85/share). A few posters offered lately that FN was UN-hedged and in my little 'study' over the last 10 days or so I notice the 'hedged' mines are not
succumbing to the pressue at all. Franco-Nevada has taken a bit of a beating in the last week. Barrick is holding strong. Any comments to this tidbit?
Canuck
(10/15/1999; 16:42:02 MDT - Msg ID: 16492)
Journeyman, Ph in La, Goldspoon
The last half dozen posts stops the bleeding a bit, thanks.

May the rotten, manipulating, crooked SOB's bankrupt themselves. I hope the stolen gold they acquire evaporate.
Leigh
(10/15/1999; 16:56:01 MDT - Msg ID: 16493)
lemetropolecafe.com
Does anyone have an e-mail address for lemetropolecafe.com? I just got locked out because they have no record of my subscription payment, though I sent it a week and a half ago! With all the interesting news coming out of GATA, I don't want to miss the latest!
CoBra(too)
(10/15/1999; 17:05:59 MDT - Msg ID: 16494)
@Leigh
Dear Leigh,
the e-mail addresss are either:
lepatron@lemetropolecafe.com or
webmaster@lemetropolecafe.com

Since I feel "guilty" in "coercing" $ 99 out of you - hope you still feel it's worth a lot more as I do there and here. Best CB2
Leigh
(10/15/1999; 17:14:11 MDT - Msg ID: 16495)
Co(Bra)Too
Thanks, Cobra(Bra)Too! I'm glad to be a member, and $99 is a small amount to pay in return for all the good things GATA is doing for us!

Have a nice evening!
Gold Dancer
(10/15/1999; 17:17:16 MDT - Msg ID: 16496)
gold
>>>>>>312.00....>

I think the mines and the all those short will prevail till after Oct options expire. This is not all bad as it will give the mines time to redo their hedgebooks. I think the lower end of the range will be broken before the next up
move.

Gold Dancer

CoBra(too)
(10/15/1999; 17:44:44 MDT - Msg ID: 16497)
Frustrated - Canuck ?
Relax, friend, your'e not alone, but don't expect the first battle of the war, which I also think it is, has just started its final phase. Counterattacks, skirmishes and even clandestine tactical warfare is to be expected in order to buy time for the retreating army - an army so spread out in their globalalization and dollarization goal of the economic and financial world hegemeony. A status brutally enforced on all nations by force of the gold/$ default in 1934 and finally in 1971.
Alas, a retreat it is, which will soon give way to an all-out flight as desperation sets in. First a few fortresses will be abandoned, in the end its every man for himself.
The dervative distortionists of capital markets will be the first to surrender since they've got the real "short" leveraged fuses, which will blow them apart - good riddance! While some of the major Bullion Bunker's will be protected as long as possible and as long as ammunition lasts - somone wiser said "you can print all the fiat paper, but you can't print GOLD".
Cheer up and put another golden bullet into your armory (silver bullets may be good for vampires only).
Take care CB2
CoBra(too)
(10/15/1999; 18:10:28 MDT - Msg ID: 16498)
GC9Z bet - 1st. time wager
*>>>>> 324.75<<<<<

The real problem is to express my gratitude to our gracious host and the valuable time MK, everpresent at the oaken tableround, TC in the tower and all other knights and squires extend to all invited to listen to the saga of true and honest money. The historical truth of the only measure and honest standard of legal tender in barter, trade and as we now may experience in any modern economy - gold.
May the golden standard of USAGOLD and the forum persevere.
True regards CB2

PS: my timid forecast is aimed at lifting the spell of the recent trading range.
RossL
(10/15/1999; 18:11:51 MDT - Msg ID: 16499)
Gold Dancer
Gold Dancer sez:
"I think the mines and the all those short will prevail till after Oct options expire."

Hey buddy, umm, OCT99 options have already expired. However, your viewpoint may be vaild if you intended to reference the DEC99 options.
Leigh
(10/15/1999; 18:16:08 MDT - Msg ID: 16500)
Co(Bra)too
Hey Co(Bra), I'm already back in! Bill Murphy's a nice (and efficient) guy!
TownCrier
(10/15/1999; 18:18:30 MDT - Msg ID: 16501)
After the Close: the GOLDEN VIEW from The Tower
The market jitters began with Fed chairman's speech yesterday (which we posted in part following the GOLDEN VIEW...regarding which we would like to thank those who singled it out as praiseworthy. "Thank you." We might suggest that anyone who missed it might want to go back a day and have a look. If others found it helpful, you might to. It not only helps explain the drop in gold prices, but would also be applicable to today's smallish rise in light of deteriorating alternative ivestments.) In his speech he reiterated what he said in Jackson, Wyoming about market participants suddenly losing confidence to panic, and the need to prepare portfolios for these rare but inevitable events. After that appetizer the main course was served by the Labor Department with their release this morning of the Producer Price Index which rose 1.1% for September, the largest rise since a 1.3% gain in September 1990--a month after the Iraq invaded Kuwait which touched off the Persian Gulf oil crisis. Analysts had expected it to come in at 0.5%, and while they expected the "core" rate--which conveniently excludes the food and energy components--to come in at 0.4%, the actual number was double that, 0.8% (the biggest gain in 11 months for this "core" rate.)

The markets tanked, with the DOW dipping briefly below 10,000 to end down 267 at 10019.71 (-2.59%). The Nasdaq fared slightly worse, losing 75.01 (-2.67%). In NYSE trading, declining stocks outnumbered advancers 2,380 to 689, and new 52-week lows beat new highs 489 to 11. This was the worst point-loss week (630) for the DOW since 1987. On the week, the DOW was off 5.9%.

The U.S. long bond suffered a sharp sell off on the early morning release of the inflationary PPI results, but when the stock markets opened later to their own sharp sell off, the 30-Yr Bond was the beneficiary of "flight to safety" capital. The yield fell to 6.261% as the price on the day gained 23/32. Incredible, that people will bid up the bond in a blind rush to "safety" in the face of the largest PPI increase in nine years. Incredible.

In currencies today, the dollar hitched its destiny to stocks instead of bonds, with losses against the yen and the euro bringing it to leves not seen in 11 days and in 7 months, respectively. The dollar closed down 1.89 yen at 105.44, and it also lost 1.2 cents against the euro to close at $1.0887 per euro. A currency analyst at Warburg Dillon Read told Bridge News, "Inflation is really picking up and there is no way to get around it."

Most people hold as conventional wisdom that gold is a hedge to protect your wealth through such an inflation as this mentioned by the currency analyst. However, many of us see gold as the preferred asset through any type of currency turmoil--be it inflation, deflation, or outright destruction. Whatever the reason, Chris Thompson sees it as an asset who's time has come. In news that is already old news to the Forum, the Chairman and CEO of Gold Fields Ltd (world's second largest gold producer) said, "Having looked at the fundamentals of the current gold market and the implications of the Ashanti situation, it seems inevitable to us that higher, if not much higher, gold prices are possible. Accordingly it seemed prudent to retrieve our hedge positions." Let that be a clear path for others to follow.

Spot gold was last quoted in NY at $314.70, up $1.80. While this may not seem too impressive, consider what was said yesterday, and also remember your history. How many times during the past two years have we all seen days on which the stock market was precariously poised for collapse, as it was today, and yet in the past gold would find a way on bogus news of Swiss sales or whatever other convenient reason to finish lower also, sinking with stocks. Today marked a nice departure, as have several other days in the past. Yes, we'd say things have changed, indeed. Stocks could have easily tanked much harder on this sharp shock delivered by the PPI, yet gold was left to find its own footing, albeit still in the influence of the action on the derivative trading floor.

Here's what Bridge has to say about life among those wagering on December prices...

NY Precious Metals Review: Gold up on weaker dollar, stock mkt
By Tina Petersen, Bridge News
Washington--Oct 15--COMEX Dec gold settled up $2.2 at $316.4 per ounce on
renewed buying interest after dropping $7.6 on Thursday. Traders said a weaker
dollar and stock market and an increase in the Producer Price Index lent support
to the gold market.

Traders said it was not surprising to see gold retrace some of its losses
from Thursday, which brought Dec to a 1 1/2 week low of $312. "With that type of
technical liquidation, we would expect a rebound after it broke below the $316
level," said a trader.

[Good grief they're getting picky on their price watching. Today's $2.2 gain wasn't a retracement of yesterday's $7 drop. You see, yesterday's drop was itself a retracement of the greater bold and brisk initial price surge of 30% in recent days. It gets a bit silly to talk about a retracement within a retracement. Just sit back and watch nature reassert itself, for cryin' out loud.]

The effects of a weaker dollar and stock market today overflowed into gold,
according to traders. "I think that the dollar and Dow are playing more of an
important role in the gold rally than I think they are given credit for. We are
definitely seeing buying resurface with a weaker stock market."

[Overvalued stock market...one of the "Five Horsemen." Check.
The dollar losing value--vs. the euro...another Horseman. Check, check.]

Also adding to bullish sentiment is that the US producer prices surged 1.1%
in September, the biggest increase in 9 years and far above the consensus call
for the index to increase 0.4%. The PPI was driven higher by increased tobacco,
auto and energy costs. The core PPI, which excludes food and energy, rose 0.8%,
also above expectations of a 0.5% increase.

[Uhhhh...Bridge? I hate to tell you this, but you switched your 0.4% and 0.5% values around. See my text earlier in the GOLDEN VIEW.]

Traders said support lies at $310-312 and heavy support below that at
$298-298.5. Traders said a 50% retracement is a normal move down after the
2-year high of $339 reached on Oct 5. "There aren't enough weak
longs liquidated yet, so there's potential for more downward pressure," he said.
***
Reprinted at USAGOLD with permission. For details please go to:
http://www.crbindex.com/
No further reproduction without written permission
---
Is anyone looking for a mining company that can't learn by the misfortunes of others?
Toronto--Oct 14--To minimize risk of lower gold prices and maximize its
revenues, Canada's Barrick Gold Corp. today said it plans to continue protecting
20-25% of its gold reserves--about 3 years of gold production-- through its gold
hedging program. Barrick Gold will realize a price of US $385 for every ounce of
gold sold from now until the end of 2001. Bridge

These two Bridge stories were provided and discussed earlier in the day, but for sake of a complete package, we'll run them past you here:

HONG KONG'S GOLD/SILVER EXCH CONSIDERS TRADING LOCO-LONDON GOLD
Hong Kong--Oct 15--The Chinese Gold and Silver Exchange Society, the
physical gold market in Hong Kong, is considering adding the trading of US
dollar-denominated Loco-London gold to its existing Hong Kong dollar-denominated
tael-gold trading, the exchange's president Raymond Chan told Bridge News today.
He said the exchange's members held a meeting Wednesday to discuss the
possibility and they will come to a decision on the matter by the end of 1999.

HONG KONG FIRM TO LAUNCH 24-HR INTERNET GOLD TRADING IN JAN-MAR
Hong Kong--Oct 15--Hong Kong-listed precious metals producing and trading
firm Tem Fat Hing Fung (Holdings) Ltd. plans to launch in the Jan-Mar 2000
quarter an Internet website that investors can use to trade gold around the
clock, the company's chairman Raymond Chan told Bridge News today. Besides US
dollar-denominated Loco-London gold, the planned website would allow global
investors to trade Hong Kong dollar-denominated tael-gold and Chinese
yuan-denominated gram-gold, Chan said.

[Hey Ted Arnold and Andy Smith...does that sound like a special effort, or one that would normally be taken for just "any ol' commodity?" Yeah, we thought so too. Special, not normal.]

The COMEX gold vaults saw no creature stirring, (not even a mouse.) Stocks remain at yesterday's values, as do the delivery intentions for October contracts. There was no appreciable net change in COMEX gold futures open interest, the total and end-of-day Thursday was 215,527, down 875.

Ahead of the expiration of November crude options contracts, November crude traded near $22.00 throughout mmuch of the day but rallied near the close to settled up 37c at $22.82. NYMEX November crude futures expire next Wednesday.

Here's a brief update on Pakistan from FWN...

Pakistan's Musharraf says economic revival top priority
By Fakhr Ahmad, Bridge News
Karachi--Oct 15--Pakistan's self-declared Chief Executive General
Pervez Musharraf today told a meeting of military corps commanders that he
hoped an interim government, which was impartial and efficient, could be
set up soon. He added that priority would be given to reviving the
country's economy.
Musharraf said the new government would ensure credibility,
transparency and accountability in running the country's affairs, the
official APP news agency said.
He said top priority would be given to economic revival, ensuring
national integration and good governance.

On the face of it, that doesn't sound like such a bad deal. We wonder if they're available for hire. If they franchised the operation, we could really clean up some sore spots on this tiny planet in no time at all. Who's next...anyone?

And that's the view from here...after the close.
Goldspoon
(10/15/1999; 18:31:24 MDT - Msg ID: 16502)
***IF YOU HAVE HEARTBURN A MUST READ****
A little medical advice from ole Doc Goldspoon....take a deep breath and count to 10......NO! not 20! Leigh you'll pass out...guess she thought if 10 was good ect.......
NOW!! Feel better??? Read on and sleep well tonight and KNOW how lucky you are to be an owner of Gold...Question knowing it is 1929 and the market is crashing would you want to be an owner of GOLD tonight or not??? SILLY YOU of course you would want to own Gold...read on and Know why you own GOLD.... and give thanks tonight for the blessing that you do!!!

As i said yesterday..."a cornered rat will fight" we have him by the tail, just don't let go...

DON"T BELEIVE A LIE.....DON'T TAKE A BITE OF THE CASH APPLE BEING OFFERED TONIGHT... Here's why...

What we are seing today is an old magician's trick...(i'll bet FOA could tell some tales of such)...it's merely an illusion... the only thing dissapearing is what was not there in the first place....let me explain... (Humor me i'm gettin there).....

Do yourself a favor.. go to your safe deposit box, mattress ect. and take in one hand a gold coin..(good that's right! feel that?) now in the other hand a dollar bill... now read the top portion of the dollar... it says "Federal Reserve Note"..Question??... What is a note? Answer.. a unit of debt... NOW look at the hand with GOLD in it. Question what is it? Answer "NOT DEBT" in other words.."The opposite of DEBT" !!!!!!! is Payment!!! ie. GOLD!!! (that's right, Leigh is shaking her head yes...she knows!!)
Question?? what was "REALLY" disapearing today?? Answer!..The DEBT promise on the front of the dollar bill!!! IT's soundness is in question all over the world tonight!!!
Question? is the soundness of gold in question??? NO!!
The USA monetary magicians are creating an illusion that both are evaporating at the same time (RULES GAME 101.. This is.. COMPLETE IMPOSIBILITY! WHY? ANSWER..THEY ARE OPPOSITES OF EATCH OTHER!) ie DEBT IS NOT PAYMENT..

The truth is... the promise made on the front of the dollar is a little less belevible today by the rest of the world..
Don't be fooled by the slight of hand!!! Call their magic trick!!! They are bribing us with the offer of more GOLD to beleive in their hollow promises!!!!
YOU MUST CHOOSE...This Day!!! A fist full of promises to pay??? OR A FIST FULL OF PAYMENT!!!

Goldspoon says "A Gold coin in one hand is worth more than a fist full of paper promises in the other"

Don't beleive me???....Just ask an American Indian if USA paper promises are good as Gold....

Poor Uncle Sam never learns...still trying to treat others as American Indians...

REMEMBER? what ole Goldspoon said??? Now Leigh? You remember!!... That old ghost from our past thought long dead comming back to life? just in time for Holloween?? He was carrying a Sharp Sickle and looking to cut the Stock Market off at the knees!!! INFLATION! posted about a month ago... tug of war with the stockmarket tugging on one end of the rope...AH! You DO! remember?... (Sigh... She's shaking her head no...) Well..anayway...the end of the story can be completed tonight...sorry but it's rated "R" too much blood involved.....pray for those loosing a fortune tonight... and be thankfull that YOU! are not one of them.....
Farfel
(10/15/1999; 18:32:14 MDT - Msg ID: 16503)
Leonard Kaplan re: Your Condescending Lecture at KITCO.
Leonard wrote:

Date: Fri Oct 15 1999 18:35
uptick (sorry guys, but) ID#277249:
Copyright � 1999 uptick/Kitco Inc. All rights reserved
I dont see how celebrating the worst one week point decline in the equity markets does, or mean, anything
to the price of gold...in fact, I think the decline of equities is NEGATIVE for gold ( but just slightly.. )
....yes, inflation was finally apparent in today's report and that should help gold ( it didnt today however )
...but why dance on the graves of equity investors??..THEY ARE ALL POSSIBLE INVESTORS IN
GOLD AND PRECIOUS METALS...sorry, but doesnt make a lot of sense to me. Yes, celebrate the rally
in gold but not the decline in equities...

just the view from my chair....
------------------------
Farfel Responds:

Leonard, you sound like a perfect gentleman and I have read a number of your articulate posts.

However, I believe your perspective on the market today is completely wrong.

You claim that equities bulls must prosper for there to be a gold bull; and that is simply absurd. We have had one of the most prosperous equity bulls in history this past decade yet gold has deteriorated badly.

Why? Because the New Paradigm in the stock market is completely unmitigatedly anti-gold. As long as bull equities surge, that engrained attitude will not change.

So, actually, it is imperative that both bonds and mainstream bull stocks deteriorate notably in order to inspire people to seek out alternative investments such as gold. In the long run, gold will NOT rise with the bull market...it can't because of the inveterate hostility felt toward gold by this bull paradigm.

As somebody who constantly lectures goldbugs about the imperative to hop aboard "THE TREND IS YOUR FRIEND" train...as somebody who declares categorically that the trend is established permanently as a persistent rising Dow/Nasdaq trend...then I have no doubt that you hold most of your investments in bull market, mainstream stocks, NOT metals. Moreover, until the past two weeks, your definition of a gold bull market consisted of a $5.00 upswing in gold, followed by a retracement. Obviously, you have been completely surprised by the extent of the past two weeks' strength in gold.

So, since I imagine you are suffering big bull equities losses as a result of trading days like today, then I perfectly understand your frustration at the jubilant reaction of KITCO posters to a falling stock market.

However, you are in no position to lecture them! After all, goldbugs have been crapped upon, stomped upon and ridiculed by these bullish overexuberants for the past decade. They are entitled to feel a sense of satisfaction and joy to see the tables reversing exactly as they predicted some time ago. Moreover, many gold bulls have also shorted the market at various times and suffered huge losses, much to the incredible mirth and delight of bull investor longs.

So please allow gold investors to enjoy their week in the sun without trying to inflict guilt upon them. If they are guilty of insensitivity, then YOU and your bull market brethren are no better.

No doubt the manipulative Clinton government is doing the best it can to contain this unfolding market debacle. However, this time, things may be getting away from them. It remains to be seen.

One thing is certain...this particular government will do everything in its power, no matter how antithetical it might be to the free markets, to ensure that the current downspike is short and brief.

But the USA government is NOT omnipotent...it is NOT God. Market forces are tremendous and might overpower their interventionist methods this time. Time will tell.

So, Leonard, although I agree THE TREND IS YOUR FRIEND mentality has served you well this past decade, you might do well to determine if the TREND is shifting irrevocably into a full chronic bear market.

Sure looks like it so far.

Thanks

F*

nickel62
(10/15/1999; 18:32:36 MDT - Msg ID: 16504)
Does anyone have any current knowlege on Inco Voisey Bay development?
I am currently revisting many of my stock investments in Canadian and US mining companies and am trying to find others to share information with about these companies. My interests are in Golden Star Resources(GSR)on the American and (GSC); Dayton Mining (Day);Expatriate Resources(EXR)Vancouver;Freeport McMoran Copper and Gold (FCX)on the NYSE and Atna (ATN)on the Toronto. Anyone have any information on any of these companies?Thanks for your help.
Hipplebeck
(10/15/1999; 18:33:25 MDT - Msg ID: 16505)
Canuck
For what it's worth, It has been my experience that it usually takes a day or so after getting beat up to get your shit together and figure out what to do next.
Michael
Farfel
(10/15/1999; 18:40:24 MDT - Msg ID: 16506)
CORRECTED Repost: Letter to Leonard Kaplan
Leonard wrote:

Date: Fri Oct 15 1999 18:35
uptick (sorry guys, but) ID#277249:
Copyright � 1999 uptick/Kitco Inc. All rights reserved
I dont see how celebrating the worst one week point decline in the equity markets does, or mean, anything
to the price of gold...in fact, I think the decline of equities is NEGATIVE for gold ( but just slightly.. )
....yes, inflation was finally apparent in today's report and that should help gold ( it didnt today however )
...but why dance on the graves of equity investors??..THEY ARE ALL POSSIBLE INVESTORS IN
GOLD AND PRECIOUS METALS...sorry, but doesnt make a lot of sense to me. Yes, celebrate the rally
in gold but not the decline in equities...

just the view from my chair....
------------------------
Farfel Responds:

Leonard, you sound like a perfect gentleman and I have read a number of your articulate posts.

However, I believe your perspective on the market today is completely wrong.

You claim that equities bulls must prosper for there to be a gold bull; and that is simply absurd. We have had one of
the most prosperous equity bulls in history this past decade yet gold has deteriorated badly.

Why? Because the New Paradigm in the stock market is completely unmitigatedly anti-gold. As long as bull
equities surge, that engrained attitude will not change.

So, actually, it is imperative that both bonds and mainstream bull stocks deteriorate notably in order to inspire
people to seek out alternative investments such as gold. In the long run, gold will NOT rise with the bull market...it
can't because of the inveterate hostility felt toward gold by this bull paradigm.

As somebody who constantly lectures goldbugs about the imperative to hop aboard "THE TREND IS YOUR
FRIEND" train...as somebody who declares categorically that the trend is established permanently as a persistent
rising Dow/Nasdaq trend...THEN UNDOUBTEDLY YOU hold most of your investments in bull market, mainstream
stocks, NOT metals. Moreover, until the past two weeks, your definition of a gold bull market consisted of a $5.00
upswing in gold, followed by a retracement. Obviously, you have been completely surprised by the extent of the
past two weeks' strength in gold.

So, since I imagine you are suffering big bull equities losses as a result of trading days like today, then I perfectly
understand your frustration at the jubilant reaction of KITCO posters to a falling stock market.

However, you are in no position to lecture them! After all, goldbugs have been crapped upon, stomped upon and
ridiculed by these bullish overexuberants for the past decade. They are entitled to feel a sense of satisfaction and joy
to see the tables reversing exactly as they predicted some time ago. Moreover, many gold bulls have also shorted
the market at various times and suffered huge losses, much to the incredible mirth and delight of bull investor
longs.

So please allow gold investors to enjoy their week in the sun without trying to inflict guilt upon them. If they are
guilty of insensitivity, then YOU and your bull market brethren are no better.

No doubt the manipulative Clinton government is doing the best it can to contain this unfolding market debacle.
However, this time, things may be getting away from them. It remains to be seen.

One thing is certain...this particular government will do everything in its power, no matter how antithetical it might
be to the free markets, to ensure that the current downspike is short and brief.

But the USA government is NOT omnipotent...it is NOT God. Market forces are tremendous and might overpower
their interventionist methods this time. Time will tell.

So, Leonard, although I agree THE TREND IS YOUR FRIEND mentality has served you well this past decade,
you might do well to determine if the TREND is shifting irrevocably into a full chronic bear market.

Sure looks like it so far.

Thanks

F*
Hipplebeck
(10/15/1999; 18:49:49 MDT - Msg ID: 16507)
>>>----------------------$320.20++++++++++>>>
I think that about says how I feel.
I think it's going to be a bit slower than we figured, but there aint no doubt where it's headed
Michael
Gold Dancer
(10/15/1999; 18:50:23 MDT - Msg ID: 16508)
RossL
That price was just a prediction for the close on Oct 22 which I mistakenly called Oct options expiration. Thanks for catching the error. I don't care if I am wrong but everyone
was looking up so...a short term counter opinion surfaced along with a resonable reason for it.


Gold Dancer
Bill
(10/15/1999; 18:52:35 MDT - Msg ID: 16509)
(No Subject)
>>>--- ?? ---> Never been very good @ projecting a certain close day price. I will say that looking at the charts... POG WILL hit $360 next week. (IMHO) The chart is beautiful. They're keeping the POG down as long as they can to re-capture as many calls and shorts as they can and it's working. The less volatile the market = the lower the value of options recouped. The lower the POG = the lower the loss on shorts as those contracts are replaced by longs. They don't expect to keep their losses at this level by keeping POG constant nor do they expect to be able to eliminate losses by pushing the POG way back down. Gold is going higher, everyone knows this. They're just trying to do this as long as they can to recoupe losses. They might even be able to continue this into next month. If so, even better for us. The wiser half of us will be fortifying our positions even more. With more DOW action like today I expect next week to be a great week for us all. I "expected" them to be able to push POG back down to 300 before the next explosion. It doesn't look like they're able to do that. Try not to get depressed when we don't see a daily increase. Instead, look at the daily and weekly chart and realize we will be seeing $400/oz before Christmas. (Picked up a couple of contracts and a little physical today)
Good luck to us all�� and keep smiling��it only gets better.
YGM
(10/15/1999; 18:56:41 MDT - Msg ID: 16510)
Gold-Eagle forum repost:


� What does CNBC, General Electric, Gold & Jim Blanchard have in common?�
(1912)Oct 15, 16:29 Interesting historic trivia:

I do not recall the exact date, but it was in the 1979-1980 period. Jim Blanchard was sole-owner of the then (and remains today) the largest precious metals coin dealer in the country. The gold company bore his name.

At the zenith of the 1970s gold bull run, General Electric made an offer to Jim Blanchard to buy him out. It was rumoured for years the buyout price was in the neighborhood of $28 million. After years of declining gold prices , General Electric tired of annual drains to its bottomline due to its 'gold-subsidiary's loses.' Consequently, it sold Blanchard Coins to someone else. And a few years later Jim Blanchard started up a new precious metals company called Jefferson Coin. The rest is history.

In recent years (unsure of date), General Electric bought total control of CNBC - which is undeniably the #1 advocate of Wall Street, and conversely, the arch enemy of GOLD.

The new gold bull is a monumental legacy to Jim Blanchard's impeccable timing - and General Electric's uncanny bad luck of always being a day late and a DOLLAR SHORT... or more correctly expressed... GOLD SHORT (:-))
Tomcat
(10/15/1999; 19:24:59 MDT - Msg ID: 16511)
PH in LA

You asked: "So, how do they do it? How are they preventing the price from exploding from here?"

With interest rates at around 6.5% and lease rates near 4% you can still roll over a lot of contracts provided that it is ok with the lender. Rollovers buy time and if they could just hold the POG steady then, as physical becomes available, they can close out more short postitions. Also, they might feel that if they can hold out till Y2k then they can use Y2k delays and temporary market closings to buy more time.

If the physical is not there they just don't have a lot of other choices unless contracts start to get settled in euros.

A lot might go on over the counter that we never hear about. Sure doesn't look like a free market to me.

Leigh
(10/15/1999; 19:32:00 MDT - Msg ID: 16512)
Doc Goldspoon
Dear Dr. Goldspoon: It's CANUCK, not me, who has a tummy ache tonight. He's probably been feasting on his Y2K stash of candy bars.

The first time I read your post, I was also trying to watch a Bible history video (by the great Japanese animator Osamu Tezuka, creator of Astroboy) -- part of a gorgeous series I got for the kids. You thought I was shaking my head, but I was really moving it from side to side as I looked from the TV to the computer screen. Now that I've read your message again, I must congratulate you -- you made an excellent point! Owning gold is a very comforting thing. All of us can rest easy tonight, next week, and throughout whatever Y2K brings knowing that we have coins that are "payment-in-full." They're also extremely beautiful and desirable. I truly feel for those who are suffering and fearful tonight, but I can't help wondering whether even now they would believe the truth about gold. You know, I think the problem with a lot of people is that they have no imagination -- they can't imagine a world that might be changed at all from what it's like now. The world has to actually change and they have to see it for themselves before they can even begin to believe what we're trying to tell them -- and then it'll be too late.
Journeyman
(10/15/1999; 19:47:38 MDT - Msg ID: 16513)
WHY GOLD HAD TO GO: Yellin' @ Oro
Yellin',

You have very interesting theoretical considerations for
instituting (or re-instituting) the so-called gold standard.
It'll probably take me quite awhile to think them through.
However we have a long, successful track record with the previous
gold standard here in the US which suggests your theoretical
considerations may be, well, mostly only theoretical.

The united States grew and prospered on a gold standard for over
a century with only one hiatus during the Civil War. This would
indicate, theoretical objections aside, that a gold standard is
eminently practical and highly conducive to economic growth,
prosperity, and, propaganda to the contrary not withstanding,
stability.

The gold standard was killed, not because it didn't work, but
because the bankers and their cronies in the political cliques
couldn't profit from gold as money as they could from paper
money. The excuses normally cited to indict the gold standard,
such as massive bank failures, etc. were greatly exaggerated, and
in the context of the depredations caused by paper money, pale to
insignificance. The quality of such whinings can be deduced from
the ultimate indictment against gold, which is no more than
calling it names such as "barbarous relic." [SEE subsequent
post, "BARBAROUS RELIC".] It wasn't that the gold standard
didn't work; it worked too well, automatically protecting
people's savings and making large banking institutions peripheral
rather than central. Hmm! "Peripheral Banks." Has kind of a
nice ring to it don't you think? {Shumpeter & "Fiscal State.")

Originally at least, this profit for the bankers and their
political cronies was based on the seigniorage (profit) from the
manufacture of money. Even now it costs only about $.05 to
manufacture a paper bill of any denomination. Thus the profit
for manufacturing a $1.00 bill is $.95 or 1900%, while the profit
for manuracturing a $100.00 bill is $99.95, a whopping 199,900%
profit. This makes the drug dealing business look like
starvation wages. How much do you think it costs to create a
"megabyte" (electronic book entry) dollar? Compare this with the
miniscule profit for minting a gold coin, expensive because of
the cost of the raw material, gold. Incidentally, the
seigniorage for manufacturing paper money goes to the Federal
Reserve (which is a cartel of private bankers NOT a branch of the
US government -- ask me) while the much smaller percent
seigniorage for manufacture of coins goes to the U.S Treasury --
which by law, ironically, manufactures both coins and all U.S.
paper bills.

An essential part of making fiat currency work (and thus
maintaining the seignorage profit) is to take away the
alternatives, usually gold and silver. This is necessary because
when hard currency is circulating along side fiat currency, as
soon as banks and/or governments begin creating too much of the
fiat -- which is ultimately their purpose -- same denomination
fiat (or "concept") money will begin to buy less than same
denomination hard currency. This sparks the workings of inverse
Gresham's Law, that is "good money drives out the bad" because
those traders receiving "money" for their part of the trade will
only accept the fiat at less than face value, if at all. [Oro, as
long as there aren't legal tender laws and gold and silver are
available, inverse Gresham's will take care of controlling debt,
which as you point out, is "natural" to free markets.] The value
of "paper" begins to diverge from the value of physical.
Circulating gold acts as a highly visible barometer making it
obvious to everyone what's happening, which accelerates the
erosion in confidence. This brings the fiat scam to an end much
more quickly. The only tactic the inflationists have once this
starts happening is legal tender laws, which don't work very well
at all:

"It [the French ruling body, the National Convention]
decreed that any person selling gold or silver coin, or
making any difference in any transaction between paper and
specie [gold and silver coin], should be imprisoned in irons
for six years; that anyone who refused to accept a payment
in assignats, [paper money not convertable to gold or
silver] or accepted assignats at a discount, should pay a
fine of three thousand francs; and that anyone committing
this crime a second time should pay a fine of six thousand
francs and suffer imprisonment twenty years in irons. Later,
on September 8, 1793, the penalty for such offenses was made
death, with confiscation of the criminal's property, and a
reward was offered to any person informing the authorities
regarding any such criminal transaction. To reach the climax
of ferocity, the Convention decreed, in May 1794, that the
death penalty should be inflicted on any person convicted of
"having asked, before a bargain was concluded, in what money
payment was to be made." -Fiat Money Inflation in France by
Andrew Dickson White, p. 78 & 79

The escalation in tactics demonstrates that even such draconian
"legal tender" measures as tried by the French simply don't work.
White goes on to tell us however, "The great finance minister,
Cambon, soon saw that the worst enemies of his policy were gold
and silver. Therefore it was that, under his lead, the Convention
closed the Exchange and finally, on November 13, 1793, under
terrifying penalties, suppressed all commerce in the precious
metals."

The real answer for the inflationists is, then, to get the
alternatives to paper out of circulation so they can't work as
automatic barometers, exposing the inflation scam. This is one
root cause as to why the "central banks," vehemently opposed by
giants like Thomas Jefferson and Andrew Jackson, still hold such
a large percentage of above ground gold --- it's not so they can
use it, it's so we can't.

You can see the footprints of the U.S. legal tender laws by
looking at any current $ denominated bill. On the face to the
upper left you will find, "This note is legal tender for all
debts public and private." The invisible ink reads, "Whether you
like it or not, sucker."

The Federal Reserve Act set up a banking cartel composed of what
had been competitors. (For a well researched, eye-opening expose
of how this was engineered, read "The Creature From Jeckyl
Island" by Ed Griffin) The Fed promised to stop "bank runs."
Previous to instituting the Federal Reserve in 1913, the very
worst year for bank runs had seen less than a 5% bank failure
rate. Twenty years later in 1933, thanks to the Fed, about HALF
of the nation's banks were unsound. To bail them out, it was
"necessary" to declare a bank holiday -- and incidentally, to
make gold ownership by Americans illegal.

Remember the "great" French finance minister, Cambon, recognizing
gold and silver as his greatest enemies? The American banksters
obviously did. In 1933 they and the U.S. government made gold a
controlled substance. Like cocaine or heroin, they made it
illegal for Americans to own gold -- and they got away with it.

Since Roosevelt pulled the trigger on stealing the gold on April
5, 1933 (by issuing infamous Executive Order No. 6102), less than
three months after taking office, it seems obvious to me that he
was merely a cats-paw and the gold-stealing had been planned and
set in motion much earlier, probably with the passage of the
Federal Reserve Act 20 years earlier.

On January 14, 1961 beloved president Dwight David Eisenhower
extended the ban, making it illegal for American citizens to own
gold even if held outside U.S. jurisdiction. Enforcing such a
law, was as in most cases, impossible without the cooperation of
the victim. As late as 1969 Americans, "the freest people in the
world," were still being jailed for owning too much gold without
a license. Collusion between banks and government? What do YOU
think?

... Though an indispensable requirement for the functioning
of an extensive order of cooperation of free people, money
has almost from its first appearance been SO SHAMELESSLY
ABUSED BY GOVERNMENTS THAT IT HAS BECOME THE PRIME SOURCE OF
DISTRUBANCE OF ALL SELF-ORDERING PROCESSES in the extended
order of human cooperation. The history of government
management of money has, except for a few short happy
periods, been one of incessant fraud and deception. In this
respect, governments have proved far more immoral than any
private agency supplying distinct kinds of money in
competition possibly could have been. -Economics Nobel
Laureate F. A. Hayek, _THE FATAL CONCEIT The Errors of
Socialism_, [Cap. emphasis added] (Chicago: The University
of Chicago Press 1988), p. 103.

When there was a gold standard, people weren't forced to put
their "hard earned" in the hands of banks, fund managers, or
other professional gamblers in order to just beat "inflation."
On the gold standard, there WASN'T any "inflation." Rather than
putting your savings in the hands of those professional gamblers,
you had the option to bury your gold currency in a coffee tin in
the backyard, etc., and have it gradually appreciate in value
without their help. When I explained this fact of the gold
standard era to a friend lately, he simply didn't believe me.
Amazing!

In short there was not, as people commonly assume, a failure of
the gold standard, in fact the reason it was done away with is
that it was too successful at protecting people from currency
depreciation ("inflation") caused by the banker-government axis.

Originally this was a straight forward scheme to institute paper
money to the benefit of banksters and their government cohorts,
and at the expense of everyone else. Various intellectuals
signed on (Maynard Keynes) or were bought to justify and explain
-- without telling the truth, of course. Keynes, I believe, was
his own dupe. He, among other well-meaning "economists" of the
era really believed they could improve on having that "barbarous
relic," gold, as a master. Many probably believed they could
improve on the economic process, which no one knew at the time
was a "complex phemomenon," not ameniable to understanding, let
alone central control. The ultimate proof that such attempted
control screws things up was the complete disintegration of the
"centrally planned" Soviet economy, which is still in process.

But even lesser control attempts, as practiced in US "capitalism"
(currently a "gentle" fascism) doesn't work very well either, as
I believe, we're about to find out. The well-intentioned failed
to take into account the stubborn "inflation" (currency
depreciation) which bankers and governments simply can't resist
causing as they incessantly create just a little extra "for the
gipper."

COMING (perhaps) PART II: Godzilla! (What is the result of the
creation of a gargantuan accumulation of so-called "megabyte
money" that has now dwarfed the relatively puny supply of
physical PAPER money?)

megatron
(10/15/1999; 20:16:14 MDT - Msg ID: 16514)
162nickel/voisey bay
Good luck. Very little 'practical, how to' info is passed along here. Lot's of 'on the money' theoretical though.
Al Fulchino
(10/15/1999; 20:40:55 MDT - Msg ID: 16515)
Contest Entry
It is so very easy to be ignorant. Pain and injustice are two things that will bring you a crossroads. Ignorance? Definitely, more peaceful. Indeed!. But, very costly, unless you enjoy pain and injustices. A man finds that at a certain point in his life, he must take stock of many things. Spriritual, physical,and where he has been and where he is going. Part of that analysis will of course be financial in nature. This forum was found at such a time in my life. When I visit, to read, to learn I am challenged to drop, to value, or enforce my paradigms and beliefs.

I am an equal here , yes a real equal in opportunity should I choose to pay attention and understand. In this forum, its unique group of posters, come by each day and unannounced, they drop their ideas and knowledge on the table for free. They let me pick it up, pinch it, shake it, and otherwise examine it for its value. At the end of the day, I often have something worth more than gold or silver.
Al Fulchino
(10/15/1999; 20:45:17 MDT - Msg ID: 16516)
Journeyman re 16513
Thanks for the great post! If anyone needs to understand what disassociating gold from paper means, they only need read your post. I make an early nomination for this forum's Hall.
Roark
(10/15/1999; 21:34:07 MDT - Msg ID: 16517)
Contest
>-----$336.00----->

Greetings to all members of the Round table.

Thanks to each of you who post on this forum, just for being here and sharing your wisdom at a time when wisdom is in short supply. Truly, for me, a beacon in the night.

I discovered the USA Gold Forum back in July, right around the time of that auction in London. You know, the one that sent the price of gold down another notch from $264 to $257 an ounce. Two days prior to the auction, I "went long" one futures contract. No big deal, I just wanted to be on the train before it left the station.

On the morning of the auction, I received a phone call from my broker at 6 am, explaining how the plummeting price of gold had shot right past my stop loss at $261, and that my contract had been sold. I was a greenhorn, you see, and a Ken Roberts disciple-in-the-making to boot. Didn't know about any pending auction, or even the purpose of such a thing. Apparently my broker didn't either since he made no mention of it at the time of my purchase. Rest assured, I was only one in a long parade of gold believers bushwhacked by a (paper) market full of nasty surprises. For me, it worked out okay, as the price I paid for what followed was indeed a bargain. Looking back, that auction became a pivotal point in my life, although I didn't know it at the time. Deep inside, something asleep had awakened. The quest had begun.

I came upon the Round Table, and listened. At first I had difficulty with the lessons, but as the days and weeks passed, I began to "get it" as the dots connected, bringing a picture into sharp � and disturbing � focus.

How lucky I feel to be alive at this critical juncture in history. It appears that right now, everything is at stake. All the chips are on the table, all the raises called. Very soon now, it will be time to see the cards. Maybe that is why I chose to be here at this time, to watch it all unfold, to witness and to learn. What an opportunity!

It should come as no surprise that gold sits at the heart of current events (the tip-off is that the word "gold" is almost never seen today in mainstream print). After all, it is gold (and guns) in the hands of rational minds which ensure the self-evident rights of every individual. And safeguards the sovereignty of every individual against those who would eradicate forever such notions as personal choice and freedom of movement as established by our forefathers.

Today I watched the Dow take another dive, and I can envision the army of Wall Street brokers calling their clients with the good news of the tremendous "buy signal." And buy they will, just a little while longer, I think. These are real people � trusting people � husbands and fathers whose children depend upon the decisions they make. But I wonder how many of these brokers anymore think about the lives they alter with the advice they dispense.

A long time ago I sold real estate. Before I was allowed to do so, I had to acknowledge a fiduciary responsibility to my clients, which meant I would always strive to act on their behalf, always with their interests placed before mine. I do not know if securities and commodities brokers today are held to any such standard. From what I have observed in the media, it appears that fiduciary responsibility has fallen by the wayside.

Roughly one month prior to gold's big move on that unforgettable and sleepless night a few weeks back, I wrangled with my broker over two measley gold options for the month of June in the year 2000. Silly me, I wanted to buy them, you see, because my gut said gold was getting restless, and because these long-neglected options lay dormant at the ridiculously undervalued price of $20 apiece. With as much force and righteous indignation as he could muster, my broker attempted to dissuade me from so wreckless a course of action. "But I hardly think that $40 is much of a risk, even for a smallfry like myself," I told him. I actually had to hang up, then call back later and purchase the options through a more assistive and less commandful broker. (At one point several days ago, those foolish options were trading at $1,800 apiece! Such is the power of gold.)

In the language of the day, I am now a goldbug, if only recently. Sure, intuitively and oh so vaguely, I recognized gold the barbarous relic for what it really is, but only recently acted upon that small whisper. For many of you, the night has been long. Because you have remained true, I stand in awe.

Soon, very soon.
Goldy Locks Guy
(10/15/1999; 21:35:58 MDT - Msg ID: 16518)
My prediction for Oct 22

>>>>>>> \\\\\\\\
>>>>>>>>>>>=============== 328.50 ===============>>>>>>>>>>
>>>>>>> ////////

OK....is that purty or what?

Yep...I'm a newbie..and loving it! (I'm also a man of 35 if your interested) And I want to win that Gold piece. I saw the limerick that our other precious poster wrote and just felt inspiration swell inside of me....So, for your entertainment alone, I offer you my little ryhme. (ladies, get your tissues before going any further...it's a real tear jerker)

There once was a people empassioned
Who longed to see justice for Gold
They were called barbaric and old fashioned
"You're crazy" by most they were told

But steadfast in faith they believed
As Wall Street continued to boast
That once the BULL was conceived
The stock market would surely would roast

The fire would not be stopped
The dollar would look like a ghost
Investors realize their fortunes are cropped
Their savings nothing but toast

But there's a lesson you can learn
Even now it's not too late
If from Bubbles and Bonds you quickly turn
Great wealth can be your fate

So liquidate your stock
Buy some gold that's tried and true
It's a shelter from the storm
That's just started passing through

I just love this forum and have signed up because maybe I won't have to hop all over the internet searching for miniscule tidbits about the markets and what's going on.

I like this forum also because we all have a common bond...and for the most part that makes us friends..right? I've been trading in precious metals all year and have loved it, even in the shakey times, and have always believed that Gold will play a major part in the world once again..(After everyone has borrowed and leveraged their life away, but still...)

Anyway, I'm just hoping I can come up with some more cash soon for getting more gold at this current price....(315 + or -)

I must apologize to everyone for guessing the correct price for gold on the 22nd...(they might as well go ahead and send me the prize now.) Perhaps after the POG rises alittle more, you all can come to TN and I'll treat you to dinner...and maybe a desert.

OK...enough is enough...It's late and I feel dangerous.

Again, thanks to all of you poster who know more than I do. I appreciate all the insight, right or wrong...it makes for a well rounded intellect in the precious metals market.

Take care and keep up the great posts!

Goldylocks







Goldy Locks Guy
(10/15/1999; 21:36:34 MDT - Msg ID: 16519)
My prediction for Oct 22

>>>>>>> \\\\\\\\
>>>>>>>>>>>=============== 328.50 ===============>>>>>>>>>>
>>>>>>> ////////

OK....is that purty or what?

Yep...I'm a newbie..and loving it! (I'm also a man of 35 if your interested) And I want to win that Gold piece. I saw the limerick that our other precious poster wrote and just felt inspiration swell inside of me....So, for your entertainment alone, I offer you my little ryhme. (ladies, get your tissues before going any further...it's a real tear jerker)

There once was a people empassioned
Who longed to see justice for Gold
They were called barbaric and old fashioned
"You're crazy" by most they were told

But steadfast in faith they believed
As Wall Street continued to boast
That once the BULL was conceived
The stock market would surely would roast

The fire would not be stopped
The dollar would look like a ghost
Investors realize their fortunes are cropped
Their savings nothing but toast

But there's a lesson you can learn
Even now it's not too late
If from Bubbles and Bonds you quickly turn
Great wealth can be your fate

So liquidate your stock
Buy some gold that's tried and true
It's a shelter from the storm
That's just started passing through

I just love this forum and have signed up because maybe I won't have to hop all over the internet searching for miniscule tidbits about the markets and what's going on.

I like this forum also because we all have a common bond...and for the most part that makes us friends..right? I've been trading in precious metals all year and have loved it, even in the shakey times, and have always believed that Gold will play a major part in the world once again..(After everyone has borrowed and leveraged their life away, but still...)

Anyway, I'm just hoping I can come up with some more cash soon for getting more gold at this current price....(315 + or -)

I must apologize to everyone for guessing the correct price for gold on the 22nd...(they might as well go ahead and send me the prize now.) Perhaps after the POG rises alittle more, you all can come to TN and I'll treat you to dinner...and maybe a desert.

OK...enough is enough...It's late and I feel dangerous.

Again, thanks to all of you poster who know more than I do. I appreciate all the insight, right or wrong...it makes for a well rounded intellect in the precious metals market.

Take care and keep up the great posts!

Goldylocks







Goldy Locks Guy
(10/15/1999; 21:37:09 MDT - Msg ID: 16520)
My prediction for Oct 22

>>>>>>> \\\\\\\\
>>>>>>>>>>>=============== 328.50 ===============>>>>>>>>>>
>>>>>>> ////////

OK....is that purty or what?

Yep...I'm a newbie..and loving it! (I'm also a man of 35 if your interested) And I want to win that Gold piece. I saw the limerick that our other precious poster wrote and just felt inspiration swell inside of me....So, for your entertainment alone, I offer you my little ryhme. (ladies, get your tissues before going any further...it's a real tear jerker)

There once was a people empassioned
Who longed to see justice for Gold
They were called barbaric and old fashioned
"You're crazy" by most they were told

But steadfast in faith they believed
As Wall Street continued to boast
That once the BULL was conceived
The stock market would surely would roast

The fire would not be stopped
The dollar would look like a ghost
Investors realize their fortunes are cropped
Their savings nothing but toast

But there's a lesson you can learn
Even now it's not too late
If from Bubbles and Bonds you quickly turn
Great wealth can be your fate

So liquidate your stock
Buy some gold that's tried and true
It's a shelter from the storm
That's just started passing through

I just love this forum and have signed up because maybe I won't have to hop all over the internet searching for miniscule tidbits about the markets and what's going on.

I like this forum also because we all have a common bond...and for the most part that makes us friends..right? I've been trading in precious metals all year and have loved it, even in the shakey times, and have always believed that Gold will play a major part in the world once again..(After everyone has borrowed and leveraged their life away, but still...)

Anyway, I'm just hoping I can come up with some more cash soon for getting more gold at this current price....(315 + or -)

I must apologize to everyone for guessing the correct price for gold on the 22nd...(they might as well go ahead and send me the prize now.) Perhaps after the POG rises alittle more, you all can come to TN and I'll treat you to dinner...and maybe a desert.

OK...enough is enough...It's late and I feel dangerous.

Again, thanks to all of you poster who know more than I do. I appreciate all the insight, right or wrong...it makes for a well rounded intellect in the precious metals market.

Take care and keep up the great posts!

Goldylocks







Goldy Locks Guy
(10/15/1999; 21:40:05 MDT - Msg ID: 16521)
My prediction for Oct 22

>>>>>>> \\\\\\\\
>>>>>>>>>>>=============== 328.50 ===============>>>>>>>>>>
>>>>>>> ////////

OK....is that purty or what?

Yep...I'm a newbie..and loving it! (I'm also a man of 35 if your interested) And I want to win that Gold piece. I saw the limerick that our other precious poster wrote and just felt inspiration swell inside of me....So, for your entertainment alone, I offer you my little ryhme. (ladies, get your tissues before going any further...it's a real tear jerker)

There once was a people empassioned
Who longed to see justice for Gold
They were called barbaric and old fashioned
"You're crazy" by most they were told

But steadfast in faith they believed
As Wall Street continued to boast
That once the BULL was conceived
The stock market would surely would roast

The fire would not be stopped
The dollar would look like a ghost
Investors realize their fortunes are cropped
Their savings nothing but toast

But there's a lesson you can learn
Even now it's not too late
If from Bubbles and Bonds you quickly turn
Great wealth can be your fate

So liquidate your stock
Buy some gold that's tried and true
It's a shelter from the storm
That's just started passing through

I just love this forum and have signed up because maybe I won't have to hop all over the internet searching for miniscule tidbits about the markets and what's going on.

I like this forum also because we all have a common bond...and for the most part that makes us friends..right? I've been trading in precious metals all year and have loved it, even in the shakey times, and have always believed that Gold will play a major part in the world once again..(After everyone has borrowed and leveraged their life away, but still...)

Anyway, I'm just hoping I can come up with some more cash soon for getting more gold at this current price....(315 + or -)

I must apologize to everyone for guessing the correct price for gold on the 22nd...(they might as well go ahead and send me the prize now.) Perhaps after the POG rises alittle more, you all can come to TN and I'll treat you to dinner...and maybe a desert.

OK...enough is enough...It's late and I feel dangerous.

Again, thanks to all of you poster who know more than I do. I appreciate all the insight, right or wrong...it makes for a well rounded intellect in the precious metals market.

Take care and keep up the great posts!

Goldylocks







RossL
(10/15/1999; 21:42:02 MDT - Msg ID: 16522)
Goldy Locks Guy
That's awesome!
Even if you are way too low on the prediction!
summicron
(10/15/1999; 21:43:38 MDT - Msg ID: 16523)
My guess for Oct. 22:
I think the gold shorts are going to be desparately selling all next week and they are going to drive the price down to

$308.75

on Oct. 22, but it will quickly rise after that to its proper level of $389.50.
Goldy Locks Guy
(10/15/1999; 21:44:32 MDT - Msg ID: 16524)
My guess for OCT 22


>>>>>>> \\\\\\\\
>>>>>>>>>>>=============== 328.50 ===============>>>>>>>>>>
>>>>>>> ////////

OK....is that purty or what?

Yep...I'm a newbie..and loving it! (I'm also a man of 35 if your interested) And I want to win that Gold piece. I saw the limerick that our other precious poster wrote and just felt inspiration swell inside of me....So, for your entertainment alone, I offer you my little ryhme. (ladies, get your tissues before going any further...it's a real tear jerker)

There once was a people empassioned
Who longed to see justice for Gold
They were called barbaric and old fashioned
"You're crazy" by most they were told

But steadfast in faith they believed
As Wall Street continued to boast
That once the BULL was conceived
The stock market would surely would roast

The fire would not be stopped
The dollar would look like a ghost
Investors realize their fortunes are cropped
Their savings nothing but toast

But there's a lesson you can learn
Even now it's not too late
If from Bubbles and Bonds you quickly turn
Great wealth can be your fate

So liquidate your stock
Buy some gold that's tried and true
It's a shelter from the storm
That's just started passing through

I just love this forum and have signed up because maybe I won't have to hop all over the internet searching for miniscule tidbits about the markets and what's going on.

I like this forum also because we all have a common bond...and for the most part that makes us friends..right? I've been trading in precious metals all year and have loved it, even in the shakey times, and have always believed that Gold will play a major part in the world once again..(After everyone has borrowed and leveraged their life away, but still...)

Anyway, I'm just hoping I can come up with some more cash soon for getting more gold at this current price....(315 + or -)

I must apologize to everyone for guessing the correct price for gold on the 22nd...(they might as well go ahead and send me the prize now.) Perhaps after the POG rises alittle more, you all can come to TN and I'll treat you to dinner...and maybe a desert.

OK...enough is enough...It's late and I feel dangerous.

Again, thanks to all of you poster who know more than I do. I appreciate all the insight, right or wrong...it makes for a well rounded intellect in the precious metals market.

Take care and keep up the great posts!

Goldylocks
Al Fulchino
(10/15/1999; 21:50:55 MDT - Msg ID: 16525)
oooops how about $$$388.50$$$
That would be a decent number
Chris Powell
(10/15/1999; 21:54:06 MDT - Msg ID: 16526)
Leigh, about Le Metropole Cafe....
www.lemetropolecafe.comYou can reach the Cafe's Bill Murphy
at Midasnh@aol.com and he'll endeavor
to fix your subscription problem
right away. I passed along to him
tonight the word of your problem and
he was very distressed. Please write
him ASAP.

Chris Powell, Secretary
Gold Anti-Trust Action Committee Inc.
RossL
(10/15/1999; 21:54:55 MDT - Msg ID: 16527)
Goldy Locks Guy
It's an awesome poem but you don't need to post it 5 times!
Goldy Locks Guy
(10/15/1999; 21:56:30 MDT - Msg ID: 16528)
OCT 22



>>>>>>> \\\\\\\\
>>>>>>>>>>>=============== 328.50 ===============>>>>>>>>>>
>>>>>>> ////////

OK....is that purty or what?

Yep...I'm a newbie..and loving it! (I'm also a man of 35 if your interested) And I want to win that Gold piece. I saw the limerick that our other precious poster wrote and just felt inspiration swell inside of me....So, for your entertainment alone, I offer you my little ryhme. (ladies, get your tissues before going any further...it's a real tear jerker)

There once was a people empassioned
Who longed to see justice for Gold
They were called barbaric and old fashioned
"You're crazy" by most they were told

But steadfast in faith they believed
As Wall Street continued to boast
That once the BULL was conceived
The stock market would surely would roast

The fire would not be stopped
The dollar would look like a ghost
Investors realize their fortunes are cropped
Their savings nothing but toast

But there's a lesson you can learn
Even now it's not too late
If from Bubbles and Bonds you quickly turn
Great wealth can be your fate

So liquidate your stock
Buy some gold that's tried and true
It's a shelter from the storm
That's just started passing through

I just love this forum and have signed up because maybe I won't have to hop all over the internet searching for miniscule tidbits about the markets and what's going on.

I like this forum also because we all have a common bond...and for the most part that makes us friends..right? I've been trading in precious metals all year and have loved it, even in the shakey times, and have always believed that Gold will play a major part in the world once again..(After everyone has borrowed and leveraged their life away, but still...)

Anyway, I'm just hoping I can come up with some more cash soon for getting more gold at this current price....(315 + or -)

I must apologize to everyone for guessing the correct price for gold on the 22nd...(they might as well go ahead and send me the prize now.) Perhaps after the POG rises alittle more, you all can come to TN and I'll treat you to dinner...and maybe a desert.

OK...enough is enough...It's late and I feel dangerous.

Again, thanks to all of you poster who know more than I do. I appreciate all the insight, right or wrong...it makes for a well rounded intellect in the precious metals market.

Take care and keep up the great posts!

Goldylocks
Tanglewild
(10/15/1999; 22:09:30 MDT - Msg ID: 16529)
contest entry
>>>>-----$319.25-----$>

I am just figuring that the same type of game will be played for the next five days as has been played for the last little while so I picked a middle of the road figure. Of course if I'm a hundred shy I won't mind losing this contest..;-) Good luck to all.
YGM
(10/15/1999; 22:20:28 MDT - Msg ID: 16530)
Hard to believe
as a very long time reader here that the writings appearing constantly, could get any better, and yet they do. I hate to miss a day!---Thanks--YGM
Gold Power
(10/15/1999; 22:34:07 MDT - Msg ID: 16531)
nickel162 & gold stocks
nickel62,

The Inco deposit in Voisey Bay is still tied up in legal problems, or permitting problems. The Labrador government won't allow things to go forward unless Inco meets certain criteria that are too costly and ridiculous.

As for Golden Star, I saw where some guy named The Preacher gave it a going over on Kitco last night. I thought he did a fairly good job. He said that its current mine has not been making money but brought the company to the brink of bankruptcy, the new mine in Ghana had a mine life of less than two years, and its other projects are exploration with limited chances for success.

Freeport McMoRan (FCX) has always been penalized by the market because it has only one mine. And when you have only one mine, if something happens there, you're in big trouble.

Also, the mine is in Indonesia. The political risk is too great for me.

As for Atna, I haven't heard about it lately, I've never heard that the metallurgical problem it had has been solved. The stock made a huge runup on its discovery, maybe three or four years ago. Then, as it developed, and the metallurgical problems of the ore became known, down went the shareprice.

I haven't heard anything about it in a while.

I don't know anything about Dayton except that the company's story fell apart more than two years ago and I haven't heard any news about it being put back together.

If anyone has something, please let us hear it.

I don't think you'll do as well as you can with these stocks. You can buy mines now for less money than it costs to find new ones. So my strategy is to buy companies with deposits that are selling for pennies on the dollar.

Gold Power
Bonedaddy
(10/15/1999; 23:12:30 MDT - Msg ID: 16532)
war?
Yes, there will be war. War has been around about as long as mankind. (You historians feel free to jump in here any time if you see me needin' help.) The cause of war is people wanting what they can't have. So they invent reasons to kill other people and take what they have. Religion plays a big part in war because people always want to claim that God is on their side. If your government wants to murder somebody, they can tell the world that they did it because it was "right in the eyes of God." If an individual does something like that, they give him a name like " Son of Sam", and put him away for life. (Unless of course he's President or something.) I always figured that God did a pretty fair job of killin' his own enemies, he probably doesn't need any help from the rest of us.
So what does all this have to do with GOLD? When all the paper money "burns", to use the words of ANOTHER, those left holding gold will have a price on their head equal to the gold in their hands. Think about it, paper promises are no longer good in that time. Only gold in the hand will be seen as wealth. That is true now, only most people haven't figured it out yet. When an angry bunch of spoiled "western thinkers" (I'm not talkin'about John Wayne fans) decides that God wants them to have your gold, so they can "do the right thing" with it, well.... it will get "interesting". We will be on the defensive, we have no choice in the matter. They are going to kill, rape, pillage, torture, (ect.)us whether we give them every last ounce in our possession or not. Maybe thats what ANOTHER meant when he said "gold will go to $30,000, but you won't like it." So, when that day comes, Tally Ho, gallant Knights! And take a cue from Poe, "Ride, boldy ride, the shade replied, if you seek for Eldorado!"
ORO
(10/15/1999; 23:13:09 MDT - Msg ID: 16533)
Journeyman
Couldn't agree more.

But take note that bankers are taking gold to this dance as well. Watch out when dating someone bigger's friend.
Chris Powell
(10/15/1999; 23:20:49 MDT - Msg ID: 16534)
Gold shareholders, battle stations on Sunday morning
http://www.egroups.com/group/gata/256.html?An alert from GATA. Please be
ready to act on forthcoming orders.
THX-1138
(10/15/1999; 23:25:54 MDT - Msg ID: 16535)
>>>>=====$400=====>

My number was chosen because of personnal pride. I bet a guy at work that if the price of gold never reached $400 by the end of the month of October, I would buy him a stuffed crust pizza at Pizza Hut. If the price touched $400 at anytime, I wouldn't buy him a pizza.

Some other reasons are the actual manipulation of the stock market and gold market by the Fed.
Y2K uncertainty coming.
Euro fighting with U.S. dollar for reserve currancy status.
Gold is pretty.
Stock Market selloff.

I also want to make another guess just to see if anyone agrees. DJIA will be at 9640 +or- 30 by next friday.
AREM
(10/16/1999; 02:51:08 MDT - Msg ID: 16536)
Fight Back Now - Before It's Too Late!
http://executiveorders.org/With the looming market crash and Y2K ahead of us, there is a high probability that our government will be taking drastic steps to curtail our freedoms, confiscate our gold and our guns and maybe even other assets. However, it is doubtful that these tyrannical actions will be enacted by congress. Most likely they will be done by our benevolent President using Executive Orders. The following are a few examples of Clinton's Executive Orders.

Presidential Decision Directive 25 enables the U.S. military to be moved under U.N. command without congressional approval.

Executive Order 12919 directs cabinet officials to take over all aspects of the economy during a declared state of emergency. It effectively puts the entire United States under the control of the Federal Emergency Management Agency. Currently, the U.S. operates under 14 states of emergency.

Executive Order 13133, titled "Working Group on Unlawful Conduct on the Internet," was issued Aug. 7, 1999, stipulating that a group of agency heads will define "unlawful conduct."
President Clinton has signed over 300 executive orders since assuming office in January 1993. The number doesn't include the presidential directives (which are kept secret), the various initiatives -- such as the Clean Water Initiative -- that also provide a way for the administration to make end runs around Congress and justify federal intervention in state and local governments.

By using executive orders and declarations of emergency, President Clinton is vastly increasing the power of the national government over us. He is also concentrating more power in his hands alone by taking the legislative power that rightfully belongs to the 535 men and women of the United States Congress.

With each stroke of his pen, he is effectively rewriting our Constitution. He is, with each stroke of his pen, effectively erasing the sacrifices made by American troops throughout our country's history who defended � not rewrote � our Constitution

"The only solution is a comprehensive bill -- authored by Rep. Ron Paul. It is HR 2655 -- the Separation of Powers Restoration Act."

Paul introduced HR 2655 this July, with co-author Jack Metcalf, R-Wash. It builds on House Concurrent Resolution 30 which Metcalf introduced in March, but which failed to get out of committee. HR 2655 is far broader than its predecessor.

If enacted, HR 2655 would:


Repeal the War Powers Resolution and end all states of national emergency.

Require that treaties and executive agreements purporting to assign powers not amongst those specifically granted to the federal government by the Constitution would be non-binding.

Require that the president, in issuing executive orders, cite the specific congressional enactment and the constitutional authority on which it's based.

Prohibit delegation of power to a foreign government or international body when no such delegating authority exists under the Constitution.

Grant legal standing to individual members of Congress, state officials and private citizens who believe a presidential executive order is unconstitutional.
Now, before it is too late, each of us can help to get this House Resolution passed. Click on to the above Web site. It will make it easy to find out if your congressman is a co-sponsor if this resolution, and if not, help you to send him/her an e-mail message urging this action.

We're not helpless sheeple, we've got the Internet!!!

AREM
elevator guy
(10/16/1999; 04:03:42 MDT - Msg ID: 16537)
Earthquake!
We just had a big earthquake out here in the LA area. It struck about 2:45 local time. As I am writing this, the house is rolling once more, during an aftershock. What a wake-up call! Did anyone else feel it?
elevator guy
(10/16/1999; 04:05:04 MDT - Msg ID: 16538)
Earthquake!
Did I mention that it was 2:45 in the morning? (Middle of nappy time)
Leigh
(10/16/1999; 05:32:55 MDT - Msg ID: 16539)
AREM
Thanks for your link to executiveorders.org. I used it this morning to send an e-mail to my Representative. To all: The website is very easy and FUN to use, and this is an extremely important issue for us to pursue.
Canuck
(10/16/1999; 05:54:50 MDT - Msg ID: 16540)
To: Hipplebeck, Journeyman, PH in LA, Goldspoon, Leigh & Goldspoon

By now you all know that the U.S. Producer Price Index
figures released today were far more bullish for gold
than anyone imagined. The dollar was beat up and the
equity markets were trounced around the world, yet gold
was allowed to rally only $2 by certain malign forces.
If that did not hit you over the head today about what
we are dealing with, get a checkup with a top brain
surgeon.

Our camp has been victimized far too long. I would like
to echo our sentiments:

WE ARE MAD AS HELL AND WE ARE NOT GOING TO TAKE IT
ANYMORE.

The Gold Anti-Trust Action Committee certainly will not
stand for the government bailout of the cartel that has
ruined so many companies, shareholders, and miners to
suit its own greed.







Thanks for the words of encouragement last night, it helped.


Farfel,

You nailed it pal!! Excerpt from Gata Msg #256
-----------------------------------------------------
At 7:50 a.m. Central Daylight Time on Sunday morning
GATA and the "right flank" will make an important
announcement to every gold company shareholder in the
world.

-END-
-----------------------------------------------------

I had a feeling that my ranting and raving last night was
a waste of energy. The Gata msg above contains a paragraph
or two of the 'unexplained' non-movement of gold yesterday.

All,

Saturday morn 7:45 am Eastern, looks like a cool, crisp golden day. Have a nice week-end!!

Canuck
Goldspoon
(10/16/1999; 08:00:30 MDT - Msg ID: 16541)
Leigh...thanks for the help
Leigh says....
Doc Goldspoon
Dear Dr. Goldspoon: It's CANUCK, not me, who has a tummy ache tonight. He's probably been feasting on his Y2K stash of candy bars.

Goldspoon says...
Leigh, thanks for being my wonderfull stage assistant!!! and for helping me demonstrate to others and provide some levity as well. i know you understand and are at peace...i just enjoy your company on stage...you are always frank and say exactly what is on your mind... i find this refreshing... You make me and many others smile....My message was aimed at Canuck,Canami and others....sorry if i took to many liberties...

Profound wisdom from Leigh...
"Owning gold is a very comforting thing. All of us can rest easy tonight, next week, and throughout whatever Y2K brings knowing that we have coins that are "payment-in-full." They're also extremely beautiful and desirable. I truly feel for those who are suffering and fearful tonight, but I can't help wondering whether even now they would believe the truth about gold. You know, I think the problem with a lot of people is that they have no imagination -- they can't imagine a world that might be changed at all from what it's like now. The world has to actually change and they have to see it for themselves before they can even begin to believe what we're trying to tell them -- and then it'll be too late."
Leigh
(10/16/1999; 08:01:05 MDT - Msg ID: 16542)
Chris Powell
Chris, thank you to you and Bill Murphy. I'm glad to be back in lemetropolecafe.com. You guys are heroes, and I hope you have a wonderful weekend!
Goldspoon
(10/16/1999; 08:09:38 MDT - Msg ID: 16543)
2nd nomination
Journeyman (10/15/99; 19:47:38MDT - Msg ID:16513)

Congradulations... Sir Journeyman.. your observations on history are enlightening and well written.. let it be known that i also wish to capture this nugget in the Hall of Fame...
Phos
(10/16/1999; 08:16:36 MDT - Msg ID: 16544)
Contest
>>>>=====$308=====>
It's only a guess. The stock market seems to be coming down with a bad case of bubble inFLUtion and is starting to look a little pale. Dr Greenspan had provided a couple of vaccinations to avert this but it was too little, too late. He wasn't even sure that there was any bubble inFLUtion around. But it looks like there was some just around the corner, and the stress of all that bubbling had damaged the immune system and it looks like the disease might be progressing. How virulent is this version? Another vaccination now could do more damage than good and put the patient in the hospital, so the good doctor has put it off.
Last time (1929) the patient ended up in intensive care. Now, poor old gold had just started getting better after a long bout of shorting fever (with extensive bloodletting/leasing). The CB quacks bled the poor devil until he was a basket case but finally decided that it wasn't good policy, the patient might not improve, and removed the catheter. Now that he is finally in recovery, a
new infection comes along to challenge his wasted body. And he is still fighting off the shorting fever. I fear he may catch the inFLUtion from the other patient for a while but I am sure he will strengthen later and grow into a strapping lad we can all be proud of. Mind you, I hope he doesn't catch it at all and just keeps improving.
Goldspoon
(10/16/1999; 08:19:53 MDT - Msg ID: 16545)
ORO
Congradulations Sir.. on your book aspirations... You have a keen mind with much to share... Your book would be a slow reader though... You compress so much knowledge in such little space... This causes me stop and ponder on my own with each new concept...Elaberate more on the concepts (assume i know nothing of which you speak)...
Just constructive criticism... i will purchace a copy and read happily cover to cover... advice taken or not...
Best Wishes...
Goldspoon
Trebor
(10/16/1999; 08:39:54 MDT - Msg ID: 16546)
Test
Test
Bonedaddy
(10/16/1999; 08:42:29 MDT - Msg ID: 16547)
Arem, Thanks for the link!
Everyone, please, we will have to fight this battle eventually. Tactically, we have a much better position now. Please use the link to contact your member of Congress. Then forward the link to as many friends, in as many different states as you can. This is a referendum on the clinton presidency and all presidents to follow. One man cannot control this much power. I guarantee you that your lives will be impacted by your choice, for better or for worse. And probably sooner than you think. You're already "marked men", the powers know much more about you than you would wish to believe. The UN will come for your gold, standing in your front yard, shouting orders at you in a forigen tongue. Begin the fight, here and now!
Goldspoon
(10/16/1999; 09:01:03 MDT - Msg ID: 16548)
Good Doctor Phos....
Your Prognosis is a most interesting one...obviously from one of the finer schools of thought and advanced Medical Science and Learning....

Me thinks Doctor Greenspan has mistreated this paitent to such an extent as to constitute Malpractice??? The medications he has perscribed only served in hiding the symptoms of a high fever inflation virus.. All the while an infection was allowed to rage and get progressively more dangerous... He saw troubling warning signs but was preplexed as to what to do..He then tried to talk the patient into being well...

Dr. Greenspan said to the patient "It is obvious you are delerrious and suffreing from irrational exeuberance"...
However my diagnostic tools can pick up no signs of inflation.... this puzzles me.. it must be a new strain and it's detection is difficult.... However i fear you are sick none the less... So take a little interest rate hike and call me in the morning....and try not to get to excited"..

Doc Goldspoon says..
The paitent will suffer gravely from the inaction of DR. Greenspan... he was correct.. it is a different strain of the inflation virus... it is systemic.. and will agressivly flare up all over the patients body at once...it is a sneaky strain..positioning itself under the nose of DR. Greenspan masked by higher productivity, economic relocations, company restructuring and the Asian contagin... The mistreatment by Dr. Greenspan of the disease may prove to be fatal...the patient is very ill and in deperate need of an imeadiate Gold shot....Doctor??
watcher
(10/16/1999; 09:01:16 MDT - Msg ID: 16549)
hedgebooks/anglogold
Hi all,

Yesterdays press announced that anglogold would not be settling its hedge books at this time .The reason being that they think the prices at time in gold are in their opinion unsustainable.It seems clear now that they have come up with other arrangements to now offset the risk of an upside move in POG.To see what happen to ashanti and remain that hedged would not make sense. A move to a 600 dollar pog would be destructive if not a death blow.
Barrick gold has also declared they would not cover and that all hedge books are not created equal.Sounds like an excited school girl who cannot yet reveal who her new boyfriend is but just can't keep quiet.

One answer is that they are not worried about their hedge books because their banker and boyfrien is the fed
The fed in allowing or making the POG go up has exposed the vulnerability of hedging such as ashanti gold and is arranging to buy their hedge book in an arranged deal.
If the offer they are proposing is to buy their book for a future delivery and to protect them from the downside this would fill their coffers with gold with future supply
for years to come as they go from company to company making these arrangements. This would be a good time and price to do this as most hedges are under water or the company doesn't have the funds to cover them.
Anglo gold gave the cold shoulder to Bill Murphy of GATA
and this might be the answer why . I don't believe that every deal is the same and the offer to each company is probably based on their books .
Once this process is completed in the not to distant future then the price will be allowed to rise again.
The last few days has shown that they are still able to control the price to some degree with probably the help of friends. Comments or input welcomed always.
nickel62
(10/16/1999; 09:07:50 MDT - Msg ID: 16550)
Thank you Gold Power and Megatron For your help.
My knowledge of goldenstar goes back to when the company was run by David Frenel and David Fagan both of who have left sometime ago. Is there anything left of the former properties that this company used to control. Atna Resources and Expatriate Resources used to control the Wolverine Deposit in the Yukon and last I heard were trying to merge it into the Cominco discovery next door that had a lower grade 12 million ton discovery that didn't have the high selenium problem this would have the potential of making the very high grade Wolverine deposit processable by blending it with the ore of the Kuth de Kayah (Cominco's) deposit.These deposits were valued at over a hundred million dollars US in 1996. The last I heard was a press release several months back saying it" was only preliminary" whatever that means. The Freeport McMoran Copper and Gold property is in Irian Jyia a contested island in Indonesia so the political risk is significant but the copper and gold deposti is one of the richest in the world and is also the largest tax payer in Indonesia. Seems to me the very large and extremely underpopulated Irian Jyia might well be retained by the military government in the new "democratic" Indonesia. As far a confiscation goes I would love to hear comments from any knowlegable posters because in my opinion this is the major risk of this property. The cash cost of the copper from the deposit is supposed to be around 12 cents US with the world price of copper around 80 cents US.Of cousrse this is after the value of the gold that the ore contains is credited against the cost of the copper. Seems to me with the rest of the world copper production consolidating Phelps Dodge/Cyprus/Amax/Asarco? and world wide copper use recovering, analysis of this stock seems worth while. Especially considering the risks of some of the unproven juniors that are being recomended currently.I have been told by management that the Voisey Bay property might well progress this fall especially now that the political situation in Labrador had been ameliorated by the successful re-election of the main protagonist. The bad news is that the amount of the production probably would only be half the origional production target. Even this amount would be very profitable if ther is no cost of the construction of a smelter and refining investment required.Anyone that can add to this your information would be greatly appreciated. True capitalism needs informed investors.What better time than now to be informing ourselves when all of us benefit.
Goldspoon
(10/16/1999; 09:19:21 MDT - Msg ID: 16551)
elevator guy...PH in LA
Hope everything is fine and will be OK keep your head covered for awhile... my prayers with you all...
Goldspoon....

London train wreck, Mexico floods, New York virus and Market crash, a major volcano eruption is close...Goldspoons bones.... Major Cities are still in peril..with events continuing to escalate.....
My prayers are with you all.. God Bless and keep you from harms way....
Goldspoon...
canamami
(10/16/1999; 09:27:29 MDT - Msg ID: 16552)
Question re Contest
This is a question for MK and Town Crier, which I had intended to ask at the time of the last contest. Does "midnight, Sunday, October 17, 1999" mean the cusp between Saturday and Sunday, or that between Sunday and Monday?

Thank You.
Leigh
(10/16/1999; 09:29:36 MDT - Msg ID: 16553)
Bonedaddy, AREM
Good for you, Bonedaddy, for helping out the cause of executiveorders.org. You're right; they are keeping tabs on us. There are times when this frightens me, but I try to keep my mind focused on our Founding Fathers, who had to endure tremendous suffering to make our nation free. Our battle for freedom will not be won without persecution and even death. However, we cannot shrink back; we must fight loudly and publicly for freedom. Let's don't make Ron Paul and his supporters fight this battle by themselves!
Trebor
(10/16/1999; 09:42:00 MDT - Msg ID: 16554)
The value of $10,000 bill
FOA

When the $10,000 bills were in use the dollar was convertable at 21.47 $/oz

This means that at current gold prices

the $10,000 in 1910 has a 1999 value of $150,000
NORTH OF 49
(10/16/1999; 09:57:39 MDT - Msg ID: 16555)
AREM, Bonedaddy, and Leigh
http://www.newswatchmagazine.org/whiteunbus.htmGood Morning folks. I should know better that to stick my nose into another Countries business--especially politically orientated, however, your posts concerning Executive Orders (Especially yours Bonedaddy, conderning UN intervention and gold confiscation) brought to mind a URL I had seen about 6 months ago. The above link is not the one I was looking for, but for your information, this is of the same context. The one I was searching for, which I evidently deleted, contained several aerial photos of literally hundreds of vehicles in this same compound.

Just a little something to get the paranoia juices flowing!

No49
PH in LA
(10/16/1999; 10:02:14 MDT - Msg ID: 16556)
Earthquake Update
Goldspoon:
Thanks for thinking of us here in LA. I can personally report that everything is fine here... We were awakened at 2:45AM... Scared the cats... No other damage or injuries...

Now doing everything possible to prepare for Sunday's bombshell announcement from GATA. All hands on deck!!! Battening down the hatches... Major storm warning... taking all precautions... hoping for the best...

PH in LA
Black Blade
(10/16/1999; 10:22:37 MDT - Msg ID: 16557)
Nickel62 and Inco
I hold a few shares of Inco. They are continuing with their exploration projects in Labrador. The question of building a smelter and mill site operations while under the current nickel price environment continues. They would rather mine and ship concentrate to existing operations until the price inmproves. The government didn't like the idea, meanwhile the unemployment picture in Labrador is still dismal. The Thompson Mine is continuing with closure operations, and a strike may or may not be imminent at some of their operations. I haven't heard much else since last month.

Dayton (DAY) Produces at $195/oz and has the Andacollo Mine in Chile. They expect to mine 138000 oz next year. I think that they have a few former Pegasus gold people involved (Pre-bankruptcy). They seem to be well regarded.

Hedging Status

The recent increase in gold price and accompanying volatility has raised concerns in the financial markets with respect to gold company hedging programs.

Dayton's hedge position is structured to provide downside protection while not significantly limiting the upside. This has been accomplished primarily through a program of puts which expire at the end of this year. During the recent rally in the gold price, Dayton acquired an additional hedge position of spot deferred contracts equivalent to approximately three months gold production or 5% of reserves.

As at October 12, 1999, Dayton's gold hedge position consists of 21,000 ounces of puts at US$340 per ounce and 35,000 ounces of spot deferred contracts (priced between US$260 and US$301 per ounce) at an average of US$276 per ounce.

Dayton Mining Corporation holds a 100% interest in the Andacollo Gold Mine located in central Chile, and trades on both the American Stock Exchange (AMEX) and Toronto Stock Exchange (TSE) under the trading symbol DAY.

elevator guy
(10/16/1999; 10:26:35 MDT - Msg ID: 16558)
Earthquake!
Thanks for you sentiments, Goldspoon. The earth was at first violently fluttering up and down, vertically, rattling windows, and jiggling things about. Then the earth started kind of a rolling motion, and you could feel the house sort of tip back and forth.
The water in the pool was a good indication of this. As the earthquake started, the water was agitated, without long waves. Then as the earthquake progressed to a rolling motion, the waves sloshed from one side of the pool to the other, growing longer in unison, and spilling much water onto the concrete deck.
Once, during an earthquake, while in a 12 story building in Anaheim, looking out at the earth, I could see the "waves" of earth movement, causing phone poles and structures to dance in concentrated bands, as ripples of surface earth movement sweept through the terrain. When you are on top of the epicenter, you feel an up and down motion. This causes ripples of wavy motion away from the epicenter. Imagine a pebble dropped into a pool of water. Thats it! But of course this effect is not true to all earthquakes, depending on a myriad of variable factors.
Well, I don't know if anyone is interested in the "flavor" of earthquakes, but there it is. Makes a lot of windfall elevator work for us. But this one was in the boondocks. -Shucks!
Can we get set up in time for the gold cartel?
How fast can you get your house in order for the changes soon to sweep over the world?
Kind of makes me shiver! Go gold!
Tanglewild
(10/16/1999; 12:16:56 MDT - Msg ID: 16559)
Cambior news
http://cambior.com/english/1_releases/index.htmLooks to me like they're in pretty deep...
This is a news release from them 10/15 concerning hedging
nickel62
(10/16/1999; 12:46:31 MDT - Msg ID: 16560)
Thanks Black Blade for info on Inco and Dayton Mining
I didn't know the current management of Dayton had a background at Pegesus Gold. The current management was brought in by the revolting shareholders about fifteen months ago when they won a shareholder proxy fight against the McWatters/Minorco group who had taken the company after the disappearence of the origional founder.I am uncertain of the exact significance of the managements recent purchase of additional puts during the recent run up in golds price. They must have thought the price was going to go back down. i hope they have listened to the changes in the market and don't seek to hedge too much more in the future. The news in the third qurter press release that they are hoping to pay off the last of the debt by the first quarter of next year. For long time owners that would be a welcome event since the heavy debt load left by the prior management led to the collapse of the stock during the last two years. with 351,000,000 million shares outstanding it is going to take higher gold prices to get this stock moving,but it seems to be trading about 1 million shares per day which should clean out most of the weak institutional holders who just want to forget they ever bought this stock. The new shareholders seem to include some savy investors which I take as a positive.The total market cap is about thirty million and no debt. The market capitalization in 1996 was north of hundred million.Gold of course was north of $400/ oz. Anyone who has any knowledge of the available gold supply on the Andacollo property in chile this would be very helpful in analyzing the current upside potential.The stated reserves had to be reduced if I remember correctly from about 1.2 million ozs. of gold when the gold price dropped through $350 / oz and large parts of the open pit reserves where no longer veiwed as being economic at the lower gold price. If gold does reverse anfd return to the higher 300's then the stated reserves could be reversed and increased from the 800,000 oz level of the current enviroment to somewhere near the prior level. Is there anyong=e who knows enough about this prroperty or open pit mining in general to say whether or not the reservse would have been permently lost do to the necessary high grading that would have most likely gone on to keep this small producer going over the last several years.I know at one time they were talkking about a super pit improving the total economics of the Andacollo property. I guess this was dropped in the crisis that has consumed the last two years.
As far as Inco Voisey Bay is concerned it was origionally touted as being worth $30-$40 /share when the mine went into full production. That was with a capital investment of about $1.4 Billion US to build the mill'smelter,refinery? and inferstructure of the mine.It seems to me that if a large portion of this capital investment is no longer needed that the return to both the inco shareholders and the Inco Voisey Bay shareholders should be higher and realized sooner than previously thought. The savy investors Franco Neveda/Euro Nevada picked up the Freidland block of twenty five percent ownership when the stock of Inco Voisey Bay was trading at $3.75 about a year and a half ago.The stock is currently $7.00 US and has about 26,000,000 shares outstanding that is a little less than Inco paid Diamond Fields for the property in august 1996. About 82% less.Anyone that has any insight into this current situation and whether or not FN has increase their ownership would be appreciated.
Freeport McMoran Copper and Gold seems like a screaming buy to me with both copper and gold likely to increase price over the next several years.The government is going to be reticent to nationalize this property if they want to continue to attract the needed capital not only in the mining sector but the much larger oil sector. Most international investors would look askance at a grab of the Grasberg assets,but I'm sitting in the US and am perhaps misreading the situation in Indonesia. Any help would be appreciated.

Bill
(10/16/1999; 13:17:13 MDT - Msg ID: 16561)
Sunday's bombshell announcement from GATA ???
PH in LA. Just curious to hear about this. Glad everyone is ok down there in LA. Didn't feel anything up here in Sac of course.
RossL
(10/16/1999; 13:17:19 MDT - Msg ID: 16562)
hedgebooks/anglogold
Watcher said:
"Yesterdays press announced that anglogold would not be settling its hedge books at this time .The reason being that they think the prices at time in gold are in their opinion unsustainable.It seems clear now that they have come up with other arrangements to now offset the risk of an upside move in POG.To see what happen to ashanti and remain that hedged would not make sense. A move to a 600 dollar pog would be destructive if not a death blow."

Watcher, where did you get this information? According to the latest Bill Murphy/GATA message, AU was one of the group pushing for a gold "cartel"...
PH in LA
(10/16/1999; 13:28:26 MDT - Msg ID: 16563)
Sunday's bombshell announcement from GATA ???
http://www.egroups.com/group/gata/256.html?Bill:
Check out the URL above.
Journeyman
(10/16/1999; 14:28:17 MDT - Msg ID: 16564)
SIRS FULCHINO & GOLDSPOON, I am greatly honored!
Ideal", I believe, a compendium of Ayn Rand's followers' work. Has itoccured to anyone how truly surreal it is that Alan Greenspan, originally amember of Rand's inner circle -- and at least originally a consumategoldbug --- is the Chariman of the Federal Reserve? ....................... ...........................................................................Say you're the most powerful, most influential organization in the world,governments at your beck and call. And you're looking for a CEO. In thepast, your business has depended on manufacturing "concept" money whichdepends on surpressing gold. You can afford, obviously, the very best CEOmoney can buy in the whole world. You obviously do a THOROUGH backgroundcheck on every applicant. Would you miss an applicant's early writings,published and widely circulated? How about his regular pro-gold comments,which he still makes, such as: ............................................ ..........................................................................."I'm one of the rare people who share a nostalgic view about the old goldstandard as you know, but I must tell you I am in a very small minorityamongst my colleagues on that issue." -Alan Greenspan to US House, July 22,1998, 11:45am ...................................................................................................................................... Do you pick someone who has EVER advocated or defended your anathema, thegold standard? True, Greenspan is articulate, etc. -- but there must beother candidates equally as articulate who NEVER espoused the gold standardand would never even consider it. What gives? .....................................................................................................Regards, Journeyman
Journeyman
(10/16/1999; 14:37:07 MDT - Msg ID: 16565)
GREENSPAN: Mystery wrapped in an enigma
Whoa! That one really got garbled! I'll try again. SORRY!I recently stumbled across Alan Greenspan's essay, very effectivelydefending the gold standard, somewhere on the internet, but stupidly failedto bookmark it. The essay appeared originally in "Capitalism The UnknownIdeal", I believe, a compendium of Ayn Rand's followers' work. Has itoccured to anyone how truly surreal it is that Alan Greenspan, originally amember of Rand's inner circle -- and at least originally a consumategoldbug --- is the Chariman of the Federal Reserve? ....................... ...........................................................................Say you're the most powerful, most influential organization in the world,governments at your beck and call. And you're looking for a CEO. In thepast, your business has depended on manufacturing "concept" money whichdepends on surpressing gold. You can afford, obviously, the very best CEOmoney can buy in the whole world. You obviously do a THOROUGH backgroundcheck on every applicant. Would you miss an applicant's early writings,published and widely circulated? How about his regular pro-gold comments,which he still makes, such as: ............................................ ..........................................................................."I'm one of the rare people who share a nostalgic view about the old goldstandard as you know, but I must tell you I am in a very small minorityamongst my colleagues on that issue." -Alan Greenspan to US House, July 22,1998, 11:45am ...................................................................................................................................... Do you pick someone who has EVER advocated or defended your anathema, thegold standard? True, Greenspan is articulate, etc. -- but there must beother candidates equally as articulate who NEVER espoused the gold standardand would never even consider it. What gives? .....................................................................................................Regards, Journeyman
Peter Asher
(10/16/1999; 14:47:06 MDT - Msg ID: 16566)
hedgebooks/anglogold (Watcher #16549)
So, the mining outfits are saying "I'm not covering, not me, got a plan with the hedge book, etc." Sure! The old joke was that the three biggest lies were "The check is in the mail; I won't ----: And -- --- is beautiful." Now we can move to the head of the list "We're not going to cover our short positions."

Anyone who believes that, should look into the IPO I'm floating offering shares in the first ever suspension bridge , built over the East River between Manhattan and Brooklyn!

Nice try, fellows, But as they say, "Money talks and B.S. walks."
Journeyman
(10/16/1999; 14:54:41 MDT - Msg ID: 16567)
SIRS FULCHINO & GOLDSPOON, I am indeed honored!
Many thanx to Sirs Fulchino & Goldspoon for nominating "WHY GOLDHAD TO GO" (Message ID# 16513) for USAGOLD'S Hall of Fame. Itwould be a real kick to have my efforts included with those ofthe "giants" who post here. I have one question: Should "WHYGOLD" actually "make the cut," will I have the opportunity toclean it up a bit? A few misspellings, etc. seem to have somehow;> crept in. Regards, Journeyman
YGM
(10/16/1999; 15:13:12 MDT - Msg ID: 16568)
Journeyman & What Gives?
What Gives?---from a purely unacademic stance I'd say the answer is simple. A.G. is a member of that most powerful of Institutions, Banking. Do you not think Bankers have more personal money (especially recently) in PMs and Bullion than anyone knows. The end result of this next set of worldly financial crises is probably unknown to them, but they ALL realize "He who Has the Gold, Makes the rules"
I personaly don't doubt that the BIS and many CBs' have made more $$$ and Gold thru this entire mess (bubble) than any of the more known culprits, ie: G Sachs et al. Maybe we shall see vast increases in Gold Assets & Physical Holdings by BIS and others in the next round of accounting. Who knows, they can hide anything. Point is the AGs' of the world know the history and the future of Gold better than any of the mortal sheep, and they've accumulated all they can, of that I'm very sure. Now who will Goldbugs turn to for Banking services? Same people, New Rules. Regards--YGM

ps: remember I said 'unacademic'>(:))
RossL
(10/16/1999; 15:33:40 MDT - Msg ID: 16569)
hedgebooks/anglogold/rumors from the dark side
http://www.anglogold.com/I did a quick search and couldn't come up with a press release from Anglogold saying they weren't going to clean up their hedgebook...

Bill Murphy has been touting the stock of Golden Star. Later that stock was trashed by some poster on another forum, and that trashing was repeated here.

I suppose this would be a good time to reiterate that nobody should make investment decisions based on posts to this and other forums on the net. You just don't know who to believe. There are agents from the dark side in our midst!!!

I tried the link above and it wasn't working for me right now.
USAGOLD
(10/16/1999; 15:49:44 MDT - Msg ID: 16570)
Farfel & PH in LA...
Many of gold's luminaries are congregating in Denver as this is written for the Denver Gold Group conference which begins, I believe, on Monday. I have not heard anything myself about any announcements but that doesn't mean anything..

South Africa still represents a significant amount of the roughly 2300-2400 tons international output despite SA's slow decline -- about 500 tons. Between Anglo and Gold Fields, roughly 300/325 tons is produced by those two companies alone. All of South Africa accounts for about 20% plus of production. So South African producers alone can deliver quite a blow to the hedgers if they so wish. I don't completely understand Anglo's positioning in this thing and haven't from the start. Bobby Godsell to me is a mystery. He fights hard for the yellow metal but his own company has a substantial hedgebook (from what I can gather.) However, if you had substantial reserves and a long term outlook, you might be willing to sacrifice that book for a huge increase in the value of your reserves. Also, Anglo is very diversified now and not just a gold producer. So it has room to move in the interests of South Africa and its stockholders. It is an interesting company.

With the recent shakeup in the industry, I don't know what percentage of current production Anglo and Gold Fields command but it is substantial. TRemital -- one of the real experts on gold mining who posts here -- told me one time that these prices could take 25% of the production out of the market if they held at the lower level (Below $275). Nobody until recently ever thought about how much production would be taken out of the supply/demand tables by an increase in the price. A comment I made in my Daily Report, to the effect that Ashanti had to be the first gold mining company to be on the verge of going out of business because the commodity it produced entered a bull market, drew some chuckles and comment. At first I didn't grasp the significance of the comment beyond making an interesting point. A shrewd corporate executive however might get the idea that by reducing output and driving the price up they could force the shutdown of mines all over the world and make them ripe merger pickings, as the Ashanti and Cambior situations so clearly and dramatically illustrate. ( Note that others in the mining industry, particularly Gold Fields, have expressed an interest in Ashanti if the Lonmin deal should break down.) Such a move would also greatly enhance in ground reserves for the unhedged producer or the producer with its hedge book under tight control.

Of the 2400 tons produced in 1996, Barrick produced about 100, Normandy 45 and Ashanti 32. I don't know all the companies short the market -- and disastrously so -- but I do know there's enough out there that you could not just create situation where they would be forced to cover, but a situation that could very well put them out of business -- and in a hurry.

I would equate a "cartel" with moving the queen to the center of chessboard in front of ample, well-positioned support. The weaknesses have been revealed; its only a matter of having enough capital and staying power to protect your flank. What the Ashanti debacle demonstrated is how fast a company could go from a highly recommended darling of the industry to severe financial trouble and on the verge of shutting down. What would the value of your reserves be IN THE SHORT TERM if you could put 10%-20% of your competitors' production to sleep.

Some thoughts on a snowy Saturday afternoon in Denver town............

Figures based on Gold Fields Mineral Services Gold 1997 report -- the only reference I have at home.

As always, this is all open to comment and refinement.....I don't know if a cartel is forming and the legal, logistical and tactical problems attached, but I will be watching with a great deal of interest as this thing unfolds.

I hope GATA has good and reliable sources, because if this is true it could be a major development. I have not seen any verification from any other source, so let's not get too excited until we see something tangible. At the moment we will label it a promising and interesting matter for discussion.
Golden Truth
(10/16/1999; 15:55:18 MDT - Msg ID: 16571)
TO RossL
Hello RoosL, I think that comment reported by "Watcher" is a head fake. I can't think of a better way to catch all the other mines (Barrick) short by saying one thing and doing another!
I listened to Bobby Godsell when our "M.K" posted the telephone # for a conference call that took place when Bobby Godsell went over to England, and wanted to meet with P.M Tony Blair. About the impact of Englands GOLD sales on SouthAfrica and of course M.R Blair didn't show.

One thing i do remember is his deep accent and he sounded like a guy who meant business. I,am sure he still remembers being "shunned" by T.blair etc.

So i,am having real trouble believing Watchers statement,also i have not seen him post to defend his position or answer your question. I have to wonder why Watcher would even post something like that. With nothing to back it up or a link for all of us to at least,, look at for ourselves before leaving this forum.

A statement like that flys right in the face of "GATA" and would they not have seen this also, including everyone that wants the P.O.G to be crushed down. They would use this as weapon against us big time!!!
Personally i don't believe it,**** 1st reason. I don't believe Bobby Godsell would "rollover" i think he has had enough of the GOLD manipulation crowd.
***2nd reason is i don't think Bill Murphy is a fool and since the announcement is tomorrow morning theres no way that GATA is unaware of Anglogold deciding not to cover thier hegdes, give me break, i can and will not believe this "rumor" but it does make me wonder where it started and why???
We will find out tomorrow who's right and who's wrong here!!
We haven't come all this way for nothing this is going to be a battle royal.
We will never surrender!!!!
Time to sharpen the Axe. :-> G.T
RossL
(10/16/1999; 16:08:50 MDT - Msg ID: 16572)
hedgebooks
Hedgebooks are not all the same. If a mining company bought puts, they could let those puts expire worthless. If they sold calls, their exposure is unlimited. If they sold forward, they can just deliver the physical. The need to restructure a hedgebook is not mandatory, it just depends!!!
TownCrier
(10/16/1999; 16:18:03 MDT - Msg ID: 16573)
Hear ye! Hear ye! A call to contest! >>>>------A REMINDER--------+>
The master of the Castle, our gracious host at Centennial Precious Metals, has made it known that he will yield up gold and silver prizes--for it would please him to see the Knights, Squires, Ladies, and honest Townsmen at play upon the green fields under these golden leaves of Autumn.

Good People of the land, hear ye, and may you walk away heavier with riches than upon your arrival. Your participation, comradery, and good times is all we seek...so please step to the field of play when you have prepared yourself for the simple task at hand. To wit, one arrow each, and your best effort to strike nearest the mark.

THE RULES:

So draw forth your truest arrow, toe the line, take aim, and let fly your best prediction for the closing COMEX December gold futures contract price (as quoted that day by TownCrier) for next Friday, October 22, 1999.

All arrows (predictions) must be leap from the bow and be in flight no later than this Sunday, October 17 at midnight (Sun./Mon.) according to the clock kept at this Round Table.

All entries into the contest must use standard arrows in the subject line as demonstrated here, or a reasonable replica:

*>>>>------$500.00--------+>

Contestants must ALSO provide a brief oratory (at least 30 words) upon release of their arrow explaining either the method of their aim, or a pleasing tale explaining what role gold or this Forum has played in their lives. These won't be judged, but we must hear your voice as you take aim at your target.

THE PRIZES:

To the arrow nearest the mark: One beautiful French 20 franc gold coin, bearing the likeness of lovely Liberty and a bold Rooster to usher in the dawn of a new era.

To the next two nearest arrows: One silver Eagle, each.

To all first time posters throughout the duration of this contest: by simply gracing us with your voice on any gold related subject, you will receive One silver Eagle, each. But you must also e-mail the Castle (Centennial Precious Metals / USAGOLD) at cpm@usagold.com to let us know that you are a first-time poster. We will confirm the record, and the precious metal will be yours for sharing your time and interest in this most important of monetary subjects.

LET THE GAMES BEGIN!
FOA
(10/16/1999; 16:23:27 MDT - Msg ID: 16574)
Comment
http://www.decisionpoint.com/DailyCharts/00goldDXY.htmlOnce again I ask everyone to take a good look at the above chart. I offered it some days ago as a witness to what is about to take place. To date the dollar has fallen and US stocks have begun a revaluation that is far from over. Both of these trends will continue as the whole financial system
changes it's tools of valuing assets.

The gold chart shows no signs of falling as would have been the case in recent years. Yet everyone sees this recent slowdown in advancement as a sign that the BBs are again working the will of the CBs. They are not! Indeed, is the fall in lending rates a sign that fresh gold is being
supplied to cover the shorts? I tell you the lending arena of the gold market is frozen in loses.

Today the lease rates offer little direction because none of the major gold sellers have covered or intend to if they can help it. Yes many of the paper shorts have covered, but the thousands of tonnes of gold contracts have yet to be made whole for the "originator".

Is this how the game is played? Consider this as you watch the gold charts.

Two types of contracts exist in these numbers that will create the crisis. These are mixed in with "clean" deals. Yet they (90% of the short gold) create the real demand that will drive prices much higher unless the paper markets are sold into oblivion.

First, some are held by actual gold lenders (mostly private entities) that are now demanding a speedy end to these relationships. Mostly this gold was put "in play" not for the low returns but for the "fees and favours" bullion would generate. So, in order for these lenders to be made whole the gold must be purchased by the dealer in the open market or it must be borrowed from someone else to complete the transactions. The "BB dealers" have the option of arranging this return as able. Presently they are doing neither as they wait and assess the situation. This process is a game we now play as they wait for gold to fall and new supplies become available. All the while the lender
sweats his position.

Understandably, they fear for the return of their gold at all. If defaulted on, they will most likely receive a cash payment that theoretically could be used to replace their gold. Still, if this process begins, a mad rush to buy gold using "default payments" would telegraph a full crisis into the trading arena. Gold would soar long before any large portion of bullion could be brought.

Second, many contracts are outright "naked short" in that it's the contract creators responsibility to supply gold when the term ends. In this position, usually gold was never lent or sold into the marketplace. The deal was little more than a play on gold falling with the writer risking the firms capital to profit making the difference in the gold price. Often a long time physical holder brought his fully owned bullion into this play and received most of his cash back plus a contract to receive gold (unallocated??). His gold could be sold outright or held by the bank as partial reserves to cover the writing of many other "naked short" contracts. This was the real engine that sucked private gold into the "supply for fabrication" deficit. In the process paper gold was sold to drive the prices down. All of the new investment demand for gold was supplied using a glut of paper instead of physical gold. Unbelievable as it may seem this is where Another said years ago that gold was falling because so many people were buying it! What seemed nuts then is understandable today.

In any event, the holders of these contracts are the ones that will be demanding "allocation" as they withdraw their investment funds from the falling stock and financial markets. Just as above, the physical markets are so tight that in order to close these deals, gold must be borrowed. That is if lenders can be found!

Onward:

We have entered the largest gold bull market in history. The Major world central banks have made it extremely clear that this bull will run as never before. Michael Kosares pointed people to the WGC site for an explanation of the recent "agreement", yet no one must not have read it for
they still talk about CB and BB lending. People, it's not happening! This small lag in the price spike is only about shorts in major trouble trying to assess how they can bail out. Here is a partial breakdown of the parts we should grasp. See the site for a full write up.

http://www.gold.org/Gra/Pr/Wr991006.htm

World Gold Council Review of:
The Washington Central Banks Agreement on Gold 26 September 1999

--First, it is an explicit signed agreement among the European central banks, which goes well beyond earlier 'clarifications' about their gold holdings by central bank governors. -----
----it has been signed by each central bank governor, all of whom (except the Bank of England) have legal responsibility for their gold reserves.-----------

During the recent fall in the gold market nothing was said to clarify to the public. All of the "official deals" were done for political reasons. Read our USAGOLD HOF site for background. Once the Euro was born, the reasons to drop the price of gold were removed. However, during this entire, multiyear operation, an enormous "sideline play" of selling gold developed. These people never would openly give their reasons for "coat tailing" the fall in gold. None of them understood why gold was falling and still don't. We can understand why they continue to think gold will fall as
they have bet the bank on that outcome. The very ones in this sector are the same entities that will suffer the most as the IMF/dollar world is destroyed. For them it's going to be a double hardship.
Today, the ECB/BIS has "openly stated for all to see" that gold will fall no more! It is indeed interesting that we spent but a few months below $280 and will now zoom through $500 in no time at all. Note these next items:

--It is our understanding that the Agreement will be monitored by the Bank for International Settlements (BIS).-----
---The International Monetary Fund and Bank for International Settlements are to abide by the 'spirit' of the agreement-----

Perfect!!!

---The US has already announced its intention not to sell or lend gold and Japan followed suit the day after the Agreement was announced.---------

The US had changed it's position on gold in the early spring of this year. Those that still think the US Fed is selling any form of gold short just do not understand how this market has changed. Waiting for the price to fall as "official sales" or "lending" confirm the recent price action will find you on the the outside of a bull market.

---In addition Australia has said it will not sell any more gold, and South Africa is unlikely to sell part of its reserves given the government's vehement opposition to the UK sales.-------
----bringing the total amount of official gold covered to 85%.--------

We have but to wait and watch as the pressure rises under the price of gold!

------We understand that the quotas are not transferable, i.e. if the Swiss decide not to sell 1300 tonnes in the next five years but instead only 1000 tonnes, then no other institution can sell the remaining 300 tonnes.--------

So, how does one prepare for the coming historic bull market in gold. Follow in the footsteps of the only correct Giant in South Africa. Read the Gold Fields report presented here in partial review":
http://news.24.com/English/Business/Companies/ENG_161017_727173_SEO.asp

---Gold Fields said on Friday it had completed the repurchase of its gold hedge (forward sales)
position.---------

---it seems inevitable to us that higher, if not much higher, gold prices are possible.----

---Gold Fields continues to hold approximately 660 000 ounces of rand-gold call options at an average strike price of R2 171 per ounce.---------

---Thompson commented: "At higher gold prices the restrictive impact on our balance sheet and the drag on earnings from a continued hedge position would limit our ability to make acquisitions and develop new deposits". ------------

I would say that these people must be the only truly progressive miners in the world. Not only did they buy physical gold at the BOE auction, they are "LONG" gold on contract! Other miners may have "bid low" to show suport, but only Gold Fields got real gold and now is long. They not
only understood where gold is going, they positioned their company as a private person should in protecting their estate. We can now most easily see the other hedged miners are trapped in the Bullion Bank web as they can do nothing. These companies will no doubt go down with the ship. If
they can not unwind their position today during a standing price, they will die during the coming run!.

With 85% of the official world gold holdings effectively blocked from lending and most all the private lenders wanting out of this game, how could any major forward seller close out? Price has nothing to do with it as the bullion will not be there for 5 years, if even then! These miners will now sit and watch as that gold chart (above) runs out of numbers on the upside. While everyone makes noise about how the market is still controlled to the downside, Bullion owners and Gold Fields will run with the wind of this historic "OFFICIAL" bull market. If only other miners would put on a Texas Hedge, at least there bookkeeping entries could benefit even if the bullion market cannot supply!

Good Job Gold Fields,,,,,,,,,, FOA


AREM
(10/16/1999; 16:25:08 MDT - Msg ID: 16575)
LEIGH, Bonedaddy, North of 49
http://executiveorders.org/Thanks for your kind support and enthusiasm for stopping Clinton's unconstitutional attempts at taking over our government.

I worked up a chain letter version of my posting (first one) this morning. I plan to send it to every one on my mailing list. Hopefully it will spread like wild fire.
I hope that everyone will feel free to copy it and use it.

==================================

(Subject) Clinton is Bypassing the US Constitution

Did you know that President Clinton has signed over 300 executive orders since assuming office in January 1993?

By using executive orders and declarations of emergency, President Clinton is vastly increasing the power of the national government over us. He is also concentrating more power in his hands alone by taking the legislative power that rightfully belongs to the 535 men and women of the United States Congress.

With each stroke of his pen, he is effectively rewriting our Constitution. He is, with each stroke of his pen, effectively erasing the sacrifices made by American troops throughout our country's history who defended � not rewrote � our Constitution

For example:

Presidential Decision Directive 25 enables the U.S. military to be moved under U.N. command without congressional approval.

Executive Order 12919 directs cabinet officials to take over all aspects of the economy during a declared state of emergency. It effectively puts the entire United States under the control of the Federal Emergency Management Agency. Currently, the U.S. operates under 14 states of emergency.

Executive Order 13133, titled "Working Group on Unlawful Conduct on the Internet," was issued Aug. 7, 1999, stipulating that a group of agency heads will define "unlawful conduct."

This deliberate erosion of our freedom and our constitution can be stopped. Congressman Ron Paul of Texas has introduced a comprehensive bill - The Separation of Powers Restoration Act, HR2655. If enacted, HR 2655 would :

* Repeal the War Powers Resolution and end all states of national emergency.

* Require that treaties and executive agreements purporting to assign powers not amongst those specifically granted to the federal government by the Constitution would be non-binding.

* Require that the president, in issuing executive orders, cite the specific congressional enactment and the constitutional authority on which it's based.

* Prohibit delegation of power to a foreign government or international body when no such delegating authority exists under the Constitution.

* Grant legal standing to individual members of Congress, state officials and private citizens who believe a presidential executive order is unconstitutional.

Each of us can help get this vital resolution passed, and it's easy to do. First, click on web site http://executiveorders.org/

It will provide more information on this resolution and will tell you if your Congressman is a sponsor. If he/she is not a sponsor, it will make it easy to urge that action. (NOTE: If your Congressman does not have a public e-mail address, you can find his web site by clicking on to http://www.house.gov/house/MemberWWW.html )

Next, make copies of this e-mail message and send them to all of your friends who value their freedom.

We must act now before it is too late.

Goldy Locks Guy
(10/16/1999; 16:31:48 MDT - Msg ID: 16576)
oct 22



>>>>>>> \\\\\\\\
>>>>>>>>>>>=============== 328.50 ===============>>>>>>>>>>
>>>>>>> ////////

OK....is that purty or what?

Yep...I'm a newbie..and loving it! (I'm also a man of 35 if your interested) And I want to win that Gold piece. I saw the limerick that our other precious poster wrote and just felt inspiration swell inside of me....So, for your entertainment alone, I offer you my little ryhme. (ladies, get your tissues before going any further...it's a real tear jerker)

There once was a people empassioned
Who longed to see justice for Gold
They were called barbaric and old fashioned
"You're crazy" by most they were told

But steadfast in faith they believed
As Wall Street continued to boast
That once the BULL was conceived
The stock market would surely would roast

The fire would not be stopped
The dollar would look like a ghost
Investors realize their fortunes are cropped
Their savings nothing but toast

But there's a lesson you can learn
Even now it's not too late
If from Bubbles and Bonds you quickly turn
Great wealth can be your fate

So liquidate your stock
Buy some gold that's tried and true
It's a shelter from the storm
That's just started passing through

I just love this forum and have signed up because maybe I won't have to hop all over the internet searching for miniscule tidbits about the markets and what's going on.

I like this forum also because we all have a common bond...and for the most part that makes us friends..right? I've been trading in precious metals all year and have loved it, even in the shakey times, and have always believed that Gold will play a major part in the world once again..(After everyone has borrowed and leveraged their life away, but still...)

Anyway, I'm just hoping I can come up with some more cash soon for getting more gold at this current price....(315 + or -)

I must apologize to everyone for guessing the correct price for gold on the 22nd...(they might as well go ahead and send me the prize now.) Perhaps after the POG rises alittle more, you all can come to TN and I'll treat you to dinner...and maybe a desert.

OK...enough is enough...It's late and I feel dangerous.

Again, thanks to all of you poster who know more than I do. I appreciate all the insight, right or wrong...it makes for a well rounded intellect in the precious metals market.

Take care and keep up the great posts!

Goldylocks
Golden Truth
(10/16/1999; 16:51:34 MDT - Msg ID: 16577)
TO F.O.A
Just a quick Hello! and wanted to say i was just looking at the dollar gold charts,before returning to the forum here to find you reminding us all about the chart you posted here a couple of days ago and told us to watch it.
Great minds think a like,** man do i wish that were true because you are truly awesome!!!!

The movie "Rollover" and account #21214 still playing through my mind.
Thanks as always :-) G.T

Leigh
(10/16/1999; 16:52:31 MDT - Msg ID: 16578)
Tomorrow's Announcement
You guys, this is hard waiting until tomorrow! I'm scarcely going to sleep tonight for wondering what's going to happen. Then I'll be going to church right after announcement time, so I won't see what everyone has to say. THEN we have to wait till tomorrow night to see how the markets react.....!!!!!
Leigh
(10/16/1999; 16:59:55 MDT - Msg ID: 16579)
GoldyLocks Guy
Great poem! We have some wonderful poets here on the Forum -- you, Bonedaddy, Peter, and others. I'm glad you're here with us, though you're not going to win the prize because apparently the POG is going to go ballistic next week.

You're going to treat us to a DESERT if we come to Tennessee? Are you part Arab? No, you can't be, not with those GoldyLocks!
CoBra(too)
(10/16/1999; 17:12:47 MDT - Msg ID: 16580)
Gold Cartel - cui bono?
I recall having suggested a cartel of the major gold producers to restrict supply, similar to OPEC before summer and got legal flac from most posters. The main difference was that oil was in oversupply, whereas the physical gold supply was in deficit for many years - since the late 80's at least.
The intent of the message was to restrict "future" or paper supply from the only real and capital intensive source - the miners -, since it was clearly only a matter of time, when the bonus of cheap financing will backfire. Both, in the anticipated price depreciation of the pledged collateral as in the attraction to the derivative "hedge fund" mob. But the attraction of carry trades, be it Yen, SFR or Gold, is the exponential leverage.
The financial establishment, thriving on better thy neighbour in terms total return by taking on ever more risk exposure - the derivative (risk) exposure of the US money center banks is probably more than $50 trillion!, not acccounting for (ab)normal credit risks (like 125% mortgage finance at peak of a bubble!!!) - as reached hist(o)erical proportions.
So has the gold carry trade. The globalization & dollarization has arrived "at the end of the rainbow" and instead of finding the pot of gold - they're just finding a pot full of (nuts)future paper promises.

Humpty Dumpty can't even fall from the Wall (St.) - the Wall
was built on a reversed " 'oval' overblown egg-bomb-shell"!
So, on't crack your head - crack the hedge (nest)egg and go gold!!!

beware of the debris -CB2
Trebor
(10/16/1999; 17:13:21 MDT - Msg ID: 16581)
Offical GATA Bombshell music (ore it should be)
http://www.futurenet.com/classicalnet/reference/works/w/wagner-valkyriessound.htmlSaw this in SI

This should be the GATA "fight" song.




http://infoseek.go.com/?win=_search&sv=M6&lk=noframes&nh=10&ud9=IE5&qt=wagner&oq=&url=http%3A//www.zazz.com/wagner/&ti=Richard+Wagner+on+the+Web⊤=

click Die Walkure

Trebor
(10/16/1999; 17:20:16 MDT - Msg ID: 16582)
Offical GATA Bombshell music (ore it should be)
Maybe it has to be a cut and paste.

http://www.futurenet.com/classicalnet/reference/works/w/wagner-valkyriessound.html
TownCrier
(10/16/1999; 17:22:54 MDT - Msg ID: 16583)
Exploring the inner core of Anglogold
New York--Oct 14--Anglogold of South Africa is concerned the enormous rally seen in gold over the past month won't be sustainable as it has introduced instability into the market, said Kelvin Williams, executive director for the company. ---Bridge News (Reprinted at USAGOLD by permission, no further reproduction without permission from Bridge)

The key element of that piece is clearly the concern over the instability aspect. And specifically, that instability is manifested in the books of both financial institutions and producers who have contracted lots of business with other parties under the medium-term prospects of prices much lower than they are today, including the additional treats of higher prices to come. His warning seems to be clearly a plea to their counterparties to please find ways to cooperate with all those having upside-down forward books...otherwise the industry-wide instability would threaten the viability and sustainability of a "new gold market" going forward. And clearly, this is what the "long" gold counterparties would want, so his comment should be seen as a bargaining device. If Anglogold is taking action (or inaction) on their forward books that would seem counter to the common-sense direction, it may just be that there's a bigger purpose to be served, and expectation of lower gold prices is not among them.

Mr. Williams is also head of Rand Refinery Ltd, and was quoted by Reuters during the unveiling of the Krugerrand 2000 coin: "Investors in North America, Europe, Asia and the Far East, as well as in South Africa, who do not hold some gold within their portfolios, may well rue the day if the unexpected should occur within the first decade of the new millennium."

Notice the time frame...he doesn't say something "unexpected" withing the first hours, days or weeks of the new millennium. He says the first DECADE. Clearly that's not a Y2K thing, but something else. And that's interesting on another level, because if you're worried about something unexpected taking place that would be so significant that you must either plan for it or else "rue the day," only two timeframes are important:
1) immediate short-term, or
2) the rest of your lifetime.
Why on earth would he say "decade?" If you take into account his earlier concern for sustainability, a picture begins to take shape that he may be somewhat "in" on things to come.

He said decade because, first, he didn't want to send the wrong signal that the reasons are Y2K related. And second, because if you are an insider, you know enough not to narrow the field of revelation too much on developments that are significant enough to warrant them being kept currently in the back rooms and dark alleys. He may know very well that the timeframe is two years, say...with the introduction of euro coinage in 2002 (just to make an example, not a prediction), but he wouldn't say in his speech..."Investors in North America, Europe, Asia and the Far East, as well as in South Africa, who do not hold some gold within their portfolios, may well rue the day if the unexpected should occur within the second year of the new millennium."

TownCrier's bottom line: The more you know about gold and the more you know about money and currency, the more you want to have real gold.
Trebor
(10/16/1999; 17:23:53 MDT - Msg ID: 16584)
One of the music sites is busy try the other
Try one of each. Sorry for any disappointment.
Quabbin
(10/16/1999; 17:26:15 MDT - Msg ID: 16585)
From the Kitco news links...
http://www.kitco.com/_a/news/2161.htmThis one was written in an Irish pub after a loooooong night of drinking. Do not read it without a bottle of Pepto nearby.
Ugh.
Q.
MRM
(10/16/1999; 17:34:53 MDT - Msg ID: 16586)
Oct22 <<<------342.79------>>>
Hey it's just a guess but with all the rumors out there who knows. Who woulda thought we'd be where we're at just a month ago or so. It will be interesting to see if the Midas rumor pans out.

I started buying physical just over one year ago. I bought a junior stock 8 months ago which I sold last week for a nice profit (but what a ride). I used the profits to buy another stock this week. Knock on wood but I have yet to lose a penny in the precious metal markets.

I'm looking for a lot of problems with America's debt this fall and extending. The sharks smell blood and it's crush time. Next week will be interesting indeed.

I heard some wild man was giving away silver for first time posters. Thanks MK!!! Thank you even more the education that I have received from this forum.
Leigh
(10/16/1999; 17:44:25 MDT - Msg ID: 16587)
Quabbin
Boy, is that writer going to be surprised next week! He'll be eating his words and gobbling the Pepto-Bismol! GO GATA!!!
Trebor
(10/16/1999; 17:53:52 MDT - Msg ID: 16588)
(No Subject)
http://www.amazon.com/exec/obidos/ASIN/B000003F4J/o/qid=940117642/sr=2-1/002-4732703-6013010Click on


"DIE WALKURE" to hear the GATA music
Black Blade
(10/16/1999; 18:05:21 MDT - Msg ID: 16589)
Quabbin....Irish news.
Just a short note here. If you were Irish, wouldn't you want gold to drop, even crater right before each and every Brit auction? Just to slam it home to the Brits as a little revenge over that potato thing awhile back ;)
gidsek
(10/16/1999; 18:12:41 MDT - Msg ID: 16590)
MRM
"Knock on wood but I have yet to lose a penny in the precious metal markets."

You must be terribly lonely!

gidsek :-)

CoBra(too)
(10/16/1999; 18:15:51 MDT - Msg ID: 16591)
A limerick? from the Vienna Woods
There once was a standard of gold
Though some have revoked it!
As I was brutally told
When still I was a kid.

The bankers of standing
Peddling fiat instead
Are in for hard landing
Systemic risk ahead!

The system of paper in a new paradigm
Whereby piling on debt
Which we can't ever redeem
("und alles ist hin" - J.N. Nestroy)
Is the new age concept.

But once the bubble starts bursting
And there's nowhere to hide
You realize you've been thirsting
To wellcome the golden tide!

Cheers - CB2 - late Sat. nite

megatron
(10/16/1999; 18:24:41 MDT - Msg ID: 16592)
greenspan
He's starting to look like the drunk at a party who keeps turning the music up. Shares are overvalued? Thankx Alan, what a genius! The rise in gold was the phone call from the neighbors, silver will be the cops beating the S##t out of him on the front lawn, and the collapse of the dollar will be the bill from the hospital. HA HA HA you phony socialist gov't statist ASS@@@@ole
Bonedaddy
(10/16/1999; 18:42:43 MDT - Msg ID: 16593)
A tale for the kindred spirits....
WHO IS IT? WHO COMES TO AWAKEN ME FROM MY REST?
Well�er�uh� it me.. bonedaddy�
COME CLOSER, STEP INTO THE LIGHT AND LET ME HAVE A LOOK AT YOU. BONEDADDY, HUH? WHAT KIND OF NAME IS THAT? SOUNDS PRETENTIOUS TO ME.
Well, it 's a nickname actually, I chose it for myself. It's slang for the leader of a tribe of savages.
JUDGING FROM THE LOOKS OF YOU, THE TRIBE MUST BE PYGMIES, WHAT DO YOU WEIGH, 120 SOAKING WET?
One thirty, if its any of your business. Besides, I chose the name in your honor. You're the bonedaddy of the whole currency tribe!
ME, THE LEADER OF ALL CURRENCIES? HA! SON, I'VE BEEN OUT OF CIRCULATION A LONG TIME, BUT WHAT PLANET HAVE YOU BEEN LIVING ON? THE TRASH THAT PASSES FOR CURRENCY TODAY RETIRED ME A LONG TIME AGO. YOU'RE WASTING MY TIME, MOVE ALONG.
Well actually, that "trash" that passes for currency, is the reason for my visit. There is more and more of it every day. There are an incredible amount of dollars and all kinds of stocks and securities that are acting like currency. There's even paper gold!
WHAT, PAPER GOLD! WHY, THAT'S PREPOSTEROUS! THERE'S NO SUCH THING AS PAPER GOLD! PEOPLE MAY AS WELL BE TRADING PAPER SUNSHINE! HOW DID ALL THIS NONSENSE GET STARTED?
Well, I can't say actually. It's rather complicated for me, but I think it was greed at the root of it. There are plenty of people around who would trade in paper sunshine if they thought they could make a buck at it.
GREED ALWAYS MAKES PEOPLE GULLIBLE. BELIEVE ME, I'VE SEEN PLENTY OF GREED IN MY TIME. WELL, I SUPPOSE IF THERE WERE ENOUGH GULLIBLE PEOPLE, A MARKET COULD BE MADE IN BOTH BLUE SKY AND SUNSHINE.
Yes. That appears to be exactly what has happened. And that is precisely why we have to get you back in circulation. There has been so much blue sky and sunshine sold to so many people that everyone forgot about storms.
SO, A HARD RAIN WOULD WIPE OUT A LOT OF PAPER SUNSHINE THEN?
I believe that is exatly our position right now.
WOULD THAT BE SO BAD?
Well, I suppose it depends on your point of view. Today many more people than ever before have everything they own in paper sunshine. It'll probably wreck the world for a while.
YES, A STORM WOULD BE TRAGIC THEN. AS YOU KNOW, I WAS CREATED AGES AGO TO SERVE MAN AS REAL MONEY. SO, I'LL ARISE NOW AND DO MY DUTY. I'LL WARN YOU NOW, MY METHODS CAN BE BRUTAL, IT WON'T BE PRETTY.
Yes, I think I understand, but there's really no one else who can do the job.
ONE MORE THING. REMEMBER THIS FOR AS LONG AS YOU LIVE. I'M ONLY MONEY. I CAN BE YOUR FRIEND, BUT NEVER, NEVER, LET ME BE YOUR MASTER!
summicron
(10/16/1999; 18:43:11 MDT - Msg ID: 16594)
>>>>>> ----- $312.50 ------ <<<<<<<
I failed to put the standard arrows before my best arrow, so I am repeating my prediction. I am pessimistic for the next week because I think the gold shorts will put up a desparate fight to save themselves and will hammer the price down repeatedly all week, and that on Oct. 22 it will end up at $312.50. Then, the following Monday, it will start to rise so powerfully that no short selling will any longer be able to hold it back.
Leigh
(10/16/1999; 19:06:39 MDT - Msg ID: 16595)
megatron
megatron, your language in that last post makes you sound like you've done too much partying yourself this evening. Your analogies are good, but your choice of words is deplorable.
elevator guy
(10/16/1999; 19:11:17 MDT - Msg ID: 16596)
POG on Friday, COMEX, NY close.
*>>>------$350----------+>

Reasons to be bullish.

There is so much truth in the air, it cant be suppressed. If every tongue would stop, the gold itself would start to sing. (My apologies, Tim Rice)
FOA is exposing the future. Bill Murphy is exposing the present. Michael Kosares is housing the troops. The shorts are shakin' in their boots, like "deer staring into the headlights" (Thx, B.M.) They can't cover now, and they certainly can't cover later. They might as well bend over and kiss their a*s goodbye. Possible cartel forming. (Hope there is good news on this tommorrow) Gold is still trading at depressed prices, compared to when the fix began in earnest, and only just now beginning to rise to its true status as reserve currency/backing. Equilibrium price is said to be $600/oz, but after rising to that level, and the dollar is coughed up around the world, it will soar until we can see just how bankrupt and worthless the dollar is, like so much confetti.
Lease rates remain very high, strong demand, and now with the advent of the Euro, there is no reason why the ECBs have to play any more dollar games. They can now blast away at the dollar, without rocking their own boat. The jig is up, and next week we are going to rock and roll!
elevator guy
(10/16/1999; 19:13:04 MDT - Msg ID: 16597)
Clarification, that makes sense. (cents?)
*>>>------$350.00----------+>

Hipplebeck
(10/16/1999; 19:14:39 MDT - Msg ID: 16598)
Hi Leigh
I think you've got a lot of class.
I've been here about 3 months, Studying, Watching, Learning,
and contributing, so I've seen some of your posts.
Have you made the Oct. 22 guess yet?
Michael. Snug Harbor, Oklahoma.
Hipplebeck
(10/16/1999; 19:30:30 MDT - Msg ID: 16599)
Just thoughts
Sometimes when I read the posts here, I feel like something big is going to happen at any moment.
Then , depending on what happens to me during the day, if I get distracted, that goes away.
I know we have all built and use, what is to me, a completely ridiculous monetary world, and that someday the crunch must come, because it is obviously built in. The world is what you make it, and sometimes is is downright embarassing to be one of the human beings that made this mess. I'm sure glad to know there are people out there who see things in a similar manner as I do.
Michael
Leigh
(10/16/1999; 19:30:39 MDT - Msg ID: 16600)
Hipplebeck
Hi, Michael, thanks for your kind words. No, I'm not going to make a prediction, but I imagine the price will be on the high ($400 or so) side. Just my guess.

I couldn't let a week go by without making a little dig at megatron. He's like a bad little brother you can't help teasing. He's probably snarling at his computer screen and saying awful things. Hi, megatron, have you clicked on executiveorders.org and e-mailed your Congressman yet? Maybe a little rebellious activity will soothe you.
Hipplebeck
(10/16/1999; 19:33:39 MDT - Msg ID: 16601)
Leigh
Put some arrows around that 400 or so
law
(10/16/1999; 19:35:24 MDT - Msg ID: 16602)
Mining stocks, 1st time poster, appreciation
http://www.goldsheet.simplenet.comDD, where are you? Boy DD!! I have to concur with you--"There's something powerful in FOA's posts--they combine an intellectual and experiential message based in philosophy, psychology, history (including geopolitical and cultural), economics, finance, and many other disciplines, while wrapping it in warmth, compassion, understanding and humor.
Also: ORO and Yellin -- your synthesized depth of reason, logic, and comprehension are terrific...as is the thought provoking analysis of MK, TC, SteveH and many others at this forum. The viewpoints, perspectives, and humor of Peter, Leigh, Tomcat, Goldspoon, Goldfly, Gandalf, Farfel, Black Blade, Beesting, Journeyman, RossL, Bonedaddy, Richard, YGM, and the many, many others here, make this a wondrous meeting place.
I may not be able to add much...so much has already been said, but will share some thoughts as I can.

DD and Skip: I can certainly identify with your experiences in business and investing. You expressed the human factor well!

RossL, GT: I think Watcher may have confused Anglo with Normandy?

FOA: The illumination of the various types of gold markets has been much appreciated!

For those of you interested in mining stocks--I have subscribed to newsletters and researched this area for 20 years--see the above link.

I thought the "system" was on the verge of collapse 20 years ago. I tend to agree with Farfel..."the powers that be" can create many "dollars" that they have used as duct (duck) tape and bandaids. But, I think the "jigs" up!!!
The tape and bandaids are losing there adhesion.

The Best to all...a lurker no longer.

Oh Yeah! The price of gold Oct 22 ----> $338.20
mike55
(10/16/1999; 19:37:56 MDT - Msg ID: 16603)
>>>>>>------ $322.40 ---------->
Since I won't be able to post tomorrow, I can't wait to see if there's any substance to the GATA cartel rumor. While the Dow will show continued strains of confidence next week, I believe the gold shorts will continue to do everything in their power to keep the lid on gold, and accordingly it will rise only a few dollars for December. I also believe next week's stop-gap to be short-lived as the weeks following will see the dollar/gold exchange rate rising toward year end. Thanks to all here -- this is far and away the best site on the internet!
mike55
(10/16/1999; 19:44:29 MDT - Msg ID: 16604)
Golden Truth, Re: Rollover
GT -- I've been trying to find the video "Rollover" you've mentioned. According to your posts, it sounds interesting. I'm in a large metro area, but have had no luck at the mega-stores, Mom & Pop shops, or public libraries. Did you rent or purchase the video ? Perhaps an online source to buy? TIA.
Canuck
(10/16/1999; 19:51:11 MDT - Msg ID: 16605)
FOA msg #16574
After the PPI release on Friday (8:30am Eastern) I felt a sudden surge of euphoria so large that I knew everything I had looked for in the past 16 months was validated. My quest for knowledge (initially Y2K) led me to USAGOLD, the scope of conversation here at this forum borders on unimaginable and it truly is a credit to all the people who shed light on such a vast array of topics.

My knowledge has grown from near nothing to a hint of an understanding of economics, finance, history, and a multitude of other subjects. I thank everyone, I thank Mr. Kosares and last but not least I thank FOA. You are cool under pressure. You are the man. I am up and down like a yo-yo and I credit this to my age or experience or possibly to my genetic ability to handle this craziness. I hope that someday I can walk in the footsteps of a giant like you.

P.S.

Oct.22

Due to announcement tomorrow, CPI on Tuesday and freak show developing at Comex, the Oct. 22 gold close, IMHO, will be in neighbourhood of:

\\\\\\\\\\\\\\\\\\__________________\\\\
-----------------__________________ $$$ )))) $399 U.S.
////////////////// ////
Leigh
(10/16/1999; 19:58:01 MDT - Msg ID: 16606)
FOA
Ditto Canuck, and gogold on Kitco says FOA's one scary dude because he knows what he's talking about.
Twice Discipled
(10/16/1999; 19:59:02 MDT - Msg ID: 16607)
*>>>>------$328.40--------+>
Just praying that it doesn't shoot up too high before, I can get my money out of the grips of those lying, cheating bankers on Tuesday.
NORTH OF 49
(10/16/1999; 19:59:42 MDT - Msg ID: 16608)
As I'm Sure, "Crock Dundee" would say
"Now THAT'S an arrow"!

No49
NORTH OF 49
(10/16/1999; 20:01:25 MDT - Msg ID: 16609)
Sorry!
That last post was addressed to "Canuck"

No49
Leigh
(10/16/1999; 20:09:17 MDT - Msg ID: 16610)
Goodnight, All
Wow, the conversation is getting really interesting tonight! Wonderful poem, CoBra! Loved your story (as always), Bonedaddy! We've all got to rise and shine early to be at our battle stations by 8:50 (Eastern), so I'm off to bed. Tomorrow sounds like a fun day!!
AEL
(10/16/1999; 20:34:53 MDT - Msg ID: 16611)
inflation
http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001ajvI hope this mans wrong, CRASH COMING and WHY.

From the Prudent bear forum.

The four possible, nay five possible outcomes and their
probabilities:

1. Grand Super Cycle crash from here to triple figures: 20%

2. Sideways Greenspan/Yardeni Bear for 3.5 years: 10%

3. "Reversion to Mean" crash (Super Cycle?) c/w dowside overshoot to
~3000 and recovery to ~5000, erasing "New Era" moral hazard: 67%

4. Final Blow-off to New Highs: 3%

Oh yes, and lest we forget:

5. PC really does change Human Nature, thus creating the New
Paradigm: 0%

And now a few words from ex-AK-Broker

Current Market News

10-15 Welcome to the promised land. I've always been amazed how years
of analytical work come to fruition at once. Now is just such a time.
Take your phone off the hook. Put up the "do not disturb sign." Call
in sick, and pay attention to this.

The PPI was released this morning. It was up an astonishing 1.1%.
That's over 12% annualized. The core rate -- the one Wall Street was
telling you would not be affected -- soared 0.8%. All the b.s. we've
seen in the PPI reports has finally come to roost.

Consumer foods prices were up 1%. Energy goods, up 2.2%. Gasoline was
up 2.2%. Heating oil, up 6%. But this is not energy-based inflation.
Passenger cars soared 2%. That's after all those months where I
screamed that prices were soaring. Finally, they couldn't hide it any
longer. But this is not the part of the report that is causing panic
at the Fed.

Inside information I have says Greenspan got an advance warning of
the report. Here are the sections that triggered his astonishing
warning yesterday. Intermediate energy goods were up 1.8%. But crude
goods were up a whopping, gone-crazy 5.1%. Crude goods less food and
energy, up 2.2%. Non-food materials, up 7.6%. Incredible numbers, my
friends. But it gets even better.

Let me give you the unadjusted numbers. They are staggering
economists the world over. Unadjusted finished goods, up 3.2%. That's
an incredible 40% annual inflation rate. Not in Brazil, but in the
United States. Less food and energy, up 1.7% unadjusted. Even more
staggering, crude goods unadjusted were up 16.1%. Non-food materials
unadjusted up 30.2%.

There's no inflation?? BULL. Inflation is out of control. It's now
embedded. It's bubbling to the surface, and the U.S. economy is going
to hell. Already, as I write this report the Dow is down nearly 200
points.

U.S. business inventories and sales were also reported today. From
July to August, this number was up 1.3%. From August 1998 to August
1999 it was up an astonishing 9.2%. Inventories were only up .3%.
Which means businesses are unable to keep up with the runaway
economy.

The August stock to sales ratio is now at 1.32. The lowest amount of
inventory to sales, American business has ever held.

Greenspan's warning last night, to American bankers, was the most
incredible speech any central banker has ever made. Greenspan will go
down in history for making one of the gravest mistakes of any Fed
Chairman. He did not raise rates early, when he still had a chance to
stop this runaway bubble economy.

Greenspan needs to stop cocking around here. He needs to raise rates.
Now, fast, and repeatedly. He has a flat-out crisis on his hands. The
least of which is the stock market collapse. He's on record warning
American bankers about a stock market collapse. Truth is, Greenspan
is petrified the crash will melt down the U.S. financial system. So
he took a greater risk. He allowed inflation to become embedded in
the U.S. economy.

For over ten years, I've warned about the danger of a U.S. stock
market bubble crash. It's here. You need to trade this. I'm not
screwing around. More important, the Fed and the markets are not
screwing around. By the time everyone else realizes the U.S. economy
is going down the poop shoot, it will be too late.

10-15 Today the stock market suffered its biggest trading loss in
over a year. The dollar plunged against the Euro, German Mark, and
Japanese yen. T-bonds were up, yields were slightly down, on a flight
to quality. Panicked traders sought a safe haven.

The Dow fell 267 points. 2.6%. The S&P500 cash fell 36.01 points, to
1247.41. That is a 2.8% drop. The NASDAQ plunged 75 points, to 2732.
Down 2.4%. For the week, the Dow fell 630 points. That is its biggest
weekly decline ever. Declining stocks outnumbered gainers by nearly
four to one. 2400 stocks fell. 687 were up. We saw an equal number of
falling stocks to rising on the NASDAQ.

Early indications I have say this week saw the biggest dollar outflow
from mutual funds ever. All this action took place on huge volume.
908 million shares traded on the NYSE today.

I was in the market the entire day. The only way to describe today's
trading activity is "panic". Huge losses were booked. I mean huge.
This is not the end of the move. It is the start of the Wall Street
wipeout you and I have been planning for.

At one point today, the Dow was below 10,000. Only panicked,
manipulated buying by club members kept the Dow above 10,000 at the
close. I don't care what kind of spin you see. This is an unmitigated
disaster. It is truly round one, in what will turn out for us to be
the most glorious event of our lives.

This week's losses on Wall Street rippled around the world. Stock
markets in Europe, Asia, and Latin America all fell, as Greenspan
warned about the bubble stock market wipeout. In the coming days and
weeks, the market will not go straight down. There will be rally
attempts. But as you see, buying for the long haul, regarding every
dip as a bargain hunting opportunity, is no longer the psychology of
the market.

How serious is this drop? One indication is that the White House felt
the need to reassure the markets that everything is great. Not once,
but several times. White House National Economic Counsel Head Gene
Sperling said he expected "quite solid U.S. economic growth in the
3rd quarter of the year." Hey, Gene, I have news for you. 3rd quarter
is done past. The stock market looks forward, not backward. He said,
"the U.S. remains in a sound growth and low-inflationary
environment." Obviously, besides all his other problems, he can't
read. Wall Street's and the Clinton administration's response is
pitiful.

More important, despite these record-setting downturns, the stock
market is still grossly overvalued. It has a long, long way to fall.

...... more at the link.........
Peter Asher
(10/16/1999; 20:49:30 MDT - Msg ID: 16612)
The usual suspects
Yahoo! NewsTop Stories Headlines
Tuesday October 12 5:33 PM ET
Maine Gets Taste of Y2K Glitch

By DAVID SHARP Associated Press Writer
PORTLAND, Maine (AP) - State government got its first Y2K surprise months early when owners of 2000 model cars and trucks received titles identifying their new vehicles as ``horseless carriages.''
Despite millions of dollars spent to ensure state computers are ready for the year 2000, computers in the secretary of state's office got confused over the 2000 model year designation.
As a result, some new vehicle owners or lien holders got titles to ``horseless carriages'' instead of cars or trucks in April.
The case demonstrates the problems that can occur when computers misread the year 2000 as the year 1900, which is what happened in the secretary of state's office.
Since the computer thought the model year was 1900, the titles were printed with the ``horseless carriage'' designation used for vintage vehicles produced before 1916, said Secretary of State Dan Gwadosky, whose office oversees licensing and registration of vehicles.
About 800 passenger car titles and about 1,200 tractor-trailer titles were issued with the error, Gwadosky said.
Since few people pay cash for cars, most of the titles went directly to banks and financial institutions.
``Most of them chuckled and said we need a clean title as soon as possible,'' Gwadosky said Tuesday.
Gov. Angus King did not know of the problem until reporters asked him about it Tuesday. He said there is no guarantee computers will work properly but he said the state doesn't envision widespread problems with state computers on Jan. 1.
``The major systems that effect health and safety are in pretty good shape,'' King spokesman Dennis Bailey said. ``We're pretty sure if there is a problem, it will be this kind and not something serious.''

watcher
(10/16/1999; 20:52:21 MDT - Msg ID: 16613)
Peter Asher/RossL
Sorry for delay in response to your posts .Was out for the day

Peter Asher, Did not say that their hedge would not be settled. I was infering that a deal may have been arranged to settle their account with the fed. We have seen a similar thing done with LTCM where there was an off market transaction.The difference here could be a deal where the fed settles or buys there hedge book and in turn a company would then promise them that gold that was hedged over a predetermined period at a determined price in the future.
This is only a postulation that presumes that the fed is actually trying to lock in as much gold (future) as possible by these deals before the price rise coming
This would not change the inevitable . Between all the gold sold forward and shorting that has gone on these deals would not change the fact that with current demand not being met with supply and no cb sales with many buying back hedges and covering shorts and investment money coming in that hasn't been in gold market and future years of supply already sold these transactions are a drop in the bucket. I still see a price increase many many times current price in not so distant a future and am personnally looking forward to this future for me and all who were forced to endure this manipulation these last few years.

Ross L
read this on kitco . was a direct quote from company
pa kua
(10/16/1999; 20:55:03 MDT - Msg ID: 16614)
>===>=====>=====> $293 <=====<======<=======<
In the 1960's and 70's I supported legalization of gold ownership and a gold standard for the USA. Today we seek a "new money" for a digital world. Successful ongoing experiments in some communities and regions (as in southern France) suggest a form of barter offers the best possibility for developing sound monies, functioning in a complimentary way with international currencies.
The manipulation of currencies by powerful interests in this century has facilitated the control of science, technology and education by the few, which has encouraged global conflicts. The technological progress and the society of today is a shoddy result compared to what it could have been and might become if ideas, technology and resources had not been suppressed, stolen and controlled by selfish interests. It has placed the human race and the environment at risk of destruction.
The three-year manipulation of gold we have just witnessed is a portent of war. Governments need gold to prepare for war; they have used the bankers to bankrupt the mines. Those who desire absolute power and control consider war or economic shocks a necessary means. The adoption of a gold standard today would be in a form that serves the governments in power, another way of manipulating the currencies to benefit the few to the detriment of the many.
The Arab proverb runs,

The neighbor before the house:
The companion before the way.

True, as ever. So, also, the Bard's Sonnet, which contains the lines," Mark how one string, sweet husband to another,/Strikes each on each in mutual ordering."

The choices that face people everywhere in their ordinary lives are becoming more closely related. "The fraud of currency," as FOA describes it, is one. When we reach Philadelphia the different ways become one.
Peter Asher
(10/16/1999; 20:55:38 MDT - Msg ID: 16615)
Bonedaddy, law!
Bonedaddy, Very nice story! I'm sure Leigh will enjoy telling it to her children at bedtime. Great tale for home schooling kids about Gold.

law; thank you for the recognition. ---P.
Golden Truth
(10/16/1999; 21:30:26 MDT - Msg ID: 16616)
TO mike55
I found "ROLLOVER" at a video rental shop that carries a big selection of older movies. I to could not find it at the regular places i.e Blockbusters etc.
Even though they had it in their computors. On my rental copy it says 1981 Orion Pictures'starring Jane Fonda and Kris Kristofferson.

On the back of the movie jacket there is an ISBN 0-7907-0256-8 this is probably for the Book?
Anyways it's a very interesting movie which links the Oil for GOLD deals to the financial world.
Since this movie was made in 1981 i'd say this has been going on since the 1970's.

Enough said, other than this is a Fiscal Titanic,and the whole World is along for the ride!
P.S you won't like the ending unless you have more GOLD than you can carry, or at least your weight in GOLD.
G.T
watcher
(10/16/1999; 21:41:45 MDT - Msg ID: 16617)
Ross L
I will try to track down where I came across this comment.
I was at kitco and gold forum lurking this AM . Anglogld doesn't seem to fit this typecasting in my mind either.
Maybe poster got name of co wrong.I'll check it out.
The Believer
(10/16/1999; 21:51:51 MDT - Msg ID: 16618)
Oct.22 >>>>----$387.50----+>
I should think we will see the war really rage this
next week.
The shorters will be seen pounding the POG, but
the tide will be turning more and more toward our
shores.
Very powerful people these shorters of gold...but
as said in the past, pride goeth before a fall....
And what a fall it will be my friends.
THX-1138
(10/16/1999; 22:14:27 MDT - Msg ID: 16619)
Some people are just so stubborn and hard headed.
I have been sending the GATA news articles to a lot of family members. My retired uncles response to the last one I sent (article 256) just makes me shake my head. This is a summary of what he said "I am not sure a gold cartel could do anything. Why should the increase in oil price have anything other than to reduce the price of gold?
If oil prices climb it would make sense to own oil stocks especially the big ones that have their own oil fields. I feel once we get past next january that gold will fall back to about $280 per ounce."

Guess he is still mesmerized by Wall Street. He told me I should invest in Banks, and perscription drug maker companies. I told him to buy gold, and at one time gold stocks (have since been selling them to get physical). Even told him my thoughts on why the market would fall and why gold would rise. He still doesn't get it.

Should I just let him take his beating with or rest of the Sheeple or continue to badger him?
Guess that's why I am buying gold, to rescue some of my soon to be poor family members.
ORO
(10/16/1999; 22:23:09 MDT - Msg ID: 16620)
Mike55 Golden Truth
Since 1969 in one form or another.

Since 1937, originally.
ORO
(10/16/1999; 22:41:30 MDT - Msg ID: 16621)
SteveH -Morgan
http://home.earthlink.net/~amn/charts.htmlThe last chart should give you a kick if you remember what we were talking of re Morgan.

Tomcat
(10/16/1999; 23:13:44 MDT - Msg ID: 16622)
Silver, law, ORO, FOA, TC, MK, Peter A.
>>>>>>>------$316-------+>>>>>>

My guesstimante is based on my feelings that the shorts are going to get at least another week or two on rollovers. The forward rate is positive (FR= LR-IR) which means those who want their gold back are going to be asked to wait. And what other choice do the have but to wait? Long term I am very bullish on both Au and Ag.

Regarding my continuing optimism for Ag. It's not based on a whole lot of data. It's the old street part of me. I figure there will be a period of time when gold will not be available. During that time there will some silver available and there will be some folks who will take silver as a substitute. It will be an emotional time for buyers and they will pay the priec. Just MHO.

FOA, your discussion on Ag a day or two ago finally allowed me to get your view on silver. Thanks for that discussion and all the other recent posts.

ORO, did I read a post that referred to you writing a book? If so, it would be a great contribution. I would buy many copies.

law: Welcome. Tell us more about yourself.

TC: Some really great coverage this week. Thanks.

MK: Just finished reading "Hitler's Banker". Good read. I was interested in how H. Schact helped Germany beat inflation in 1924. He did it in only 12 months!! By 1926 he had Germany starting to boom again. I am also reading Chernow's House of Morgan.

Peter A: Nice to see you back.
DD
(10/16/1999; 23:34:10 MDT - Msg ID: 16623)
Gentleman, Start Your Engins - It appears we have a contest
------------>>>>>>>>>>$345.01------------>>>>>>>>>>>>>

When it comes to understanding charts, support levels and the like, I'm like a fat guy in a wet suit doing a marathon.
In other words, I don't look good doing it. In any case, a number of people have said that $345 is the next major support level for gold and that if we break that, we go to the $375+ area. Is this true? I have no idea. But I'd like to test the theory. By the way, would $375+ create any more stress in the old short shorts? Probably not. I understand everyone's short shorts are already covered. Or is that buried? Best, DD
ET
(10/16/1999; 23:35:25 MDT - Msg ID: 16624)
Y2k
http://www.odci.gov/cia/public_affairs/speeches/pr101399.html
NIO for Science and Technology Statement October 13, 1999
----------------------------------------------------------------------

Statement for the Record Senate Special Committee on the Year 2000 Technology Problem

Foreign Preparedness for Y2K

Lawrence K. Gershwin National Intelligence Officer for Science and Technology

Mr. Chairman and members of the Committee, I am pleased to have the opportunity to provide the
Committee with the Intelligence Community's latest assessment of the status of foreign preparedness
for Y2K. We recently published a comprehensive, classified National Intelligence Estimate on
foreign Y2K efforts, and we are continuing to focus on this evolving issue to ensure that policy
makers are as prepared as possible for the potential consequences for the US and our allies of
international Y2K failures. This assessment is essentially a "snapshot" of the current state of
international preparedness for Y2K. As countries continue their remediation, testing, and contingency
planning activities, and as we get more information, some of our observations will change.

Efforts to address potential problems vary widely both among and within individual countries. For
example, the United Kingdom has a highly successful government awareness campaign which has
spurred industry, commerce and government agencies to take steps to correct Y2K problems. At the
other end of the spectrum, when Indonesia's national electricity board was recently asked by an
Indonesian newspaper about its Y2K preparedness, they replied that they can observe what happens
at midnight 1999 in Western Samoa, New Zealand and Australia, and still have six hours to make
plans.

* The quality of corrective work varies greatly among countries and sectors and, in some cases,
remediation work introduces new flaws that go undetected due to limited or faulty testing. Moreover,
time for effective corrective action is running out. Even if remediation work has taken place, there
may be insufficient time left for testing, identifying problems that emerge, and follow-up remediation.
Industry experts believe, in many cases, effective testing can take two to three times as long as
remediation. The availability of funding and technical expertise in foreign countries to analyze
vulnerabilities and carry out remediation and testing will continue to be a major impediment. The
public and private sectors will increasingly focus on contingency planning for coping with the impact
of Y2K failures after 1 January and prioritizing repairs.

Where effective prevention action has been taken in advance of 1 January, disruptions will likely be
random, temporary, and of localized impact. In the absence of effective remediation and contingency
plans, Y2K-related problems could cause widespread, possibly prolonged disruptions in vital
services that could have serious humanitarian and economic consequences.

Y2K failures will occur before and as the date rollover approaches, peaking on 1 January and
persisting well beyond that. In some countries, such as Russia, it will likely take a significant amount
of time to overcome Y2K failures.

Russia, Ukraine, China and Indonesia are among the countries most likely to experience significant
Y2K-related failures. Countries in Western Europe are generally better prepared, although we see the
chance of some significant failures in countries such as Italy. Major economic powers such as
Germany and Japan are making great strides in Y2K remediation, but their late start and the magnitude
of the effort suggest that even these countries are at risk of some failures. Canada, the UK, Australia,
Singapore, and Hong Kong are very well prepared and have a lower chance of experiencing any
significant Y2K failures.

Regional Overview

The Americas. The level of Y2K preparedness varies widely among foreign countries in the
Americas and even among sectors within individual countries; Canada�working closely with the
United States on sectors where national interests are highly integrated such as electrical
power�emerges as the best prepared.

Most national governments in Latin America have established commissions to coordinate
preparations within the public sector and to increase general awareness, but efforts in many cases are
late, underfunded, and weakly enforced. Some disruptions of basic public services�including
utilities, telecommunications, public health, and social welfare�are likely throughout the region, but
we are unable to judge their potential scope or duration. We consider it unlikely that these disruptions
will affect domestic stability or US interests in this region.

Europe. European countries, with the exception of the United Kingdom, got a late start in assessing,
repairing, and planning for contingencies related to the Y2K problem. Nearly all European
governments have national Y2K programs in place, and most are working very hard to minimize the
significance of Y2K-related problems. However, we are concerned that some have not allotted
adequate resources to remediation and testing. Remediation efforts are the most advanced in the
finance and telecommunications sectors Russia and Ukraine. Russia and Ukraine are particularly
vulnerable to Y2K failures. They got a late start in remediation and lack sufficient resources to
identify and correct problems--virtually guaranteeing that the countries will suffer economic and
social consequences for some time. Both countries have old capital stock, much of which has not been
upgraded since the Soviet era. They are further impeded because of their perception that a limited
computer dependence largely "protects" them. Areas of greatest risk are strategic warning and
command and control, nuclear power plants, the gas industry, and the electric power grid.

Middle East & North Africa. Most countries in the Middle East and North Africa recognize Y2K as a
computer hardware and software problem, but started later in dealing with the potential problems
with embedded chips and interconnected systems. The oil companies, banking sector, and large
multinational companies are best informed and are conducting remediation and testing. Government
institutions, small businesses, the health sector, and some public utilities lag because of funding
shortfalls, a late start in addressing the problem and, in some cases, a misunderstanding of the nature
and scope of Y2K vulnerabilities.

Y2K-related failures will occur, especially in public utilities, although we cannot yet judge their
scope or duration. Urban areas will be most affected.

Africa. With the exception of South Africa, other countries in sub-Saharan Africa were late in
recognizing the Y2K problem but are developing preparations to deal with it. Because many
Africans�especially in rural areas�expect little from government, interruptions in services are
unlikely to spark unrest.

Asia-Pacific. Preparations for dealing with Y2K problems across the Asia-Pacific region vary
greatly. The Asian countries that rely heavily on advanced technology for power generation,
communications, and transportation have had comprehensive Y2K programs under way for some
time. Most countries with moderate reliance on computers are aware of potential Y2K problems and
have begun assessment and remediation efforts.

The sectors with the most advanced programs for dealing with Y2K are banking and finance, civil
aviation, and telecommunications. The sectors least prepared, as a general rule, are railroads, ports,
medical services, and small- and medium-sized enterprises.

Impact on US of Y2K Failures

Y2K-related disruptions and failures can affect US interests in three ways:

* They may have a direct impact. Some foreign infrastructures and vital sectors are directly linked to
those in the United States either physically or through computer networks. * They may have an
indirect impact. The United States depends on the uninterrupted flow of many raw materials and
finished goods for its economic security and national defense. In addition, diplomatic and military
operations depend upon host-nation infrastructure support, including telecommunications and electric
power. * They may have broad national security implications. Foreign Y2K-related crises have the
potential to involve US military and civilian components in humanitarian relief, environmental
disaster recovery, or evacuations.

The direct impact on the United States of Y2K-related disruptions and failures in foreign
infrastructures will be limited. There are several reasons for this. First of all, Canada, the country to
whose infrastructure we are most tightly linked, is well advanced in Y2K remediation and unlikely to
export significant problems to the United States.

Second, the global payments system is unlikely to experience significant failures, because most of the
developed countries appear well prepared in the banking and finance sector. Financial institutions in
most emerging markets, however, as well as those in less developed countries, may experience
failures because they started the remediation process later and because they are experiencing
scarcities of resources and technical expertise.

* Even well-prepared institutions, however, will still be impacted if disruptions occur in domestic
infrastructures�especially electric power and telecommunications. They are also exposed to Y2K
problems in the information systems of their customers, vendors, and smaller banks to whom they are
linked.

Third, we are highly confident that Y2K failures will not lead to the inadvertent or unauthorized
launch of a ballistic missile by any country. If Y2K failures do occur, we are concerned about the
potential for Russia to misinterpret early warning data�especially if we were in a period of
increased tensions brought on by an international political crisis. Russia and the United States have
agreed to establish the Center for Year 2000 Strategic Stability at Peterson Air Force Base,
Colorado. The Center will provide a venue for sharing information on missile and space launches
collected by US sensors across the year 2000 date change in order to prevent any misunderstandings
resulting from Russian early warning failures.

Finally, the United States is unlikely to experience a significant disruption in oil deliveries because
our key suppliers appear to be Y2K ready. Major multinational firms have been in the forefront of
remediation and testing efforts, and operators of oil terminals and tankers have been similarly active
in correcting Y2K vulnerabilities.

While we probably will not be directly impacted by foreign Y2K failures, breakdowns in foreign
infrastructure could impact US interests overseas: our official and military presence overseas, US
businesses, and the welfare of countries important to us. Disruptions and failures in
telecommunications, electricity generation and transmission, and transportation pose the greatest
threat because of their fundamental importance to all other critical services.

Sector Overview

Telecommunications. Although a high priority for most countries, efforts to remediate Y2K problems
in the telecommunications sector in many countries, particularly developing countries, have been
hampered by inadequate funding, a shortage of skilled personnel, a late start, and the need for lengthy
remediation and testing. We estimate that only a few countries are on target in remediating and testing
their telecommunications systems. Networks elsewhere are likely to experience problems ranging
from minor inconveniences to serious disruptions. Experts are concerned that minor failures could
cascade, causing a network to become degraded over time.

* The interconnections among many time-sensitive systems make it more likely that a Y2K problem in
one system will cause problems in a system with which it is connected. Problems in
telecommunications would also affect other sectors, such as power and national defense.

Failure to complete Y2K remediation is likely to result in outages that could affect the United States
and foreign countries in significant ways. They could cost telecommunications operators considerable
money in lost revenue; affect the operations of government, the financial sector, the military, industry,
and the energy sector; and exacerbate regional tensions. Communications disruptions will damage US
businesses and official activities that depend on host-government support.

Many well known companies that follow Y2K preparations list countries such as Russia, China, and
Italy as likely to have telecommunications problems and we have no reason to disagree with these
assessments. Some countries�such as Russia�are likely to be so poorly prepared that widespread
telecommunications failures will likely occur.

Electric Power. Localized blackouts lasting possibly up to a week and regional brownouts of much
shorter duration are likely to occur in Russia; however, the city of Moscow is unlikely to experience
serious disruptions. In western Europe, some countries are likely to experience localized blackouts;
however, a cascading failure throughout the region is highly unlikely.

* Each of the different elements of the electric power sector�generation facilities, transmission and
distribution networks, telecommunications, protection systems, and consumers�forms a complex
interrelationship that could cause a systemwide failure even if there were significant failures in only
one element. Some electrical power grids in Europe and Asia�where Y2K remediation has been
inconsistent at the national and local levels�are likely to experience outages.

Foreign Nuclear Power Plants. Y2K failures affecting nuclear power plants fall into two categories:
problems that occur outside the nuclear plant (for example, voltage and frequency fluctuations or the
collapse of the electricity grid) or, less likely, problems that occur inside the nuclear plant that affect
generation capability. Of these two, the first is by far the more serious because nuclear plants depend
on off-site electricity to operate. Loss of off-site power or large fluctuations of voltage frequency on
the grid would lead to an automatic shutdown. In the event that a prolonged outage occurs, this would
require, among other things, that backup systems supply power to pump coolant through the reactor
core for about a week until the reactor is below fuel melting temperatures. Therefore, Y2K problems
impacting generation capability in conventional plants can affect nuclear plants by causing frequency
or voltage fluctuations leading to a possible collapse of the electrical grid. Similarly, Y2K problems
within equipment on the grid itself might cause problems leading to the disconnection and shutdown
of nuclear power plants.

We judge that those Y2K problems occurring within nuclear power plants probably will pose no
direct safety problem because almost all plants have analog, electro-mechanical safety systems that
will shut down the reactors if anomalies are detected. Y2K problems in digital non-safety-related
systems within the nuclear plants, if they occur, would most likely lead to a reduction in generation
capacity or shutdowns.

These Y2K-initiated shutdowns presumably could be conducted in a safe manner, but digital systems
experiencing Y2K problems could produce false data that would then be displayed to operators,
increasing the chance for operator error and, potentially, accidents. Internally-generated Y2K
problems that caused a shutdown could also contribute to instability of the electricity grid by
removing generation capacity from the grid. Therefore, Y2K problems at one nuclear power plant
could contribute to problems at surrounding power plants.

Soviet-Designed Reactors. We are most concerned about the safety of Soviet-designed nuclear plants,
including Chernobyl-type reactors in Russia and Ukraine, due both to inherent design problems of
these plants�for example, lack of total containment systems�and to the lack of detailed data on
Y2K remediation plans and contingency plans.

* Nonetheless, we judge the chance of a nuclear accident on the scale of Chernobyl is extremely low.

The combined effects of possible Y2K-generated internal failures and external power problems (loss
of offsite power) increase the risk of a nuclear incident, particularly if operators believe they can
compensate for Y2K malfunctions or for power supply reductions in the grid by overriding plant
safety systems. Similar operator actions led to the accident at Chernobyl.

At this late date, remediating and testing all Soviet-designed nuclear power plant systems before
yearend is not feasible, particularly given the age of the computer systems and the fact that many of
the original manufacturers have gone out of business. However, countries possessing these systems
have made significant efforts to identify their Y2K-related problems and are working hard to
minimize the effects. Moreover, significant international attention and assistance has been beneficial.

The chance of a nuclear incident in Russia, Ukraine, or another state with Soviet-designed reactors
during the Y2K rollover is low. It is, however, higher than normal because of the likelihood that the
power grid could experience failures, leading to a reliance on emergency power supplies of
questionable reliability, because of the possibility that auxiliary generators are inoperable due to
maintenance problems or a lack of sufficient fuel, and the potential for erroneous data leading to
operator error. In the worst case, this could cause a meltdown and in some cases, an accompanying
release of radioactive fission gases causing localized contamination.

Gazprom Gas Deliveries. The dependence of Russian and European markets on gas deliveries from
Russia's Gazprom is of particular concern. We know that several countries in Europe have extensive
facilities to store natural gas and, in some cases, are preparing to increase their stored reserves in
anticipation of possible disruptions in gas supplies at yearend. We cannot, however, estimate the
sufficiency of these reserves should Gazprom deliveries be reduced due to Y2K failures. This would
depend, in part, on the successful operation of the local pipeline distribution system. Locally severe
gas shortages may occur in Russia, Ukraine, and in parts of Central and Eastern Europe due to
reduced pipeline efficiency resulting from Y2K problems. Western Europe is at less risk due to
greater attention to storage, contingency plans, and remediation of other infrastructure on which gas
supply depends.

Transportation. Y2K problems can emerge in the transportation sector from failures in rail, highway,
ports and shipping, and civil aviation services as well as from disruptions in electrical power,
telecommunications, and the distribution of fuel. Because transportation systems cross national
borders, noncompliance of neighbors can cause interruptions in the systems of compliant countries.
Information on the potential impact of Y2K on foreign transport services and facilities has been
particularly difficult to acquire, and much of it is still being gathered by international organizations
and private groups. Moreover, much of the data is self-reported with little independent analysis. We
lack critical details necessary to make confident judgments on problems likely to be encountered in
the sector.

Commerce. Because of the increasing dependence of the US economy on "just-in-time" distribution
systems, interruptions in trade flows are important to us.The lack of Y2K preparations�and even
awareness�within small- and medium-sized businesses throughout the world indicates that larger
enterprises, which have conscientiously addressed their own Y2K problems, may experience delays
and disruptions due to failures in the systems of key business partners.

Lack of financial resources and technical skills in many cases is preventing smaller companies from
undertaking remediation, and failure to take timely action will put some of them out of business.

We are also concerned about possible Y2K-related disruptions in countries planning major tourist
events�for example, Italy, Egypt, Brazil, and the Caribbean�should local infrastructures experience
significant failures. Other countries may experience a dramatic decline in normal tourist flows�and
foreign exchange�because of concerns about Y2K-related disasters.

Implications

Public Response. Public behavior in both the runup to 1 January and in response to Y2K-generated
failures, whether real or perceived, will vary widely and could have significant economic and
political implications.

In developing countries, populations have minimal access to Y2K-vulnerable public services, and
those who do are accustomed to frequent breakdowns. But countries with crowded urban populations
could experi�� ���A�d�
ET
(10/16/1999; 23:37:12 MDT - Msg ID: 16625)
Y2k - continued

Implications

Public Response. Public behavior in both the runup to 1 January and in response to Y2K-generated
failures, whether real or perceived, will vary widely and could have significant economic and
political implications.

In developing countries, populations have minimal access to Y2K-vulnerable public services, and
those who do are accustomed to frequent breakdowns. But countries with crowded urban populations
could experience significant unrest if outages are prolonged.

The reactions of urban populations in developed countries are harder to gauge. Because of
widespread media attention and high public awareness of the issue, we expect that the risks of
panic�before and after the date rollover�are higher than in countries with lower interest in Y2K.
Possible risks include hoarding, heavy bank withdrawals, safehavening financial assets, and
purchases of guns and other equipment to ensure personal safety. Public reactions will depend to a
great extent on how the media represents the issue. Inaccurate reporting or hyping minor
inconveniences could stimulate disruptive public behavior.

We judge the threat of Y2K-inspired social unrest in developed countries to be low, but protracted
delays in resolving problems with basic services, especially banks and utilities, could provoke
demonstrations.

Malevolent Actors. The extensive publicity surrounding the Y2K phenomenon and the millennium, the
increased vulnerability of critical infrastructures, and the resultant potential for disruptions in
services could invite state and nonstate actors, including mischief-makers, to conduct attacks against
the United States or US interests abroad, or against other perceived adversaries.

Humanitarian Crises. Y2K-related malfunctions have the potential to cause or exacerbate
humanitarian crises through prolonged outages of power and heat, breakdowns in urban water
supplies, food shortages, degraded medical services, and environmental disasters resulting from
failures in safety controls. Russia, Ukraine, China, Eastern Europe, Egypt, India, and Indonesia are
especially vulnerable, due to their poor Y2K preparations and, in some cases, the difficulty of coping
with breakdowns in critical services in the middle of winter. We are also concerned that Y2K
failures in chemical plants�which are often located in urban areas�could result in environmental
degradation and hazards to the nearby population.

Even the poorest countries rely on essential services that are computerized to some extent, such as
power, telecommunications, food and fuel distribution, and medical care. Remediation work in these
sectors, however, has proceeded slowly.

Few governments outside the West would be capable of managing widespread humanitarian needs
should they arise from a breakdown of basic infrastructure in their countries, especially in urban
areas. Although many have systems experienced in delivering medical and social services following
natural disasters, Y2K failures present a more complex challenge because of the potential for
multiple and simultaneous "disasters" within specific countries and around the world, taxing the
ability of international organizations to help. Y2K failures in necessary emergency communications
systems and in needed medical and social services would compound difficulties mobilizing
emergency responses.

Some foreign governments and businesses will look to the United States and its better prepared
infrastructure to overcome Y2K problems abroad. We expect to see "safehavening" of financial
assets, routing traffic through US computer and telecommunications networks to avoid local
bottlenecks, using US transportation facilities to move international trade, and calls on the US
military to intervene in humanitarian crises.

Challenges for Intelligence

Y2K is a particularly challenging issue for analysis because of the uneven understanding around the
world of the vulnerabilities of computer hardware and software, the unpredictability of cascading
failures among interconnected systems, and the self-interest at all levels in either overstating or
minimizing Y2K preparedness.

We have seen in recent months an increasing number of statements by countries and commercial
enterprises that they are now prepared for Y2K, and we expect to see more such claims in the
remaining three months of the year. While progress has certainly been made on many fronts since I
testified to this Committee in March, not all of these readiness claims are credible, and it is a
challenge for us to sort out the truth. Commercial enterprises marketing Y2K remediation services
and governments soliciting external assistance have an incentive to overstate the Y2K problem. At the
same time, fear of stimulating panic, sensitivity about disclosing security vulnerabilities, and
concerns about legal liability are incentives to downplay the risks of Y2K failures.

In some cases, our uncertainty about Y2K preparations in a country or sector has led us to conclude
that there is an increased risk of failures. For example, in open societies with high popular interest in
Y2K issues, a paucity of information about efforts to prepare public services is likely to indicate that
authorities have paid insufficient attention to potential problems.

Y2K has a unique capacity to produce multiple, simultaneous crises. Its probable impact, however, is
difficult to assess. We have an uneven understanding about global and national infrastructures, and the
reactions of decisionmakers and the general public in a Y2K-stressed environment are also uncertain.

Furthermore, the impact of Y2K failures will depend, to some extent, on the context in which failures
occur. While manageable under normal circumstances, some outages and breakdowns would assume
much greater significance in the event of heightened political tensions, severe weather conditions, or
an ongoing humanitarian emergency.

The Intelligence Community continues to work closely with key policy consumers to ensure that
policy makers are kept informed of our best assessment of foreign Y2K developments between now
and year's end.
TEX
(10/16/1999; 23:51:25 MDT - Msg ID: 16626)
Tossin My Hat Into The Ring
>>>>>>>>>>>.........356.00.........>>>>>>>>>>!

OK, I'm tossin my hat into the ring. As far as how I came up with that figure..........Its a flat out blind guess! I have no idea as to what I am doing. Odds are....and with that kind of attitude.....I'll win!
Adios Amigos and see you in the winner's circle!
HopeingII
(10/16/1999; 23:55:31 MDT - Msg ID: 16627)
October 22 *>>>>------ $ 324.75 --------+>

I estimate this closing price on October 22 for
the following reasons.

1) I believe there truly is a huge short position in
paper Gold.
2) I believe that many that are short think they can
continue doing what they have been doing for the
past two or three years and drive the POG down
to the point where they can cover without sustaining
large losses.
3) I believe that as we get ever closer to January 1st 2000
the demand for Gold will continue to grow and there
will be more and more buyers entering the market.
4) I believe that these two opposing camps will result
in a modest increase (approximately $10.00) by the
end of next week.
TEX
(10/17/1999; 00:08:37 MDT - Msg ID: 16628)
Sorry About The Arrow
Sorry about the arrow (>>>>>>>>>.....356.00........>>>>>>>!)
You know, us cowboys aren't the experts when it comes to shootin arrows (apologies to all of you P.C. types). Gidday Up you GOLD doggies!!!
TEX
(10/17/1999; 00:09:53 MDT - Msg ID: 16629)
Tossin My Hat Into The Ring
>>>>>>>>>>>.........356.00.........>>>>>>>>>>!

OK, I'm tossin my hat into the ring. As far as how I came up with that figure..........Its a flat out blind guess! I have no idea as to what I am doing. Odds are....and with that kind of attitude.....I'll win!
Adios Amigos and see you in the winner's circle!
TEX
(10/17/1999; 00:16:59 MDT - Msg ID: 16630)
Jeez......repostin the posts
What a rookie......I'm reposting my posts. It late. Got to hit the bunkhouse. Sorry all.....
TEX
(10/17/1999; 00:21:03 MDT - Msg ID: 16631)
One Last Time
I'm gettin pretty good at this.....does anybody think I'll make it to the "Hall of Fame" someday? Goodnight......
el St.One
(10/17/1999; 03:46:55 MDT - Msg ID: 16632)
REPOST
I posted this a year ago ( Aug 1998) Seems like it's time to pin it up again.

HERE TODAY GONE TOMORROW
In these times of the soaring Dow and billion dollar deals, here is a
little quiz for any business or financial mogul who thinks he's on top
of the world.
Back in the 1920's during the last great bull market , who
was..................
1. President of the largest steel company in the U.S.?
2. President of the largest gas company?
#. President of the New York Stock Exchange?
4. The greatest commodity speculator of his time?
5. President of the BIS (Bank of International Settlement), and one of
the great
financiers of that time?
6. The "Great Bear of Wall Street?"
The Answers......
1. Charles Schwab---who died a pauper, after spending the last years of
his life begging for meals.
2. Edward Hopson who was certified insane, and spent his last years as
a babbling idiot in an institution.
3. Richard Whitney, who was president of the NYSE, was released from
prison to die at home.
4. Arthur Cooger died abroad completely penniless, living in flop
houses when he could afford the nightly charge.
5. The president of the Bank of International Settlement Nelson Keeley,
shot himself.
6. The Great Bear of Wall Street, Cosabee Rivermore----a bit ahead of
his time---died from suicide.
So all of you moguls and deal makers.....just remember. You're all to
human and pride goes before a fall. ALWAYS HAS ALWAYS WILL

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Monday could be a repeat of OCT 87

Dow down 20% in one day ????????????????????

I really really hope not

el
The Invisible Hand
(10/17/1999; 04:59:43 MDT - Msg ID: 16633)
October 22 *>>>>------ $ 523.25 --------+>
Come on, a little imagination, GATA is speaking this afternoon (London, England time)
The Invisible Hand
(10/17/1999; 05:14:28 MDT - Msg ID: 16634)
GATA quotes FOA
http://www.egroups.com/group/gata/257.html?FOA's # 16574 is GATA's 257th message
Jon
(10/17/1999; 05:40:22 MDT - Msg ID: 16635)
Closing POG 10/22
up up up 331.25
Silver Tongue
(10/17/1999; 06:26:37 MDT - Msg ID: 16636)
Wall Street
I thought it was pretty interesting to see the CNN poll which is at their website. They asked if the voters though Friday's deep dip was the end of the decline, near the end of the decline in stock prices or if the dip had barely scratched the surface of the drop which is coming. A large majority who voted feel that the stock market will drop a whole lot further. Since the people voting on CNN poles have access to a computer and hence are probably in most cases well to do and the people who have the money to invest this perception could bode badly for the market this coming week. I subscribe the Bull Market which comes out every day or so. The author blame Greenspan for the drop in the market. Sort of like blaming the weatherman in Florida for the hurricane. The market is in for a hammering if the only thing that is holding it up is Greenspan's word that everything is all right. My advice would be to stock up on physical gold because you will have it even if the market collapses. Likewise you will have a bunch of stock certificates to start your fire if you remain in paper.
Chris Powell
(10/17/1999; 06:55:13 MDT - Msg ID: 16637)
Tora! Tora! Tora! Help us bomb the Denver gold show
http://www.egroups.com/group/gata/258.html?GATA's war plan for is in the link above.
The details you'll need are in the link
below.

http://www.egroups.com/group/gata/259.html?
Golden Calf
(10/17/1999; 07:03:23 MDT - Msg ID: 16638)
What to expect...?
Previews, trailers, expectations.....

http://quote.yahoo.com/m2?u
It seems that the only market open today is
Israel, and it dropped a whopping 3.24%.

Tomorrow may just be a real swinger/zinger
in international markets.....NO?
RossL
(10/17/1999; 07:09:39 MDT - Msg ID: 16639)
Barrick
http://www.egroups.com/group/gata/258.html?Barrick has written 4 million ounces of calls. Wow! We will soon add them to the list of Ashanti and Cambior.
Bonedaddy
(10/17/1999; 07:23:06 MDT - Msg ID: 16640)
On the topic of martial law
http://www.FreeRepublic.com/forum/a37e440d7398a.htm Research by lawyers for Gun Owners of America. What they have uncovered is quite chilling for the law abiding. The impreached president already has dictatorial powers. Bonedaddy's query: will US troops kill us for peacefull
non-nompliance? If they do will the Chinese government protest?
Number Six
(10/17/1999; 08:11:42 MDT - Msg ID: 16641)
GATA Action
I live in Denver so will take a drive down there and pester them in the bar!!!
MidEastGold
(10/17/1999; 08:17:24 MDT - Msg ID: 16642)
Link on Current Known Executive Orders
http://forums.cosmoaccess.net/forum/survival/prep/exorders.htm!!!!!
Carl
(10/17/1999; 09:06:24 MDT - Msg ID: 16643)
My entry
Gold price to be >>>>$320.00.
mike55
(10/17/1999; 09:15:14 MDT - Msg ID: 16644)
Golden Truth & ORO, Re: Rollover
G.T. -- Thanks for the info. I'll look at shops that specialize in older movies. Based on your comment that I won't like the ending unless I have more gold than I can carry or at least my weight in gold, well.....I guess I won't like the ending in that case. But, a little is better than none, and at one point in the late 1920's to early 1930's, King Ibn Saud was able to carry the entire treasury of his dynasty (gold)in one saddlebag on a horse. That doesn't directly apply to me since I don't have a natural resource to exchange for gold, but I do have unnatural resources known as Federal Reserve Notes that I do exchange for gold when the family budget permits. Hey, I gotta' start somewhere! My interest in watching the movie is to put yet another piece in the puzzle to gain greater understanding of the gold/oil/Wall Street/CB workings of the world.

ORO -- I've read a few books on the subject of the gold for oil deals. There's no question in my mind that this has been fact for a long time. We will see what the future brings regarding US $/euro/gold for oil linkage. The corroboration I've found in reading your postings and those of many of the other astute people here, combined with reading "Oil, God, and Gold", "The Prize", and "In the Footsteps of Giants", leaves no doubt to the validity of the deals. As you noted, the deals have been in effect since 1937 originally on various concession agreements, and even earlier on others. In the later 1920's, when the main interest on the part of the Saudis was to grant exploration privileges for the search of water, the payment was made in part or full with gold. The natural extension of the exploration, of course, was the discovery of oil reserves, and in some cases gold and other precious metals and minerals. Thanks for all your sharing of knowledge and understanding at this site.

ORO/All -- So now as we approach the year 2000, where the confluence of the debt bubble, equities (over)valuation, euro, gold shorts, various carry trades, date rollover jitters, etc. have to face each other more directly than in the past, what do you see regarding oil in the near-term and long-term? I believe the US imports roughly 50%(?) of its oil, and let's say that between temporary delivery issues related to the date rollover, and the possible (probable) payment for oil in euros instead of dollars, what does this bode for the US domestic oil fields? Cost of US production may not be a controlling factor depending on the way things play-out over the long run. I know that many US fields have fallen into disrepair over the last 20 years due to the extortion we've forced on the OPEC countries in carrying US debt in exchange for low prices of their resources. We are notorious for our methods of getting the other guy's resources one way or the other before dipping into our own. And if we don't have a certain type of resource of our own (food, minerals, raw/finsihed goods, strategic geographic location, etc.), we just keep them in financial slavery or take over their country or government. Oops, sorry for rambling....I get so little computer time with three sons using the machine for homework that the pent-up thoughts come to the surface when I can get on. Back to the question at hand: Knowing that some of the US oil fields are water/mud filled and would take some time to reactivate, but that some could be brought back into production to supplement those currently producing, what are the thoughts on the long-term future of US oil production? Thanks to all.
Jon
(10/17/1999; 09:22:55 MDT - Msg ID: 16645)
Gold Fields
I've seen Gold Fields mentioned several times, most recently by FOA in msg #16574, dated 10/16. Is that the Company listed on American Stock Exchage trading for a fraction of a dollar? Thanks.
Bill
(10/17/1999; 09:23:08 MDT - Msg ID: 16646)
Gold & Blue in Denver
Green Bay "Gold" plays Denver "Blue" today in Denver. Hopefully GATA will have same results.
AEL
(10/17/1999; 09:27:51 MDT - Msg ID: 16647)
pa kua
"pa kua (10/16/99; 20:55:03MDT - Msg ID:16614)
>===>=====>=====> $293 <=====<======<=======<"

.... your reasoning behind that low number?
YGM
(10/17/1999; 09:31:59 MDT - Msg ID: 16648)
Gata Message----




� GATA Message---Hardly Worth Sitting on Seat Edge All Wkend For.�
(YGM)Oct 17, 11:26
The content of the message is all well & good. BUT,
personally I'm getting tired of this Hannibal Cannibal and Shaka Zulu stuff. It's beginning to sound very childish. Like we have a board game going. We raised $100K lets use it to do something. Get Berger Montague to demand a copy of the tapes from the trading pits. Show the courts who's doing all the short selling and the media. There is a paper trail a mile long attached to trades in COMEX pits. Personally I'm dissapointed in this last round of Gata news, I thought it would be of much more substance.------YGM.
apdchief
(10/17/1999; 09:39:56 MDT - Msg ID: 16649)
Jon
http://finance.yahoo.com/q?s=GOLD&d=tGold Fields Ltd on NASDAQ
USAGOLD
(10/17/1999; 09:54:50 MDT - Msg ID: 16650)
I can say with pleasure that the markets have become infinitely more interesting, and with no pleasure that they have perhaps become infinitely more dangerous.
"Indeed, is the fall in lending rates a sign that fresh
gold is being supplied to cover the shorts? I tell you
the lending arena of the gold market is frozen in
loses." --FOA 10/16/99

I agree with this, FOA. I think the lending rate is falling not because of a new supply of gold but because there are no takers. This gold carry trade is indeed locked up. I think many are losing their career positions over this debacle and many more are on the verge of losing their positions. The proponents of gold sales, leasing et al are in the process of being severely discredited both in public and in the professional investment community due to its burdensome excesses -- excesses which could have severe repercussions with financial firms up and down Wall Street. ( I saw one report where it was rumored that Goldman Sachs losses at the moment could be as high as $2 billion.) It appears to me that the gold carry trade battle is now over and all that remains is burying the corpses and removing the debris from the battlefield. There will be further attempts to drag these firms out of the fire, but when the day is done, I think the gold carry trade will be taken out of the financial firm training manual and rendered a much deserved place in financial history books.

--------

So FOA....This new gold market; it is a free market, yes?

In the Robert Mundell speech for which Steve H provided a link, the laureate said as early as 1997 there would be a new gold market and that central banks would look to settling with gold at free market prices. He suggested that this would occur in the 21st century. Was it last year, the gave Prize was awarded to Black and Scholes -- and then LTCM -- where Scholes was employed -- promptly went under water? Now Mundell wins the Nobel Prize while the gold carry trade implodes. The former honed tools for statist economics; the latter honed tools for free currency and gold markets and a much-needed competitor for the dollar. One became the tools of the status quo; the other the tools for a new economy.

In talking with colleagues in the gold industry, the feeling is that it will be a long time before the Wall Street trading firms and mining companies sanction again something like the gold carry trade -- at least to the degree that it was utilized in the late 1990s. Perhaps this was a usable idea that had gotten out of control? There is little doubt that the European action with respect to gold, sanctioned by Alan Greenspan who attended the Washington meeting, was aimed at the hedge funds and foreign exchange traders at the big banks. Leveraged trading was beginning to frustrate some nations' foreign policies and the mechanisms previously established to keep crisis situations from getting out of control. What good is it to try to save a country like Indonesia with fresh loans, stiff political and economic sanctions when hedge funds can easily destroy the Indonesian currency through derivative plays and leverage and undermine the intent of the international agencies. (Please don't construe from this that I back IMF actions during this Asian contagion lending crisis. I do not. I simply offer the foregoing as an explanation for the cb's actions.) So they acted to cut off the life-blood from the speculators -- the gold and yen carry trades.

The two pronged attack on the bullion banks, foreign exchange desks, hedge funds, et al co-incided with the latest jawboning by Alan Greenspan with respect to the stock market. He has to be getting a little fed up with being laughed at and ignored by the speculators whenever he warns of the excesses in the equities markets. Perhaps now they will find out the central banks still have teeth?

This all goes hand in hand and marks a turning point. The financial world has changed in the last few weeks and I think the man on the street is just now finding out that something has happened. At the moment I can say with pleasure that the markets have become infinitely more interesting, and with no pleasure that they have perhaps become infinitely more dangerous.

Phos
(10/17/1999; 10:12:29 MDT - Msg ID: 16651)
el St.One (10/17/99; 03:46:55MDT - Msg ID:16632)
It is interesting that this item has been making the rounds again of late. I did some research on it and it is all over the internet on different websites but with different text and names in some cases. I checked into the names on one post (they disagree with some that you posted) and found much of the information to be factual such as the fates of the participants. At most of the sites that carry this item, these men met at the Edgewater Hotel in Chicago in 1923. There was an Edgewater Hotel there at that time and there is an Edgewater historical society which collects items from Edgewater (which is a suburb of Chicago) including items from that hotel. It is an interesting story and I would love to know why these men met there at that time. I don't know if anyone alive today knows but, if anyone does, it is probably one of their decendants. Just an item of interest.
pa kua
(10/17/1999; 10:15:43 MDT - Msg ID: 16652)
@AEL (reply)
AEL (10/17/99; 9:27:51MDT - Msg ID:16647)
>===>=====>=====> $293 <=====<======<=======<"
.... your reasoning behind that low number?

In reply.
I had to make a guess! I take things hour by hour, and hope I see my mistakes in time. I was looking for a pattern, which some call waves to which they assign various numbers. The 285-295 range seemed a good area for a pullback from the recent rise. A reversal there would point to 345. If 286 doesn't hold maybe look for 270 or so. Of course, the price could take off from here! The ensuing weeks are fraught with uncertainty, not only because of the unclear hedging problems of the mines and BBs, but especially because the markets could crash bigtime(this may not be just a correction to 8500-9200 range).
The Scot
(10/17/1999; 10:32:07 MDT - Msg ID: 16653)
Sunday Ramblings
Having been mostly a lurker at this site, I have tried to be quiet and learn. I guess I have led a sheltered life compared to most on this forum, as far as world finance is concerned.

I have pretty much curled up in my own little world and let others try to cure the planet's problems. I was drawn into Gold by the Y2K thing. I believed that many would turn to "Real Money" at the end of the year because of nothing more than fear. I am beginning to learn how much more complex the world gold trade is than I ever imagined.

After 60 years in the good old USA, I have lived through many changes in our society. Being a teenager in the 50's with hot rods and rock & roll, I know what, IMHO, great times are all about.

What I have seen this country become is a country of retailers. We, by planning or by accident, have based our whole economy on selling to each other, products made elsewhere. This has, by and large, destroyed our manufacturing base and the assembly worker along with it. The few products assembled here are made with components made elsewhere. Weather this is good or bad, I'm not sure?

We have, at the cost of most of our producers, stopped using our own natural resources and are rapidly depleting the resources of other countries. Don't get me wrong; I am not a conservationist by today's standards. I believe God gave us these resources and we have the right to use them, "wisely".

Where am I going with this Sunday rambling? The point I was trying to get to is this. I believe those that harvest and sell their natural resources, whether it be oil, gold, silver, platinum, timber or any other of God's gifts have the right to set the price of that product.
If that means forming a cartel, binding together and setting a price that the rest of the world is "willing to pay" so be it.

Capitalism is "selling". Set the price you want for your product, if it doesn't sell, you know it's too high and then you have the right to lower the price.

Why the Gold miner's on this planet have allowed bankers to set the price of their commodity is beyond me. I am overjoyed with the initiative that GATA has taken this day and I want to give them my full support.

Forgive me for rambling , it's back to NASCAR for me.

Sincerely, The Scot
Cmax
(10/17/1999; 10:33:38 MDT - Msg ID: 16654)
Charts??? Why?
Charts, yes.
I stopped looking at your charts long ago, when I finally arrived at the understanding that they offer next to NO tecnical assistance, because the market for some time now has had NOTHING to do with fundamentals. The market in recent times has proven itself to be ONLY driven by the media, by 30 year old market "consultants", and the goverment coerced program of MUTUAL FUNDS, which has converted the ignorant "joe sixpack�s" savings into into casino bets (stockmarket "investments). This RIVER of income, with the pros knowingly playing into incredibly irrational markets, (with their fingers always on the panic button) are the true determining factor to stock and gold prices, at this time, but NOT FUNDAMENTAL charts. A chart of public opinion averages is the trader�s only real chart (as for all the other "trend is your friend" people). No, no more Elliott waves, Gann lines, Grand Super Cycles, and other useless information....the "National Enquirer" has been a better indicator....at least until this present panorama collapses on top of all the ostriches, with their heads fully buried in the sand, (or other places). As I remember my U.S. history, the Securities Exchange Commission was formed shortly after the �29 crash, for the primary reason of prohibiting the sales what were essentially MUTUAL FUNDS (!), which were dubbed as the major cause of the "irrational exhuberance" back then. In what rational society, would a person put their savings into a casino bet, and call it an "investment"? And then everyone, staight faced, banties about their "charts" that will predict future events.

Charts...I guess they make a good barometer of present irrationality, but they sure won�t predict the future.
My only charts are of the nautical variety now...they DO tell you when you will hit ground. Greenspan in two paragraphs can deride ANY financial chart. Our belated crash is knocking at both doors, finally. The question is: will anyone even notice before the immovable reality of gold short covering starts (or lack thereof)? THIS, is the ONLY concrete, tangible, juggernaut that will WITHOUT A DOUBT put an end to all this nonsense which is the world economy. All economic future, in all aspects, rest solely and commonly on this one fact. All myth will soon be dispelled from there, and rationality may rein once again.
Enough Sunday banter. A golden weekend to all.
RossL
(10/17/1999; 10:45:43 MDT - Msg ID: 16655)
Anglogold hedging
http://www.goldminingoutlook.com/I did find a reference to the Anglogold decision to continue hedging. It is on Kaplan's goldminingoutlook page in the "Thought of the day" section.
Clint H
(10/17/1999; 10:49:06 MDT - Msg ID: 16656)
Oct.22
>>>>>...$417 Oct 22..>>>
It appears to me that we need to take a hard second step before we break into a full run. The full stretch run will give us many "limit up" days. The "limit up" days will get us to $30,000 and beyond.
elevator guy
(10/17/1999; 10:53:02 MDT - Msg ID: 16657)
Rambling too!
pa qua, welcome to the forum. Are you into kung fu? I know pa qua is a Southern internal style, if I remember correctly. Your words add to the value of the forum.

The Scot, I also came to study gold because of the looming event of Y2K. Unlike you, I did not take time to figure out which way was up before opening my mouth. Mello88 was having a tizzy with FOA, and I jumped right in to defend mello88, not knowing who FOA was. Maybe thats why I feel like I'm hollering in a well when I post here? (Silence.......-hell hounds wailing in the distance)
flierdude
(10/17/1999; 10:59:21 MDT - Msg ID: 16658)
(No Subject)
>>>>>---------$318.70----------+>>>> I was hopeing that Gata would announce something today that would bring a positive price movement in gold next week. After all, thats the way they made it sound yesterday. I got up early for that overblown announcement. I could have used the extra sleep this morning that I have lost since the breakout. I agree with others on this "Hanibal" stuff, that it is beginning to sound awfully sophomoric.

With that said, I believe that the powers that be will continue to hold back gold until the November 12 expiration of the options.

To bad that I did not purchase April, June and August 2000 options. I placed my bets in June on these Decmber options to bring me a couple 100 K in profits. Looks like I'm going to be lucky getting out with $60 K in profits. Oh well still have them 50 December Dow Puts.

Leigh
(10/17/1999; 11:08:15 MDT - Msg ID: 16659)
elevator guy
elevator guy, don't feel like you're hollering into a well when you post here! Lots of times we don't get our questions answered or our most profound thoughts responded to simply because other people are thinking about something else. Very often I don't respond to other people's postings because what they say is so good that nothing else needs to be said. I enjoy reading what you write and appreciate your strong spiritual stand. As for FOA, he's a nice guy and doesn't hold grudges. Sometimes he doesn't answer questions if he doesn't feel ready to talk about the subject right then.

Please keep hollering -- we enjoy the sound of your voice!
Goldfly
(10/17/1999; 11:08:23 MDT - Msg ID: 16660)
>>>>>>--------317.20------------(>X

There is no full Moon, but last night Spot was out in back (still tied up) howling his brains out, and Spike was bouncing around the house. I thought there was going to be an earthquake or something this morning......

But all has passed rather peacefully, and Spot seems to be content on his tether with the Bear kids still teasing him (but keeping their distance!)

All in all, it looks to be a quiet week.
Leigh
(10/17/1999; 11:25:39 MDT - Msg ID: 16661)
elevator guy (continued)
As far as that terrible day back in August goes, please remember that the whole day's postings were ERASED FOREVER. I thought MK was going to shut the Forum down for a couple of weeks! That day is gone forever, and nobody remembers what anyone wrote!
elevator guy
(10/17/1999; 11:26:49 MDT - Msg ID: 16662)
Thanks, Leigh!
Sometimes you have to wonder what effect you are having on others, since with an internet chat forum there is no feedback, except if someone posts back.
When people talk face to face, there is the spoken language, and body language. And even on the phone, there is spoken language, with its intricate inflections. But here in the internet chat room, its hard to tell what effect you are having, if any.
I'd have to say that I enjoy 99 44/100ths % of the posts here, and always look forward to learning something.
I have no backround in investing, and this forum has been a tremendous education for me, and profited me personally. It has even alerted me to changes coming in our economy in the near furture, and this will help me take care of my family, during what may prove to be hard times for many. God bless the internet!
And thanks for your response!
Clint H
(10/17/1999; 11:31:32 MDT - Msg ID: 16663)
The Scot Msg ID:16653)
The Scot, in your Sunday Ramblings you state,

<<<manufacturing base and the assembly worker along with it.
The few products assembled here are made with components made elsewhere. Weather this is good or bad, I'm not sure?
We have, at the cost of most of our producers, stopped using our own natural resources and are rapidly depleting the resources of other countries. Don't get me wrong; I am not a conservationist by today's standards. I believe God gave us these resources and we have the right to use them, "wisely.">>>>>

It is petty clear to me that those who set aside gold in preparation for the coming events will retain and gain assets. These assets will be the foundation for the recovery of our nation the USofA.

I have read some articles about hyper inflation and its painful effects but I am short on information about recovery strategy. Where do we start? Basic manufacturing? Other areas? I haven't a clue. I have been so busy getting here that I haven't thought about how to get there.... or even where "there" is.

I would welcome your thoughts. Anyone else who may have thoughts please jump in. How do we responsibly handle any wealth carried forward for our families and our nation?
Roark
(10/17/1999; 11:42:24 MDT - Msg ID: 16664)
"Be Very Afraid"
In case anyone hasn't noticed, that is what your government wishes you to be. Because, to quote a mantra from "Dune," "Fear is the mindkiller..." Martial Law? Yes, that appears to be Bill Clinton's fondest wish, and three-peat, too! Bonedaddy, you said they will come for the gold. Will they really? Or have they already achieved their ends by making us believe they will?

Fearful people are paralyzed and powerless. Legs turn to jelly, minds to mush. But guess what? It doesn't have to be that way!

Just suppose it is mostly a bluff? Sure, power mongers always want more power, but is it likely they actually have the means to pull off such a thing as Martial Law and confiscation of gold in this big country full of guns? And while we're on the subject, will our own troops fire on us and keep on firing? I think mass mutiny is much more likely in such a scenario.

But remember this. If you can psyche out your opponent before a match, it is already over. I have no intention of giving away my power to others, which is all fear really is for.

On a more positive note, we can all agree that gold is about become very expensive, and whoever holds the physical will prosper. THERE IS NOTHING ANYONE CAN DO ABOUT IT. So let us enjoy what is about to happen. After all, haven't you all waited long enough?

The shorters, BBs, CBs, hedgers, PPT, FED, Comex and all others who oppose gold know the gig is up. Right now they are in damage control mode.

But what they will not easily stomach is goldbugs enjoying a market turning in their favor. And so we are made to believe that something sinister is about to spring upon us and take away that which we deserve. Because they know that we have been on the run for so long now that we do not know what it feels like to be on the winning team. They think they broke our spirit a long time ago, that we are too conditioned to even recognize a victory when it sit squarely before us.

How �bout we prove them wrong. If you have gold, you don't have to do anything but relax and enjoy the ride.

If anyone insists on trying to figure out what sinister thing they are going to do next, go ahead. I think it is wasted energy, since you cannot stop it anyway.

Please let go of this scarcity mentality, because the energy your thoughts generate actually manifest in the material world, and draws toward you that which you fear.

This is what they want you to do. We can each overcome these forces by recognizing that we each hold the power of our own destiny. No one can take it away unless we willingly give it away.

elevator guy
(10/17/1999; 12:01:27 MDT - Msg ID: 16665)
Go GATA!
It is not Bill Murphy's job to give us good news. We should not look to him to make us happy, or entertain us. He has worked hard and risked his life to fight for gold. Don't belittle his spirited tactics, and animated narrative. Don't forsake his cause, because you don't want to join him in battle. Have you worked as hard for gold as he? Become part of the solution, and don't criticise your brother in gold, who obviously has stuck his neck out for us all. "If we don't hang together, most assuredly, we will hang separatrely" (Loosely quoted)
Peter Asher
(10/17/1999; 12:02:18 MDT - Msg ID: 16666)
Gold giants gather as investors hedge their bets
http://news.excite.com/news/r/991017/13/minerals-gold-hedgingIt's Mainstream news today
St. George
(10/17/1999; 12:04:30 MDT - Msg ID: 16667)
Contest
*>>>-----$360.50----+> Whether this will be the actual COMEX closing price on 10/22/99 I cannot say for certain, however, I know that at some future point in time and space the closing price will be this and more it's a matter of timing and patience. History is repeating itself. Just as the IMF and US Treasury attempted to control/supress gold through their failed auctions in 75/79 only to see the pog explode, the cheap gold today which has been made available at giveaway prices by forces trying to control the pog is getting sucked up never to be seen again.and another price explosion is imminent. Human nature and simple mathematics still have not changed nor has golds rightful place in finance and commerce After $360 I believe all hell breaks loose as discussed by many here. Something big in the financial world will happen in October which will positively impact gold. I'm betting on Monday 10/25/99 not Friday 10/22/99.
The Scot
(10/17/1999; 12:19:05 MDT - Msg ID: 16668)
CLINT H #1 666 3
Clint, thanks for your response. Your questions on returning to a healthly society are valid; however, my opinion will probably be very unpopular to many on this site.

I believe, and it is only my opinion, we shall never see those times again. I believe the next century, if it lasts that long, will be one of survival. Not because of y2k but because of the nature of man. We have abondoned all sense of morality and must now pay the price. The best window into the future, that I can recomend, is the last book in the New Testimant. I think we are at the threshold of those times.
Personal possesion of physical Gold will give the possessor the chance for survival, for a time, for him and his family.
Don't let me discourage you, this is good news.
Sincerely, The Scot
NORTH OF 49
(10/17/1999; 12:41:01 MDT - Msg ID: 16669)
Elevator guy--I agree with Leigh
There have been a couple or three times that I have posted a thought looking for comments from which there came none. Most recent case in point, my concern about small coin dealers--"Mom and Pop" operations, should the price of bullion run wild. Don't sweat it. Everybody is either on edge or very excited due to the events of the last few days, and some peoples' thoughts just don't stay with them for very long. I am just as guilty as any, although my wife leans more towards the senility angle.
I quite enjoyed your piece about the overhead description of a earthquake in full deployment. I also gathered from that piece (not to mention your handle) that you are in the "verticle transportation" industry. I have a question that has entered my mind from time to time and you may be just the person to shed some light on it for me. In the drilling Industry, (oil) which I am associated with from time to time, I have seen the drillers performing a prodedure that I believe is called "slip and Cut the Line." This is a process of trailing off a predetermined amount of drilling line, the cable used to hoist and lower the down-hole drilling assembly, and cutting it off. This discarded length is then replaced at the other end of the drilling line from a spool of new cable. Very accurate records are kept as to the "pound or ton/milage" usage on the drilling line, and is "slipped and cut" accordingly.
My question, in your industry, is there a similar system to keep track of how many times an elevator hoist cable has been run through a cycle, so to speak? I realise that Drilling rigs are hoisting in the neighbourhood of 500 tons and commercial elevators only a fraction of that, but am curious anyways.

No49
Journeyman
(10/17/1999; 12:51:25 MDT - Msg ID: 16670)
DON'T UNDERESTIMATE HUMAN NATURE: The SCOT @ Message ID 16668
http://www.webleyweb.com/tle/libe53-19990815-04.htmlWe've been sold a bill of goods as far as depicting human nature asevil. Perhaps this "evil human nature" paradigm has more to dowith media's "dramatic imperative" -- what they show on TV & movies,news has to be dramatic in order to sell. Also, most "evil" (if killingmillions is evil) is done by governments. Esitmates by R.J. Rummellare that governments in the 20th century alone are responsible for thedeaths of about 152,000,000 human beings. Amnesty International estimates200,000,000. See link above for a lucid presentation of this juxtapositionof individual human nature as OK vs. government "nature." Regards, Journeyman
Leigh
(10/17/1999; 12:54:17 MDT - Msg ID: 16671)
Peter Asher
Thanks for your link containing free gold stock investment advice from Goldman Sachs.

"There is a greater-than-should-be perceived notion that all hedge books are potential issues right now. They're not in my view," said Daniel McConvey, analyst with U.S. brokerage Goldman Sachs in New York. "The average amount of production that North American companies have hedged is probably less than two years. I think the market here can deal with that and the counterparties can deal with that," McConvey added.

Oh, OK, Mr. McConvey, we'll go right out and buy Barrick and--have any MORE suggestions for us?
Leigh
(10/17/1999; 13:03:45 MDT - Msg ID: 16672)
elevator guy
THANK YOU, e-guy, for standing up tall for Bill Murphy and GATA! I wish I could have helped them this morning; however, I'm not a gold stock owner. If they need any help from us non-stock owners, they can COUNT on my support! Just let us know!
YGM
(10/17/1999; 13:04:50 MDT - Msg ID: 16673)
elevator guy
Being as I'm the only poster who had critisism of Gata I take it you've directed your comments (@ least partially) at my thoughts. Let me say first that I'n NOT belittleing Bill. I don't expect him to entertain or make me happy. I feel enough has been said about Hannibal Cannibals and Shaka Zulu.
Time to move on, and act a little more serious. FYI--I was one of the first to get involved w/ gata (I hold # 25 of the gata prints) I pledged 2 oz of gold at around the $7,000.00 mark and subsequently sent 3 oz, which raised $1,060.00 for the cause, not to mention 3 to 400 emails I sent out w/ the origional Gata manifesto. I've thanked Bill, Chris and John many many times at forums and personally for all their hard work. Like I said last Feb. "once Gata has a measure of success everybody will get on the bandwagon and act like they've always been a supporter." I sure hope you were there back then when few were. Anyways rest assured I take no measure of offense to comments posted here as we all have our own views. Regards---YGM.
goldnbones
(10/17/1999; 13:09:04 MDT - Msg ID: 16674)
my shot
####-----$339.75----->

Hi all! Well, I am afraid I more or less just shut my eyes and let fly!

The funny thing is that on Oct 22 I will be flying out to go review a small mine, and I won't find out who won for a week or so! In fact, I won't even know what went on with the POG either! The suspense will be great.

It has been a long cold season, with the POG tanking like it did. Hopefully we will start to get the investments coming back so we can start finding more gold in the ground instead of mining the CB's!

Gold....Go find some, or buy some...but get you some!
YGM
(10/17/1999; 13:15:54 MDT - Msg ID: 16675)
Liegh
Don't take this wrong as it's not meant to be rude, but I was standing up for GATA long before most of you knew it existed and I made these earlier comments because some gata supporters have told me they feel the same way. Many are worried that gata will become nothing more than a stepping stone for Bill personally and promo for Cafe. That I DO NOT agree with. I know better than most how hard he has worked and Chris and John. Go back among the first 46 messages at E-groups and you'll see who YGM is and where I'm coming from.---YGM.
Leigh
(10/17/1999; 13:25:24 MDT - Msg ID: 16676)
YGM
No, I wasn't directing criticism at you personally; there were some posters on Kitco also who were saying GATA's attack was too little, too late. I don't know whether that's true or not (again, I'm not a stockholder), but I just feel that right now GATA and Bill Murphy really, really need our support. Any criticism can be directed to them privately. That's all.
YGM
(10/17/1999; 13:38:24 MDT - Msg ID: 16677)
Leigh--
Thanks for clarifying that. Well the hype let many minds (mine included) run wild w/ hopes and anticipation of bigger things and bigger things is what we await. Open discussion does more than personal e-mails. Bill gets 100s I'm sure and many trying to give advice. I've been advocating e-mails to mining exec's since last Jan & Feb. I just want Gata and it's agenda dicussed more. It's not just a one man show. Regards to you --YGM.
Golden Vanity
(10/17/1999; 13:39:49 MDT - Msg ID: 16678)
FOA
Though we haven't been formally introduced, I would like to express
my sincere appreciation for the information and education provided
by You and Another. In a world where so many doors are closed and
dis-information and rumors are rampant you and ANOTHER stand (mountains)
above the landscape and I hope you will not think me presumptuous
if I address you both, (friends).
I feel very fortunate to have been afforded the time...and means to be able to
utilize modern technology for gathering information and assessing situations
as they apply to my families safety and financial well being.
As I read and assimilate the vast amount of opinions out there on the state of the
global gold markets, and what be the next moves, I have only to compare each
one to your last post....FOA (10/16/99; 16:23:27MDT - Msg ID:16574).
That post cuts the (static) out of the market and shows the situation as it is.
All others at USA-G...be assured your thoughts posted here are not in vain, do not fall on deaf
ears.
Thank you( Friends)!!
Leigh
(10/17/1999; 14:22:13 MDT - Msg ID: 16679)
Battalion at Kitco
A while ago I mentioned that there were a few malcontents over at Kitco complaining about the GATA announcement. But there are MANY MORE faithful posters who have sent lots and lots of faxes and e-mails to their gold stock execs. Sorry if I seemed to be deriding all of Kitco (I wasn't!).
HopeingII
(10/17/1999; 14:46:13 MDT - Msg ID: 16680)
GATA & Bill Murphy

I have no way of knowing if there is any truth
to it whatsoever, but, some have suggested
that GATA's exposure of what has been going
on in the GOLD market was to some degree
responsible for the ECB announcement Sept. 26th.

If true, no matter what the degree of influence, I
personally feel Goldbugs owe Gata and Bill Murphy
much more than most realise.

Just my opinion.
el St.One
(10/17/1999; 15:09:29 MDT - Msg ID: 16681)
>>>>>-----303.30------>>>>
A big drop in the Dow will pull everything down with it early in the week. A 50 to 62% pullback of the recent run in Gold would bottom between 285 and 295, then by Friday close Gold will recover to 303.30 Dec Comex. By the end of the week we should be calling MK if we can get thru. MK will your business phones be avaialble the weekend?

el
baba2
(10/17/1999; 15:10:27 MDT - Msg ID: 16682)
contest..gata..and a comment
\\\\\\\\\\\\\\\\\________$321.70__________\\
///////////////// //

To All,
First Post.......
Thank You for an absolute wonderful forum.....I have read each post and have become educated beyond my imagination....The POG is a pure guess, as good as anyone's I suppose. As for GATA and some of the bashing that's been going on, I find it utterly disgusting. This guy is sticking his neck out so that each one of us can reap the rewards. You do not have to be a member to his Cafe as most of the posts wind up on the "free" net anyway. So if his posts are a bit corny at times is that any reason to castrate him...Let it go and why not do as he suggests. I have sent E-mails to Kinross and Barrick(not printable here).
Remember folks we are all on the same page and looking for the same end result. No reason to belittle anyone for their efforts.

BTW..... I re-upped for a second year with GATA the other day...

Netking
(10/17/1999; 15:16:49 MDT - Msg ID: 16683)
Stock Market
@FOA Great post yesterday.
@All, Our NZ stock market has just opened. As the first
market in the world open for this new week and as a market
largely owned offshore it may serve as an indicator together
with Australia in a couple of hours & Asia after that what
the market sentiment is heading into Wall street tonight our
time (can't help it if you guys area a bit behind ok!).
So far after 30 minutes we're down about %2.7 to %3.0 by the
look of things although it's hard to get the NZSE to supply
information for a few hours due to "technical problems" on
our automated exchange. - Updated later if any major changes
throughout Australasia today.
elevator guy
(10/17/1999; 15:33:09 MDT - Msg ID: 16684)
@YGM
YGM, I didn't even take note of your name on your post. I just read the text, and it occurred to me, in a sort of general way, that there are "armchair quarterbacks" who are critical of Bill, but yet who do nothing to advance the causes of gold and freedom. But they like to sit in a safe iconoclast chat room and "preach to the choir", like a bunch of old ladies talking about the weather.
I didn't know that you did anything for GATA at all. Just shows how little I really know 'ya. I suffer from the "ready, fire, aim" malody of journalism. My apologies.
I was just afraid that with criticism, sometimes comes ostracisment, and that is not what Bill deserves. Sometimes a good man can get put in a bad light, and that destroys his message. "Sophmoric" is a word usually used in derision. I prefer to think of his "enveloping horn" strategy as animated narrative, descriptive of intent, and useful for rallying the fighting spirit of the troops. People need pep talks, especially in battle.
I'm probably very sensitive to anyone saying anything the slightest bit negative about Bill. Before I learned about USA Gold, and all the giants here, all I had to shed light on the gold situation was Bill Murphy and GATA, which is a great source for information. When he said "Now is the time to be agressively long", back in August, I think, I stuck in my claws at $260 spot, and I've been lovin' it ever since. So he is a hero to me, and always will be.
Since then, I've come to learn from FOA, and Another, among others. I think we all share the same goals. We are in the middle of a change in the financial landscape that will affect the lives of people around the world for years to come.
Again, I apologize if it seemed that I directed my defense of Bill at you. You are my brother in gold, and I need your input.
Thanks for your gentlemanly response, exibhiting the qualities of knighthood.
Chicken man
(10/17/1999; 15:44:09 MDT - Msg ID: 16685)
A contrarian's view....
>>>>>>----$225---->

The main thought for this price is liquidity...or should I say the lack of liquidity......I'm spending more time lurking rather than posting.....it is just easier to study the market (people) when sitting on the roost listening.....

Will post a note on 3,000,000 cent gold later in the week....the road will not be without tears of joy and many more tears of sorrow for all .....including gold bugs...!
Poppa Bear
(10/17/1999; 15:45:02 MDT - Msg ID: 16686)
GATA Anouncement
I for one, was very disappointed with the lack of substance to this so called big announcement. Bill Murphy's statements leading up to today's announcement was very misleading and added up to nothing more than a propaganda ploy. I quote the statements.

"Since the British gold sale, South Africa got real
angry and, led by Anglogold, it has been pushing full-
steam into creating an international gold cartel made
up of non-USA gold producers. "

"The rumor buzzing out of London tonight is that an
agreement has been reached and will be announced at a
big press conference soon."

"At 7:50 a.m. Central Daylight Time on Sunday morning
GATA and the "right flank" will make an important
announcement to every gold company shareholder in the
world."

Obviously, if indeed this was to be the announcement made today, then this would have had a very significant impact on the market and the POG. In my opinion, these were very reckless statements to make regarding the purpose of the Denver meeting. To me this only weakens GATA and causes a serious loss of credibility.

Don't get me wrong, I truly would like to see GATA make some headway in the fight against the manipulation of the market, but unfortunately today's announcement was a bad move made with very poor judgement. I certainly hope that in the future Bill Murphy would use greater discretion before he does something like this again.

I believe that GATA may be causing some heat in the market, but in all truthfulness, GATA probably had very little to do with the recent announcement made by the ECB. The ECB announcement was driven purely by the fundamentals of the market place and the high amount of risk that exists do to the over exposure of the derivatives.

I would speculate that as a result of the Denver meeting, we quite possibly could see just the opposite occur. It is feasible that all the members attending the Denver meeting may decide to increase supply, rather than decreasing supply to the market in order to further drive down prices so that they can safely exit their short positions. Don't under estimate the power that the bullion banks have. We are not out of the woods yet, and the battle has only just begun. We don't really know, who is on our side yet.


Poppa Bear
(10/17/1999; 15:45:45 MDT - Msg ID: 16687)
GATA
I for one was very disappointed with the lack of substance to this so called big announcement. Bill Murphy's statements leading up to today's announcement was very misleading and added up to nothing more than a propaganda ploy. I quote the statements.

"Since the British gold sale, South Africa got real
angry and, led by Anglogold, it has been pushing full-
steam into creating an international gold cartel made
up of non-USA gold producers. "

"The rumor buzzing out of London tonight is that an
agreement has been reached and will be announced at a
big press conference soon."

"At 7:50 a.m. Central Daylight Time on Sunday morning
GATA and the "right flank" will make an important
announcement to every gold company shareholder in the
world."

Obviously, if indeed this was to be the announcement made today, then this would have had a very significant impact on the market and the POG. In my opinion, these were very reckless statements to make regarding the purpose of the Denver meeting. To me this only weakens GATA and causes a serious loss of credibility.

Don't get me wrong, I truly would like to see GATA make some headway in the fight against the manipulation of the market, but unfortunately today's announcement was a bad move made with very poor judgement. I certainly hope that in the future Bill Murphy would use greater discretion before he does something like this again.

I believe that GATA may be causing some heat in the market, but in all truthfulness, GATA probably had very little to do with the recent announcement made by the ECB. The ECB announcement was driven purely by the fundamentals of the market place and the high amount of risk that exists do to the over exposure of the derivatives.

I would speculate that as a result of the Denver meeting, we quite possibly could see just the opposite occur. It is feasible that all the members attending the Denver meeting may decide to increase supply, rather than decreasing supply to the market in order to further drive down prices so that they can safely exit their short positions. Don't under estimate the power that the bullion banks have. We are not out of the woods yet, and the battle has only just begun. We don't really know, who is on our side yet.


Poppa Bear
(10/17/1999; 15:46:56 MDT - Msg ID: 16688)
Gata
I for one was very disappointed with the lack of substance to this so called big announcement. Bill Murphy's statements leading up to today's announcement was very misleading and added up to nothing more than a propaganda ploy. I quote the statements.

"Since the British gold sale, South Africa got real
angry and, led by Anglogold, it has been pushing full-
steam into creating an international gold cartel made
up of non-USA gold producers. "

"The rumor buzzing out of London tonight is that an
agreement has been reached and will be announced at a
big press conference soon."

"At 7:50 a.m. Central Daylight Time on Sunday morning
GATA and the "right flank" will make an important
announcement to every gold company shareholder in the
world."

Obviously, if indeed this was to be the announcement made today, then this would have had a very significant impact on the market and the POG. In my opinion, these were very reckless statements to make regarding the purpose of the Denver meeting. To me this only weakens GATA and causes a serious loss of credibility.

Don't get me wrong, I truly would like to see GATA make some headway in the fight against the manipulation of the market, but unfortunately today's announcement was a bad move made with very poor judgement. I certainly hope that in the future Bill Murphy would use greater discretion before he does something like this again.

I believe that GATA may be causing some heat in the market, but in all truthfulness, GATA probably had very little to do with the recent announcement made by the ECB. The ECB announcement was driven purely by the fundamentals of the market place and the high amount of risk that exists do to the over exposure of the derivatives.

I would speculate that as a result of the Denver meeting, we quite possibly could see just the opposite occur. It is feasible that all the members attending the Denver meeting may decide to increase supply, rather than decreasing supply to the market in order to further drive down prices so that they can safely exit their short positions. Don't under estimate the power that the bullion banks have. We are not out of the woods yet, and the battle has only just begun. We don't really know, who is on our side yet.


Poppa Bear
(10/17/1999; 15:49:15 MDT - Msg ID: 16689)
Sorry for Tripple Post
Sorry for the tripple post, I kept getting an error message that said the message did not post.
YGM
(10/17/1999; 16:02:17 MDT - Msg ID: 16690)
elevator guy
Thanks for your well appreciated response. I feel we share many thoughts. I too suffer from hair trigger reactions and I've been chastised for it by forum friends emails etc over the many months of this major battle for us Gold Believers.
Sometimes I wonder how many non-contributors have benefited greatly by Gatas' superb unvieling of the gold collusion crowd. Leigh IS right tho I should have mentioned this to Bill personaly but didn't and now I've caused a furor probably. My thoughts posted early today have been on many minds for along time tho and I felt it needed to be said. GATA has been a voice in the wilderness and a special vehicle for those like me who depend on the price of Gold not just for an investment return but for the basic necessities of life, a living. I posted at GE forum early today & since haven't been able to return to do damage control.
Seems a server is down somewhere along the line. If Bill takes offense to my thoughts he'll email me & then I'll explain my points. I know I'm sure sick and tired of all we say at these forums having to be so "Politically Correct".---------- I do btw read & enjoy your posts as well as most all others folks.--My best regards to all who stand up for gata, gold, themselves and the other guy----YGM.
Leigh
(10/17/1999; 16:05:34 MDT - Msg ID: 16691)
Poppa Bear
It's easy for you to criticize GATA, but since you're not in the thick of the battle, please give the warriors a break! You don't know what's really going on behind the scenes. Perhaps an announcement was originally scheduled for this morning, but Bill decided to put it off for a day or two to garner more support. There's a lot more going on here than we know about, so please be patient and give GATA the benefit of the doubt. I imagine they know what they're doing.
andrew the kiwi
(10/17/1999; 16:16:38 MDT - Msg ID: 16692)
Bill, Elevator guy, Trader-vic, Flierdude
I appreciate all your replies re djx options.

Bill, do you like june options or are you spreading yourself more in feb and april?

spot gold now trading in Sydney, no action yet though.
YGM
(10/17/1999; 16:16:53 MDT - Msg ID: 16693)
Poppa Bear & triple posts----
(chuckle) at least no one can say they missed it-- Your comments are similar to the ones I recieve. Nobody wants Bill chastised or his great achievements belittled, just slow down on the hype and Shaka Zulu thing. We are all so poised for action that we don't need false starts. I felt like a kid waiting for xmas to come this AM & now I feel like Santa left a little gift w/ a lump coal. I remain a GO GATA gold miner....................Regards--YGM
andrew the kiwi
(10/17/1999; 16:32:16 MDT - Msg ID: 16694)
gold prediction
>>>>>--------$219--------->

I would prefer to be a little more optimistic in the short term, but I anticipate more market manipulation to surpress gold which is likely to more than offset the global equity market jitters. This gives us a little more time to acquire that extra sovereign or two.

Thanks to all who post for illuminating gold in all its glory.
TAILPIECE "Frienship is like money, easier made than kept" Samuel Butler
YGM
(10/17/1999; 16:34:58 MDT - Msg ID: 16695)
Leigh
http://www.gata.org/honor_board.htmlSince you feel so strongly about GATA how about putting your name up here on the Honor Board. These people and many other contributors ARE ALSO the Warriors of GATA.
Like I said it's not just a one man show. I know as I've spent dozens of hrs at this keyboard on their (our & your gata) behalf. Pappa Bear has a point.--YGM.
Netking
(10/17/1999; 16:35:15 MDT - Msg ID: 16696)
POG & the '87 Crash
Before the crash of '87 the market price of Gold was well
below its fundamental value. In the weeks that followed the
stock market crash the POG approached $500 an ounce as the
Federal Reserve began to pump money into the economy. Looking
at the peak prices of the first two Gold supercycles in 1864
and again in 1980 & we have some answers as to how high this
next supercycle may go of which we are definitely in now. I
don't want to pin numbers here or bore you but take the 1980
peak figure of $850 an ounce plus the allowance for inflation
on that for 19/20 years & you've got a Mt Everest target to
aim for in this current supercycle. POG will break out
sooner than many think but I'm ready.
andrew the kiwi
(10/17/1999; 16:42:50 MDT - Msg ID: 16697)
gold prediction
>>>>>>>>--------------$319-------->

what a wild prediction my keyboard made on my behalf, mistook the 2 for a 3,....now thats better.
andrew the kiwi
(10/17/1999; 16:42:51 MDT - Msg ID: 16698)
gold prediction
>>>>>>>>--------------$319-------->

what a wild prediction my keyboard made on my behalf, mistook the 2 for a 3,....now thats better.
andrew the kiwi
(10/17/1999; 16:50:07 MDT - Msg ID: 16699)
Netking
Q. where do you source your gold and silver here in NZ? as you are probably aware, supplies of silver(maples etc) are generally non-existent.
The Invisible Hand
(10/17/1999; 17:01:57 MDT - Msg ID: 16700)
October 22 *>>>>------ $ 523.25 --------+>
I came back to my office on this Monday morning at 12:30 am to complete my message

The Invisible Hand (10/17/99; 4:59:43MDT - Msg ID:16633)
October 22 *>>>>------ $ 523.25 --------+>
Come on, a little imagination, GATA is speaking this afternoon (London, England time)

in which I forgot to write what gold means to me.

So here I go (and I will motivate my price). I bought my first Maple Leaf in 1989 (when the price was $ 400) at the same time that my Belgian Banker (Kredietbank) sold me some grams of paper gold. After some months, I sold the paper gold. Later the Belgian government forbade it to Kredietbank. it was only recently that I realised that I had bought paper gold.

What does gold mean to me? Gold means justice and truth (A=A). Gold means a free economy in which price fixing agreements are allowed to exist because anyway they can't work without government help/coercion. GATA should attack governments helping price-fixers. GATA should NOT use the antitrust laws which Alan Greenspan has characterised as follows:
"The world of antitrust is reminiscent of Alice's Wonderland: everything seemingly is, yet apparently isn't, simultaneously. It is a world in which competition is lauded as the basic axiom and guiding principle, yet "too much" competition is condemned as "cutthroat". It is a world in which actions designed to limit competition are branded as criminal when taken by businessmen, yet praised as "enlightened" when initiated by the government. It is a world in which the law is so vague that businessmen have no way of knowing whether specific actions will be declared illegal until they hear the judge's verdict - after the fact."
(GREENSPAN, A., "Antitrust", in: RAND, A., (ed.), Capitalism: the Unknown Ideal, New York, New American Library - Signet, 1967, p.63 - based on a paper given at the Antitrust Seminar of the National Association of Business Economists, Cleveland, September 25, 1961, published by the Nathaniel Branden Institute, New York, 1962.)

Now the PRICE I'm proposing, FIVE HUNDRED TWENTY THREE POINT TWENTY FIVE. This is much higher than all other entries. Perhaps it's because English is not my mother tongue but I'm reading
- FOA's 15,495 of Oct 9, 1999 as saying that something will happen before Oct 23, 1999
- FOA's 16,557 of Oct 16, 1999 as saying that gold will very soon cross the 500 mark.

Why is it that even this Forum does not seem to want to take FOA's predictions to their logical conclusion? It's because I have asked this question ("Why don't you take (matter X, Y or Z) to its logical conclusion?") and never received an answer that I chose gold. But even then, here the assembled Ladies and Knights, who should know better, don't want to draw conclusions.
WHY? WHY? WHY
doesn't anybody dare to cross the 400 mark when FOA has demonstrated that the 500 mark will easily be crossed before Oct 23?
WHY? WHY? WHY?
JCTex
(10/17/1999; 17:03:50 MDT - Msg ID: 16701)
PoppaBear: GATA
At first, I was disappointed, myself. However, after I thought about it a little, I decided that Bill is in the trenches [probably even in some danger], and I am getting a free ride. If he wants me to email a few folks, that is plenty okay with me, and it is the least I can do. I am not speaking for you or anyone else, just me.
Number Six
(10/17/1999; 17:07:05 MDT - Msg ID: 16702)
First Post - contest entry - GATA
Just wanted to thank Michael Kosares for hosting THE best Gold internet site in the world - really, you don't know how important this site is to us! I've been lurking for a long time and get withdrawl symptoms (an urge to go and buy another ounce or two) if I don't get my daily dose!

I trust my instinct, it has never let me down. I feel as GoldBugs that we are now in the "end game" - to this end I made a large purchase of Philharmonics a few days ago to lock in the price now. A while back I also bought some Gold Eagles through Centennial. I took the trouble to deliver the cheque personally as I live in Denver, and whilst at the office I picked up Michaels two most excellent books.

Let me tell you that I spent days reading and re-reading "In The Footsteps Of Giants" which chronicles the oil for gold deal and details the "thoughts" of ANOTHER with superb commentary and charts from Michael. As having worked in Saudia Arabia for a few years, and travelled extensively in the Middle east, I have a good feel for the Arab mindset and the importance of gold to them on a daily basis - one only has to enter the Gold Souk in Jeddah to be immediately blown away by the whole experience. Truly amazing.

I had already been scouring the archives and doing my homework on ANOTHER and FOA, but this book really hit home with the most important early posts layed out so eloquently.

Which brings me to FOA - Sir it is a real privilege to read your daily commentaries - we all wish to sincerely thank you for gracing us with your laser-like insights on a daily basis. Truly, we would be lost without you, heading in the right direction yes, but possibly open to making staggeringly wrong financial mistakes. Bravo Sir!

Lastly the whole forum is I believe the best I have found on the net in any capacity - I feel that I have come to know you all and I am truly overawed that this wealth of experience and kindness exists for those who choose to partake of it... too many names to mention but thank you one and all!

To business.

At some point the markets are going to explode at the LBMA and COMEX. And it's commig soon I feel. Combined with the unholy mess on Wall Street that I feel will hit hard this week, I do believe the markets are interellated... to this end I'm going to go out on a limb and say

>>>>>>>======= LOCK LIMIT =======>>>>>>>

The markets being closed - last price, if I have to specify one, being $477 :)

Hey, at some point soon this will happen...:)

GATA

Like my friend flierdude, I stayed up all night (actually working the night shift) monitoring the web for commentary on this "announcement"...

Well I must say I was disappointed. GATA needs to play hardball, NOW, time is of the essence... the shorts are on the ropes, let's for God's sake finish this surgically... I hate to say this as I think they, GATA, are doig a wonderful job...

To me, they should have launched a Class Action suit, or at least launched some sort of suit for damages against the worst offender - the evidence is out there, paper trails etc.

The Miners for their part should have formed a Cartel... or an "association", with a massive international press conference to highlight the abuses they, their workers and their countries have suffered (not to mention us poor suck... uh, investors :)...

Let them know we mean business... I've personally lost a lot of money on mine shares and now that I know what has been going on I am appalled that we cannot as a group of GoldBugs fight back with venom... hit the Fed, hit the major players - that's what the Law Firm should be advising on.

Once y2k comes along they will all have a "get out of jail free" card and they WILL use it - count on it.

Rant mode off :-)

Thanks for listening...

Go Golden Sun, Silver Moon and The Horse With No Name!
JCTex
(10/17/1999; 17:10:14 MDT - Msg ID: 16703)
PoppaBear: GATA
By the way, Poppa, I thoroughly enjoy your posts, and everyone else on this forum.
Tomcat
(10/17/1999; 17:23:00 MDT - Msg ID: 16704)
I know what GATA has been lacking.

Sure, it is easy to criticize GATA. To some, maybe their last action lacks substance (practical importance). But not to me.

Maybe their actions lacked a bit of surprise and romantic adventure but to me these actions did not lack substance. I'll tell you what they lacked. They lacked me!

What have I been doing? Sitting on the sideline and treating GATA actions like a TV show. I am ashamed of myself and at this point I would not be able to face Bill Murphey and look him in the eye.

I am better off today because of BILL and his small team and in return I have done nothing for them. To me GATA, Bill Murphey, Chris Powell, et al are heros. Single-handedly they are taking on the gold establisment.

I love this forum because it is a group that treats people fairly, with dignity, and respect. For many of us, gold represents the integrity, honour, and a better world for our children. So, with those factors in mind, I appeal to all of you to help Bill. Let's be heard and put our honour where our wallet is.

Let's see how much this forum can kick in to the cause. Today I'll send a check for a two hundred dollars in the mail to GATA. Who's next?

Perhaps we can help GATA in other ways. How about those faxes and e-mails to the different gold firms. Any other suggestions?
Journeyman
(10/17/1999; 17:37:45 MDT - Msg ID: 16705)
>>>>-----$475.00------->
NOONE really knows, "prediction being very difficult, especiallyof the future," and major manipulation, apparently, by the "heavyhitters." So, any number being OK, I like $475 because on myrecommendation, my mother law bought gold at $450 a few years ago,and gold @ $475 would take me off the hook. Why not? Regards,Journeyman
megatron
(10/17/1999; 17:41:49 MDT - Msg ID: 16706)
GATA
Corny language aside, Bill Murphy seems to be an honorable man against a insane posse of dis-honorable men. Certainly he's inteligent enough not to blab every detail that he comes across if in fact he plans to actually go after the REAL scumbags (Rubin, GoldmanSachs). I predict that if he is successful in 'outing' them, he will be vilified by the press for 'causing' the concurrent stock valuation wipe-out, because somehow, someone is to blame and the liberal garbage that run Washington will need a bigtime scapegoat. He may get eaten alive like Milken. Thank you Bill Murphy!!!!!!!!
Netking
(10/17/1999; 17:47:10 MDT - Msg ID: 16707)
@ Andrew the Kiwi
Re:Gold in New Zeland; Hello, we have limited options for
sourcing here compared with our US forum friends but this
may help you;
Call, Morris & Watson Ltd, P/Metal Refiners & Dealers,
Ph 09-634 2035(Auckland). They have sold out of Maples &
Gold Kiwi's for the moment but have Sth African K's as they
do 1 & 10+ Oz ingots of pure (or granules).
*Also contact USAGold & find out how the sponsor of this
fine site can get some of their product to where you live in
New Zealand. This is not too difficult or expensive a
procedure to undertake & is worth looking into.


ORO
(10/17/1999; 17:59:53 MDT - Msg ID: 16708)
The Invisible Hand
I understand what you are saying, but you see, the distress of the shorts is not necessarily going to translate into immediate action. They are still trying not to break ranks. Still looking for new sources. Perhaps the Russians actually expect to get their gold back if it is loaned out.
Main point is pretty much that the US/IMF side is in a daze. The IMF, at least, figured out that the jig is up and started looking for a way for it to retain its position. The commercial shorts are probably being held at bay by Morgan and possibly Goldman Sachs. The current financial power structure is trying to hold on and still hope they can find a way to gain the upper hand.
Short of war, they can't.
When they break rank and run (UBS and Ashanti) there will be a mad scramble, and prices can go anywhere. FOA is the only one among us plugged in enough to know what to expect per a particular date.
Right now I think the shorts are trying to figure out what to do individually and together (see Denver Conference).
wiley
(10/17/1999; 18:08:14 MDT - Msg ID: 16709)
POGuess
Newby here but been lurking since the start. My shot at POG >>>--------------$369----------------+>>> and my reasoning--I was born @6:39 but that's way too high for friday as is 936 or 963.Since I'm a newborn bug with a larva like brain that deductive reasoning will have to do.

I too want to thank all who gather here. I'm getting an education that is phenominal without having to spend a cent on tuition. I haven't posted before because I have, as a sub-freshman, nothing to offer such an AUgust group. So you don't get my postings but you all, and I mean ALL have my sincere thanks, my utmost respect and my humble lurkage.

I got interested in gold about four years ago--Mainly because I LIKE gold. I like the glitter, the heft and feel as well as the fine things you can do with it. And, it was cheap, out of favor with the "IN" crowd on Wall Street and has been money in any part of the world for thousands of years. I started with a single Maple Leaf and am now into a new hobby of cyanide extraction from electronic parts, costume jewelery and whatever else comes my way. Keeps me out of the bars.

Got Gold? extract you some.
mike55
(10/17/1999; 18:10:41 MDT - Msg ID: 16710)
ORO: Repost of Earlier Message
ORO -- Here's a partial repost of my earlier response regarding "Rollover", and a new question for you or anyone else interested in commenting. Thanks.

I've read a few books on the subject of the gold for oil deals. There's no question in my mind that this has been fact for a long time. We will see what the future brings regarding US $/euro/gold for oil linkage. The corroboration I've found in reading your postings and those of many of the other astute people here, combined with reading "Oil, God, and Gold", "The Prize", and "In the Footsteps of Giants", leaves no doubt to the validity of the deals. As you noted, the deals have been in effect since 1937 originally on various concession agreements, and even earlier on others. In the later 1920's, when the main interest on the part of the Saudis was to grant exploration privileges for the search of water, the payment was made in part or full with gold. The natural extension of the exploration, of course, was the discovery of oil reserves, and in some cases gold and other precious metals and minerals. Thanks for all your sharing of knowledge and understanding at this site.

ORO/All -- So now as we approach the year 2000, where the confluence of the debt bubble, equities (over)valuation, euro, gold shorts, various carry trades, date rollover jitters, etc. have to face each other more directly than in the past, what do you see regarding oil in the near-term and long-term? I believe the US imports roughly 50%(?) of its oil, and let's say that between temporary delivery issues related to the date rollover, and the possible (probable) payment for oil in euros instead of dollars, what does this bode for the US domestic oil fields? Cost of US production may not be a controlling factor depending on the way things play-out over the long run. I know that many US fields have fallen into disrepair over the last 20 years due to the extortion we've forced on the OPEC countries in carrying US debt in exchange for low prices of their resources. We are notorious for our methods of getting the other guy's resources one way or the other before dipping into our own. And if we don't have a certain type of resource of our own (food, minerals, raw/finsihed goods, strategic geographic location, etc.), we just keep them in financial slavery or take over their country or government. Oops, sorry for rambling....I get so little computer time with three sons using the machine for homework that the pent-up thoughts come to the surface when I can get on. Back to the question at hand: Knowing that some of the US oil fields are water/mud filled and would take some time to reactivate, but that some could be brought back into production to supplement those currently producing, what are the thoughts on the long-term future of US oil production? Thanks to all.
elevator guy
(10/17/1999; 18:23:22 MDT - Msg ID: 16711)
@YGM
What does it take to get on the GATA Honor Board? I never want name recognition, which to me is vanity, but maybe "elevator guy" looks a little too campy? But anyway, I will strive to put my money where my mouth is, and try to be a GATA supporter like you. Enough talk!
Angel
(10/17/1999; 18:30:32 MDT - Msg ID: 16712)
>>>>>>--------------------347.70--------------------->>>>>>>>>
What this forum means to me: I LOVE THIS FORUM !!!!!
There is really nothing else I can say except I haven't had this much of an education since Grad school. Thanks to all of the USA Gold Professors and of course our esteemed Dean Michael Kosares.
Goldiehawk
(10/17/1999; 18:45:26 MDT - Msg ID: 16713)
Gold Prediction
\\\\\\
===============305.60========>>>>>>
//////
I don't post too often, but I visit and read daily this Forum which I find is now better than Kitco. Sorry Kitco fans. I really hope than I am wrong in my prediction, but I don't trust those Hannibal Cannibals. Together, they are going to pull some strings at least on the short term.
When GATA was formally organised and started to make some noise, gold didn't go down but the gold stocks did. With this conference in Denver, I think the Hannibal Cannibals are going to use all their ammunitions this week and perhaps next, and their best one is demoralization of the goldbugs. And like someone mentionned this morning, they may increase their production or at least advertise it to bring the POG down and to let the big guys get out of their big jam. ABX are not going to give up that easily, they know too many people in high places!!
Again, I hope I am wrong as I aim for a >$1000 POG soon !!!
But I am not too confident about Oct,22. I guess I have been burnt too many times. The Hannibal Cannibals have still a lot of ammunitions, but sooner than later they will run out. Then, we will have finally our Golden days.
Chris Powell
(10/17/1999; 18:51:39 MDT - Msg ID: 16714)
You're all friends to GATA
http://www.egroups.com/group/gata/260.html?Dear Friends:

I've read with great interest tonight
all the posts here involving GATA, and
I hope everyone knows that their
observations and even criticism are
appreciated.

I'm sorry for the suggestion GATA may
have made yesterday that our announcement
today would involve a South African-based
gold cartel. I can see how such an
inference was drawn, but this is not what
we meant, not even as cheap hyperbole and
promotional flash.

Our general goal is simply to try to do
something on gold's behalf EVERY DAY and
to mobilize the honorable part of the
industry to stand up for itself and for
all that gold represents. I imagine that
sometimes we succeed better than at other
times but I will claim credit for GATA
for its always trying to be doing
something for the cause. We really believe
that we can win by mobilizing gold people
everywhere. Indeed, when I proposed forming
this organization, it was because I was so
damned tired of our complaining to ourselves
while doing absolutely nothing to change
what was going on in the real world.

The Denver gold show is where the gold world
will be this week. The people there have
great influence over the direction of the
gold price and world economic policy. So GATA
has to be there and, more important, we must
get the rest of the gold world there too.

That's what we're about at the moment. Please
forgive any misunderstanding, and thanks again
to all here, particularly to YGM, a very special
friend to GATA indeed. He has well earned the
right to criticize us all he wants, for no one
has supported us better.

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

Ray Patten
(10/17/1999; 18:54:01 MDT - Msg ID: 16715)
10/22/99 Dec Gold close: >>>====308.10-----> POING!

The lease rates are telling us that the shorts are not going to give up all at once. It could be a battle until the longs start demanding delivery of December futures. After that, the fun could really begin!


WILEY: Your cyanide extraction process could be the only growth industry of the next few years. If Revelation, Chapter 6, Verse 6, "A day's wages for a ration of wheat" is about to happen, everyone would be trying to convert their jewelry into something to eat. Please tell us more about your process and when is the IPO.
elevator guy
(10/17/1999; 19:03:18 MDT - Msg ID: 16716)
@North of 49
Sorry I couldn't respond in a timely manner.

Elevator ropes have a different winding, and are generally much more flexible than steel braided ropes found in other industrys. In the elevator industry, we generally check a few things about hoist ropes like this:

1. What is the age of the rope? There is no age limit, but it helps make decisions.
2. What is the original diameter of the rope? As the hemp core becomes degraded, and the rope gets stretched out, the rope shrinks in diameter. We watch for this.
3. We also examine the lays of rope, and look for strand breaks in the valleys, and on the crown. The rate of breakage is a rough gauge of the life expectancy of the rope.
4. We look for rust, or "rouge". (I don't know why we don't just call it rust!) A rope should be well lubricated. Rusted ropes get replaced.
5. We check for crown wear. This is shown by elongated flat spots, on what should be round strands.
6. The rope terminations are examined for integrity.

All the above checks are useful for determining the factor of safety of hoist ropes. Thats not all there is to it, but thats the basics. It varies greatly depending on the particular job. ie
Is the job near the ocean, with its salty air?
Was the job installed with many sheaves, (or pulleys), for the rope to be bent back and forth over?
How old is the job?
Are the ropes well lubricated?
Well, you get the point. Determination of safety is made on a case by case basis. As you get to know jobs "personally", as part of the overall maintenance program, you get an awareness as to what is normal, and what is not.

Some ropes can last for 15 years or more. Some installations get the ropes relaced in a year or two.

While I'm at it, I should mention that, usually, only one rope is needed to suspend the car and counterweight, or sometimes two. Many jobs have 5 ropes, some have 6 or more, depending on capacity. So you can see that the margin of safety is tremendous. If one rope were to break, it would not make the elevator fall. Even if two broke, you are still safe. Ropes rarely break. More common is that they just start to "strand out", which, even if no inspections were made, woukld give warning that replacement is needed. But inspections are made. And ropes don't just go all breaking all at the same time. Its a mathematical improbability. And, on top of all that, there is the governor, which applies the brakes, if the car overspeeds.

One time, during WW2, an airplane smashed into the Empire State buliding in NYC. The wing severed all hoist ropes, and the governor rope, and the car fell. The operator lived. Now how often does that happen? You are in more danger, statistically, when you drive your car, or even walk down stairs.

The worst thing an elevator is likely to do to you, is to get you stuck for a while. They are designed to stop if any system is not 1000% up to par. Even a speck of dust does not go un-noticed by the control, and the car is required to "fail safe", or stop. This doesn't mean that anything is broken. They are just extremely safety redundant, and designed that way to protect the riding public. But old stories and conceptions die hard, and besides, scary stuff makes better conversation.
Sorry for the long post. Is anyone still awake? 8^)
YGM
(10/17/1999; 19:13:00 MDT - Msg ID: 16717)
Chris Powell
Well having read your post I sure feel something now, I can't tell if it's good or bad. Thanks for showing us all what class our point men have. I never ever have doubted you, Bill or John and I'm sure you know that. My critisism is meant to be constructive at worst. Go Gold & Go Gata--Best Regards and keep up the fight, you're getting more voices in the wilderness every day--YGM.
Black Blade
(10/17/1999; 19:23:50 MDT - Msg ID: 16718)
Short update
Gold up $0.55 to $315.25 (so far). s&p futures are positive +0.70 (for now), at this level a flat to barely positive opening (don't know current fair value). Maybe the markets will continue their pattern of rise at the open and sell at the end of the session. We shall see. Meanwhile, Nikkei down -515, and the Japanese markets continue downward. Looks like an interesting day tomorrow, nothing as dramatic as last week. All eyes are on European markets tonight.
Phos
(10/17/1999; 19:33:34 MDT - Msg ID: 16719)
@ORO (10/17/99; 17:59:53MDT - Msg ID:16708)
You say FOA is 'plugged in' and a good source of information on what is going on in the gold world (with which I would fully agree). Another good source of information, at a different but valuable level, is SEQUIN on Kitco. I have noticed lately that his posts have been very much on the mark as he is in the business. I would suggest USAGOLD fans check the other site (much chaff but some good wheat too). He does not post often. You can use the browser search for his Acronym.
diston5
(10/17/1999; 19:40:51 MDT - Msg ID: 16720)
>>--------$304.00----------+>>>
Knights and Ladies of the Round Table:

My apologies for the SHORT-TERM pessimistic guess. My personal chart analysis actually is very bullish longer-term than this Friday, but I feel we are in a bullish pennant that must dip precipitously before ascending to the next target level of $400+! I feel last Friday's small rise was only a retracement before the last capitulation to the forces of dark, and then resurrection!
By the way, I am a glutton for punishment: I never saw any opinions regarding my contest entry some weeks ago to: Americans spend without restraint... I hope someone read it?
Netking
(10/17/1999; 19:52:38 MDT - Msg ID: 16721)
POG...my shot
>>>>>-----$365.47------>>>>.
Scenario; DOW becomes DOWN on 21st/22nd, panic in the street.Frantic activity at Comex & physical market. Emergency meetings held by the 'plunge protection team'.
NORTH OF 49
(10/17/1999; 19:53:37 MDT - Msg ID: 16722)
Elevator guy--Wow!! Like everything else, there is so much to learn about it!!
I really appreciate the time it must have taken to respond to what I have to admit, was an off topic subject, but of interest to many of us I'm sure. Especially the safety aspect. I've no doubt there are few amongst us that, at some time in their lives, while riding an elevator didn't contemplate "I wonder what would happen if----?"

On the drilling side, I have only seen one disaster in which the driller, while pulling out of the hole, lost count of the number of joints of pipe he had pulled, and "crowned the blocks". Basically, he ran the blocks up until they collided with the crown sheaves. The one and a half inch cable was no match for the 2,350 horsepower pulling on it, and down came blocks, 1,800 feet of cable, 14,000 feet of drill string (which headed back into a 17,000 foot hole) and a whole lot of derrick lights. To this day I'll never understand how no one was injured!
Again, thanks for your time and expert
NORTH OF 49
(10/17/1999; 19:57:17 MDT - Msg ID: 16723)
What the heck is that stuff on the end of my last post??????
I don't even have keys like that on my terminal!!!!

No49
sstins
(10/17/1999; 20:04:20 MDT - Msg ID: 16724)
Friday Gold Close... >>----------$318--------->>
The giant is awake but is very groggy. We are definately on the way.
Fasolt
(10/17/1999; 20:13:31 MDT - Msg ID: 16725)
Fasolt:kudos to MK, TownCrier, Another, FOA, Bill Murphy, et al
I visit this website daily, and it's various posters have
contributed substantially to my understanding of the Fog & Mirrors Game, otherwise known as POG. If I were a bullion or
central banker, which I'm not, whether a follower of the
Keynesian, Classical or "What-the-Hell" school of economic theory, I'd check in here too, for there is much to be learned. Thx to all of you. Ah yes, my guess for next Friday's POG close:
>>>>------310.25------.
Goldfly
(10/17/1999; 20:50:38 MDT - Msg ID: 16726)
WOW!! Check this markets page!
http://quote.yahoo.com/m2?u
Asia is sinking fast! And it's early yet.........
Goldfly
(10/17/1999; 21:04:52 MDT - Msg ID: 16727)
Angel

Angel, you're still around! Did you catch "16 Tons" a couple weeks ago? How'd you like it?
ORO
(10/17/1999; 21:20:12 MDT - Msg ID: 16728)
Mike55 US - oil
There is enough for the US to survive on after the Arab oil is gone, for a few years out. Then high temperature steam extraction can bring back another 20% return on the old wells.
The Arab oil will be used first, if only because it is the cheapest to extract, if you are actually willing to pay for it. The US has not been willing to pay for anything. In future it must. Therefore, the US oil industry will have a bit of the good and a bit of the bad. The good part is that the $ price of oil will rise tremendously. The bad part is that because the change is solely due to the trashing of the dollar, the costs of US production will rise more.
On a gold standard, oil is cheap. US oil companies will only survive with the few best oil fields or if the US subsidizes domestic oil.
AllanC
(10/17/1999; 21:42:26 MDT - Msg ID: 16729)
My best shot
>>>>----523.15------>

Whew....just made it in time.

I think the POG will stabilize at these levels, with a little support this week from the shaky markets and the trade numbers about to be released. No I don't think it will retrace to 280- 285 since were not talking silver here, which has a tendency to rise and retrace half the gain. Longer term I think we've started the bull market, the fed had to inflate rather than risk deflation. I think it's too late to stop it now. Those trade numbers will be very telling in the months and years to come, as investors will start to focus on them. Good luck to all the physical holders here, you are all on the right road . As for the gold paper players, you have little concept of money and risk, you will no doubt be the first to sell out and I can't wish you luck. Sorry but it had to be said.

Strad Master
(10/17/1999; 21:48:51 MDT - Msg ID: 16730)
Gold Prediction
I have no idea where gold could be at the end of this week but why not take a stab at it before the deadline? Couldn't hoit, eh?

>>>>>>>-----------$322--------+>
JCTex
(10/17/1999; 21:52:07 MDT - Msg ID: 16731)
Board Liability
Can't help but wonder just how long it is going to take Barrick's Board of Directors to figure out that Mr.Oliphant is opening them up to somewhere around 5-10 years of litigation...or worse. Now, lets see: lawyers at #100+ per hour, plus expenses...........for how many years?
JCTex
(10/17/1999; 21:56:56 MDT - Msg ID: 16732)
ORO: enough to survive
I have been gone from the oil patch for a good while. By "survive", do you mean at the 50% level, or do you mean that the domestic industry can maintain its 50% AND make up 50% coming from Saudi, Venezuela, etc.??
CoinGuy
(10/17/1999; 21:59:42 MDT - Msg ID: 16733)
Goldfly, GATA, and all
Goldfly,
Nice page for international info, I put a bookmark to that gem.

GATA's message was interesting? I'm still looking for more info on the future development of the Gold Cartels. I felt the African mines were looking for a little payback, as well as, security in the future by banning together to form a strong group. After the BOE sales, I wouldn't blame them...

Anyone think the market will dip, and close below the support level of 10,000? I think the Plunge Protection team probably had weekend meetings to develop an orderly market for Monday. Watch for quick rally's on one or two Dow stocks(via the PPT), but overall market weakness. My humble opinion...

Coinguy
elevator guy
(10/17/1999; 22:02:08 MDT - Msg ID: 16734)
@ North of 49
Your most welcome for the answer. I'll try not to swerve off course too much here at the forum.

17,000' holes are incomprehensible to me. A deep one for us is 70'!

Back on the subject, did you see that URL Goldfly put up? Wow! Thanks, Goldfly! Markets are down, all over the world!
Its kinda scary! They say the market swooned on Friday, during the big crash of 87, and then there was Black Monday following! I'm sure glad I'm not in mutuals, and those other paper products. Paper gold is bad enough, and I'm trying to get out of that!
canamami
(10/17/1999; 22:15:49 MDT - Msg ID: 16735)
*>>>>>>>- - - - - - -$306.67- - - - - - - ->>>>>>+>
Why did I pick this number?

1. I wanted to give previous posters at least $1.00 "space".
2. I think the shorts will win this week, and I don't think the equity markets will crash this week. Thus, the POG will decline (I hope dearly that I'm wrong.)

Why do I like this Forum?

1. A VERY high degree of CIVILITY (not always found elsewhere).
2. A VERY, VERY high standard of substantive discourse, on various topics.
3. Interesting insights which alter one's world view- e.g., the closing of the gold window in 1971 was a "default" by the U.S. (I had never even contemplated that); the lease rates are now declining because no one dare borrow gold at these low prices, as opposed to a CB putting gold on the market; the $US role as reserve currency means Americans could "get away" with "printing" their imports, instead of earning them.
4.Cutting edge information and analysis, long before similar ideas appear in the mainstream media.
5. The company of fine posters, whom one can tell are fine individuals.

Now, I must focus on my job - no more posting for October - or I will have to ask MK to suspend my posting privileges, lest I lose my job.

A prosperous month to all.

Bonedaddy
(10/17/1999; 22:30:36 MDT - Msg ID: 16736)
Good Point Roark
I suppose you too have noticed all of the movies lately
where the guys in black suburbans roll up and cell phones are traced and big brother knows your every move. I believe that you are absolutely correct In saying that they want us to be afraid. I also believe that Hollywood is attempting to condition people for the "brave new world". What they don't count on is that while fear paralizes some, it is also a call to action for others. Sometimes I recall things I'd rather not have done and places I'd rather not have been. You know, the only times I have ever seen people be truly "heroic", we were all scared S*#@less!
AllanC
(10/17/1999; 22:34:19 MDT - Msg ID: 16737)
My best shot-correction
>>>>-----323.15----->

523.15?? Now that doesn't make sense. Sorry for the typo MK
onlychild
(10/17/1999; 22:39:13 MDT - Msg ID: 16738)
>>>>>>>>---------328.55---------->>>>>>>>>
I really feel that this is more like throwing darts than shooting arrows, I can put an arrow where I want it, however I'm not so good at darts. Greetings all, I'm not going to go into a long dissertation, rather I would like to express my confidence in the forces that manipulate this market. They seem to have run the price to a managable level, just high enough to make some of the players feel the pain, but not high enough to trash the system. I have the utmost faith in the handful of individuals that run the show, they're not ready to end the game.....yet.
NORTH OF 49
(10/17/1999; 22:41:56 MDT - Msg ID: 16739)
Elevator guy
No No Sir! You've misunderstood me. T'was I who drug you off course. I was merrily trying to defend my position for doing so. And, I might add, we are all a little wiser, thanks to you, for it.

No49
Netking
(10/17/1999; 22:45:06 MDT - Msg ID: 16740)
@Goldfly Re: world markets
I think if Turkey can do it again on Monday that's the place
to be . . . but then again my wife might be hard to convince
on that one!
Marius
(10/17/1999; 22:48:25 MDT - Msg ID: 16741)
My $.02 on GATA
Like several of you, I could live without the "Hannibal" & Shaka Zulu hyperbole. That said, my chance exposure to Murphy & GATA has enabled me to make a good deal of money, with a lot more on the way. That buys him a lot of slack as far as stylistic issues are concerned, and also means I'm not going to get in a snit if every message isn't a revelation!

The best course, assuming one isn't a gold stock holder: PAY THE MAN. Subscribe to the Cafe. Make a contribution to GATA, or buy one of their prints. Talk them up in other venues. There are some genuinely fine contributors to the Cafe, and a subscription is a bargain at twice the price! (It's what I plan to do as soon as the first check from my broker arrives next week.)

Personally, I think it's a hoot that a former AFL wide receiver ends up being the investment guru who hauled my sorry ass out of the fire! A lot of that was coincidence, but I still feel gratitude & an appreciation for the position the man has put himself in. It takes bigger (insert appropriate appendages here) ones than I've got to put my reputation on the line like he has. I always try to temper my opinion of GATA with a personal history lesson.
Simply Me
(10/17/1999; 23:08:20 MDT - Msg ID: 16742)
*>>>>------$0--------+>
Surely the wildest arrow I've ever let fly! I keep thinking back to ANOTHER saying "$100 the first night, $200 the next night", then gold goes to "any price". At that rate there will be no COMEX December gold futures. Boy I hope I understand what I'm saying and not making a fool of myself...because I really don't understand futures markets.


I "feel" more than think (because there is so little to go on) that this is the week to look for it. My feelings are not entirely without ground, though. I think the pressure for gold to rise is just too great to resist for much longer. Rumors and little splashes of gold are not enough against the current DOW numbers and the falling dollar. The cash is flowing, to pockets, to bonds...next comes gold.
I think the "shorters" are feeling it, too...and someone is going to break ranks and start the stampede this week. Then it's shut-down for the future's market.

By the way, I've been working long hours this weekend without much chance to keep up with all the postings, so I hope I haven't duplicated someone else's guess.

Although I know we can't all win the contest...Good Luck, to ALL the fine posters here.
Simply Me


MarkeTalk
(10/17/1999; 23:12:28 MDT - Msg ID: 16743)
Gold: A Rumbling Volcano
For all of you market technicians, these next two weeks could be momentous in market history. CPI number comes out on Tuesday which just happens to be the anniversary date (Gann followers, take note) of the 1987 crash. The Friday before that big event had the market down 109 points. Our market last Friday was down 266 points. The next big date is Friday, October 29th which is also the anniversary of the 1929 crash. The market tends to have a memory of such events and tends to repeat in dramatic fashion. My best guess is that the DJIA will drop between 500-1000 points in a single day sometime by the end of October, with emphasis on October 19th and the 29th. If this occurs, gold will shoot up to a minimum of $350 and probably $400. Gold at $400 by the end of November seems to be a slam dunk because December options will have expired and First Notice Day for December futures contracts occurs on November 30th. We will see who will stand for delivery and who will go belly up. Finally, don't count out a international political or geophysical event (such as another 7.0 earthquake but this time in downtown LA) which could rattle the markets.
Peter Asher
(10/17/1999; 23:15:12 MDT - Msg ID: 16744)
>>>>>>> $333.50 >>>>>>>>

There seems to be much disappointment, even anger, that the POG did not continue upward after the panic break to $339 or so. However, one should observe that Gold spent only two weeks to reverse a price drop of TWO YEARS! A lot of buyers entered the market on the way down, many of whom might have been "Getting out from under" this past week.

A pause at this point is logical by even Vulcan standards. Granted there are historically new facts at work, but the first rush to jump on the new paradigm has subsided and the market will now continue to evaluate probabilities and seek opportunities in the environment of the new CB situation.

The initial breakout was 'news driven demand' as opposed to a demand driven rally that made news.
Supply/Demand on the trading floor is based on strategies to a greater degree then fundamentals unless the buy or sell momentum is in the extreme. Short, forward and naked positions will jockey for their profit/loss positions in a contest based on fact and fiction, statement and rumor, dancing to the tune of a new piper.

Even with "Blood on the (Wall) streets" of the world Friday and Monday in Asia the S&P is holding up with the premium fluctuating between -2542 and + 1275, now at a net change of+1521. (Index now down 2.30) It may be the " PPT" or it may simply be that Asia is having a short term bottom to match one made on Wall street on Friday. The "Men behind the curtain" will pull whatever levers they think will keep a controlled burn going, hoping a high wind doesn't come along and create a firestorm. They can only be intending to keep the trading public in equities, and out of Gold.

Gold could trade tightly range bound next week, or it could work it's way steadily higher as Funds and Mines acquire as much long position that can be had without re-igniting a buy panic. I will opt for that scenario as most likely. --- I would be most surprised if the week is down, or violently upward.

One thing is certain; we are on a cusp!
Peter Asher
(10/17/1999; 23:26:08 MDT - Msg ID: 16745)
First statistics from non/Asia
France is up.35% and Egypt up .45% (Only Euro/Africa so far)
backlash
(10/17/1999; 23:32:11 MDT - Msg ID: 16746)
>>>>>>------- $ 314.80 -------+>

A while has passed since my last post, but have been lurking every chance available.

My guess is based upon the feeling that the 'anti-golders' have not quit yet. They will throw everything they have in their arsenal at the gold market to keep their collective posteriors out of trouble. TOO LATE !! At this time I believe they are lying low as they marshal their forces. Unless something really drastic occurs, it will take them until 10-25-99 or longer to be ready. Hence, the POG likely will stay in this narrow band for just a bit longer.

Boy, does that sound like I know what I'm talking about. Actually it's another one of those SWAG's.

Since it is still a few minutes until deadline, a bit about my handle 'backlash'. It represents what I feel is going to happen from the 'little people' (of which I consider myself to be a member) when this whole mess unwinds. It is the little guys (and gals) in the market, etc., etc. that will get the proverbial shaft. THAT is when the backlash will occur. Therefore, my handle (in small letters) represents what will likely be what happens in the end game. I truly hope that many, many of us small folks wind up having the last laugh.

Bonedaddy - - Just love that discussion you had with Old Man Gold. How fantastic! But, the last line was the wisest of statements. It will be placed into my
backlash
(10/17/1999; 23:37:26 MDT - Msg ID: 16747)
Bonedaddy

Something happened and my last post just posted before I finished.

To continue: That last statement in your related encounter with Old Man Gold will be filed in my W.O.W. (Words-of-Wisdom) file.

Best Wishes, bl
Number Six
(10/18/1999; 00:42:41 MDT - Msg ID: 16748)
Asia Tanking
http://quote.yahoo.com/m2?uWeeell, i'm working the night shift here in Denver and Asia is tanking, and it's still early...

Korea down 4.2%

Australia 2.3%

Japan 1.85%

China 2.6%

============================

France also first to open at 1% down...
Netking
(10/18/1999; 00:45:03 MDT - Msg ID: 16749)
@Number Six/All
What's our best guess for the Dow?
Number Six
(10/18/1999; 01:04:53 MDT - Msg ID: 16750)
Pharaoh's Gold - I see this as a good omen :)
http://www.the-times.co.uk/news/pages/Times/frontpage.html?999 Ancient map points to pharaohs' gold

FROM MICHAEL THEODOLOU IN NICOSIA

AN Australian-Egyptian company is planning an ambitious
�37 million project to mine gold in Egypt which once
supplied the precious metal for ancient pharaonic
treasures, including those of Tutankhamun. It will make
the country one of the ten top gold producers in the
world, company directors said.

Behind the project is an Egyptian geologist, Sami Raghy,
who was inspired by a 3,200-year-old papyrus map
showing gold mine tunnels. It is believed to have been
sketched by King Seti I. He was the father of Rameses II,
a prolific builder and the most celebrated of all the
Pharaohs.

"Every king was buried with a cache of gold and it was
written where that gold came from," Mr Raghy said. "It's
the oldest known geological plan in the world."

Using the map as his guide, Mr Raghy, who has been
dubbed Egypt's Indiana Jones, is leading a 40-strong team
of Egyptian and Australian prospectors in the mountainous
eastern desert at Sukari, 500 miles south of Cairo. Even in
October temperatures rise above 30 degrees. "It's very
tough work, but I love exploring," Mr Raghy said.

Full-scale mining is due to begin early next year.
Development work has begun at one hill which alone
promises deposits of two million ounces of gold. Ten
other potential deposits of "world standard" have been
found.

The remarkable quest for riches in the desert began seven
years ago when Mr Raghy, who spent 32 years in
Australian mines, spotted a copy of the ancient map in a
government office in Cairo while on holiday with his
Welsh-born wife, Mair.

For him the map was proof that the ancient Egyptians
mined gold while our ancestors were still in the Stone
Age. The Pharaohs sent out exploration teams on camel
trains to open mines as far south as Kush, the pharaonic
name for Ethiopia.

Seti I ruled Egypt from 1290BC to 1279BC, about 40
years after the death of Tutankhamun, the boy Pharaoh,
whose gold funerary mask has become an icon of
Egyptology. But Mr Raghy is in no doubt that the mines in
the area he is now working supplied the gold for
Tutankhamun's treasures.

Mr Raghy's company, Centamin Egypt, hopes to use
opencast mining instead of the more costly tunnelling.

Number Six
(10/18/1999; 01:10:24 MDT - Msg ID: 16751)
The DOW[N]
Hi Netking,

per my golden arrow wild-assed guess, I'm gunna go for another LOCK LIMIT day on Wall Street...

I believe it kicks in at a 10% drop, but I am probably wrong...

I have some BEARX (the Prudent Bear Fund) which made about +2% last Friday :)

Asia is not looking at all good...

Tuesday is the anniversary of the 1987 crash...

And the Oct '29 day is coming up soon, is it friday of this week?

Cheers
Quabbin
(10/18/1999; 02:37:23 MDT - Msg ID: 16752)
Who was it that said gold will follow platinum?
http://www.kitco.com/platinum.graph.htmlhehe....just for kicks (if you don't hold plat) check out the Kitco above. (if you do hold plat, don't even look...it MUST be a VERY sick mistake)
BTW, I didn't even shoot an arrow but I'll go on record with >>>======333.33========> because they tell me I just turned 33. Seriously though, I don't believe there is a closing price between 226.00 and 249.00.
Good luck to all nonetheless.
Q:)
ORO
(10/18/1999; 02:40:59 MDT - Msg ID: 16753)
Yellin' of troy AragornIII FOA
Good morning all.
I am hoping this posts in one piece.
So here it goes.------The problem with "concept money" is that it is vulnerable to "reverberant doubt." I accept it only because I believe others will, which requires believing they believe still others will, and so on.

1. This is a problem with all money and all goods and assets.
2. As you point out, concept money is more susceptible to doubt because one does not see any value to it from its inherent properties. (I folded 3 bills into a small wedge and it straightened out my wobbly end table I erased the depositor database of the bank computer to play Doom 3D, nobody seemed to mind).
3. Wealth money and exchange money. You seem to make a distinction at some point though you don't say so outright. I would like to make the distinction and make it clear. I would only add that some wealth money can often take the place of an exchange money, but no concept money could be wealth money. Gold and the PMs are best suited for both roles.

1. Money. What is it?
1.1. Usage - medium of exchange, wealth
1.2. Properties as medium of exchange
1.2.1. Liquidity in physical and electronic form.
1.2.2. Generally accepted in trade - don't want that smelly herring
1.2.3. Does not loose significant purchasing power over the course of a day or two from the time of pay till it is safely used or transformed into wealth money - see Weimar.
1.2.4. In physical form it is not too bulky to take to market. (I'll give you this truck load o shells here for the cucumber...)
1.2.5. Finely divisible. It'll cost you 0.01 Ming Dynasty vases.
1.2.6. Easily verifiable
1.3. Properties as wealth
1.3.1. Rare and grows rarer over time. (each new unit costs the same or more to produce than the previous one)
1.3.2. Longevity. Does not corrode, bleach out, break, decay etc..
1.3.3. High density of purchasing power per carriage on one's person and in storage. Transportable, low cost of ownership. (We couldn't take the Michelangelo statue when the Nazis came to Milan, damn new roof on the villa cost a fortune)
1.3.4. Not dependent on arbitrary decisions of political and economic powers as to the bulk of supply and demand over prolonged periods of time. Say a generation or two. (Grandpa left us a safe deposit box in Rio, full of money he worked for all his life, we bought a popsicle for each of us with what we got from a collector)
1.3.5. Has significant demand of its own to consume whatever quantity could hit the market. (as opposed to a mile wide meteor that would wipe out life on earth)
1.3.6. Has a market and accepted in trade in many places, does not have to be particularly liquid.
1.3.7. Easily verifiable
1.3.8. Has value in wartime or peace. Preferably more during war than in peace
1.4. Can concept money be money in all senses?
1.4.1. Not even a slight chance, because the loss of value in war time, and its susceptibility to the inevitable government goof(s).
1.4.2. Can it be used as short term preserver of wealth (i.e. a bond?), yes in time of peace and economic stability, no when these are threatened. (Like now)
1.4.3. As a medium of exchange it is good so long as its decline allows sufficient time for wealth preservation through conversion to commodity money and precious goods.

------ if this money, though risky enough to be lousy money, is still the *best* kind of money available, then just because there is a chance it might find no takers when I want to spend it does *not* mean I should spend it all now and refuse to take any more.

As you say later on, it is a matter of allocation and purpose.
Whether you are looking to store wealth for the unborn grandkids, or supply tonight's dinner. Investing in GE is one thing, locking up your money in a CD is another, but none of these are for the next generation. They are for money you will use yourself and this need not be very liquid, and they are susceptible to the same vagaries as your money, namely dilution.

------ if the money has an issuer or other central authority who can reduce the supply as appropriate -- more likely for concept money than a physical commodity --, the price of a unit of money need not even change, and this price stability can itself bolster confidence. As long as we are in this regime, the doubt inherent in concept money does not reverberate: #n *isn't* going to reject the money as not-money, so there's no reason for #n-1 to do so either.

As AragornIII said, the fact of the presence and need of a regulatory authority indicates the fear in officialdom that there would not be confidence in the money. Confidence in this Issuing Authority assumes that there is a possibility if not a probability of them "getting it right". I will say this again: It is not a possibility. The best you can hope for is that you won't see a major break within the next couple of years. C'est la.
Remember this, in order for the burden of issuing and controlling money to have value for the authority, it must include a "fraud", something for nothing must play into it. The whole concept of fiat/concept money is just that, seignorage. If concept money is used, it will cause a cumulative economic distortion over time. Attempts to correct it will only cause further distortion because of the interjection of another arbitrary decision making process.
Why would anyone think that central planning, so bad for anything else in the economy, should be a valuable component in money issuance and control?

------It becomes right to hold less money/liquidity, but not to hold none; *some* amount of liquidity really is *very* valuable.

As long as you can make it to the coin store or supermarket without loosing a chunk of your purchasing power, you are fine. When the speed of purchasing power loss heats up, you see in your own anxiety and your rush to spend before the price goes up the same evidence that others do and can be sure that liquidity is going to disappear, as you are surely not #n, otherwise prices would have been stable. When new price booklets are distributed at the store entrance daily because the cost of updating the price on the shelves is be too high you know you are there.

------ There are a couple of classic ways to keep the system in the stable region. Laws requiring payment of taxes in a particular kind of money or making it legal tender for debt and other contracts assure everyone that there will always be at least a limited, specialized demand for the money, which reduces the risk of loss from getting stuck with it when the music stops.

Not really.
The excess demand for money for settlement of these tricks for slowing its devaluation are also among the main causes for it to occur. One of my first observations upon reviewing debt and monetary aggregates has been that there is a cycle and there are two phases. Debt growth starts it, then monetization and credit crunches follow it. Credit crunches are what a monetary authority is most concerned with, because of its destructive domino effects on banking. The alternative is monetization. Ultimately, the method for clearing excess money creation dooms the system to violent unwinding through debt collapse or monetization. Given the slightest choice, the central bank will monazite.
Taking Parkinson's second law into account within the monetary realm, we have the introduction of the recently ballyhooed moral hazard. Essentially, if the monetary authority offers "insurance", the system will inevitably reach the capacity of this insurance's reserves and surpass it significantly. In the concept money world there is no end to reserves, but each additional draw dilutes the whole in circulation and in accounts.

------ non/monetary values. Of course, at any one time, the price and marginal value for commodity use and for use as money must be about the same, otherwise stocks would shift from one use to the other...... The point is that when a commodity becomes money its demand curve shifts, since it is now the sum of the regular, physical demand curve and an additional curve of demand for use as money. The latter is downward-sloping, since the higher the price -- the more you can get for a unit of money -- the fewer units you need to serve your liquidity needs (assuming the money is reasonably divisible). So there will be a new equilibrium, at a higher price [purchasing power]. And at this higher price, actual physical demand will be less, as users shift to substitutes or do without or reduce their own outputs.

Wonderfully thought out demand picture. What is missing is the presence of supply. The big difference between the various candidate monetary commodities, and the reason PMs got top billing is here. All PMs are depleting "natural" resources. The "easy" ores are produced first then, when depleted, the next level ore is used; with lower concentration, more difficult chemistry, deeper excavation, greater political instability, or lack of infrastructure. Because of this steep staircase ascension in real cost of production with each rise in demand, the global economy's technological advancement is challenged to just keep gold production going, not to speak of attempting to lower the cost.
The PMs are assured in this way of maintaining purchasing power over long stretches of time. New high quality deposits are rapidly depleted to the same cost level as the rest. Similarly, the bringing to market of large hoards may lower the purchasing power over a short time, however, there is bound to be a recovery in its relative value. The prospect of recovery is what causes the savvy to buy during these "supply crises" and puts a natural floor under the purchasing power.
The bottom line is that over a generation or more, there is no meaning to the monetary demand, since it is not what dictates the purchasing power. It is the fact of the ever increasing real inputs of production (however slowly).
.
------ Conversely, if money is demonetized, if the monetary demand vanishes, the price will drop, and this reduced price is what I have been referring to as the nonmonetary value. Pure concept money, having no nonmonetary use/demand to speak of (apart from a few collectors, historians, etc.), becomes (nearly) worthless if demonetized.

The analysis of supply should suspend your interpretation of demonetization when referring to a depleting resource commodity money. Though the supply shock from official demonetization may cause loss of confidence for a period, particularly before it actually happens, the fact is that the monetary authorities of all countries can not actually make the decision to demonetize PMs, only the decision to not call them money. Just as printing "I am money" on a paper does not make it so, so does the new official nomenclature not make the PMs any less money than they were before the decision.

------ But when the money first becomes money, the whole circulating balance has to be obtained, creating a much higher demand, temporarily; and the effect on price will be all the greater since suppliers know the demand is temporary and won't turn their businesses upside down to meet it. Conversely, on demonetization the whole monetary balance, no longer wanted, gets dumped into the supply side of the equilibrium, but only as a one-time thing, until it is absorbed. (Essentially, this is what was happening to gold in recent years.)

Your discussion of overshoot is quite to the point, I believe we have just started out of the gate on recovery from overshooting in the gold markets. The paradigm has shifted as the high demand for gold at "demonetized" prices has been satisfied by the implied encumbrance of much "monetary authority" gold, fraudulently backing impossible promises by bullion bankers. As ANOTHER is wont to say, the price was dropping because of the high demand.

------These transitional effects are much less a problem for pure concept money, which can be created and destroyed by magic wand as needed, but for commodity money they are serious, making the stuff less attractive and more risky as money, and thus perhaps preventing it from becoming or remaining money.

Quite the contrary here. The requirement of a monetary authority controlling the spigot is exactly the kind of thing that a wealth accumulator like AragornIII wants to avoid. The current popular trust and confidence in the motives and abilities of the monetary authorities is an anomaly, as is the benevolence of a dictator or regent. There has yet to be a case in which the monetary authority was due its accolades. The best one should expect is their mass resignation, perhaps accompanied by some tar and feathers, followed by the elimination of their powers.
Magically appearing and disappearing is not a property of stable money, or wealth money. Concept money rabbits appearing and disappearing repeatedly from the hat do not indicate magic, they indicate trickery and illusion. Our wizards of money know this, and have made a fine art of "hand quicker than the eye" illusions of concept money rabbits where they keep the rabbits and sell the "magical" hats to the simple circus audience.
Finally, the issue is: does one trust the magician, or the natural properties of commodity money, particularly of the depleting resource variety?

------ Let's consider the claim that has been made around here that gold is going to $30,000/oz. When I first saw that, I wondered, like others, what those $s will buy. It appears the claim is that the change will be about equally divided between gold and dollars: The price of gold will rise by an order of magnitude and the price of dollars fall by an order of magnitude, both relative to things-in-general.

Yes, that is the general estimate some of us are using.

The dollar's purchasing power is an artificially maintained state. In some of my previous posts I discussed the mechanism of its maintenance, the reasons for it on a number of planes, and the current state of affairs. FOA, ANOTHER, AragornIII, MK and others have pointed to this as well. All of the major reasons for the maintenance program have already disappeared. The mechanism itself is breaking apart. And a 10 fold devaluation is not only thinkable, but inevitable. Furthermore, it has happened before, in the rather quick drop of the late sixties to early eighties when there was strong international support for it. This support is now gone, so the elements to delay the drop are gone as well.

------Is it at all plausible that the price could go up by a factor of ten? As I understand the claim, the proponents are not talking about a mere brief spike in the price (caused by a short squeeze or some other aberration), but about a fairly stable price level, a new equilibrium.

Yes, and again, the current gold purchasing power is an artificially maintained state. The mechanism that maintains the low price as well as the interests backing it are all changing. The interest of the new monetary authorities does not lie with low gold prices at this point, but with high prices. The mechanism itself, the details of which I and others have discussed and estimated, was about done for even if the official support was still standing (which it isn't). The war against gold was lost and the opposing forces are trying to decide the right retreat tactics (scorched earth, panic and run...), and whether to make a last stand or surrender.
And to repeat the dollar story, it has happened before (20 fold in 11 years, 10 fold was permanent) despite many measures taken by the most powerful players in the monetary system to stop it. The "united front" is no longer there, and the interests of its former members now stand on the other side, or at odds with each other.

------ Now, no one is predicting some huge technological or aesthetic change in physical demand (or supply), so the idea must be a flood of new *monetary* demand, a remonetization of gold. But what all that theory tells us is that at ten times the present price, gold will not be such good money. ..... what price would clear a purely physical market, so offhand I have no quarrel with the $600/oz figure that has been going around here. (I would like to point out, though, that for gold the "physical" and monetary demands aren't totally separable, since a lot of gold jewelry around the world is held as a store of wealth, with monetary overtones and assumptions vulnerable to a demonetization and disillusionment.) But that isn't the number in the public mind; what will come to mind when people envision a loss of gold's monetary status is the $300 it was at for so long before the New Monetary Order. To make things still worse, there's the overhang of all those official gold holdings.

The one thing to remember is that the revaluation is rarely that of gold itself, the revaluation is usually that of gold obligations - back to near 0. It is a deflationary phenomenon, when viewed through the eyes of gold.
The historical record shows that revaluations of gold have met with heavy dishoarding when an 10 ounces can buy the prevailing mode of transport.
In banking terms, when banks are restored to 60% reserves stability is restored. (it is not threatened significantly until it drops below 40%.) In our case of the late 90's, the leverage of M3 is 4 within the US. In order for the whole debt to be 60% coverable in cash, monetization needs to be 60% of a quadruple the money supply. In order to obtain 60% coverage of the resulting inflated M3 with 262 million ounces, we have roughly
$6 trillion X 4 X 0.6 X 0.6 / 262 million = $33 000
The 1976 "redistribution of wealth calculation" brings just under 200 barrels of oil per ounce. Currently at $22, implying a $4400 price. If the price of oil continues to rise, one should expect gold to rise at least in proportion. A 10 fold drop in the dollar would bring $200 oil, and $40 000 gold.
In terms of unskilled labor, one ounce per month (shaky figure, since I can't find the source at the moment). Since the US, Mexican and Southeast Asian unskilled workers sit at about the same international value of employment and skills, the $ should fall to near parity in pay of unskilled labor, which would bring it down by a factor of 10.

Back to the vulnerability of the New Monetary Order. I do agree that there is a danger of artificial inflation of gold with the proposed regime, and monetary authorities will doubtless try to do just this, as it stands in their interest to do so. One thing to add here is that the appropriate level would still be at the $30 000 range. In any case, one should consider the rule of rising incremental supply cost coming into play. Once price rises in the inputs to gold production are considered (10 fold?) and the depletion effects are taken into consideration, given sufficient time, the supply cost will be just that - $30 000. No one will be thinking of $300 as a downside potential. Perhaps 10 - 20 000 more tons would be produced in the next decade than otherwise, but that is not to mean the price would fall much below the new, much higher production cost .

As AragornIII said, there is nothing else to go to but real goods and gold. The new money would just be spent if it perceived to be too richly valued. But there is no incentive to "cheat" because of the lack of alternatives for parking the receipts of sale. Levels of debt and leverage through derivatives are so absurdly high that raising interest rates to lure the central bankers into any currency will backfire in producing enormous flows of newly "printed" currency into the markets that would swamp the initial financial flows. This strategy has been the lynchpin of the post Volcker era. The accumulation of obligations this has caused is so enormous that there is no way to let it continue, not to speak of it being substantially extended without large scale runs of the printing press. I would expect one form of "cheating" to be reincorporation of the PGMs and silver into the central bank accounts.
Bottom line on the issue is that the leverage against gold that develops with the bull market will be a major determinant of the stability of the system. The degree of diversification by central banks into the other PMs that have natural properties similar to gold will also be a measure of stability.

The main conclusions you drew from your work were:
--- For someone holding newly-monetized gold, the potential loss if the monetization fails or is reversed will be.... 80%...95%.
--- At such prices, gold will be the softest "hard money" you can imagine.
--- For practical economic purposes, it will be almost like concept money.
--- this will represent a *change* in [gold's] economics.
--- But if you thought of gold as good money precisely because its ratio [of monetary to commodity value] was low, because its commodity value provided security, then an effective loss of that state of affairs is an *event*, a news peg, an occasion to reconsider one's policy.
--- I cannot believe that gold at those prices will be stable money.
--- The system will be on the wrong side of the tipping point, and gold will cease to be money. [which is why it will never become such]

Frankly, your conclusions err in not considering the natural supply dynamics. The simple fact is that gold as wealth money has never left us. The monetary authorities have never had the power to decide this issue, and still do not. This is no different from government engineers not being able to decide that cling wrap has the strength of steel. Furthermore, I suspect that gold was never let go as the unit of account for international trade and debt settlement at a dollar price much higher than "allowed" in the markets.

So the counter-conclusions are:
1. Gold does not need to be remonetized, because it has never ceased to be money.
2. Publication and recognition of gold's price is the issue at hand.
3. The second issue is recognition that the 16000 to 20000 tons of paper gold sold to cover demand for the metal over the last decade will not satisfy it because it is not deliverable. The demand for that metal will be satisfied by the physical market along with the new demand now mounting at a true price much higher than now. In times of peace, bad ammunition is counted along with the good, in times of war only the ammunition that works is counted.
4. Primary to all of this, is the recognition by the markets that the dollar has lost its political support and has little economic backing to provide it with value. It is the concept that you are rich on paper until you try and spend your paper money. As you spend your money you both increase the price of what you buy and decrease the value of your unspent money.
5. The extent of monetary use of gold makes its cost of prod\�B�<���SK��N`����>--$q� y:���U���5P���jኤ>g����*--�K--�˧˞M... '--���'76�z�]�-��M�}eb�8�ݿ"6*"t�'?�9��u�;V�//i"K�
ORO
(10/18/1999; 02:45:12 MDT - Msg ID: 16754)
Continued
5. The extent of monetary use of gold makes its cost of production rise to the same level rather quickly. Thus, the supply side of commodity money prevents the ratio of monetary to commodity value from going much beyond 2.

Reiterating and commenting on AragornIII. Msg ID:16418
1. The paper chicken was hatched from the golden egg. I.e. concept money derives its acceptance, at least in part, from its history as a gold receipt.
2. The driving force for concept money is the seignorage it allows the monetary authority. Reduction of its supply is anathema to its purpose.
3. The debt traps that are the blood vessels of modern concept money get clogged with bad debt when money supply is reduced and a fatal stroke in the economy results. Therefore, the monetary authority stands at the ready with enormous syringes of dollar thinner and clot busting default rescue packages. In the meantime much monetary blood is spilled into the markets.
4. The monetary use becomes the commodity money's major use in an advanced economy so the ratio of monetary demand to nonmonetary demand is indeed high. However, there is no reason to expect that there would be a preference to anything else as money, since there is ample evidence that recognizing and harnessing gold's monetary role is simply going along with the markets rather than with an artificial construct. The actual element of importance in Yellin's argument is the ratio of monetary value to production cost, not commodity demand. (My own point in AragornIII's context)
5. Confidence in a money is predominantly a function of the lack of a need for trust in official intervention, on the one hand, and on the other if there is an authority, the confidence in the authority itself,. If the large central bank hoards were dumped, gold would be quickly set free of the only significant threat it has ever faced.
6. Contrary to AragornIII (with all deference) there is more than an arbitrary agreement and tradition behind gold. Furthermore, there is more than an evolution behind the market's choice of gold as money. The evolution was a process of discovery of the nature of gold, its deposits, its economics. The process brought about a confidence in gold. AragornIII, I think, is mixing the concepts of money and concept money. The point is that gold money can't escape being an instance of the concept of money, but "concept money" is a claim of label on an empty box. It is the attempt to use the label of the concept as the thing it represents. It is a cognitive miscreant. What one discovers in studying the nature and mechanisms of concept money, does not promote confidence in it. One of the first things learned is that it either represents nothing and is devoid of inherent value, or is a deed of ownership over the products of the citizens' time, that citizens have not issued, but their government issued in their name without their consent. Thus, it can be interpreted as part of a time share arrangement for owning people, i.e. slavery, sold by a promoter known also as government. Since the attempts of collection are very low yielding in extremis, I would claim that it is more plain sham than straight slavery. Further study reveals the problems inherent in concept money are generated by the cognitive error, I will not elaborate further on this point in this posting.
7. Overshoot and plateau. Somewhat outside AragornIII's comments. Since the official monetization as discussed in this case is an open bid for the metal by a fiat currency aiming to back itself with gold, there is likely no interest on their part to push gold into dangerous "bubble" territory. They may actually be able to tell within a factor of 2 where the market stands and will stop raising the bid at some point in very loose proximity to the point of mania taking over. Quite frankly, I believe this is a core problem with the mechanics of the future system.
8. Keeling over and bouncing back. Gold bounces back mostly because of the supply characteristics, but also because of its retained role as wealth money even when outlawed. Concept money falls and has to be tied back to PMs and re-evolve.
9. Again, contrary to AragornIII, there is very much a distinction between commodity money (PMs in particular) and concept money, whether of government fiat or otherwise. The commodity money is a product with natural corrective processes built into the nature of its economics because of its physical reality. Concept money is divorced from reality by intentionally making a cognitive error equivalent to putting a label reading "food" on an empty box of Mac 'n Cheese. The key element in the nature of successful commodity money is the structure of its supply, its physical properties, and the presence of commodity demand. Commodity money is within the concept of money, but is not the label itself. Thus, "true money" is not concept money, though it derives most of its demand from its use as money, it derives its value (over extended periods) from its physical nature. Commodity money is part of the barter system that is the nature of trade, concept money is not natural, does not rely on trade or barter but is anathema to both. It is based on coercion and fraud, not agreement and cooperation.

Commentary:
FOA (10/15/99; 14:50:00MDT -:16479)
Yellin' of troy (10/15/99; 13:03:53MDT - Msg ID:16465)
FOA -- the demand for gold is not insatiable See Msg ID 16465

1. FOA, I could not agree more. As stated above, "true money" is part of the world of barter and trade, where items of value are traded, services and products of use to the receivers. Money is the label used to describe usage, whether that of a common barter item (commodity money) or concept money. Yes, banking has a little to do with it, because it was very inefficient without a natural or coerced money, and once developed around particular items for debt settlement, they do become the defacto monies. And right again, the concept money of today is an implied contract intended for default.
2. FOA, again, I need only translate to my (inferior) terms, for consistency: Because of their nature, PMs are natural moneys of the commodity type. Thus, official pronouncements may make them official or black market money, but not change their nature as money. PMs are as much wealth as a Cellini piece, a seaside villa, or a fleet of luxury cars.
3. Most important for the wealth accumulation issue, PMs need not go through a trade into fiat to be used as exchange money, because they may be traded directly. In extremis, contracts and deeds of ownership are in danger of being ignored, thus the portability and "big money" liquidity of gold play a part in its preference as part of wealth. When the threats to solvency, order and civility mount, all tend to move to the safety of gold. It is more liquid and more easily divided than any other form of wealth. In expectation of war at home, some will convert as much as they can into PMs and gems. PMs are preferred because of ease of verification of pure materials.
4. I will drop the question of infinite demand for PMs, though it is obviously significantly greater than the market prices might suggest. It should be noted that in the days when fiduciary duty was important, financial advisors advised gold and other PMs to constitute at least 5% of one's net worth in times of quiet, 15% in preparation for financial disruption. In liquid assets, they would suggest 10% to 15% in the PMs in quiet times, and as much as possible in preparation for financial instability and war.
5. Gold is both underpriced and underused. Much of the gold bought by individuals as part of their diversification was never delivered, but replaced by gold related obligations that were never intended to be delivered against by their issuer. A fraud. Most of the buyers are still not aware that their "gold" does not glitter. Since 1995, I estimate a supply deficit of 4000 to 5000 tons per year was papered over with fraudulent contracts. The "price" to clear this demand from the market after such a long period of accumulating demand is anyone's guess.
6. Measures of wealth. In extremis, currencies and all that is denominated in them are worthless. Debts and derivatives are all dependent on the ability of institutions to remain solvent. Deeds to property depend on the willingness of government (much distracted during financial, political and marital upheaval) to secure them. Thus the error of Yellin of Troy is in reasoning in her posting using the wrong unit of account. One that tends to disintegrate quickly when pressed. " How can the price be correct when no paper money can define wealth? No person knows the true wealth of gold."
7. The value of gold in times of upheaval is amplified, as both FOA and ANOTHER indicate. Why? Because these are the times in which most other types of wealth are threatened, when obligations are not honored. Gold and the PMs are not promises, carry no commitments, and grow more desirable with the growth of noise about us. In a way, it is a measure of insecurity, thus Yellin of Troy's observation of temporary instability in gold's purchasing power, do not indicate a weakness in gold so much as a temporary strength of the monetary authority as consecutive errors collect to form the necessary conditions for disaster.

A bit of thinking on the current system:

The current monetary systems all use debt money. i.e. money that is generated almost exclusively by the production of new debt in the banking system and the debt markets. Positive account balances are possible only as the obverse of someone taking on a debt obligation. Thus, instead of currency being supplied first, debt is created simultaneously with money (by the bank or credit market, not government). Future demand for money is created such that it is greater than the money created. The credit expansion phase of a credit cycle is the cause of expansion of economic activity to meet real demand. The expansion phase is often accompanied by price inflation. But this also creates a future demand that may not be met by income produced in the economy (profit and wage), and therefore the willingness to borrow, and historically has done so cyclically. Interest rates tend to fall under these circumstances since demand for fresh loans sours. However, as the loss of fresh money flows through the economy, price deflation sets in and default risk increases, thus increasing borrowing costs later in the cycle. When new borrowing creates too little fresh money, the banking system falls apart, with a significant portion of the banks going under.
The banking system can be said to have two phases and to be inherently unstable, subject to necessary fits and starts.

In a commodity money system, the commodity money becomes more valuable, as it is necessary for debt settlement, and wages fall because of the reduced profitability of many businesses. Under these circumstances, the production of the monetary commodities becomes more profitable, and their production increases during the debt contraction phase. During the debt expansion phase, the markets are flooded with paper equivalents and the profitability of the commodity money production, and hence the supply of new commodity money is eventually reduced, thus making debt repayments more difficult and limiting excessive debt expansion.

In a fiat money system there is a central bank to attempt to artificially fill in the natural role of money creation in the commodity money system when the bank system is in danger of deflating. The Central bank stands behind the banks with the promise of replacing dead assets (non performing obligations) with subsidized loans and fresh cash money. Currency may be supplied by the Central Bank as necessary to prevent default in the banking system when "natural" debt growth is insufficient to create enough money to service the debt burden. To some extent, the Central Bank may change interest rates to raise or limit the debt burden while increasing or decreasing the monetization of debt (it is assymetrical, as easing brings on refinancings of long term debt, and tightening has a much slower effect as few will refinance into higher interest rates). (I) In an economy closed to foreign trade and investment, this eventually leads to disaster as the Central Bank must choose alternately between debt bubbles and price inflation on the one hand, and explosive collapse of banking, on the other. Why? Because of the growth of the accumulated debt will continue to such heights that the economy will not be able to serve it. When this point is reached, only the massive printing of money will solve the problem of servicing the debt. Lowering of interest rates (to encourage borrowing) reduces bank liquidity as money moves into mattresses while banks face both withdrawals and surges in bad debt. Monetization follows as there is no other choice if the banks are to be saved. When the economy has healed and normal banking resumes, the economy expands in strong price inflation as people return money to the banks and the banks lend to all who have deferred demand through the debt repudiation cycle.
(II) In an open economy that does not have the stature of issuer of the reserve currency, there are two types of scenarios, one for a debtor nation, one for a creditor nation. In the debtor nation, the free and easy buildup of debt within the country is supplemented by foreign borrowing to finance trade deficits. The debt bubble of this kind of economy ends when the first trouble in debt payments causes an abrupt panic departure of reserve currency and results in chaos in the credit system as it implodes in unpayable foreign debt (denominated in reserve currency). These foreign debts can not be serviced with any amount of monetization, and the economy turns to exports. The economy ends up in severe debt deflation, extreme price inflation originating in import price inflation being matched by inflation of the prices of local goods being exported, and a severe drop in living standards.
(III) In a creditor nation (an exporter), the debt bubble grows in a similar way as in a closed economy, and ends up as does the closed economy, but with more severe price and credit deflation. Once the Central Bank has lowered interest rates sufficiently, an interesting phenomenon occurs, (1) the lower interest rates encourage other countries to borrow in the creditor's currency, and thus reduce (initially) the exchange rate. (2) The low interest rates cause bank withdrawals, (3) the low prices caused by the price and credit deflation are supplemented by the low currency exchange rates to push export volume heavily. (4) This exacerbates the importer's and the reserve currency issuer's debt, thus contributing to their credit bubbles.
(IV) The issuer of the reserve currency has the most flexibility, but also has the most vulnerable position in the long run. The issuer of reserve currency must have a trade deficit and a current accounts deficit. (A) If interest rates are directed towards a reduction of the trade and current accounts deficits by encouraging foreign borrowing that would cause a decline in the currency, there would be price inflation accompanied by rapid debt growth. However, the country would not become a heavy debtor (as % GDP) to foreigners because it only has to supply enough currency each year to (1) settle the increase in trade volume (not the whole trade volume), (2) settle the differential between new foreign borrowing and foreign debt load denominated in its currency. Under these circumstances, the reserve currency issuer will cause a steady accumulation of debt of foreign debtor nations and an accumulation of reserve currency in the hands of the creditor nations. (B) If interest rates are raised to combat inflation, there is a quick switch in trade flows due to the reversal of the interest rate differential joining with the "natural" reserve currency demand (1 and 2 above - this also causes an increase in the demand for money to settle debt because of the higher debt load arising from hikes in interest rates) to quickly raise the exchange rate to the detriment of the exporting industries and to the merriment of consumers and retailers. (B1) This produces a strong surge of imports and a fundamental change in the structure of the economy. The "mature" economy rapidly looses industries, one after the other, and turns more towards the marketing and transport of foreign made goods. (B2) As is soon discovered, the added imports serve to grow the nominal economy more quickly than the production of the same products, since the assembly, transport, retailing and marketing operations generate a greater GDP per worker than does the manufacturing itself. (B3) During this phase there is a rapid accumulation of foreign debt and bouts of currency weakness. (B4) When interest rates are raised it is foreign debtor nations that keel over (see II) while the reserve issuer finds very low inflation caused by the fire sale prices of the debtor nation's exports. (B5) Once the debtor nations are restored to normalcy, inflation resumes quickly and interest rates must be raised again. (C) During these processes, creditor nations find that there is no way for them to make use of the accumulated reserve currency, and that when they lower interest rates, there is no response in their own economy, but the reserve issuer's economy runs through the roof. Jealousy is, justifiably, directed towards the profligate reserve issuer. (D) Eventually, (D1) repeated collapses of the debtor nations teach them not to accumulate foreign debt, and thus the demand for the reserve currency abroad is damaged, just as its supply reaches new heights due to higher import costs as the value of the reserve currency falls. (D2) When support from the creditor nations ends, the issuer of the reserve currency will have accumulated a huge debt that (D3) will loose value quickly as (D4) alternatives (like commodity money or currencies of creditor nations) are used to balance trade. (E) The (former) reserve currency will be decimated, and no matter how severe the interest rate hikes, there would not be any way to remove the flow of reserve currency seeking to procure real products rather than recycle the reserves into new debt and equities in the reserve issuer's markets. The lower currency exchange rate and the price hikes this causes in imports shakes the confidence of the local and foreign investors who seek safety in commodity money and real assets. Since in this inflationary environment, deposits and debt securities are being sold by substantial foreign holders, raising interest rates or refraining from monetization may cause the beginning of a credit crunch and a rolling default that would cause the credit markets to seize up and the economy to crash.

A quick glance at aggregate debt in the US reveals that debt has grown in all years since 1960 (the beginning of my series). It has grown faster than GDP. From a steady 150% (+/- 5%) of GDP through 1980, it has grown since to 277% of GDP today. Viewing the debt balloon as a portion of M3, the debt in the US shows a similar pattern where the significant break occurs from a steady 235% (+/-10%) of M3 in the 1961 to 1984 period. Since then, it broke sharply upwards to reach 400% of M3 in 1995. This is where it has stayed. What is most interesting here, is that in the post 1980 world of higher interest rates, indebtedness
Debt service less debt growth and nominal GDP growth gives a measure of the ease of filling the debt service needs of the US economy, particularly as a portion of GDP. Prior to 1980 there were no periods where debt service was greater than new debt creation and GDP growth. Since then, in the periods 1980 to 1983, and in 1990 through 1994 there were serious, if not severe deficiencies in the ability of the economy to service its debt load. These were periods of slow or negative growth (less than 3% real GDP growth). These periods were punctuated by six year periods of quick debt growth and heavy trade deficits centered around 1987 and 1998 (we are still in the latter period, in the debt slowdown phase).
After the 1987 crisis, all nations came together to help the US economy recover. The Japanese interest rate reductions and the US interest reductions of the early 90s were sufficient to heat up the Asian "Tigers" and some of the Latin American countries in an orgy of trade deficits and debt accumulation that threw some economies into hyperdrive growth over 10%. The 1994-5 interest rate hikes in the US marked the end of the debtor nation's ride as their reserves dwindled and businesses were quick to invest in export producing capital using foreign and local debt. Though this excess production lowered prices, the heavy consumption this caused brought the great deficits discussed before and caused profitability to disappear.

As is obvious from this, debt is key to modern monetary issues, it is not possible for the banking system to survive on a pure debt structure without continuous growth of debt outstanding. The willingness of people, corporations and the government to go into debt is the limiting factor of debt growth. The prevention of a deflation of the banking system, a liquidity or credit crunch requires debt monetization. Thus, recessions cause a drop in business activity and income generation by the economy. The drop in this activity needs to be matched by fiscal expansion of the government's indebtedness to generate sufficient debt expansion to avoid the destructive deflation of the banking system and exasperation of the recession. Alternatively, interest rates may be lowered to the point of resumption of borrowing. If borrowing does not resume, government deficit spending must be monetized by the purchase of government (or other) securities by the Central Bank. Otherwise, debt expansion would have to be replaced out of income, causing a liquidity shortage and price declines and then the banking system would be in danger of collapse due to defaults by unprofitable businesses.

The bottom line is that creating money from nothing, as banking debt does, creates no goods or services, just concept money. Thus, the banking system increases money supply and debt and causes the presence of concept money known (initially) through price inflation. The price inflation later leads to more indebtedness, and finally to a credit squeeze when the economy is unwinding produces a "death" of the money through default and liquidation. Over this debt repudiation process, the leverage of the bankers will cause their destruction through the elimination of the money they "created". The elimination of the debt obligations lays the groundwork for price inflation to follow as the Central Bank eventually gives in to monetization and the buying power of the currency falls to the point where bank leverage is returned to "normal".

In the US markets, this means that debt in proportion to M3 must end back at the 220-240%
ORO
(10/18/1999; 02:46:40 MDT - Msg ID: 16755)
Continued 2

In the US markets, this means that debt in proportion to M3 must end back at the 220-240% area, and debt as a portion of GDP should go back below the 150% range. If the derivatives positions of US banks are treated as debt, the repudiation process would end up with their fall to a similar or smaller proportion of aggregate debt relative to the current debt position. Such that $33 trillion of notional value of outstanding derivatives over $24.5 trillion of US internal debt, each falling by roughly half relative to GDP, ends with a GDP revalued to $15-20 trillion (doubling), the $ index at 50, the CRB at 400, and nominal debt levels the same, though lower relative to GDP and M3.
Whatever further monetization is necessary until the US can rebuild its export capability, will cause a further decline in the $.


Finally, some thanks are due

FOA, thank you for your writings, always informative, weighty with wisdom. I rarely find cause to comment unless translating your thoughts into my own dry language.
I thank you for the timely information and your enlightening explanation, most of all, thank you for the depth of wisdom.

Aragorn III. Some say the value of something is its price. Some will see the errors at the core of today's monetary instability (e.g. James Dines and Rick Ackerman in their versions of "The Bonfire of the Currencies") yet unwilling to deal seriously with the underlying philosophical issues, even as they manifest in real life. Perhaps disdain for the discussions of angels dancing on pinheads?
I thank you, "who was not born yesterday" for the depth of experience you communicate.

Yellin of Troy. Thank you for thinking and taking the time to write your thoughts. From your writing I see an astute economist wrapping a bright mind around issues no longer discussed in economics textbooks. Much of the theory I discuss runs counter to the interests of economists in advancing their careers through the revolving doors of government, academia and finance. I suggest that the smart start collecting material for a history of stupid economic experiments and the idiotic mental constructs built to hide the truth behind concept money and its innate instability.
Thank you for stimulating me to gather more thoughts from dispersed notes and fragments.

Writing this was great fun.

We still have tons and tonnes to go over.
ORO
(10/18/1999; 02:53:02 MDT - Msg ID: 16756)
Quabin - Plat
http://www.mrci.com/qpnight.htmFor a quote and some cool stock index analysis.

Market Mth Open High Low Last Change Date Time Ask Bid
Gold(CMX) Dec 317.2 318.1 315.7 318.1 +1.7 10/18/99 1:26 318.0 317.7
Silver(CMX) Dec 536.0 537.5 535.0 537.5 +3.7 10/18/99 1:20 537.5 536.0
Copper(CMX) Dec 79.10 79.10 78.50 78.50 -0.45 10/18/99 1:34 78.80 78.35
Platinum(NYM)(Access) Jan 407.0 407.0 407.0 407.0 +1.0 10/17/99 18:39 407.9 404.1


Number Six
(10/18/1999; 03:08:25 MDT - Msg ID: 16757)
Would anyone care to comment on this POG exhange I had tonight...
This is No. 6 aka Andy in Denver.

Tonight I saw a post by Dick Moody referencing what may happen todat to the POG and I rebutted a few of his statements...

It's fairly lonf but I would appreciate any comments, am I out of line here, is Dick...

I trust FOA and so Dick's reasoning doesn't add up for me... this is the exchange...

===========================================================

Heyyyyy AAAAAAANNNNNNDDDDDDYYYYYYYYY & Anyone else
Careful that you don't stroke out guys & gals.

Most of the 14 Market oscillators that I follow are still primarily bearish on the DJIA technically...but only for probably another day or so. DMI remains bearish/ADX trendline remains bearish. Commodity Channel Index remains just went bearish, indicating that this move may have a few days to go or perhaps 500 points downward to spare. The Bollinger Bands however are showing a switch is developing and anticipating another bounce... though I suspect in light of all the other oscillator's that the BBs are a bit premature in here. The Momentum Indicator is showing oversold status again, but it could fall still further,anyway. I suspect so. Rate of Change shows being oversold, but it also shows further lows are ahead for Monday anyway. The Relative Strength Index is also showing oversold status but still weakly oversold and that means there is still strength for a downmove over the next day or so. MACD is VERY bearish for the next day or so, and the Volume Index suggests more new lows are ahead (probably over the next week or so) The current new low is accompanied by increasing volume, suggesting further new lows are ahead.

Fast Stochastics (not reliable for timing, IMHO)indicates an upward move is building.

Slow Stochastics (more reliable) indicates an oversold market but is not reliable here as a bottom signal setter because stochastics is only reliable in marking bull market bottom retracements. We're now into a "bear market" -- basis LONG TERM...

Guys, we're not likely to see a steep drop here on Monday beyond 300 to 500 points down. I won't say we couldn't see even greater drops than 300-500 points on the DJIA but say 1,000 points or more is highly unlikely without more bad fundamental news hitting the market unexpectedly. It is also possible that this market move may stop out at -300 or more and then turn and retrace back to perhaps even positive territory during Monday's trading. It IS possible (though not likely)) to see a + day on the DJIA, if so it wouldn't be + by much. Frankly I'd expect to see on the close a range somewhere between -150 and -250. This is probably the most plausible range.

IF so, I would be more inclined to see a short term rally as the short-traders unwind their positions to take profits, IF there is no further signs fresh selling or margin call selling on Tuesday. That said, I'd figure that under such a scenario you might see a 100 point or more gain on Tuesday, depending on how low she closes Monday. Right now, its a bit early to figure out Tuesday.

Re: GOLD... GOLD had better NOT break below $310 IF the DOW is tanking because IF Gold does NOT SKYROCKET... then Gold has its own EMERGENCY PROBLEM in that the big boys are back to keeping GOLD down probably due to bank selling of long positions to cover stock losses. Banks and others might just unwind out of all other markets to cover stock losses, per the demand by Greenspan last Thur nite. In doing so, it automatically covers up the Gold market with more selling. This I suspect explains why Gold/Silver sat stupefied on Friday during the Stock turmoil. SOMEHOW, I expect more of that today in the metals. I hope not. I'd like to see her run. For me, Gold... NOW REMEMBER I BASE ALL GOLD ANALYSIS ON THE NEAREST ACTIVE TRADING MONTH, WHICH IS DECEMBER GOLD... and it NEEDS TO CRACK BACK OVER $320 quickly on the open... IF gold fools around below $320.00 til the NYSE opens... this is a bad sign for gold...it shows extreme weakness and probably confirms my suspicions about bank and funds-house liquidations to cover Friday losses. IF so, it will be a long, long day for metals.

IF gold can quickly break over $320 and hold around $325 by NYSE opening, then I think Gold would have a decent chance of locklimiting up for the day, at least for awhile... and should certainly crack back over $330.00 and race to $340.00 and over and should close above $340.

Yes, closing above $340 is extremely important here.

On the flip side... If gold loses on Monday...IF Gold closes below $310... then the Gold Bull Market will have ENDED. That's right, technically a move and close below 310 (basis December 99) would have fatal technical ramifications that will signal something seriously wrong internally within the Gold Comex pits as well as world markets.

Silver will follow gold whereever Gold leads it.

Crude appears to be in the middle of a developing trading range for awhile bouncing back and forth between $20-$25. Too many mixed signals now in the oscillators after Friday's trading.

Well, there's a FWIW from the guy who knows Murphy and his laws quite well. Somehow, I managed to keep from sawing myself off of that limb on Thursday, but it was kinda scary...with that big black bear down below me just a waitin' for supper.

Have fun watching the market and just remember the only floor traders who may survive on Monday would be those wearing their "crash helmets." Yes, even in the exchanges we must have "safety first." I'm just waiting for them to mandate seatbelt laws on their chairs! Especially over at NASDAQ. HA!

-- Dick Moody (dickmoody@yahoo.com), October 18, 1999.


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

Thanks for the analysis Dick... did you ever read my recent post explaining what is going on in the gold markets as perceived by FOA (friend of ANOTHER) over at USAGOLD?
Per his analysis he says the shorts are playing a waiting game, desperately buying time, time which is about to run out as there is no physical available... He says gold will run to $500 in no time once it unravels...

Thoughts?

-- Andy (2000EOD@prodigy.net), October 18, 1999.


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

This is the link
http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001azV

-- Andy (2000EOD@prodigy.net), October 18, 1999.


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

Yeah, Andy, I read it and a lot of other goodies too.
I don't buy the scenarios though. Perhaps its because I've heard that same sort of song and dance for 20 years now, just a different verse. But same bottom line. The thing is, I just read a Reuters story a few hours ago that most of the Gold boys were covered on their shorts for now. A lot of the problems had been in options also that they've been able to either roll back or are sitting way, way out there.

Thus with a combination of that and the fact that Gold failed to move on Friday ... well that Friday action just about nailed down a coffin on the current technicals for this Gold bull-rally... This would also indicate that the shorts have not lost control of the gold market. As I also said earlier, stock drops may have an adverse effect on gold...IN FACT... Greenspan may have realized this and the whole reason for a stock drop was to force actions by the banks to sell off their metals both long and short positions to raise capital to cover stock losses...thereby killing 2 birds with one stone. NOW, I might be wrong on that, but its a strong suspicion of mine.

Andy, never underestimate the boys that Greenspan is running with... and btw, they're not Europeans... their globalists...and their purpose is to set up a New World Order for a strong dictator to arise greater than anything Hitler could dream of. As I see it, Y2K might be the least of our worries... All I can see is that they're still in control and will remain so barring unforeseen natural calamities like a "deep impact" or solar flare that fries the planet.

Oh, one other thing, ... I AM PERSONAL FRIENDS WITH MURPHY and I find myself out on the darndest limbs, so consider that when you read my rambling comments. Ha!

Have fun watching the action.

-- Dick Moody (dickmoody@yahoo.com), October 18, 1999.


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

Thanks for replying Dick... a couple of points...
Yeah, Andy, I read it and a lot of other goodies too. I don't buy the scenarios though. Perhaps its because I've heard that same sort of song and dance for 20 years now, just a different verse. But same bottom line. The thing is, I just read a Reuters story a few

###### ding ding ding ding

REUTERS - the mouthpiece of the cabal Dick :) the controlled establishment press i.e. the big banks that are connected are gonna spread these rumours that the shorts are ok...

Did you read the other Reuters story today basically covering the Denver Gold Miners conference and basically talking up Barrick's hedge position - which as you know is absolutely disastrous - as being not a problem. Consider Murphy's letter to that Bas***D Oliphant!!!

#######

hours ago that most of the Gold boys were covered on their shorts for now. A lot of the problems had been in options also that they've been able to either roll back or are sitting way, way out there.

####### Sorry. Don't believe it Dick. #######

Thus with a combination of that and the fact that Gold failed to move on Friday ... well that Friday action just about nailed down a coffin on the current technicals for this Gold bull-rally...

####### With all due respect to all your expertise over all the years you have been in this game this is pure BS Dick.

You CAN NOT look at technicals in the rigged gold market. It just cannot be done.

Yes you can look at resistance levels and so on - but we are in a different game here now Dick, involving many many factors other than pure profit or loss...

Think about it - gold at $252 fer chrissakes.... that is NOT market supply and demand Dick :) #######


This would also indicate that the shorts have not lost control of the gold market. As I also said earlier, stock drops may have an adverse effect on gold...IN FACT... Greenspan may have realized this and the whole reason for a stock drop was to force actions by the banks to sell off their metals both long and short positions to raise capital to cover stock losses...thereby killing 2 birds with one stone. NOW, I might be wrong on that, but its a strong suspicion of mine.

####### you could be right - we'll see soon enough... #######

Andy, never underestimate the boys that Greenspan is running with... and btw, they're not Europeans... their globalists...and their purpose is to set up a New World Order for a strong dictator to arise greater than anything Hitler could dream of. As I see it, Y2K might be the least of our worries... All I can see is that they're still in control and will remain so barring unforeseen natural calamities like a "deep impact" or solar flare that fries the planet.

####### I agree they are globalists, and I agree with much of what you say. we'll soon see. None of this is new to me... :) #######

Oh, one other thing, ... I AM PERSONAL FRIENDS WITH MURPHY and I find myself out on the darndest limbs, so consider that when you read my rambling comments. Ha!

Have fun watching the action.

####### Thanks very much Dick. Let us agree to differ a little. Fact is the recent breakout of Gold was the largest since 1980. if I had told you a few weeks ago that gold would hit $339 you would have laughed and told me your technicals wouldn't support the run-up!

Yet it happened.

For a reason.

Which is about to made plain for all to see. Won't be long Dick, no way has this bull run ended :)

Cheers - tell Murphy he's doing a SUPERB job! #######

===========================================================

We'll see soon enough :)

Thanks in advance, Andy
Number Six
(10/18/1999; 04:36:25 MDT - Msg ID: 16758)
It's Official - Barron's sees possibility of $1,000 an ounce!
Whatever is really driving the price of bullion, one columnist in New York has offered his own point of view. Alan Abelson of Barron's, a weekly financial magazine, argues that the price of gold has sky-rocketed because of "the fear factor". But not just any old fear. It seems that investors didn't give a toss about the precious metal during the Asian contagion, the financial debacles in Russia and Brazil, or even during the possible impeachment trial in the United States.

So what are they so afraid of? According to Abelson, Beatty and Trump. As in Warren Beatty, handsome actor, and Donald Trump, property developer and casino operator. It seems that these two stalwart Americans are threatening to run for US president. Neither claims to have any experience in the political arena, but as Abelson points out they "both boast considerable success in other pursuits [mostly the opposite sex].

"In other words, investors, to their credit, perceived this dire threat to the future of the republic and hurried to protect themselves by laying in a store of gold. Should Trump or Beatty actually throw his hat in the ring, the next price point for bullion is $500 an ounce. If either were to get elected, $1,000 is in the bag."
TownCrier
(10/18/1999; 04:45:45 MDT - Msg ID: 16759)
Hear ye! Hear ye! The call to contest! >>>>------PRELIMINARY RESULTS--------+>
When the final archer was seen to depart by moonlight, we took an oil lamp from off the wall and descended the Tower steps to duly note the various placement of the many arrows. In truth, some arrows were so misshapen that we marvelled at their arrival to the target!

This parchment of results shall remain attached to this sturdy oak for all to study until the day of truth arrives. If any contestant discovers that their arrow was overlooked or misidentified, please attribute the mistake to the dim light, and call the correction to the attention of your devoted TownCrier.
__________________________________________________________
Simply Me (10/17/99; 23:08:20MDT - Msg ID:16742)
*>>>>------$0--------+>
Chicken man (10/17/99; 15:44:09MDT - Msg ID:16685)
>>>>>>----$225---->
pa kua (10/16/99; 20:55:03MDT - Msg ID:16614)
>===>=====>=====> $293 <=====<======<=======<
el St.One (10/17/99; 15:09:29MDT - Msg ID:16681)
>>>>>-----303.30------>>>>
diston5 (10/17/99; 19:40:51MDT - Msg ID:16720)
>>--------$304.00----------+>>>
Goldiehawk (10/17/99; 18:45:26MDT - Msg ID:16713)
===============305.60========>>>>>>
canamami (10/17/99; 22:15:49MDT - Msg ID:16735)
*>>>>>>>- - - - - - -$306.67- - - - - - - ->>>>>>+>
Phos (10/16/99; 08:16:36MDT - Msg ID:16544)
>>>>=====$308=====>
Ray Patten (10/17/99; 18:54:01MDT - Msg ID:16715)
>>>====308.10----->
Fasolt (10/17/99; 20:13:31MDT - Msg ID:16725)
>>>>------310.25------
Gold Dancer (10/15/99; 17:17:16MDT - Msg ID:16496)
>>>>>>312.00....>
summicron (10/16/99; 18:43:11MDT - Msg ID:16594)
>>>>>> ----- $312.50 ------ <<<<<<<
backlash (10/17/99; 23:32:11MDT - Msg ID:16746)
>>>>>>------- $ 314.80 -------+>
Tomcat (10/16/99; 23:13:44MDT - Msg ID:16622)
>>>>>>>------$316-------+>>>>>>
Goldfly (10/17/99; 11:08:23MDT - Msg ID:16660)
>>>>>>--------317.20------------(>X
sstins (10/17/99; 20:04:20MDT - Msg ID:16724)
>>----------$318--------->>
flierdude (10/17/99; 10:59:21MDT - Msg ID:16658)
>>>>>---------$318.70----------+>>>>
andrew the kiwi (10/17/99; 16:32:16MDT - Msg ID:16694)
>>>>>--------$319--------->
Tanglewild (10/15/99; 22:09:30MDT - Msg ID:16529)
>>>>-----$319.25-----$>
Carl (10/17/99; 9:06:24MDT - Msg ID:16643)
>>>>$320.00.
Hipplebeck (10/15/99; 18:49:49MDT - Msg ID:16507)
>>>----------------------$320.20++++++++++>>>
Gandalf the White (10/14/99; 15:09:35MDT - Msg ID:16356)
>>>>>----------$321.0----------->
SCRCS (10/15/99; 15:28:37MDT - Msg ID:16481)
>>>----321.25----+>
baba2 (10/17/99; 15:10:27MDT - Msg ID:16682)
\\\\\\\\\\\\\\\\\________$321.70__________\\
Strad Master (10/17/99; 21:48:51MDT - Msg ID:16730)
>>>>>>>-----------$322--------+>
mike55 (10/16/99; 19:37:56MDT - Msg ID:16603)
>>>>>>------ $322.40 ---------->
Black Blade (10/14/99; 22:06:42MDT - Msg ID:16399)
>>>>>----$323.00----+>
AllanC (10/17/99; 22:34:19MDT - Msg ID:16737)
>>>>-----323.15----->
CoinGuy (10/14/99; 22:04:47MDT - Msg ID:16397)
>>>>>----------323.50-------------->
CoBra(too) (10/15/99; 18:10:28MDT - Msg ID:16498)
*>>>>> 324.75<<<<<
HopeingII (10/16/99; 23:55:31MDT - Msg ID:16627)
*>>>>------ $ 324.75 --------+>
NORTH OF 49 (10/15/99; 11:24:33MDT - Msg ID:16456)
>>>>>=====327.50=====>
Goldy Locks Guy (10/15/99; 21:35:58MDT - Msg ID:16518)
>>>>>>>>>>>=============== 328.50 ===============>>>>>>>>>>
Goldy Locks Guy (10/15/99; 21:36:34MDT - Msg ID:16519)
>>>>>>>>>>>=============== 328.50 ===============>>>>>>>>>>
Goldy Locks Guy (10/15/99; 21:37:09MDT - Msg ID:16520)
>>>>>>>>>>>=============== 328.50 ===============>>>>>>>>>>
Goldy Locks Guy (10/15/99; 21:40:05MDT - Msg ID:16521)
>>>>>>>>>>>=============== 328.50 ===============>>>>>>>>>>
Goldy Locks Guy (10/15/99; 21:44:32MDT - Msg ID:16524)
>>>>>>>>>>>=============== 328.50 ===============>>>>>>>>>>
RossL (10/15/99; 21:54:55MDT - Msg ID:16527)
Goldy Locks Guy
It's an awesome poem but you don't need to post it 5 times! [Hey Rosco, you spoke too soon...would you believe the final count was SEVEN times?? Goldy Locks Guy...we're all impressed that you were able to empty your quiver, sending each arrow to split the shaft of the preceeding one. You're quite the marksman!--TownCrier]
Goldy Locks Guy (10/16/99; 16:31:48MDT - Msg ID:16576)
>>>>>>>>>>>=============== 328.50 ===============>>>>>>>>>>
Goldy Locks Guy (10/15/99; 21:56:30MDT - Msg ID:16528)
>>>>>>>>>>>=============== 328.50 ===============>>>>>>>>>>
onlychild (10/17/99; 22:39:13MDT - Msg ID:16738)
>>>>>>>>---------328.55---------->>>>>>>>>
MidEastGold (10/15/99; 11:37:45MDT - Msg ID:16458)
>>>>>=====329.25=====>
Richard, Oregon (10/15/99; 10:53:35MDT - Msg ID:16452)
>>>-----$330.00----->>
Jon (10/17/99; 5:40:22MDT - Msg ID:16635)
331.25
nugget101 (10/15/99; 13:17:04MDT - Msg ID:16470)
>>>---------- 332.10 ------ >>
Quabbin (10/18/99; 02:37:23MDT - Msg ID:16752)
>>>======333.33========> [Happy 33rd Birthday, Sir!]
Peter Asher (10/17/99; 23:15:12MDT - Msg ID:16744)
>>>>>>> $333.50 >>>>>>>>
Roark (10/15/99; 21:34:07MDT - Msg ID:16517)
>-----$336.00----->
law (10/16/99; 19:35:24MDT - Msg ID:16602)
----> $338.20
Hill Billy Mitchell (10/14/99; 21:38:11MDT - Msg ID:16386)
$338.50
T. Remital (10/15/99; 15:54:43MDT - Msg ID:16485)
>>>>>>339.50-------->
goldnbones (10/17/99; 13:09:04MDT - Msg ID:16674)
####-----$339.75----->
MRM (10/16/99; 17:34:53MDT - Msg ID:16586)
<<<------342.79------>>>
DD (10/16/99; 23:34:10MDT - Msg ID:16623)
------------>>>>>>>>>>$345.01------------>>>>>>>>>>>>>
Angel (10/17/99; 18:30:32MDT - Msg ID:16712)
>>>>>>--------------------347.70--------------------->>>>>>>>>
Trader_vic (10/14/99; 21:01:28MDT - Msg ID:16383)
>>>>>-----349.50-------->
RossL (10/15/99; 14:13:04MDT - Msg ID:16474)
>>>----------$349.60 ------>>>
elevator guy (10/16/99; 19:11:17MDT - Msg ID:16596)
*>>>------$350.00----------+>
TEX (10/16/99; 23:51:25MDT - Msg ID:16626)
>>>>>>>>>>>.........356.00.........>>>>>>>>>>!
Goldspoon (10/15/99; 15:49:14MDT - Msg ID:16484)
>>>----357.25----+>
St. George (10/17/99; 12:04:30MDT - Msg ID:16667)
*>>>-----$360.50----+>
phaedrus (10/15/99; 10:23:14MDT - Msg ID:16450)
>>>>--------$362.50------+>
Netking (10/17/99; 19:52:38MDT - Msg ID:16721)
>>>>>-----$365.47------>>>>
wiley (10/17/99; 18:08:14MDT - Msg ID:16709)
>>>--------------$369----------------+>>>
Village Idiot (10/15/99; 16:16:02MDT - Msg ID:16489)
>>>---374.20--->
The Believer (10/16/99; 21:51:51MDT - Msg ID:16618)
>>>>----$387.50----+>
Al Fulchino (10/15/99; 21:50:55MDT - Msg ID:16525)
$$$388.50$$$
apdchief (10/15/99; 15:00:47MDT - Msg ID:16480)
>>>>-----$389.90----->X
Canuck (10/16/99; 19:51:11MDT - Msg ID:16605)
-----------------__________________ $$$ )))) $399 U.S.
THX-1138 (10/15/99; 23:25:54MDT - Msg ID:16535)
>>>>=====$400=====>
Clint H (10/17/99; 10:49:06MDT - Msg ID:16656)
>>>>>...$417 Oct 22..>>>
Journeyman (10/17/99; 17:37:45MDT - Msg ID:16705)
>>>>-----$475.00------->
Number Six (10/17/99; 17:07:05MDT - Msg ID:16702)
>>>>>>>======= LOCK LIMIT ===($477)====>>>>>>>
The Invisible Hand (10/17/99; 4:59:43MDT - Msg ID:16633)
*>>>>------ $ 523.25 --------+>
Bill (10/15/99; 18:52:35MDT - Msg ID:16509)
>>>--- ?? --->

A French 20 franc (Rooster) gold coin goes to the marksman placing his arrow closest to the December COMEX gold futures contract closing price on Friday, October 22, a silver Eagle goes to each of the next two closest.

REMINDER: All first-time posters through the span of this contest (Oct 14 - 17) will be given a silver Eagle each as a warm welcome to this Round Table, but they must e-mail the Castle (Centennial Precious Metals / USAGOLD) to alert the staff so that your effort does not go overlooked.

cpm@usagold.com (Please put "first time poster" in the subject box of the e-mail)

Good luck to our many archers!
The Invisible Hand
(10/18/1999; 05:15:37 MDT - Msg ID: 16760)
the Value of this Forum
http://www.ft.com/hippocampus/q259a92.htmSorry my browser can't get farther then this in today's FT, but if you there take comments, you should find James Grant's (www.grantspub.com) article "A bad case of excessive optimism".
It contains the following paragraph:
"Someday a professor of English will win a Nobel prize in economics for proving that the financial markets actually operate on a principle of irony. Our Nobel laureate of the future will persuasively demonstrate that the discussion preceding the movement of prices at dramatic turning points is always the wrong discussion. Thus, for example, what foreshadowed the recent explosive rally in gold bullion was not a public forum on the opportunities available in the gold market. it was rather the auction of a portion of Britain's national treasure at what may prove to be generation low prices."
Is this Forum not public?
SteveH
(10/18/1999; 05:24:16 MDT - Msg ID: 16761)
Hall of fame and december gold
First, I nominate Oro's dissertation into the hall of fame.

Next, dec. gold now...$317.30.
FOA
(10/18/1999; 05:42:35 MDT - Msg ID: 16762)
Note
Number Six (10/18/99; 03:08:25MDT - Msg ID:16757)
Would anyone care to comment on this POG exhange I had tonight... This is No. 6 aka Andy in Denver.

Hello Number Six,
I want to thank and reply to all the fantastic thoughts given here the last day or two. But have no time right now. So, I'll work it in as I can. It's going to be interesting this next few days.
Six, Yes, a good portion of the short may have been covered or maybe not! Yet, the tonnage has not moved! It's going to and when it does this last move will look like a "wiggle". For now we must wait and watch the paper game. Thanks all FOA
Twice Discipled
(10/18/1999; 06:34:14 MDT - Msg ID: 16763)
Town Crier - check out Msg ID:16607
My feable explanation may not have been enough.
Leigh
(10/18/1999; 06:46:35 MDT - Msg ID: 16764)
A Question for FOA
Dear FOA: I've been wondering for some time about people who are political and financial "insiders." Do they know that gold is going to go up, and are they putting large percentage of their money into gold? Some of these people have a LOT of money, and if they were to shift it over into gold, you'd think supply would vanish overnight. I'm thinking of people like politically correct entertainers, politicians, business people (especially financial insiders), and so on. Do some of these people already have their money in paper gold, thinking they're safe, and not realizing that there is no physical gold to back it up?

Thank you.
Al Fulchino
(10/18/1999; 07:33:05 MDT - Msg ID: 16765)
Leigh..great question for FOA
I have had similar questions. Dear FOA??? Sooner or later, surely, the Hillary Clinton's of the world would be getting
more advice on how to make another commodities killing? What say you on this subject?
TownCrier
(10/18/1999; 07:55:19 MDT - Msg ID: 16766)
My mistake, Twice Discipled (Perfect looking arrow, by the way!)
Twice Discipled (10/16/99; 19:59:02MDT - Msg ID:16607)
*>>>>------$328.40--------+>

I must have missed it because it was only a dime away from that "porcupine" that Sir Goldy Locks Guy made at $328.50.

There were so many splinters in that area that it was quite easy to miss.

Thanks for the notice!
TownCrier
(10/18/1999; 08:15:54 MDT - Msg ID: 16767)
Hall of Fame nominations, past and present
http://www.usagold.com/halloffame.htmlI noticed that we had a few nominations for the HoF over the past week. The "entrance requirements" are further explained at the top of the Hall, but essentially, to be considered for addition there must be at least three well-considered "Seconds" to the original nomination. Everyone is encouraged to point out to me if I've missed something, but of the past-week's nominations, our count so far reveals that none have received the requisite support. (We're still blushing here in the Tower because one of you rascals nominated Thursday's GOLDEN VIEW. Thanks for the praise, but the G-V's are ALL probably best left to reside in the cozy dim glow of the archives...put to use as bookends!)
Leigh
(10/18/1999; 08:19:40 MDT - Msg ID: 16768)
Thinking About Burying Your Gold?
In today's paper a convicted marijuana smuggler/murderer speaks of authorities who searched for his supposed wealth. "[They] never found a red cent," Garza said. "They even went into my back yard with backhoes. They were under the impression I had money."
SRXtreme
(10/18/1999; 08:20:03 MDT - Msg ID: 16769)
Going Down Short and Up long ??
Hey all you experts out there, I'm just a small time (nervous) gold investor, holding some 300's and find all this info on gold a little confusing.
With Gold dropping below $310 this morning I find myself somewhat nervous and am looking for some reassurance from the knowedgeable traders out there.
Please correct me if I mis-understood what most are saying.
Overall Gold is on its way Up, probablty up to the $350-400 range by Dec 99. The current Fall in price is due to the Floodong of traders selling there holding believing those who attempt to manipulate the price, that gold is going back down to tht $260 range.
This is what those who attempt to manipulate the market want expect everone to do is sell now and gather thier small profit and force the price down so they can buy low before golds starts its real trek towards the actual 350-400 range by the end of the year.
Do you guys (gals) think that gold will be climbing soon?
Prjected price by years end.
My guess is around $400. This guestimate is NOT calculating Y2K panic factor into the equation.
I se some HUGE Numbers (over $1000) Is that really possible without a major depression?
Welcome all comments in layman terms please
TownCrier
(10/18/1999; 08:21:04 MDT - Msg ID: 16770)
UK dismisses talk Brown to succeed IMF's Camdessus
http://biz.yahoo.com/rf/991017/2.htmlBigger changes coming to the IMF?
watcher
(10/18/1999; 08:33:26 MDT - Msg ID: 16771)
denver/gold show
I would expect the price in gold to be neutral or down during the gold show which ends wedn.

The bullion bankers and shorts don't want to lose face publicly and will try to flex whatever strenght they still have.
These shows sometimes take on a carnaval like setting and can generate a lot of excitement if allowed to.After the show we'll see what happens.
Must be interesting , one side pro gold and the other against it. Only in this world those involved in the most stable entity can create such instability.
Golden Calf
(10/18/1999; 08:51:20 MDT - Msg ID: 16772)
advising is always difficult
SRXtreme (10/18/99; 08:20:03MDT - Msg ID:16769)
Going Down Short and Up long ??

If you're a short term trader, who knows what he's
doing, you should have stops placed when you make a
trade. If you're buying for the long term, more than
a year....then sit tight, unless gold breaks below 280
where, I for one, would advise taking a loss and selling.

Good luck, and don't watch the daily fluctuations if
you're in it for the long pull, unless you have a strong
stomach, and don't let emotions get the better of you.

Good investing!
SRXtreme
(10/18/1999; 09:07:53 MDT - Msg ID: 16773)
Thanks for your input Golden Calf
Golden Calf (advising is always difficult)
Thanks for your input, I am in short, april 2000
Since gold was VERY Low around 260 when I bought in August,
I Figured the dow was preparing to fall which it is and hoped to capitalize on the Y2K maddness.
I thought that it could only go up considering the "what goes up must come down" (and vise versa) therory. I know it's much more complex than that but so far its bee simple but effective.
BTW; I do have the stops in place
Thanks
Viper
(10/18/1999; 09:15:47 MDT - Msg ID: 16774)
SRXtreme/Gold
I understand your nervousness. I get a little anxious myself even though I truely believe that this is just a retracement that every market makes. You may want to check out a couple other forums, (I will incl. the site addresses)
as with this forum, there are a few people that can ease your anxioty.
I know no one can say for 100% certainty that Gold will go up, but reading the opinions of the people on this & other forums can help put your mind at ease.

Happy Trading To You! Viper

GO GOLD!!!!! :)
Viper
(10/18/1999; 09:16:54 MDT - Msg ID: 16775)
SRXtreme/Gold
I understand your nervousness. I get a little anxious myself even though I truely believe that this is just a retracement that every market makes. You may want to check out a couple other forums, (I will incl. the site addresses)
as with this forum, there are a few people that can ease your anxioty.
I know no one can say for 100% certainty that Gold will go up, but reading the opinions of the people on this & other forums can help put your mind at ease.

Happy Trading To You! Viper

GO GOLD!!!!! :)

tfc-charts.w2d.com/forum/
marketforum.com
TownCrier
(10/18/1999; 09:17:37 MDT - Msg ID: 16776)
Atlanta Fed's Guynn -- Fed can't get complacent...Though signs are that the "strong dollar" is a goner.
http://biz.yahoo.com/rf/991018/k0.htmlRegarding the atypically strong dollar and the growing current account deficit, Robert Eisenbeis, senior vice president at the Atlanta Fed, said "Everybody fully expected that at some point you would start seeing a pullback in exchange rates and that's been happening in an orderly fashion. It would be a mistake to try and lean against that."
USAGOLD
(10/18/1999; 09:20:20 MDT - Msg ID: 16777)
Today's Gold Market Report: Gold Tumbles; Ashanti Sweats Bullets; Cambior Begs for Time as Gold Luminaries Begin Meeting in Denver
MARKET REPORT(10/18/99):Gold tumbled this morning despite another
postponement/extension of the Ashanti margin calls. Bridge News calls
the market "nervous"......The postponement delayed further the merger
talks with Lonmin and kept the market up in the air as to how these huge
margin calls are going to be handled. Also, Lonmin lowered its offer for
Ashanti reflecting the hedging woes on Africa's third largest gold
producer ....Meanwhile gold luminaries from across the world are
gathering in Denver this week for the Denver Gold Group conference
amidst chaos among some producers and much uncertainty over hedging
programs throughout the gold mining industry. The potential for default
on gold loan obligations plagues several mining
companies...........Besides Ashanti, Canadian mining company, Cambior is
also experiencing hedge book difficulties resulting from forwarding
nearly double its production for 1999. Cambior's counterparties are
being asked to "defer Cambior gold delivery obligations under all or
substantially all hedging contracts." In other words,Cambior requesting
permission to default and the counterparties do not have much choice but
to go along. But this problem is not likely to go away and could very
well stretch beyond Cambior and Ashanti to other high-profile mining
companies........ Should gold prices go higher Cambior and Ashanti both
would be subject to additional margin calls. As it is the Ashanti is
equal to nearly half the value of the entire company.......... London
Reuters reports one dealer as saying: "Financial markets are expected to
remain hypersensitive to economic data this week, any further sell-off
in equity markets should at least see gold remain well supported at
current levels."...... Gold lease rates continue to slip reflecting a
cooling of action in the gold lending market -- most likely a reflection
of the major bullion banks and mining companies cooling their heals in
wake of the Ashanti and Cambior defaults.......... That's it for today,
fellow goldmeisters. We'll see you back here tomorrow.

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 gol
Goldspoon
(10/18/1999; 09:23:24 MDT - Msg ID: 16778)
After Quabbin posted ,laughing at Platinum...Gold then fell ....Beleiver now??
http://www.kitco.com/gold.graph.htmlQuabbin (10/18/99; 02:37:23MDT - Msg ID:16752)
Who was it that said gold will follow platinum?
http://www.kitco.com/platinum.graph.html
hehe....just for kicks (if you don't hold plat) check out the Kitco above. (if you do hold plat, don't even look...it MUST be a VERY sick mistake)
**********************************
Dear Quabbin....
Don't feel bad, lots of people make the mistake of not listening to Goldspoon... your not the first and won't be the last..... i'm sure....

Watch.... Platinum when it turns a rally in gold will follow..Key WORD here....WHEN.....
Goldspoon
(10/18/1999; 09:44:57 MDT - Msg ID: 16779)
Gold -Platinum spread...Want a preview of where gold is headed (short term basis)??
OF course you do!!! Here's how to know!!! The average spread between Platinum and gold has been about $100 dollars with gold correcting to this figure on the up swing or on the down swing.(in Quabbin's case) As i write this Platinum is $409 and Gold is $310.....Watch when platinum moves..... and simply correct gold for a $100 average spread...The delay in golds move is usually 1-2 hours sometimes as much as 24.... but gold has always corrected to platinum this way for the whole run...i see no reason to change this rule per "Rules Game" i'll let you know if this should change...
My Best as Always..
Goldspoon
RossL
(10/18/1999; 09:54:48 MDT - Msg ID: 16780)
More Gary North
http://www.garynorth.com/y2k/detail_.cfm/6550Subject: Gold: A Political Metal
TownCrier
(10/18/1999; 09:57:14 MDT - Msg ID: 16781)
EU's Solbes on Volatility, Inflation Threat: Comment
http://quote.bloomberg.com/pgcgi.cgi?T=markets_newsfeat99.ht=&ptitle=EMU%20Top%20Stories&touch=1&s=594c7c9bde02ca581ea749cf7d603094European Union Monetary Commissioner Pedro Solbes said their were concerns express in their last meeting about "short-term volatility and the risk of turbulence" in the euro coming from the "situation in the U.S. and the
debate about whether America will have a hard or soft landing."

OK, now if America's situation is so bubbly and precarious that Europeans are worried about the fallout, don't you think it would be prudent for more Americans to wake up and smell the coffee? But, most people seem content to just keep on buying the dips in the stock market. Its amazing how many blank stares you get when you talk to people about gold. Although, in all fairness, more and more are "coming around to our way of thinking."
Bill
(10/18/1999; 09:58:38 MDT - Msg ID: 16782)
FOA
When do you see this huge move starting? I realize no one knows the answer to that for sure. I think a lot of us would really appreciate your best, educated guess.
Thanks
fox
(10/18/1999; 10:15:47 MDT - Msg ID: 16783)
fox
http://news.24.com/English/Business/companies/ENG_162003_732627_SEO.asphow bad is the situation realy ad ashanti gold ?
Goldy Locks Guy
(10/18/1999; 10:16:15 MDT - Msg ID: 16784)
Oooops....SORRY
Sorry guys....When I went to post my thingy the FIRST time, I got this error. I assumed that it did not post. So, I thought I was doing something wrong and thus, kept trying to post it....In fact, I may get an error code when I send this message....Anyway, I know you guys are probably nauseated by seeing my post 7 times, please barf quitely...it might make someone else miss their mark. Towncrier, your response was most amusing :) but Robin Hood I'm not...at least I don't think so. (Where's maid marion?)
Goldfly
(10/18/1999; 10:17:18 MDT - Msg ID: 16785)
Townie - HOF noms

You know, 16 Tons only got two seconds, but lots of accolades too....

TownCrier
(10/18/1999; 10:21:08 MDT - Msg ID: 16786)
Minimum Wage Bill in U.S. Includes Favors for Florists, Brewers, Others
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20World%20News&s1=blk&tp=ad_topright_topworld&T=markets_bfgcgi_content99.ht&s2=blk&bt=blk&s=fb7757135e3c3ff83412fb0db6111a6aWith all of this legislative meddling, do Americans even know what capitalism and a free-market is these days?
Journeyman
(10/18/1999; 10:21:18 MDT - Msg ID: 16787)
In Search of the PPT 1
http://www.decisionpoint.com/chartspotlitefiles/chartspot02.htmlI'm on I-NET safari in an attempt to bag the fabled PPT (plungeprotection team). Have found some interesting tracks. Stumbledupon the clearing in the link above. Whoa! You now have a map, andif ye be a brave knight or lady, go boldly forth -- then slipsilently into the night! Regards, Journeyman
Goldspoon
(10/18/1999; 10:29:03 MDT - Msg ID: 16788)
***GREAT READ*****
http://www.contraryinvestor.com/mo.htm***It is begining to hit the streets.. Wall Street first then Main Street... Many stock Gurus are just beginning to smell the coffee...Gary North appears to be brewing a huge pot and waking up a soon to be (rushing mob) of Main Streeters...****enjoy, Goldspoon (see the link for more)****

Golden Years?...For those who have tuned in to our commentary for some time, you know we are not gold bugs by any stretch of the imagination. We've maybe mentioned gold a handful of times over the last six months. We want to spend a little time discussing the current market environment for gold and why gold may be quite important as we move ahead. We're not going to recommend gold stocks here, although we do believe the price of the metal has little place to go but up (despite the drop in price today). We'll cut right to the conclusion and then discuss the backdrop we see for what is developing in gold. The key to our current scenario for the metal is leverage. The fact that it is happening in gold is almost a moot point. Almost any asset class would do. Whenever a situation develops were excess leverage and structural demand/supply imbalance meet, trouble is eventually sure to find a seat at the head of the table. The Yen carry trade was almost an identical replay - a preponderance of bets on one side of the trade coupled with an application of excess leverage. Unlike the ability of the Bank of Japan to help manipulate Yen valuation, there is no "Bank of Gold" to which to turn for help to offset some of the pressure in unwinding the trade and the leverage. With gold, it's every man for himself. What makes the current environment interesting, is that very few mainstream "professional" investors have much experience with the metals complex. Most investors in the business for twenty years or less only know that gold goes down. Few understand the in place global structure of basic production, demand, leasing, shorting, etc. (We, clearly, are not experts by a long shot. It's the structural supply/demand imbalance and application of leverage which we hope to understand.)

We believe the ECB decision to suspend gold sales, leasing and derivatives transactions was largely borne of the need for Germany to shore up its balance sheet in order to maintain the financial dictates of ECB participation. It was an economic decision, not a market call. In a sense, it was protectionist. This decision just happens to come at a time when extreme imbalances in the complex exist. Hedge funds, banks and brokerages have used gold short sales and leasing to finance trading operations for years now. Simplistically, lease gold at 1% lease rates, sell the gold and use the proceeds to invest in higher return assets. Apply leverage, and this was almost shooting fish in a barrel. Other strategies included selling out of the money calls and using a portion of the proceeds to hedge with puts (for those who held bullion or leased bullion) or just plain old selling of naked calls. This type of strategy was really the province of the quant shops. Simple arbitrage, assuming the price of gold would continue to fall, of course. After years of suffering significant margin pressure, the producers also got in on the act in an attempt to preserve their P&L and balance sheets by selling gold forward. Poor Ashanti had about half of their proven reserves hedged - equivalent to approximately 6 years worth of production. After the close today, Barrick fessed up on a conference call that they too will take a hit due to their hedging activities. The stock will clearly react tomorrow. The unfortunate and almost unimaginable part of this scenario was that much of the leasing and short sales were done with "paper gold". Trading operations were essentially leasing and shorting gold they did not own. The pricing was tied to the metal, but their was no bullion ultimately backing the trades. Much like the Yen carry trade, when the unanticipated event happened (the spike in the price), leveraged speculators were caught off guard. We have to believe the Fed knew of this danger. Although we have zero factual information, LTCM was rumored to be massively short gold as it went into its death spiral late last year. One, or a number, of the brokerages that bailed out LTCM had to have taken on this liability. It is rumored to have been Goldman by foreign press sources, but we have absolutely no way of knowing if this is true.

Here we are in the present. The gold bullion price has spiked. Naked gold shorts have been caught on the wrong side of the trade. Those leasing gold they did not own have been caught. The producers who sold forward significant portions of their unmined reserves are stuck holding the bag. Because of the enormity of the one-sidedness of the trade and the excess leverage applied, there appears to be no way that the physical gold can be delivered to make the trades good. Imagine yourself on the other side of a short gold trade. Would you want payment in cash, or virtually undeliverable bullion? Of course you would choose the bullion, given that the lack of supply would force up the price as the short paid up to buy the bullion to deliver to you.

Sorry for what seems like tangential rambling. The point we are leading up to is that if you are caught on the wrong side of the trade, you will most likely be forced to sell liquid assets to fund the purchase of the bullion for delivery. Specifically we are referring to liquid stock and bonds. It is quite interesting to notice that we are witnessing days where stocks and bonds decline, but gold trades higher. Have we made it clear enough for you? We strongly believe that the excessive market imbalances and leverage existing in the gold market of today may have very negative ramifications for financial assets in the broader scheme of things. This has nothing to do with inflation. This has everything to do with the reckless use of leverage. The greater problem, which we unfortunately can't quantify, may make the LTCM fiasco seem minor in comparison. Unlike the problem being singularly centered in one firm, this has to involve many brokers, banks, the hedge community and the producers themselves.
TownCrier
(10/18/1999; 10:31:56 MDT - Msg ID: 16789)
Sir Goldfly, thanks, and...
you'll be pleased to know that your early "Masterpiece" is in the works, too, for inclusion in the "fun room" because we are a bit more free to take some liberties there. Why? Because at these prices we can have both gold AND fun, and no matter what may befall the gold supply, we'll never run out of "fun."
mike55
(10/18/1999; 10:42:29 MDT - Msg ID: 16790)
ORO - US Oil
Thanks for your response to my question on the long-term outlook for US oil. I have also been of the belief and understanding of the points you made -- use up the other guy's first, $ price rise for domestic production, etc., and construe from your response that based on our continued thirst for oil, the long-term outlook for US production is not a matter of if, but of when, and at what cost. US subsidization of domestic fields may be required from a strategic reserve standpoint depending on what the future brings.
Goldy Locks Guy
(10/18/1999; 10:46:42 MDT - Msg ID: 16791)
Good Grief
Ok...I just had to scroll back and look at my mess. I'm totally humiliated...Who says making a grand entrance is so grand....

Sorry again guys...

By the way........Looks like most peoples fears and anxieties over gold AND the DJ is going to have to extend another day or two.? Gee....maybe the lid will stay on until I can take a 3rd quater draw from my company...then I can stuff my mattress alittle fuller with those golden feathers!

Later Gold Roly Poly's! (That's one of those bugs with lots of legs that curl up in a little ball when you pick them up..)

Goldylocks
TownCrier
(10/18/1999; 10:50:16 MDT - Msg ID: 16792)
Glad you took our jesting in stride, Goldy.
CoinGuy
(10/18/1999; 10:53:23 MDT - Msg ID: 16793)
Stocks, Gold
Like I said last night, the market looks weak, but a few Dow stocks would keep this market around the crucial 10,000 level(via the PPT). I'm wondering what the CPI will look like tomorrow?
I expect gold to retrace some of it's gains, but personally I'm using the time to get into more physical numismatic coins. I thought of picking up some Plat, but like to stick with the PM'S I'm familiar with.
Gary North has an interesting article this morning...

Get Physical,

CoInGuY
TownCrier
(10/18/1999; 10:57:11 MDT - Msg ID: 16794)
DJIA just went south of the border, Nasdaq -75
Not that anyone cares...
Chris Powell
(10/18/1999; 11:02:31 MDT - Msg ID: 16795)
If you'd like to DO something to HELP....
.... Instead of just complaining to no one
in particular, you can check out the
following.

This message suggests some questions about
the Fed and Treasury Department that could
be directed to your congressman and senators:

http://www.egroups.com/group/gata/251.html?

To identify and get the addresses of your
congressman and senators, go to this site
and type in your ZIP code:

http://www.vote-smart.org

To see what we'd like to tell gold mining
company executives at the Denver gold show,
and for the fax number of the hotel where
the show is being held, please read:

http://www.egroups.com/group/gata/258.html?

For a list of the companies expected to be
represented at the show, and their home
office addresses, please read:

http://www.egroups.com/group/gata/260.html?
TownCrier
(10/18/1999; 12:22:31 MDT - Msg ID: 16796)
FOCUS-Ashanti weighs options as Lonmin cuts offer
http://biz.yahoo.com/rf/991018/rq.htmlOne analyst said, "Anyone taking on that company would want to neutralise or sterilise that hedge and there's going to be a cost associated to that. I suspect they have to satisfy themselves they've got $150-200 million and that's basically the difference between the first and second offers."

The counterparties' voluntary standstill agreement expires at 1630 GMT.
TownCrier
(10/18/1999; 12:28:25 MDT - Msg ID: 16797)
Fed's 3-day fixed system RPs added $2.495 billion
http://biz.yahoo.com/rf/991018/l4.htmlMakin' money outta "junk"...these new reserves were achieved through tri-party repos.

At what point will the Fed participate in repos with office furniture? "Ah, yes, we'd like an overnight system repo on our branch manager's antique oak desk...how's 5-5/16% sound? Great."
Tomcat
(10/18/1999; 12:32:03 MDT - Msg ID: 16798)
Repost: Are premiums beginning to grow?

Galearis (@farmer: I was jawing with rhody the just the other day and chewing over the) ID#430259: Copyright � 1999 Galearis/Kitco Inc. All rights reserved

I was jawing with rhody the just the other day and chewing over the chaos of this market and the fundamentals of the pms. Ted Butler ( of course! ) would also have good insights into this market. The ( little known!? ) consensus is that there is about a year and a half of above ground silver available to the market in physical metal. The short overhang is a frozen tidal wave of heavy hurt just poised to crush the shorts should they lose control of this thing. They are terrified!!!! You must understand that the price is ( obviously ) being controlled by deriviative trades ( hell, if anyone attempted to take physical delivery of one sizeable "buy", that would be it. ) A default and the resulting run would be an ugly thing of gigantic proportions and it is doubtful that COMEX would survive. Since many of the shorts are also hurting from their exposure to the gold rally ( bull? ) , the beginning of the silver ( bull? ) rally would truly be the end.

To give you an anecdotal example of the tightness in this market: a certain silver bug went down to the BNS in Toronto last week and bought a paultry number of 100 oz Ag bullion bars. Not only did this person have to wait 45 minutes for them to bring it up one floor from the vault, but it was noted that the payment represented a much higher spread from that which he paid on earlier occasions. Spot does not represent as great a factor by which these people sell you PHYSICAL metal as it once did . There really are two markets, one of paper and the other of physical. The same goes for gold. Should one buy a thousand ounces of physical and take possession, the buyer is likely to be paying closer to $400 per oz - IF it is available. I think the beginning of the Buffet spike will mark the beginnings of TRULY interesting times for this market! THEN you will see the beginnings of the BIG defaults!!!! The cabel is going to have a time juggling both of these things at the same time.... Buy physical if and when you can then sit back and wait for the lights to dim and .....
Tomcat
(10/18/1999; 12:51:36 MDT - Msg ID: 16799)
Repost: More on the possibility of rising premiums

Date: Mon Oct 18 1999 11:50 rhody (Scotia Mocatta spreads are crazy! I just phoned them to get) ID#408236 Copyright � 1999 rhody/Kitco Inc. All rights reserved

Scotia Mocatta spreads are crazy! I just phoned them to get a quote for gold maple leafs in Canadian funds and was quoted $516 per one oz coin. It was 498 yesterday per coin. Kitco, on the other hand is quoting 492 right now for the same coin, and was quoting 496 yesterday. Gold is down over
$US4, but Scotia Mocatta RAISED prices today. This is not a function of an exchange fluctuation, or Barts's prices should also be going up. What gives with Scotia Mocatta?

Any comments? SM as a bullion bank will be part of the CABAL. Could it be that they really don't want to part with gold, even at retail rates at these levels?
Al Fulchino
(10/18/1999; 13:00:00 MDT - Msg ID: 16800)
Your question
Tomcat, how are you? You asked about SM not wanting to part with their product. If they truly did not wish to part with it, IMO, they would not have it up for sale. I have gasoline in the ground.....I am willing to sell it today for what I can charge. Now, if i was unsure of future deliveries, then I would hold back. I am no expert here but, I believe the principle holds just the same. They are selling for a reason.And if they are part of a cabal that wishes not to put it on the market then there can be only ONE reason. And that would be to NOT scare the market. Best wishes.
el St.One
(10/18/1999; 13:25:35 MDT - Msg ID: 16801)
C P T
Looks like the Crash Protection Team are giving it their best effort. If they can hold the DOW together for another hour, they will be toasting each other with double Martinis with triple olives.

I had my doubts, but when they can hold the Dow steady while the NASDAQ losses a 100 points they must have some very deep pockets. I'll bet some of it is coming out of my pocket. Time to put a better lock on this shallow pocket. Buy more real stuff. GOLD GOLD GOLD and more GOLD

el







Yellin' of troy
(10/18/1999; 13:33:13 MDT - Msg ID: 16802)
webmaster, sysop, anyone
On Saturday I tried to post a fairly long message (though not as long as I've done in the past), and when I was almost through, my Message box suddenly went blank, as if I had just started, and I couldn't get it back. (In fact, I couldn't then even manage to post an "arrow" when I tried.) I lost over an hour's work. Today, just now, I tried again, and the same thing happened. No warning, no graceful degradation, just another hour and a half down the drain. What's going on? Is this a Windows problem? a problem with your system? Can anyone help? I can't afford to keep trying until I get some advice or assurances.
JCS
(10/18/1999; 13:37:14 MDT - Msg ID: 16803)
Re: Yellin of troy--needs help
I don't know what the problem is that you're having, but if you'll use a word processor like Netscape composer, type your message and then copy & paste into the message area you'll save yourself the loss of 2+ hours of typing an composing. This way you can save your typed material in a text file even if the message board screws up.
ORO
(10/18/1999; 13:39:15 MDT - Msg ID: 16804)
el St.One - PPT
PPT is not at all assisting. They are pulling out most of the time, assisting only in short intervals near the close. The rallies they produce are being sold into. Most of the Dow strength is a result of previous losses bringing the dipsters in to pick up bits of crushed blue chips. The Dow has also a skew to oil and banking and these are doing rather well. Banking because of the coming earnings reports, oil because of the inflationary rise in oil prices.
The selling is coming from the futures, not only the individual stocks. That is where the very high market cap to float value ratio of the megatech stocks is causing their shares to be disproportionately shorted as part of the arbitrage from the futures.
When the futures are being pumped up by the PPT, this show up as extra strength in megatechs. These have been showing weakness in all but the short futures driven upswings. The PPT isn't even trying to reverse the markets, only to keep them stable.
SteveH
(10/18/1999; 13:45:31 MDT - Msg ID: 16805)
ORO
You amaze me.

Who is the PPT made of and is what you are talking about legal?
Tomcat
(10/18/1999; 13:47:34 MDT - Msg ID: 16806)
Al Fulchino, ORO, TC, Chris Powell

Al: I am fine. Thanks for asking. Al, that question at the bottom of the post was actually part of the repost so I can't really contribute much. However, if the premium (the spread between spot and the street price for physical) is starting to rise, then that is very significant. I am hoping more knights/ladies will post any information on premiums that they hear about.

ORO: Your latest reply to Yellin and AragornIII is unbelievably great. If just a fraction of what you write could be put into a book or paper it would spread faster than fiat in inflationary times.

TC: Amazing how those repos are getting pumped into the system.

Chris Powell: Those urls are just what the doctor ordered. Thanks.
ORO
(10/18/1999; 13:48:08 MDT - Msg ID: 16807)
Yellin' of troy - Computer trouble
http://www.quote.com/livechartscom/I am sorry you had lost your posts. I am looking forward to reading your work.

I can only suggest you use a word processor or notepad and copy and paste from there. When I go beyond a couple of paragraphs I keep the post on a text or word processor and save at every turn. On the word processor I put on a 10 minute autosave.

el St.One - look at the intraday charts right now. You will see what a PPT intervention looks like. Note the strong correlation of the SP premium being pushed up on a sudden motion "out of thin air", and the sharp rebound on the Nasdaq. (klick the $COMPX)
TownCrier
(10/18/1999; 14:32:35 MDT - Msg ID: 16808)
Ashanti wins extension on standstill deal
http://biz.yahoo.com/rf/991018/vh.htmlAshanti Goldfields was granted an extension to their standstill agreement with its gold hedging counterparties for up to one week. Does anyone else believe that Ashanti is simply the industry's high-profile "poster child," and that this sort of thing is working itself through a great many set of counterparties out there in one degree or another? The best guess it that when the dust settles, very little newly produced gold will be reaching the open market for quite some time...it will already have commitments to a destination. Old sovereigns from other people's pockets (so to speak) may be the only supply available that the rest of us will be vying for.
JCS
(10/18/1999; 14:38:31 MDT - Msg ID: 16809)
PPT-Steve H
Not to steal any of ORO's thunder, 'cause, just as they say in that commercial "you da man!",
PPT = Plunge Protection Team, aka, CPT = Crash Protection Team, consists of Mr. Peter Fisher, Trading Strategist of the NY FED. He has a team who occupy an office in the NYSE building with a glass window overlooking the trading floor. They have constant contact with their floor sources and execute most of the "stabilizing" trades through Goldman Sachs. As I understand it, it's is legal under an Executive Order established after the 1987 crash. However, KIM, no one knows what they do, what positions they take or the strategy, whether VST, ST, or, I doubt, IT, trades, because the FED has never been audited and there's no law that requires them to report their market activities. As we have , no doubt seen posted here and other places, the FED isn't owned or controlled by the US Gov't so they do what they please, to suit the needs of the FED's owners.
canamami
(10/18/1999; 15:04:15 MDT - Msg ID: 16810)
Question for Oro
Did the PPT cause the decline in the POG and the price of silver today?
Viper
(10/18/1999; 15:19:52 MDT - Msg ID: 16811)
Post from another forum
Good afternoon all,...I found this on another forum, thought you might find it of interest. I for one haven't decided yet wheather I find it funny or not.
It was titled, REASONS TO BE BULLISH IN GOLD....I think this gentleman has viewed this forum. I have seen him on several, although I don't believe I've ever seen him post here.
Here Goes!......

The recent short covering rally has created an incredible wave of enthusiasm, especially amongst newer traders. The recent rally certainly has put a spark into a once dead market.

Most commodity forums (not so this one) are full of stories
of manipulations, and predictions of gold prices going to the moon.

For the new trader, figuring out the fundamental background of gold may be an overwhelming task. To make this task easier for you, I have collected some posts of various gold afficionados, citing what makes this market move. I hope the presented comments may give you an idea on how to really analyze this market.

Lease rates are high - this is bullish for gold, because the people doing lease programs will be in trouble when it comes to covering their short positions.

Lease rates coming down - this is bullish for gold, because the people doing lease programs are in trouble.

Large open long position in options (a large Dec option position was quoted, a few days ago) - this is bullish for gold, because smart money entered this position, and these guys know what they are doing.

(this option contract, of course, has an equally large short position) Large open short position in options - this is bullish for gold, because the not-so-smart money entered into these positions, and they will soon be sorry.

Large commercial long position in gold futures, before the move starts - this is bullish, because the big guys know where it's going

Large commercial short position in gold futures - this is bullish, because the big guys will have to cover their shorts.

Silver going down - this is bullish for gold, because the silver/gold spreaders are liquidating their spreads (long silver, short gold)

Silver going up - this is bullish, because it shows that all metals will now run

Dollar becoming stronger - this is bullish for gold, because the other countries will be forced to liquidate their gold reserves to raise money, so that they can offset the falling value of their currencies.

Dollar becoming weaker - this is bullish for gold, because we will have to pay more US Dollars for gold that's traded on overseas markets.

Crude oil going up - this is bullish for gold, because it is inflationary, and gold will go up with inflation.

Crude oil going down - this is bullish for gold, because�. wellllll, heck, its bullish too

the stock market going down - this is bullish for gold, because investors will leave the stock market and buy gold

the stock market going up - this is bullish for gold, because the stock market will create a lot of new wealth, which eventually will be diverted into gold.

Interest rates going down - this is bullish for gold, because investors will flock to the more tangible value of gold

Interest rates going up - this is bullish for gold, because it is inflationary.

The XAU (gold stock index) going up - this is bullish for gold, because traditionally the XAU leads gold

The XAU going down - this bullish for gold, because it reflects the troubles many gold mining companies are in, due to problems with short option positions.

As you can see, all you have to do is study the news and do some thinking, and before you know it, you will know whether to buy or sell gold.

While doing your studying, you also have to be aware of the big players: there are some powerful interest groups who have tried to force prices down, and there are some powerful interest groups who try to force prices up.

Proper etiquette requires you to use the terms "manipulation" or "conspiracy" whenever you mention the group that pushed prices down. On the other hand, when you mention the group that is trying to push prices up (such as GATA), it is a good idea to use terms such as "reliable source of information", or any other respectful terminology.

Also, you have to become a better judge of character than you might have been up to now. For example, you have to know that people who are short gold, be it banks or large specs, are despicable characters who deserve to be punished by rising gold prices, whereas people who buy metals, such as Buffett, Soros, and recently Gates, are benign and warm people, who have your well-being in mind..

There it is! Not so difficult, is it?

(I thought, a little humor might lighten up our sometimes tense days. But then, to some, this isn't humor!)

GK




canamami
(10/18/1999; 15:37:18 MDT - Msg ID: 16812)
Reply to Viper
Viper,

Sadly, there is some genuine truth to what you posted. I have noted that gold advocates sometimes do have an unfortunate tendency to create what Karl Popper called ad hoc premises - i.e., explanations for the failure of a predicted event to occur, designed to uphold the validity of the original theory or postulate.
Journeyman
(10/18/1999; 15:46:02 MDT - Msg ID: 16813)
WHO OWNS THE FEDERAL RESERVE; JCS @ Message ID #16809
You've probably been assuming your whole life, when you thought of it, thatthe "Federal Reserve" was a government agency of some sort. As hard asthis may be for you to believe, despite the misdirective use of the word"Federal" in it's name, it is not. It is, in fact, an agglomeration ofprivately owned banks which work hand in glove with the Federal Government.-L.Reichard White, "MONEY," (Brownsville, Penna: WhiteINK 1997)............ ................................................................................The bankers have also been able to deceive the American people intobelieving that a Federal Reserve Bank is a government institution, when infact, each one is privately owned. If you want to see for yourself, look inthe government pages of a phone book in a large city such as Los Angeles orSan Francisco. [A city where there is a Federal Reserve branch bank. -LRW]You will not find any Federal Reserve Bank listed in the government pages.But you will find a Federal Reserve Bank listed in the white pages, justlike any other privately owned corporate entity. The Ninth Circuit Court ofAppeals also confirms the fact of private ownership. ..........................Each Federal Reserve Bank is a separate corporation owned bycommercial banks in its region. -Lewis v. United States, 680 F.2d 1239,1241 (1982). -Otto Skinner, The Biggest 'Tax Loophole' of All, (San Pedro,CA: Otto U. Skinner 1997) p. 163 ...................................................................................................................Here is an idea of who owns the Federal Reserve from The Economic Rape ofAmerica by Fredrick Mann, p21: ............................................................................................................................WHO OWNS THE FEDERAL RESERVE?.........................................................................................................................There has been much speculation about who owns the Federal ReserveCorporation. It has been one of the best kept secrets of the century,because the Federal Reserve Act of 1913 provided that the names of theowner banks be kept secret. However, R. E. McMaster publisher of thenewsletter The Reaper, asked his Swiss banking contacts which banks holdthe controlling stock in the Federal Reserve Corporation. The answer:...........................................................................1. Rothschild Banks of London and Berlin ..................................2. Lazard Brothers Bank of Paris ..........................................3. Israel Moses Sieff Banks of Italy ......................................4. Warburg Bank of Hamburg and Amsterdam ..................................5. Lehman Brothers Bank of New York .......................................6. Kuhn Loeb Bank of New York .............................................7. Chase Manhattan Bank of New York .......................................8. Goldman Sachs Bank of New York .........................................................................................................................In The Secrets Of The Federal Reserve, Eustace Mullins indicates that,because the Federal Reserve Bank of New York sets interest rates andcontrols the daily supply and price of currency throughout the U.S., theowners of that bank are the real directors of the entire system. Mullinsstates: .............................................................................................................................................."The shareholders of these banks which own the stock of the Federal ReserveBank of New York are the people who have controlled our political andeconomic destinies since 1914. They are the Rothschilds, Lazard Freres(Eugene Mayer), Israel Sieff, Kuhn Loeb Company, Warburg Company, LehmanBrothers, Goldman Sachs. the Rockefeller family, and the J.P. Morganinterests." ..........................................................................................................................................Regards, Journeyman
Al Fulchino
(10/18/1999; 15:47:29 MDT - Msg ID: 16814)
Must Read
www.geocities.com/Heartland/7006/psychopolitics.htmlEveryone, I have meant to share this for a long time. It is a MUST read. If you value your wealth, your freedom your free spirit and not necessarily in that order, you will sit and be shocked if you have never read the text that you will find in the link above. I have copied and pasted a small excerpt that I think will give you a small taste. The entire text came to light in the thirties. Perhaps, with so much time having gone bye, some will see why sheeple are just that. The link is not an overly long read, but I find that you will be missing too much if you skip any of the chapters. Hope it is useful to you all. It likeley is the second strongest thing I will ever contribute to this forum.
What follows is a pretty mild example of what you will find .

From the Russian Textbook on Psychopolitics:


The handling of economic propaganda is not properly the sphere of psychopolitics but the psychopolitician must understand the economic measures and Communist goals connected with them.

The masses must at last come to believe that only excessive taxation of the rich can deliver them of the "burdensome leisure class" and can thus be brought to accept such a thing as income tax, a Marxist principle smoothly slid into Capitalistic framework in 1909-1913 in the United States. This, even though the basic law of the United States forbade it and even though Communism at that time had been active only a few years in America. Such success as the Income Tax law, had it been followed thoroughly could have brought the United States and not Russia into the world scene as the first Communist nation.
arlen
(10/18/1999; 15:49:23 MDT - Msg ID: 16815)
"THE CRASH OF 1999...1929 Revisited & Magnified"
http://www.angelfire.com/ok3/oz/index.comThis a forcast...a prediction...a augery and intro into
a UNIQUE body of research on the Markets. Available ONLY
from the author, UNCENSORED and entitled:

"MILLENNIUM FINANCIAL FORCASTING"
-------------------------------
You are also invited to visit website:

http://www.viettexas.com/myhome/OZ.html
arlen
(10/18/1999; 15:51:02 MDT - Msg ID: 16816)
"THE CRASH OF 1999...1929 Revisited & Magnified"
http://wwww.viettexas.com/myhome/OZ.htmlThis a forcast...a prediction...a augery and intro into
a UNIQUE body of research on the Markets. Available ONLY
from the author, UNCENSORED and entitled:

"MILLENNIUM FINANCIAL FORCASTING"
-------------------------------

Al Fulchino
(10/18/1999; 16:09:55 MDT - Msg ID: 16817)
Journeymen
It is no coincidence that the income tax and the federal reserve system have come into being. Note the similar time frame. Some will see this view as seeing a conspiracy under every rock. That is the myopic.
Al Fulchino
(10/18/1999; 16:10:45 MDT - Msg ID: 16818)
sorry
Last sentence should read "That isthe myopic view."
ORO
(10/18/1999; 16:42:47 MDT - Msg ID: 16819)
SteveH- JCS PPT Who's who
http://washingtonpost.com/wp-srv/business/daily/feb/26/plunge.htmTake note that this is an interpretation of a compendium of news, editorials, and rumors. Take what you will as fact. I can't confirm much of anything.
1. JCS is spot on.
2. Oversight is by the Federal Reserve, SEC, CFTC, Treasury and NYSE heads.
3. It was set up according to the recommendations of the post 1987 Report of the Working Group on Financial Markets - or Brady Report. Its' recommendation was (of course) to keep themselves active, and to have a "physical" presence in the markets, particularly the NYSE.
Article in link above is a "nice" description
"the members of his Working Group on Financial Markets -- the secretary of the treasury and the chairmen of the Federal Reserve Board, the Securities and Exchange Commission and the Commodity Futures Trading Commission."

4. The trading is done through NY Fed stock holder Goldman Sachs. Part of the methodology is flooding the markets with liquidity (i.e. loans) and then pumping the futures by command from the booth. Goldman buys on its own account trading with money borrowed from the Fed with assurances of a buy back if it fails.
5. Stock index futures are normally purchased. Particularly S&P.
6. In parallel to this function, Treasury runs the exchange stabilization fund to support selected markets through loans for particular transactions. I think they are not active anymore.

I do not know that any of the agencies do their buying outright.

The Fed has routine open market operations in the bond markets and gold derivatives. This is what it is allowed to "play with" according to its charter.

I do not know of any action by the PPT or Treasury today, but suspect that the action at the end of last week was orchestrated.

To give some idea of the thinking behind this, here is another quote from the link above.

"""It was extraordinarily difficult around 11 o'clock," Corrigan recalled. "The market was at one point down another 250 points, and that's when the debate with Phelan took place."

Simultaneously, Corrigan and other central bank officials spoke privately with the big banks and urged them not to call loans they had made to Wall Street houses, which were collateralized by securities that could no longer be traded and whose value was in question.

A final critical moment came that day when the Fed decided not to shut down a subsidiary of the Continental Illinois Bank that was the largest lender to the commodity futures and options trading houses in Chicago. The subsidiary had run out of capital to provide financing to that market.

"Closing it would have drained all the liquidity out of the futures and options markets," said one former top Fed official involved in the decision. Investors use stock futures and options to hedge positions in the underlying stock market. ""

The idea is buy time by lending money and pressing on firms not to execute margin calls on clients.

JCS
(10/18/1999; 17:12:36 MDT - Msg ID: 16820)
Journeyman; who owns FED
The plot thickens and gets even better:
The FED was created because of a "need" to have a central bank due to the Banking/Financial Panic of 1908. But historians all agree that the crisis was created by J.P.Morgan who was, effectively, the central banker in the U.S. at the time. He controlled most of the gold bullion and when the banks got in trouble he loaned them gold to bail them out and, ultimately ,bought their allegiance for a CB. When the Federal Reserve Act was passed, the NY FED was and still is a private corporation and had 300 stockholders, the majority of voting shares held among the list that you provided. But, there's even more: most of those names were involved in the financing of the Revolutionary Army in 1776 when the New Colony declared its independence from the King. So the "big money" financed the formation of our nation and in return, got whatever it wanted in "franchises" in the new land. You can see this on the back of every $1 bill. Its the pyramid and the eye. At the base of the pyramid is a date: May 1, 1776, the day the allegiance was formed among the big money to finance the war effort.
Its a truly amazing story that goes back much, much further in time, but space here just doesn't permit going into all the details. However, as a teaser, it all began in Babylon about 4,000 years ago!!
Good luck
Tanglewild
(10/18/1999; 17:30:02 MDT - Msg ID: 16821)
Journeyman msg #1687
http://www.decisionpoint.com/chartspotlitefiles/chartspot02.htmlHi, it seems that chart is no longer there. Gremlins???
regards, tw
ORO
(10/18/1999; 17:36:45 MDT - Msg ID: 16822)
This one does work
http://www.decisionpoint.com/ChartSpotliteFiles/ChartSpot02.htmlhttp://www.decisionpoint.com/

See newer Newman stuff in the Chart Spotlight section
SteveH
(10/18/1999; 18:03:32 MDT - Msg ID: 16823)
Thanks ORO
Oro,

You amaze me again. You didn't answer the question is it legal, although JCS did, I believe. I would guess that the plunge protection team breaks the 5th and 14th amendments though as it doesn't allow due process or equal protection under the law. In fact the entire concept of trading through GS provides an unfair advantage and smells of insider knowledge. Anyway, due process as it takes away a liberty interest for shareholders in gold stocks by causing a market action against them and unequal protection under the law because it stems from a law that works to protect some (longs) and hurt others (shorts and gold stocks). But as in any law, one most go to the courts to prove up its ultimate constitutionality.
SteveH
(10/18/1999; 18:14:05 MDT - Msg ID: 16824)
Speach

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THE DENVER GOLD GROUP
Mining Investment Forum '99
The Westin Hotel Tabor Center, Denver Colorado

18 October 1999
Keynote Speech
given by Miss Haruko Fukuda
Chief Executive Officer
World Gold Council


Chairman, ladies and gentlemen,

Thank you for your warm welcome. It gives me much pleasure to be here at this distinguished gathering of the Denver Gold Group Investment Forum. When Michele Ashby asked me some months ago if I would make the Keynote speech over lunch I accepted without hesitation because, even though I was new to the world of gold, I was already well aware of the splendid reputation of the annual Denver Gold Group meeting as the pivotal event of the gold industry each year. What I did not know was that we would be meeting in a dramatically changed environment of renewed confidence and optimism.

Before I speak on the latest development, I should like to pay a personal tribute to Michele for her courage and professionalism in arranging this annual event. I know how hard it is to establish and maintain the integrity of a global meeting of this scale year in and year out. She told me to keep going as the gold price declined daily to new lows in July. Today we are meeting at what will always be remembered as a landmark in the history of the gold market. As mining share analysts assess the impact of the new dynamics in the gold market on the future earnings of gold mining companies and their financial gearing strategies, I wonder how many mining companies have had to re-write their presentations during the last two weeks. I am privileged to attend this historic Denver Gold Forum and would like to ask you all to join me in expressing our gratitude to Michele for this important occasion.

On Sunday 26th September - just three weeks ago - a new era dawned for gold. For the first time in almost exactly 28 years, since convertibility of gold into US dollars for official holders was suspended on 15th August 1971, the governments with the largest gold holdings made a positive joint statement on gold. Those three decades have been a period in which gold was persistently sidelined by the official sector attempting to demonetise gold. In recent years the market has been plagued by persistent rumours of ever increasing official sector sales and each and every announcement of sale by central banks has acted as a trigger for a new downturn in the price of gold. Yet the amount of gold held in reserve by the official sector has barely declined during that period - a decline of a mere 6% in three decades. The attempt to replace gold with SDRs as a reserve asset was an abject failure.

The rationale behind the decision of the British government to more than halve its gold reserves earlier this year announced on 7th May has never properly been explained but it sparked off a fierce international debate on the role of gold as a reserve asset. In planning to bring the level of British gold reserves down to a mere 300 tons the Prime Minister told the House of Commons that gold has been 'a bad investment' and that 'other countries were selling too. The IMF is also selling.' Today that answer sounds singularly out of tune.

Acting as spokesman on behalf of 15 central banks - the ECB, the 11 national central banks in the European System of Central Banks (the Eurosystem), plus the central banks of Sweden, Switzerland and the UK - Mr Wim Duisenberg, the President of the European Central Bank, read out their historic five-point agreement on the sidelines of the IMF/World Bank Annual Meeting in Washington. The five points in the order in which they were put in the Communiqu� were as follows. I read them verbatim:

� Gold will remain an important element of global monetary reserves.
� The above institutions will not enter the market as sellers, with the exception of already decided sales.
� The gold sales already decided will be achieved through a concerted programme of sales over the next five years. Annual sales will not exceed approximately 400 tons and total sales over this period will not exceed 2,000 tons.
� The signatories to this agreement have agreed not to expand their gold leasings and their use of gold futures and options over this period.
� This agreement will be reviewed after five years.

We at the World Gold Council have christened it The Washington Agreement on Gold. I hope you will all also use this name.

The Washington Agreement was finalised and agreed over lunch on that Sunday in Washington of the Group of Ten central bank governors, and the US Secretary of the Treasury, Lawrence Summers, and the Chairman of the Federal Reserve, Alan Greenspan, were also present. It is a remarkable achievement. It is extremely rare for independently-minded central banks to agree to co-ordination of this magnitude on reserve management. This is not just one-off joint intervention in foreign exchange markets of the kind we see from time to time, but an agreement to last at least five years. The agreement is significant in several respects. It also raises some far-reaching questions for the future.

First, although it does not have the legal force of an international treaty, it is nonetheless an international agreement signed by each central bank governor, each having legal responsibility for his country's official gold reserves. For the UK, the Governor of the Bank of England signed on behalf of HM Treasury, where that legal responsibility rests. The agreement will be monitored by the Bank for International Settlements, with a dedicated unit to be set up there for this purpose.

While the agreement is between European central banks, including the ECB, it was put together through the Group of Ten central bank governors who meet regularly in Basle on a monthly basis. It therefore has a broader dimension in that the United States and Japan have been at least present at the G10 discussions and in agreement with the spirit of the agreement. Indeed, the Japanese government issued a statement in support the following day on 27th September stating that it also will not be selling or lending gold. The United States had of course stated its intention not to sell earlier on 20th May this year and neither the US nor the IMF lend gold.

Secondly, the agreement covers nearly 50% of the world's official gold holdings as the 15 signatories of the Washington Agreement collectively hold approximately 16,000 tonnes (including the 2,000 to be sold by 2005) out of the world total official holdings of 33,500 tonnes. Adding to this the US, Japan, the IMF and BIS (both of which have stated that they will abide by the spirit of the Washington Agreement), Australia, which already said earlier in July it will not sell any more gold, and South Africa, which has been actively opposing the UK sale, we calculate that over 85% of the world official sector holdings are now out of the market.

Thirdly, the agreement to limit lending to present levels is certain to reduce substantially any new supply of gold for borrowing, given that the US, Japan and the IMF are also out of this market. We estimate that about half of the currently outstanding gold leases of at least some 5-6,000 tonnes has come under the restriction of the Washington Agreement, and many of the countries not party to the agreement are thought to be already "fully lent" or are barred from lending by domestic legislation.

Fourthly, as I have been told by signatory governors of central banks to the agreement, there is good reason to expect that the agreement is watertight. Not only do the signatory central banks have legal control over their gold reserves, their governors meet every month in Basle. Eleven out of 15 participate in Economic and Monetary Union (EMU) and their gold reserves are already controlled in part by the ECB. The UK and Sweden, though not part of EMU, are also legally members of the European System of Central Banks. It is also possible that Switzerland will have associate status with the EU in future.

By 2005 when the agreement is to be "reviewed" both the UK and Sweden might be either in or preparing to be in the Euro, thus bringing their reserves under ECB control. How strongly politically motivated this agreement has been amongst the European nations is one of the questions that will be answered in time. But it is now certain, whether by default or intent, that the Euro has equal if not greater gold "backing" than the US dollar.

My perception is that there was a congruence of various factors that gave rise to this agreement. There were certain to have been Euro-political, world-economic, and market-related reasons. Perhaps the most interesting and far-reaching question for the future that comes to my mind is whether this agreement will end up as a forerunner in some form to a return to an official price for gold. Though that is unlikely and was certainly in no way intended to lead to this, at least one of the triggers for the agreement was the price falling to a level not seen since 1978. What level of price would be appropriate and acceptable by the major official holders for valuing their gold reserves? Will any of this imply central bank intervention in the conventional sense in the gold market and will BIS continue its co-ordinating function in future to encompass all the G10 countries? It opens up ultimately a whole host of philosophical as well as practical questions about the role, nature, and the "value" of gold as a monetary asset. In any event, the world's largest holders of gold have now said that they will be keeping their chestnuts in their bag; what will other central banks do?

As if not to be outdone by European central bankers, the IMF held its Press Conference on the HIPC debt relief the very next day on Monday 27th September. The confirmation that the IMF would not be auctioning its gold to finance debt relief but will use what it has called "off-market" transactions represented a double coup for all of us who have been campaigning for many months over this issue. Though we found it gratifying to hear the IMF spokesman say (I quote from the transcript of the Press Conference) '� I think there was quite an effective campaign by the World Gold Council, and I think the World Gold Council has said on the record that actually it welcomed this proposed change because it recognised exactly � that an off-market transaction does not have and cannot have any impact on the gold price' (End of quote), it was a triumph for the concerted campaign by different parts of the industry pulling together. In essence the proposal now is for the Fund to sell up to 14 million ounces of gold to member countries with payments due to the Fund for past loans. The country would buy with SDRs or usable currency just the amount of gold worth, at market value, its debt to the Fund. It would immediately settle with the Fund by returning the gold, which would then be entered in the Fund's books at market price. The Fund's gold is valued at US$48 an ounce (SDRs 35) compared with the market value of over US$300 now. A straightforward revaluation for the required quantity of gold would result only in an accounting gain; moreover, such a revaluation is inconsistent with the Fund's Articles of Association. So the Fund has shown its customary flair for ingenuity in overcoming the technical difficulty.

As recently as this July, Michel Camdessus, with the backing of the Group of Seven heads of government, said that some open market sales of IMF gold would certainly be entailed in funding HIPC debt relief. It was only after the gold price hit a succession of new 20-year lows in July following the first British auction on 6th July that the Fund grudgingly admitted it was considering "several options" to make use of its gold. By then it seemed virtually certain that the US Congress would not approve the essential US vote on open market sales on the IMF Board. Opposition from US lawmakers came broadly from three camps:

� those who ardently oppose virtually anything the IMF does;
� those representing gold-mining districts; and
� those, such as Jim Leach, the influential chairman of the House Banking Committee, who were concerned about the effect on the mining industry in the developing world.

This third group, which included the Congressional Black Caucus, promised to be a growing one as the facts became more widely known - in part as a result of the circulation of the World Gold Council's study "A Glittering Future?" which no one has disputed in either substance or detail. It is worth noting that the economic research into the role of gold production in poor developing countries was started two years previously by the Public Policy Centre of the World Gold Council and that widespread dissemination of the findings of this research led to impartial observers who were concerned neither with politics nor gold interests also becoming convinced of the dangers of IMF gold sales and publicly expressing their concerns. The World Gold Council was then concerned with engaging the IMF officials in discussion on what alternative ways existed for the Fund to finance its portion of the HIPC debt relief throughout August and September. Some of you will have seen the exchange of correspondence between Mr Stanley Fischer, the First Deputy Managing Director of the IMF, and myself on the IMF and WGC web sites.

Far from gold being marginalised and finished as a monetary asset, the latest IMF proposal uses gold as money to pay back debt! What happened to SDRs, once thought to be the answer to external payment problems?

Gold is back with its customary charisma. I will tell you an amusing aside. The British Chancellor of the Exchequer may have thought he was getting rid of it. But as we speak today gold is being flown back to London in crates: Brinks Mat vans are busy delivering consignment stocks flown back from lying idle in all parts of the world to London, to the Bank of England and to other gold depositaries. Bullion banks need them for their liquidity.

What greater affirmation can there be for gold as a monetary asset than the declaration by 15 of the world's largest gold holders that 'gold will remain an important element of global monetary reserves'? Wim Duisenberg, the President of the ECB, in announcing the Washington Agreement, acknowledged generously that he and his fellow central bankers were influenced by the arguments of the World Gold Council and gold-producing countries: he had to blame it on someone! In private conversation, I have been told on good authority, Michel Camdessus too, who incidentally refers to the World Gold Council as the "Conseil de l'Or" as if this was a Byzantine institution, - it sounds grander in French - also acknowledges the role of the Council. But France and Germany who are known to have led the initiative have the tradition and natural understanding of the intrinsic value of gold. They understand that gold is no one's liability, that it is universal and eternal. They hold a large proportion of their external reserves in gold because they believe that gold is the only thing that will ultimately secure a country's monetary independence and sovereignty.

The Chairman of the Federal Reserve, Alan Greenspan, said on 20th May to the House Banking Committee soon after Britain announced its decision to sell gold that (I quote) 'gold still represents the ultimate form of payment in the world. Germany in 1944 could buy materials during the war only with gold. Fiat money in extremis is accepted by nobody. Gold is always accepted.' (End of quote) But even amongst friends, between Britain and America, gold played a crucial role in Britain's war efforts. Sir Martin Gilbert writes in his classic biography of Churchill that at the end of December 1940 (I quote): 'Relations with Roosevelt had reached a difficult point, almost a breaking point. Many of Churchill's most urgent requests for war supplies had failed to win the President's approval. Britain's inability to pay was proving a serious stumbling-block. Arms purchases for December, January and February amounted to US$1,000 million, but her gold reserves and dollar balances had been so depleted by a year of war expenditure as to total only $574 million. The Americans offered to provide the equipment for ten British divisions but, Churchill told his War Cabinet colleagues, wanted $257 million paid in advance out of these rapidly dwindling gold reserves. Roosevelt had gone so far as to send an American warship to the Simonstown naval base near Cape Town to collect the $50 million of Britain's gold reserves held in South Africa.' (End of quote) Roosevelt was clearly being advised by the US Treasury and the Fed that if Britain sued for peace the pound sterling would become valueless. Sir Martin Gilbert continues, referring to January 1941 (I quote): 'Even as Churchill and Hopkins talked, Roosevelt was announcing the financial solution; the United States would build what Britain needed and then lease it to her, on a rental basis, with payment to be delayed until after the war. But before this Lend-Lease arrangement came into force, Britain must pay all the debts she could in gold, and by the sale of British commercial assets in the United States. It was a hard bargain, depriving Britain of what was left of her economic strength. �' (End of quote)

Gold is, then, held in official reserve not just as an investment as the British Prime Minister asserted, but partly at least for the rainy day. Our Asian friends understand this well. During the recent financial crisis the South Korean government asked its people to hand in their gold to help the national economy. In 1991 the Indian government used its gold reserves to raise US$1 billion to avoid default. The Chinese, the Indian and Middle Eastern ladies hold on to their high caratage gold jewellery lest their husbands desert them. The World Gold Council has recently collaborated with the government of Indonesia, where the domestic currency has depreciated by over 80% against the dollar to introduce last month gold coins for saving to pay for the pilgrimage to Mecca. Gold comes into use at unexpected moments but when it does it outshines all else for its universal acceptability.

Now the pendulum has swung away from the extreme situation into which the gold debate had plunged. So what about the market? All of you are of course greatly better qualified to speak on this than I am. In any case the gold market is thick with its own private agenda and I am not really party to these. But I would like to comment on the more general aspect of the market - the part you would say ordinary lay people like myself can understand. Well-known, respected analysts have been saying "gold is finished", frequently misquoting John Maynard Keynes. Keynes, for instance, never wrote that gold is a "barbarous relic". What he wrote was (I quote): 'In truth, the gold standard is already a barbarous relic' (My italics; End of quote) - a very different concept. Keynes well understood the complexity and the multiplicity of the role of gold in economics. He understood too that gold meant different things to different people at different times and that its "value" is relative to other things - as the value of anything always is. Writing in 1923, rejecting the arguments to return to a gold standard, in his Tract on Monetary Reform he said (I quote): 'The value of gold has not depended on the policy or the decision of a single body of men; and a sufficient proportion of the supply has been able to find its way, without any flooding of the market, into the Arts or into the hoards of Asia for its marginal value to be governed by a steady psychological estimation of the metal in relation to other things. This is what is meant by saying that gold has "intrinsic value" and is free from the dangers of a "managed" currency.' (End of quote)

Today the dominant theme in the gold market is the impact of the Washington Agreement on the demand and supply balance; analysts and commentators talk as though the price movement of the last three weeks is entirely the responsibility of the European central bankers. But we all know that markets are made up of many independent forces and the determinants of price are not always immediately visible. On high levels of physical gold demand, the World Gold Council is confident of its analysis as it tracks in detail demand patterns in the major consuming countries. But as Keynes well understood gold has something to do with the stability of internal domestic prices and the stability of external exchange rates (and the two are of course linked). The Washington Agreement came at a time when commodity prices led by oil are rising faster than at any time for more than a decade. This could feed through to higher wage demands in time. Global economic prospects have picked up substantially with world GDP growth likely to exceed 3% for 1999; the US dollar has recently weakened with a growing trade deficit, and long bond yields have been rising. We are not here today to debate the prospects for inflation. But I would not totally discount the possibility that inflationary expectations may be a factor in the market. The Washington Agreement was certainly a trigger, a big trigger, for market participants to reassess their understanding of the marginal value of gold in relation to other things. We cannot yet judge whether the recent price movement in gold is indicating a wholesale change in the structure of relative prices. Many analysts still believe, though, that when the current panic short covering comes to an end the gold price will resume its downward spiral.

But when and how will the short covering "come to an end"? Nobody really knows the extent of the supposed gigantic short positions that have built up over the recent years, possibly even posing a new threat of instability related to those gold derivatives. What does seem certain to me is that the dynamics of the gold derivative markets have changed dramatically as a result of the Washington Agreement limiting central bank lending. The World Gold Council some months ago commissioned a major study on the international market in gold derivatives which we believe will continue to play a significant role in bullion in the future. We expect to complete this study early next summer. With this and in other ways we strive for greater transparency and to encourage all those concerned to make a balanced assessment of the role of gold in our economies.

If the Council has had an influence on this historic agreement, it is a result of work we have carried out over a number of years. I would like to mention in particular our work with central banks, where we have endeavoured to position gold as a reserve asset in the context of the changing environment facing central banks and the pressures on them,
CoBra(too)
(10/18/1999; 18:21:03 MDT - Msg ID: 16825)
Re:PPT
ORO - thanks for providing the link to Wash. Post's PPT (hillary-ous) article, which I was trying to find again - you've saved me lots of time. And thanks to you SteveH, JCS and Journeyman I have to reconsider a recent short post "seems as the PPT has lost control of what to control" -at least not yet, but "buying time"-for a "controlled" bubble deflator vs. implosive meltdown- may become increasingly difficult with the emergence of adversaries of some stature.
To be fair, a piece or two of the cake might not be asking for too much, would it? -indeed! Other President's financial markets working group(ie)s would surely like to lend a hand in rigging the friggin' $-frigate as some of the old hands either abandonded ship altogether - seasick RR defected Slick WJC for greener pastures - or else wear out at the continuous watches.
In the era of globalization the international division of laborious rigging of markets, cooking of books and protecting the politically correct partys should be more evenly distributed - globally.

IMHO - CB2
SteveH
(10/18/1999; 18:50:14 MDT - Msg ID: 16826)
Protecting gold (final final)
In trying to figure out if a CCW case that ruled against a law-abiding citizen (the case was Clair County CCW Licesing Board v. Pencak) because he was deprived of a CCW permit (concealed weapons permit) (no I don't know if it was to protect his gold) by a CCW licensing board, the judge ruled that the 2nd Amendment was a state right and denied Pencak his permit. In organizing my thoughts, I wrote this to myself in an attempt to figure out if I were an attorney how I would personally argue the same case Pro Per (my own counsel). I believe that before the Emerson case, which I mentioned earlier, there would be no hope but I believe as you may that hope definitely exists now (MSA 28.426 is the law that require a board to deny a license unless certain criteria are met and which are subjective):

This is not legal advice, just my opinion.

These thoughts are based on the recent Federal case United States of America v Timothy Joe Emerson, which states "�the Second Amendment within the Bill of Rights proves that the right to bear arms is an individual right, rather than a collective one�" Further, Emerson calls into question United States v. Miller, 307 U.S. 174 (1939). "Miller did not answer the crucial question of whether the Second Amendment embodies an individual right to bear arms. Although its holdings have been to justify many previous many previous lower federal court rulings circumscribing Second Amendment rights�" including the right to bear 'concealed� weapons. See, e.g., Hickman v. Block; 81 F.3d 98, 100-01 (9th Cir. 1996) where the court ruled the plaintiff lacked standing to sue for denial of concealed weapon permit, because, in that court's opinion, the Second Amendment did not protect possession of weapon by private citizen; right to bear arms is held by the state. In other words, Emerson radically reverses Federal court standing on the Second Amendment, as it now considers it an individual right and makes Miller pass� and irrelevant as well as the cases built around it.

Further, "�what it means to take rights seriously is that one will honor them even when there is a significant social cost in doing so. Protecting freedom of speech, the rights of criminal defendants, or any other part of the Bill of Rights has significant costs � criminals going free, oppressed groups having to hear viciously racist speech and so on �consequences which we take for granted in defending the Bill of Rights�" and Plaintiff argues carrying of a concealed weapon is one of these rights that overrides the states right to prevent lawful, non-violent, citizens and legal aliens from carrying concealed weapons as reasonable exercise of police power or because a concealed pistol can conveniently be classified as a weapon suitable to criminals and therefore be prohibited from concealed carrying.
The plaintiff holds that preventing citizens who otherwise meet the stipulations of MSA 28.246 can not be prevented from concealed bearing of arms as a reasonable exercise of police power nor can the state classify a concealed weapon that is otherwise legal to own as being a compelling reason of the state when the Right to Keep and Bear Arms is an individual right and therefore invokes Strict Scrutiny in consideration of Section 6.1 of MSA 28.246, which in part states:
"�A license shall not be issued unless it appears that the applicant has good reason to fear injury to his or her person or property, or has other proper reasons�."
Further, since the defendant is known to preclude only those proven to be in imminent danger or those persons who are law enforcement personnel (or former law enforcement personnel) to the exclusion of those with 'other proper reasons� or those whose occupations and life styles may have other proper reason to fear but are not under immediate threat or danger such as the Plaintiff presented in application for the CCW permit, the Plaintiff argues that not only does the Defendant fail in protecting the Defendant's constitutional rights as in 2 above but fails to consider 'other proper reasons� as a valid exercise of their mandated responsibility and exceeds reasonable police power by denying people who have compelling reasons of simple self protection (even without an immediate threat). Further, the Defendant is well documented to overuse its police powers � it acts to limit unrestricted CCW permits to the least amount of people as possible. This is an absurd abuse of reasonable police power. It is unreasonable use of police power.
The Plaintiff holds that the Defendants practice of its charter and MSA 28.246 Section 6.1 is unconstitutional because it allows a Concealed Weapons Board to discriminate against a citizen's rights by automatically depriving an otherwise eligible citizen or legal alien of their Second Amendment rights. MSA 28.246 Section 6.1 is putting the burden on the citizen to prove their right to bear arms. The Plaintiff is stripped of his right to bear arms as much as a convicted felon. The Emerson courts said, "Second Amendment rights should not be so easily abridged. There must be a limit to government regulation on lawful bearing of firearms�" This section of the statute exceeds that limit, and therefore it is unconstitutional.
Plaintiff argues that Defendants� denial of an unrestricted or restricted concealed weapon license violated the Fourteenth Amendment's guarantee of equal protection: He argues that the Defendant deprived him of the right to carry a concealed weapon while traveling thus triggering Strict Scrutiny. Unlike the Concealed Weapons Licensing Board of St. Clair County v. Pencak, where the court ruled the Second Amendment right to bear arms was a state right and denied Pencak the license, Emerson rules that it is an individual right. That makes the Pencak denial a counterclaim because it is an individual right and carrying a concealed weapon should have been allowed under Pencak and thus for the Plaintiff in this complaint and therefore does trigger Strict Scrutiny: carrying a concealed weapon is an individual right and should be given equal protection to bearing an arm at home or hunting or at work.
Further, firearm possession is a valuable liberty interest imbedded in the Second Amendment to the United States Constitution. There is a long tradition of widespread lawful gun ownership and carrying of concealed weapons by private individuals in this country. The Plaintiff's request for a Concealed Weapons permit is a simple manifestation of the Plaintiff's liberty right, for case Law derived from Miller had the affect of making it only legal to bear arms while at home or at work. So even though the Second Amendment states the 'right to keep and bear arms� the end-result of restrictive Case law based on Miller was to essentially limit people to the possession of arms at home or work or hunting but not while traveling or walking or mobile in public. One could argue that it is perfectly legal to openly carry a side arm in a holster (just like a cowboy or cowgirl) while in a downtown metropolitan area but no citizen or legal alien would do such a legal but socially unacceptable act for it would have the likely affect of bringing the law to bear and impede the mobility of the citizen. In other words, concealed carry becomes the only way a modern citizen can manifest their Second Amendment right away from hunting, home, or work. In Emerson the court said "�the right of the citizens to keep and bear arms has justly been considered as the palladium of the liberties of a republic; since it offers a strong moral check against the usurpation and arbitrary power of rulers; and will generally, even if these are successful in the first instance, enable the people to resist and triumph over them." Without a right of carrying a concealed weapon one could argue that one could only protect the republic or themselves while at home or hunting or at work but not while in public or traveling. So making concealed carry a special restriction under the states reasonable use of police power and not a valid liberty right safeguarded by the Second Amendment has the affect of diminishing the Second Amendment by restricting it to only applying to a citizen or legal alien while home, hunting, or at work but puts them at risk to their self protection and protection of the state while in public or traveling. Unrestricted concealed carry therefore is an essential meaning within the broad phrase 'the right to bear arms,� for without it the right to bear arms is diminished. Again, in Emerson, the court stated, "Thus, concerns about the social costs of enforcing the Second Amendment must be outweighed by considering the lengths to which the federal courts have gone to uphold other rights in the Constitution. The rights of the Second Amendment should be as zealously guarded as the other individual liberties enshrined in the Bill of Rights." Also, "�But there is no need to deceive ourselves as to what the original Second Amendment said and meant. Of course, properly understood, it is no limitation upon arms control by the states." Therefore MSA 28.426 Section 6.1 is unconstitutional in that it automatically denies a permit without a threat to the requester or other proper reason. A proper reason of self-protection is enough and should be a given and not have to be proven to the Defendant and Strict Scrutiny applies.
4. Further, the process of 'shall not be issued unless� as written in MSA 28.426 Section 6.1 denies due process as it requires a citizen or legal alien to prove a liberty right instead of the state proving the right doesn't exist for a compelling reason of the state. Since there is a liberty interest, which is much more than an abstract need or desire for or an unilateral expectation of a benefit, in obtaining a license to carry a concealed weapon, the Plaintiff argues that MSA 28.426 section 6.1 violates his Fifth Amendment right of due process. Even though the Defendant is given broad discretion in their role as provided for in MSA 28.426, since, per Emerson, the Second Amendment is an individual right, that makes it a Liberty right as well and as such subject to strict scrutiny and thus unconstitutional for the Defendant to automatically deny a license unrestricted or otherwise for the purpose of self-defense or defense of the state even if danger is not imminent. Therefore MSA 28.426 Sec. 6.1 is unconstitutional.
5. Equal protection. Plaintiff argues that Defendants� denial of an unrestricted concealed weapon license violated the Fourteenth Amendment's guarantee of equal protection in that MSA 28.432a exempts CCW license holders from other states from the requirements of MSA 28.246.

28.432a Persons to whom {Sect} 28.426 inapplicable; exception as to township constable. [M.S.A. 28.98(1)]
(f) A person licensed to carry a pistol concealed upon his or her person issued by another state.
Plaintiff argues that he qualifies for several other state unrestricted CCW licenses, Florida being one.

Since Michigan allows other citizens and legal aliens within its borders under the exemption of MSA 28.432a and he qualifies for at least one State's unrestricted CCW license, if not several others, and could legally carry a concealed weapon in at least Florida
The Department of State [Florida] shall issue a license if the applicant (a) is at least 21 and a resident of the United States�
�The licensing law "shall be liberally construed to carry out the Constitutional right to bear arms for self-defense."
and several other states and would be in compliance with even the Michigan exemption within Michigan as well as Florida with a Florida permit, the Plaintiff is not being given equal protection of the law as a Michigan Law's protects the rights of a Michigan citizen with another state's CCW license and the rights of another State's citizen while in Michigan. Since the Plaintiff qualifies for a Florida and several other State unrestricted CCW permits and is exempted by MSA 28.432a from MSA 28.426 but is denied an unrestricted CCW license by the State of Michigan when applying under MSA 28.426 this is not equal protection of the law and thus MSA 28.426 Section 6.1 is unconstitutional.
Finally, Miller had the effect to diminish the personal right to bear arms and merely supports where in the court says in the Emerson case that "� when the Second Amendment is held to guarantee nothing more than the state National Guard, this would simply show that the Founders were right when they feared that some future generation might wish to abandon liberties that they considered essential, and so sought to protect those liberties in a Bill of rights�but we should not pretend that these are not reductions of rights." The MSA 28.426 Sec.6.1 is such a reduction of rights.



iceberg
(10/18/1999; 18:53:09 MDT - Msg ID: 16827)
Greenspan and Gold
On October 14, 1999 Fed Chairman Greenspan delivered an extraordinary warning to bankers about the
need to prepare for a finanicial crisis, market crashes and panic. The Fed Chairman's speech, "Measuring
Financial Risk in the Twenty-first Century", was extraordinary in several ways :

1) The Fed Chairman sounded the alarm about a real possibility for a collapse of the financial markets.
Unlike other Fed-speak, Greenspan's speech was unambiguous...his message clear.
2) The Fed Chairman pointed out that such a collapse can occur anytime...without advance notice (hint,
hint...nudge,nudge). Clearly, Greenspan is warning these bankers that the potential for collapse
"anytime", includes the coming weeks or months .
3) The Fed Chairman is talking openly about potential "panic" in the markets.
4) The Fed Chairman warns about "a bursting bubble" in the tradition of "Dutch tulip bulbs or Russian
equities."
5) The Fed Chairman tells bankers they need to prepare for a systematic failure, across all markets,
affecting "even a seemingly well-diversified portfolio."

It is extraordinary for the Fed Chairman to clearly and unambiguosly warn about market crashes, financial
collapse and panic. It is extraordinary for the Fed Chairman so publicly to warn banks about the need to
prepare for a finanicial crisis, market crash and panic.

What has prompted the Fed Chairman's blunt warning and urgent call for action?

First, the bankers and other financial institutions have not taken sufficient action based on Greenspan's
previous warnings. As Greenspan states , "I have called attention to this risk-management challenge in a
different context when discussing the roots of the international financial crises of the past two and a half
years. My focus has been on the perils of risk management when periodic crises--read sharply rising risk
premiums--undermine risk-management structures that fail to address them." At the time of the LTCM
debacle, Greenspan issued some warning about risky financial shenanigans, including derivative trading.
Greenspan warned that failure of the relatively small LTCM could lead to failure of much larger financial
systems. However, after the LTCM crisis, many banks and "risk-management structures" have failed to
address Greenspan's warnings.

Secondly, a new crisis, much larger than LTCM, looms before the Fed Chairman. A clue as to nature of
this crisis can be found in what Greenspan, on October 14, 1999, tells the bankers to do:

"At a minimum, risk managers need to stress test the assumptions underlying their models and set aside
somewhat higher contingency resources--reserves or capital--to cover the losses that will inevitably emerge
from time to time when investors suffer a loss of confidence. These reserves will appear almost all the time
to be a suboptimal use of capital. So do fire insurance premiums. "

The Fed Chairman wants the bankers and other "risk managers" to "stress test" their assumptions and
models. Where have the words "stress test" been used in the past couple of weeks, just before Greenspan
uses the same words. Ashanti Goldfields recently suffered a large drop in its stock price despite the sharp
rise in gold prices. The drop in Ashanti's stock is due to Ashanti's hedging program. Recent reports indicate
someone from Ashanti said that Ashanti had "stess tested" it's hedging program for a $50 rise in gold but
not for a $70 rise in gold. Recent reports indicate others invloved in shorting gold or hedging had not
"stress tested" their strategy. The bullion bankers are vulnerable to billion dollar losses due to rising gold
prices.

The recent run-up in gold prices has caught bullion bakers, derivatives speculators, and other gold shorts in
an historic squeeze of monumental proportions. The Fed Chairman, privy to specific information he can
not divulge, probably sees a clear risk for financial collapse larger than the LTCM debacle...a collapse
which even the Fed with all its tools can not prevent.



While he does not want to divulge company-specific horror stories, the Fed Chairman probably feels
compelled to at least warn the general public in some way. And that is a reasonable explanation for his
October 14 speech, publicly admonishing the bankers to reduce risk and increase reserves. Greenspan may
also be thinking about his "legacy". If the financial markets collapse and some banks fail, the Fed
Chairman would be able to say that he warned the banks and the public.

The media justs reports on the effects, but not the content (stark warning) of the October 14 speech. Read
Greenspan's blockbuster for yourself. The text of the Oct 14 speech is at:

http://www.bog.frb.fed.us/boarddocs/speeches/1999/19991014.htm

Iceberg
October 18, 1999
TownCrier
(10/18/1999; 18:55:12 MDT - Msg ID: 16828)
After the Close: the GOLDEN VIEW from The Tower
Gold is back at the centre of international financial thinking. Yes...yes, indeed. You can actually hear the ring of truth to it if you'd take a moment to turn down the volume on CNBC.

"Gold is back with its customary charisma. What greater affirmation can there be for gold as a monetary asset than the declaration by 15 of the world's largest gold holders that 'gold will remain an important element of global monetary reserves'?" That was the rhetorical question Miss Haruko Fakuda, chief executive of the World Gold Council, put before the Denver Gold Group in a keynote speech today. The World Gold Council issued a company press release, and we'll pick it up where Miss Fakuda's comments left off...

The Washington Agreement was agreed on Sept. 26 by the Group of Ten central bank governors, with the U.S. Secretary of the Treasury, Lawrence Summers, and the Chairman of the Federal Reserve, Alan Greenspan, also present.

"It is a remarkable achievement. It is extremely rare for independently-minded central banks to agree to co-ordination of this magnitude on reserve management,'' she said. ``This is not just a one-off joint intervention in foreign exchange markets of the kind we see from time to time, but an agreement to last at least five years."

Fakuda said the Washington Agreement marked the first time in 28 years that the governments with the largest gold holdings had made a positive joint statement on gold.

"Those three decades have been a period in which gold was persistently sidelined by the official sector attempting to demonetise gold. Yet the amount of gold held in reserve by the official sector has barely declined during that period, a decline of a mere six percent in three decades. The attempt to replace gold with SDRs as a reserve asset was an abject failure," said Fakuda.

"Far from gold being marginalised and finished as a monetary asset, the latest IMF proposal uses gold as money to pay back debt! What happened to SDRs, once thought to be the answer to external payment problems?"

Fakuda added that the Washington Agreement was significant in several respects and it raised some questions for the future. Although it did not have the force of an international treaty, it was signed by each central bank governor and had a broader dimension as the U.S. and Japan, although not signatories, were in accord with the spirit of the Agreement and both countries had stated they were not sellers of gold. The Agreement will also be monitored by the Bank for International Settlements.

The Agreement covered nearly 50 percent of the world's official gold holdings and with the addition of the U.S., Japan, the IMF and BIS, and Australia who were also non-sellers and South Africa which was not expected to sell given its opposition to U.K. sales, over 85 percent of the official sector gold holdings "are not out of the market."

Fakuda also pointed out that by 2005 when the agreement is to be "reviewed," both the U.K. and Sweden might be either in or preparing to be in the Euro, thus bringing their reserves under ECB control.

"How strongly politically motivated this agreement has been amongst the European nations is one of the questions that will be answered in time. But it is now certain, whether by default or intent, that the Euro has equal if not greater gold 'backing' than the U.S. dollar," she said.

"Perhaps the most interesting and far-reaching question for the future that comes to my mind is whether this agreement will end up as a forerunner in some form to a return to an official price for gold. Though that is unlikely and was certainly in no way intended to lead to this, at least one of the triggers for the agreement was the price falling to a level not seen since 1978.

"What level of price would be appropriate and acceptable by the major official holders for valuing their gold reserves? Will any of this imply central bank intervention in the conventional sense in the gold market and will BIS continue its co-ordinating function in future to encompass all the G10 countries?" she asked.

"It opens up ultimately a whole host of philosophical as well as practical questions about the role, nature, and the 'value' of gold as a monetary asset. In any event, the world's largest holders of gold have not said that they will be keeping their chestnuts in their bag; what will other central banks do?" said Fakuda.

In another company press release, it would appear that Homestake Mining has fortune telling skills that rival that of Nostradamus...that, or they're simply the luckiest dogs on the planet when it comes to market timing. According to their press release, the company has "no margin call requirements in any of its existing hedge contracts despite recent changes in the price of gold. Over 95% of its reserve base can benefit from the rising gold market. Homestake further confirmed that it is not exposed to mark to market earnings adjustments with respect to its precious metals contracts.
Although Homestake's policy provides for the use of forward sales contracts to hedge up to 30 per cent of each of the following ten year's expected annual gold and silver production, it is currently largely unhedged due in part to the previously announced closure of a major portion of its hedge portfolio. In that transaction, which took place on July 29, 1999 when the price of gold was $254/oz, Homestake closed out 245,000 ounces of US dollar denominated forward sales and realized $35 million."

Why bother mining gold at all when you can call em' that good? They might as well keep pulling paper profits out of a hat...its much easier, and much cleaner work, apparently.

European Central Bank (ECB) board member Tommaso Padoa-Schioppa said that he shares Federal Reserve Chairman Alan Greenspan's fears about the existence of a financial market bubble, but that didn't stop punch-drunk investors from bidding up the DJIA, the whole DJIA, and nothing but the DJIA. While the DOW gained 96 points, the Nasdaq pared earlier losses near 100 to close 43 points lower. Again, only the DOW itself looked good, as market breadth was as anemic as it ever has been these many past weeks. NYSE decliners outpaced advancers by 2 to 1, and new 52-week lows numbered 398 compared to only 8 new highs. On the Nasdaq, the decliner:advancer ratio was also 2:1, and new lows beat new highs by 220 to 33.

The 30-Yr Bond gave back Friday's rally, losing 23/32 in price (yield 6.297%) as traders claim it is bracing for tomorrow's CPI data. Why bother? If Friday was any guidepost, a strong CPI will tank the DOW (especially following today's bogus deadcat bounce gains) and the long bond will once again benefit from foolish flights to safety. Not that the flight itself is foolish, mind you, but the destination (bonds) sure is. When the fate of the dollar seems to be so firmly intertwined with the destiny of the stock market, holding these interest bearing promises of "future dollar delivery" seems a sure way to take a bath on capital losses through adverse exchange rate movements. Oh well, everybody's got to live and learn.

Just so you know what key figure to look for, in this latest measure of consumer inflation, analysts expect the September's Consumer Price Index to come in at +0.4%.

Turning back to gold for the market results, spot gold was last quoted in NY at $309.70.

Sometimes a closer look into other though basically similar markets will help you to see things somewhat differently, and gain some new perspective in what had become old or routine. As you read this Bridge NYMEX Oil Review, think about the connection of this contract trading in relation to the underlying physical crude market. Then, see if you can imagine their gold trading counterparts...throwing paper around as needed to help prop up the vulnerable areas of their overall book.

New York--Oct 18--Front-month WTI crude futures weakened in dull trade
as participants continued to roll their November positions into December
ahead of Wednesday's expiration of Nov crude futures contracts. The
Nov-Dec spread went into deep contango, widening to 18 cents. Nov crude
settled down 29c at $22.53.

With little fresh news, brokers and traders twiddled their thumbs for
most of the session as Nov crude drifted lower after coming off an
intraday high of $22.90.
When local participants failed to push the contract above this
resistance level, the contract tumbled through support at $22.60 and later
at $22.40 to hit an intraday low of $22.30.

Meanwhile, today's background news made little impact on the market,
brokers said. The market shrugged off comments made by Luis Tellez, the
Mexican secretary of state for energy, that the price of Brent crude oil
should be around 25 to 27 dollars per barrel in the next 4 months. The
benchmark North Sea Brent crude currently costs between 20 and 22 dollars
per barrel, having reached a low-point of around 10 dollars per barrel
earlier this year.
---

OK, so having prepped your mind to freshly absorb routine info, here's the Bridge NY Precious Metals Review....

NY Precious Metals Review: Dec gold down $4.7, silver slides
By Melanie Lovatt, Bridge News
New York--Oct 18--COMEX Dec gold futures settled down $4.70 at $311.70
per ounce after slipping to a 2-week low of $311.10. Dec silver settled
down 9.8c at $5.24 per ounce after a 1-month low of $5.205. They were both
hurt by fund sales and started to slip early in the session as equities
steadied after last week's fall and the dollar recouped some losses
against the euro.

"The dollar/stock market comeback was weighing on gold and these
things are strongly inversely correlated now," said James Steel, analyst
at Refco. "The key behind the gold rally was the dollar decline and the
revival of the dollar will cut into the rally," he added.
However, after the COMEX gold close at 1430 ET the Dow Jones
industrial average was coming under renewed pressure and was down 26.6 at
9993.41 at 1514 ET. Furthermore, while the dollar had started to recover
against the euro, it resumed its slump against the yen. If this trend
continues, it could help gold and silver recover today's losses, commented
one trader, although he cautioned reading much into today's moves. "Prices
were falling, but no-one really appeared to know why and it wasn't huge
volume," he said.

Steel noted that the fallback was also in part helped by the fact most
of the frenzied short-covering seen over the recent weeks after gold
rallied is now largely completed. "Everyone says all the short-covering is
over with--players have had ample time to cover," he commented.
He said that funds continue to "sell silver heavily in the absence of
any heavy trade support" and that they are "testing the entire metals
complex by selling silver first."

In silver, locals became short and pushed Dec below sell-stops at the
$5.30 area, which brought in some fund selling, said one broker. Gold and
silver were both playing off each other's weaknesses today, he said.
Another broker noted that some players may attempt to push gold lower
in order to test and then confirm the $300 support area. "We need to pull
back and then hold that major support area after the recent climb," he
said.

"People are looking for the bottom part of the range--they've
established the upside for a while," he added. Traders suggested that a
slip in gold lease rates had also contributed to today's easier tone.
Platinum and palladium followed gold and silver to lower prices, but
there was very little activity and they were largely ignored, said
traders.
***
(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

Today was the first brisk day at the COMEX gold depositories in the past couple of weeks. Today we watched as 97 ounces were withdrawn from Registered gold stock at Republic National, and 21,231 ounces (two-thirds tonne) were withdrawn from Registered gold at ScotiaMocatta. Total invetory stands at 897,401 ounces, of which 810,997 ounces are Registered.

In last Friday's trading, open interest in October futures rose by 2 contracts to 114, November was unchanged at 14, December rose 790 contracts to 115,968, and total open interest in COMEX gold futures thru June 2004 rose by 158 to 215,685 contracts. Total postitions so far for October that have received delivery intentions are 2,510 contracts (251,000 ounces).

In the "real" world, Ashanti Goldfields Ltd, the third largest gold producer in South Africa, continues to be the industry's most highly visible example of "how NOT to..." The recent sharp rise in gold price has put Ashanti into a liquidity crisis thanks to their gold hedges--meant to protect them against lower prices, but at a gold price of $325, entitles its counterparties to margin calls of $270 million. Ashanti has managed to keep the wolves from the door by first negotiating a temporary standstill on action by its 17 derivatives counterparties, but as that expired at 1630 GMT today, Ashanti's counterparties agreed to grant a waiver of their millions in claims for up to another week. With the derivative markets drifting lower over the past few days, you would think these same counterparties would be hot to cash out now and run. The cooperation would seem to give clear evidence that receiving the cash gains are not so much the objective, but rather the effort is to keep everyone in business and to keep the gold coming. On that note, here is a somewhat related commentary we offered on Saturday in regard to some questions raised as to whether or not Anglogold was closing out its own hedge positions, beginning with a brief report from Bridge...
---
New York--Oct 14--Anglogold of South Africa is concerned the enormous rally seen in gold over the past month won't be sustainable as it has introduced instability into the market, said Kelvin Williams, executive director for the company. ---Bridge News (Reprinted at USAGOLD by permission, no further reproduction without permission from Bridge)

The key element of that piece is clearly the concern over the instability aspect. And specifically, that instability is manifested in the books of both financial institutions and producers who have contracted lots of business with other parties under the medium-term prospects of prices much lower than they are today, including the additional threats of higher prices to come. His warning seems to be clearly a plea to their counterparties to please find ways to cooperate with all those having upside-down forward books...otherwise the industry-wide instability would threaten the viability and sustainability of a "new gold market" going forward. And clearly, this is what the "long" gold counterparties would want, so his comment should be seen as a bargaining device. If Anglogold is taking action (or inaction) on their forward books that might otherwise seem counter to the common-sense direction, it may just be that there's a bigger purpose to be served--and expectation of lower gold prices is NOT among them.
---

Gold lease rates continue to ease back toward levels that begin to approach something that almost resembles the high side of "normal." Sorta. Some gold market watchers are saying this reflects more a cooling of action in the lending market, rather than the arrival of new sources of gold to assuage the same borrowing needs present just a few short weeks ago. The Tower is inclined to favor this view, too, and perhaps moreso, that the lending market has seized up, and the counterparies are busy striking deals...not unlike the situation demonstrated amply in the hedging realm by Ashanti and its counterparties. It should come as no surprise that participants suddenly become very cooperative when faced with the prospect of seeing their hopes of gold turn permanently into little more than paper settlements...better to buy time and get what you can get, right?
Today's gold lease rates (annualized)
1-month 2.6580%
2-month 2.7600%
3-month 3.7980%
6-month 3.6040%
12-mnth 3.4500%

Bottom line: If the gold is not in your hand, at least you'll have the consolation that your leveraged paper will always buy you a ride on the Reading R.R. and a couple of houses for Park Place and Boardwalk. That is, if your counterparty doesn't come to you first for an I.O.U.

And that's the view from here...after the close.
SHIFTY
(10/18/1999; 19:10:02 MDT - Msg ID: 16829)
To Journeyman re: Eustace Mullins
I had the pleasure of meeting Eustace Mullins back in 1992.I will never forget what he said about Mr.Bill Clinton. He said that we were about to see the most corrupt administration in the history of the United States. I'm sad to say he hit that one right on the nose.
SHIFTY
(10/18/1999; 19:14:55 MDT - Msg ID: 16830)
To Journeyman re: Eustace Mullins
I had the pleasure of meeting Eustace Mullins back in 1992.I will never forget what he said about Mr.Bill Clinton. He said that we were about to see the most corrupt administration in the history of the United States. I'm sad to say he hit that one right on the nose.
SHIFTY
(10/18/1999; 19:16:07 MDT - Msg ID: 16831)
To Journeyman re: Eustace Mullins
I had the pleasure of meeting Eustace Mullins back in 1992.I will never forget what he said about Mr.Bill Clinton. He said that we were about to see the most corrupt administration in the history of the United States. I'm sad to say he hit that one right on the nose.
SteveH
(10/18/1999; 19:16:18 MDT - Msg ID: 16832)
another friend
This is from a friend (not Leroy) who, when given Greenspan's speach told me this in email:

My contention is that our currency is the strongest, and it will probably prevail, but even if it doesn't, I don't care. I'm not out to make money on commodity speculation. I have no stomach for that - especially where gold in concerned. If you're right, in time, your investments will pay off. But in the mean time, realize that by being so enamored, you risk missing out on even better opportunities....
You take the simplest things all out of "epic proportion" if they even remotely associate with your obsession. All he is saying is that risk managers have put aside traditional norms when it comes to determining acceptible risk/reward levels when evaluating investment opportunities. As a result, there is more downside exposure than there would be otherwise. This is not news. The article clearly states that he emphasized that he was not predicting a crash, so how do you get "a down market of epic proportions" out of this? He is merely spreading the word to be cautious in an attempt to limit expansion to a healthy, sustainable rate. He is telling everyone what they should already know. To read anything else into this is to imagine conclusions that just aren't there. But that's what your little circle does - like an obsequious gaggle, you parrot illogical pronouncements back and forth and laud the wisdom of the author - as if he is a prophet and the messages are articles of faith - without ever stopping to consider the source or scritinize the conclusions for logic, objective factual basis, or refutability. Actually, faith in gold is behind it all - blind faith. I find this akin to idolatry, and wish you would leave me out of it.

USAGOLD
(10/18/1999; 19:16:49 MDT - Msg ID: 16833)
Ladies and Gentleman...A Toast
Please Rise....and lift your glasses.

For the Executive Director of the World Gold Council.... Haruko Fukuda

Raise your voices:


Hip Hip Hoorah!


Hip Hip Hoorah!


Hip Hip Hoorah!


For the Director of the Denver Gold Group......
Michelle Ashby


Raise your voices:


Hip Hip Hoorah!


Hip Hip Hoorah!


Hip Hip Hoorah!


For our colleagues and friends...


Raise your voices:


Hip Hip Hoorah!


Hip Hip Horrah!


Hip Hip Hoorah!


Haruko Fukuda and Michelle Ashby:

Please know that Chairs of Distinction have been honorably reserved for you at this eminent Table of yore. When not with us in substance, you are with us in spirit.
JCS
(10/18/1999; 19:53:36 MDT - Msg ID: 16834)
SteveH RE: Another Friend
What Mr. Greenspan didn't come right out and say, and what, IMHO, he or anyone in his position, would never say, is that he and Mr. Rubin have, virtually, destroyed the U.S. Dollar.
First, THEY hyperinflated the credit markets last fall allowing an additional $3+ trillion in public and private debt to be created over a 12 month period.
Second, through this massive credit expansion, THEY allowed a stock market mania to get out of reason, with a speculative bubble that they are scared to death of.
Third, in the process, THEY tried to destroy gold as a monetary asset by allowing CB "gold carry trade" to expand to levels equal to the financial market bubble.
Now, THEY and WE are all going to pay dearly for THEIR gross negligence through the following:
If HE doesn't increase interest rates immediately and significantly, the dollar stands to collapse, which will burst the bubble in a 1929 type collapse, bringing a deflation of all investment assets except the REAL MONEY: gold, silver, platinum, which will inflate significantly.
If HE does increase interest rates immediately and significantly, HE will possibly save the dollar, burst the bubble in the process and bring a 1929 type collapse, which will deflate all investment assets except the REAL MONEY (REPEAT ABOVE).
If THEY CONTINUE TO TRY AN MANIPULATE GOLD, it will burst the bubble (etc, etc, you get the picture).
Its the proverbial "painting yourself into a corner" and he and Rubin have done just that.
The FED and the US TReasury dept. will not be able to meet all of the margin calls and bail out all of the hedge funds that are destined to go down over the next few weeks.
For your friend: Gold is, most likely, the only safe haven that will survive the coming upheaval.
All given IMHO.
FOA
(10/18/1999; 19:58:38 MDT - Msg ID: 16835)
Haruko Fukuda is telling thr real story now!!!!! OH YES!
ALL: I can make but one post now, so I will reply to Michael's observations. Will try to broden some thoughts as I comment.

--------------USAGOLD (10/17/99; 9:54:50MDT - Msg ID:16650)
I can say with pleasure that the markets have become infinitely more interesting, and with no pleasure that they have perhaps become infinitely more dangerous. "Indeed, is the fall in lending rates a sign that fresh gold is being supplied to cover the shorts? I tell you the lending arena of the gold market is frozen in loses." --FOA 10/16/99

I agree with this, FOA. I think the lending rate is falling not because of a new supply of gold but because there are no takers. This gold carry trade is indeed locked up. I think many are losing their career positions over this debacle and many more are on the verge of losing their positions. The
proponents of gold sales, leasing et al are in the process of being severely discredited both in public and in the professional investment community due to its burdensome excesses -- excesses which could have severe repercussions with financial firms up and down Wall Street. ( I saw one report where it was rumoured that Goldman Sachs losses at the moment could be as high as $2 billion.) It appears to me that the gold carry trade battle is now over and all that remains is burying the corpses and removing the debris from the battlefield. There will be further attempts to drag these firms out of the fire, but when the day is done, I think the gold carry trade will be taken out of the
financial firm training manual and rendered a much deserved place in financial history books.--------
-----------------------------------

Hello MK,
Yes, I think we are in the middle of an extended workout. None of the BBs are in a rush to cover these (carry trade and other) bad loans because in doing so they must borrow gold to do it. There is no way they could bid the physical market. If they did it would completely dry up what
gold is supplying the retail markets. If they must return gold they must borrow to do it and create same problem in the lending arena. Their image is seen on the borrow side and the rates spike. We saw this recently. So they fall back into the financial workout mode and the rates relax.
The ECB/BIS really nailed this entire play to the wall. An entire industry was built on expanding the liquidity for international traders as our Washington officials looked on with approval. The top people knew why gold was originally (starting years ago) being taken down, yet they smiled as
these funds (and others) "coat tailed" the fall. And why not smile, these trades were using huge leverage to build (and support) the American market mania. The ECB said "enough is enough" earlier this year, but no one listened. I guess they thought these people (ECB) were nobodies? Then the BIS said they were going to cut it off short and the US asked for some time to work it out. Ha! They worked it out all right! Our treasury head watched them flood the gold paper onto
the markets like madmen.
What amazes me is that most of these "big inside" operators create the market and really didn't know why the original gold (and loan guarantees) was being supplied by the Euro arena. I always thought they did and their stories to clients about "CBs no longer using gold" was just a "good retail story". When the ECB and the BIS told Greenspan "it done", it hit these BBs like a nuclear blast! I don't think anyone yet understands that these people are now the sole backup for an entire asset class that cannot be made whole. On the surface, they may have to make good on 5 or 10 billion. But underneath, the ECB could crush them by running gold into the thousands. That's why I say "it's all over people", because this bull is going to run the equity of the dollar creating banks into the ground. And the US FED has no power to stop it. There is no way the US will use one ounce of it's gold to support a "banking crisis" if a "currency war" becomes the result! Some think that if we have one it's as bad as the other. They should study "currency war" history, preDollar!
The BBs can go for the ride slowly (and be controlled) or they can kill themselves by attempting to cover. What a master play this has been.
-------------------------------------------


--So FOA....This new gold market; it is a free market, yes?

--In the Robert Mundell speech for which Steve H provided a link, the laureate said as early as 1997 there would be a new gold market and that central banks would look to settling with gold at free market prices. He suggested that this would occur in the 21st century. Was it last year, the gave Prize was awarded to Black and Scholes -- and then LTCM -- where Scholes was employed --promptly went under water? Now Mundell wins the Nobel Prize while the gold carry trade
implodes. The former honed tools for statist economics; the latter honed tools for free currency and gold markets and a much-needed competitor for the dollar. One became the tools of the status quo; the other the tools for a new economy.----------- ----------------------

Boy,,,, Michael, I have to tell you, Mundell knew the story and no one listened! Now the whole Dollar/IMF system is in change and most of the nonEURO US trade partners have bet their entire economic society on a prosperous, buying American public. The next few years will be history to
remember. By the way, any thoughts on a "Britian in the EU"? (smile)

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

-----In talking with colleagues in the gold industry, the feeling is that it will be a long time before the Wall Street trading firms and mining companies sanction again something like the gold carry trade -- at least to the degree that it was utilized in the late 1990s. Perhaps this was a usable idea that had got out of control? There is little doubt that the European action with respect to gold,
sanctioned by Alan Greenspan who attended the Washington meeting, was aimed at the hedge funds and foreign exchange traders at the big banks. Leveraged trading was beginning to frustrate some nations' foreign policies and the mechanisms previously established to keep crisis situations from getting out of control. What good is it to try to save a country like Indonesia with fresh loans, stiff political and economic sanctions when hedge funds can easily destroy the Indonesian currency through derivative plays and leverage and undermine the intent of the international agencies. (Please don't construe from this that I back IMF actions during this Asian contagion lending crisis. I do not. I simply offer the foregoing as an explanation for the cb's actions.) So they acted to cut off the life-blood from the speculators -- the gold and yen carry trades.

The two pronged attack on the bullion banks, foreign exchange desks, hedge funds, et al co-incided with the latest jawboning by Alan Greenspan with respect to the stock market. He has to be getting a little fed up with being laughed at and ignored by the speculators whenever he warns
of the excesses in the equities markets. Perhaps now they will find out the central banks still have teeth?

This all goes hand in hand and marks a turning point. The financial world has changed in the last few weeks and I think the man on the street is just now finding out that something has happened. At the moment I can say with pleasure that the markets have become infinitely more interesting, and with no pleasure that they have perhaps become infinitely more dangerous.---------------
-----------------------

Dangerous is the right word, MK! Indeed, I did little more than "extend" my context into your "just written" perception. As events have unfolded we can clearly see what this gold market means to Euroland. Traders are busy trying to build a strategy to gain from a move in gold while the very trading arena they use may go up in smoke! I know that the BIS wants gold over $400. Yet, for the same reasons they didn't buy at $280 they don't have to buy physical now. The BIS is responsible for all gold movements between CBs, it's in their charter. Few know what they are doing untill after the fact. Today, they can let the BB "paper crunch" do their work for them. Soon. How fast it gets there will be determined by how the BBs can workout their problems. I suspect we will see rental rates rise each time one of them has to slice off some capital. When this process is wide open Another said he will be writing again (above $360 should do it). The changeover of oil to Euro settlement is the next area to discuss and I am intrested to follow how this ties with gold.

On another note:: With the EU recently (last week?) accepting South Africa into a "favoured nation" trade status, I suspect that any of the SA gold shares that survive this may be left alone (just a guess). The EU needs the SA minerals as much as oil and that country may become very important to them. We will watch as this all plays out.

Also to ALL::: Everyone is down on Bill Murphy for the wrong reasons. They don't have to do anything but continue to discuss this in public to be a huge success! What ever else can be done will indeed help more! Investors can and do think, read and hear much better than most advisors give
them credit for. With the "right insights", they will know to move their assets as events unfold. Walking assets have more impact than standing armies. So don't discount what GATA is doing.
From my perspective, most all mines will have a rough time (not only from hedges) in this new bull. If people keep reading GATA they will at least know to run from BB controlled shares as they will be the first hit. I always say, bullion first and foremost. But, human nature as it is, the biggest and most free mines are the next place to be. They won't run as bullion will later, but everyone can't
be totally in gold. It's a physics problem at these low values! So "GOOD WORK" Bill, I know the sweat is running on the other team!

Thanks to everyone for reading and discussing FOA

ORO
(10/18/1999; 20:08:17 MDT - Msg ID: 16836)
Tanglewild Journeyman - CB2
http://home.earthlink.net/~amn/charts.htmlMore Newman charts.

I just love his work. Particularly his M2 to Stock market capitalization ratio. He essentially has shown that to save the markets the Fed would need to print up so much money that it would bring too high an inflation in the money supply. Doubtless it would cause the real asset markets to go bonkers if he did try. This graph he got from Bianco.

CB2 - The Fed speach is essentially saying that the PPT does not have enough fire power to keep things going. The Newman article shows they can do it but not without drowning the economy in newly printed cash.
Speach:
http://www.federalreserve.gov/boarddocs/speeches/1999/19991014.htm
Background can be found in:
http://www.clev.frb.org/
"Beyond Price Stability: A Reconsideration of Monetary Policy in Periods of Low Inflation" - couldn't find exact URL
http://www.federalreserve.gov/pubs/bulletin/1999/0199lead.pdf
CoinGuy
(10/18/1999; 20:14:35 MDT - Msg ID: 16837)
JCS
As far as your "humble opinion" stated below, "I concur".
Had a great time reading all of todays posts.

Any guesses on CPI, I'll say %5...who knows

Coiguy
CoinGuy
(10/18/1999; 20:18:40 MDT - Msg ID: 16838)
no typing skills
That was supposed to be .5

cOiNgUy
SteveH
(10/18/1999; 20:37:43 MDT - Msg ID: 16839)
repost
www.kitco.comI missed this in the WGC keynote speach:

Date: Mon Oct 18 1999 22:12
HighRise (flierdude) ID#401460:

( Keynote Speech given by Miss Haruko Fukuda CEO World Gold Council )

"But it is now certain, whether by default or intent,
that the Euro has equal if not greater gold "backing" than the US dollar."

HighRise
Leigh
(10/18/1999; 21:09:21 MDT - Msg ID: 16840)
Author Alex Hailey Lends GATA a Hand
Over at lemetropolecafe.com, there are copies of letters written to Barrick and Gold Fields by author Alex Hailey, author of Airport and many other best-sellers. Mr. Hailey, it turns out, is a goldbug and supporter of GATA. He recently sold his Barrick stock, and his blistering letter to Barrick makes for delightful reading.

A couple of weeks ago I mentioned Mr. Hailey as the possible author of "Roots." Well, I was wrong (though it seems as though the real author, who is now deceased, had a similar name).
ORO
(10/18/1999; 21:36:40 MDT - Msg ID: 16841)
SteveH-Your friend
You must have started into this without working out a good argument - the kind of logical, fully reasoned and well backed information one must put together to move a knowledgeable individual away from his familliar grounds.
Not having a good argument for anything beyond a good intermediate term/long term trade in gold, I could take my Mises and Hayek, and read them at leasure over the next few years, and totally miss the point FOA and ANOTHER put up. Knowing how leveraged the US was and how heavy its current account deficit was, I found something ringing true but far from proven. I collected enough information to make an argument for (1) the oil for gold deals (beyond their old historical background), (2) the gold short situation, (3)the seignorage for military protection deal, (4) debt trap economics, (5) workability of gold backed currencies, (6) debt and monetization dynamics, (7) the workings of a trade economy (the New Rome), (8) interplay into politics.

I think one needs to go over at least some of this to understand the issues and be able to provide a consistent and coherent view of the gold market and its environment.
Gandalf the White
(10/18/1999; 21:57:32 MDT - Msg ID: 16842)
ORO's post to SteveH
BUT ORO, what if Sir Steve has friends that are not open to true proven facts, and only believe those statements of the "talking heads" intent on selling "their book" for the betterment of there clients and selves. There are far too many of those types of sheeple, or the talking heads would not have a job. -- Tis only through diverse viewpoints and ability to ask cutting questions of theose viewpoints that one can determine for himself the ringing of trueism in a thought. -- Most of your thoughts are far above my febble mind comprehension, but after a while even I can piece together the road that you are walking. I may have to run to catchup with you as you are far ahead of me, BUT I am miles in front of Steve's "friends" and they may never even get on the correct road. -- Remember that we can not save those that do not wish to listen to a different viewpoint and even the best argument in this world often falls on "deaf" ears. -- To those that care to listen, OK. -- To those that care not, their loss ! Please ORO, speak slowly .....
<;-)
Just Weight & Measures
(10/18/1999; 22:00:56 MDT - Msg ID: 16843)
Where to from here?
Been enjoying all the posts on this forum. An intelligent discussion page about one of my favorite topics - GOLD. Thought I'd finally join in

I'm just a little bitter about the government messing with my savings - after I'd sweated for them - every time they started up that big photo copier. Inflation at 1 or 2% YA RIGHT!!!! Price increases are NOT inflation. They are just a sign of inflation. So the CPI numbers will only indicate what has already happened. The money supply has been going up at about 9% per year for quite some time. The truth is finally comming out in PPI and CPI numbers - which are always fiddled with anyways.

I determined - after reading Anthony Sutton's "War on Gold" - to put a little of the yellow stuff away for retirement/inheritance. Uncle Sam doesn't know I've got it so he can't tax it when I either sell or give it to my kids. I've been wondering if I missed the boat these past few year Gold went down, down, down and the DOW went up, up , up.

These last few weeks have been enjoyable, not so much because I can laugh at all my DOW buddies, but because the cycle of fiat money is once again going down in flames (as it always will) just like it predecessor the Continental Dollar, the French Assignat and numerous other currencies that no one even remembers. I like it when I see dishonest weights and measures destroyed, though it takes a toll on society. I pity the fokes who believed the lie and thought the money party would never end. They thought there was such a thing as a free lunch and that they could only benefit from inflation. They have their life saving tied up in equities and real estate that has only ever gone up in terms of dollars. Soon, perhaps the dollar will come crashing down. I say, get some physical GOLD while you still can and get ready for a rocky few years.

I'm looking forward to my DOW puts moving into the money, perhaps tomorrow. My Gold call options finally paying off, though perhaps Gold won't move up enough before DEC. Most of all I'm looking forward to a change in our fiat money system - no more funny money I hope. But I wonder how it will change or perhaps what will replace it. If Mr. Clinton has his way, I somehow think it won't be step in the right direction. Perhaps facisim?

Long enough for an intrductory post I think.
ORO
(10/18/1999; 22:30:16 MDT - Msg ID: 16844)
Gandalf the White
This is where credibility comes in, building over years. Excitement stands in the way of presenting a solid argument. Aside from that, yes, some people will never get it because they don't want to bother with thinking. This friend is very well written and lives his mind. He can be convinced if he gets the arguments presented to him. Unfortunately, he does not seem to want to listen. A convincing prediction coming true is all you need to get his attention again. Gandalf, you are by no means feeble or lacking in any faculty.

SteveH - you need not "recruit" converts to a cause. I don't think you owe it to anybody. If this friend is highly valued, make an effort to give him a concise rendition of your view. He seems to have no more patience for snippets.
I am putting all this together and posting in order to collect criticisms and find holes in the arguments, and prod people to reveal more information or analysis. I believe the only way to get the professionals I try to cater to to listen is to provide a well tested line of thinking.
Tomcat
(10/19/1999; 00:00:53 MDT - Msg ID: 16845)
iceberg, your post #16827

Hey iceberg, that was a great post on Greenspan's Oct 14 speech. You said in point 5:

5) The Fed Chairman tells bankers they need to prepare for a systematic failure, across all markets, affecting "even a seemingly well-diversified portfolio."

OK, the banks need to prepare. But what he doesn't say is how. How can they prepare? Sell their furniture? Call in some loans?

The problem is that their assets are in loans, which, in a "systemic collapse" aren't going to be worth a whole lot. And if there is a run on the banks the banks won't have the money to give to their depositors. The only thing holding up confidence is the workability of our economic system and the that falters the confidences will vanish faster than they can print money.

I understand what he was saying to the banks. I just don't see what the banks can practically do. Do you?
Tanglewild
(10/19/1999; 02:13:34 MDT - Msg ID: 16846)
Financial Times report--Ashanti
A sneak attack..heheh. A little piece of the report:

The Saudi Arabian investor, Prince Al-Waleed Bin Talal Bin Abdulaziz
Al Saud, yesterday pledged financial
support for the Ghanaian
government, which owns 20 per cent
of the troubled gold miner Ashanti, in
a move that could block Lonmin's bid
for the company.
http://ft.com/hippocampus/q25b146.htm
el St.One
(10/19/1999; 02:44:31 MDT - Msg ID: 16847)
ORO PPT
Thanks for the education on PPT. Sorry I did not see your reply until just now. I had to be out the door as the market closed. Do I read you right, the PPT operates in the futures mkt? I know the leverage is there, but where will they get their backing the day things goes against them. I guess I shouldn't have to ask, their share holders or DC bailout.

Thanks again el
SteveH
(10/19/1999; 03:27:54 MDT - Msg ID: 16848)
friend (not Leroy)
ORO and Gandalf and JCS,

My friend is intelligent and articulate. I have sent him select articles that support and well-articulate the gold arguments you mention. He just chooses not to listen. Remember the story of the black crabs in the box who keep pulling the one black crab back in once he or she discovered how standing on the shoulders of a friend could lead to escape. His wisdom stops at the dollar's door: he earns in dollars, he spends in dollars and to hell with the Euro, the Yuan, the Yen, and the Yang (gold). Interest earned is king in his book but he fails to leap to the loss of earnings against other currencies as that is tantamount to gambling. If the dollar goes down, everyone's dollar (in the US) goes down and he is still ahead (of everyone else in the US). Nothing else matters. Gold is idol or icon and is tantamount to idol worship. That simple.

RossL
(10/19/1999; 04:40:07 MDT - Msg ID: 16849)
PPT
el St.One (10/19/99; 2:44:31MDT - Msg ID:16847) said:
"Do I read you right, the PPT operates in the futures mkt? I know the leverage is there, but where will they get their backing the day things goes against them."

SP futures are settled in cash, so the FED could monetize and pour cash into the stock markets. The question is, how will they settle losses on the gold derivatives? As someone pointed out in the past, they can't just print up gold.
SteveH
(10/19/1999; 05:35:06 MDT - Msg ID: 16850)
Dec. gold trending lower
$310.10.

Oro,

Please give us one paragraph on the military seignorage and what it is and how it works?

Thanks
Hill Billy Mitchell
(10/19/1999; 06:04:35 MDT - Msg ID: 16851)
WORKING
WEALTH MILEAGE CHART @ 10-14-00



$ U.S. EURO YEN GOLD SILVER

$ U.S. 1.00 0.93 1.07 0.00 0.19

EURO 1.08 1.00 1.15 0.00 0.20

100 YEN 0.936 0.871 1.00 0.003 0.175

GOLD 317.25 295.06 339 1.00 59.41

SILVER 5.34 4.97 5.70 0.02 1.00


WEALTH MILEAGE CHART @ 10-18-99



$ U.S. EURO YEN GOLD SILVER

$ U.S. 1.00 0.92 1.05 0.00 0.19

EURO 1.09 1.00 1.15 0.00 0.20

100 YEN 0.949 0.872 1.00 0.003 0.178

GOLD 317.25 291.38 334 1.00 59.41

SILVER 5.34 4.90 5.63 0.02 1.00
The Invisible Hand
(10/19/1999; 06:20:09 MDT - Msg ID: 16852)
Von Mises and the dollar as debt
I am still struggling with the idea that the dollar is a debt of the US government (and by extension, through tax extortion, of every actor in the US economy). I think I almost found the answer on p.76 of Mises's "The theory of Money and Credit" (1981, Liberty classics ed.). First the quotation, then my question:
"The decisive characteristic of commodity money is the employment for monetary purposes of a commodity in the technological sense. For the present investigation, it is a matter of complete indifference what particular commodity this is; the important thing is that it is the commodity in question that constitutes the money and that the money is merely this commodity. The case of fiat money is quite different. Here the deciding factor is the stamp, and it is not the material bearing the stamp that constitutes the money, but the stamp itself. The nature of the material that bears the stamp is a matter of quite minor importance. Credit money, finally, is a claim falling due in the future that is used as a general medium of exchange."
I understand everything in this quotation except the last sentence. Fiat money relies on trust in the stamp, OK, but how does one infer from this that fiat money is "a claim falling due in the future"?
FOA
(10/19/1999; 06:24:25 MDT - Msg ID: 16853)
Paris and Berlin Look to Offset U.S. at IMF
http://www.iht.com/IHT/TODAY/TUE/FIN/imf.2.htmlThere is a Dollar/IMF faction!


---In a book published last week on the period leading up to his resignation in March, Mr. Lafontaine quotes from articles describing Treasury Secretary Lawrence Summers of the United States and his predecessor, Robert Rubin, as regarding the IMF and the World Bank as organs of American policy and the IMF as coming under the dominating influence of the Treasury Department and Wall Street. -------------
Quabbin
(10/19/1999; 06:30:15 MDT - Msg ID: 16854)
@Goldspoon re: Platinums shadow
http://www.mrci.com/qpnight.htmI must explain that when I posted about checking the Kitco plat chart yesterday it was down about $240 to $170. Clicking on Kitco for a quick look can be like going to a horror movie, it takes a pretty good trick to scare you when you already expect it. After about 3 seconds of panic I slapped Kitco and the back and said, "haha, good one Kitco, you got me with that one" and simply came back here lure other victims to fiery pits of Hell for a little stress relief.

That being said, although the term "believer" doesn't fit (I am most suspicious of the things I find I think I've come to know), your perception of POP as a leading indication of POG is not lost on me.
Most often when someone feels they have snapped a piece of the puzzle into place I tend to feel that they have only recovered said piece from the carpet and identified it as an actual piece of the puzzle we are currently working on.
This view in no way reduces my gratitude for a job well done. Thank you Mr. Spoon.
Incidently, given the implications, I'm quite glad that plat wasn't really trading at $170 :).

Also, thank you for the above link regarding quotes. Perhaps you could further help me understand them. I am used to dealing with stock quotes where "change"="open"-"last" or "last"-"open". I can't seem to find any mathematical reasoning for the field "change" on the page you directed me to. For example, your post included:

Market Mth Open High Low Last Change Date Time Ask Bid
Platinum(NYM)(Access) Jan 407.0 407.0 407.0 407.0 +1.0 10/17/99 18:39 407.9 404.1

...if Open, High, Low, and Last are all 407.0, from where is the +1.0 Change derived?

Thanks in advance for clarifying this. I have seen these types of quotes many times before but have never given them much credence. It wasn't until your post yesterday that I really realized why.
(If anyone else is reading this, I would of course be glad to see your explanations of this as well.)

Thankee Sai,
Q:)
Peter Asher
(10/19/1999; 06:41:35 MDT - Msg ID: 16855)
CPI ?
Dont' have the number but the S&P is up 12 pts. in the first ten minutes.
Tanglewild
(10/19/1999; 06:56:09 MDT - Msg ID: 16856)
cpi
cpi numbers came in as expected...+0.04 and +0.03 for the core number. markets headed up
Tanglewild
(10/19/1999; 07:10:43 MDT - Msg ID: 16857)
quabbin
Most likely the open at 407.00 would have been a gap open. that is to say the last market(say london for examble) closed at 406.00 and then to open-the quoting market went higher to 407.00....hope this helps.
tw
CoBra(too)
(10/19/1999; 08:15:51 MDT - Msg ID: 16858)
CPI - tame as expected!
There is no inflation (CPI)
There is no deflation (PPI)
There is only one thing left to say
There IS Manipulation!!!

@ ORO - hope you're right with the FED running out of ammunition. Even if they can't print gold,and perhaps they have already (pre)sold all bullion, since they've defaulted anyway on their gold/$ contracts twice in this century - they still can print more greenbacks. Why should the FED care as long as they can postpone the inevitable and in the meantime their cronies have privately stashed away the bullion and most probable some of the major deposits of the overhedged producers for the showdown of the $-credit & equities bubble.
This paper game is not only rigged - it is a scandalous and unethical criminal transgression of the general public administered outside of the realm of any legal accountability. The SEC, CFTC and all other financial watchdogs of the current administration seem to be trained exclusively to hound the small fry.
Sorry -CoBra's (too) get venomous once in a while.





SHIFTY
(10/19/1999; 08:23:46 MDT - Msg ID: 16859)
To Journeyman re: Eustace Mullins
I had the pleasure of meeting Eustace Mullins back in 1992.I will never forget what he said about Mr. Bill Clinton.He said we were about to see the most currupt administration in the history of the United States. I'm sad to say he hit that nail right on the head.
Tomcat
(10/19/1999; 08:51:54 MDT - Msg ID: 16860)
Settling short positions when no physical gold is available.

I think it is pretty clear to most of us that much more paper gold exists than is available in physical form.

Those lenders of physical gold want their gold back but many lenders are going to realize that they are not going to get their gold. If I were one of them, and I was sure that I would not get my gold, I would: 1) realize that the potential for more losses are possible if the market for paper folds, 2) I would begin search out means to minimize future losses by settling for something other than gold: euros, US dollars, silver, platinum, palladium, stocks, bonds, etc.

There are many ways to negotiate a settlement. Here is one example. Let's say GS owes me 50 million dollars worth of gold and GS tells me they want to settle in dollars. I say ok but I want the 50 million dollars now plus an agreement that if the POG rises, and is physically available within the next year, then I have the option to return/exchange my 50 million for physical gold which GS must deliver. At least, with this sort of agreement, I get my initial investment back and am covered if physical gold becomes available.

Is this a great settlement? No. But what choice do I have. My major concern would be that GS is going to go into recievership and then I would not even be able to make a cash settlement. Furthermore, if I don't do this quickly, GS might do it with others and then run out of cash.

So, my question to the forum is simply this. If you can settle for cash or cash substitutes (like silver or something phyical that is available) then this will happen. Yes? No?

And, this being the case, the shorts will be able to cover.

Perhaps someone can take an opposing position and tear this argument apart. Perhaps I missing the boat (I have missed a few in my time). But until someone can counter this approach, I foresee the shorts getting covered (even if the Fed has to loan money to the BBs to do it). Fed loans would be inflationary but hell, the fed is throwing billions into repos every week. What's a 10 or 20 or 50 billion more? And if this isn't done the system goes down.
CoinGuy
(10/19/1999; 08:59:17 MDT - Msg ID: 16861)
Greenspan
I believe I heard a blurb on CNBC that Greenspam will be commenting on the markets this afternoon. It will be carried live...

I agree with Cobra(too) markets assesment this morning. In lite of the shake the PPI, rising oil prices, and Greenspan gave the markets last week, I don't think a nuclear bomb would deter these "greedy" wall streeters. The only thing I know is "fear" is three times the motivator. I think this market needs some motivation.

Can you say "manipulation", I would sell into the rallys if you have anything else at risk.

I could go on but there's a neighbor's cow loose in my back yard.

Get physical,
Coinguy
elevator guy
(10/19/1999; 09:20:25 MDT - Msg ID: 16862)
Bill Murphy thanks FOA for his supportive comments.
FOA's recent supportive comments were most appreciated by Bill Murphy and GATA.

That the dollar is on a slide, is a fact. That Gold is on the rise, is a fact.

However, our paper gold market is just fiction, and being manipulated at every chance by those who have a vested interest in maintaining the staus quo of the DOW, and other derivitives.

We must continue to educate the general public. If we were to assume that public knowledge is not consequential, we err in judgement.

Only when the public knows nothing, and does nothing, are the perpetrators of dishonesty and deceit allowed to function with impunity.

We can see the importance for influencing public opinion, by observing how the powers that be, through a well oiled media machine, hide inflation behind tweaked numbers, and disparage gold ownership. Their polls tell us what to think, so that we all begin to think alike, and accept the party line with out so much as a cough.

So then every time you re-post an expose of the colluding cabal to your Senator, Congressman, within financial circles, and all over, you are striking a blow for freedom, and helping to turn the tide of the all-important public opinion.

Support GATA any way you can, and make a difference!
watcher
(10/19/1999; 09:22:16 MDT - Msg ID: 16863)
armstrong
armstrong pointing finger at republic bank of NY. Could get interesting. picked up on GOLD EAGLE this am
golden
(10/19/1999; 09:22:23 MDT - Msg ID: 16864)
Trying to Learn
I have been going from area to area to try to figure out how to make money with gold and silver.
Tomcat, I just read your post. You say that if they cannot cover, that the system will collapse, which system - gold, gold leasing, banks, please clarify for me.
I have heard people say that if you do not have physical possession of the gold, watch out as the big boys with more power will grab it. Who are the big boys, governments, Goldman Saks?
Currently I am in leveraged positions with gold and silver with Monex. I suppossedly have bars in a bank with my name on them, and certificates to show it. Is this safe, Monex says it is. What do you say?
Every day there seems to be a new 'excuse' why the metals market is down. It does not seem consistant with my perception of reality that the metals market is down. I hear talk of manipulations of the market, people trying to cover shorts, then I hear that they have not covered. I am very confused. I invesstes in the market just 2 months ago, with a strong belief that gold and silver would go up due to the concerns about Y2K. Now I am just plain confused. Knowing that gold and silver will someday go up cannot help me make day to day decisions. I hear all this talk about graph and charts. 10 days ago, my broker told me for sure silver is about to pop up. Since then there has been one reason after another (- someone is selling to cover stock losses, - etc.) as reasons why it did not go up. I am searching for information - that is how I found this forum. But it is so time consuming. Where do you folks get your best reliable iformation. What is silver doing? What is gold doing? I have heard that gold is more manipulated than silver. I have been spending about 10 hours a day for three months now trying to get educated, and I feel more ignorant now than I did then. Thanks for any input. If you use appreviations, could you tell me what they stand for the first time that you use them. Thanks. Nancy
JCS
(10/19/1999; 09:25:21 MDT - Msg ID: 16865)
Gold--Elliott Wave
December Gold appears to have completed the "C" wave of a 3-3-5 "running flat" wave 2 correction on the daily chart. If this is the correct count, the pattern is extremely bullish and it should be on the verge of the next up leg, a 3rd wave lift off.
Coincidentally, this is the exact same labeling that I am applying to the SPX on the daily chart from the Aug. 10 low. From that point to the October 11th high was a corrective pattern, Elliott 3-3-5 running flat, and it should now be in a 3rd wave decline.
Back to gold: on the chart the big spike up to 339 was a "B" wave and from there to this morning's low the "C", completing the pattern.
Hopefully, this is correct count and its "up up and away".
Good luck,
Chicken man
(10/19/1999; 09:28:32 MDT - Msg ID: 16866)
elavator guy @ "the public"
What if the public really don't care about GATA's message.....if your audience is deaf you can shout all you want and nothing will happen....eh?
CoBra(too)
(10/19/1999; 09:31:32 MDT - Msg ID: 16867)
Buy on dips!
The "buy on dips" syndrome for the general market was heavily sponsored by your friendly PPT again. We all believe it too be the (politically) correct action. Thank you!

We're rapidly catching up on this free education and buy gold on any dip.

You too? - CB2
USAGOLD
(10/19/1999; 09:32:12 MDT - Msg ID: 16868)
Today's Gold Market Report: Intrigue in Ghana, Londontown
MARKET REPORT(10/19/99): Gold continued its southerly trek this
morning with many of the bigger players still on the sidelines awaiting
the outcome of the Ashanti and Cambior margin call negotiations. These
talks are critical to the gold market because, if the calls are forced
by the two companies' counterparties,it could touch off a wave of short
covering both in the physical and derivative market..........As it is
reports are circulating that gold is being returned by various
counterparties to the central banks as the process of unwinding the gold
carry trade continues.......Gold lease rates continue to
fall.............Reuters reports in one article that "Saudi Prince
al-Waleed bin Talal had offered financial help to Ghana's Ashanti
Goldfields" and the move "helped keep the lid on prices, removing the
bullish prospect of a forced closure of the miner's hedge book." (I
think Reuters may have gotten the prince's name wrong. If I recall
correctly, it is "Alaweed.") In another Reuters report, Al Waleed, a
self-made multi-billionaire, reportedly offered his support to the Ghana
government not Ashanti per se -- the significance of that distinction
remains to be determined, but it does start some red lights flashing.
Ashanti has been given "no more than a week" to straighten the mess out,
according to reports......... It is difficult to understand why anyone
would be interested in absorbing Ashanti's $270 million margin call
under the circumstances, especially when you consider that any further
rise could touch still more margin calls and unwinding the position
would most likely bankrupt the company. From where I sit -- and mind
you, this is only speculation from someone sitting in old Denver-town
thousands of miles from New York and London let alone Ghana -- the
positioning going on behind the scenes gives off the scent of default.
The intrigue here is palpable....The fact that the mining company was
given only a week by its 17 counterparties tells you something. Add
Prince Alaweed in the mix and you have the type of intrigue and
characters you would expect to find in a good financial
thriller.......Fear and loathing grip old Londontown and whose to say
that Ghana might not play the nationalization card? As it is, Reuters
reports that "the possibility that it (Ashanti) will fall into foreign
hands is a sensitive political issue for (Ghana)President Jerry
Rawlings.".... The European and Asian markets were quiet overnight.
"Typically, the retreats are coming in New York trading hours while Asia
picks up physical metal," said Rhona O'Connell of T. Hoare & Co as
reported at FWN. "The market overall is expecting strong buying, both
professional and retail, on any dip towards $300," she
added................ That's it for today, fellow goldmeisters. Keep
your ear to the rail. If the Ashanti situation blows up, things could
get interesting in a hurry. We'll see you back here tomorrow.

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.
golden
(10/19/1999; 09:33:52 MDT - Msg ID: 16869)
oops/spelling
I had to chuckle when I read my post. I did not realize my spelling (in my just posted post) was so bad. Please forgive.
'Appreviation' should be abbreviations.
And 'invesstes' should be invested.
Thanks for your patience and your responses.
Nancy
GAa5274575@aol.com
Leigh
(10/19/1999; 09:45:18 MDT - Msg ID: 16870)
CoBra(too) and elevator guy
Dear CoBra: I'm always amazed at how tuned-in you are to financial matters here in the States. Are there a lot of people in Europe who pay attention to our stock market? If our markets were to crash, would it affect Europeans a great deal?

elevator guy: I'm so much in agreement on you about our responsibility to warn the sheeple. I know the terrible feeling of having people ignore you or even hang up on you (the worst offenders are family members, too, and that really hurts!), but they'll remember and think about what you say. Sometimes they'll do their thinking at the lowest ebb, when they're the most frightened, and your words will seem as a guiding light!
elevator guy
(10/19/1999; 09:59:55 MDT - Msg ID: 16871)
Leigh, and Chicken Man
Thank you Leigh! Can you imagine the impact it had when we told people gold was poised to go up, and then after the ECB agreement, it went up? That must have gotten some attention from those outside our little camp!

Your right, Chicken Man! If the general public sees no value in gold, they may never buy it. Until the DOW crashes, and they see their life savings go up in smoke. With the advent of the Euro, and the cap on sales by the ECB, it seems probable that the dollar will decline in status as a world wide reserve currency. Or at least it will be in for a rough ride. If I knew nothing about gold, (just like now!), were to be told this in advance, I would be thankful someone tipped me off to the changes coming, and buy at least some gold.

Does anyone think the public at large will ever realise just how it is that their hard earned value is stolen from them, by devaluation of the dollar? Perhaps it will go unoticed, or be blamed on some scapegoat factors.

Maybe we are all just part of an inside group, that will profit from the coming changes in our economy, and the public at large will be stupified, and in the dark as always.

At any rate, I'm very pleased to be here, and receiving information of the long view.
Strad Master
(10/19/1999; 10:03:21 MDT - Msg ID: 16872)
For USA Gold or anyone - regarding Margin calls
The imminent failure of Ashanti Gold you mention in today's update brings up a question. Is Ashanti responsible for a margin call delivered at the time the price fix was much higher than it is now or does the drifting down in the price of gold relieve them of their debt. If the latter, I imagine that everyone who is involved in geting the price progressively lower is breathing a big sigh of relief as the danger becomes increasingly more remote. I know from my own experience with a big gold brokerage that when I got a margin call on a leveraged position, it didn't matter about the subsequent price; I was liable for meeting the call even if the very next day it reversed and I went into profit territory. Which leads me to a second question: How is the price established for the margin call Ashantineeds to meet? At the close of trading in London, or New York, the high for the day, the low for the day - what? Thanks for responses.
ORO
(10/19/1999; 10:22:37 MDT - Msg ID: 16873)
SteveH-R. A. Mundell
Thanks for the URL.

Reading his stuff. Very rich. Has his whole '68 book online. Seems to continue some of the Austrian thinking with "updates" from monetarist works and others. Very big on noting the profitable seignorage both as a tool of the "superpower" in maintaining Hegemony, and the "prize" of international power.

Great read so far.

If anybody is interested in a little more on monetary thinking, Outside of Mises Theory of Money, there is Mundell's thinking and Hayek's Good Money, newly reprinted in a new (expensive) edition.


Scrappy
(10/19/1999; 10:24:39 MDT - Msg ID: 16874)
golden
noneHi. I kind of know how you feel. I'm a coffee shop waitress, in a tiny town, always have been poor. Suddenly, I have this chunk of money thrown in my lap. I am determined to make something of it-not to just see it gone on nothing. I have two kids, now college age, both enrolled at community colleges, for now.
The amount of money in my lap is, I am sure, pocket change to these guys here. But, to me, it represents a real chance, with time and patience, to perhaps elevate my financial positon above the poverty level. I have lived at or below the poverty level all of my life. I have never taken welfare, and have never received one red cent in child support. This 'chunk of money' means a LOT to me, and I am totally ignorant on what to do with it. Or i was. Thanks to these people here, I feel I have a beginners' knowledge, at least, of the money world, how it works, and what is going on with it at this point in time.
I strongly encourage you to read the Forum archives, especially the "Important posts, 6/99 to present" Get educated. Calm down, trust yourself and your brain, and mostly, MAKE YOUR OWN DECISIONS! Don't let anyone tell you what to do-if you are using a broker, YOU tell HIM/HER what you want done! Sounds like that is what you are trying to do, and there is so much conflicting info, it IS confusing.
But, I got quite an education reading the above mentioned posts. I know I am not going to get rich overnight, and I know that if I get all excited about the day to day events, I will freak out, cash out, and blow it.
I really believe what FOA and ANOTHER, among others have been saying. It seems many of the people who speak here play with money on a daily basis, so their opinions are for short term, day to day considerations. Even if I had the money to get into the day to day game, right now, I know I would not have enough knowledge to do so. Not if I wanted to rely solely on my own opinions and interpretations.
I think, therefore, the best thing for me to do, is to play for the long haul. And of all the gnarled thoughts I have read here, the one that keeps jumping out at me is, "Get physical, shut my mouth, and WAIT!"
I don't know if this has helped you at all. I hope we all 'make it'. I for one, have some hope and feel pretty secure that I am doing the best I possibly can with what I have.


All, sorry this is so long. Thank you for the free flow of thoughts and ideas. You people have taught me a lot at a time when I was WAY too excited, and needed to learn a LOT. Thanks tonnes, from the bottom of me heart.
Gold Dancer
(10/19/1999; 10:28:59 MDT - Msg ID: 16875)
JCS/Elliot count
I agree with your latest Elliot Wave Count on gold and the stock market. Looks to me like the correction is over. Tomorrow should be up.

Ashanti was in a margin call for $250 million but at what gold price? If it was $335 they are certainly able to cover at a lot lower prices now. With a lot of these derivitives not tested in court and the risks never stated clearly I bet it might be cheaped in the end for Goldman and the other Bullion Banks to eat some their handywork. Time will tell but if they force the issue that could complicate matters more than they want.

But I am convinced that until Greenspan leaves next April the markets will be manipulated so he can make him self look
good. For those who don't think he can do this, or that the markets are bigger than he is, I just remind you that he has done this for a long time already and no one is complaining that matters. We don't matter on this forum. It was not until Rubin left that the Yen was allowed to rise. And gold is not going to really get going to the upside till after
Greenspan leaves. It does not mean that gold can't go to
$390 but that is about it as far as I can see. Then we will spend another 3 months going sideways. And then Alan leaves and the wheels come off, the turbo is turned on and off we go to $600+ by the end of 2000. Just my thoughts for now.

Gold Dancer
Broken Oak
(10/19/1999; 10:41:40 MDT - Msg ID: 16876)
The Invisible Hand
I believe the last line is basicly saying that 'fiat' money is not a thing in its own right, but a medium which must be used to get some thing later. If a bushel of wheat is both a commodity as well as a unit of account. If we all delt with only units of account and the relationship of goods one to another was stable in relationship to the unit of account then all would be well and one would not have to think about it. But this is not the case when the unit of account has no sustantive, corporial identity as a tangible material thing in its own right (wheat, oil, gold).

This is another way of talking about the quantity of 'fiat' money vs the need for 'fiat' money in transactions. Or another way of talking about the effects of 'printing to much or too little paper money'. You can't fake a bushel of wheat, a barrel of oil or an ounce of gold. You can manufacture fiat money till the couws come home. The holder of fiat money risks inflation (which destroys the value of his held money). Since gold can not be extracted very easily it can not really be 'printed' and therefore becomes stable in its relationship to other things.

Further, one of the reasons that the gold standard was abandonded was because a pure gold standard does not really enable massive industrialization, but rather hinders it due to a restriction in the amount of available capital. This, IMHO, relates to the capacity of a nation to make war or keep sovereignty.

golden
(10/19/1999; 10:49:44 MDT - Msg ID: 16877)
Gold Dancer's post
Dear GOld Dancer,,
I need to clarify your post for my understanding. You are saying that the gold spot price should be up as of tomorrow? What about silver?
Broken Oak
(10/19/1999; 10:50:49 MDT - Msg ID: 16878)
Scrappy
My admiration for your work ethic and grit. Hang tight. Think about the opportunity to obtain productive capability even on a small scale. ie - knitting machine, bread baking, etc. To rise above your current situation will require many hours of fresh thinking.

I remember my mom who had 'yard sales'. She would have small scraps of fabric in small bundles which she sold fo 25 to 50� each. Her neighbor always over priced things. At the end of the day my mom was always WAY ahead of the game. There are ways to grow small businesses or enterprises which will net you significant rewards, but alot of today's business strategies depend upon debt, which is a real tragic step.

Keep up the good work. You ARE a winner.
Leigh
(10/19/1999; 10:57:28 MDT - Msg ID: 16879)
Latest from SEQUIN
Date: Tue Oct 19 1999 11:25
SEQUIN (GOLD) ID#25171
306.50 Indeed. (to paraphrase the now silent RJ)
We got good help from Goldman who bought 650,000 oz (in my opinion maybe up to 150,000 were for own account and the remaining for Ashanti).
We will see if the level holds in coming days or we will be punished down to 296.5.
THKS
TownCrier
(10/19/1999; 11:06:23 MDT - Msg ID: 16880)
Investors should be cautious on US stocks-Miyazawa
http://biz.yahoo.com/rf/991018/9b.htmlJapan's Finance Minister Kiichi Miyazawa warned investors to be careful about developments in the U.S. stock market, "It is best not to say anything unnecessarily...but investors should pay sufficient attention to what the Fed chairman said." And in case your memory is suffering today, we reported last Friday that Chairman Greenspan warned about possibilities of sudden, sharp reversals in confidence by investors taking their toll on equity and financial markets.

In comparing the two, Miyazawa said it was "almost certain" that the Japanese economy will tend to improve while gains in the U.S. economy and stock market will slow down.
Scrappy
(10/19/1999; 11:17:01 MDT - Msg ID: 16881)
Broken Oak
noneThank you for the accolades. FYI, I have overcome lots in my life-financial considerations always were low on my list of priorities. I always felt as long as we ate, etc., we could focus on other things, like God, morals, etc. Let me tell you, raising two kids to be drug free, gang free, teenage parent trap free, etc., has been no easy feat. I look around, and I am glad I didn't concentrate on getting them 'things'. They are both two exceptional indiveiduals.
Also, just for your interest, I am finally investing a little in myself. Over the years, I have acquired a basic working knowledge of medicinal herbalism. I am signing up for an 'official' diploma program. With such a skill, and with the growing interest in this area, I should be a.o.k. no matter if society as we know it crumbles or continues. My main concern, if society as we know it continues, is paying for college for the offspring. They are definitely worthy of any help I can give them, and they deserve a real shot at it.
Again, thanks so much for the accolades. They mean a lot to me on my little island.
Gold Dancer
(10/19/1999; 11:18:21 MDT - Msg ID: 16882)
Golden
The spot price of gold will be up tomorrow. Leg 3 will begin and be the same size as leg 1 or about $86. The Dec contract should reach $391. If not the gold market will reach $296 and the Dec $382.

I am holding long term so these gyrations don't conern me.
We are in a bull market. I am enjoying myself.

If one want's to buy, today is a good time. Maybe it will pay to wait. Maybe not.

Gold Dancer
CoBra(too)
(10/19/1999; 11:33:17 MDT - Msg ID: 16883)
Ashanti are "nuts"!
Or more to the point "Ashanti Nuts" is an old Austrian expression for peanuts.
Where are the good old days of down to earth peanut farmers becoming presidents of the US of A - don't we all feel a bit nostalgic for those days, when the average guy felt sympathy in fair view of the gigantic chores any US president is facing. We were able to "read his lips", a major feat, while not discounting Ron and Georgie's acomplishments at their respective shift in contributing to the the world's abandonment of communism, I feel the legacy of these leaders
are being betrayed today. It is "decroyable" that the high principles of former administrations have been squashed only to keep up the pretense of new and virtual paper wealth. It is also deplorable that the rest of the world was playing at "EMU" (couldn't resist, but mean ostrich), until, well until
they couldn't cope with it any longer. ORO, A, FOA and all at the forum have spelled out the eventual outcome, which I subscribe -mostly- to as well.

@Leigh - Thank you for your kind words (which I know I don't really deserve)- but we're a "global village" and as the saying goes, when AG utters his inimitable greenspeak every financial and political analyst picks at any crumbs left between the lines and will - ultimately - be proven wrong. To answer your question, yes any meltdown in the US $ and financial markets will have a definite impact on Europe and any other markets globally. This is another factor I would hope against hope for a gradual decline (maybe the PPT can prove its value in achievig this end, which I doubt). Anyway, the EU may survive this predicament in better shape, but by no means unscathd.

MK @ usagold mentioned the possibility of "Flight Lieutenant" Jerry Rawlins (Pres. of Ghana - ormer Gold Coast and the source of the British Gold Guinea) to nationalize Ashanti and/or all other gold mining activities in the country. IMO, there is no way to do that again, not only that it was done before and the results have led to the
ousting of the Communists at the Rawling led coup, which again led to the floating of minority equity in ASL -now almost 70% of the capitalization of Accra's Stock Exchange-. Gold production accounts for 40% of Ghana's exports - right after cocoa and don't forget Goldfileds Tarkwa Mine, now 30 moz Reserve/resource and counting, not including several smaller reserves and resources delineated by a host of international exploration and development co's. (wi'll send an -mail on this topic directly). - BTW-Ghana's commissioner of Mines was fired last friday on sketching rescue plans for ASL by himself - whithout consulting the gubbmint.

@ Coin Guy - it's so visible - isn't it?
Best CB2
Journeyman
(10/19/1999; 11:39:21 MDT - Msg ID: 16884)
Broken Oak @ Invisible Hand: Re: WHY GOLD HAD TO GO
Dear Broken, .................................................................................................................................................Good points in your Message ID# 16876! But your suggestion that the goldstandard was abandoned because there wasn't enough gold for large-scaleindustialization is the result of deliberate anti-gold disinformation. The goldstandard wasn't really "abandoned," it was killed, & for good reasons -- but notgood reasons for us "jus plain folks." For an explanation of the reasons I makethis claim, see Message ID# 16513 "WHY GOLD HAD TO GO" on 10/15/99. (Check theArchives section of this site.) ................................................................................................................................Some relevant excerpts: ........................................................................................................................................The united States grew and prospered on a gold standard for over a century withonly one hiatus during the Civil War. This would indicate, theoreticalobjections aside, that a gold standard is eminently practical and highlyconducive to economic growth, prosperity, and, propaganda to the contrary notwithstanding, stability. .......................................................................................................................................The gold standard was killed, not because it didn't work, but because thebankers and their cronies in the political cliques couldn't profit from gold asmoney as they could from paper money. The excuses normally cited to indict thegold standard, such as massive bank failures, etc. were greatly exaggerated, andin the context of the depredations caused by paper money, pale toinsignificance. The quality of such whinings can be deduced from the ultimateindictment against gold, which is no more than calling it names such as"barbarous relic." [SEE subsequent post, "BARBAROUS RELIC".] It wasn't thatthe gold standard didn't work; it worked too well, automatically protectingpeople's savings and making large banking institutions peripheral rather thancentral. Hmm! "Peripheral Banks." Has kind of a nice ring to it don't youthink? .........................................................................................................................................................In short there was not, as people commonly assume, a failure of the goldstandard, in fact the reason it was done away with is that it was too successfulat protecting people from currency depreciation ("inflation") caused by thebanker-government axis. ........................................................................................................................................Regards, Journeyman
TownCrier
(10/19/1999; 11:44:11 MDT - Msg ID: 16885)
Germany's Eichel Says Euro-11 Inflation 'Must Not Be Feared'
http://quote.bloomberg.com/pgcgi.cgi?T=markets_newsfeat99.ht=&ptitle=EMU%20Top%20Stories&touch=1&s=04904681f2e7da2406ebc8f309bee20fIn what has been the latest in a series of remarks from European Central Bank officials hinting at the possibility of a rate rise, Bundesbank President Ernst Welteke said today that the ECB is "ready to do its duty" to preserve low inflation in the euro economy.
German Finance Minister Hans Eichel said that countries which have adopted the euro must "maintain iron discipline" in fiscal policy, but that "what has happened with oil should not cause a change in the ECB's monetary policy."

Hmmmmmmm...makes you think he might have a little insight into the future, doesn't it?
JCS
(10/19/1999; 11:55:53 MDT - Msg ID: 16886)
Gold Dancer (10/19/99; 11:18:21MDT - Msg ID:16882)
Re: 3rd wave up, given the dynamics,IMHO, I think we'll see at a minimum 1.618x wave 1 or about $445, alternatively, 2.618x wave 1 or about $531. I am not expecting this overnight, and I think wave 3 will subdivide, so my guess is that it will complete over a 4-6 month period. This would give time for some washout among the margined positions that are in trouble. It could be that the entire cycle wave completes in that time frame; ie, 5 waves of a larger wave 1 up to $600+ over 4-6 months.
patrias
(10/19/1999; 11:57:00 MDT - Msg ID: 16887)
strad master - margin calls
excellent question! from my experience trading, once i come under margin call they might give me until the next day or my trade is closed out at the market. it seems awfully strange that the powers that be have allowed this much time for ashanti to cover their margin call. the pog would probably be over $500 if comex had required ashanti to cover their position. any others out there know more on this subject.

first time post for me, but i've been reading the forum for several weeks now. i'm getting quite an education about monetary systems. thanks all!
ORO
(10/19/1999; 12:06:05 MDT - Msg ID: 16888)
Broken Oak
The "pure" gold standard was run during the end of the period of the western world's greatest rise in production and living standards. This period also saw a powerful Britain being met by France Russia America italy Austria and Germany, as well as an emerging Japan. There was no way for any of these to predominate on their own, alliances were needed.
Note that Silver was still being used in one way or another during most of the growth phase. The ejection of silver from the monetary system was an intrusion by governments into the markets, an arbitrary decision. When the process was over, the world was ready for a depression because post WWI currencies were pegged to gold at unrealistic prewar levels: while before the war silver was still part of the official money supply, post war regimes did not have it as a part of their monetary system on a level with gold. In this way an artificial gold shortage was formed. Later, Germany's post Weimar return to the gold standard tightened the gold deficit further.
Free exchange rates of silver and gold monetary systems are conductive to rapid growth and stable prices. Interruption of these exchanges by governments seeking one advantage or another over others, or just being the plain stupid organizations that they are, was the source of the trouble in the post WWI gold standard.

See Mundell's links for a good analysis of some of these issues.
http://www.columbia.edu/~ram15/LBE.htm
http://www.columbia.edu/~ram15/grash.html
http://www.columbia.edu/~ram15/ABrettwds.htm

I will add that silver was hurt as a monetary metal not only because the metal was being pushed out by gold through government "fiat" but also because of the discovery of the enormous Mexican silver deposits that caused a doubling of production relative to gold production.

TownCrier
(10/19/1999; 12:09:21 MDT - Msg ID: 16889)
U.S. Consumer Prices Core Rate Rose 0.3% in September; Housing Starts Fell
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=blk&bt=blk&s=d8f5378551b8c5ff1497507f10893dd8Excluding food and energy (the most important staples of life!) the Labor Department's consumer price index's "core" rate rose 0.3 percent in September, totaling 2 percent higher on the year since September 1998--the lowest yearly increase in 33 years. HURRAH! Inflation is a thing of the past! It is so comforting to know that as we go to the fuel station for gas so that we can drive to the grocery store the prices encountered won't be a burden. No wait...we forgot they were referring to the "core" rate, which applies to things like yo-yo's, rubber bands, chia pets, and postage stamps.

Not surprisingly, stocks and bonds rose on this good news.
DD
(10/19/1999; 12:25:33 MDT - Msg ID: 16890)
survival
Hi All - Just a quick note & some observations.Scrappy - Wow! You sure have the right handle. I believe that life is not meant to "work out". It's more likely to be a series of tests in which we are given opportunities to handle adversity. Obviously, you've passed your tests with flying colors. You are undoubtedly a teacher for others. Maybe you should be the one handing out diplomas. Nice job Scrappy.One another note, I believe it is difficult to predict what is going to happen short term under the current conditions. However, there is one truth that will probably hold through out the coming crisis. People will do ANYTHING when their survival is threatened. Like a cornered rat, people become more irrational and dangerous when left with no escape. So, what will the shorts, BBs, leveraged speculators and US/dollar advocates do when everything starts to fall apart in earnest??? ANYTHING!! Oh, and don't forget the final fly in the ointment, Y2k. We're about 70 days away and anyone who thinks Y2k isn't going to have an adverse effect on global economies is either ignorant on in denial. The global computer system of systems, with its vitually infinate interconnects and effects, is what allows the current high viloscity of the global commerce. Can any say, "Sorry, we can't ship. Our computers are down."....or, "Our supplier's computers are down."....or, "Our customer's computers are down."...or, "Our factory is down." Looks like interesting times, No? Best, DD
Netking
(10/19/1999; 12:25:43 MDT - Msg ID: 16891)
Stock Market
This comment by Vronsky copied here for your info from our
"brothers in Gold" at Gold-Eagle;

The continuation of the ingredients that we have
identified as those that have preceded the crashes of
the past continued with Friday's 267 point decline.
Under current circumstances, those market indicators
that have become oversold are of little consequence as
panic takes hold of emotions and reality. We truly wish
this weren't so, but it is the way markets have always
worked. In the truest spirit of the market's propensity
to act in recurring patterns, it is indeed tracing out
almost the exact replay of past market meltdowns.

In a recent commentary written this past weekend by Dan
Ascani, President of the "Global Market Perspectives",
Dan points out some eerie similarities:

"Countdown to a crash: days #37 to #40 are likely to
bring a collapse;The market tends to remember
anniversaries. Thus, note the S&P 500 peak on July 20,
1999, exactly one year from the July 20, 1998 peak.
Note: The market also peaked at the time in July
1990 before it plunged into the October low that year;
Note also the Dow's August 25, 1999 peak, exactly 12
years from the August 25, 1987 peak. Taking this one
step further, both the 1929 and 1987 market crashes
occurred between the 37th and 40th market days from the
record high. Black Tuesday in 1929 occurred on the 40th
day, and Black Monday in 1987 occurred on the 37th
market Day;The 37th market day is October 18, 1999, and
the 40th market day is October 21, 1999." I would like
to point out that today is only the 39th "market day"
from the peak – but, I think you get the picture.

After probing below the 10,000 level on the Dow several
times Friday and yesterday, the Dow managed to bounce by
about 100 points by the closing bell. It just makes
sense for "some" buyers to emerge thinking this is the
appropriate level to attempt buying the dip,
especially as they have failed to learn NOT to front run
important economic reports like this morning's CPI
release. We think they are too early and still think
10,000 will give way, perhaps after the report. In any
event we are content for the moment NOT joining them
in trying are skills as Olympic Javelin catchers. As
seen on so many recent "seemingly" strong days, there
were only 11 stocks that went up for every 19 that went
down yesterday as the A/D Line remains in a virtual free
fall. Also, the OTC Composite played "catch-down"
to the Dow, dropping by another 43 points after last
week's early all time high, reversal, and major Buying
Climax (BC) by closing lower for the week. This is a
strong sign that prices may have seen their high for
quite some time to come.

The probing of the psychological 10,000 level has
already satisfied our "minimum" expectation for the
entire 5 wave decline that we had forecast. This does
not mean that within the minor 5th wave that it can't
decline further, to within our target zone of Fibonnacci
support between 9691 and 9840. Should support at 10,000
give way, without fulfilling the prophecy of an all out
crash, I would expect the target to be realized. To
confirm that the 5th wave ended by falling short of this
target, it would have to close above resistance at
10,350. Higher resistance is above 10,700. A decline
below 9970 would usher in further
selling toward our lower price objective.

(market comment courtesy of Mitch Harris)

Mitch Harris
MARKET TREND REALITIES, Reality Check Update

RossL
(10/19/1999; 12:26:43 MDT - Msg ID: 16892)
Gold standard
http://www.mises.com/journals/scholar/Blockgold%2EPDFHere is an essay on the gold standard and commodity money that recently showed up on the Mises page (http://www.mises.com/) The link above is requires PDF reader.

Radical Privatization of Gold: A Critique of Friedman, Mundell, Hayek, and Greenspan
by Walter Block ( University of Central Arkansas )
phaedrus
(10/19/1999; 12:51:05 MDT - Msg ID: 16893)
stock rally betrayed by bonds
After rallying earlier this morning on the benign CPI, bonds
are now down more than half a point, ten minutes or so
before they close. This is bad for Wall Street and a clear
indication that this stock rally is bogus.

As the WSJ points out, bond traders are kind of like the
canary in the coal mine- they are among the first indicators
that things are going sour- and they are clearly not
rejoicing over this CPI number.

The big stock rally has been chopped in half so far- but as
for whether we will finish up or down on the day, I don't
really care. Bonds are telling the story that Wall Street
is trying to mute.

If we do finish negative, though, after such a big rally,
it's not going to do much for the stature of Abby Joseph and
company.

Gold Dancer
(10/19/1999; 12:56:27 MDT - Msg ID: 16894)
JCS--Gold Predictions
Your projections for gold are fine with me but I think a little optimistic over the shorter term. I really think it will take a while for the public to catch on and I think there are too many shorts and mining companies who would like to see a slower rise.

In the end, the slower the rise the higher the gold stocks will go. They will need several quarters of rising earnings to get Wall Street and the public interested.

That's not only my feeling, that's what the market is telling me. Drooy still under $2!!! Can you believe that?
It is going to take another 12 to 18 months to get that where it belongs: in the 20's.

Gold Dancer
The Scot
(10/19/1999; 12:59:05 MDT - Msg ID: 16895)
Scrappy
Your posts today have lifted my spirit. It is wonderful to know that there are still those out there with your determination. I cannot advise you on golden matters for I am a novice myself. I am curious about Medicinal Herbalisim, could you tell me more about it. So we don't take up space here, e-mail me at: scot@wans.net
Sincerely, The Scot
AREM
(10/19/1999; 13:12:26 MDT - Msg ID: 16896)
golden (10/19/99; 09:22:23MDT - Msg ID:16864) Trying to Learn
I share your confusion about what's happening on the gold market,and I bet that a lot of others are equally confused. There are so many words and so many predictions about what is going to happen "any day now". Too much hype. The abreviations like WTO and SWAG are confusing too. Please people, spell them out. Brevity is a virtue, but not with abreviations.
Yellin' of troy
(10/19/1999; 13:12:55 MDT - Msg ID: 16897)
Aragorn III -- CBs and their paper
I have so far only been able to read your response to me once through quickly, but for now, two points are what stick in my mind as most needing a reply. For greater computer safety I'm going to do them separately. This is the first.

You say there is no reason for a CB to sell its gold, even at a high price, because it has no use for the paper it would get, which it can simply emit on its own and use to buy foreign currencies or whatever it needs. Would you say the same if the great price to be had were for something other than gold, something blatantly non-monetary? Imagine you are the chairman of the CB. One of its assets is the Chairman's Car, which was bought for $50,000 and is now old enough that you have been thinking of trading it in, you expect for about $15,000. (If you don't like the $ units, substitute your favorite or make one up.) You get a letter from Honest Abby's Used Cars, offering $100,000 for the Chairman's Car. It appears that Abby has a clientele who thrill at driving cars formerly owned by celebrities, and you, Mr. Chairman, are a popular celebrity. Knowing what policies you are planning and what tragedies to fear, you suspect you will soon be hated, so it's now or never. Well, there are no doubt arguments against such a sale, based on, say, questions of dignity or SOP. But wouldn't it sound very strange to tell Abby, or hear from your colleagues, "The Bank never sells anything, in fact we've decided just to junk the Car rather than do the usual trade-in -- all that paperwork is no fun, and we don't need the money, you know, we can just print it"? Is gold so different? I assert that it is perfectly plausible to sell the Car, or the gold, because it isn't true that the Bank can issue its paper money in any amounts with impunity. Issuing more money will cause more inflation. The Bank may not mind some inflation -- its policy may be anything from No More Money through Stable Prices to the Keynesian Limit --, but it *has* a policy, which it regards as optimal (for whatever political or professional or patriotic reasons), and whatever that policy is, issuing more of our $s every time we need some of their Afros or Fiats is going to upset it. Even though the Bank does not exist simply to maximize profits, snatching a profit when the golden opportunity presents is a useful tactic toward its mission. For the more wealth the Bank has, the more flexibility and ammunition it has for whatever interventions and bailouts it chooses to engage in. As an analogy, consider the Widget Monopoly. The monopolist produces fewer widgets and sells them at a higher price than a competitive market would and thereby makes a monopoly profit. But hardly an infinite profit. And when it comes to ordinary business decisions -- Should we offer a red model? a longer warranty? pay our vice presidents more? --, the considerations and strategies that will maximize profits are the same as for a non-monopolist. An issuer of paper money is a monopolist in the money, "producing" much less of it, at a much higher price, than marginal-cost tactics would dictate. But the resulting "profits" don't equate to a perfectly free hand, and when it comes to sideshows like the overpriced gold or the Chairman's Car, there is no reason to depart from Generally Accepted Greedy Principles. And once this is realized, the fact that, as you noticed, CBs aren't far from the perfect logicians is not a stabilizing influence.
Phos
(10/19/1999; 13:14:57 MDT - Msg ID: 16898)
A minute of silence on the 60th anniversary
Sorry for the length of this post. Any of this sound familiar? Blame the Mobs (see December 19th headline).
FISHER=ABBY C, etc.

Headlines from 1929 "The New York Times"
==========================================
Wednesday, July 3, 1929, Page 31, Col. 5
SEES STOCK RISE JUSTIFIED
Moody's Says Returns Are In Line With Industrial Activity
==========================================
Friday, September 6, 1929, Page 1, Col. 7

STOCK PRICES BREAK ON DARK PROPHECY
Drop In Hectic Last Hour As Babson's Prediction Of A Big Slump Is Printed
Page 12, Col. 2
BABSON PREDICTS 'CRASH' IN STOCKS
Says Wise Investors Will Pay Up Loans And Avoid Marging [sic] Trading
----------
FISHER VIEW IS OPPOSITE
Declares No Big Recession In Market Is Due, Because Inventions Are Adding To Health
==========================================
Wednesday, October 2, 1929, Page 5, Col. 1

HAZLEWOOD WARNS BANKERS ON CREDITS
He Tells Convention Tendency is to "Pass the Buck" On Market Loans to Reserve Board
----------
CALLS THEM RESPONSIBLE
Not Reserve System's Duty to Assume Burden, Says President at San Francisco Meeting
----------
CONFIDENCE IS UNSHAKEN
But He Declares That Some Institutions Are Overloaded At The Present Time
==========================================
Sunday, October 13, 1929, II, Page 7, Col. 2

STOCK PRICES WILL STAY AT HIGH LEVEL FOR YEARS TO COME, SAYS OHIO ECONOMIST
==========================================
Wednesday, October 16, 1929, Page 8, Col. 4

FISHER SEES STOCKS PERMANENTLY HIGH
Yale Economist Tells Purchasing Agents Increased Earnings Justify Rise
----------
SAYS TRUSTS AID SALES
------------
AYRES SEES MARKET AS 'CREEPING BEAR'
Fall of Prices Began Months Ago, He Says, but Was Hidden by Rising Averages
----------
DECLINE IN AUTUMN USUAL
Recession This Season About 14 Per Cent, Against Normal Drop of 9, He Reports
----------
MITCHELL ASSERTS STOCKS ARE SOUND
Banker, Sailing From Europe, Says He Sees No Signs of Wall Street Slump
==========================================
Tuesday, October 22, 1929, Page 24, Col. 1

FISHER SAYS PRICES OF STOCKS ARE LOW
Quotations Have Not Caught Up With Real Values As Yet, He Declares
----------
SEES NO CAUSE FOR SLUMP
Economist Tells Credit Men that Market Has Not Been Inflated, But Merely Readjusted
==========================================
Wednesday, October 23, 1929, Page 1, Col. 4

STOCKS GAIN SHARPLY BUT SLIP NEAR CLOSE
Vigorous Recovery Marks Most of Day and Many Issues Show Net Advances
----------
MARKET GLOOM LESSENED
Banking Support, Ease of Money and Mitchell's Optimistic Statement Help Rally
==========================================
Thursday, October 24, 1929, Page 1, Col. 1

PRICES OF STOCKS CRASH IN HEAVY LIQUIDATION, TOTAL DROP OF BILLIONS
PAPER LOSS $4,000,000,000
2,600,000 Shares Sold In The Final Hour In Record Decline
----------
MANY ACCOUNTS WIPED OUT
But No Brokerage House Is In Difficulties, As Margins Have Been Kept High
----------
ORGANIZED BANKING ABSENT
Bankers Confer On Steps To Support Market - Highest Break Is 96 Points
----------
SAYS STOCK SLUMP IS ONLY TEMPORARY
Professor Fisher Tells Capital Bankers Market Rise Since War Has Been Justified.
----------
ECONOMIC REASONS CITED
----------
"Public Speculative Mania," He Declares, is Least Important Cause of Price Inflation.
==========================================
Friday, October 24, 1929, Page 1, Columns 5-8

WORST STOCK CRASH STEMMED BY BANKS;
12,894,650-SHARE DAY SWAMPS MARKET;
LEADERS CONFER, FIND CONDITIONS SOUND
----------
FINANCIERS EASE TENSION
LOSSES RECOVERED IN PART
Five Wall Street Bankers Hold Two Meetings at Morgan Office
Upward Trend Start with 200,000-Share Order for Steel
----------
TICKERS LAG FOUR HOURS
Thousands of Accounts Wiped Out, With Traders in Dark as to Events on Exchange
==========================================
Saturday, October 26, 1929, Page 2, Col. 5

CAUTION ADVISED BY STOCK BROKERS
Letters to Clients Warn Against Hysterical Selling and Favor Some Buying
----------
TONE IS OPTIMISTIC
Narrow Trading is Predicted for a Time Till the Market Recuperates
==========================================
Tuesday, October 29, 1929, Page 1, Col. 6

STOCK PRICES SLUMP $14,000,000,000
NATION-WIDE STAMPEDE TO UNLOAD;
BANKERS TO SUPPORT MARKET TODAY

Sixteen Leading Issues Down $2,893,520,108;
Tel. & Tel. and Steel Among Heaviest Losses
----------
PREMIER ISSUES HARD HIT
Unexpected Torrent of Liquidation Again Rocks Markets
==========================================
Wednesday, October 30, 1929, Page 1, Columns 6-8

STOCKS COLLAPSE IN 16,410,030-SHARE DAY,
BUT RALLY AT CLOSE CHEERS BROKERS;
BANKERS OPTIMISTIC, TO CONTINUE AID

240 Issues Lose $15,894,818,894 in Month; Slump in Full Exchange List Vastly Larger
==========================================
Friday, November 1, 1929, Page 3, Col. 3

SISSON DECRIES INFLATION
Lays Crash to Small Investors' Lack of Experience
==========================================
Thursday, December 19, 1929, Page 36, Col. 1

LAYS STOCK BREAKS TO MOB PSYCHOLOGY
W.W. Price Says Crashes Will Come So Long as Facilities for Speculation Exist.
----------
ARMSTRONG IS OPTIMISTIC
Consul General Tells British Chamber England Has Weathered the Worst of Industrial Crisis
TownCrier
(10/19/1999; 13:22:27 MDT - Msg ID: 16899)
Selected Excerpts of Today's Remarks by Fed Chairman Alan Greenspan
http://www.bog.frb.fed.us/BoardDocs/speeches/1999/19991019.HTMDo efficient financial markets mitigate financial crises?
Before the 1999 Financial Markets Conference of the Federal Reserve Bank of Atlanta, Sea Island, Georgia
October 19, 1999

Before the crisis broke, there was little reason to question the three decades of phenomenally solid East Asian economic growth, largely financed through the banking system. The rapidly expanding economies and bank credit growth kept the ratio of nonperforming loans to total bank assets low. The failure to have backup forms of intermediation was of little consequence. The lack of a spare tire is of no concern if you do not get a flat. East Asia had no spare tires.

Banks, being highly leveraged institutions, have, throughout their history, periodically fallen into crisis. The classic problem of bank risk management is to achieve an always-elusive degree of leverage that creates an adequate return on equity without threatening default.
The success rate has never approached 100 percent, except where banks are credibly guaranteed, usually by their governments, in the currency of their liabilities. But even that exception is by no means ironclad, especially when that currency is foreign.
...
In dire circumstances, modern central banks have provided liquidity, but fear is not always assuaged by cash. Even with increased liquidity, banks do not lend in unstable periods. The Japanese banking system today is an example: The Bank of Japan has created massive liquidity, yet bank lending has responded little.

We must continually remind ourselves that a financial infrastructure is composed of a broad set of institutions whose functioning, like all else in a society, must be consistent with the underlying value system. On the surface, financial infrastructure appears to be a strictly technical concern. It includes accounting standards that accurately portray the condition of the firm, legal systems that reliably provide for the protection of property and the enforcement of contracts, and bankruptcy provisions that lend assurance in advance as to how claims will be resolved in the inevitable result that some business decisions prove to be mistakes. ... But the development of such institutions almost invariably is molded by the culture of a society. Arguably the notion of property rights in today's Russia is subliminally biased by a Soviet education that inculcated a highly negative view of individual property ownership. The antipathy to the "loss of face" in Asia makes it difficult to institute, for example, the bankruptcy procedures of Western nations, and in the West we each differ owing to deep-seated views of creditor-debtor relationships.
...
Nonetheless, the competitive pressures toward convergence will be a formidable force in the future if, as I suspect, additional forms of financial intermediation are seen as benefiting an economy. Moreover, a broader financial infrastructure will likely also strengthen the environment for the banking system and enhance its performance.
...
It is noteworthy that the financial systems of most continental European countries escaped much of the turmoil of the past two years. And looking back over recent decades, we find fewer examples in continental Europe of banking crises sparked by real estate booms and busts or episodes of credit crunch of the sort I have mentioned in the United States and Japan. ... Such institutions rarely exhibit the dynamism and innovation that many private banks have employed for their, and their economies', prosperity. Government participation often distorts the allocation of capital to its most productive uses and undermines the reliability of price signals. But at times when market adjustment processes might have proved inadequate to prevent a banking crisis, such a government presence in the banking system can provide implicit guarantees of resources to keep credit flowing, even if its direction is suboptimal. ... In short, there is some evidence to suggest that insurance against destabilizing credit crises has been purchased with a less efficient utilization of capital.
...
The rapidly developing international financial system has clearly intensified competitive forces that have enhanced standards of living throughout most of the world. It is important that we develop domestic financial structures that facilitate and protect our international financial and trading systems, a process that will require much energy and commitment in the years ahead.
CoBra(too)
(10/19/1999; 13:30:17 MDT - Msg ID: 16900)
Give or take 10 years Phos...
Dear Leigh - TC's summary of today's greenspeak gives a better answer to your Q. @ Europe.
Ineresting day - take care CB2
USAGOLD
(10/19/1999; 13:32:36 MDT - Msg ID: 16901)
test
test
Leigh
(10/19/1999; 13:40:24 MDT - Msg ID: 16902)
Alex Haley / Arthur Hailey
You guys, I apologize for giving out dumb information. Last night when I wrote the post about Novelist Hailey ("Airport"), I got his first name wrong. But it turned out to be the correct first name of Novelist Haley ("Roots").

This is the right information:
- Arthur Hailey wrote "Airport," "The Moneychangers" etc. -- he's a loyal GATA supporter.
- Alex Haley wrote "Roots" -- he died a number of years ago.

Sorry for the mixup.
Gandalf the White
(10/19/1999; 13:42:48 MDT - Msg ID: 16903)
Ok the "TEST" was fine, USAGOLD
NOW Speak!
<;-)
Yellin' of troy
(10/19/1999; 13:44:16 MDT - Msg ID: 16904)
Aragorn III -- gold as concept money -- part 1/2
I'm glad to see you and I agree that "all true money is concept money." And believing that, I will certainly not deny that gold could in principle serve as money even at some arbitrarily high price, *given the right historical path*. If gold were money, still more if it were the only money in town, if it had been so for a long time and seemed natural and unquestionable, if the rise in its price had happened slowly enough not to make it unsuitable as money, then by now the price might be sky-high without inducing anyone to abandon the golden money, any more than they in fact abandon King Dollar. Gold would be stable concept money, and would be on the whole (despite some flaws) excellent money. But we aren't in that situation, and won't be any time soon. In fact, I think it would be difficult (for reasons I'll explain in a later post) even to give gold a running start by introducing it as money alongside the paper stuff. If gold is to monetize, it will be in a crisis atmosphere, with the dollar failing or failed. And the question is what exactly the public will desert, under what description will they lose faith in the dollar. Will it be only the dollar itself (but the New Dollar, the "Bill," is a great idea), or paper money (but beads are worth a fortune as we seek our roots), or concept money in general? My assumption was that having been once burned, people will want to see "real value" and will adopt gold as money only if it offers security in the form of the low price ratio I discussed. This, it is now clear, is where we disagree. I'll take your word for it that no one on this Forum has offered that as the reason why gold will be money, but it hardly matters what people here think -- we're a small, self-selected, unrepresentative bunch. What matters is how everone else thinks and will react. Forecasting waves of mass opinion ain't easy, and I for one certainly can't claim to be infallible, having guessed wrong which microcomputer platform and operating system would catch on. But we must do our best, so let's continue. As I now understand you, you and the other proponents of the gold moon shot believe gold will be welcomed and accepted as money (at any price) simply because it is (1) traditional money, and (2) good money, in the sense that its inherent permanent features, as distinguished from its current financial ones, its use-value and price, make it excellent for use as money.

You argue first that gold has been money longer than the dollar, so it will be easy for us to "get back on the bicycle." But those centuries of gold money are the wrong time scale. All my family back to Zeus have been great bicyclists, but as a child I was contrary and refused to learn to ride, preferring the little red rocket-powered wagon I tantrumed Uncle into buying me. I'm almost sure the family bike is sitting in my attic somewhere, and with today's prices for rocket fuel I sometimes think about taking it down. But I can't ride it. I inherited only the bike, not the neuromuscular habits. What counts is not whether our ancestors thought gold was money but whether we do. Most Americans today have no experience whtaever of gold as money. To have the faintest recollection of gold money you have to be about 70, and more like 80 to recall it really clearly. And most people don't know much history, let alone monetary history. As several posts here have described, Joe Average does *not* think of gold coins as money. (And my personal experience is that the people well up in their 70s, who might know better, are the first to dismiss talk of gold. They still worship FDR.) And we have now had years of anti-gold propaganda. Yes, there is a mystique, as evidenced by the "gold standard" metaphor (and I'd be the last to deny that metaphors are often very revealing), but is that enough? Look at the countries that have already come down with the Asian Contagion. By now, quite a number of stock markets and economies and currencies have tanked, many in societies with much stronger gold traditions than ours, and thus with gold much more ubiquitous and immediately available to get the ball rolling. And in these crashes, gold has done very well, as an investment or insurance policy. Millionaires without gold have turned into paupers while people with gold escaped. If ever there was a moment for gold to shine, wasn't this it? And these events happened long enough ago to allow not only an initial panic but also some reflection and experimentation, time for economic and social and political dynamics to play out. Yet, as far as I know -- I'm no expert, correct me if I'm wrong --, not one of these peoples has abandoned paper money for golden. What makes you think we will?
phaedrus
(10/19/1999; 13:48:28 MDT - Msg ID: 16905)
Central Banks reason to sell gold
Just wanted to give a quick response to this point, which came up in an earlier post:

"There is no reason for a CB to sell its gold, even at a high price, because it has no use for the paper it would get, which it can simply emit on its own and use to buy foreign currencies or whatever it needs."

Not sure who's supporting this argument, but I'd like to point out that it is very simplistic. CB's can print all the money they want, yes, but they cannot do it free of charge. By rolling out the printing presses, the CB weakens the currency. If I print dollars to buy Yen, I am weakening the dollar by injecting more dollars into the system. This is inflationary.

Having said that, there is clearly a valid reason for CB's to sell gold: in an effort to directly strengthen their currency. For example, let us say that Switzerland sold off a portion of its gold reserves to the Japanese, then used the Yen they received to buy back a large portion of the Swiss Francs in the global market. This would have the net effect of directly strengthening the Swiss Franc. In otherwords, a central bank with strong gold reserves has the luxury of being able to strengthen its currency in a pinch without having to slow down its economy by raising interest rates or taxes or whathaveyou. The ability to print paper money is NOT a free and clear option because it erodes the currency.

The best time to do sell gold in an effort to strengthen the currency, obviously, is when the gold price seems to have peaked (or, alternatively, when your financial system is in a serious bind). And the price of gold WILL peak again, eventually, though as for where it will do that no one knows. But the whole reason gold reserves are seen as desirable is because of their ability to return value to a depreciating currency.

The logic behind CB's keeping gold is so that they can USE it in times of financial crisis. If there were never any need to use it it would be dumb to have it in the first place.
TownCrier
(10/19/1999; 13:58:47 MDT - Msg ID: 16906)
Hear ye! Hear ye! An update at USAGOLD!
http://www.usagold.com/wgc.htmlGrab your torch and wander down the hallway to the doorway listed above wherein you will find THIS WEEK IN GOLD, the latest weekly gold market commentary provided courtesy of the World Gold Council. Among other news, you'll learn that British assay offices hallmarked 6,495,547 gold items during Q3-1999, an increase of 5.7% over the third quarter last year.
Journeyman
(10/19/1999; 14:18:00 MDT - Msg ID: 16907)
BARBAROUS RELIC?? Re: Message ID# 16513
"If you have a fiat currency, which is what everyone has in the world --- . . .Central banks of necessity determine what the money supply is. If you're on agold standard or other mechanism in which the central banks do not havediscretion then the system works automatically. The reason why there is verylittle support for gold standard, you know as well as I in the current context,is the consequences of those types of market adjustments are not considered tobe appropriate in the 20th and 21st century. I'm one of the rare people whoshare a nostalgic view about the old gold standard as you know, but I must tellyou I am in a very small minority amongst my colleagues on that issue." -AlanGreenspan, to US House Banking Committee, July 22, 1998. . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . .By the late 1970s [after Nixon "closed the gold window"] the world had seen anoverall price increase of roughly 400 percent. -Joel Kurtzman, THE DEATH OFMONEY, (New York, NY: SIMON & SCHUSTER 1993), p. 70. . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . ."It takes $4.92 today to buy the same amount of goods that could be bought for$1.00 in 1960." -CNN Factoid, 12 Aug. 1993. . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . .The ruble is sharply down {vs. the dollar, }from 17 to the dollar to about 20 tothe dollar. This is due to confusion over the central bank's plans to printrubles in order to redeem government debts and bonds and fears of the resultanthyper-inflation. Russian prices are up 43% since September 1. -CNBC, 18 Sep1998, ~8:33:04 AM EDT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .- Seagate Technologies, a large disk-drive manufacturer, takes $63 millioncharge, essentially for speculating on foreign currencies, particularly hedgingon the Thai bhat and the Malaysian ringgit. -CNBC, 10-16-97, 5:57pm EST. . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .- Seagate will cut 10% of its work force worldwide. This includes 7200 jobs inAsia, 1300 jobs in the US, and 1400 jobs in Ireland. -CNBC, 15 Jan 1998,~6:35:24 PM EST. . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . .- Philippine Airlines, Asia's oldest, will cease operations and go out ofbusiness next week after 57 years in the air. A pilot strike and a $2 billiondollar debt brought on by the Asian economic slow-down are cited as the reasons.-NWI, 19 Sep 1998, ~2:10:56 PM EDT. . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .- The British Colombian economy, predicted to grow 2.8% in 1998, because of theAsian crisis, is now expected to grow only 1.8%, or ~36% less. -NWI, 16 Feb1998, ~ 3:37:03 PM EST. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .- The World Bank reports that [as a result of the Asian currency crisis] thenumber of poor in Asia (Malaysia, Thailand, Indonesia, and the Philippines) maydouble to 90 million over the next three years, and there is a desperate need toreduce the prices of basic supplies [food, etc.]. -NWI, 30 Sep 1998, ~5:51:13 PMEDT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . ."Whenever you have a currency fall as sharply as the [Indonesian] rupiah hasfallen, which is approximately 80%, and you import any significant amount ofmaterials or foodstuffs, which they do, then clearly the domestic price of manyof the things which they import obviously skyrockets ...there are increasingconcerns of food shortages and food prices which are too high for those averageIndonesian citizens to afford." -Alan Greenspan, Semi-annual Humphrey-HawkinsTestimony to US House, July 22, 1998, 11:45am . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . .The [Indonesian] people are angry about an inflation rate that's hit 40% amonth. Some basics are rising even faster: Gasoline has soared 70% the past twoweeks; rice has doubled in the same period. "Who can afford to live, let aloneeat, here anymore?" said Mozes, a 43-year [old?] accountant. -"Economic despairturns peaceful protests violent" by James Cox, USA TODAY, FRI./SAT./SUN., MAY15-17, 1998, COVER STORY, pg. 1. . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .- There's now a shortage of imported drugs in Indonesia because foreign drugcompanies won't extend credit to Indonesian hospitals and doctors. As a resultof this and other side-effects of the Asian economic crisis, the cost of manymedical procedures has risen by 500%. Many Indonesians can't afford this, andsome are paying with their lives. -NWI, 20 Feb 1998, ~1:55:50 PM EST. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . .Eight-thousand (8,000) Idonesians, half of them children, now sift through thegarbage dump outside Jakarta from dusk to dawn, searching for food and goods.This is a direct result of the Asian economic crisis, and if it continues, thedump may become Jakarta's fastest growing suburb. -NWI Up Close, 16 Aug 1998,~1:56:35 PM EDT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . .- Most of the Asian tigers are now creating money at the rate of ~20% since thebeginning of the crisis. This results in inflation and will further devaluethese currencies. This is a result of prompting by the IMF. The result is thatthe workers' salaries and the people's savings are decimated [by inflation].This results in various forms of civil and political unrest, and if thiscontinues, we'll see more. -Lawrence Kudlow, -CNBC, 8 Jan 1998, ~9:11:50 AM EST.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .- The Indonesian currency lost 25% of its value overnight. Indonesian stockswere off 12%. Indonesians stripped the supermarket shelves, buying everything insight, because of expectation of price increases. -CNBC, 8 Jan 1998, ~9:02:12AM EST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . .JAKARTA, Indonesia -- "As the roof of a blazing central Jakarta police stationcaved in a few yards away, rioters roared their approval and a shop owner namedJoko broke into a grin. This makes me happy. I support it," he said, whilenervously declining to reveal his full name. ...Demonstrations that began twoweeks ago with university students shouting for democracy have turned into riotsdriven by a frustrated and rapidly expanding population of poor people who can'tafford many of life's basic necessities. ...it's estimated that between 8million and 20 million people out of a population of 200 million have lost theirjobs since last fall. -"Economic despair turns peaceful protests violent" byJames Cox, USA TODAY, FRI./SAT./SUN., MAY 15-17, 1998, COVER STORY, pg. 1. . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .-Russian inflation is 67% this month, which makes it almost impossible foraverage Russians to survive. 100,000 Russians in Moscow will lose their jobs inthe next two months, and that's just in the financial sector alone. -NBC EveningNews, 3 Oct 1998, ~6:36:11 PM EDT . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .Government price hikes sparked a week of riots and demonstrations throughoutYemen that left more than 50 people dead in June, reports Faysal Makram in theSaudi-owned Al-Hayat of London. -WORLD PRESS REVIEW, SEPTEMBER 1998, p. 24. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .- Ecuador devalued it's currency today. -CNBC, 14 Sep 1998, ~4:54:32 PM EDT. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .- Riots break out against the results of Ecuadorian Government financialreforms. -CNNI, 3 Oct 1998, ~1:51:01 PM EDT. . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . .etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . .So, Mr. Greenspan, if "the consequences of those types of market adjustments[caused by a gold based, thus "automatically controlled" trade unit] are notconsidered to be appropriate in the 20th and 21st century," how do yourcolleagues feel about the above consequences of the market adjustments caused bypaper/megabyte trade units? Are THESE market adjustments considered to beappropriate in the 20th and 21st century? Which is the "BARBAROUS RELIC," goldor paper/megabyte money?. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . Regards, Journeyman
Yellin' of troy
(10/19/1999; 14:24:07 MDT - Msg ID: 16908)
Aragorn III -- gold as concept money -- part 2/2
Then is gold simply so wonderful as money that everyone will have to realize it? But actually, it's not; in most ways paper is at least as good, even better. In comparison to today's paper, gold has only one great virtue: It's hard to fake, to manipulate, to politicize, to cheat on, to dilute. It's almost pure free-market money, untamed by government leash, heedless of our masters' voices. A "vote with your fingers" for gold is a vote against Big Government, a vote for the invisible hand. But Americans (and not alone) consistently vote *for* Big Government, rhetoric to the contrary. And this is even more true in crisis eras, when sound money especially comes under attack. The Great Depression gave us gold confiscation and the New Deal. WWI brought forth censorship, Prohibition, and the Red Scare (and lynchings). The Civil War gave us Greenbacks and the Legal Tender Cases, plus a draft and military rule and purely political suspension of habeas corpus. The Revolutionary War gave us "not worth a continental" and confiscations and "debt relief" and repudiations. When people hurt, they do not look for an invisible hand to kiss, they run to Big Brother and shriek for relief. And they look for villains, scapegoats. And in the popular mind, gold has not escaped associations with the traditional villains: the Money Power, New York, greedy speculators, fat cats, bankers. "You shall not crucify mankind upon a cross of gold" didn't actually win the election, but it sure got a lot of votes, and that was in the days when gold was familiar and had plenty of political support. We can all hope that this time will be different, but I'm not holding my breath. The bull market in politics has not yet been broken. And if it *is* broken, or if people simply want sounder money, there will still be no urgent need for gold (though it would help in the longer run, by guarding against backsliding). The dollar doesn't *have* to be run irresponsibly; as I said in some previous post, the problem with government money is politics, not economically inevitable. And we do live in a demeocracy. If most Americans really wanted sound money, the dollar would be sound, Congress would see to it. You (or someone else?) dismissed the possibility of a money issuer -- though actually I wasn't speaking particularly about dollars or debt money or government money -- shrinking supply to match demand, on the ground that the pain would be too great. Depending on how it's done I'm not so sure about that, but in any case, the pain from a shrinking money supply is nothing compared to the pain of a complete change in the monetary system, especially to one that will take away our codeine for good. What you are predicting is that people will choose in the shops the very things they refuse at the polls, and in a way much more irrevocable than they could manage at the polls. If we put Ron Paul in the White House we could change our minds in a few years, but if we depose the dollar and put gold on the monetary throne, there's no easy going back.

People do pay more attention and make better decisions and sometimes face very different incentives in their private affairs than in the voting booth, but I don't offhand see this as one of those cases where individual and collective choices will differ. A monetary system is a public good, and when you decide what money to accept or demand you aren't just considering your own preferences, you're betting on what others will do. Adoption of a new money is always, to a large degree, a collective phenomenon, even if not exactly "political": it is a "social" choice, and much affected by whatever organization is available. And the usual organization that people rely on for these things is *government*. Politics might actually be fed by the facing of such an important social choice. It's true that people's influence in the money decision may differ from their political influence; businessmen will probably be very important, since that's where the transacting is. But I know of no broad class in society that is gold-oriented; the people for whom gold coins have chocolate inside come from all walks of life. And yes, the people who had gold ahead of the crisis will have gained wealth and maybe influence compared to their neighbors, but that's a one-shot event, and several times a very small fraction is still a very small fraction. There may be other ways -- Is there an organization of gold activists who could pop up on street corners everywhere at the right time? Or perhaps there is some mechanism for a golden contagion of pandemic proportions, some way a small nucleus of gold bugs could expand gradually but swiftly by rational individual decisions. But nothing comes to mind. What I want to see from this Forum is some detailed explanation of exactly *how* gold might become money. My lack of imagination isn't conclusive, but it's all I've got at the moment.

Once again we must face the possibility of doing it through CBs. They do know history. But they have also spent decades bashing gold. And they are basically just trying to bolster their currencies and maintain political support at home, and both of these depend on public perceptions. If gold isn't money to the hobbit in the street, why should CBs value it? Why install a money whose claim to fame is that it will fetter them and their cronies?
Netking
(10/19/1999; 14:34:18 MDT - Msg ID: 16909)
Crash alert update
http://www.wwfn.com/crashupdate.htmlUpdated link herewith.
NZ's market has just opened for Wednesday & up about 1.25%.
SteveH
(10/19/1999; 14:36:03 MDT - Msg ID: 16910)
repost
www.kitco.comDate: Tue Oct 19 1999 16:27
LGBee (Allen / Kiwi, Who made the following statements last week?) ID#269409:
Copyright � 1999 LGBee/Kitco Inc. All rights reserved
Take a guess....


The analysts who call the current retraction "healthy" are correct. In a low inflation era, you can not have an equity market rising
exponentially 20% annually with no one paying the piper. It becomes an unsustainable bubble, where valuations no longer have
meaning, and folks are borrowing to buy stocks.

When the peak of such a buying bubble frenzy is reached, and the Ponzi scheme becomes unsustainable by new buyers, and
monetary expansion, the bubble bursts with a horrific collapse that drags the entire economy downwith it, into massive recession.

Think about this. The growth of households "playing the market" has tripled in the past decade in the U.S. In other developed
countries it has doubled. At the same time, U.S. personal savings rates are at all time lows, debt ratios are at all time highs.

There is a consumer buying frenzy going on based on the new "paper" wealth everyone feels they have, due to their market gains,
and a strong economy. This puts the economy, and it's healthy expansion, in precarious posiiton, subject to massive collapse, in the
event of a burst bubble market.

A correction now, and a pull back to more rational valuations, is much preferable to a final blowoff push to the top, followed by an
all out collapse, such as we saw in 1929. Yes, much has changed since 1929, and we are nowhere near such a fisaco at this point,
due to smarter monetary policy, a FED willing to loosen as well as tighten, a new high tech. economy, etc etc. This is why a bear
market is not coming to the U.S. economy, a this point IMHO.

However, ironicaly, the greatest threat to the market's long term health, is for the market to move up too much too fast, based on
"borrowed" money, expanded M3 money supply ( currently expanding at 10% plus ) and derivitaves play, at all time highs. WHen
these margin and derivitaves buyers are forced to sell to cover loss positions, the collapse can be horrific.

A pull back now prevents this scenario, from being an uncontrolled collapse, and instead we have a correction followed by
resumption of the bull market, we have all come to take for granted.

Keep in mind, from 1959 to 1980, the stock market essentially made ZERO gains! Investors today have forgotten that the market
isn't ALWAYS a great place make gains, EVEN IN THE LONG RUN, if the economy doesn't support those gains. ( Think how
much whining Lafayette would have been doing during that 20 year period of no gains!!! )

The market does not ALWAYS move up, and if it does so too sharply in a period of no inflation, using borrowed funds, there will be
a piper to pay, I can assure you. And it won't just be investors paying that piper.
Yellin' of troy
(10/19/1999; 14:36:16 MDT - Msg ID: 16911)
Goldspoon -- more horse sense
It is becoming clear to me from this Forum that one of the main things gold has going for it is the sheer mystique, the aura of magic. To a lesser degree, silver shares that. Platinum does not. I'm not sure why, maybe it's too dull-colored, or too industrial, or too new. And it used to be far worse; people had plenty at hand, but refused to stake their claims, threw it away as waste and nuisance. But what a horse it's turned out to be! So I think you should call it Uncharismatic.
SteveH
(10/19/1999; 14:50:13 MDT - Msg ID: 16912)
Yellin
Hello and a comment,

Gold's mystique, imo, is the 32,000 metric tons in the Central Bank vaults, of which little or no silver or platinum exists (except in a strategic stockpile) in CB warehouses. Further, platinum's use is mostly industrial and it is many times rarer than gold. Silver is more abundent but not a CB stored item. Gold packs more value for the weight than silver but not platinum but platinum might be less desired and sold at a discount whereas gold coins are gold coins of known value and more marketable. Because gold has more concentrated value and is more recognized it is a better value brought out of strifed areas into non-strifed areas of the world by refugees fleeing for their lives.

Gold's value as money is seen by its ability to settle debt of itself (see the old and some new contracts with a gold option of payment) or it can be converted at the 'going-rate' into any local currency by the local 'gold' changer (coin shop/bank/?). That's my take on it.

None of us adore or idol it. We just don't want it messed with. We don't bother other people (with money); why are they bothering us. That is the basis of the GATA thing. What right has the government to secretly play in the gold market at our detriment and without our permission. It affects us and we don't like it. What is more, there is an apparent and obvious conflict of interest when the Treasury, the Fed, and GS all share employees. What else is being shared? Info, gold, ....? This is the source of our fervor (at least some of us).

Personally, I own some gold stocks and it really irks me to see my stocks beatup for 2 years and see the shenanigans in the gold market. It ain't right and GATA is right on.
JCS
(10/19/1999; 14:51:44 MDT - Msg ID: 16913)
Gold Dancer (10/19/99; 12:56:27MDT - Msg ID:16894)
Just depends on how hard they squeeze them. With no physical metal in sight, and the Dec. contract loaded up, a moster squeeze appears in the making. I still think $400+ is a possibility by year's end. GATA is swearing by $600 spot overnight when the next move starts. Guess we'll know in the fullness of time.
Re: DROOY--I know. Price is astounding. If the article at www.gold-eagle is even half accurate, $500 gold = $38/share and its at 1.875. Also, a new article at gold-eagle today has a listing of the hedged positions of most of the companies and DROOY is in pretty good shape, based on what we know.
Anyone have a line on why the weakness in GSR. Earlier this afternoon the size was 2,300x76,000. I bought a little at 1.125 but wonder now-- if I was so smart--why does someone want out of 76,000. Help me if you can.
Gold conference ends tomorrow--maybe wave 3 begins?
Gold Dancer
(10/19/1999; 15:13:19 MDT - Msg ID: 16914)
JCS
I am real leary about all those Dec contracts. Sometimes the obvious never works. Who is to know who owns them and for what purpose. I know only one thing: Greenspan and Rubin
are not people to stand up and take any blame for what they have done and will do ANYTHING to make sure the thing
holds together till next April. And I don't think the mining companies are going to start a hugh rally and hurt themselves again either.

We need a whole new generation of gold stock buyers to move prices higher and this is going to take time. A lot longer than I want given how much time has passed already.

Drooy says it all. If it had rallied to $5 I would have agreed with you and. But it didn't and that told me more than I wanted to hear!

We will know in the fullness of time what happens. I have
no choice but to hold on the what I have. It hasn't done
very much in this rally and it is discouraging to say the least. Doesn't mean it can't turn on a dime but.....

Gold Dancer
CoBra(too)
(10/19/1999; 15:36:33 MDT - Msg ID: 16915)
@ Leigh :"Queen" by Alex Haley - the author of "Roots"
-The Epic Saga of ROOTS is now complete(d) by David Stevens - may be the American bestseller of all times, observes The Observer. Hey, Leigh I'm just reading it and made the same mistake. I would have asked Bill about the statement of today - but then I figured a guy writing Roots and Queen can't be the same author as "Moneychangers"!
BTW - J. Mitcheners - "CENTENNIAL" is as precious to me, though its not our host's Cent. PM's, but was known as a town at the fork of two tributaries to the river 'Platte' next to Denver. A fascinating story - similar to the true sagas on PM's MK writes about.
Rambling on, @ MK - I do remember a book on Cripple Creek's either Bullion or Money Mountain and as I recall one of the best bookstores west of Chicago, no NY is in your area - I would appreciate your assistance in getting a copy - if at all available.
Sorry, folks for off subject post-it's just I love Colorado.
CB2
Journeyman
(10/19/1999; 15:40:25 MDT - Msg ID: 16916)
Why Gold should & could become money AGAIN. @Yellin', Aragorn III, etc.
I happened to be in Germany during the almost hyper inflation inthe U.S. Der Welt (The World), Germany's "Time" magazine, had acover picture of a thousand mark note, all green and nasty,obviously rotting away. The headline on the cover read, "What arethey doing to our money?" Official figures put US inflation over10% at the time . The German inflation that got them so excited?~4%! Why? Becasue living Germans remembered the "wheelbarrowfull of money/ money dumped wheelbarrow stolen" realities theyhad lived through. A whole generation of Asians has just beenlikewise innoculated against trust in paper money. Americans maybe just about to get an even more powerful innoculation. Thesekinds of disasters don't happen when there is gold circulating.Remember, "the people" didn't vote against gold; it was foistedon them by the banking/government elites for their own fun andprofit. Regards, Journeyman
Journeyman
(10/19/1999; 15:49:24 MDT - Msg ID: 16917)
Why Gold should & could become money AGAIN: @yellin', Aragorn III, ALL
I happened to be in Germany during the almost hyper inflation inthe U.S. Der Welt (The World), Germany's "Time" magazine, had acover picture of a thousand mark note, all green and nasty,obviously rotting away. The headline on the cover read, "What arethey doing to our money?" Official figures put US inflation over10% at the time . The German inflation that got them so excited?~4%! Why? Becasue living Germans remembered the "wheelbarrowfull of money/ money dumped wheelbarrow stolen" realities theyhad lived through. A whole generation of Asians has just beenlikewise innoculated against trust in paper money. Americans maybe just about to get an even more powerful innoculation. Thesekinds of disasters don't happen when there is gold circulating.Remember, "the people" didn't vote against gold; PAPER money was foisted on them by the banking/government elites for their own fun and profit. Regards, Journeyman
backlash
(10/19/1999; 16:06:58 MDT - Msg ID: 16918)
AREM & Scrappy

Sorry for the lapse in using 'short-speak' without first defining it. However, 'SWAG' is not a computer term and goes back far before computers. We engineers many years ago, when we really did not know the answer, would simply make a 'Scientific Wild Ass Guess'. (which was considered far superior to a simple WAG.)

Scrappy - -
Hats off to you and yours. You are what America is really made of! I, too, started off with little, worked to support a wife and child while attending college. (And finally finished.) To give you a boost in confidence, you will certainly succeed. It is in your makeup (no, not cosmetics) to succeed. Your best realization is that you will not get rich quick. Absolutely EVERY time I thought I had it figured out and was about to cut that fat hog, I was blindsided but good. Lost a year's salary (of borrowed money) on the stock market, bought a business by hocking everything I had just before the botttom fell out of the local economy, and the story goes on and on. However, each and every time, I felt obliged to press on, pay my debts, and do my best. No, I never did make ANY big killing on anything, but by persevering, life has been good to me, blessed me with three fine children and seven beautiful grandchildren. Oh, yes, by being diligent in monetary discipline, now am financially comfortable.

My thanks to all on this forum and especially MK for having shown me the next level of responsibility and knowledge at USAGold.

Scrappy, hang in there, you will surely prosper.

Best Wishes, bl
Journeyman
(10/19/1999; 16:18:27 MDT - Msg ID: 16919)
Gold's mystique @yellin' et. al.
It isn't mystique that gives gold value to those who are familiarwith the relevant history of the apparently inevitableconsequences of paper money: "Thus was the history of France[during the 1793 paper currency debacle] logically developed inobedience to natural laws; such has, to a greater or less degree,always been the result of irredeemable paper, created accordingto the whim or interest of legislative assemblies rather thanbased upon standards of value permanent in their nature andagreed upon throughout the entire world. Such, we may fairlyexpect, will always be the result of them until the fiat of theAlmighty shall evolve laws in the universe radically differentfrom those which at present obtain. {*86} -Fiat Money Inflationin France by Andrew Dickson White, p. 109 To the uninformed, thesecond best is the remaining mystique, based on the unknown (tothem) history of gold vs. paper. That is, gold, for variousphysical-psychological reasons, maintains it's value, where papernever has. Hopefully, the legends, mystique, etc. will servethose entranced by it well if and when "modern" paper currencygoes the way of all other "modern" paper currencies of the past.Regards, Journeyman
Hill Billy Mitchell
(10/19/1999; 16:25:49 MDT - Msg ID: 16920)
Still working
WEALTH MILEAGE CHART @ 10-14-98

$ U.S. EURO YEN GOLD SILVER

$ U.S. 1.OO .9301 106.81 .0032 .1862

EURO 1.0752 1.00 114.85 .0034 .2002

YEN .0094 .0087 1.00 .000030 .0017

GOLD 314.00 292.04 33,540 1.00 58.47

SILVER 5.37 4.99 573.60 .0171 1.00
ORO
(10/19/1999; 16:31:46 MDT - Msg ID: 16921)
Yellin' of troy - comments on your reply to Aragorn III
You raised the issue of Joe politico vs. economic Joe. Joe is happy to see inflation ease his debt, and can find protection for assets in stocks of companies benefiting from price rises and in the PMs. Joe will not fear inflation, he will vote for it while Jane is exchanging the savings account into gold coin. Your point is well taken, as in the case of Volcker's good money policy, which was never voted on, he just did it without saying what it was till after the fact.
As things stand, dollars and all other currency can and do fill the exchange money role. As long as avenues to move from exchange money to wealth money are open without too heavy a loss, it will stay so. Even if not, most of the exchange medium role will continue as it does in Brazil and in Russia (though Russians are pretty used to barter anyway, and do so routinely and Brazilians use Marks and Dollars for trade as well).
Where the changes are greatest is in gold for wealth money, as opposed to $ wealth (Money market "cash", CDs, bonds, growth stocks...). Most of us don't have much $ wealth, but have quite a bit of debt, so most of us will vote for crummy funny money but avoid its use. We will continue doing so till our debts are safely behind us. A cry for hard money will come only much later, when price inflation robs us of our pay too quickly for us to take action against it.

Another issue, not raised, but very relevant is the fact of global trade and the perception of $ and its associated assets as counterbalance to trade deficits. Here Joe's vote matters little and appreciation of political intervention in his favor will give way when he discovers that the world, still awash in dollars, does not want any more and that his politicians can't improve his lot in life because the dollars have no place to go but into higher prices. Over most of the past decade, $ were needed by the world to finance debt repayment in $ so that the world did not compete with Joe for products, the $ price floor for global goods and services were dictated by Joe. Today, and in the near future, Dominiques, Gustavs, Kims, Lees, Seijis and Keshavs will be competing with Joe for products using the same $ that Joe has. During this time the US may try to control inflation by raising interest rates. As a result, the world will have more $ because of the US's previous profilgacy led to such external debt that higher interest rates flood the world's $ money supply to a far greater extent than they can limit local economic activity without massive disruption to our thinly capitalized financial system.
The world at large, much more aware of gold as both wealth and exchange money, will impose their perceptions on Joe. Joe will come along for the ride as gold rises and catches his attention as one of the few things moving up (aside from oil prices and processed foods).
In a nutshell, the US policies acceptible to Joe are not going to make him feel any better. The "bull market in politics" is nearing its end as people are being more strongly divided between pro and anti government. The last two generations of adults in this country are predisposed to breaking up large organizations. They will eventually deconstruct government.

You said in a number os posts that a fiat currency can be managed by a responsible monetary authority. I believe it can not. The two main reasons are that (1) the funny money obfuscates market signals and gives false readings on anything measured, thereby blinding policymakers and assuring that most policies will be erroneous, I would say that the current structure can't even allow us to figure out our trade balances or make the GNP measurements meaningful. (2) There is an inflationary bias for seignorage and a tendency to recoil from painful (short term) monetary measures (remember Joe?)

In a previous post I answered that question by recounting my version of the floating gold reserve system FOA and Another refer to. It is simply a motivational matter for the gold holding central banks to mark to market the gold reserves, and keep a quickly rising bid under it to raise the value of the gold backing. Deficit spending can be hidden behind this activity without increasing taxes until it causes a general price inflation (which I believe it will).
USAGOLD
(10/19/1999; 17:03:45 MDT - Msg ID: 16922)
Cobra(too)
http://www.amazon.com/exec/obidos/ASIN/0804005915/qid%3D940372714/002-9607081-2297022The above link will introduce to a book that I think will serve your purposes. You are in luck because I read the book many years ago and remembered the title -- Midas of the Rockies. (Tough to forget.) W.S. Stratton, Midas of the Rockies, pulled a fortune out of the Cripple Creek district. I think, but I am not sure, that he was the first to own the fabled Sunnyside mine the primary vein of which was first seen from miles away by the prospectors who discovered it. I guess up until that time others who saw it didn't know what they were looking at. I owned a small sample ore from that extraordinary mine where you could see the gold in the rock -- little specks of native gold. Quite a sight....

Glad I could help. A standard reference of sorts is Men to Match My Mountains by Irving Stone -- the same with several fine historical novels to his credit including a good one on John and Abigail Adams. But you probably already have that in your library. One I liked was Silver Dollar (can't remember the author) -- the story of Horace and Baby Doe Tabor -- rags to riches then back to rags, the quintessential Colorado gold story -- though he made his fortune in silver and then lost it when the nations of the world went exclusively to a gold standard.

A nice side benefit to Midas of the Rockies is that it was written by a very good writer named Frank Waters who has something of a cult following out here. Around here the Stratton book is must reading for anyone interested in Colorado gold history.

So has winter yet touched those Vienna Woods? My best to you and yours, C2. Thanks for being here and your interest in the Centennial state.
Scrappy
(10/19/1999; 17:08:26 MDT - Msg ID: 16923)
The Scot; DD
Thanks, folks.
Ah, a little respect! Your compliments are accepted with, (I hope), a flair of grace!

The Scot, I will e-mail you re; medicinal herbalism. Bear in mind, I am an amateur, but I do seem to have more knowledge in this area than the average joe. And if I don't know the answer, I can look it up-have a ton of books. Expect to get an e-letter tonight or tomorrow.


Yellin and Steve H.- Gold has been the one constant throughout history and across boundaries. When I considered it, I kept coming back to that conclusion. Even if it was down, it would, sooner or later, go back up. And it's ALWAYS worth SOMETHING, even if less than what you originally paid for it. In an emergency, you can count on it being saleable. Considering y2k or any other event or series of events that might bring society to its' knees, gold is the only thing, besides barter of goods and services, that would possibly be used as a 'money' again. Then I found this site, and started learning a WHOLE lot about what the 'economic structure could possibly be in for, with or without y2k. THEN, and ONLY then, did I go buy one. Gee, it felt cool. My kids wanted some too, they thought it was cool, too. Oh yeah, it's purty.
I think you give too little credit to the 'little guy'
I know of many, many people in my part of the world, who are prepared for ANYTHING. They don't talk about it all too much, ya never know who's gonna hear, but I can tell you this. When gold started going up, and the DOW started going down, my customers came in happy as all get. For no apparent reason. I just wonder how many have a nice 'stash' buried somewhere....
The only one I have had to convince is my city buddy in Chi-town who's been playing the market the last year or two.
And he wasn't hard to convince. Common sense prevailed easily.
I geuss my point is, that, for the 'littlest of the little guys', anyway, a little knowledge goes a long way. We wanna, and will, survive.
Perhaps the ones for whom this whole ordeal will be the most difficult, the ones who will be hardest to convince, are the ones who have been counting on this dollar joy-ride to go on forever. It won't, it isn't, and I hope GATA et al will continue to fight for right and work to get the general populace educated on all of this. As for the 'mystique' of gold, well, I don't think there is a 'mystique'. It is what it is, and if one is willing to 'get educated' about it, one will see that it is a constant throughout history and across borders. Sooner or later, it always comes back, and it always comes through.
Chris Powell
(10/19/1999; 17:31:33 MDT - Msg ID: 16924)
Renowed author Arthur Hailey joins GATA
http://www.egroups.com/group/gata/261.html?Three new posts at the GATA site at eGroups
tonight.

The first has "Airport" and "Hotel" author Arthur
Hailey's letters in support of GATA and a pro-gold
excerpt from his other novel, "The Moneychangers."

The second is a story from yesterday's Financial
Post in Canada about manipulation of the gold
market. The story mentions GATA.

The third describes the speech of the World Gold
Council's president to open the Denver Gold Group
convention.
TownCrier
(10/19/1999; 19:12:16 MDT - Msg ID: 16925)
After the Close: the GOLDEN VIEW from The Tower
The Dow Jones Industrial Average of 30 stocks (a.k.a. the DOW) lost 130 points today. But, "Hold the phone!" you say..your conventional sources of information are telling you that the DOW gained 88.65 points today, closing at 10204.93. That may seem true enough, but your taking a rather narrow view of things if you look no further. Let's look further...
+
First of all, the DOW does not define the whole market. For instance, advancers were almost evenly matched by declining stocks, and new 52-week lows outnumbered new highs by 264 to 18. The Nasdaq Composite actually closed lower on the day and has now lost 7.8%--just a few days after setting its all-time high on Oct. 11.
+
And second, there's no reason to fixate on the closing cost as a sign of overall market health. Sure, there's a tendency to do so, because it provides a convenient snapshot in time for comparing day to day trends, but you risk missing the big picture. Here's the rest of that big picture (in addition to the rest of the NYSE and Nasdaq as briefly mentioned above.)
+
The Labor Department released the Consumer Price Index an hour before the opening bell on Wall Street reporting a CPI increase of 0.4% with increase in the "core" CPI (excludes food and energy prices) of 0.3%. Because both figures matched the expectations of economists, the DOW launched nearly 220 points from its previous closing level (10116.28) in a spurt of irrational exuberance to reach 10335.37 at 11:00 EDT. But from there, things steadily deteriorated throughout the remainder of the day, and the DOW had lost 130 points by the time they rang the closing bell. If trading were done around the clock, who knows where we'd be by now, but surely you can see the fallacy of simply comparing one day's closing numbers to the next. Anyone who bought into the DOW at its peak today certainly has no trouble making this same distinction. Because this market operates as it does, we must now wait a day before it is allowed to continue trading from where it left off, and we can follow the development of this trend.

You might also have a tendency to fixate on the closing gold price, comparing one day to the next for signs for your trading strategy. Because gold is not a unique American asset, it trades around the clock and around the world, so its "closing price" in NY is even less significant than the closing price as described above for the DOW. The continuing trend is what is important, and gold's history is so long that even the "trend" of one day to the next is inadequate to tell the story. Certainly, the span of a human life is much shorter than the span of gold's history. But because we all have earthly needs, we are less inclined to take the historical view, preferring instead a shorter view that more closely matches a span of time best characterized as "paycheck-to-paycheck." Hence the fixation on what gold did since yesterday in New York, or for the more astute, what gold did since last week. This GOLDEN VIEW is written daily with the realization that a great many people will always want to see these daily snapshots of numbers.

The reality is that we are not mayflies with the lifespan of a few hours, so it is often to our advantage to detect and focus on the trends that are meaningful in a span of time that more closely matches our own. In a general investment sense, the DOW and Nasdaq remain near lifetime highs, while gold is currently priced at levels seen twenty years ago--and just think of the vast currency-creation that has occurred globally since then.

But here in The Tower, our view doesn't even focus on gold as an investment in contrast with the DOW or Nasdaq. We see it terms of the more important trends as a monetary asset. Let's review the most recent news in this regard. The World Gold Council reported that the demand for gold in the second quarter of this year broke all-time records. This was not done on the back of expanded industrial use of gold for electroplating electronic connectors. This was done by people worldwide acquiring gold as a financial asset...an alternative to national currency savings that have either failed them in the past or threaten to betray them in the future. Once bitten, twice shy...and wiser for it.

Additionally, it is quite clear that gold has been extensively lent (with interest) as a financial asset...lent to the point of unsustainability. Fearing the devastating economic impact from an impending collapse of this important worldwide system of bullion banking (not to mention the loss of gold to various private lenders), the European central banks have recently emerged from actions previously held "behind closed doors" to announce to the world that gold was an important financial asset and further sales or lending would be curtailed. The hope would seem to be that the market participants might somehow close or liquidate their outstanding positions in an orderly fashion in the process of transitioning "from here to there."

Further, the International Monetary Fund has been an 800-pound gorilla sitting on the fair use and fair valuation of gold for three decades. The IMF passed "ironclad" articles of agreement that member nations would no longer peg their national currencies to gold, and they made no bones about it. In their own words:

"Before the Second Amendment of the Articles of Agreement of the IMF in April 1978, the role of gold in the international monetary system was central and pervasive. The Second Amendment contained a number of provisions that, in combination, were intended to achieve a gradual reduction of the role of gold in the international monetary system and in the IMF.
------The Second Amendment to the Articles of Agreement of the IMF eliminated the use of gold as the common denominator of the par value system and as the basis of the value of the SDR. The Amendment also abolished the official price of gold and abrogated the obligatory uses of gold in transactions between the IMF and its members. The Second Amendment required the Fund, in its dealings in gold, to avoid managing its price or establishing a fixed price of gold. Under the Amendment, members undertook to collaborate with the IMF and other members with respect to reserve assets to promote better international surveillance of international liquidity.-------
However, gold is still an important asset in the reserve holdings of a number of countries, and the IMF remains one of the largest official holders of gold in the world."

So now, after carrying 3,200 tonnes of gold at a bogus book value of SDR 35 (one Special Drawing Right currently equates with $1.40, giving IMF gold a current book value of $49.00 per ounce in U.S. currency terms...in euro terms, that same ounce would be �45.15 per ounce.) the IMF gorilla has taken its fat butt off of gold, consenting that the easiest solution to their problems is to allow themselves to recognize the actual market value of gold, whatever that may prove to be. So as to not blatently run rough shod all over their own articles, the IMF is proposing to bring about this new operating scheme in fits and starts. They'll catch on soon enough. The European Central Bank already utilizes the best international banking practice of marking gold reserves regularly to market values. They do this at the end of each quarter. (Currently, the ECB values its total gold assets at �114.988 billion.)

So having said all that, when we tell you that the spot price for gold was last quoted in NY at $307.60, down $2.10 from the previous day, we hope you keep these thoughts in mind and take Bart Simpsons' advice..."don't have a cow, man." Further, keep this larger perspective in mind when you read the latest thoughts and antics of the traders of gold derivatives as reported by Bridge News...

NY Precious Metals Review: Dec gold down $2.2 after 18-day low
By Melanie Lovatt, Bridge News
New York--Oct 19--COMEX Dec gold settled down $2.20 at $309.50 per ounce
after dropping to an 18-day low of $306.20. A climb in US equities prices and a
recovery in the dollar against the euro and yen pushed gold lower, said traders.
Gold was also pressured as 1-month lease rates slipped to 2.25% from Monday's
2.30%, which in turn was down on Friday's 3%.

[Our latest source shows the 1-month gold lease rate at 2.4570% (annualized). As we've speculated before, we wonder if rates are dropping for the same reason that margin calls are being postponed on certain producers (Ashanti), that being that so much postion squaring through on-market operations has been rendered impossible due to the latest developments in gold that those involved have had to put on a brave face and try to resolve things off-market. In the meanwhile, to the casual outside observer, everything appears to be business as usual. We would not be surprised to see certain degrees of latitude allowed in this LTCM-esque replay, perhaps officially and temporarily justified as a special Y2K allowance. You need look no further than the Fed's own new policy to participate in extended and "tri-party" repo agreements in order to add reserves to the banking system due to Y2K. Anyway, back to the Bridge report...]

The stock market rose in relief that today's US Consumer Price Index only
met expectations as opposed to Friday's Producer Price Index, which came in much
higher than expectations. The CPI was in-line with analysts' forecasts, climbing
by 0.4%, which was 0.3% without food and energy components."The CPI number
was friendly to equities and eases inflationary pressure in the market," said
David Meger, senior metals analyst at Alaron Trading.
"Gold was therefore pressured by the stock market recovery, dollar strength
and hit by fund selling," he added. He noted that the recent lack of buying
interest over the last couple of days shows something of a reversal of the
previously positive sentiment in gold, although bargain hunting overnight in
Asia has continued.

He suggests that gold sees solid support at $298.50, which is a 50%
retracement from the recent highs. "Gold came in weaker, we had a sharper
selloff, bounced back and then looked dead," he noted.
Meanwhile, Dec silver fell to $5.17, which is a fresh 1-month low. It slipped
on lack of buying interest, accompanied by some low volume fund selling. Chart
support is at $5.13, noted Meger, suggesting that if silver prices moved to
these levels they would start to see not only technically driven buying, but
physical demand.
There was talk that one large NY dealer was attempting to keep silver down in
order to keep pressure on the gold market. However, some traders dismissed this
as fantasy. Nevertheless, some were discouraged. Leonard Kaplan, chief bullion
dealer at LFG Bullion Services complained that silver is "back into the low
$5.20s--the same price as when gold was $50 lower." He said: "I would have
thought that silver would be well supported at $5.40 with gold up." [Seems to confirm that gold and silver are fundamentally different creatures, doen't it? In a separate report, Bridge also had this to offer...]
London--Oct 19--Saudi investor Prince Alwaleed Bin Talal today confirmed
reports he has been studying the "investment opportunity" in the Ghanaian
Ashanti Goldfields Co. Ltd, a statement issued by Alwaleed's office said today.
***
Reprinted at USAGOLD with permission. For details please go to:
http://www.crbindex.com/reviews/index.htm
No further reproduction without written permission

Here are the numbers for COMEX open interest on gold futures for the end of derivative trading yesterday: October contracts increased by 2 to 116 (with 2,510 previous positions closed upon the announcement of delivery intentions), November was unchanged at 14, open interest in December futures increased by 693 contracts to 116,661, and the total open interest on COMEX through June 2004 rose by 5186 to 220,871 contracts.

Unfortunately, our scout didn't return with a report from the COMEX gold depositories today (must have gotten sidetracked at an inn with good beer), so hopefully somebody at the Round Table here can provide a link to an alternate source of info that works for that info.

In addition to stocks' failing performance as the day wore on, US Treasuries also gave up their early gains today. After turning south, the 30-year bond headed further into loss-territory to the tune of 12/32 in price, pushing the yield to 6.342%. Rumors circulated among traders that the ECB would likely act to raise rates at their November 4th meeting, which in turn would pressure US bonds.

In currencies, the dollar lost only tiny ground against the yen, losing .03 yen to close at 105.33 yen per dollar. The euro gained .001 cents against the dollar, closing up at 1.0831 dollars per euro.

November crude settled down 31c at $22.22 with the expiration of November crude futures contracts tomorrow (Wednesday) said to be the reason for the selloff as traders wanted to liquidate out of their November positions, according to several brokers and traders. FWN reports a broker as saying "With expiration tomorrow nobody knows what's going to happen so
people are getting out so they don't want to take a position in the Dec contract."

Some volatility crept into the day and prices were pushed higher from a weak start on news of "an impromptu meeting between Saudi's oil minister Ali Naimi and his counterparts, who may have included Mexico's Luis Tellez and Venezuela's Ali Rodriguez sources," according to FWN. It was confirmed there was in fact a meeting of officials, reported to have focused on current conditions in the oil market. However, one wire report said only Saudi Arabia and Mexico held talks.

And that's the view from here...after the close.
SteveH
(10/19/1999; 19:13:55 MDT - Msg ID: 16926)
repost
www.kitco.comDate: Tue Oct 19 1999 19:30
Rob (SEQUIN (@ LGBull .sh*t) ID#25171:) ID#409221:
Sequin



Forbes magazine had a gold price chart ( constant dollars ) whose origin started in the year 1000 AD. The chart showed a centuries long decline in the price of gold. The rate of change was incosequential for a mans life span but, never the less.....



Its seems the more specialized economies become, the less valuable gold becomes v. other commodities.



Am I missing something?





robert
SteveH
(10/19/1999; 19:22:14 MDT - Msg ID: 16927)
Kinross's hedge and financial picture 3rd qtr
Related Quotes

K.TO
3.86
-0.05

delayed 20 mins - disclaimer


Tuesday October 19, 12:52 pm Eastern Time
Kinross Gold Q3 results
(Full text of press release from Canadian Corporate News)

OCTOBER 19, 1999

Kinross Gold Corporation Third Quarter Results

TORONTO, ONTARIO--KINROSS GOLD CORPORATION (TSE-K; NYSE-KGC) announced today that results for the three months and nine months ended September 30, 1999 are as follows:

All results are expressed in United States Dollars unless otherwise stated.

Kinross provides the following detail regarding the Company's performance during the third quarter of 1999. Although the average spot price of gold was $259 per ounce compared to $289 in 1998, cash flow provided from operations for the third quarter was $17.0 million, compared to $17.8 million in 1998. Gold equivalent production for the third quarter was 257,331 ounces at total cash costs of $193 per ounce.

Net loss for the three months ended September 30, 1999 was $11.4 million, five cents per share, on revenues of $79.7 million, compared with a net loss for the third quarter of 1998 of $10.2 million, six cents per share, on revenues of $87.0 million. Total cash costs were $193 per ounce of gold equivalent in the quarter, down from the 1998 third quarter costs of $210 per ounce. Cash flow provided from operations was $17.0 million, six cents per share, compared to $17.8 million, nine cents per share in the same period of 1998.

Net loss for the nine months ended September 30, 1999 was $36.1 million, fourteen cents per share, on revenues of $236.2 million, compared with a net loss for the first nine months of 1998 of $9.9 million, eight cents per share on revenues of $193.6 million. Total cash costs were $194 per ounce of gold equivalent in the first nine months, down from $218 per ounce of gold equivalent in the same period of 1998. Cash flow provided from operations for the first nine months of 1999 was $47.6 million, sixteen cents per share, compared to $37.8 million, nineteen cents per share in the same period of 1998.

Included in the results of operations for the nine months ended September 30, 1999 are $5.0 million, or two cents per share of unusual charges. These charges resulted from severance obligation associated with the decision to place the Macassa mine on care and maintenance and a contract termination fee associated with the termination of the surface mining contract at the Refugio mine.

Gold equivalent production for the third quarter was 257,331 ounces, for a nine-month total of 759,642 ounces. The Company is on track to produce in excess of one million ounces of gold equivalent in 1999.

The Company's gold hedging program enabled the Company to realize an average price of $300 and $299 per ounce for the third quarter and nine months respectively, compared with average spot prices of $259 and $273 for the third quarter and nine months respectively.

Operating Performance

Although production was nominally lower than planned, total cash costs were slightly better than anticipated for the first nine months of 1999. The current plan calls for higher production from the Hoyle Pond and Refugio mines for the fourth quarter of the year, for a full year total of more than one million ounces for the Company at sustainable low total cash costs of approximately $190 per ounce of gold equivalent. For details of tonnes processed, grade and recovery refer to the tables presented later in this press release.

Fort Knox Mine - Alaska

The Fort Knox mine continued to increase production during the third quarter. Third quarter production increased by six percent over the second quarter at total cash costs of $182 per ounce, better than planned. With the closing of the True North acquisition, the Company is now focusing the exploration and permitting activities in Alaska on the nearby True North and Ryan Lode properties which will provide higher grade ore and allow the Company to increase production at the Fort Knox mine by 2001.

Hoyle Pond Mine - Ontario

As previously reported substantial changes at the Hoyle Pond operations lead to improved productivity by the end of the second quarter. The Company is pleased to report a continual improvement in production during the third quarter. Production increased by 36% and total cash costs improved to $187 per ounce for the third quarter. While this is still not at an acceptable level, continued improvement is forecast for the balance of the year such that production expectations for the full year are approximately 135,000 ounces at a total cash cost of about $190 per ounce.

Kubaka Mine - Russia

The Kubaka mine continues to exceed planned production with lower than forecasted total cash costs. Production at the Kubaka mine is significantly better than planned due to higher than expected mill feed grade, greater mill throughput and lower operating costs. Total cash costs at the Kubaka mine remained the lowest in the Company at $139 per ounce of gold equivalent for the third quarter of 1999.

Refugio Mine - Chile

Production at the Refugio mine declined 27% during the third quarter when compared to the second quarter, but increased by 37% when compared to the third quarter of 1998. Total cash costs were $314 per equivalent ounce, compared to $437 for the third quarter of 1998. While the nine month performance at Refugio is disappointing, management remains confident that beginning with the fourth quarter and going forward, sustainable, much lower production costs will be reported.

Denton-Rawhide - Nevada

Production at the Denton-Rawhide mine increased by 20% during the third quarter and total cash costs remained better than planned at $253 per ounce of gold equivalent. For the nine months, production at the Denton-Rawhide Mine continues to exceed plan due to higher than planned tonnes placed on the leachpad. Blanket - Zimbabwe

Production at the Blanket mine increased by 18% during the third quarter and total cash costs remained on plan at $170 per ounce of gold. For the year, production is slightly lower than planned but total cash costs remain below planned at $161 per ounce of gold.

Hedge Position

As at September 30, 1999, the Company had sold forward 1,100,000 ounces of gold at prices ranging from $298 to $325 per ounce. The Company uses spot deferred contracts and forward sales with floating gold interest rates. The majority of gold borrowing costs have been fixed out to March or April of 2000, minimizing the impact of current high gold lease rates. In addition the Company has 500,000 ounces of European style call options (exercisable only at expiry) at prices detailed in the table below.

All of the hedging facilities that the Company has established are margin free, therefore the Company does not face any exposure to margin calls in any gold price environment.



Gold Hedge Position
As at September 30, 1999

Gold

Sold Gold Call Average

Forward Average Options Strike Year '000 oz. price Sold '000 oz. Price


1999 200 $298 200 $283
2000 350 $305 0 $0
2001 150 $325 0 $0
2002 150 $325 100 $340
2003 150 $325 100 $340
2004 100 $316 100 $340
----- -----
Total 1,100 500
----- -----


Year 2000 Update

The remediation of the Company's operating facilities with regard to Y2K compliance has been completed. The Fort Knox, Hoyle Pond, Kubaka, Refugio, Macassa and Blanket properties have all completed remediation of their process control systems and these plant systems are considered Y2K compliant.

Remediation of business information systems, and ancillary application packages has successfully been completed at the Fort Knox, Hoyle Pond, Kubaka, Macassa and Blanket properties. Remediation at the Refugio property is 90% complete with a planned completion date of December 1, 1999.

No issues have been identified with our critical vendors.

Y2K contingency planning is currently taking place at each site, and the plans will be updated as circumstances change throughout the remainder of the year. The supply of electrical power to various sites still remains a concern despite confirmations by the electrical utilities that they are ready.

Contingency plans will take this into consideration and will determine the best method to maintain operations utilizing our standby power generators.

Total project spending estimates for the year remain in line with previous estimates.

No serious issues have been identified by the assessments, and it is the Company's belief that there will not be any serious operational problems caused by the Y2K ``bug'' and that the Company has taken the necessary steps to resolve any Year 2000 issues. However, there can be no assurance that any one or more such failures would not have a material adverse effect on the Company. Actual outcomes and results could be affected by future factors including, but not limited to, availability of skilled personnel, ability to locate software problems, critical suppliers and subcontractors meeting commitments, and timely actions by customers and suppliers.

Outlook

As at September 30, 1999, the Company has $122.2 million of cash and operating working capital of $27.4 million for total working capital of $149.6 million. This combined with sustainable low cost production, and a manageable debt repayment schedule, provides the Company with a solid platform for future growth when opportunities present themselves.

This press release includes certain ``Forward-Looking Statements'' within the meaning of section 21E of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential mineralization and reserves, exploration results and future plans and objectives of Kinross Gold Corporation (``Kinross''), are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Kinross' expectations are disclosed under the heading ``Risk Factors'' and elsewhere in Kinross' documents filed from time to time with the Toronto Stock Exchange, the United States Securities and Exchange Commission and other regulatory authorities.


Kinross Gold Corporation
Consolidated Balance Sheets

(expressed in millions of U.S. dollars) (unaudited)

As at September 30 As at December 31
1999 1998
------------ ------------
Assets

Current assets
Cash and cash equivalents $122.2 $153.4
Bullion settlements and other
accounts receivable 50.6 55.4
Inventories 50.5 54.6
Marketable securities 1.9 1.2
------------ ------------
225.2 264.6
Mineral properties, plant and
equipment 817.0 809.8
Long - term investments 24.6 25.0
Deferred charges and other assets 14.3 15.4
------------ ------------
$ 1,081.1 $ 1,114.8
------------ ------------
------------ ------------

Liabilities
Current liabilities
Accounts payable and accrued

liabilities $ 43.9 $ 49.4
Current portion of long - term debt 25.3 25.1
Current portion of site restoration
cost accruals 6.4 5.9
------------ ------------
75.6 80.4


Long-term debt 120.3 125.8
Site restoration cost accruals 48.0 52.0
Deferred income and mining taxes 7.2 6.9
Deferred revenue and other 22.6 29.0
Debt component of convertible
debentures 39.4 42.7
Redeemable retractable preferred
shares 3.1 3.1
------------ ------------
316.2 339.9

------------ ------------ Convertible preferred shares of

subsidiary company 88.3 88.3

------------ ------------ Common shareholders' equity

Common share capital 919.9 904.2
Contributed surplus 7.9 3.6
Equity component of convertible
debentures 108.0 103.1
Deficit (337.4) (296.4)
Foreign currency translation
adjustments (21.8) (27.9)
------------ ------------
676.6 686.6
------------ ------------


$ 1,081.1 $ 1,114.8
------------ ------------
------------ ------------

Kinross Gold Corporation
Consolidated Statements of Operations
For the nine months ended September 30

(expressed in millions of U.S. dollars except per share amounts)
(unaudited)
Three months ended Nine months ended
September 30 September 30
1999 1998 1999 1998
------- ------- ------- -------
Revenue
Mining revenue $ 77.1 $ 83.5 $ 227.0 $ 181.6
Interest and other income 2.6 3.5 9.2 12.0
------- ------- ------- -------


79.7 87.0 236.2 193.6

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

Expenses

Operating 51.3 61.2 156.5 132.4

General and administrative 2.6 1.8 7.5 5.0


Exploration and business

development 3.1 2.8 7.4 5.9


Depreciation, depletion
and amortization 28.0 27.2 82.9 50.9
------- ------- ------- -------
85.0 93.0 254.3 194.2
------- ------- ------- -------

Loss before the undernoted (5.3) (6.0) (18.1) (0.6)

Gain on sale of marketable

securities - 1.9 0.1 2.7 Foreign exchange gain (loss)

and other 0.1 (0.4) - (0.1)
Share in loss of associated
companies (0.1) (0.1) (0.3) (0.3)
Interest expense on long-term
liabilities (3.4) (3.8) (10.0) (7.2)
------- ------- ------- -------


Loss before taxes and
dividends on convertible
preferred shares of

subsidiary company (8.7) (8.4) (28.3) (5.5)

Provision for income and

mining taxes (1.0) (0.1) (2.7) (2.1)

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

Loss for the period before
dividends on convertible
preferred shares of

subsidiary company (9.7) (8.5) (31.0) (7.6)

Dividends on convertible

preferred shares of subsidiary
company (1.7) (1.7) (5.1) (2.3)
------- ------- ------- -------

Net loss for the period (11.4) (10.2) (36.1) (9.9)

Increase in equity component

of convertible debentures (1.7) (1.5) (4.9) (4.4)

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

Net loss attributable to

common shares $(13.1) $(11.7) $(41.0) $(14.3)
------- ------- ------- -------
------- ------- ------- -------

Net loss per share

Net basic and fully

diluted $(0.05) $(0.06) $(0.14) $(0.08)

Weighted average number common

shares outstanding 299.9 191.5 298.9 191.5 Total outstanding and issued

common shares at

September 30 300.1 292.4


Kinross Gold Corporation
Consolidated Statements of Cash Flows
For the nine months ended September 30

(expressed in millions of U.S. dollars) (unaudited)

Three months ended Nine months ended
September 30 September 30
1999 1998 1999 1998

------- ------- ------- ------- Net inflow (outflow) of cash

related to the following activities:
Operating:
Loss for the period before
dividends on convertible
preferred shares

of subsidiary company $(9.7) $(8.5) $(31.0) $(7.6) Items not affecting cash:

Depreciation, depletion
and amortization 28.0 27.2 82.9 50.9
Gain on sale of marketable
securities - (1.9) (0.1) (2.7)
Deferred income and
mining taxes - (0.4) - (1.5)
Deferred revenue realized (2.2) (2.2) (7.0) (6.7)
Site restoration cost
accruals 0.8 3.1 2.3 5.1


Other 0.1 0.5 0.5 0.3


------- ------- ------- ------- Cash flow provided from

operations 17.0 17.8 47.6 37.8
Deferred revenue - hedging
gains - - - 13.9
Site restoration
expenditures (2.7) (0.4) (6.3) (0.8)
Changes in non-cash working
capital items
Bullion settlements and other
accounts receivable 0.4 (0.5) 4.5 5.4


Inventories 0.7 (1.8) 4.1 -


Marketable securities - 2.2 (0.4) 5.4
Commodity derivative
contracts - 46.0 - 46.0
Accounts payable and accrued
liabilities 1.4 (16.8) (5.1) (19.3)
Effect of exchange rate
changes (3.9) 2.0 0.4 (3.3)

------- ------- ------- ------- Cash flow provided from

operating activities 12.9 48.5 44.8 85.1

------- ------- ------- ------- Financing:

Issuance (repurchase) of
common shares, net 0.5 (1.6) (6.0) 171.1
Convertible debentures (1.1) (0.9) (3.3) (2.7)
Repayment of debt 2.0 (0.6) (5.4) (256.2)
Dividends on convertible
preferred shares of
subsidiary company (1.7) (1.7) (5.2) (2.3)

------- ------- ------- ------- Cash flow (used in) financing

activities (0.3) (4.8) (19.9) (90.1)

------- ------- ------- ------- Investing:

Additions to properties,
plant and equipment (10.5) (12.6) (28.7) (24.8)
Business acquisitions, net
of cash acquired (0.1) - (30.4) 3.5
Long-term investments and
other assets 0.5 (0.8) 0.7 (0.8)
Proceeds from the sale of
fixed assets - - 2.3 2.0


------- ------- ------- ------- Cash flow (used in) provided

by investing activities (10.1) (13.4) (56.1) (20.1)

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

Increase (decrease) in cash

and cash equivalents 2.5 30.3 (31.2) (25.1)

Cash and cash equivalents,

beginning of period 119.7 134.9 153.4 190.3

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

Cash and cash equivalents,

end of period $122.2 $165.2 $122.2 $165.2
------- ------- ------- -------
------- ------- ------- -------


Kinross Gold Corporation Consolidated Statements of Common Shareholders' Equity For the nine months ended September 30 (expressed in millions of U.S. dollars) (unaudited)


Foreign
Currency
Common Contributed Convertible Translation
Shares Surplus Debentures Deficit Adjustment Total

------- ----------- ---------- ------- ---------- ----- Balance, December 31, 1998 $904.2 $3.6 $103.1 $(296.4) $(27.9) $686.6

Shares issued
pursuant to the
La Teko

acquisition 25.9 - - - - 25.9 Repurchased pursuant

to issuer

bid (11.8) 4.3 - - - (7.5) Other 1.6 - - - - 1.6 Convertible

debenture equity

component

increase - - 4.9 (4.9) - - Net loss for

the period - - - (36.1) - (36.1) Foreign currency

translation

adjustment - - - - 6.1 6.1

------- ----------- ---------- ------- ---------- ----- Balance, September

30, 1999 $919.9 $7.9 $108.0 $(337.4) $(21� *kp$8�fcfc PROPHECy`*kpfcfc��@)�`ifcfc Msg ID:�k  � 0`0_
ORO
(10/19/1999; 19:35:07 MDT - Msg ID: 16928)
Scrappy
http://www.mises.comIndeed, your story is inspiring. Hat's off to you.

The Mystique of gold is somewhat a reverse observation. Mundell pointed out that the references to gods, emperors and national emblems grow in relation to the debasement of the coin of the realm. Thus he points to the appearance of "In God We Trust" on the Civil War greenback. Simple. Before, we could rely on there being something behind the bill. During the war we had to hope God would provide it.

SteveH - thanks again for pointing him out to me. I do like his historical depth and analysis. I think he is still not seeing things in full. The Block article in RossL's URL is great, and touches on Mundell's early attempts to put together Keynesian and Monetarist thinking without pushing gold. Then Block admonishes Hayek for giving up on a free market commodity money as politically infeasible.
http://www.mises.com/journals/scholar/Blockgold%2EPDF
Wonderful read.
Quite alot of good stuff in the Mises site. Highly recommended.

megatron
(10/19/1999; 19:35:23 MDT - Msg ID: 16929)
future of gold
If you want to know what Rubin and Clinton are thinking about your gold stock investments and how to deal with your gold, I strongly urge you to read 'The Prince' by Machiavelli. Too REAL, Too scary.
SteveH
(10/19/1999; 19:49:22 MDT - Msg ID: 16930)
Interesting
http://www.goldensextant.com/commentary.html#anchor6027snippet--

"With over 400 million ounces (12,560 metric tons) of gold reserves, the EA has almost 1.4 ounces per person compared to 262 million ounces (8150 tons) equating to just under 1 ounce per person for the U. S. More importantly, with the equivalent of around $1350 of cash currency per person in circulation compared to more than $2000 for each American, the EA could provide a 40% gold cover for its currency outstanding (i.e., the combined total of all 11 national currencies outstanding) at less than $400/oz. The U. S., as I have noted before, would need a gold price in excess of $800/oz. to do the same thing. Total U. S. foreign exchange reserves are some $30 billion; those of the EA over $220 billion. And with a 1998 balance of payments surplus in excess of $120 billion, the EA is running trade surpluses almost as large as U. S. trade deficits.

The implications of these numbers are huge, particularly for anyone contemplating any sort of currency competition, let alone a possible currency war, between the Euro Area and the United States. What makes them even more frightening from the American perspective is the fact that Euro currency itself does not yet exist but must be introduced by January 1, 2002. Why?"

FOA
(10/19/1999; 19:54:16 MDT - Msg ID: 16931)
The Euro Area: A New Monetary Colossus
http://www.goldensextant.com/commentary.html#anchor6027PH, I trust you have been reading this gentleman lately. As one reads this entire article we can understand what "Yellin" cannot.
Paper gold may be sold down at anytime but in this new atmosphere of an Official physical gold bull, there paper bluff is being called. Did anyone witness the huge call on london today? Buy physical while you can get it under $360 as we will be there soon enough. Gold will outperform!

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

October 21, 1999. The Euro Area: A New Monetary Colossus

The 11 nations of the Euro Area have a total population of 290 million and a combined annual GDP of almost $7 trillion, comparing quite favorably in size to the United States with a population of 270 million and a GDP of $8.5 trillion. Impressive as these numbers are, they pale beside the monetary numbers. Source: IMF, International Financial Statistics, October 1999 (most figures for end of June 1999).

With over 400 million ounces (12,560 metric tons) of gold reserves, the EA has almost 1.4 ounces per person compared to 262 million ounces(8150 tons) equating to just under 1 ounce per person for the U. S. More importantly, with the equivalent of around $1350 of cash currency per person in circulation compared to more than $2000 for each American, the EA could provide a 40% gold cover for its currency outstanding (i.e., the combined total of all 11 national currencies outstanding) at less than $400/oz. The U. S., as I have noted before, would need a gold price in excess of $800/oz. to do the same thing. Total U. S. foreign exchange reserves are some $30 billion; those of the EA over $220 billion. And with a 1998 balance of payments surplus in excess of $120 billion, the EA is running trade surpluses almost as large as U. S. trade deficits.

The implications of these numbers are huge, particularly for anyone contemplating any sort of currency competition, let alone a possible currency war, between the Euro Area and the United States. What makes them even more frightening from the American perspective is the fact that Euro currency itself does not yet exist but must be introduced by January 1, 2002. Why?

One of the most intriguing questions about the U.S. dollar, or more precisely the 550 billion of them circulating in the world, is: where are they? No one really knows, but it seems almost certain that a great many of them circulate outside the country in parts of the world where the local currency is unreliable. Something of the same phenomonon is seen with the German mark, of which there are the equivalent of almost 1675 Euros (approx. US$ 1800) for every German, and even more spectacularly with the Swiss franc (over 4500 (approx. US$ 3000) per citizen, for each whom Switzerland also has gold reserves equal to almost 11.75 ounces before the currently proposed gold sales). On the other hand, Belgium, France, Italy and the Netherlands, taken together, have currency outstanding equal to about 1000 Euros (approx. US$1100) per citizen.

The problem with a currency held in large quantities outside its country of issuance, where it is legal tender, is its potential for causing destabilizing inflation in its home country should a large amount of it be repatriated suddenly, as might be caused for example by a sudden loss of confidence. Indeed, just this problem led to some discussion in Congress a few years ago about creating two dollars, one to circulate internally and one externally. The problem with such an idea, of course, is that even serious discussion of it can trigger the very consequences it seeks to forestall.

In this context, the planned issuance of Euro notes and associated elimination of national currencies, particularly the German mark, should hold some potential concern for the EMU. What is more, and even more importantly, the new Euro currency will have to earn and secure acceptance by citizens of the Euro Area. But look at the numbers. It is well within the realm of possibility: (1) to back the new Euro currency with a 40% gold cover, whether it is actually redeemable or not; and (2) to mop up all excess German marks and other EA national currencies circulating externally with EA dollar forex reserves. Indeed, what other use will there be for the bulk of these reserves? If the United States can get along with its gold and $30 billion of forex reserves, surely the EA -- with more gold as well as balance of payments surpluses -- can do the same. And however attached EA citizens may be to their old national currencies, a new Euro currency -- backed by gold -- might command not only monetary allegiance ("a Euro as good as gold") but also greater allegiance to the whole concept of a United States of Europe.

FOA NOTE: Much more to this at this site.
FOA
(10/19/1999; 19:57:36 MDT - Msg ID: 16932)
SteveH
You arrived there first! Good.
Cavan Man
(10/19/1999; 20:58:24 MDT - Msg ID: 16933)
FOA $360
Hello. That's your second reference today to 360. Why?
andrew the kiwi
(10/19/1999; 20:59:15 MDT - Msg ID: 16934)
the hare and the tortoise!
platinum up $5.00 or 1.23%, b$413 a$418, wake up gold!!!!
SteveH
(10/19/1999; 20:59:17 MDT - Msg ID: 16935)
GS/Ashanti
http://www.gold-eagle.com/editorials_99/dvcohen102199.html"...In Goldman Sach's case, one of their major debtor clients happens to be Ashanti Gold. Via excessive hedging activity in the gold market, Ashanti apparently owes Goldman Sachs a hefty amount of physical gold (since ALL gold loans are only repayable in gold, NOT currency!). Apparently, with the spot price of gold now higher than Ashanti's hedge price, Ashanti has received a margin call from its bullion bank, Goldman Sachs...."
SteveH
(10/19/1999; 21:02:36 MDT - Msg ID: 16936)
Letter
I believe the author to be Farfel.
canamami
(10/19/1999; 21:11:10 MDT - Msg ID: 16937)
Questions for FOA
I will really start to post again Halloween weekend (month end will be over then).

However, some questions for FOA:

1. Will the "oil" countries move to "currency basket" settlement or Euro settlement solely? If only Euro settlement, why not also Japan which also has a trade surplus? Does "oil" include non-Mid-East countries like Venezuela? Will there be direct gold settlement in any form (not merely the Euro getting credibility from the ECB's gold reserves)?

2. Why do you believe the switch by "oil" to Euro settlement will "harm" the dollar so severely? Why would Euro settlement necessarily enhance gold's status, if gold itself is not used directly for settlement? Are you positing that the US will be obliged to settle with its gold reserves to buy oil and other necessaries, a la Germany circa 1944, and this is the reason the gold mines will be nationalized?

FOA, I know there are too many questions here, but your replies to those you have time to answer would be appreciated. I also know you have dealt with these issues in certain respects on previous occasions.

Thank You.
The Stranger
(10/19/1999; 21:15:53 MDT - Msg ID: 16938)
Inflation Update
Today's CPI report only showed the largest U.S. consumer price increase in 5 months. And, of course, hearing news like that, the crowd couldn't snap up those Wall Street bargains fast enough this morning. Why hell, I guess 5% annual is no inflation at all, is it?

Well, it may be no inflation to some, but it is precisely what this writer predicted here at USAGOLD almost 9 months ago. It is also what the bond market, various commodity markets, and the Fed have warned us about all year long. Yet, how ridiculous are the contortions through which the disinflation crowd puts itself in trying to explain away the obvious. Friday, on CNBC, one commentator was heard to say that, if you didn't smoke or eat or drive a new car, you hardly experienced any inflation at all. Of course he left out most healthcare costs and most housing costs, which don't count in the government's numbers and have been running well ahead of both the PPI and the CPI of late.

Today "Institutional Investor" magazine's Economist of the Year (sorry sir, I did not catch your name) declared that the bond market will make certain there is no inflation. Well, excuuuuuse me, but that never seemed to work in the 70s. Inflation is by definition an increase in the money supply. Sooner or later more money shows up in higher prices, and that is precisely what is going on NOW. You can raise rates as high as you want, you can send your bond market to absolute zero. None of this will make a whit of difference unless you control the growth of money. The problem is how to do that when so nascent a worldwide recovery hangs in the balance, y2k approaches, and U.S. stocks are in dive mode? Mundell might suggest coordinating such an act with a tax cut, but Clinton has already disarmed himself of that weapon by vowing to veto virtually anything that comes along.

I know the gold rally appears to have petered out these days, but I wouldn't be duped by what, in my judgement, is just a feint. The way I see it, neither bonds, nor the dollar, nor the stock market have bottomed yet. And gold? Why, I think it's just warmin' up.

SteveH
(10/19/1999; 21:29:57 MDT - Msg ID: 16939)
What call?
FOA, what call in London? Tell us more, please.
Bonedaddy
(10/19/1999; 21:42:27 MDT - Msg ID: 16940)
Howdy Stranger!
Man, I've missed your posts! Do you suppose that real inflation is just hard for people to see in a "virtual world"? But, I'm predicting one thing will become more affordable, greenbacks as wallpaper.
Black Blade
(10/19/1999; 21:51:40 MDT - Msg ID: 16941)
can you believe the spinmeisters?
Howdy stranger! It sure is a good thing that I don't need energy, drink or eat...otherwise I'd be in real trouble! Thank God for the core rate! I feel much better now. I guess that explains the current drop in Au (-0.50) and the rise in s&p futures (currently +4.70). Oh well, I guess all is well, never mind that new highs at 19 and new lows at 396 don't mean anything. Well stranger you really did take the words right out of my mouth. Good to see you back!
Scrappy
(10/19/1999; 21:56:18 MDT - Msg ID: 16942)
ORO
Oh.
Thanks. Re: the mystique of gold. Oh. Thanks. :}
ORO
(10/19/1999; 22:00:10 MDT - Msg ID: 16943)
The Stranger - Inflation indexes
Aside from the PPI and the CPI, there is the GDP deflator which does include health care. Unfortunately, it also includes the government's $ estimate of the "horse power" of computers rather than their actual selling price in the calculation. This is a (stupid) attempt at making sense of the economic value of technology. The idea is that the marginal value of each additional megaflop or megabite is the same as the previous. The measurement is better on a logarithmic scale, but not even close to precise.
Bottom line, there is no official aggregate figure, published by the government, that can even come close to estimating the actual inflation rate.
There is another issue - one of interpretation. Some industries are running out of workers and some key materials, in particular construction, where in some areas construction is halted because contractors can't find people to fulfil contract, in others, wallboard was not ordered early enough and the crews sit idle for a short while and go home. In some areas, the economy is stretched to the limit, and if prices were facing resistance before, this resistance is slowly falling away.

By my index of lowest available prices for foods and gasoline, we are at 25% inflation. In some food areas it is closer to 50% Y/Y. (sampled in two week period in Sep.)
Chris Powell
(10/19/1999; 22:06:02 MDT - Msg ID: 16944)
Get the industry to stand up for itself
One more day for the Denver gold show.
Let them hear from you and we can beat
gold's enemies.

http://www.egroups.com/group/gata/258.html?

http://www.egroups.com/group/gata/260.html?
Black Blade
(10/19/1999; 22:06:18 MDT - Msg ID: 16945)
ORO....kudos!
One more thing. When the Gov. calculates food in the base CPI for example....Meats can substitute for one another, such as steak vs. hamburger vs. chicken, etc. Who knows, maybe even vs. baloney. The point is the CPI is actually meaningless. I heard one of the talking heads on the tube today trying to explain the core rate. How pathetic!
The Stranger
(10/19/1999; 22:08:29 MDT - Msg ID: 16946)
Bonedaddy
What a nice thing to say. Thank you for your kindness. Wall Street professionals learned long ago that the market goes up more than 60% of the time. Therefore, you can usually be right by just being an eternal optimist. This will also free you from long hours of study and provide ample time to work on your golf game. Of course, once you have invested your clients' money accordingly, you have little choice but to talk your book. Sure enough, it makes sense, but that is no game for heroes, if you ask me.
Black Blade
(10/19/1999; 22:19:27 MDT - Msg ID: 16947)
Bonedaddy
You are so close. I saw an episode on A&E once called "American castles" (I think that was the name). Someone actually did have sheets of US currency as wallpaper. And in the most appopriate place perhaps.....the bathroom! Sorry, but I could resist.
Gandalf the White
(10/19/1999; 22:22:16 MDT - Msg ID: 16948)
Hey Goldspoony -- Did youse see this ?
Gold Mining OutlookGold Mining Outlook
by Steven Jon KaplanBack Issue List
Updated @ 6:55 p.m. EDT, Tuesday, October 19, 1999.



KAPLAN'S CORNER: QUESTION: Platinum and palladium seem to be holding up well even as gold has been dropping. Do you think they represent a good buying opportunity?
ANSWER: Definitely not. Recent share price weakness in platinum mining shares around the world after a significant rally, including Stillwater in the U.S. and Anglo and Impala in South Africa, are probably pointing the way
toward lower prices for platinum and palladium in the coming months. In any downtrend for gold, the PGMs (shorthand for platinum and palladium) are likely
to underperform, and may even suffer a collapse as their traders' commitments show that their current lofty price levels, especially for platinum, have been
primarily achieved through speculator accumulation. Any downturn will trigger a cascade of speculator sell stops. Once platinum mining shares begin to outperform the metals themselves, it will probably be time to accumulate these
again; their traders' commitments have been strongly bullish at least a few times per year and will almost certainly confirm any good buying opportunity.
*****Better get more saddle glue !
<;-)
Quabbin
(10/20/1999; 01:42:54 MDT - Msg ID: 16949)
Consolidation Sweeping Through Gold Sector - Reuters repost @ Kitco
http://www.kitcomm.com/comments/gold/1999q4/1999_10/991020.024939.ftlaudeee.htmsame old fluffy Ashanti story but I liked this twist:

"Huge losses stemming from ***ill-advised*** gold hedging positions have complicated at least one takeover bid."

Aragorn III
(10/20/1999; 03:15:06 MDT - Msg ID: 16950)
Some food for thought...and balance
I seem to be about a week behind in my reading. I will read and respond to recent post as time will allow. Until then, there was this from a week ago, from portions of recent articles reposted here by SteveH--articles orignally cited within Le Metropole commentary.

October 11 - UBS turns screw on gold firms
Swiss bank acts on debts as hedging contracts go sour
By Dan Gledhill
...Gold's recovery, to close on Friday $70 above this
year's low at $320.15 an ounce, was prompted by the
decision of European central banks two weeks ago
to suspend the selloff of their reserves. It brought
to an end four years of almost continuous decline,
which saw the price of the precious metal plummet
from $415 to $250 an ounce. Analysts believe that many
gold producers, assuming gold would continue to
depreciate, took out derivatives positions
so large that they would actually profit from
lower prices.

[A ridiculous comment. Under a standard agreement that guarantees a fixed price for future gold as a safety net for "profitability" under the chances of lower future prices, the actual experience of lower prices will only succeed in producing lower returns on that fraction of gold which remains uncommitted to the price hedge. Put directly, $400 per delivered ounce remains $400 per delivered ounce. Whether or not the daily gold falls to lower prices, the profit stays the same...unless cost of production changes.]

One derivatives specialist said: "I think that,
judging by the events that have unfolded in the market,
the reasonable explanation is that some mines
have aggressively over-hedged."

[Rather light work for a "specialist", would you agree?]

It is unclear whether the banks that took out such
positions with mining companies and hedge funds decided
to cover their risk elsewhere, or chose to
leave their books open in the belief that the gold
price would come back. UBS declined to comment on
its exposure.

[Ahhhhh...here we get to the Art of the Deal. Not all deals unfold alike, as we see a "rising tide" does not "float all boats"...Ashanti as Titanic comes to mind--a deal written badly for them. If cost of production does not change, the profit does not change under a fixed payment per ounce...whether daily gold goes ever lower (explained above) or higher as we see here. As we see that only the daily gold price has changed suddenly higher, their business profits would be expected to rise in small measure because not each and every ounce was pledged to the guaranteed price. However, they wrote a bad deal through exposure to margin calls. With no margin call, the books are left open and the profitable company liquidates its position over time with delivery throughout whatever the daily price may become. More on this after the next excerpt.]
--------------------------
London (Dow Jones) October 11 -- Central Banks are
selling gold in order to prevent a further sharp rise
in prices from causing a major financial crisis,
according to Ted Arnold, analyst at Prudential Bache
Securities Ltd.
Many funds and banks sustained heavy losses over the
past two weeks as gold surged after 15 European central
banks stunned the market by saying they would cap
sales of gold for the next 5 years.
If gold prices continue to rise sharply they could
cause major losses at U.S. and European investment
and bullion banks and cause a domino effect that
could lead to a major financial crisis, Arnold said.
-------------------
Suddenly the media has worried about exposures and risks to these higher prices. Why the one-sided treatment? Gold is now up a "small" 60 dollars from its low at 250, and somehow pain abounds...threatening a calamity nothing short of, in the words above, "major losses at U.S. and European investment and bullion banks and cause a domino effect that could lead to a major financial crisis." And in the top article, we see the UBS remain tight-lipped to reporters' inquiry of its "exposure".

Yet, we all have seen mining companies in recent months attempt to soothe investors with their claims of gold deliverable with profits today--sold forward from times of much higher prices...some higher than $400 per ounce. But as the gold fell a "big" 150 dollars from those levels, where was the media clamour of impending doom and financial crisis? Where were the reporters' inquire to UBS "exposure" in writing the deal? Where was coverage of the bigger pain that must surely have been of the counterparty facing margin calls for his big cash side of the deal?

Do you see things as they are, or as the media would have you see them? Gold rises $60 and we weep for the mining side with gold that had braced for possible lower prices by securing future guarantees of cash...and we worry of financial calamity. Yet when gold fell $150, there was no weeping for the other side with cash that acted to secure future guarantees of gold...with no concurrent pronouncements of financial armageddon. What is the difference? The motive in the deal! Re-read, if you must, the writings of Aristotle in the Hall of Fame as a reminder that in large part the cash side took their position for the "gold profit" motive, not the "dollar profit" motive. Falling daily gold price was of no concern and no "pain" was felt. They did not weep for themselves, but rather felt satisfaction to see gold moving (and continue to move this day) to their hands at these "bargain prices" above $400...even as the few goldhearts on the street might pick up real gold crumbs at "derivative prices" during this time.

As the view through the eyes of the media chooses to be skewed, I write this as a means to offer balance...a reminder that the cash side to those "miraculous high price" guarantees through this time of low gold were courtesy of a group not born yesterday, and not born fools. For as long as you may pick up gold crumbs at derivative prices, I suggest you do it.

got bargains?
Canuck
(10/20/1999; 05:01:23 MDT - Msg ID: 16951)
To: JCS and Gold Dancer
re: Drooy and hedging
Could not find the 'gold-eagle' article on 'hedged' mining
companies. Please elaborate.

I think all of us should be very careful if and when purchasing mining stock. There has been many posts lately re: hedged vs unhedged mining companies. I was following one company that at least 4 posters assured me was 'unhedged', bought into it and it has dropped far more
than most others. I dumped the stock and swallowed the loss.
I bear no ill feeling towards the advise I received because
a) I can't be sure the company is hedged or non-hedged and b) it is ultimately my responsibility to research the stock
before I buy.

I will echo a quote for the benefit of all and in particular the newbies to this forum.

"The (free) advise you receive might be as good as what you pay for it."

JCS and Gold Dancer,

The above is not to imply that Drooy is not 'unhedged', it is to say that one should not run out and buy mega-shares of Drooy because of an opinion of its speculated financial
position.

P.S.
I am interested in Drooy and more info. re hedging as per first paragraph.
ss of nep
(10/20/1999; 05:40:12 MDT - Msg ID: 16952)
DROOY
Taken from Gold-Eagle
-.-.-.-.-.-.-.-.-.-.-
WHAT DOES IT TAKE TO OVERCOME "IGNORANCE"!!!! in regard to Durban Deep
(ray) Oct 19, 22:00

I have been gone for 2 days and ignorance appears AGAIN.
Here is THE response from company OFFICIALS about
any hedge from Durban Deep.

BTW-I have SOLD my Harmony and many other stocks
to buy ALL the shares of Durban I can get my hands on.
My $$$ is where my mouth is!
Tally Ho
Ray

REPLY FROM DURBAN COMPANY OFFICALS-

This is the reply Mike & I sent to Mr Saville aka "MILHHOUSE". Please pass it on to anyone else who needs clarity and perception correction.

Regards,
Mike Prinsloo
Ian Murray


Hi Mr Saville

I read with interest that Durban Deep has been expanding its hedge book. This
is not true. DRD's hedge book is managed by Mr Roger Kebble (Chairman), Mr
Mike Prinsloo (CEO), Mr Charles Mostert (CFO) and myself. We have not
authorised any forward sales of gold since prior to the last UK Gold Auction.
What we have done however, is to guarantee greater upside participation
through buying Call Options (1.2 million ounces) and physically buying back of
certain forward sales. Our current "net exposure" is 850,000 ounces (being
forward sales plus call options sold less call options bought) which is less
than one year of DRD's production (1.2 million ounces). This hedge book is
managed in the interest of all stakeholders.

1.. The DRD hedge was put in place to protect the business against further
declines in the gold price.
2.. It was also put in place to protect our capital upgrade and renewal
programmes which have been essential in the growth of DRD production profile
over the past two & half years. We have completed 16 of these programmes to
date and are busy with the last 3 big programmes. All these will add
additional ounces at <$250/oz.
3.. Part of our hedge is used to protect marginal ounces from closure and
then restarting mining operations (at extremely high cost) during this very
volatile period of gold price movement.
4.. We have also been busy with restructure programmes at the operations
we have acquired and we fix a target price for these operations while we
conclude the restructure and bring these operations into profit.
5.. As we continue to acquisition and grow, the percentage hedged reduces
accordingly.
6.. With the recent Harties acquisition with an additional 400,000 ounces
of production per annum and our growth in Australasia, DRD is now a 1.2
million ounce producer per annum which will continue to reduce our net
exposure and allow upside participation.
7.. DRD's reserves exceed 14 million ounces, which means the "net
exposure" is roughly 6% of DRD reserves (and 1% of resources).
8.. Our current hedge is spread over a five year period, but we have the
ability to accelerate delivery into our hedges which we are currently doing in
order to maximise exposure for future upside participation.

This, to us, is good business and adds to shareholder value. We are well
positioned to take advantage of the higher gold price.

I would appreciate if you would correct the statement that you posted on Gold
Eagle as it is incorrect, damaging to shareholder value and skews perceptions
to DRD.

Regards

Ian Murray (Manager: Corporate Finance)
Durban Roodepoort Deep, Limited


JCS
(10/20/1999; 06:46:35 MDT - Msg ID: 16953)
Canuck (10/20/99; 5:01:23MDT - Msg ID:16951)
Its the article by Chapman "Gold-Part III", found in the scrolling box upper left section.
CoBra(too)
(10/20/1999; 08:15:07 MDT - Msg ID: 16954)
Smaller than expected trade deficit - sends Wall Street & $ rallying !
Trade deficit only 24.1 billion in Aug. vs revised 24.9 bn. in July. Wall Street and the $ treats this as victory and as if the current account balance being in surplus. You have to admire these guys - enough spin to prolong bubblemania for a few days. I begin to wonder if AG has "expected" these
CPI and trade numbers and his Thursday speech was proactive after all?

@ MK - thanks for your assistance on the books and more thanks for your kind words. The Vienna Woods enjoyed the best September and October so far in years. Over the last week it started to get cold, though weather still great and
the most colorful foliage turning I've seen, since 10 years and that in Stowe, Vt. Thanks again for tolerating CoBra's on your great forum (too).
SHIFTY
(10/20/1999; 08:44:37 MDT - Msg ID: 16955)
Gold stocks without hedges
Can sombody please post a list of gold stocks that are not hedged? preferibly trading on NY ex. thanks
Scrappy
(10/20/1999; 09:01:56 MDT - Msg ID: 16956)
HELP!
HELP!Would somebody please tell me what it ws you were all saying about HARMONY a few weeks ago? A friend of mine took a look at what I was saying about gold, (ignoring the 'buy physical' part), saw that harmony was a good buy, and BOUGHT SOME! Did he luck out, or do I need to beat him for his stupidity??!!
USAGOLD
(10/20/1999; 09:08:46 MDT - Msg ID: 16957)
Today's Gold Market Report: Ashanti, Cambior Watch Continues
MARKET REPORT(10/20/99): Gold was down marginally at today's New
York COMEX open after a fairly quiet night overseas........Gold weakness
has been attributed to a stronger dollar, a wait-and-see attitude among
major players concerned about the near defaults on hedge positions by
Ashanti and Cambior, and general market nervousness after the nearly $70
up move over the past few weeks. Technical traders were expecting a
correction that many say will find support in the $305 to $310 area, at
least initially.......Traders are also reporting strong physical demand
at these levels....... Lenny Kaplan at LFG Bullion Services reports that
Goldman Sachs was a big buyer yesterday on the dips. Goldman has been
mentioned as one of the counterparties on the hook for the Ashanti hedge
book if they should default but that has not been
verified................John Willson, CEO of Canada's Placer Dome said
yesterday at the Denver Gold Group meeting that the bottom for gold is
probably $300 and stands a good chance to returning to the stronger
trading ranges of 3 to 4 years ago ( Ed. Note: above $400 per
ounce.)................. Cambior said yesterday it is now interested in
selling off assets and a merger assuming it reaches an agreement with
its counterparties on its hedge book............The trade gap came in at
$24.1 billion for August and though failing to set another sent bonds on
a slide nevertheless........The World Gold Council told Radio Free
Europe that countries seeking to join the EU in its eastern expansion
could maximize their clout by building up gold reserves.......That's it
for today, fellow goldmeisters. See you here tomorrow.

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
(10/20/1999; 09:13:43 MDT - Msg ID: 16958)
Harmony
Harmony owns a big chunk of DROOY
- - - - - - - - - - - - - - - - -
from gold-eagle: the following
- - - - - - - -
@Josef
(Atahualpa) Oct 20, 10:57

You nailed it. If you can't decide which one to own, have both or none. If one still thinks that HGCMY has more short-term upside potential than DROOY, then buy both, and when HGCMY goes up first, take your profits and reinvest them in DROOY. And then when DROOY goes up, way up, I would take profits and buy physical gold. I understand that this strategy is risky if you think that it will be very difficult to get physical gold if the price were to rise dramatically, but for people who live in cheap gold producing countries that do not have LBMAs, COMEXs or Hannibals, that is another story. Of course, if all the gold call option players in this forum have the bad luck (high probability) that the paper gold market defaults, I will invite you all down here to Peru, where we can walk around the mountains and jungle, picking the nuggets from the air...

Gold Dancer
(10/20/1999; 09:15:03 MDT - Msg ID: 16959)
Canuck
http://www.drd.co.za/

Here is the web site of Durban Deep. Their hedging has been there for a couple of weeks.

Gold Dancer
Gold Dancer
(10/20/1999; 09:19:07 MDT - Msg ID: 16960)
aa of nep
Are you sure it is Harmony that own's a big piece of Drooy?

I thought is was RANGY with its 6.35 million shares plus 2 DRD options.

Gold Dancer
The Stranger
(10/20/1999; 09:20:12 MDT - Msg ID: 16961)
New Record High for U.S. Exports
I think it worth noting that the lower dollar and recovering foreign economies have combined to lift American exports to $82.03 billion per today's August report. This is a new U.S. export record. I think this news underlines the fact that the bull case for gold is NOT about stagflation or economic decline. What it IS about is dollar inflation and a whole lot of short covering.
JCS
(10/20/1999; 09:29:24 MDT - Msg ID: 16962)
SHIFTY (10/20/99; 8:44:37MDT - Msg ID:16955)
This is from Chapman's report on www.gold-eagle.com:

"The gold market will remain uneasy for sometime to come just
based on the damage miners' hedge books have suffered
during the recent rally. The first declared victim is Cambior,which announced it had hedge 2.7 million ounces at an averageprice of $318 an ounce. They will pursue discussions with their counter parties concerning the management of the situation of its hedge book.

Another heavy hedger is being handed its head, Ashanti
Goldfields. A net hedge of 10 million ounces has backfired
spectacularly leaving the company exposed to the tune of
$570 million at a gold price of $325. an ounce. Lonmin, 32%
shareholder, has bid to buy Ashanti out.

Among the sophisticated it's thought that the FED had held
off on raising interest rates to protect prominent institutions still enmeshed in large losses from short gold positions. We think the idea is well founded. The next rate hike by the FED and the ECB should be early next year, if necessary. The FED 1/4% and the ECB 1/2%.

Dealers caught in the crossfire are Goldman Sachs $105
million, Societe General $82 million, Credit Suisse First Boston $62 million, UBS $61 million, AIG $32 million and Chase Manhattan $25 million. This has forced Ashanti into merger talks with Lonmin, a UK mining group.

As we warned in the last release don't buy Newmont until we
can see how much damage has been done. Newmont's stock has
since fallen several points as has Barrick Gold. This trap
central banks have set is the culmination of 15 years of gold mining companies being the antithesis of what they should be. Instead of shutting mines down due to lower prices, they higraded them and sold forward selling off their most valuable ore assets just so they could keep themselves in fat salaries and directors' fees. Investors should have been throwing them out of their positions, but they didn't. Forward contracts and options are now burying these mining companies and their investors. Let the lawsuits begin. These forwards and options are now major liabilities. All those poor investors that bought major gold stocks are getting screwed for not finding out the companies' hedge position. Barrick has sold forward 13.3 million ounces of gold at an average price of $385 an ounce through 2001. If the gold price reaches those levels, and there is a good chance it will, then Barrick won't make much money. As Riley used to say, what a revolting development this turned out to be.

Here are a few companies, that as far as we know, have either low or no forward positions. We warn you, that if you want to purchase these issues, that you personally call the company to double check our research. We are here to try to help, but we don't have all the answers, just most of them. Those with no hedge positions that we know are: Battle Mountain, Buenaventura, Freeport MacMoRan, Harmony, Agnico-Eagle and Goldcorp. Those with some leverage: Homestake - position unknown, Kinross 12%, Anglogold 11%, Durban Deep 5%, Gold Fields 2%, Western Areas 2%, Glamis - position unknown, Meridian 11%, Kidston 13%, Iamgold 5% and Randgold 5%.
Gold hedging by producers is not surprising. Bema has hedged
for 2.3 years, but at the same level as Barrick, $385. an
ounce. If prices are higher they'll be losers. Even if
companies' forward sales and put options to cover come out
even the mines will have made no money. We wrote a long
article about this in 1992. Approximate hedged positions are
as follows: Barrick 3.9 years, or 26% of reserves; Cambior 4.3 years, or 52%; Echo Bay 2.5 years, or 23%, Kinross 0.9 years, or 12%; Placer Dome 2 years, or 19%; Bema 2.3 years, or 14%; Eldorado 2.8 years, or 28%; Meridian 3.8 years, or 11%; Teck 2.5 years, or 33%; Ashanti 7.4 years, or 49%; Randfontein 1.6 years, or 20%. Australia is unbelievable, Acacia 4.7 years, or 73%; Delta 2.3%, or 47%; Goldfields 4.4 years, or 54%; Lihir 3.9 years, or 21%; Newcrest 9.5 years, or 81%; Normandy 7 years, or 91%; Sons of Gwalia 8.9 years, or 113%. These and many more issues should be avoided if hedging is above 20% of reserves. That doesn't leave much to buy does it? Can you see the massive mismanagement. Shareholders sue the hell out of the officers and directors, personally."
Cassius
(10/20/1999; 10:02:27 MDT - Msg ID: 16963)
@Goldspoon
Man, Where are you? Isn't the "Goldspoon Platinum Leader Rule" supposed to be kicking in right about now? Platinum's up $18. Where's a guy when you need him? Cassius
Gandalf the White
(10/20/1999; 10:05:57 MDT - Msg ID: 16964)
It took a while to find out which vulture would get RYO's best.
Company Press Release
Northgate Announces Purchase Of The Kemess Mine
VANCOUVER, B.C.-- ( BUSINESS WIRE ) --Oct. 20, 1999--Northgate Exploration Limited ( TSE symbol - NGX ) today announced that it has reached agreement to purchase the Kemess mine and orebody from Price WaterhouseCoopers, the interim receiver for Royal Oak Mines, for approximately US$180 million. Closing of the transaction is expected prior to the end of the year and is conditional on court approval.
Terry Lyons, President and CEO of Northgate stated that Kemess is the largest gold mine built in Canada during the last decade and is based on a world-class orebody. Northgate has received strong support from the Province of British Columbia in completing the purchase, which has made it possible for Kemess to provide high quality jobs to 400 employees.'

The financing required to complete this transaction, net of the company's current commitment to the project, totals approximately US$145 million. Trilon Financial Corporation has agreed to arrange or provide the additional financing required. This financing is likely to comprise a combination of project debt and equity capital to be issued by Northgate. The precise structure of the purchase and the amount and terms of the project debt or equity capital to be raised have yet to be determined.
******Looks to the Hobbits as if TRILON Financial Corp. really bought the mine.
<;-)
Gold Power
(10/20/1999; 10:09:52 MDT - Msg ID: 16965)
Goldman Sachs and Gold
I think it's a very positive sign that Goldman-Sachs (GS) was in the market buying gold yesterday. GS has been one of the sharpest players in the game.

As you recall, GS went massively short just days prior to the announcement of the Bank of England to auction gold. I'm sure GS made a lot of money on the gold decline after the announcement.

Then in August, with gold below $260, GS began accumulating gold in a very aggressive manner, looking for it to move over $300 by December.

It did.

The fact that GS is now back in the market buying aggressively, can be nothing but good for those of us on the long side. Because GS has been so accurate in its gold positions, it's almost as if it knows what's going to happen in advance.

Gold Power
TownCrier
(10/20/1999; 10:29:03 MDT - Msg ID: 16966)
Tea leaves: IMM currency futures mixed after U.S. trade data
http://biz.yahoo.com/rf/991020/ov.html"When the numbers come in at expectation or below, it's kind of a sense of relief, and the dollar makes residual gains. Nonetheless, one should not be popping champagne corks when we still have a $24 billion trade gap." --David Ethridge, director foreign exchange analysis for Standard & Poor's MMS
Gandalf the White
(10/20/1999; 10:32:36 MDT - Msg ID: 16967)
Gold Power's GS comment !
YOU ARE JOKING!!! Right ?
<;-)
TownCrier
(10/20/1999; 10:43:48 MDT - Msg ID: 16968)
Firms 'already hit' by Y2K bug
http://news.bbc.co.uk/hi/english/business/newsid_477000/477991.stmA UK survey of Britain's top 1,000 companies shows nearly one in three has already experienced millennium bug problems, and many remain unconvinced by official reassurances. As a result, 98% of thoses surveyed are taking some form of action...84% are preparing for possible power failures, 86% for loss of telecommunications links and 97% for systems failures.
SteveH
(10/20/1999; 10:47:25 MDT - Msg ID: 16969)
Counterpoint (from my friend, not Leroy)
This is in response to the latest ORO piece that I sent to my friend (the sceptic original):

Steve - this is nothing but opinion based on speculation and conjecture. He cleverly weaves a seemingly plausible tale, but if one of the "truths" upon which he builds his argument proves inaccurate, the house of cards tumbles. These assumptions are far from indisputable truths. I draw your attention to his conclusion:

"You said in a number os posts that a fiat currency can be managed by a
responsible monetary authority. I believe it can not. The two main reasons
are that (1) the funny money obfuscates market signals and gives false
readings on anything measured, thereby blinding policymakers and assuring
that most policies will be erroneous, I would say that the current structure
can't even allow us to figure out our trade balances or make the GNP
measurements meaningful."

Fiat money is nothing but a medium of exchange. As such it is an accurate measure of the relative value of marketable goods and services - BY DEFINITION. You can not argue this point. The only obfuscation to be observed will happen if one tries to take the measurements using some ficticious absolute scale and doesn't know what the conversion formula is. And that is the fallacy with this whole line of reasoning. There is no absolute scale - not gold, not anything. Your analyst friends concoct elaborate scenarios to "prove" opinions, but each assumption - presented as an absolute - really isn't. In calculus, we learn to perform calculations - really approximations - using changing (but related) variables (functions) which defy simple mathematical analysis. You and your associates are not savvy enough to analyze the complex interrelationships between currencies and commodities, and write off the whole process claiming the signals are obscure, the measurements flawed, and the conculsions erroneous. True, the information available is not absolutely perfect. But it's a complex world, and perfect information is a pipe dream. If you understand the complexities of the related rates and dynamics at work, and have constructed a good model (as I believe the powers that be have), your approximations will be close enough to be useful.

You are very confused between the role of money as a facilitator of trade and the role of money as a repository of wealth. Yes, different currencies will move with respect to each other - that's a given. Euros may gain value, dollars may decline relative to each other. Gold may rise relative to the dollar. Great. Place your bet. But don't think for a minute that powerful forces are not at work to preserve the status quo. I won't bet against them.
TownCrier
(10/20/1999; 10:48:57 MDT - Msg ID: 16970)
Y2K Czar Says Thousands of Businesses Still at Risk
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/1999/10/18/BU9812.DTL&type=tech_articleWhite House Y2K czar John Koskinen said in an interview last week of the appoximately 800,000 small businesses across the country that remain at risk, "If you're a small company that decides to wait and fix it and does not get it fixed on time, our position is, 'That's life.' It's a great, free country, and you have the freedom to fail."

Individual citizens would do well to heed that same counsel. Anyone who views the government as their ultimate safety net is surely in for a hard landing.
TownCrier
(10/20/1999; 10:54:39 MDT - Msg ID: 16971)
(AP) Trade Deficit Narrows Slightly
http://biz.yahoo.com/apf/991020/economy_3.htmlLots of big numbers reviewed here for your wincing pleasure.
Gold Power
(10/20/1999; 11:22:34 MDT - Msg ID: 16972)
Gandalf and Joking
Joking about what, sir?

Gold Power
Cassius
(10/20/1999; 11:45:01 MDT - Msg ID: 16973)
@Gold Power A Possible reason for Gandalf's comment.
There is a strong rumor on the street that GS is down about $2 billion on the recent rise in POG. Their commodities trader has been dismissed because of the bungle. Their taking delivery on approximately $500k in PM's was for a client. Therefore, contrary to your statement, these guys don't look any brighter than the guys over @LTCM. It's just a little easier when you're well connected and a share-holder in the US Federal Reserve Bank, but it doesn't guarantee positive results all the time. Sometimes arrogance overcomes the best in all of us. Cassius
Yellin' of troy
(10/20/1999; 11:51:29 MDT - Msg ID: 16974)
Journeyman -- the gold of old
The fact that the U.S. once had a gold standard, and that it worked pretty well, does not refute the theoretical argument I made and does not imply that we can easily reestablish gold now, as if nothing had happened in between. The use of gold (or anything) as money depends critically on history, and the history of gold today is not what it was a century ago. I hope my reply to Aragorn III yesterday clarifies my thinking on this point.

But I want to think aloud about the old gold standard a little, because I think it, or more precisely the attacks on it, may actually bolster my argument. Let me admit at the outset that this is highly tentative, hardly even half baked. I simply don't know enough about the history, monetary or political or social, to feel confident about any of this. But I have a vague impression that gold was rather often under attack, and not always from the same quarters or in the same political alignment. In particular, the assailants weren't always bankers angling for a printing license; one of the most intense struggles was for the free coinage of silver. No doubt there were sectoral and regional and partisan interests at stake, and certainly any officially fixed price ratio between the two metals would create distortions and special interests. But I have (again) a vague impression that through all the varying demands and alignments, the attack generally took the form of an assertion, a belief, a feeling, that gold was "too scarce," and must be supplemented with other money if money was not to be too tight. Now, I'm sure a lot of this was just the usual wish of existing debtors for inflation, but that only works if it's unanticipated, so it can't work very often, or very well if it takes a long political agitation to accomplish. Likewise, any hope for cheaper credit in the future would be unfounded; silver mines need bankers like any business, so the banking industry will find out the prospects for silver production and adjust rates accordingly -- and inflation through coinage rather than credit does not in itself make credit cheap. Random misanticipations about price levels could make rates on existing loans painfully high, but other times pleasantly cheap, and when they're high you can refinance, so even if people notice the bad times more than the good, it's hard to believe such fluctuations could sustain the attack on gold. Obviously, adding up all these possible influences, with generous doses of ignorance and gullibility thrown in, it's hard to come to any firm conclusions, but I wonder, could there be more to it? In particular I wonder: Could the "money is too scarce" idea have been *right*?

Not if gold was functioning as nearly pure concept money, that is, with its price determined entirely by its monetary use without regard for any other value. For the price level would simply adjust to however much or little gold there was, until the amount on hand was just right in terms of its buying power. But suppose people didn't think of gold that way; suppose they imagined (perhaps quite incorrectly) that their gold was trading, and was supposed to trade, must trade if it was to be sound money, at its "real" value, which could be rather a vague concept, but would very naturally include some idea about possible commodity use (or production cost). This unwillingness to let the price of gold get (too far) above some "true" value would be all the more likely if an alternative money, like silver coin, was available, familiar, and equally "natural,"
for the price ratio between two such close substitutes would make changes in the POG more noticeable, and the availability of an alternative would make ditching gold money thinkable. Actually, though, most people would have no idea of the commodity/use value (or production cost), and would rely on *past* price. There is an interesting and problematic phenomenon in music, that the first really good performance you hear of a piece becomes, in your mind, the definitive interpretation. Might there be something akin in prices, that the price you knew as a teenager or young adult or whenever seems natural and correct? In fact, I think some such effect happens even in *dollar* prices, but probably much less, since the fiat dollar is so obviously "unreal" that it would be harder to imagine it as having a true, intrinsic value, and probably harder, as well, to think of price changes as changes in the price of a dollar (which is *uniquely* money) rather than those other things. With gold, conceived of as commodity money and only one of two, it's easier to think of both a proper price and a fluctuating price. So what happens when gold seems too dear, because the price has risen too fast, either because the economy in general, and thus the demand for money, is expanding faster than the gold industry or perhaps in a business-cycle deflation? Some people, who actually think of it in terms of the dearness of gold (most likely in relation to silver) will take the opportunity to "sell"/spend some at this excellent price. But even the majority who don't imagine that there is any such thing as a "POG" (because it's the numeraire) will act much the same. All those possible purchases they were considering will seem unusually cheap, and presumably only temporarily so, while anything they might be thinking of selling will not, they will discover, bring in as much money as it "should." So they will want to buy more and sell less than would be optimal or normal. This will leave an unusually and uncomfortably low cash balance, for you can't spend your gold and have it too; if you spend too much too early, you sacrifice flexibilty and liquidity for later. Money seems "tight." All that urge to spend drives up prices, which is to say drives down the POG. People don't believe how dear gold has to be to clear the market, so they insist on keeping the POG artificially low, so the "gold market" doesn't clear, there is a shortage, everyone is making do with less than they really want. With gold too cheap, i.e., with the prices of everything else too high, you need more gold for the same purchasing power, more gold to maintain the proper real liquidity. But that much gold isn't there. So the cry goes up: not enough gold, not enough money in circulation. As I said, something like this can happen with paper, too, though probably on a smaller scale. But at least with paper, it's only a matter of fine-tuning the system, demanding a "looser monetary policy." Whereas with gold, clamor con't extend the supply, and everyone knows it. So the political demand has to be for a change in the whole system, for some other *kind* of money, either as a supplement or a replacement.

Which is what happened. So until it is clear that other explanations are adequate, this is at least some evidence in favor of the hypothesis of a psychology in which gold has a "proper" price, above which the monetary economy screws up. Which feeds my skepticism about the stability of a system of newly monetized gold at a price vastly in excess of what people are used to. Even allowing a considerable fudge factor for the difficulty in comparing new prices in gold to old ones in dollars, a factor of ten is hard to miss. Perhaps such a huge increase would make it simply impossible for people to think of the old, low price as truly correct; so the 19th-century-style "shortage" might not appear. But we would still be left with a keen awareness and discomfort that gold is remarkably pricey, which could feed the reverberant doubt of my earlier argument.
Cavan Man
(10/20/1999; 11:55:51 MDT - Msg ID: 16975)
SteveH (your friend)
Indeed, powerful forces are at work to maintain the status quo. This particular dynamic can be observed insightfully in either macro or micro contexts. The question always is, "Will they (powerful forces) succeed or fail?". As we have witnessed "failure" before, I humbly submit the bet is even money. Also, I'm not game enough to be against the likes of FOA, ORO, MK, Aristotle, SteveH, et al.
SteveH
(10/20/1999; 11:58:37 MDT - Msg ID: 16976)
repost
www.kitco.comDate: Wed Oct 20 1999 10:42
cornucopia (Pete, the Saudis have been changing their oil for gold for years now!) ID#340233:
This is nothing new! Why do you think the price spikes up so high in 79-80? It was mainly due to the massive positions the Arabs bought with the oil profits. The same thing is about to occur again!~ All the reasons you fear gold are exactly the reasons you should be selling other assets to buy it! Don't listen to all the bogus numbers the experts are lying to figure and figuring to lie with, go with your gut instinct and history,-------- a sure winner! Gold Stocks, gold and silver are looking like a mighty fine buy today!
y2kwiz
(10/20/1999; 12:02:44 MDT - Msg ID: 16977)
Homestake Hedge Position
http://biz.yahoo.com/prnews/991018/ca_homesta_1.htmlHere is a news report listing the hedge position for Homestake Mining
Gold Power
(10/20/1999; 12:04:43 MDT - Msg ID: 16978)
Goldman-Sachs
Cassius,

Thank you for the perspective. As for the rumor on GS losing money on the gold rally, if you recall, back in July when Bill Murphy got really strong on buying gold and gold stocks, much of his reasoning was built on the fact that GS was going long on gold through options, plus buying as much as 85% of the gold that came available through the COMEX (admittedly, I don't fully understand what this means). The comment from GS was that there was tremendous demand for physical gold; so, it was buying.

GS put out a bulletin to its clients at the time telling them to get long.

I understood they were buying December $300 calls. At the time I thought it was fairly far-fetched gold would rise as far as $300 by December. I was wrong; GS was right.

I hear the rumors about GS and the large banks being in big trouble over the gold rise; but the price movement of the Bank Index does not give acknowledgement that these rumors are true.

I mean we've seen what gold-short problems do to a stock with real losses, such as Cambior and Ashanti. GS stock has not been hit like that.

It appears to me that GS either covered its short at the bottom and/or took on a net long position in July/August for the upcoming rise. I imagine it profited handsomely from the rise in gold.

Now, it is taking on an even larger long position. Or so it appears to me. I say; go with a winner.

Gold Power
Leigh
(10/20/1999; 12:08:27 MDT - Msg ID: 16979)
Repost from Kitco
This is a very thought-provoking little post from tolerant. It is about Mr. Greenspan's speech of yesterday:

Greenspan...simply put...an older man...discussing the administrative process of dealing with a grotesquely flawed system which he wrote about in the fire of his youth as criminal and a blueprint for the statists robbing the people blind....

Catastrophic it would be if he merely walked up to the microphone and said...

"Gold." ... "Thank you."

And walked away.
Tomcat
(10/20/1999; 12:09:58 MDT - Msg ID: 16980)
Are the real issues regarding the POG being avoided?

Everyday we read about Ashanti, Barrick, Cambior, Royal Oak, etc. While those mining issues are important the real meat and potatoes are avoided.

Some of the main issues are (perhaps others can add to this list):

1. Are the massive short positions being covered?
2. Is physical gold getting back to the original lenders? 3. Why are forward rate between 2-3%?
4. Are massive rollovers happening? Why?
5. What is actually trading? Is it mostly paper gold?
6. The mining industry is clearly having trouble but they are avoiding GATA like the plague. Doesn't seem like they are on the side of gold to me.
7. Look at Aragorn III's post today. It brilliantly summarizes the real issue of the fraud that is occuring. Still, nothing in the press.
8. Isn't is a bit strange that few lenders are demanding their gold. Looks like noone wants to break rank. Break rank? Are the lenders that organized? Is this legal?

Two weeks ago we thought that the shorters were in deep doo doo. We started to see the short scam getting real exposure. Then, all the press focused on the mining issues and these heavy issues were avoided.

It looks to me that the dark side is doing a great job of buying time, supporting rollovers, preventing the breaking of rank, while driving down lease rates and the POG.

If you were being tracked by dogs and threw some fish on your trail the dogs would be distracted and the chase would be lost. The mining news, while important, is a red herring (something that detracts from the main issue).
DD
(10/20/1999; 12:11:13 MDT - Msg ID: 16981)
TC - 800,000 Y2k failures in small business
Hey TC -

What a great job you do. Keep up the steller work. Just a note on: "White House Y2K czar John Koskinen said in an interview last week of the appoximately 800,000 small businesses across the country that remain at risk, "If you're a small company that decides to wait and fix it and does not get it fixed on time, our position is, 'That's life.' It's a great, free country, and you have the freedom to fail."

John K., as near as I can tell, almost always finds a way to make things spin better than the data indicates. Even the spin masters don't argue that 1/3 of all 8 million small businesses in the US will do NOTHING about Y2k. As I recall, 1/3 of 8 million is closer to 2.7 million than 800,000.

A couple of other interesting notes. Yourdon says that in large software projects, everything is "on schedule" until about 30 days before the project is due. Then, it becomes late. How late? Well, how about months to years to never? 6 months is a good average guess with 25% of the projects cancelled. How do you cancell an overdue mission critical Y2k project? Easy, close the company. You don't suppose that some of these "on target" massive Y2k projects might become late in December, do you? Nah. Y2k software projects are somehow immune to the history and patterns of all other software projects. I wouldn't bet my life, job or savings on this mindless notion. It's also interesting that nearly every business is urged to do contingency planning while the public is urged to do nothing. What do the cronies know that they don't want the public to know? It's a disgrace.

One final blast of hot air. I was talking to Ed Yardini around the first of the year, 1999. We exchanged views about the effects of Y2k. He asked me what I thought would be the biggest factor in Y2k disruptions. I told him the interconnectedness and interdependencies of systems both here in the US and globally. He agreed. I then asked him how, with this understanding, he could be predicting only a 70% chance of a resession in 2000 and not a full blown depression or worse. He said that he was already on the edge of losing credibility with his current prediction and that going beyond that would surely destroy it. He is right, of course. I believe Ed is a good and knowledgable man. He may have even changed his view over the last 10 months. But, notice how even the best of us in high places are run, at least to some extent, by the system. Tell the truth, lose credibility or get fired. No wonder people like Clinton, Gore, and puppets John K must spin their merry tales.

Again, thanks for keeping Y2k on the burner along with gold. I firmly believe they are joined at the hip. Best, DD

Rhialto
(10/20/1999; 12:16:54 MDT - Msg ID: 16982)
Saudi prince/Ashanti
Saudi prince mulls $400 mln Ashanti lifeline (Reuters 10/19/99)
http://biz.yahoo.com/rf/991019/3k.html
Saudi prince backs Gahana on Ashanti - London Financial Times 10/20/99
Ashanti Goldfields announces standstill arrangement with its hedging counterparties (10/19/99) Business Wire. This was a 72 hour arrangement entered into on Monday.

Ashanti trading at $4.625 10/20/99
Gold down $1.60 @ 14.08

Al-Waleed considering topping Lonmin's offer of $5 per share, perhaps to offer as much as $10 per share.

Ashanti's margin call is $270m (London Times, 10/20). Al-Waleed may invest $400m.

This guy is a very smart investor with deep pockets, worth an estimated $15b by Forbes.


This is my first post and want to say HI to everybody here. A long time lurker on a great site. I live in Colorado and trade pm futures and options, and buy the physical. Also trade index contracts. Thanks
USAGOLD
(10/20/1999; 12:22:47 MDT - Msg ID: 16983)
Hi Steve...
Your friend lives in a world of his making where things are "predictable" when he wants them to be according to whatever model he chooses to endorse. It then becomes "unpredictable" if someone uses a different model with which he happens to disagree. He is one who would have thought the Black and Scholes model "sophisticated" and "reasonable" because it was generated by "sophisticated" and "reasonable" people (or so he was told).....until the model is revealed to be flawed after all and it nearly brings down Wall Street. Then I suppose it remained "sophisticated" but maybe "unreasonable?" How does one on that side of the fence explain these things? Always, though when these models fail, it is the taxpayer who is asked to clean up the mess after these geniuses have gone their way. Models, ideas, relationships, etc must be analyzed for what they are, not endorsed simply because the right name is attached to them. (When you get right down to it that comprises the essence of the gold investor: One who says "I don't believe you guys --government, central banks, Wall Street financial firms -- are incapable of making a mistake. In fact my reading of history teaches me exactly the opposite. In fact you are capable of making mistakes and major mistakes at that. So I will own gold which is an asset that is not simultaneously another's liability for that reason and THAT REASON ALONE.")

He says at the beginning of his statement that fiat money is a medium of exchange and that's it -- end of story; end of discussion. Actually, he's absolutely right and that's the problem with fiat money: It is only a means of exchange, but that's not an attribute it's the tragic flaw. Then he ends his argument by nullifying his first point. He says money must also be a repository of wealth. There is much confusion in that paragraph.

He must make a choice. He must be willing to define money one way or the other and proceed from there: For money to be "real money", "reliable money", it MUST perform -- IT must store value, or it is not worth saving. If the authorities, through whatever model he would like to propose, undermines that second function of money (as a store of value), then it is not money by definition but something else -- I would call it a "tax" because in this transaction all the government and central bank have done is take my work, my creativity, my productive employment and given me back value they never intended to honor. (In fact I think both Jefferson and Franklin defined inflation as a tax.) If you question that statement tell me what a 1945 dollar is worth today. If its more than two or three cents I would be surprised. Since they took my purchasing power and gave me back dubious government beneficience, I can only say that I have had my purchasing power taxed away.

The Keynsian/Socialists have always attempted to confuse the public through these elaborate and condescending arguments that really don't make any sense. It seems your friend has bought into these arguments and this is his choice. He chooses to believe in the infallibility of the "status quo" and this is his view of life.

Had he been living in Germany in 1921, when his vaunted "status quo" were undermining the mark and paving the way for Hitler, would he have written that he wouldn't "bet against them." I'll bet he would have said exactly that and gone down the drain with them. As it is, what is the difference between Germany printing marks ad infinitum to pay its war reparations and the United States printing money ad infinitum to pay its deficits -- except that the United States has managed to position the dollar as the world's reserve currency and dilute the everyday effects of inflation on Americans? Take that advantage away and what do you have but pre-World War II Germany all over again. And with euro introduction this is precisely what might happen in the United States.

No, all this is boils down to is the age old argument between conservatives and liberals. The conservative says I believe in no one but myself, my family, my free associations. The liberal says I believe in this hero, that hero, the government, the central banks, Wall Street i.e., whoever tells me they'll take care of me because that's what I want to hear -- the credo that has allowed the Washington/ Wall Street behemoth to rage out of control.

He can put his faith in Black and Scholes, the Clinton administration, Wall Street -- whoever he likes.

I'll put mine in gold.

And never the twain shall meet.
ORO
(10/20/1999; 12:27:35 MDT - Msg ID: 16984)
A passing thought on banking
Banking is the business of borrowing and lending in private and public markets. It is also the provider of a service of convenience to owners of money, offering them safe stotage and convenient use of money.
The core economic function of banking is aggregation of capital and its distribution into businesses or individuals for best returns at minimal risk. The bank takes upon itself a risk by making an obligation of return of funds at specific times, or on demand with specific interest, while placing the money in the businesses or individuals at a higher rate than is paid to the lenders. Taking upon itself the risk of default by the borrower, the bank is judged a better arbiter of creditworthiness than most individuals consider themselves to be by their own judgement (otherwise they would not deposit with a bank, outside of fully allocated accounts).
In the heat of a credit boom and in the stress of a liquidity crissis, bankers tended to forget their fiduciary responsibilities and have created in the minds of depositors an illusion of money stored in the bank vaults. Many today understand that the money is not actually there or even in treasury securities, but have learned that modern banks are not in real danger of insolvency because of the availability of Federal Reserve loans, FDIC and the availability of credit cards in the interim. What was the S & L crisis about then? didn't it take years for people to get their funds back?
Double entry book keeping allows banks to tell you there is so much money in your account, while lending it out at the same time. Essentially, the bank equates its obligation to pay you as money you have at the bank, while the lending to a third party the majority of your money. In this way banks can create money. The core of this is the fictional equation of a bank obligation to cash holdings. This money creation is practiced in reality the other way round; the bank makes a loan (creates money), and when the borrower passes the money borrowed to the next person, the bank scrambles to get money to provide that person. Usually, this comes in with the day's incoming deposits roughly balancing out the withdrawal. If not, the money is borrowed from another bank, or from the Fed. Before the Fed was created, the banks were constantly undergoing bank runs. Because of this, they were rather conservative and avoided undue risk because of the danger of insolvency. Even under the most severe conditions, most banks did well and only 5% would fail in the course of a banking panic. In the example of Scotch banks before coming under the purview of the Bank of England (in a post here some days ago), there were no special laws governing the bank's activities, and there were no failures because of the staid nature of the people involved in banking in that era and area.
The question this brings in looking at a free market banking system is: should the banks be regulated so that they can not claim that accounts are money? Or should a free market system simply put the banks in the position of having to stand up to their fiction during a bank run and end up tarred and feathered if they don't succeed, on the one hand, or remain outstanding citizens if they do survive the run?
The caveat emptor issue of the unregulated system would quickly eliminate all non-brand name banks that lack heavy reserves and a good local reputation. Many people would be taken in by fly by night operators and bad banking practices. On the other hand, establishing new banks and commiting fraud would later become quite difficult.
The regulatory approach could have two independent components, the first being the drawing of legal definitions and requirements of diclosure. The other is the actual hands on regulation of the banks by a government agency.
If one takes a look at banking as depository service, which is how savings banks started, the question would be, if one has an account with such a bank, a depository account would be considered as completely allocated (fee bearing, rather than interest bearing) where the money is never lent and the bank is just storing it. If not an allocated account, the bank would disclose what kind of contract it is giving the depositor, and tell the depositor outright that he has a bank obligation in his account, rather than money and that redemption is limited in certain conditions. This would be disclosed in the biggest letters in the forms as in cigarette warnings "banks are dangerous to your wealth". Furthermore, a net asset value estimate of the account and a dollar balance would be provided the account holder. A problem here is that bank account books contain the most mysterious of fictions and can not be readilly transformed into a reliable NAV.
The introduction of a government regulatory body making decisions on which bank loans are to be made, which are not, how to mark value of distressed loans etc. would partially solve this problem. But this brings us back to the non-free market and its associated distortions. Moral hazard being one of them. Government regulation forms an impression of government approval and takes the burden of investigation off the depositor. Thus a distinction between weak and strong institutions is at least partially lost and the sole driver for bank decision making becomes maximization of return (allows attraction of more customers) with less emphasis on risk minimzation.

So we are back to the completely regulated system.

Though the issue is more complicated than presented here, I think this is sufficient to convince me that regulation of banking may prevent some theft and fraud, it would shift the risk control function into the hands of government. By lowering the value added of debt rating agencies, this would prevent their investment in better oversight, and replace it with the inefficient government oversight. The result would be the elimination of effective oversight altogether during booms (easier to do when workload goes ballistic) and overzealous oversight during busts (workload is lower and the pressure to redeem one's self from prior regulatory failures cause this).
This brings me to the conclusion that a Rothbard like caveat emptor approach, coupled with explicit legislation with strong punishment under fraud provisions would solve this problem in a manner consistent with a free market.
Cavan Man
(10/20/1999; 12:38:45 MDT - Msg ID: 16985)
USA Gold 16983
Thanks for stating so thoroughly and eloquently what I could not. Right on the money!
phaedrus
(10/20/1999; 12:44:29 MDT - Msg ID: 16986)
gold and silver open interest
Note that COMEX gold open interest is above 223,000 contracts- the highest it's been since the last rally peak of $416 in Feb '96. This indicates that the paper shorts have still come nowhere close to covering. It also indicates that new shorts have been coming into the market over the past two weeks (as OI has been increasing even as gold has been falling back).

The key difference between now and the Feb '96 peak is that the funds were all heavily long when open interest was up here. Now it is the reverse.

Silver, on the other hand, has seen its open interest plummet like a rock (just like the price). On october twelfth, december silver open interest was above 97,000 contracts. Now, 40 cents lower, open interest is just above 80,000- an 18% drop in just over a week. 8% drop in price, 18% drop in open interest- this indicates that most all the funds, which were heavily long silver, have completely bailed.

The next commitment of traders report, out friday, should make for an interesting read.

Action in both these markets is typical, and in the long run good. When the weak longs are washed out, only strong hands will be left.

As for why shorts would have been building further in gold over the last few weeks, the only plausible explanation, IMHO, is that big players are simultaneously holding down the paper and scooping up the physical at the same time, so that when the market breaks out again they will be sitting pretty. Unless they are just idiots, masochists, or both.
Golden Truth
(10/20/1999; 13:07:51 MDT - Msg ID: 16987)
TO phaedrus
If so many contracts are short what do they know that we don,t?
SteveH
(10/20/1999; 13:16:26 MDT - Msg ID: 16988)
Predictability
USAGOLD,

Agreed. My friend, not Leroy, is most assuredly a stickler for the predictable. How astute. Excellent words.
phaedrus
(10/20/1999; 13:36:13 MDT - Msg ID: 16989)
@Golden Truth
I don't know what they know. But a majority of those shorts were put on much lower, so it's not as if these guys are looking smart just now. The old shorts just haven't bothered to cover yet. As for the new shorts agenda it is hard to say, though a fair number of these I bet are small one-lot traders who think they are clever.

In the long run, the commercial interests have a much better track record. They were heavily short silver before the latest drop, and last time I checked they were net long gold at the same time, which is a surprise because commercials are almost always net short.

I think this market will continue to drift down until either a) we get another mini panic event of some sort, b) someone's hand is forced- Ashanti etc., or c) 90% of the weak longs are washed out.

Tomcat
(10/20/1999; 13:43:51 MDT - Msg ID: 16990)
phaedrus

Hey phaedrus, thanks for that last post. You said,

"On october twelfth, december silver open interest was above 97,000 contracts. Now, 40 cents lower, open interest is just
above 80,000- an 18% drop in just over a week. 8% drop in price, 18% drop in open interest- this indicates that most all the funds, which were heavily long silver, have completely bailed."

Could you take a few moments to expand on that statement? Could you detail the reasoning behind it? Thanks.
ORO
(10/20/1999; 13:46:26 MDT - Msg ID: 16991)
SteveH - USAGOLD
Steve, your friend is looking at the definition. He has not stopped to think of what it is that is defined. The relative value of goods and services? under what conditions? value to whom? what drives these valuations? Do the concepts of "undervalued" and "overvalued" bear no meaning to Leroy? The market is a price finding mechanism. The snapshots we see in the price levels are the reactions of the market to various pressures, including artificial ones introduced by governments directly or through their control of banking (and vice versa) and pricing of some items by public or secret treaty.

If Canada were to provide its goods and services at steep discount to their input costs in the US because of a nuclear threat by the US (no, I do not think it is, this is purely hypothetical), is that not a component of market pricing? Does that mean that market pricing is not distorted by non-economic action (not driven by profit motive or economic necessity)?

Is Leroy claiming that $1.5 trillion of daily trading in the currency markets can possibly have anything to do with actual economies that trade only some $10 trillion in a year? Would the reality of these actual economic trades not be driven by the financial tides? If the financial flows are driven by perceptions, and these are driven by government (Fed, BOJ, ECB) actions, is not that in itself a sign of severe dislocation coming down the road? If the interest rate differentials that are partially driving these trades are based on a discount rate of 0.25% and 0.5% in Japan and Switzerland, and a discount rate of 2.5% in the EU, would not tiny changes in interest rates, made arbitrarily by the central banks distort things completely? Under these circumstances, isn't it obvious that the labor and assets of the real economy are assigned values as random as the discount rates? In predicting these market moves, isn't it important to understand what motivates the central banks' decisions? Is it not important to understand the relationships of the real economy to the pricing mechanism?

Regarding my house of cards, all investigations and logical arguments are subject to flaws that may change the conclusions as they change the arguments. I try never to succumb to the sin of consistency. If Leroy has a specific card in mind he thinks is not put in the right place, or is crooked, please have him point it out so that I can fix it. Even if I have to rebuild the whole house, I will at least try.

I am open to criticism at any time, but will not take seriously anything that ammounts to criticism of the fact that I am making an argument. I hope you and your friend focus on the arguments, checking them out, checking out the details or the logic and assessing the conclusions not based on the noise of the media and the salesmanship of Wall Street, but on the arguments themselves.MK does shoot down your friend's observations and his belief in the motivations and abilities of the "powers that be". Note that there is no law of nature that would make political or career bureaucrats capable of doing their assignments, nor is there a law of nature that alligns their motivations with your needs and wants.
Wholesale dismissal of an argument is not something anyone should do without examining their own house of cards, or the one they are relying on.
RAINMAN
(10/20/1999; 13:53:34 MDT - Msg ID: 16992)
@ RHIALTO
Did you pick your handle out of a Jack Vance novel ?
ORO
(10/20/1999; 13:56:41 MDT - Msg ID: 16993)
USAGOLD - SteveH
What is it that so bothers intelligent people when they are asked to doubt the message written on the facade of the edifice of the US financial system and the global economy and the government that supports it?
It was only 10 years ago that the message was translated to mean "dedicated to robbing and stealing your stuff"
SteveH
(10/20/1999; 14:18:29 MDT - Msg ID: 16994)
Friend, not Leroy
ORO,

I passed your's and USAGOLD's comments along to my frined, not Leroy. FYI. My friend I am referring to isn't Leroy. Just for the record.
ORO
(10/20/1999; 14:31:39 MDT - Msg ID: 16995)
SteveH
Sorry,

Thanks for the correction
Cavan Man
(10/20/1999; 14:39:00 MDT - Msg ID: 16996)
ORO
In your view, is there any probability that the demise of the US$ world we have come to know and love can be avoided?

I visited the Golden Sextant site. It appears on surface to be a compelling story for the 11 nation EEC and the Euro.

Thanks.
phaedrus
(10/20/1999; 14:46:12 MDT - Msg ID: 16997)
@Tomcat re expanding on open interest
Open interest is the total number of futures contracts in a market for any given date. For each and every contract there is someone on the buy side and someone else on the sell side. The more popular the market is, the bigger the open interest. The smaller and duller the market, the lower the open interest. It's basically a reflection of how big the action is in the market at any given time.

To give perspective, open interest in a dinky market like lumber is generally under 5000 contracts. Open interest in the mack daddy of all futures markets, T Bonds, is generally between six and eight hundred thousand contracts.

So- if I decide to buy a silver contract today and you decide to sell a silver contract short today, then together you and I have increased the open interest by one contract.

Conversely, if I was long silver and decided to sell my position to get out, and you were short and covered your position to get out, then together we would have DECREASED open interest by one contract because we have both left the game.

Clear as mud? Okay, basically think like this: open interest goes Up when more people are getting INto the market- regardless of whether they are long or short- and open interest goes Down when people are getting Out.

So: when a market drops sharply and open interest drops sharply at the same time, it is a clear indication that a lot of longs are getting out. Since the commercials were net short 15 to 1 and the funds were net long on the last commitment of traders report, we know it was the funds who were getting out.

(And plus one of my guys on the Comex floor told me so also. But that's cheatin'.)

Here's how it works in terms of open interest- might have to read this a few times, so bear with me:

When a market is falling and open interest is falling sharply also, that indicates that longs are getting out. This is usually bottoming action because once the longs finish liquidating there won't be many sellers left.

When a market is falling and open interest is Rising sharply, that indicates that new shorts are getting In. This is bearish and usually indicates an acceleration of the downtrend.

When a market is rising and open interest is Falling, that indicates that shorts are getting Out. This indicates topping action because when the shorts finish covering there won't be much buying left.

When a market is rising and open interest is sharply rising, that indicates that new longs are jumping in. This is bullish and indicates an acceleration of the uptrend.

p.s. in case I completely missed the point of your question and you already knew all that stuff, then please forgive me as I am a moron.
Leigh
(10/20/1999; 14:46:25 MDT - Msg ID: 16998)
ORO
ORO, what did you mean in your last post about a message written on the facade of the edifice of the US financial system, etc.? Are you speaking figuratively, or are you referring to an actual inscription? (Please don't laugh!)

Cavan Man, I'm so glad to see you posting again!!
SteveH
(10/20/1999; 14:53:57 MDT - Msg ID: 16999)
counterpoint point counterpoint
(note: this guy is my friend. He means well but is the most stubborn man I know. Nothing I have told him on this issue has swayed him. In that sense, though, he is like many of my other friends who hear nothing of this. I do get the sense that the argument is turning into argument for argument sake and not an argument of issues anylonger. I believe ultimately that is where the battle will be ultimately won. As USAGOLD said, he has his model and has worked so far.)

from my friend (not Leroy):

Please pass this on to the person who responded to my email:

It's funny how you attribute to me that which so obviously pertains to you. My whole point is that this is unpredictable - we can only hope to make good, educated guesses based on all the information available. You use tidbits of information and manufacture elaborate gloom and doom scenarios, and completely ignore contradicting information. Your model is far less perfect than the ones running the show. I'm not using any model - I'll leave that to the experts. I don't claim to be an expert. I do claim to have some common sense and enough of a background in economics to recognize a red-herring when I see one. The only side of the fence I'm on is the one that says your logic is flawed, and your rhetoric - while colorful - isn't worth the email its written on. I never said anyone was incapable of making a mistake, but it is typical of your reactionary mindset to twist and misconstrue my words in an attempt to discredit my position. You attempt to discredit economic models as failures simply by association. Models will come and go. They will be revamped to account for previously unknown phenomena. I'd be very surprised if they didn't already take into account the factors you think are game breakers. And, like any other program, it's garbage in, garbage out. If the keepers of the model are objective and truly trying to emulate reality, then I'm very comfortable letting them do their jobs. You are not because you lack objectivity and would have them add weight to factors you have chosen to hang your hat on, yet are not as significant as you imagine them to be.

What truly defines the gold investor is a faith in an inanimate object over the devices of modern economics. You can define yourself anyway you want and wax romantically about how virtuous it is to be a gold worshipper, but the fact is, most real people find your gushing obsession rather pitiful. There is nothing "tragic" or "flawed" about a worthless medium of exchange. If you write a check, is the check of intrinsic value? No, it is a convenience. So are dollars. There is no contradiction or confusion in what I have said previously - except on your part. You're trying to complicate a simple issue by infusing emotional attachments which are personal and subjective in nature.

Here is my paragraph:
"You are very confused between the role of money as a facilitator of trade and the role of money as a repository of wealth. Yes, different currencies will move with respect to each other - that's a given. Euros may gain value, dollars may decline relative to each other. Gold may rise relative to the dollar. Great. Place your bet. But don't think for a minute that powerful forces are not at work to preserve the status quo. I won't bet against them."

Here is yours:
"He says at the beginning of his statement that fiat money is a medium
of exchange and that's it -- end of story; end of discussion.
Actually, he's absolutely right and that's the problem with fiat
money: It is only a means of exchange, but that's not an attribute
it's the tragic flaw. Then he ends his argument by nullifying his
first point. He says money must also be a repository of wealth. There
is much confusion in that paragraph."

Obviously one may hold fiat money between exchanges, and such "savings" can be considered an investment. This is not a confusing concept, is it? Does it contradict the fact that it's only value derrives from its ability to be used as a medium of exchange? I think not. Does it contradict the fact that it serves 2 roles (as stated above)? No. You want to ascribe significance to nits and miss the point entirely. Your interpretation of my statement (and the subject matter in general) is what is confused. If you were a friend of mine, I might consider that tragic. You're not, but rather are a rhetoric spewing geyser of gold worship, so I really don't care how messed up your reasoning and reading comprehension abilities are. But I am concerned for Steve because he is very impressionable. Steve has been totally sucked in - that's what is truly tragic.
Cavan Man
(10/20/1999; 15:05:36 MDT - Msg ID: 17000)
SteveH
His use of the term, "modern economics" implies he is a new paradigm type of guy. I personally would never consider using the word modern followed by the word economics in the same sentence. Those he refers to as currently running the day to day operations of this so-called modern economy are not on the whole nitwits; many of them are no doubt "old school" and, "taught at the old school" type of individuals.
These would chuckle at the thought of "economics" being modern in any sense I think.

I give you credit for trying with him. I have given up with all those I know. Also, sounds like you hit a nerve.
phaedrus
(10/20/1999; 15:45:57 MDT - Msg ID: 17001)
US Government to bail out Ashanti?
Has anyone heard the rumours that OPIC, a US government backed overseas investment fund, is set to possibly join Prince Alwaleed and Lonmin in bailing out Ashanti so that they won't have to cover their mangled hedge book?

ORO
(10/20/1999; 15:46:05 MDT - Msg ID: 17002)
Cavan Man - Howe and $
Howe has a great voice and has covered in the last few weeks much of the ground we have been covering here over years (FOA, ANOTHER, MK AragornIII) and more intensely in the aftermath of the BOE sales announcement. The EU+ statement of the 26th gave our words sufficient credibility to have others pick them up and sing them to different melodies.
I, for one, hope that there would be no "currency war", since in economic and monetary terms, the US has already lost it. The things that stand in favor of the US are (1) a more entrepreneurial structure and tradition, (2) a lean and mean manufacturing sector surviving the currency playing field tilted so far against it, (3) US leadership of key computer and telecomunications technologies, as well as genetic engineering and drugs, (4) political pressure, (5) the interest of the creditor nations to gain something of value in return for the goods sent to these shores and consumed in war preparations in Europe and Asia for 40 years.
The "Technology Revolution" here, may provide some of the critical interest in preserving a functioning US economy. Until the economic situation starts a brain drain out of the US - some years ahead, this may be a critical advantage.

If the US does not try to strongarm the EU, it can press these advantages so that they don't push the trigger but let a slow "controlled burn" as per FOA take its course, standing in the way of each panic.

However, the debt will have to be dealt with one way or another. The reduced demand for $ due to the unwinding of the $ debt trap will still push it lower. The capital demands of a reviving Japan, Eutope and Asia will take away the liquidity of our markets and pressure the $ further.

I am hoping for a slow smooth decline in the $, rather than a steep dump. The quiet from the Fed and its pointing out possible weaknesses in the models used for risk analysis in the banking system are warnings that currency war is a possibility and banks should brace for it. To a large extent, this is why I am in gold, and posting on this forum.
andrew the kiwi
(10/20/1999; 15:51:29 MDT - Msg ID: 17003)
(No Subject)
koan, 18karatwhat has happened two you too, koan, when are you coming over to NZ?
All, I think that just as gold is purified and moulded by heat and pressure, we are having 'the heat turned up' on our resolve and commitment in maintaining our strategy. As before, I think that it is the event that takes everyone by surprise that will herald the next leg up in PM prices, in the meantime those that need to cover their short positions will be breathing a little easier as au heads lower in the short term.
TAILPIECE 'learn to pause-or nothing worthwile can catch up with you' Anonymous
Cavan Man
(10/20/1999; 16:04:08 MDT - Msg ID: 17004)
ORO
Thank you. Who is Howe and how (no pun intended) can I find his writings.

IYO, this controlled burn, when will it stoke the gold already in the furnace to valuation over $1K?

IMO, if you are not teaching, you should consider it. Your knowledge and insight would be a great gift to all who would attend your classes. Of course, the gifts pressented here ain't too shabby!
AllanC
(10/20/1999; 16:11:37 MDT - Msg ID: 17005)
...and counterpoint
Steve H

I am sure you tried many times to convince your friend, but you shouldn't waste your efforts on one such as he. I've seen people like him on other forums. His remarks to MK and his use of unfair characterizations only proves your point. He's only interested in scoring debating points, not in firming up his arguments. His response to the fiat money as wealth storage argument was pretty lame. I think MK got him on that one, and it must have frayed a nerve judging from the tone and nature of his inadequate response. Stick to your guns and remain quiet and content in the fact that time and history is on our side. As Another says "time will tell all things".
TownCrier
(10/20/1999; 16:37:06 MDT - Msg ID: 17006)
After the Close: the GOLDEN VIEW from The Tower
(microphone feedback fading to silence)
(clears throat..."Ahem...)

Gold.

Thank you."

And that's the view from here...after the close.
Tomcat
(10/20/1999; 16:41:48 MDT - Msg ID: 17007)
phaedrus, re #16997: How about A Basics/Definition Section For This Forum

phaedrus, that is exactly what I was looking for. It is a great start and a great example of how we can learn together.

I have already plotted the various possibilities on and x-y axis with different actions happening in different quadrants. It will take me a while to get a feel for the action but I can take it from here. Thanks again.

Perhaps the forum could have a basics/definitions section where posts like yours could be stored and easily referred to. It could have discussions on things like forward rates, lease rates, and other basic terms/acronyms that appear so often in the forum discussions.

Is anyone else interested in this?
ORO
(10/20/1999; 16:49:42 MDT - Msg ID: 17008)
SteveH - counterpoint n+1
http://www.clev.frb.org/Annual98/essay2.pdfBefore I start with the counterpoint, I think a little look at the link above is worthwhile because it shows what the "powers that be" are worrying about.

First, the belittling tone is unworthy of someone capable of making an argument.
Second, "tidbits" is all you get when you study something held in close secrecy.
Third, your friend obviously thinks that what I say is propaganda for gold, and I worship it as much as MK seems to in his eyes. I don't "worship" gold. On the contrary, the one thing that bugs me, and seems to bug Yellin of Troy, is that the talk here of driving the price of gold skyward by governments - this time the EU interfering in the markets rather than US - will cause a distortion of similar proportions to that reached by artificially pushing down gold.
The international flow of funds data that brought me into this, was first pointed out to me when I read Joel Kurtzman (exec. editor at the Harvard Business Review). It has since grown worse, and has shown its method of operation in the Asian crisis. Comparing the US financial flow position to that of the Asian countries indicates that the US is in the exact same danger.
Fourth, the basic economics - in particular debt traps and financial flow dynamics are typically ignored by Wall Street's sell side and are too complex to appear in the poppular press. The analytical community within Wall Street does not necessarily echo the same to their bosses.
Fifth, because of familly involvement in financial derivatives research, I have a rather good idea of what is known, what is not known and is being researched, and what is being ignored. From the second hand information from some banking folks who visit lectures on derivatives modeling, I know for a fact that they are way behind academic financial research. I know that the complexity of the "repaired" Black Scholes models makes them near impossible to apply correctly in real time, also that what is available, though much better than the original model, is still difficult to use and requires input data that are near impossible to estimate (e.g. market liquidity information). The new "hot topic" of research is in the quantification of the non-normalcy of the distribution of price behaviors and thus the inadequacy of variance estimates used by models based on Black Scholes. Furthermore, Greenspan has pointed out repeatedly of late, that the models using the normal distribution are insufficient and that the "big tails" of the variance distribution itself must be incorporated in risk estimates. I can say that the academic research in this is so far from "ready for use" that the banks can not have anything good enough in their hands that would still allow them to make a profit in their activity.

Unknowable. Yes, there are many things that are difficult to figure. But there are many things that are knowable, or at least estimable (is that a word?). There are also estimation methods that are workable but are rarely used because they indicate things that people do not want to hear.

Last, Ludwig von Mises, the great influence on Hayek, Rothbard and Greenspan, makes many arguments that I use, and faced with the current situation, would probably take cover under his desk in expectation of a financial explosion. He is also the one who espouses a commodity money standard and throws the strongest punches at funny money.

Rhialto
(10/20/1999; 16:50:18 MDT - Msg ID: 17009)
Rainman
Yes. Rhialto the Magnificent. Jack Vance is the only author to win the highest writing honors both as a mystery writer and as a science fiction writer. A master wordsman.
TownCrier
(10/20/1999; 16:50:33 MDT - Msg ID: 17010)
Fed's tri-party overnight system RPs added $4.495 billion
http://biz.yahoo.com/rf/991020/nc.htmlThis was a surprise because analysts had expected the Fed to drain about $4 billion in reserves today as the last day of the two week reserve maintenance. The daily add need thru this period had been estimated at $15.7 billion, but the Fed had added an average of $16 billion daily. Analysts expected the excess to be drained, but obviously, things didn't shape up that way, and the Fed bought more "junk" collateral.

As we near Y2K, the daily add need increases. We'll be curious to see what the average add need is for the new period.
Only ten weeks 'til Y2K. "Do ya feel lucky?"
Phos
(10/20/1999; 16:56:55 MDT - Msg ID: 17011)
phaedrus (10/20/99; 14:46:12MDT - Msg ID:16997)
Don't worry, you are definitiely not a moron. And thank you for the Open Interest explantion which I found very informative. A question. Gold has been dropping on COMEX the past few days and the OI has been rising. Based on your explanation, this should be bearish? I would not think the rise would be considered sharp, though, which you specified as part of the bearish scenario. Steve Kaplan thinks the rise is due to Commercial interest which should be bullish. In an earlier post, you thought that the market would drop further although you said commercials are long. What is your take on commerical positions viv-a-vis market direction? TIA.
USAGOLD
(10/20/1999; 17:06:21 MDT - Msg ID: 17012)
Steve
I'll try not to be too flowery here.

Now he's trying to tell us "it's all unpredictable" after he tried to tell us in his first message that "it was all predictable" -- calculus, models, "approximations close enough to be useful", etc. -- all, I would presume so that "the status quo" can call the shots. And that's why we -- "the great unsavvy", should have faith in his Masters of the Universe (status quo).

Which is it? Predictable or Unpredictable? If its unpredictable, as he now says, then that is the best argument for gold ownership I could imagine. If it is predictable, as he said previously, then I say play with the Masters -- put your fate in their hands. You already know where my "bet" is if that's what you want to call it. I'm a little more down to earth. I call it a diversification.

By the way, the mark of a debate won is in when your adversary reduces the discussion to name calling. I won't belabor this any further. I've run into this sort of thing before. Nothing will convince this individual. It's a waste of time to try. I frankly don't care what he believes, Steve, and I doubt that he cares what I believe. He's already said as much. I know you are not as fragile as this well-meaning friend suggests, but like most liberals (political parties aside) he will always know what is better for his "friends" and the rest of American society than we do ouselves -- misguided as we gold-owners are.

My original remarks stand ...for the most part unanswered I might add. He can rebut if he likes but I have nothing more to add. As I say, its a waste of time.

Here are some words for you from another "pitiful gusher" named Charles de Gaulle:

"Indeed there can be no other criterion, no other standard than gold. Yes, gold which never changes, which can be shaped into ingots, bars, coins which has no nationality and which is eternally and universally accepted as the unalterable fiduciary value par excellence."

We can hang those words next to those of some other well-known gushers who voiced similar sentiments like Alan Greenspan, Thomas Jefferson, and Karl Marx (to cut as wide as swathe as possible) who put it this way:

"Although gold and silver are not by nature money, money is by nature gold and silver."

A bit tricky and flowery, but there's a message there.

By the way unlike the paper promoters who stampede their the American public completely into paper instruments without a thought to proper diversification, I simply advise people that they should hold a reasonable portion of their assets in gold, physical gold that is, should the Masters of the Universe fail. A perscription I have followed in my own portfolio.

Let's face it, Steve, your friend worships paper and its promoters as he accuses me of worshipping gold, but does he have any gold? Has he diversified to any degree? So who has the fanatical commitment and who is being unreasonable? Who is being prudent? In the end, who has been sucked in?

One more for your friend and I must go (Got a business to run):

"The modern mind dislikes gold because it blurts out unpleasant truths." Joseph Schumpeter
Rhialto
(10/20/1999; 17:16:14 MDT - Msg ID: 17013)
Rainman
Yes. Rhialto the Magnificent. Jack Vance is the only author to win the highest writing honors both as a mystery writer and as a science fiction writer. A master wordsman.
FOA
(10/20/1999; 17:17:09 MDT - Msg ID: 17014)
A simple message
http://www.decisionpoint.com/DailyCharts/DXY.htmlALL: a few things to follow as this unfolds:


Dollar chart: (see above link) http://www.decisionpoint.com/DailyCharts/DXY.html

We can look at the dollar chart today and see the the future. The US dollar has broken down and will continue this trend as the Euro becomes more accepted. Unlike times past, this trend will not stop. It will continue and in doing so impact every financial asset in Western hands.

US interest rates chart: http://www.decisionpoint.com/DailyCharts/InterestRates.html

Once the trend of the dollar is clearly established it will force interest rates ever higher. This will happen well before any obvious inflation because this time the dollar isn't falling from inflation worries. This run is caused from competition. Even though rates are now on the upswing, they will rise even faster in an effort to keep the dollar from falling too fast. True, imported goods inflation
will drive rate worries also, but these perceptions will be "behind the curve" and "after the fact". Again, switching ones reserve holdings into another currency because it offers a better use function is a different kind of run "from" the dollar.
This new trend, created from a different concept will be the "wrecking ball" in the American economic system.

Gold chart: http://www.decisionpoint.com/DailyCharts/GoldSilver.html

The new bull market in gold has begun. Large buyers of bullion should have already completed their trades some time ago. Indeed, most of the major players that are holding for the currency transition turmoil have been buying for several years. This past spring ended the "easy times" of bullion accumulation. All buying now (except for small private holdings) will be difficult if not risky.
It will be difficult if not impossible to trade physical bullion during the swings of this run. Even now selling the recent high to buy the current low offered a poor return over the dealer spreads. Truly, the risk will be found in the sudden spikes created as physical is brought to return loans. Add to that the rush to purchase by short term traders that makes it impossible to "buy under your last
sale".
Again, the price action will prove this is not a bullion trading market.

Gold stocks chart: http://www.decisionpoint.com/DailyCharts/XAU.html

The major shares did not lead the dynamics of this new market. Contrary to all the last 20 year history of gold shares, at best, they only kept up with gold bullion. To date, some have lost much more on this correction. The next major move up in bullion will lead the shares by an even wider margin. Some shares will fall away into legal proceedings as we run past $360 and $400. As this market works it's will, gold is destin to outperform all other investments by a wide margin. This market is not as before.
The above chart can be seen as adding silver to the list of fallen competitors. At best silver will struggle to attain it's recent high during gold's next rise. Eventually, gold will pass and much more than triple the dollar price of platinum. No other metal will be pursued as money like gold will during this transition.

Onward:

I have not offered such an outline before because the political turn had not materialized. It now has! True, the paper markets will work their effects on dollar pricing, but the now developing shortage will overwhelm even these areas. Leasing rates will rise and fall precipitously as trapped
players borrow to replace accounts. Then they will borrow again to replace those accounts, never able to fully escape as the price runs away. Eventually, the rental markets will stop from inactivity. Paper markets will stop from inability to match "street gold" prices.
So, read the above charts, not as a TA trader, rather as an asset holder that follows the breaking news. As this unfolds we will be glad to own, "only gold"!

On the road..............FOA
Cavan Man
(10/20/1999; 17:23:54 MDT - Msg ID: 17015)
ORO
Sorry. I found Howe. Oops!
Cavan Man
(10/20/1999; 17:28:27 MDT - Msg ID: 17016)
FOA
Hello. What is your personal target for $ price? How do you come by it? Have you abandoned any hope of 10K or 30K?
Thanks....CM

PS: Saw some good rugby while in Ireland last week.
Viper
(10/20/1999; 17:30:08 MDT - Msg ID: 17017)
Gold Information
Here's an article from the below address that I thought you might find interesting. I have yet to go through the entire site, but it appears to be very informative. Alot of foreign country news.

http://ft.com/hippocampus/q259da6.htm

GOLD FIELDS: Gold hedges buy back
By Victor Mallet in Johannesburg

Gold Fields, the South African group that is the world's second biggest gold producer, has bought back most of its hedge positions because it expects the gold price to rise and wants to avoid the sort of problems faced by Ashanti, the Ghanaian mining company.

As the gold price fell in recent years, many companies protected themselves by selling their production forward at guaranteed prices.

However, this month the gold price has risen sharply from around $260 an ounce to well over $300. Ashanti has a particularly large hedge book, and has hit liquidity problems because the counter-parties to the forward transactions are entitled to margin payments as security.

"Having looked at the fundamentals of the current gold market and the implications of the Ashanti situation, it seems inevitable to us that higher, if not much higher, gold prices are possible," said Chris Thompson, Gold Fields chief executive. "Accordingly, it seemed prudent to retrieve our hedge positions."

Gold Fields, which produces 4m ounces of gold a year, had previously hedged 1.8m ounces of its production with a mixture of forward sales and options.

The company spent a net $3m to buy back most of the hedge position.

In addition, St Helena Gold Mines, which is managed by Gold Fields, paid a net $6.8m to repurchase its obligations of 100,000 ounces hedged at an average price of $258 an ounce.

Gold Fields said its only remaining forward obligations were 200,000 ounces of forward sales for its 71 per cent-owned subsidiary Gold Fields Ghana.

These were left in place to cover possible debt covenant obligations required by lenders to the Tarkwa gold project.

Gold Fields also holds 660,000 ounces of gold call options in rand at an average strike price of R2,171 ($354) per ounce, maturing in September 2001, and 50,000 ounces of put options, at a strike price of $270 per ounce and expiring in November next year.

Other South African gold companies have made announcements about hedge positions that have suddenly become unattractive to shareholders.

Randfontein Estates, for example, said its hedge position represented approximately one-third of planned production over the next six years.

The company has hedged 1.78m ounces of gold at an average price of $283 an ounce over the period.



Leigh
(10/20/1999; 18:17:36 MDT - Msg ID: 17018)
SteveH
Dear SteveH: You need some different friends! (Just kidding!)
Scrappy
(10/20/1999; 18:26:19 MDT - Msg ID: 17019)
Bll market in Gold
FOA
Please correct me if I'm wrong. But judging from what you have taught in your posts, and what you say is happening and is going to be happening; this is all going to take quite some time to occur, yes? Your prediction of $30,000./oz gold, for instance, is not for the immediate future, but some years from now, yes? At what point will there be 'no turning back'--in other words, when do you speculate the price of gold will begin to go up, and not come back down?
From what I have understood, your lessons are for those who are not interested in making 'quick' money on gold. But you are teaching for the sake of those who are trying to preserve some financial security through the coming turmoil.
Am I incorrect in the context in which I interpret your words of wisdom?
Cavan Man
(10/20/1999; 18:42:24 MDT - Msg ID: 17020)
Dear FOA
Your "wrecking ball" metaphor sounds ominous and unlike your previous references to "controlled burn" and to paraphrase from a more recent post; life will go on pretty much as normal or something like that. Can you explain please?

I almost detect a hint of glee. I must be mistaken. I agree we are in deep #@$%; but, devastation?

RossL
(10/20/1999; 18:50:21 MDT - Msg ID: 17021)
Scrappy
http://www.decisionpoint.com/DailyCharts/GoldSilver.html"when do you speculate the price of gold will begin to go up, and not come back down?"

The charts will always have ups and downs!
SteveH
(10/20/1999; 18:51:04 MDT - Msg ID: 17022)
point-counterpoint-point-counterpoint
My buddy also got confused as ORO did as to who Leroy is, which is actually quit hilarious. We have started anew the "where's Kilroy" of WWII and made it into "where's Leroy?" Absolutely hillarious.

Anyway, these dissertations have actually got him reading this stuff, which he routinely just erased before. I have a motive for him to understand all of this, because when he does then issues in my circle will be easier.

Thanks to ORO, USAGOLD, Cavan Man, and others who have joined the fracas. It is truly the best education when truly emotional forces battle (as Michael and the Bull) for the result is clarity for all.

He wrote this before he has read any response and will be gone until next week so any responses from him to these cogent thoughts will have to wait to be read by my friend, but don't hold back as the result has been informative and funny too. Battle!!!

my friend:

Steve, your friend is looking at the definition. He has not stopped to
think of what it is that is defined. The relative value of goods and
services? under what conditions? value to whom? what drives these
valuations? Do the concepts of "undervalued" and "overvalued" bear no
meaning to Leroy?
LEROY: WHATEVER

The market is a price finding mechanism. The snapshots we see in the
price levels are the reactions of the market to various pressures,
including artificial ones introduced by governments directly or through
their control of banking (and vice versa) and pricing of some items by
public or secret treaty.
LEROY: INDUBITABLY

If Canada were to provide its goods and services at steep discount to
their input costs in the US because of a nuclear threat by the US, is
that not a component of market pricing? Does that mean that market pricing
is not distorted by non-economic action (not driven by profit motive or
economic necessity)?
LEROY: THIS CAN HARDLY BE CONSIDERED FREE TRADE, CAN IT? BUT THE ANSWER IS NO,
IT CAN BE AND IS DISTORTED ALL THE TIME.

Is Leroy claiming that $1.5 trillion of daily trading
in the currency markets can possibly have anything to do with actual
economies that trade only some $10 trillion in a year?
LEROY: YOU LOST ME. IF YOU MEAN THAT THE PURCHASING POWER OF SUBJECT ECONOMIES
IS INFLUENCED BY EXTERNALLY DRIVEN FLUCTUATIONS IN THE VALUE OF THEIR TRADE
MEDIUM, HOW COULD I DISAGREE?

Would the reality of these actual economic trades not be driven by the financial
tides?
LEROY: NOT ONLY FINANCIAL TIDES, BUT ALSO POLITICAL TIDES.

If the financial flows are driven by perceptions, and these are
driven by government (Fed, BOJ, ECB) actions, is not that in itself a
sign of severe dislocation coming down the road?
LEROY: DISLOCATION FROM WHAT? PURE MARKET FORCES? OF COURSE. FROM FINANCIAL AND
POLITICAL TIDES? NO - BY YOUR DEFINITION, THOSE FORCES ARE MANIPULATING THINGS.

If the interest rate differentials that are partially driving these trades are
based on a discount rate of 0.25% and 0.5% in Japan and Switzerland, and a
discount rate of 2.5% in the EU, would not tiny changes in interest
rates, made arbitrarily by the central banks distort things
completely?
LEROY: LEAVE INTEREST RATES OUT OF IT. IN YOUR SCENARIO, THINGS ARE ALREADY DISTORTED

Under these circumstances, isn't it obvious that the labor and assets of the real
economy are assigned values as random as the discount rates?
LEROY: NO. THEY ARE NOT RANDOM. THEIR VALUES ARE ASSIGNED BASED ON ALL THE FACTORS
INFLUENCING THEM - MARKET AS WELL AS POLITICAL.

In predicting these market moves, isn't it important to understand what motivates the
central banks' decisions?
LEROY: HOW DID WE GET FROM VALUING LABOR AND ASSETS TO PREDICTING MARKET MOVES? I
THINK YOU SKIPPED SOME IMPORTANT STEPS, BUT THIS IS AN UNNECESSARY DIVERSION.

Is it not important to understand the relationships of the real economy
to the pricing mechanism?
LEROY: PRICING MECHANISM - NAMELY SUPPLY AND DEMAND WHICH WE HAVE AGREED CAN BE
INFLUENCED AND MANIPULATED? THAT'S WHAT ECONOMIC MODELS ATTEMPT TO DO.

Regarding my house of cards, all investigations and logical arguments
are subject to flaws that may change the conclusions as they change
the arguments. I try never to succumb to the sin of consistency. If
Leroy has a specific card in mind he thinks is not put
in the right place, or is crooked, please have him point it out so
that I can fix it. Even if I have to rebuild the whole house, I will
at least try. I am open to criticism at any time, but will not take seriously
anything that ammounts to criticism of the fact that I am making an
argument. I hope you and your friend focus on the arguments, checking
them out, checking out the details or the logic and assessing the
conclusions not based on the noise of the media and the salesmanship
of Wall Street, but on the arguments themselves.MK does shoot down
your friend's observations and his belief in the motivations and
abilities of the "powers that be". Note that there is no law of nature
that would make political or career bureaucrats capable of doing their
assignments, nor is there a law of nature that alligns their
motivations with your needs and wants.
Wholesale dismissal of an argument is not something anyone should do
without examining their own house of cards, or the one they are
relying on.
LEROY: MK MISSED THE BOAT - AND I HOPE STEVE SHARED MY RESPONSE WITH YOU.
I AGREE WITH EVERYTHING ELSE IN THE PARAGRAPH. YOU NEED TO KNOW THAT I THINK
WALL STREET HAS RUN AMUCK. I ALSO THINK THE POWERS THAT BE HAVE DONE A GOOD JOB
OF TWEAKING THINGS TO KEEP GROWTH UNDER CONTROL AND INFLATION IN CHECK.
I DON'T SEE HOW THIS CAN BE DISPUTED. I BELIEVE INFLATION IS THE ONE TRUE ENEMY
OF THE ECONOMY. I'M COUNTING ON THE FACT THAT BATTLING IT IS GREENSPAN'S MISSION.
AS FOR THE HOUSE OF CARDS, I HAVE NEVER SEEN ANY ARGUMENT THAT UPHOLDS THE NOTION
THAT THE LACK OF A GOLD STANDARD IN AND OF ITSELF CAN LEAD TO THE DEMISE OF THE ECONOMY.
THAT SEEMS TO BE YOUR (STEVE'S CIRCLE'S) POSITION. I'D LOVE TO TAKE THAT ONE APART.
UNTIL THEN, THIS IS ALL JUST DANCING AROUND THE PERIPHERY.
SteveH
(10/20/1999; 18:56:02 MDT - Msg ID: 17023)
FOA
No, your messages have been very direct for some time now and what you say is the ultimate outcome of your theme. What you are saying is what I confirmed before in my thoughts when I said you waited to come public until the outcome was already in your favor. It is truly a chess game of worldly proportions that is played here and you have just called, "check."
Scrappy
(10/20/1999; 19:02:09 MDT - Msg ID: 17024)
FOA; the Bull market in Gold
RossL
I apologize. I was referring to FOAs' assertion that it will become impossible for short term traders to 'buy under your last sale'
Thank you, but I do realize that the markets will always have ups and downs.
FOA
(10/20/1999; 19:25:56 MDT - Msg ID: 17025)
Reply
Cavan Man (10/20/99; 17:28:27MDT - Msg ID:17016)
FOA
Hello. What is your personal target for $ price? How do you come by it? Have you abandoned any hope of 10K or 30K?
Thanks....CM
--------------------------------------------
Cavan Man (10/20/99; 18:42:24MDT - Msg ID:17020)
Dear FOA
Your "wrecking ball" metaphor sounds ominous and unlike your previous references to "controlled burn" and to paraphrase from a more recent post; life will go on pretty much as normal or something like that. Can you explain please?

I almost detect a hint of glee. I must be mistaken. I agree we are in deep #@$%; but, devastation?

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



Hello Cavan Man,
I expect to see gold quickly running through $360 because that is the area a great many buyers began locking in forward gold. Don't confuse these with Comex or OTC deals. These were "long term" in nature and were but supplemental to substantial bullion already held. I think some of these "buys" are now in question of delivery. If this perception takes hold, real buying will ensue buy
these very persons that were to receive gold. It's mostly market dynamics at this point, because only a very small percentage of bullion can be purchased, out of the thousands of tonnes needed.
We will run well past $400, but I use this as the first area that the ECB would like gold to attain. The "controlled burn" comment should be applied to the gold markets. The ECB does not want to see a total run-away and will try to slow the gold rise. This comment is better applied to the Washington Agreement as that signed paper was really two statements that: (1.) applied to the need to sell gold in a future context (going out 5 years?). This would control the rise. (2.) The halt of the expansion of lending was what killed the current markets. Like fractional reserve currency inflation, stop the presses and banks fail. Therefore, stop the fractional gold lending and the market
"officially" changes!
The "wrecking ball" metaphor is applied to the world IMF/Dollar economic structure. Not so much the gold markets. Note the charts it applied to.
------------------------


Scrappy (10/20/99; 18:26:19MDT - Msg ID:17019)

Welcome Scrappy,
I addressed the $30,000 concept a while back. It's more a projection taken during a study (I was not part of) that indicated just how much the dollar would lose "reserve use"! Truly, the price is unimportant as value assignment can take many forms at that stage of failure. Let's say, at least
$5,000 in the five years the ECB has allowed.
Yes, total change is a time consuming affair. Yet, it is longer than an eternity for investors that cannot recover in their lifetimes! The major story here, is the transition of currencies. Earlier, Another was pointing to the various political leverage that made this outcome proceed. Gold, being the historic world currency of "all" resort, will benefit from this transition in that it's use will greatly
expand! It's price in currency terms is meaningless as it's new value in today's modern world is made clear. No one knows where it will finally level out.
Truly, until the IMF/dollar pricing system fails, gold's paper price can run literally "anywhere" as the values indicated in dollar currency are completely false! As Another says, "time will prove this out".

thanks FOA

Gold Power
(10/20/1999; 19:33:55 MDT - Msg ID: 17026)
FOA: two questions
Am I correct in understanding you to say that the street price of physical gold will runaway from the printed price of COMEX gold and other forms of paper gold until the authorities realize that the contracts don't mean anything anymore because they are not shadowing any tangible reality, and then the paper gold will quit trading?

Second, what political event has transpired to enable you to say: "I have not offered such an outline before because the political turn had not materialized. It now has!"?

Thank you,

Gold Power
FOA
(10/20/1999; 19:40:24 MDT - Msg ID: 17027)
Comment
SteveH (10/20/99; 18:56:02MDT - Msg ID:17023)
FOA
No, your messages have been very direct for some time now and what you say is the ultimate outcome of your theme. What you are saying is what I confirmed before in my thoughts when I said you waited to come public until the outcome was already in your favour. It is truly a chess game of
worldly proportions that is played here and you have just called, "check."

Hello Steve,
Yes, "check"!! You better believe it. I have no knowledge of other counter moves until we at least pass $400. We might say that this is will be a "time out" period from play as some "taken players" are removed from the board. If the BBs persist in writing down the paper markets, against the "spirit" of the agreement, I would look for some serious international capital flows placed on bullion! The BIS has this responsibility and authority to make it so. We shall see!

Thanks FOA
FOA
(10/20/1999; 19:43:01 MDT - Msg ID: 17028)
mistake
Should read:

" international capital flows restrictions placed on investment bullion"

SteveH
(10/20/1999; 19:44:44 MDT - Msg ID: 17029)
Gold Power
It is comments like that which FOA makes that lead us all to believe that he is an insider or that ANOTHER is feeding him information which he then passes along to us. Time will prove him right (or wrong), but he has been more right than wrong so far (except timing and values and I attribute that to his camp [BIS/EURO] as only be one of many players on that chess board).
Cavan Man
(10/20/1999; 19:51:44 MDT - Msg ID: 17030)
FOA
"Cast a cold eye at life, at death; horseman pass by."

WB Yeats' Headstone Inscription

The metal does help me sleep better. Yes, absolutely!

How long will it take for gold to trade at $10K US?
Scrappy
(10/20/1999; 19:52:54 MDT - Msg ID: 17031)
FOA
Thank you.
The education and information you provide is greatly appreciated! Thank you for the time and effort you spend.
RossL
(10/20/1999; 19:57:05 MDT - Msg ID: 17032)
Steve, Leroy, friend, et al.
Some years ago, after WWI, socialism was the new paradigm that the intelligentsia of the world embraced. Central planning would cure all ills. Elite, but benevolent and passionate government officials would run the economy like a fine tuned clock. Fair prices were to be set. They were going to right the wrongs and eliminate economic injustice.

An Austrian economist named Ludwig von Mises wrote a book where he predicted socialism would fail. It was the "knowledge problem".

In a free market, the multitudes of participants acting upon their own knowledge, needs, desires, and instincts. They determine prices of goods, commodities, and interest rates through supply and demand.

A set of elites sitting at the meeting table up in some high government office can not possibly gain the knowledge of the millions. They cannot set prices because they cannot fully measure the supply and demand. Distortions will occur. Shortages, famine and destitution were the result of central planning.

The federal reserve note is centrally planned money. The FED has the knowledge problem. They can not know, they cannot predict, they can only react to data. Multitudes of data. They can try to slow the exponential growth of fractional reserve money, but there is always the risk of overcorrection and dis-inflation.

What the world needs is free market money. Town Crier has already given us a speech and announced the answer!
FOA
(10/20/1999; 19:58:56 MDT - Msg ID: 17033)
Reply
Gold Power (10/20/99; 19:33:55MDT - Msg ID:17026)
FOA: two questions
Am I correct in understanding you to say that the street price of physical gold will runaway from the printed price of COMEX gold and other forms of paper gold until the authorities realize that the contracts don't mean anything anymore because they are not shadowing any tangible reality, and then the paper gold will quit trading?

Second, what political event has transpired to enable you to say: "I have not offered such an outline before because the political turn had not materialized. It now has!"?

Hello Gold Power,
Read the USAGOLD HOF (especially Mr. Holtzman). The whole point about contract paper gold being discounted is found in his post. Also read some historic accounts about the events that transpired during the Hunt silver affair. I clarify today's future this way:

When the day comes that 150,000 Comex contract longs ask for delivery, it will not happen! Truly, it will never get that close. In the event of a disorderly market, the exchange already has in it's articles the power to declare "liquidation only trade" for cash settlement! That's means no new longs can enter, only close out.

Consider that the comex is the very smallest of the world gold arenas. If all the current bullion derivatives were to ask for delivery tomorrow, the world would be short some 500 million ounces. So, use your best imagination when looking down the long road before us.

GP, the "Washington Agreement" that was recently signed, is a first! I trust you know about it? Could someone here point this gentleman to the WGC site?

Thanks FOA




Cavan Man
(10/20/1999; 20:00:52 MDT - Msg ID: 17034)
FOA
Good Sir Knight:

I dub you with a new sobriquet:

FOH (friend of humanity)

Merci beaucoup
FOA
(10/20/1999; 20:06:13 MDT - Msg ID: 17035)
(No Subject)
Cavan Man (10/20/99; 19:51:44MDT - Msg ID:17030)
FOA
How long will it take for gold to trade at $10K US?

Mr. Man,
Just as soon as the dollar trades at $1.00 to 1 / 10,000 of a gold ounce! (smile)
FOA
(10/20/1999; 20:26:51 MDT - Msg ID: 17036)
Comment
Kilroy,
Stand strong in your beliefs, for in large numbers we find agreement. And in full agreement we reach accepted conclusions. Yet, reason states that reality is the strongest of all conclusions. And reality arrives on the rarest of occasions, when mostly the few accept it.
The history of the world is filled with common perceptions that lasted for lifetimes. Only the few are fortunate enough to experience "massive change" against the established way. For the mind it is an experience to behold. For the pocketbook it becomes an expensive lesson.

Follow your spirit, my friend,,,,,,,, and we will meet the future down the road,,,,,,,down the road to $30,000

Thanks all FOA
TownCrier
(10/20/1999; 20:28:40 MDT - Msg ID: 17037)
After the Close: the GOLDEN VIEW from The Tower
The sun came up this morning, and following a good night's sleep the world's investors took this for a bullish sign and bid the markets up in an inexplicable momentary lapse of sanity. Share holders and would-be shareholders alike were given sweet dreams by Microsoft's announcement yesterday evening that their fiscal-year first-quarter earnings beat analysts expectations of 34c per share by 4 cents. Investors bidding the stock up 6.9% today seemed to be asleep at the wheel, however, when Chief Financial Officer Greg Maffei said looking forward he saw "little upside" to estimates of 39 cents a share for second-quarter earnings.

Microsoft's announcement helped investors and mutual funds that had been sitting on cash to find the courage to throw caution to the wind and enter realms where angels fear to tread. The result to the Nasdaq Composite index was an obvious one, and its 99.9 point gain (+3.72%) was its third largest in history. October is a scary month, for sure. The DOW drafted along in the Nasdaq's wake, gaining 187 points (+1.84%) on heavy volume. On the New York Stock Exchange, advancing issues outpaced decliners by a ratio of 32 to 27, however, those reaching new 52-week lows still smoked new highs by 307 to 20.

The brisk upside performance of the equities markets gave hope to the dollar on currency markets that more Q3 earning surprises (and additional stock demand) would be in store. Today's burst of
stock buying lifted the dollar against all currencies in thin trading. The dollar gained 1.32 yen to close equivalent to 106.58 yen, while the euro achieved more modest gains against the yen, gaining 0.44 yen to close equivalent to 114.48 yen.

The Commerce Department released their report today showing that the trade deficit had slackened (for the first time in four months) by 3.2% in August from its all-time record of $24.9 billion set in July. However, despite the improvement, August hit the books as the third largest deficit in history, lifting the annual rate to $252 billion...a whopping 53% higher than last year's record-setting deficit of *only* %164.3 billion.

Looking at year-over-year figures, imports have risen by 15.2% versus an increase in exports by a rate of 7.6%. You'll want to notice that new imports are growing twice as fast as new exports. So although the pickup of the Asian economies have helped boost America's exports, clearly the American propensity to spend and consume remains unequaled. Taking over the top spot as the biggest parking spot for U.S. dollars is China. America's imbalance with China increased by 8.8% to $6.9 billion, representing the biggest monthly imbalance ever with a single country. (The previous distinction belonged to the July deficit established with Japan.)

Kevin Flanagan, an economist at Morgan Stanley Dean Witter, said, "The Treasury market is concerned that the Fed has fallen behind this inflation curve." Yet, the long bond managed to erase sharper losses mid-day to settle for a small gain that dropped the yield to 6.338% on this day that was kind to all forms of financial paper.

In the spirit of officials falling behind the curve, our quote of the day comes from our earlier report today from the San Francisco Chronicle. White House Y2K czar John Koskinen said in an interview last week in regard to the appoximately 800,000 small businesses across the country that remain at risk: "If you're a small company that decides to wait and fix it and does not get it fixed on time, our position is, 'That's life.' It's a great, free country, and you have the freedom to fail." Our caution from our high Tower perspective is that individual citizens would do well to heed that same counsel. Anyone who views the government as their ultimate safety net is surely in for a hard landing.

And on the topic of safety nets, our golden net was buffeted in today's same wind which blew in the storm that had most financial market participants scrambling to grab hold of some good sturdy paper. (grin) We're not sure if this bizarre mass behavior is in complete disregard to the Five Horsemen which we've discussed here previously, or whether it is some kind of warped preparation for that uncertainty which lies ahead...an uncertainty that looms larger than any in any future we've faced in recent memory. In our daily snapshot of the great gold continuum, the spot price last quoted in New York was down $2.30 after taking a hard look at what wagers the futures contract traders were taking with the December price. At $305.30, we are now squarely $50 higher than we were the morning of the last UK gold auction in which 25 tonnes were offered as a band-aide on September 21st. The next auction is scheduled for November, and we can't help but wonder how many groups are holding off on spot market opperations, hoping to meet their needs through that avenue and thereby avoid to the extent possible touching off a spot market/price powderkeg.

We'll turn to Bridge News to get the word from those guys at the COMEX poker table...

NY Precious Metals Review: Dec gold hits 2-week low
By Melanie Lovatt, Bridge News
New York--Oct 20--COMEX Dec gold repeated Tuesday's $2.20 slip,
settling at $307.30 per ounce after dropping to $305.80, which is its
lowest level in roughly 2 weeks. Traders said that gold, once again,
became the victim of a climb in US equities prices and a recovery in the
dollar against both the euro and yen.

Gold's fall today was "really linked to the rally in the stock market
and the dollar climb against the yen is a good strong inverse relationship
to gold," said James Steel, analyst at Refco.
"Last week there was gloom and doom about the stock market," noted
Bill O'Neill, analyst at Merrill Lynch. He said that the upturn this week
is sapping gold's strength.
Further increases in the dollar and equities could continue to put a
lid on gold prices, analysts are, however, quick to point out that despite
this week's pullback, the uptrend, which saw COMEX gold reach a 2-year
high of $339 on Oct 5, is essentially still intact.

Lennie Kaplan, chief bullion dealer at LFG Bullion Services views the
recent dip as a consolidation before higher prices. He noted that dealers
are still nervous of another price spike and continuing to quote wide
price spreads.

O'Neill notes that while he does not envisage a massive climb,
Merrill's upside target for this year is $340 "allowing for $360 if things
become really heated."
However, he points out that gold's recent climb has been "a structural
rally and is not a proxy for inflation or anything indicating that gold
should be re-monetized," he noted.
Traders noted that there is still concern over the fate of
London-listed Ghana gold mining company Ashanti. The company announced it
has renewed its short-term standstill arrangement with its hedging
counterparties as merger talks with Lonmin continue.

After the recent sharp spike in gold prices, Ashanti has been liable
for margin calls from its hedge program. If Ashanti can't work out its
problems and has to face margin calls, it could cause a domino effect,
sending gold prices higher as banks scramble to cover any exposure, a
trader 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
---
The vaults at Republic National saw no action, but there was considerable movement of gold inventory at ScotiaMocatta. The COMEX Registered gold inventory was decreased by 14,574 ounces as 2,020 ounces were transferred to Eligible inventory status while 12,554 ounces were withdrawn altogether. As the heavy doors were swung closed to end the day, COMEX held 884,847 troy ounces under guardianship.

Two contracts (net) were settled yesterday among those October futures in open interest, leaving 114, November was unchanged at 14, but 1998 new contracts were written for gamblers on the December futures price of gold, upping that month's open interest to 118,659 contracts. December was the lion's share of action as the total COMEX OI for gold futures was raised yesterday by 2219 to 223,090 contracts through June 2004.

Of those October contracts remaining in open interest, delivery intentions were announced on yet another two this morning, bringing the number of October contracts that called for physical settlement to 2,512 (representing 251,200 ounces) so far this month...an overwhelming majority of all open interest earlier outstanding in this COMEX future. Why weren't these same physical transactions handled on the spot market? This is a trend that surfaced in August. Can we expect more of the same in December? If so, about 11,865,900 ounces (369 tonnes) will be called for. Any ideas where it might come from?

And finally, in our oil watch, US Department of Energy released data today showing an unexpectedly
large 3.4-million-barrel rise in crude stockpiles last week which was a stark contrast to yesterday's post-market release of American Petroleum Institute data reporting a slight gain of 325,000-barrels. On the shock, NYMEX crude futures fell to an intraday low of $21.95, but a late recovery was sparked by comments made by Saudi Arabia's Oil Minister Ali Naimi that there are "absolutely" no current plans to change crude oil production levels before March. Some of today's selling was also due to the liquidation of positions in light of today's expiration of the November contract. In the end, November crude settled down 2c at $22.20.

And that's the view from here...after the close.
Al Fulchino
(10/20/1999; 20:50:29 MDT - Msg ID: 17038)
Steve and MK re Steve's friend
About 30 years ago, Vermont and New Hampshire became very different as Vermont went the high tax route and New Hampshire, held to it's usual limited tax philosophy. Today the results are in. All signs point to an overall better economy in New Hampshire. Yet, the Vermonters hold fast to their philosophy? Even with overwhelming evidence as to which system works best, they stubbornly refuse to acknowledge their mistake. Why? Simple! The tax state is a man made creation. And as supreme beings in their own mind, they can see no other way. What would you both say to the entire forum moving to New Hampshire and we go one step further. Enact a law that provides for all trade and financial transactions to be conducted with a currency backed by PM's?
PH in LA
(10/20/1999; 20:57:40 MDT - Msg ID: 17039)
SteveH and Golden Truth:
(see below)Many of us DO attribute almost magical insider connections to FOA and Another. It is also true that they often seem go out of their way to be unclear. Some of this may well be an effort not to compromise their sources and some may be to stimulate discussion and thought on our part. They may well have other motives as well.

"I have not offered such an outline before because the political turn had not materialized. It now has!" FOA

There are several "political turns" evident lately. One is certainly the rumors and delays swirling around the Ashanti "default" (as MK almost called it this morning). A Saudi prince becoming involved with the Ghana government, rumors of US involvement... etc. BB selling of newly created paper positions probably has some heavy government involvement and financial backing. The very publishing of the Washington Agreement is a political event itself.

Is FOA refering to BIS involvement waiting in the wings? Does FOA have direct knowledge of that or is he speculating based on prior actions by them? It would be too easy if he declared either "yes" or "no". Until then, time will...

I am not quite willing to conclude that FOA demonstrates a source of direct inside information just yet. That he is very astute and has a very penetrating understanding of these matters is NOT in doubt. His vision is very close to Reginald Howe at the golden sextant from whom I have received private communications. (He likes to spend free time on his boat just as I do and can be seen aboard at his web site.) I see little reason to believe that Howe has insider connections. Yet he is reaching many of the same conclusions as FOA.

So is Nobel Prize-winning Robert Mundell at Columbia University. For a fascinating read see:

http://www.columbia.edu/~ram15/LBE.htmhttp://www.columbia.edu/~ram15/LBE.htm

The International Monetary System in the 21st Century: "Could Gold Make a Comeback?" Robert A. Mundell, Columbia University/Lecture delivered at St. Vincent College, Letrobe, Pennsylvania, March 12, 1997.

onlychild
(10/20/1999; 21:07:25 MDT - Msg ID: 17040)
USAGOLD: First Amendment question
MK, I understand that the CO state gov't is debating the passage of a law that would restrict the distribution of handbills, playing of music, or the right to assemble near certain institutions or facilities. Can you elaborate?
watcher
(10/20/1999; 21:37:39 MDT - Msg ID: 17041)
US backed fund to help ashanti/
By Ben Hirschler

LONDON, Oct 20 (Reuters) - A leading U.S.-based Africa fund has joined Saudi Prince Alwaleed bin Talal in offering financial support for Ghana's troubled Ashanti Goldfields Co Ltd , industry sources said on Tuesday.

People familiar with the situation said the U.S. government-backed Overseas Private Investment Corp's (OPIC) $500 million Africa Infrastructure Fund had signalled its backing to the Ghana government and its advisers.

The Ghana government, which has a 20 percent stake and a veto vote in Africa's third largest gold producer, is actively pursuing alternatives to a bid for Ashanti from Lonmin Plc (quote from Yahoo! UK & Ireland: LMI.L).

Ashanti is battling for survival in the face of a liquidity crisis caused by huge losses on gold derivatives triggered by a sharp rise in the gold price in recent weeks.

The Africa Infrastructure Fund's approach is separate from that of billionaire Alwaleed, who confirmed on Tuesday that he was considering investing in Ashanti.

Alwaleed is thought to be considering extending a $400 million lifeline to Ashanti, probably in exchange for a stake in the company. The OPIC fund is likely to contribute a smaller amount.

Ashanti on Monday won a 72-hour breathing space from 17 gold hedging counterparties who agreed to extend a standstill on claims for hundreds of millions of dollars of margin calls until the close of business on Thursday.

Meanwhile, the chairman and chief executive of Lonmin -- which already owns 32 percent of Ashanti -- were in Accra on Wednesday for talks with the Ghana's cabinet, sources said.

Lonmin on Monday reduced its bid for Ashanti by 20 percent to $5.95 a share, valuing the whole company at $665 million, after studying the company's books.

Its bid is conditional on support from the government and a standstill on claims from the hedging counterparties.

trade for paper credits for gold ownership
Cavan Man
(10/20/1999; 21:43:02 MDT - Msg ID: 17042)
FOA 17305
HA HA. I get it.
Cavan Man
(10/20/1999; 21:44:33 MDT - Msg ID: 17043)
FOA 17306
'Tis eloquent and, teriffic.

Good night Irene.
Skip
(10/20/1999; 21:50:18 MDT - Msg ID: 17044)
Letter to Congress (posted on another site)
http://www.gold-eagle.com/editorials_99/dvcohen102199.htmlI found the following message on the Gold-Eagle website, and felt that it was important enough to post in this forum. Forgive me if someone else already posted this.

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

The following letter was sent to U.S. REP. HENRY WAXMAN (Dem) in protest to the apparent impunity enjoyed by some financial institutions, which is decidedly not in the best interest of the investing public. The poignant letter leads by admirable example of what we all should do.

U.S. REP. HENRY WAXMAN (Dem)

Re: Amnesty for Gold Loans

As a follow-up to my letter dated October 14, 1999, I would like to express further frustration and anger with respect to alleged rigging activities taking place in the gold market designed to "control and fix" the price of gold, thereby preventing the gold price from reaching its natural, higher equilibrium
value.

It is my understanding that certain bullion banks are providing amnesty for gold loans owed to them by their various clients. Supposedly, they are doing this via agreements to accept repayments of gold loans in CASH instead of real physical gold, as legally required under ALL gold loan agreements. Moreover, they are providing grace periods for gold loan repayment so as to prevent their debtors from entering the gold market to BUY gold, thereby sending the gold price higher. Of course, a higher gold price is anathema to bullion banks since they are alleged to hold enormous short positions in the gold market.

In Goldman Sach's case, one of their major debtor clients happens to be Ashanti Gold. Via excessive hedging activity in the gold market, Ashanti apparently owes Goldman Sachs a hefty amount of physical gold (since ALL gold loans are only repayable in gold, NOT currency!). Apparently, with the spot price of gold now higher than Ashanti's hedge price, Ashanti has received a margin call from its bullion bank, Goldman Sachs.

Once again, I must state unequivocally that, if these allegations are true, then Goldman's actions are violations of antitrust, anti-collusion, and anti-price fixing statutes designed to preserve and maintain free American financial markets.

It is particularly infuriating insofar as such actions subvert the alleged LEVEL PLAYING FIELD in the gold market.

In other words, why were certain gold companies allowed to go bankrupt and die these past few years, owing to a collapsing gold price, while today, other gold producers who "have been in bed" with Wall Street's bullion banks to suppress the price of gold are now being afforded amnesty for their gold loans IN ORDER TO PREVENT THE GOLD PRICE FROM MOVING HIGHER????

This is yet another classic case of MORAL HAZARD that has been corrupting the financial markets particularly during the current Clinton administration. Such MORAL HAZARD raises a number of disturbing questions:

WHAT ABOUT ALL THE HUGE FINANCIAL LOSSES THAT UNFORTUNATE GOLD INVESTORS SUFFERED THESE PAST FEW YEARS AS A RESULT OF WALL STREET BULLION BANK ACTIVITIES TO SUBVERT THE PRICE OF GOLD AND BANKRUPT UNHEDGED (OR INSUFFICIENTLY HEDGED) GOLD PRODUCERS???

WHY WERE THOSE VARIOUS HARMED GOLD COMPANIES NOT AFFORDED SPECIAL SWEETHEART DEALS BY THEIR BULLION BANK CREDITORS TOO???

WHERE HAVE THE CFTC REGULATORY AUTHORITIES BEEN DURING THIS ENTIRE GOLD MARKET MANIPULATON???

WHY IS THE CFTC ASLEEP AT THE WHEEL???

WHY IS THE CFTC NOT LOOKING INTO THESE AMNESTY AGREEMENTS BETWEEN WALL STREET BULLION BANKS AND THEIR GOLD PRODUCER CLIENTS WHICH SO OBVIOUSLY CORRUPT THE GOLD MARKET AND POLLUTE IT WITH MORAL HAZARD??

WHY HAS THE CFTC FAILED TO LOOK INTO THE EXCESSIVE HEDGING PRACTICES OF BULLION BANK PREFERRED CLIENTS SUCH AS ASHANTI GOLD, BARRICK GOLD, ETC....SUCH CLIENTS HAVING SO SEVERELY UNDERMINED THE PRICE OF GOLD THESE PAST FEW YEARS?

AS PER REPORTS IN VARIOUS FINANCIAL MEDIA, WHY IS THE FEDERAL RESERVE ALLOWED TO BAIL OUT WALL STREET BULLION BANKS THAT ARE UNABLE TO REPAY THEIR GOLD LOANS TO CENTRAL BANKS?

WHY DOES SUCH FEDERAL RESERVE INTERFERENCE IN THE GOLD MARKET CONTRADICT THE INFORMATION PROVIDED TO BOTH YOU AND ME BY THE FEDERAL RESERVE CONGRESSIONAL LIASON, MR. HAMBLEY?

WHY ARE THESE BULLION BANKS NOT HELD TO THE SAME STRICT ACCOUNTABILITY AND STANDARDS THAT INVESTORS LIKE MYSELF MUST FOLLOW IN THE GOLD MARKET???

WHY ARE WALL STREET'S BULLION BANKS PROHIBITED FROM SUFFERING LOSSES DURING THIS CLINTON ADMINISTRATON... WHILE ALL OTHER GOLD INVESTORS ARE LEFT TO BITE THE DUST???

Rep. Waxman, I cannot begin to express my anger and frustration over these matters.

If the gold market is as rigged as it appears, then I believe the Clinton Administration should afford immediate compensatory, exemplary, and punitive compensation for all losses suffered by gold investors like myself who were naive (or stupid) enough to believe in the existence of a supposed free gold market here in America.

Please note that I am forwarding this letter to various Republican representatives PLUS several Reform Party candidates for them to look into this entire matter. Furthermore, I will provide copies to relevant business media.

Enough is enough. If the Democrat administration is willing to sanction this kind of inveterate malfeasance, then it is time to look to other political parties to redress the crimes.

Once again, I will restate that I truly regret the hefty political donations I have made to the Democrat party in the past given their apparent facilitation of the destruction of my gold investments, not to mention the gold industry itself (excepting those FAVORED gold producers who have aided and abetted the decimation of the gold price these past few years).

Very Truly
DAVID COHEN

Mr. Cohen recommends that ALL gold investors use the above as a FORM LETTER for exercising the right to express their opinion by writing to their various representatives and media interests. GOLD-EAGLE seconds this suggestion. To this end we supply below the following web URLs to help locate your Congressional Representative's address.

http://www.visi.com/juan/congress/

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

Apparently they want this message spread around.
Black Blade
(10/20/1999; 21:50:41 MDT - Msg ID: 17045)
Looking interesting again tonight
s&p futures down -8.50, and gold up +$1.00 in overnight trading. Tomorrow could be interesting indeed. Looks like the bears might come out of hibernation tomorrow if these levels hold. The sheeple have been looking for safety in numbers. The DOW and certain large caps have offered some protection in the recent past, yet it looks as if those days may be ending soon. The sheeple tend to ignore the bottom line of their portfolios, and see the common indices such as the DOW, and think that all is well. However, the A/D line looks as grim as ever, new lows outpace new highs in the markets. It is only a matter of time (72 days until Y2K). It will only take a small number of sheeple to break from the flock in this grand game of "musical chairs". The question begs: "who will be left standing without a seat?" The nervous tension will build of course, since it is only human nature to procrastinate. There are already a few cracks in the general cohesiveness of the flock. PPI is up, trade deficit is growing, profits haven't risen enough to justify current PE valuations, etc., etc., etc. I would expect PM's to stagnate until we close in on the new century. Then I would expect all hell to break loose as many flee to safety (just in case). What will Y2K be? I don't know. Maybe just a "bump in the road", maybe total disaster. What really matters is uncertainty...it is the driver of fear. The talking heads can bray "all is well", but eventually the sheeple will bleat "what if....?" If come the new year, even a few problems arise, then hard assets, maybe even cash (for a time) will be king, as market tumble downward. Then again the markets may do fairly well right up until Y2K as the spinmeisters do their stuff by calming the masses. However, I expect a last minute rush for the exits. I expect that the FED and Treasury believe this as well. Why else provide an extra 200+ billion liquidity (cash) for the banking system? Coincidence? I think not.
Gandalf the White
(10/20/1999; 21:53:15 MDT - Msg ID: 17046)
Why is it after FOA posts that the Crystal Ball becomes GOLDEN?
Yes, PeterA. it has now taken a golden look! (BLUE on the DOW again!) -- EVEN GS will not be able to pump the PPT enought tomorrow to stop the change! -- Look out Goldspoon, the race is about to end soon. -- Ever eaten horseburger ? Twas not so great in the 40's, and I shall bet that it has not improved.
WELCOME to all you new posters -- and a "come on out" to all you lurkers in the background, step up to the TableRound and claim your seat before the music stops.
<;-)
Netking
(10/20/1999; 21:56:53 MDT - Msg ID: 17047)
FOA - Comex paper
FOA RE: Message 17033

FOA-Hello & Thanks for your words of wisdom much appreciated
by us down here in this part of the World Sir!

Regarding when the liquidation of the Comex longs happens as the
physical Gold runs ahead of the paper with no hope of
delivery of those paper contracts;
Would I be right in saying that the many people who do hold
long contracts would be "unlucky" to loose their investment
ie there will be a cash settlement/guarantee regime put in
place that is likely to return them their capital plus
prof accrued until when the plug is pulled.?
watcher
(10/20/1999; 21:58:26 MDT - Msg ID: 17048)
uptick/ sr bullion trader at merril L
Thought this comment Date: Wed Oct 20 1999 19:03
uptick (just for the record on Ashanti) ID#277249:
I got a baaaaaaad feeling about this one...first extention of standstill agreement ends tomorrow....Ghana has asked for another 3 weeks, no answer from the 17 counterparties yet....I dont know why but something abnout this one makes me believe that it may very well disintegrate..

if it does, imagine 17 banks trying to buy 10 million ounces of gold all at the same time without any consideration of price...UGH


might be interesting to follow
Black Blade
(10/20/1999; 22:08:58 MDT - Msg ID: 17049)
Just a taste of Y2K
http://news.bbc.co.uk/hi/english/business/newsid_477000/477991.stmThe link provided is just a preview. Actually I'm not so worried about software per se, however, it is the date sensitive embedded SCADA chips and other date sensitive chips that are the real problem. Especially the inaccessable hardware. Fore warned is fore armed.
Black Blade
(10/20/1999; 22:28:59 MDT - Msg ID: 17050)
Scrappy, Townie, and HGMCY
Scrappy, welcome the the table! Your friend couldn't go wrong with Harmony Gold (HGMCY). They are unhedged and pay a dividend to boot. They are profitable even at these prices. This stock can be accumulated easily through a DSP (direct stock purchase program). You can check it out at http://www.netstockdirect.com as well as a few other gold miners such as Buenaventura, Lihir, etc. A DSP is similar to a DRIP, which you can accumulate shares of Homestake Mining, for example. There are some fees ($5.00 per purchase) but still much less than through a broker. The more shares bought, the less the fees matter of course. Registration at the site is free, etc. I have HGMCY, though some prefer hedge-lites such as DROOY. I have no problem with either one, though leverage may be greater with DROOY, they are hedged and diluted shares with a secondary offering. Good luck!

Townie, I see that you already posted the Y2K link that I posted in the my last post. You sure are on top of this stuff! Keep up the good work guy! and thanks.
Tanglewild
(10/20/1999; 23:17:20 MDT - Msg ID: 17051)
y2k-ibm
http://www.cnnfn.com/1999/10/20/news/ibm/
Looks like big blue is having some y2k problems. stock is down 10 in overnight trading. article says "should send the markets reeling" in the morning. may help the gold.
Peter Asher
(10/20/1999; 23:42:07 MDT - Msg ID: 17052)
Aragorn III (10/20/99; 03:15:06MDT - Msg ID:16950)

I thought so, but figured I must be missing something. I saw a few posts later that Chapman's report on www.gold-eagle.com had the same delusion "Barrick has sold forward 13.3 million ounces of
gold at an average price of $385 an ounce through 2001. If the gold price reaches those levels,
and there is a good chance it will, then Barrick won't make much money." Must be that "New math" --- What makes the Ashanti deal have a margin call? Is it structured as a short sale rather then a sale of in ground assets for future delivery?

Great to see a good 'ham sandwich post' from you. There has been much caviar and petit foie de gras of late and it was good to have some hearty basic food again.
Peter Asher
(10/20/1999; 23:47:35 MDT - Msg ID: 17053)
About Gandalf's #17046
Do not make light of this crystal ball. every position I've had in contradiction to it this month, wiped out!!
Peter Asher
(10/20/1999; 23:52:29 MDT - Msg ID: 17054)
Tomcat (10/20/99; 16:41:48MDT - Msg ID:17007)

>>>phaedrus, re #16997: How about A Basics/Definition Section For This Forum <<<

Absolutly! A definition section would be an incredible asset to the HOF.

I believe we are talking about Empirical definitions in this case, yes?.
elevator guy
(10/20/1999; 23:56:24 MDT - Msg ID: 17055)
@ Goldpower
Goldpower, I like your thoughful style of logic.

Even though we detest Goldman Sachs for all their insider manipulation, and for all the pain they have inflicted on the gold community, there is still something to be learned from them.

But I have to say, they may have lost quite a bit of cash with the recent upturn in gold. But this may be due to the fact that they could not have anticipated the ECB action, since it came from a "different corner" of the gold world, the side who supports the Euro, and who hope to make the Euro "currency king". Goldman Sachs is only an insider as to movements in the price of gold either allowed by the Fed, or orchestrated by the Fed. To me, this is the "other corner" at the boxing match of heavyweight currencies.

In the voice of the prize fight announcer-

"And in the green corner, the reigning currency champ, the US Dollar, is weighing in at.... Lets look at the scale- The champ weighs....Um, uh, the champ weighs...Uh,.. Hey, wait a minute, the champ is losing weight even while he's standing on the scale! Don't turn sideways, Champ, we wouldn't want to lose sight of you!

Where was I? Oh, yeah... I don't think its a shame to make money by shadowing the movements of Hillary, or Warren Buffet, or Bill Gates, any more than FOA, Another, MK, et al. I'm in this Forum to learn about the greatest investment, gold. Along the way, I may try my hand at paper this and paper that. (Can we say that on this forum?) Yes, YES, YES, aquire physical. Always and above all. But there is still a time frame in which paper investments can and will profit an individual tremendously, providing one knows how and when to get out.

Until the dam breaks, I walk the rim, and listen to the sounds of stress. I'm only a few feet from the shore.... Lets see, hmmm, I can jump that far in an instant..(?)
Strad Master
(10/21/1999; 00:57:44 MDT - Msg ID: 17056)
Question for FOA
Dear Mr. FOA,
First, I greatly apreciate your kind response to my question about a week ago. Please forgive me for not being able to thank you earlier.
You mentioned in your postings today that silver and platinum would greatly underperform gold in price, yet I seem to remember from a posting of yours a few days ago something that implied that you were also holding physical silver and platinum. Did I misinterpret that? Do you think that holding silver and platinum will prove useful in the coming times - just not as spectacularly useful as gold? Or, do you feel that if someone had the choice to be diversified in all three metals (albeit largely weighted in gold) versus holding only gold and nothing else, that the latter would be the better option? Thanks in advance for your comments. All the best to you.
STRAD
SteveH
(10/21/1999; 01:36:18 MDT - Msg ID: 17057)
Dec gold now...
www.gold-eagle.com$307.50.

repost from above link:

Gold short squeeze is alive and well.
(Don_L.) Oct 20, 23:33

Looking at the open interest data on the COMEX gold futures together with the open interest on COMEX gold options (both calls and puts) is indicating to me that the short squeeze is alive and well. It is just that we are now in a period of transformation where the in the money calls are being converted into futures contracts and that some of the Dec. option positions are now being rolled out to February and beyond. COMEX gold call total open interest is still growing at a record rate. Heaven help us when this next one blows..........

Goldspoon
(10/21/1999; 03:12:11 MDT - Msg ID: 17058)
No time can't post more now...later
Platinum's up again... if gold does not soon confirm this recovery....platinum will retreat (false labor (grin)).
Gandalf... where is the nearest Glue factory.... they used horses didn't they????
The Clock is ticking... on my 24 hour window + or - (its a liberal rule)
Best wishes and Good Hunting today!!!! Go get them Shorts!!!
AREM
(10/21/1999; 03:58:29 MDT - Msg ID: 17059)
How about A Basics/Definition Section For This Forum
@ Tomcat, phaedrus

You said :
"Perhaps the forum could have a basics/definitions section where posts like yours could be stored and easily referred to. It could have discussions on things like forward rates, lease rates, and other basic terms/acronyms that appear so often in the forum discussions."

I think that information like that would be a great idea, especially for investment neophytes like me.




FOA
(10/21/1999; 05:29:58 MDT - Msg ID: 17060)
Reply
Netking (10/20/99; 21:56:53MDT - Msg ID:17047)
FOA - Comex paper
FOA RE: Message 17033
Would I be right in saying that the many people who do hold
long contracts would be "unlucky" to loose their investment
ie there will be a cash settlement/guarantee regime put in
place that is likely to return them their capital plus
prof accrued until when the plug is pulled.?

Hello Netking,
They can print all the cash necessary to cover everyone. But, they can't print any more bullion! Will the cash cover everyone's gains? This question is aimed at only the longs. It takes a short and a long position to create a contract. If they cover the longs + profits, will they cover the shorts + loses? It was a big mess the last time this happened and it will be bigger this time.
Note: Usually, the market makers of paper exchanges are protected so as to at least keep the exchange alive. Again, this can involve "liquidation only settlement" that favours a crashing price. (See the silver history line) Because bullion is not used, it impacts the accounts of the players, not the supply and demand in the physical dealer markets. Even so, many dealers do use the paper games to carry inventory? What will happen in such a convoluted mess? I say total market shutdown!


-------------------------------
Strad Master (10/21/99; 00:57:44MDT - Msg ID:17056)
Question for FOA
--You mentioned in your postings today that silver and platinum would greatly underperform gold inprice, yet I seem to remember from a posting of yours a few days ago something that implied that you were also holding physical silver and platinum.-----Do you think that holding silver and
platinum will prove useful in the coming times - just not as spectacularly useful as gold? Or, do you feel that if someone had the choice to be diversified in all three metals (albeit largely weighted in gold) versus holding only gold and nothing else, that the latter would be the better option? Thanks in advance for your comments. All the best to you.
STRAD



-----------------------------
Hello Strad,
Yes, I do own some silver, about 1% of holdings. I recently purchased some Platinum, 1/4%. These metals will rise a lot in the future. They just will not come anywhere close to the run gold will have as it is taken into it's new money asset image. These metals are held for use and have a
definite limit to their demand, subject to a higher price. No, gold will mostly not be circulated as money, just as stocks and bonds are not used to buy auto fuel at the station. However, physical gold will come into tremendous (unlimited) demand as it becomes a savings asset.

Thanks FOA

SteveH
(10/21/1999; 06:14:56 MDT - Msg ID: 17061)
Something is happening with...
www.mrci.combonds and stocks this morning. Check this out:

Market Mth Open High Low Last Change Date Time Ask Bid
S & P 500(CME)(Globex) Dec 1290.00 1291.50 1282.90 1282.90 -9.60 10/21/99 5:00 1283.00
S&P 500 Futures Premium -263 -143 -633 -633 -340 10/21/99 4:59
S & P 500 E-Mini(CME) Dec 1284.25 1288.00 1282.75 1282.75 -1.75 10/21/99 5:00 1283.00 1282.75
NASDAQ 100(CME)(GLOBEX) Dec 2468.00 2468.00 2425.00 2425.00 -46.00 10/21/99 5:00 2429.90 2422.60
DJIA Index(CBOT) Dec 10400 10403 10306 10306 -111 10/21/99 5:00 10318
Nikkei 225(CME) Dec 10/20/99 13:36


Market Mth Open High Low Last Change Date Time Ask Bid
30-Yr T-Bonds(CBOT)(Proj. A) Dec 111~05 111~13 111~05 111~13 +0~08 10/21/99 5:00
Black Blade
(10/21/1999; 06:37:50 MDT - Msg ID: 17062)
Looking to be an interesting day, maybe?
s&p futures down -13.50, DOW looking ugly. IBM out with profit warning for 4th quarter and down to $98 (DOW component), all due to Y2K fears. hmmmm....
Cavan Man
(10/21/1999; 06:47:29 MDT - Msg ID: 17063)
To SteveH
Offered for your friend and for all those who, "go along to get along".

THE LEADERS OF THE CROWD

They must to keep their certainty accuse
All that are different of a base intent;
Pull down established honor; hawk for news
Whatever their loose fantasy invent
And murmur it with bated breath, as though
The abounding gutter had been Helicon
Or calumny a song. How can they know
Truth flourishes where the student's lamp has shown,
And there alone, that have no solitude?
So the crowd come they care not what may come.
They have loud music, hope every day renewed
And heartier loves; that lamp is from the tomb.

W.B. Yeats
1921-
FOA
(10/21/1999; 07:02:42 MDT - Msg ID: 17064)
Comment
http://www.crbindex.com/news/story2203.htmlYou can bet this deal was done "off market" at a loan rate much higher than 10%. Physical gold as the interest with "down line" attachments to "in ground gold". Along with Arabia in this "ASHANTI" workout points to what is really happening behind the screen. And some people thought everything was covered because rental rates were low! Don't believe it! The whole rental system is moving "offline" to hide the effects. We must ask, from who will they borrow the next time to repay this new loan? A trap that the "Washington Agreement" has closed.

KUWAIT TO DEPOSIT 79 TONNES OF GOLD WITH INTERNATIONAL FIRMS
Kuwait--Oct 21--Kuwait's Central Bank announced today that it had decided to deposit 79 tonnes of its gold reserves with "reputable" international finance institutions. Central bank governor Sheikh Salem Abdul-Aziz al-Sabah said the bank would invest its gold through limited-term deposits, without giving up the ownership of the reserves. (Story .13467)


Leigh
(10/21/1999; 07:23:28 MDT - Msg ID: 17065)
FOA
Do you think Kuwait was prevailed upon to make this gold available because of the help given them during Desert Storm?
ss of nep
(10/21/1999; 07:33:21 MDT - Msg ID: 17066)
KUWAIT

I think the Bush family(former president) have a large
position in Kuwait's oil. The former pres is also
associated with Barrick Gold Corp.

I think Royal Dutch Shell has interests in Kuwait's oil.
Royal Dutch is mostly owned by N.M.Rothschilds, the Queen
of the Netherlands and the british Royal Family.

Hmmmmmmmm ...........
FOA
(10/21/1999; 07:45:58 MDT - Msg ID: 17067)
reply
Leigh,
You assume the gold is being loaned into IMF/dollar players. I could be, yet it most likely is flowing through these BBs to cover an old Euro borrowed position. It is the ECB faction that has stopped further lending and could be repositioning to "self liquidating status". Again, the major
dollar BBs will get cover in this "controlled burn" if they agree to pay the "undisclosed rate" price.
This latest move shows just how much the deals are in trouble. It's obvious that most of the transactions are "off-line" because the lenders "announce" their intentions before the fact. Neither the Russians or Kuwait bid themselves a lower rate by publicly talking the deal. Rather they are asked to "Pre announce" so as to influence what is becoming a largely non investment bullion "retail lease market". Such an action telegraphs to the community that everything is OK.
Once these initial workouts are done, some of the players will be removed from the chess board and the "official bull" will run again. That is run until some more players are "taken".
We have but to buy physical (if you can get it) and watch the destruction.

Thanks I must go now FOA

CoinGuy
(10/21/1999; 07:49:21 MDT - Msg ID: 17068)
IBM
IBM opens down 22 1/8. WOW! Never seen that on a Dow stock before the opening. All due to earnings warnings from the "bump in the road" called Y2K(or is it?). More days like this to come?

Get Physical,

Coinguy
CoBra(too)
(10/21/1999; 07:59:55 MDT - Msg ID: 17069)
Leigh and FOA
Agree on your conclusions FOA, though I still feel it's the US calling upon any former favor extended in order to buy time for an "orderly" retreat vs. meltdown. It seems to me the good old US of A is rapidly running out of allies and has used up its greenmailing capacity as well.
Kuwait is supposedly only delivering paper contracts- catching on to the game!
Regards CB2

golden
(10/21/1999; 08:09:34 MDT - Msg ID: 17070)
What now?
Dear FOA,
What a morning. I have seen your earlier today posts, and wonder what the gold lending and IBM's loss will mean to the gold and silver markets in the next 1-3 days? Yes I am new to this board (and to gold and silver)and I am delighted to have found it. Thanks for your insights.
SHIFTY
(10/21/1999; 08:17:52 MDT - Msg ID: 17071)
JCS thank you
To JCS I thank you for the info. I checked out www.gold eagle.com , lots of stuff to read. Thanks again,GO GOLD SHIFTY.
golden
(10/21/1999; 08:33:47 MDT - Msg ID: 17072)
Leigh or anyone else with an opinion
You were having a good discussion with FOA earlier. I got my question in too late.
What do you think this latest news will do to gold and silver today, tomorrow.
Or will it take awhile for these events to effect metals

Do silver and gold need to go their technical ways and go their own ways? People have said lately that gold and silver are filling in the downside and will go up eventually. Or am I misinformed? I am trying to take all this in and to make a full picture. Obviously you have a great long term relationship here. Whatever you can do to help me understand is appreciated.
ganymede
(10/21/1999; 08:55:33 MDT - Msg ID: 17073)
Where is all the gold?
Hello USA Gold Forum!

I have only recently discovered this forum and have been very interested to read its many intelligent and informed postings. I read Aristotle's five part series over the weekend and that opened a few doors and turned on a few lights in my mind. It also raised a few questions that I want to bring for discussion here. I have no doubt that these or similar questions have been discussed before, but I want to bring them up again because I think they might help us focus on some important issues while we watch the price of gold.

I did some calculations with Saudi oil production figures. The Saudis currently produce 8 million barrels of oil per day. I imagine that production rate has been both higher and lower over the past 20 years. If we assume that were the average production rate and they were able to sell that oil at an average of $13/barrel then they would have earned $416 billion over the last 20 years. That is enough currency to buy over 32000 tons of gold at $400/oz. Now we know they didn't spend all their money on gold, but we also know that they aren't the only oil producing country in the world that buys gold too (eg. Kuwait). Where is this gold?

Various writers on this forum quote the amounts of gold held by various CBs around the world. The amounts of gold held by CBs is dwarfed by the amount of gold that the Saudis and their brethren could have bought over the last 20 years. Is all of this Saudi gold really still in the ground in the form of forward-sold production?

Lets talk about some truths of business. The western financial elite (WFE) are a snobby bunch. They see the Saudis and their brethren through racist eyes. The western elite were made indignant in the 1970's when "those people" dared to threaten the established order and exert their new-found power. They were further frustrated by the fact that the Arabs were too smart to sell their oil for mere paper. So they faced a challenge: how do we screw them out of their oil?

The WFE soon faced the fact that fortune had placed the most important resource in the world in the hands of those they despised. They quickly formulated a plan: we must trick the Arabs into depleting their oil resources for minimal return to correct this misplacement of power. The Arabs wanted gold. Was that good news to the WFE? Did that present an opportunity to trade the "barbarous relic" for something of use? Or was the prospect of gaining precious gold offered as bait while the intent was never to deliver? Did the WFE say to themselves: "The Arabs want gold, so gold they will get but it will be in a form of our choosing"?

So with that plan they tricked the Arabs into taking paper gold for their oil. Over the years the Arabs have been made to think that the paper gold was real because they have been able to convert all they wanted into physical form. But how much physical gold have the Arabs really demanded? Where is it stored? Does the gold in Fort Knox really belong to the Saudis? Is there any gold in Fort Knox or is there a stack of paper?

Over that last few weeks, a disturbing thought has been uttered: Maybe all that paper gold can't be delivered. Maybe all this forward-sold gold will never make its way to its Arab owners' hands. Is this why Saudi Prince al-Waleed bin Talal rushed to Ashanti's aid this week? Is he worried about his holdings? Who else is thinking they will have to do the same (maybe for Barrick)?

Sorry for the long post.
Leigh
(10/21/1999; 08:56:59 MDT - Msg ID: 17074)
golden
Dear golden: You flatter me by thinking that I have some inside track on the gold market! I'm only a Navy wife and mom, and for the past hour I've been drying off a very wet two year old who's been splashing in the bathroom sink (as well as mopping an inch of water on the floor)!

I've been following the gold market since early this year, when I began to buy gold because of Y2K and Euro fears. In my panic after the Bank of England auction news back in May, I searched the Internet for news and stumbled on this site. It's great, isn't it?

Gold has been through so many ups and downs lately that an investor can hardly know what to expect. Even the technical types who post on Kitco only get it right part of the time. From what FOA has been saying, it sounds as though gold may stay stable for a short while (a couple of weeks, maybe?), and then start rising. I used to think it was going to go ballistic very soon, but last night FOA said the ECB was trying to control the rise. But that's leaving out of the equation any parties who may decide to take delivery of their gold. If someone demands delivery soon, panic may set in.

Golden, this is only my take on what I've been reading, and I could be very wrong. I hope I'm not misleading you or anyone else who may be reading this. Does anyone have a different view of this?

(P.S. Welcome to the Forum!)
Gandalf the White
(10/21/1999; 08:58:46 MDT - Msg ID: 17075)
Question to Golden
First -- Sorry Golden, I forgot to welcome you to the TableRound !! -- I have a question for you that may assist in answering your question. -- Do the results of todays news, like the IBM announcement have ANY effect on the long term value of Gold ? -- Perhaps you are seeing the trees at a very close range and therefore can not see if you are at the edge of the forest, or the heart of the forest. May I suggest that you, as Townie says, light a torch and head for the HoF and the FORUM Archives and get a little flavor of the discussions at this TableRound. There are many tall and strong trees here in the forest and one gets directions from the blazes on the trunks, but not often the exact answer that one asks.
<;-)
Cavan Man
(10/21/1999; 09:03:08 MDT - Msg ID: 17076)
golden
Follow FOA, USAGOLD at this forum. Buy and hold gold for the medium to long term. FOA said 360-400 for the initial leg up. No one can time, not even FOA. I think it might be safe to assume 90 days or so. Keep in mind that very few of us here in the US understand the metals "complex". Seek counsel here.
USAGOLD
(10/21/1999; 09:08:55 MDT - Msg ID: 17077)
Today's Gold Market Report: Of Reputable and Disreputable Bullion Banks; What Next for Ashanti?; The Gold Market on Hold
MARKET REPORT(10/21/99): Gold down $3 in the early going despite the
Dow taking a major hit and the dollar cratering in currency markets.
This morning's reports are notable for their lack of a good reason for
the drop......Ashanti's remains up in the air with the bullion bank
reprieve set to expire today. Our bet? Ashanti and Ghana are given time
to try to find someone willing to exchange margin call money for equity
in the company.......Bridge News reports that Ashanti has approached
Anglogold on merger talks. With the downdraft in the gold price,
Ashanti's problems have considerably lighter in the last few days...One
analyst put their exposure now at $100 million down from the $270
million two weeks ago. This could attract new interest in the ailing
African gold mining company and lend support for a longer reprieve from
call and forward holders. ..................Gold lease rates continued
downward with Kuwait adding 79 tons to gold lending market liquidity
with deposits to bullion banks. It is interesting to note that Bridge
reports the deposit with "reputable" international financial
institutions. One wonders why they had occasion to publicly qualify
their debtor. It appears the deposits are short term and may be a quid
pro quo of some sort to shore up the sagging fortunes of the gold
lending business. I can think of no other reason why they would have
gone public at this juncture except to help someone out..............It
just proves the old saw: He who owns the gold makes the rules. And those
that need it must beg for it and give something up in return....One can
only speculate what that "something" might be...........Along these
lines, Bridge News reports that Robert Mundell, winner of the 1999 Nobel
Economics Prize, today described gold sales by national central banks
over the past 5 years as "idiotic."...........It is perhaps because of
this changing attitude toward gold that Kuwait finds it necessary to
assure the markets that the people to whom they have loaned their gold
are "reputable.".... Whenever one lends metal, it is always good to take
a financial statement and check the three "c"'s -- credit, collateral
and character and Kuwait wants us to know, for whatever, reason that it
has done its due diligence. Kuwait's stance, hoever, does raise an
interesting question with respect to the implied opposite: Who are the
disreputable bullion banks they have avoided? ..................That's
it for today, my fellow goldmeisters. It's a light news morning with
most of the fireworks occurring over at the equities markets.....Have a
good day.

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.
transparent
(10/21/1999; 09:15:59 MDT - Msg ID: 17078)
Newsmax article " Money - What is it ? "
http://www.newsmax.com/commentmax/articles/Greg_Hobbs.htmlclick on link
TownCrier
(10/21/1999; 09:24:29 MDT - Msg ID: 17079)
ECB leaves all rates unchanged at council meeting
http://biz.yahoo.com/rf/991021/j7.htmlEyes now turn to the Nov. 4 ECB meeting. Y2K factors prominently into analysts' expectations of "make or break" policy to be implemented in the near-term.
TownCrier
(10/21/1999; 09:49:26 MDT - Msg ID: 17080)
Tea leaves: IMM currency futures surge higher in early trade
http://biz.yahoo.com/rf/991021/oa.htmlInternational Money Market currencies are higher against the dollar due to sagging U.S. assets today. The euro, after trading lower overnight in the wake of the ECB's hand's-off decision on rates, had rebounded to spike to a session high. Andy Busch, senior foreign exchange trader at the Bank of Montreal, offered the explanation "They are still seeing a very benign inflation environment (in the euro zone), and that is positive for equities and bonds. Any time you get a rate rise it is a negative for the currency and the asset markets, so we saw some buying back of euros this morning."

Currency futures trading today has been described as "a big snore so far."
phaedrus
(10/21/1999; 10:04:05 MDT - Msg ID: 17081)
@Towncrier post regarding currencies
"Any time you get a rate rise it is a negative for the currency and the asset markets, so we saw some buying back of euros this morning."

Say what? This seems a little simplistic.

It is generally more accurate to say that rising interest rates simultaneously strengthen currencies and weaken asset markets. In fact, often currencies will rise in anticipation of a coming rate increase.

It is only when the weakening of the asset market is enough to cause significant outflows of foreign capital that a rate rise hurts a currency.

If Greenspan were to raise rates a full percent, for example, this would be supportive to the dollar on one hand, but the foreign capital stampede out of the US stockmarket would slam the dollar through the floor on the other hand. Which is why creeping inflation puts Greenspan between a rock and a hard place.

It's never simple.

Hill Billy Mitchell
(10/21/1999; 10:05:23 MDT - Msg ID: 17082)
All in all done ALL DOWN going going gone
Everything is down. Stocks across the world-30 yr treasuries-PM's!

Boy a bunch of wealth transferred to somewhere this morning, this last few weeks for that matter.

Where did all this wealth go! Nowhere! is must have moved to a temporary parking place (CASH).

Why cash! All are worried. Notice that I did not use the word fear. When worried and bonds look bad the money seems to flow to cash for the wait and see.

When fear kicks in this cash will go into PM's, mainly gold. Worry is caused by uncertainty which is the emotional state of the market at the moment. When disaster strikes and replaces uncertainty, only then will fear take over and it will be too late for those who are not in cash at the time. Of course if you are certain that fear is coming you will not be in cash today. You will be in PM's before the fear factor kicks in.

Watch the Euro, Yen, Dollar, 30 yr Treasuries and their relationships. Poor dollar ( no hope). I could not live in U.S. cash while waiting to see what next. I have no cash. I do have highly liquid physical metals. If you have to have liquidity why stay in paper.
TownCrier
(10/21/1999; 10:16:13 MDT - Msg ID: 17083)
Nothing says "Thank you" like gold
http://dailynews.yahoo.com/h/ap/19991021/us/winston_churchill_1.htmlWinston Churchill gave engraved gold pocketwatches to the eight people who helped him escape as a POW during the Boer War and flee Pretoria in December 1899 to Mozambique. In the new today because one watch fetched $15,600 at auction.
TownCrier
(10/21/1999; 10:21:58 MDT - Msg ID: 17084)
phaedrus ... "never simple"
You're right. That's probably why traders first dumped it followed by a spike higher...trying to figure out which effect would dominate demand. Thanks for elaborating on Andy's quote.
Chicken man
(10/21/1999; 10:34:36 MDT - Msg ID: 17085)
Let the "7 Day Gold War" begin....!
.
ORO
(10/21/1999; 10:35:04 MDT - Msg ID: 17086)
Phaedrus, TC
Never simple-one more complication

The interest rate rise would also raise current supply rate of $ to the world in proportion to the interest rate rise because the US is by far more the debtor than the creditor.
JCS
(10/21/1999; 11:03:21 MDT - Msg ID: 17087)
XAU Hourly chart
Holding my breath as I type this but it looks like the "c" wave low of a 3-3-5 correction finished a little while ago. We need to see a real lift off to confirm, otherwise a more complex pattern could set up. But, for now, looking better!
golden
(10/21/1999; 11:04:33 MDT - Msg ID: 17088)
Chickenman
What do you mean let the 7 day war begin? I need more. Why 7 days and who is the war between? What is the possible outcomes? Please help.
golden
(10/21/1999; 11:04:39 MDT - Msg ID: 17089)
Chickenman
What do you mean let the 7 day war begin? I need more. Why 7 days and who is the war between? What is the possible outcomes? Please help.
Chicken man
(10/21/1999; 11:04:56 MDT - Msg ID: 17090)
ORO - Thanks for sharing....!
Enjoy your sleuthfulness in finding out figures......got a favor to ask.....
I read some time back about the percentage of "loans" people have against their retirement accouts....some unbeleivable # like 70%.....!!!!!
If that # is true we have a liquidity crisis in the making...( ? )
ORO
(10/21/1999; 11:24:09 MDT - Msg ID: 17091)
Chicken man - 401k borrowing
http://search.federalreserve.gov/search97cgi/s97_cgi.exe?action=formgen&template=fSearch.htmI am looking for options compensation data with aggregate figures in time series.

The Fed has a report relating to this but I can't find it. The 401K thing is covered there too if memory serves me right.

The % figure is high. The motivation is simple;
Put contribution into 401k - $100,
Employer contribution-$50
Tax savings at 40% total rate-$40
Borrow to 50% of balance-$75
Balance:
401K - $75 ($25 vested)
Checking-$75
Govvie-$0

Cash flow:
+$150

If you did not do this,
No contribution:
Balance:
401K - $0
Checking-$60
Govvie-$40

So the reality of it is that the 401K borrowing just allows you to have a better income and is only marginally used for savings. When you withdraw, your tax rate is supposedly going to be lower. The money you owe is to yourself.
golden
(10/21/1999; 11:27:46 MDT - Msg ID: 17092)
Cavan Man, Gandelf the White and Leigh
Thanks for the welcomes and the advice. I do not feel so alone now. I am new to this so please forgive any mistakes I make and correct me.

I really was touched to have responses to my message.

I am also new to the metals market. As a way of introduction, I have been disabled for 10 years and I do not have regular income. Last Thursday I put my limited money from stocks into a leveraged silver buy at 5.40. The broker was sure it would go up. It has not. I need to settle or default by Tuesday. I know gold and silver are going up someday; but by Tuesday?

With things so weird now, I now realize it is hard to figure out what government or organization is going to do what.

However, I am open to all advice about what you would do in this situation. If silver goes to 5.40 by Tuesday, I am OK. If it even is close, I can get an extention.

I would like to be able to get silver and gold at these prices or the lows that they are aiming for, with the idea that they could go up by Tuesday to give me some equity, but unless I am really sure that they will be higher by Tuesday, I don't know if I should risk it.
Is this too personal a post? I need advise, and I won't hold any resentment if you offer some and it is not 100 on target.
Thanks.
PS sorry for the duplicate past post, I guess I had a heavy finger on the button.
phaedrus
(10/21/1999; 11:51:27 MDT - Msg ID: 17093)
little bit o' reversal and some random thoughts
After touching 302.20, gold is now creeping back towards unchanged, just under 306. After being down a nickel silver is now up three cents on the day.

Bonds, which had managed a modest rally earlier today, are now down again, providing no relief for stocks. Bonds were briefly cheered by the ECB's decision not to raise rates (which would put pressure on US rates), but it seems that flash of good feeling has worn right off again.

The bond market is perhaps the biggest sore spot for the stock market lately, as it has proven unable to rally even on relatively good news.

Also read the interesting observation this morning that individuals have been net sellers of stocks for years now, and that the latter majority of this bull market has been fueled by corporations buying back their own stock.

Hmmm, let's see...say ABC corporation has holdings of $1 billion worth of stock. Then they issue $1 billion worth of bonds, and use the proceeds to buy back enough shares of ABC stock to double their original position.

Of course this heavy buying action causes the stock price to rise, maybe even double over the course of a year or so. So now ABC corporation has $4 billion dollars worth of stock and $1 billion dollars in debt, giving them a profit of between 1 and 2 billion, depending on how much their average cost was for the stock that they bought on its way up.

The question is- where the heck did this extra money come from?

From the pockets of Joe Sucker, who was convinced that ABC stock was rising for a good reason instead of just plain old accumulation. Joe was of course further bamboozled by ABC's bogus earnings reports, overinflated by 30% to 50% due to sleight-of-hand accounting neglecting to tally the hidden obligations of employee stock options.

The greatest pyramid scheme in history? Can't wait for the Albania style conclusion.
nugget101
(10/21/1999; 11:52:26 MDT - Msg ID: 17094)
Will the Arabs be able to pump?
I'm wondering today about the value of Mideast oil if they can't get out of the ground or refined because of Y2K.
It still has value but would the countries political structures allow a hiatus of funds not flowing in? I read some time ago that the Saudis were having to balance oil production vs their people's expectations of a standard of living ie. no free health care - hello guillotine.
Would the western nations rush in to do anything to start production again? Yes. But would it be at the expense of the domestic producers? It seems to me that, all things equal, the domestic producers should be given priority and that might cause the West-MidEast oil balance to change and have an effect on the balance of payments. Unfortunatly, I think that our politicians are too deep in others pockets to let something like putting the nation first to get in their way.
Thoughts?
Peter Asher
(10/21/1999; 11:55:50 MDT - Msg ID: 17095)
Chicken man, ORO
There was something last month, in The Wall Street Underground, about Mutual Funds lending out cash collateralized by the 'profits' one has in their shares. This is definitely a time bomb. The question is, what is the magnitude of this activity? There was something last month, in The Wall street Underground, about Mutual Funds lending out cash collateralized by the 'profits' one has in their shares. This is definatly a time bomb. The question is, what is the magnitude of this activity?
nugget101
(10/21/1999; 11:59:45 MDT - Msg ID: 17096)
Golden and the Bear
All investments should be made with your play money. Putting alot of eggs in one place could get them fried.
As others have said, the PMs have many differences than stocks and not many have reliable expertise. I think I cna say that your broker is not one of them. He/she also should have not put you in a leveraged position. Are you pulling the handle too hard?
Start by buying some physical as a storage of wealth, build it up and get knowledgeable.
I also have much to learn.
TownCrier
(10/21/1999; 12:25:57 MDT - Msg ID: 17097)
Government watchdog admits Y2K bug will cause disruption
http://www.vnunet.com/News/101238The chairman of Britain's millennium watchdog Action 2000 admitted that despite months of preparation to avoid the effects of the date programming errors, unpredictable disruption over the New Year period is inevitable.
Mr Gresham
(10/21/1999; 12:38:37 MDT - Msg ID: 17099)
Forum this week!
All -- Reading all your postings back to the weekend long into this morning when I should be doing three other projects. Risking trouble with wife, clients, family, but I just can't let your wisdoms fade into the archives never to be read. Besides the normal hour to read the day's postings and links, this catching up consumes half a day!

Canamami I know why you considered asking MK to revoke posting privileges :>) Now if they just had a similar NetNanny program for excessive lurking!

Monday the 18th was an amazing read:

ORO -- you have surpassed. So CLEAR! So CLEAR! Economics (the comprehension of multiple variables incorporating both history and what-has-never-yet-happened) is the proper exercise for a 100% living mind! You shine, Sir!

FOA and Aragorn steer us with a wisdom that we do not find elsewhere in life these days. Are we finding something here that we miss in society: the rediscovery of TRUST?

My fellow Knights and Ladies shine in their growing sophistication in these matters -- Yellin and Journeyman and Goldspoon and -- dammit! I can't remember those other three when I get to the Posting page! Many of you claim to have been novices when you came to this forum several months ago -- hard to believe today! But if you were EVERYMAN such a short while ago, imagine the wisdom lying untapped today in our general populace waiting to be called upon by an honest system.

One of my lifelong dilemma/questions: (A KOAN perhaps?) Are people smart? Are people stupid? I get extreme and opposite confirmations of both on different days.

All: To be in your company in these days (However it all turns out!) is a joy indeed. Now, off to get Physical.
ORO
(10/21/1999; 13:05:00 MDT - Msg ID: 17100)
Options compensation and un-earnings
http://www.federalreserve.gov/pubs/feds/1999/199923/199923pap.pdfhttp://www.mises.com/fullarticle.asp?control=317&month=13&title=+Will+the+Bubble+Pop%3F&id=13

http://www.prudentbear.com/

I have been looking at the value of options compensation as a way for management to reduce reported employment costs, as part of a little investigation into stock valuation. The suspicion, from a number floated by some as the total current mark to market value of options compensation. If the number were correct, then since 1994, there has been no profit at all in the major US publicly traded corporations. Most notably, the large tech companies, in particular the net stocks, would have registered zilch or negative earnings since 1994. Even when taking the volatility discount on the options (average 25%) the figure would still bring corporate profitability into the vicinity of 0.

So why the stock mania? In part, corporate borrowing is used to fund Stock buybacks. The Fed report essentially finds that 76% of stock repurchases are related to options issuance to management. Particularly strong in the high Market cap to book (high valuation) companies.

Corrigan (Mises institute article) puts 75% of corporate debt issuance used for stock buybacks. At about $3 trillion, mostly issued in the last 5 years, the sum comes out to 75% X $3000 billion = $2250 billion. Pretax corporate profits (essentially flat lined since 97) during this 5 year period were roughly $3000 billion. Using the figures above, 75% of buybacks are used for supplying stock options at 75% X $2250 = $1688 billion. Taken out of earnings, $3000 - $1685 = $1315 billion, or less than half (44%) of reported earnings. So it is that actual valuation in the stock market is much higher than it appears to be. In fact, SP500 PE would not be 30 today, but closer to 75, if this accounting for options financing was considered.

Applying this to the year's latest trailing 12 month data, it is $305 billion of equity retired (using $418 billion in debt issued). Pretax earnings at $686 billion ($528 billion after tax), for all corporations public and private, leaves $686 - 75% X $305 = $457. And after tax, $351 - giving a 50% overstatement of earnings due to retirement of stock options through stock buybacks. This does not include new issuance, which would increase the overstatement into the la la land area of all of the earnings being bogus, given the numbers received before. In this calculation alone, the PE on the SP500 ends up being revved up to the incredible-in-itself level of 45.

Taking debt financed corporate buybacks as margin debt, and throwing it in with the NYSE reported margin debt (http://www.nyse.com/pdfs/margin.pdf) we get $3000 X 75% + 180 = $2430.

From Corrigan at Mises site:
"America is a nation which has so outstripped its own productive capacity that it has seen the current account balance deteriorate from a deficit of around 1.5% of national product just four short years ago to 3.7% today. It is a nation where household debt has risen from two thirds of income in 1987 to over 82% today, where the level of mortgage debt as a proportion of income has been raised to a new height of 62% from 38%, where consumer credit is well over a trillion dollars, where over a third of "savers" borrow against their 401(k) retirement nest-egg. Americans are consuming capital on a vast scale. They have become a nation of Tomorrow Eaters." [i.e. yuppy boomers]

From Fed report:

"Our principal findings are these: First, management share ownership encourages higher payouts by firms with potentially the greatest agency problems�those with low market-to-book ratios and low management share ownership. However, we find no empirical evidence that higher levels of share ownership promote higher payouts for high market-to-book firms, or for firms with relatively high management ownership. We conclude that managerial stock incentives
mitigate agency costs at companies with the most serious excess cash flow problems, but payouts at other firms are at the margin largely unaffected. We also find strong evidence that repurchases and dividends are strongly related to firm characteristics in a way consistent with the agency cost theoretic explanation of payouts. In particular, we document that repurchases and dividends are
positively related to net operating cash flow and size and negatively related to market-to-book and leverage.
Second, controlling for free cash flow, stock option holdings change the composition of payouts. We find a strong negative relationship between dividends and management stock options, as predicted by Lambert, Lannen, and Larcker (1989). Our estimates imply that a one standard deviation change in the management stock option variable reduces dividend yields by an economically significant 38 basis points. We also find a statistically significant positive relationship between repurchases and management stock options, which together with the dividend results, suggest that stock options may help to explain the rise in repurchases at the expense of dividends."


Chicken Man - "....where over a third of "savers" borrow against their 401(k) retirement nest-egg..." -Corrigan at Mises site
USAGOLD
(10/21/1999; 13:17:09 MDT - Msg ID: 17101)
Nobel Winner Mundell to Propose "Gold Anchor" on the Lehrer Report Tonight
http://www.polyconomics.com/In this letter to Treasury Secretary Summers, Jude Wanniski tells of Robert Mundell's television appearance tonight.

"The news today that IBM will report lower revenues for the next two quarters because customers have decided to wait to see what Y2K brings should cause you some greater concern
about the millennium bug than it has thus far. A client letter I sent out on Monday follows, which likens the millennium bug to Hurricane Floyd. This morning I talked to Bob Mundell, our new Nobel Laureate in economics, and he thinks you should advise President Clinton to have a hurry-up conference of our major trading partners -- and do what Jack Kemp urged the President to do in his June 11 letter: Reconstitute the Bretton Woods monetary structure for the
next four or five months, until we can see that the world's computers can handle the complexities of global finance in this floating exchange-rate world. Anchor the dollar to gold in the coming storm, which may be small, but also may be a whopper. If I were you, Larry, I'd get Bob on the phone and hear him out. I know that you have great respect for his work and probably agree he is a bona fide genius. Or, you can tune in the Jim Lehrer NewsHour tonight. Bob will be a guest and says he plans to suggest the idea of a quickie international conference to arrange this simple precaution. "
TownCrier
(10/21/1999; 13:21:13 MDT - Msg ID: 17102)
Dollar Declines Against Euro and Yen as Tumble in U.S. Stocks Damps Demand
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=blk&bt=blk&s=5b9b12fd9c511581395fdb0c08fe9c18Bloomberg writes uncommonly good reports. This one indicates the dollar is weakening because foreign sentiment in U.S. stock is degrading, prompting them to sell and move their currency elsewhere. Also, the ECB is expected to raise rates at its November 4 meeting, positioning the euro for additional lift against the dollar.
ORO
(10/21/1999; 13:22:13 MDT - Msg ID: 17103)
We don't want to know
http://www.mises.com/fullarticle.asp?control=317&month=13&title=+Will+the+Bubble+Pop%3F&id=13The stock market tends to go up after the close of the bond market because of two reasons. (1) no bad news from bond land if no bonds are traded. (2) the borrowing for index arbitrage can't turn into selling of bonds by the lender, so that the intrusion of PPT led buying does not misfire by dragging up bond yields and spooking the market.
So you see the futures pump turned on some time after close of the bond markets. As a result, the large cap light float stocks in techland get a boost and the rest of the market lags.

As TC has made a point in his posts to show us the ever increasing "temporary" moneization by the Fed, Corrigan seems to have noticed this himself.


Mr Gresham, thank you for the kind words.
YGM
(10/21/1999; 13:42:13 MDT - Msg ID: 17104)
@ USA Gold
I do believe you have just posted one of the most important pieces of information to come our way in some time. I cannot contain my glee. Imagine how many of what we commonly call the sheep will see this broadcast and hear a message that goldbugs have been advocating for so long.
And a nobel laureat sending the warning. This is almost to good to be true! Finally a spark to ignite the fear and frenzy that will ultimately prevail in the PM markets. You made my day/week/month?---Regards - YGM
Go GATA & Go Physical
Chicken man
(10/21/1999; 13:45:23 MDT - Msg ID: 17105)
golden - Sorry about being caught between a rock and a hard spot
Here are two news stories that bear futher studying:


Kuwait, Oct. 21 ( Bloomberg ) -- Kuwait plans to lend its 79 tons of gold reserves, worth $850 million, to take advantage of a curb in gold
lending by European central banks and boost revenue.

``The bank's gold reserves will be used as fixed-term deposits in reputable international investment institutions,'' said Kuwait's Central Bank
Governor Sheikh Salem Abdel Aziz Al- Sabah, Kuwait's official KUNA news agency reported.

Gold rose as much as 22 percent, from close to a 20-year low, after 15 European central banks announced on Sept. 26 they would restrict sales
and loans of gold reserves. Gold loans by central banks, which hold more than a fifth of all above-ground stocks, have been blamed for
increasing supplies of metal available to investors and contributing to a slump in prices.

Kuwait's central bank would transfer the reserves to the Bank of England for investment and would retain ownership of the gold, Al-Sabah
said.

``This decision has been taken following the latest developments in gold reserves on the world market, particularly the variety of investment
instruments which could generate revenue,'' he said.

Gold for immediate delivery fell as much as $1.95 an ounce, or 0.6 percent, to $304.75. It rose as high as $340.50 an ounce Oct. 5 in the wake
of the European banks' announcement.

The International Monetary Fund's decision not to sell its gold reserves on the open market to finance debt relief to the world's poorest
countries has also helped lift prices.

Gold will average $325 an ounce in 2000, Paul Goodacre, gold analyst at Australian Mineral Economics has said. Other analysts have predicted
the precious metal's price will increase to between US$350 and US$380 an ounce next year.

Oct/21/1999 9:21

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


FOCUS-Saudi prince mulls $400 mln Ashanti lifeline (Reuters)
(Adds statement from Alwaleed, updates shares) By Ben Hirschler LONDON, Oct 19 (Reuters) - Saudi Prince Alwaleed bin Talal said on Tuesday he was
considering investing in Ghana's Ashanti Goldfields Co Ltd , which is battling for survival in the face of huge losses on gold derivatives. Ghana's acting
Mines and Energy minister, Ekwow Spio-Garbrah, said Alwaleed had written formally offering help.
- Oct 19 6:47 PM EDT
************************************************************
First thing, these are all Muslim countries......they see Ashanti sitting on a spear and would like to help......and they are telling everbody they have some "ammo"....Saudi prince...400 mil ....and Kuwait 850 mil in gold on deposit at a "reputable" (sounds like some banks are not...? hmmm)....this gold can be used as collateral for "partipating in the market"

The way the chicken man is viewing this is....Ashanti is the pride of Ghana and Ghana's cash cow.....40% of foreign exchange....it is also a time of the Mid-East to exercise a bit of economic power,rather than let the NY bankers and Fed tell them what they should do.....thow in the "common faith" thing and we could have a gold war....or should I say a gold price war.........
If the POG goes up from here, they banks have the mine....when these loan were made,the bank is in first position as receiver.....bye bye Ashanti....(this is what happened to Royal Oak and Trilon......Trilon got the mine and "sold " it to NGX.TO - Northgate Exploration Limited)
If the price of gold goes lower, Ashanti can cover their bets or at best "sterilize" their outlandish bets and survive ....."power" was shown by another "player" in the world game of chest.....this could coinside with next Wed OTC option bets.....these are "European style".....can only be exercise on the LAST trading day.....

So let's see who gets the mine...!
ORO
(10/21/1999; 13:46:48 MDT - Msg ID: 17106)
Lease rates
Gold Oct 19 1999
......Bid..... Change
1-month... 2.4570% -0.2010
2-month... 2.7100% -0.0500
3-month... 3.6010% -0.1970
6-month... -43.8900% -47.4940
1-year.... 3.6550% +0.2050

Is the 6 month rate real?
YGM
(10/21/1999; 13:51:50 MDT - Msg ID: 17107)
A LETTER OF GREAT SUBSTANCE & Admirable Boldness!!!
****Vronsky --You and I don't see eye to eye on a few things, but I congratulate you wholeheartedly for this your
"Inspiration"........It should be forwarded all over the Gold Comunnity. ..........IMO---YGM


� AN OPEN LETTER TO Central Bank of KUWAIT�
(vronsky)Oct 21, 15:33 21 October 1999

AN OPEN LETTER TO:

His Excellency The Governor
Sheikh Salem Abdul-Aziz al-Sabah
Central Bank of KUWAIT


Ref: Central Bank of KUWAIT's decision to lend gold


Your Excellency:

The following news has just been made public:

"Kuwait--Oct 21--Kuwait's Central Bank announced today that it had decided to deposit 79 tonnes of its gold reserves with "reputable" international finance institutions. Central bank governor Sheikh Salem Abdul-Aziz al-Sabah said the bank would invest its gold through limited-term deposits, without giving up the ownership of the reserves."

This is very sad and disturbing news for a number of reasons, which concern KUWAIT, its currency and the Central Bank of KUWAIT (CBK). We feel Your Excellency has been sorely ill-advised. And given time the dire ramifications of the ill-fated decision will inevitably taint KUWAIT's heretofore impeccable financial reputation.

Your Excellency, please allow us to share the following information.

Since early 1996 the international gold market ceased to be a purely free market, subject only to supply/demand dynamics. There is little doubt external forces have been artificially affecting the gold price during the last four years. The cardinal goals in manipulating the price of gold have been - and remain - to further inflate the Wall Street Bubble and allow for the 'exportation' of U.S. inflation.

To achieve this purpose various Central Banks have collectively engaged in what they euphemistically call "gold leasing or "gold loans." HOWEVER, recent reports by qualified financial experts published on the Internet unequivocally prove a "gold lease" is not a LOAN, but rather a Gold Sale with little or no hope of return of the "leased" bullion.

Testament to the realization of this dangerous Central Bank practice was the announcement by 15 European Central Banks on September 26, 1999. They informed the world annual gold sales would be severely curtailed, and all gold leasing stopped during the next five years.

Your Excellency, please allow us to present various examples of expert analysis and reports for the review and evaluation by the CBK's economists and financial advisors. Indubitably, they too will be forced to conclude "gold leasing" is tantamount to a GOLD SALE - which puts into dire jeopardy the financial reputation of the country indulging in these speculative operations, and indeed runs the very real risk of undermining the value of its own currency.


"GOLD LEASING" REPORTS

A Letter to the Federal Reserve and the Treasury Department
http://www.gold-eagle.com/gold_digest/butler414.html

An Open Letter to the Securities and Exchange Commission
http://www.gold-eagle.com/gold_digest_99/butler050699.html

THE OTHER SIDE OF LEASING
http://www.gold-eagle.com/gold_digest_99/butler050599.html

PONZI REVISTITED
http://www.gold-eagle.com/gold_digest_98/butler121798.html

MISSION: TO THE MOON
http://www.gold-eagle.com/gold_digest_99/butler100499.html

What went wrong with Central Banks' Gold Leasing?
http://www.gold-eagle.com/editorials_99/madhok081999.html

Hedging or Speculation?
http://www.gold-eagle.com/editorials_99/madhok101999.html

One departing thought. With utmost respect to Your Excellency, I am obliged to ask the embarrassing question: What are the grievous repercussions to KUWAIT, its currency and the financial reputation of your esteemed nation in the event KUWAIT gold is not recoverable, because it was sold to a third party?

With greatest admiration for Your Excellency we wish you good health and best regards,

I.M. Vronsky
Editor & Partner - GOLD-EAGLE
http://www.gold-eagle.com


copies:
CBK website: http://www.cbk.gov.kw
CBK contact: cbk@cbk.gov.kw
Yellin' of troy
(10/21/1999; 14:00:10 MDT - Msg ID: 17109)
elevator guy -- earth's heat balance -- NOT ABOUT GOLD
The earth loses heat/energy by radiation, mostly in the infrared, that is, at frequencies much lower than visible light. No matter is needed to carry the stuff: Photons (light, of whatever frequency) can travel in a vacuum.

I haven't thought this through carefully, but my intuition is that this surrounded-by-near-vacuum condition is necessary for life. If there were lots of matter all over what would no longer be "space," so that the energy were carried mostly by conduction, I think the whole system would be much more thermalized, that is, in thermodynamic equilibrium, including the light. It would be impossible for us to take in energy at, effectively, high temperatures and put it out at low temperatures. That's what we do: We (plants) take in photons of visible light, essentially at solar-surface temperature -- out of equilibrium with earth because of the lack of opportunity to interact much --, use it for our purposes, and eventually put it out in the infrared, into the cold of deep space. Each infrared photon carries much less energy than a visible photon, so we put out more photons than we take in to maintain energy balance. More photons means more randomness in directions, meaning higher entropy. So the entropy of the whole system increases, as it must, but as heat flows from the hot sun to cold space, we intercept it and can make use of some of it. If everything around us were at the same temperature, everywhere you looked, there would be no such flow, and life would be unable to extract any usable energy, "free" energy, and would cease.

No relation to gold, but the question was asked.
Yellin' of troy
(10/21/1999; 14:03:32 MDT - Msg ID: 17110)
Hipplebeck
Michael,
Thanks. That helped.
Netking
(10/21/1999; 14:11:55 MDT - Msg ID: 17111)
@Phaedrus
Phaedrus - We have commission rates negotiable here in New Zealand
for futures orders. The orders are then on-placed with USA
brokers & depend on volume but we might expect to pay at the
most $50-$75USD all up for a round trade & this covers the
combined fees of two brokers. I would say up to $200 is. . .
"not good value for money" especially if the USA is the
purchasers country of origin. Cheers Netking
Chicken man
(10/21/1999; 14:16:37 MDT - Msg ID: 17112)
The "macdaddy contest".....or was it daddymac...?
The T-bond was claimed to be the top dog of the finacials.but that is not the case...!
T-bonds trade 650k on the futures....another 800k of options on futures.....1,450,000 contracts @ $100,000 = $145 billion of underlying value....
The Eurodollar futures trades 2.7 million contracts and the options on the futures adds another 1.7 million.....4.4 million contacts @ $1,000,000 = $4.4 trillion......
Folks that is a pile of bets....!

This is the Top Dog.....!
Gold Power
(10/21/1999; 14:22:06 MDT - Msg ID: 17113)
New Gold Rally
The sharp turnaround in the XAU today portends the continuation of the gold rally that began a month ago. If we get follow-through tomorrow and next week, then once again, Goldman-Sachs will have gotten positioned in the right direction just days before a significant move in gold.

My interpretation of what FOA has told us is that the next leg up should contain more fireworks than the first one. He says $360 is where many mining companies start having troubles, so we should trade through that level onto $400.

The key reversal in the XAU with virtually all components closing near or at their daily highs, it a very positive sign.

The market digested the news of the Kuwaiti gold loan in three hours and spent the rest of the day rallying.

I think we're ready. Hope you are, too.

Gold Power
USAGOLD
(10/21/1999; 14:31:54 MDT - Msg ID: 17114)
Phaedrus and Skip:
I very much appreciate your contributions to USAGOLD but it seems you may have forgotten or overlooked two important Prohibitions:

3. Any slander or derogation of USAGOLD/Centennial Precious Metals or any of its competitors

4. Self-promotion; promotion of the company you work for; promotion of internet sites that compete directly with
USAGOLD/Centennial Precious Metals.

Under the rules the two offending posts have been removed.

Since the one attacked a competitor and the other in essence promoted same, both had to go.
phaedrus
(10/21/1999; 14:52:42 MDT - Msg ID: 17116)
@chicken man regarding the macdaddy futures contract
yes chicken man you are right, the Eurodollar contract is the biggest one out there, bigger even than T-bonds. And I knew that. But bigness is not the only attribute in determining mackdaddiness.

In terms of mackdaddiness, the Eurodollar is a big old lame-o. It hardly ever moves. It's about as volatile as a dead turtle. Margin per contract for the Eurodollar is the same as for boring old wheat.

But T-bonds- now there's a market to watch, a market that keeps people on their toes, a market that's always good for a pop if you read the tea leaves right. I'll take T-bonds as the macdaddy over eurodollars any day.

ORO
(10/21/1999; 14:53:35 MDT - Msg ID: 17117)
Kuwaiti Gold,, Ashanti, and Bin Talal
My take on this is as follows:

(1). Much of the gold obligations of Ashanti were used to back gold loans to its bankers by both Kuwait and Bin Talal, and probably many others related to the gulf Royals.
(2). The Ashanti mines are viewed by the Moslem world as part of the Moslem birthright. Just like oil. Loss of the mine from the hands of Ghana would be regarded as a disaster.
(3). The BB creditors of Ashanti are likely telling the Oil Royalty that they will default if Ashanti defaults, and further, will sell the mine to Lohnmin at a discount to its value. The end result would be paper settlement of gold obligations to the Royals, and the Moslem world looses one of its prize posessions.
(4) To prevent this, Bin Talal is putting up money to cover the margin calls up to $360 gold and a purchase of calls up to coverage of the remaining hedge - in return for an equity stake, Kuwait is taking over Ashanti's gold obligations from the Gold Ca(nni)bals with 2.5 mil oz. of fresh gold on deposit. Lowering the Ashanti margined gold debt from 11.5 Moz to under 9Moz.
(5) Hence, much of the remaining output of ashanti will be provided to Kuwait and Bin Talal (and partners) through equity.
(6) Using Bin Talal's money, the Kuwaiti gold will be purchased by Ashanti, returned to the BBs, who will return it to Kuwait.

To sum it up:
1. Swap Kuwaiti gold for Ashanti paper, (roll over 2.5 Moz.)
2. Inject Bin Talal cash into ashanti (cover margin) raise cash reserves.
3. Use cash to buy 2.5 Moz (on margin) to reduce Ashanti gold debt. Return to BB. Now Ashanti has rolled over 2.5Moz and returned 2.5Moz out of 11.5 Moz.
4. BB returns 2.5 Moz to Kuwait.
5. The remaining figure is probably Kuwait's and BinTalal's anyway, so the key is to swap BB paper for Ashanti paper. UBS, the one with the burning desire to grab Ashanti, is probably the one interested in this kind of resolution.

Do the Oil Royals get a chunk of each of the BBs? perhaps an extra chunk out of Ashanti, perhaps taken from Lohmnin's hands?

Since the BBs are more pressed to return gold NOW (short term leases), this would take much of the action off market till the money and credit facilities at Ashanti are ready for a bid to cover. (See FOA)
SteveH
(10/21/1999; 14:55:34 MDT - Msg ID: 17118)
repost
www.kitco.comDate: Thu Oct 21 1999 15:19
PCM (@tolerant (14:34)oil for gold) ID#169332:
I think you overlooked my question. Have we in fact been paying for oil at about $800 per oz. for nearly 20 years? Forget the "dollar" and "SDR" as iou's. The Jamaica Accords were secret. The price paid for oil could have been, as some have built a case, about $800 per oz., since the early 80's. This a separate market.
Skip
(10/21/1999; 15:09:51 MDT - Msg ID: 17119)
USAGOLD (10/21/99; 14:31:54MDT - Msg ID:17114)
Although my posting was intended to be more of a defense for a company that I have done business with (rather than a promotion), I applaud your wisdom of removing the earlier posting as well as mine. I would rather see both postings removed rather than see the earlier one remain.

--Skip
Netking
(10/21/1999; 16:43:18 MDT - Msg ID: 17120)
BOE again?
Is it true that it was The Bank of England that Kuwait handed its gold over to. If true, in what capacity were they acting, broker, spin doctor etc.
seeker
(10/21/1999; 17:31:55 MDT - Msg ID: 17121)
call options
dec call options expire the second friday of November. If you own these calls, what are your options after that date? I understand that the otc gold expires next wed. is this correct? Could someone tell me how this market works. I am a firm believer in buying physical, but is it possible those that are short gold could cover their positions thru these 2 markets?

Has anyone noticed that the spot goes down about $2/day. If the spirit of the agreement is being breeched day by day in this manner, when will the parties that agreed to this accord step in and say enough is enough? Or is time being given for certian parties to cover before the upward pog resumes? Perhaps everyone is waiting for the expiration of the otc next wed. FOA could you enlighten us on this constant drop in the pog?

Thanx
Scrappy
(10/21/1999; 17:58:12 MDT - Msg ID: 17122)
Black Blade; Mr. Gresham; Golden
Thank you and a suggestionBlack Blade, thank you for your reassurances re: my buddy and Harmony. He will also appreciate the suggestion of buying through direct stock purchase. (I know he is paying somebody more than that-and he is quite the tight wad. I'm getting quite a chuckle over your $5.oo per purchase price. He fancies himself the champion bargain hunter. :} :} :}}
Again, I thank you.


Mr. Gresham, (in jest only)

May I suggest you quit your job, divorce your wife, and let her have the kids? Then you could spend day in and day out parked in front of the monitor, soaking up this most excellent, world class education! :} :} :}!


Golden, good luck to you. I, for one, am pulling for you.
Black Blade
(10/21/1999; 18:14:37 MDT - Msg ID: 17123)
Some INCO news for Nickel62
Inco (N:TSE,ME) discovered a new area of mineralisation at its Totten
copper/nickel/palladium/platinum mine in Ontario, which ceased
production in 1970 and has been on stand-by since. The company says
that all six holes drilled intersected high total metal grades ranging
from 0.9% nickel to 3.3% nickel, from 1.6% copper to 5.4% copper and
PGMs from 6.3 g/t to 8.7 g/t over true thicknesses between 6.3 m and
35.6 m. The highest grade intersection reportedly contained 3.2%
nickel, 3.6% copper and 5.7 g/t PGMs over an estimated true thickness
of 16.0 m. Inco also reports that geophysical surveys confirmed the
continuity of the mineralisation between the holes and indicated
southern extensions. The zone is accessible from the mine's existing
1400 m shaft situated between 100 m and 300 m north of the zone. (Oct
19/99)
Bill
(10/21/1999; 18:15:09 MDT - Msg ID: 17124)
seeker / call options
The day options expire. There are no options... they no longer exist. One time my broker told me of a client who had about $20,000 in options that were about to expire. He couldn't reach him to remind him to sell. The client called from vacation 2 days later, only to find that his $20k worth of options had expired (worthless). Hope that helps to answer one of your questions.
andrew the kiwi
(10/21/1999; 18:25:20 MDT - Msg ID: 17125)
Bill, thoughts.....
IYHO, do you see this current retracement as a move back to $287 or so over the next two to three weeks, if so do you throw caution to the wind and trade your opts(a portion) or simply ride the abberations into next year?
Its always good to get someone elses thoughts. Those djx puts are cheaper now, I should have waited................
Scrappy
(10/21/1999; 19:39:41 MDT - Msg ID: 17126)
HellO?
Anybody out there?I see no new posts since 18:25:20MDT, Bill the Kiwis' mess # 17125. Where's "After the Close"? Where'd everybody go? This time of night is usually jumping? AmIbroken?
Scrappy
(10/21/1999; 19:41:56 MDT - Msg ID: 17127)
I mean Andrew the Kiwi, sorry.
Geuss all is well.Just quiet. See you all later. Thanks
andrew the kiwi
(10/21/1999; 19:44:06 MDT - Msg ID: 17128)
pm or am
night time! its 2.42pm friday afternoon NZ time, and a great warm spring day downunder, certainly better than the pm markets!!!
Scrappy
(10/21/1999; 19:55:29 MDT - Msg ID: 17129)
Thank You Mr. Kiwi,
I appreciate the response!I am as new to this computer gig as I am to the world of GOLD. Thus, I never know if it's me, the computer, the ISP, or the website. I had visions of everyone reading my post, and laughing.

It is 6:20 PM in Oregon, USA, a wonderful, cool AUTUMN evening, and I suppose I could be out walking my dog, so maybe he'll quit biting my toes. Just trying to hang on to every word that appears here, so I don't miss anything. Best learning experience I've had in many years.
Don't let me keep you from spring in NZ- the sun won't last!
SteveH
(10/21/1999; 20:12:21 MDT - Msg ID: 17130)
Learned repos today (sort of)
Tell me if I got this wrong.

When someone says $4billion as taken at the repo window at the Fed, I was told, means that Company A has money, Company B needs money. The Fed takes Company A's funds and converts it to a US fund instrument of somekind and gives it to Company B and somehow they get to use cash for it, but somewhere in there collateral is given by B. Anybody care to clarify?
Quabbin
(10/21/1999; 20:12:55 MDT - Msg ID: 17131)
Did anybody catch....
the interview with Robert Mundell on the "Jim Lehrer News Hour"??? I tuned in late to "News Hour with Jim Lehrer" on PBS and didn't see Mundell. Checked the shows lineup at their site and it listed three segments of which none were such an interview. Was that the wrong show?
Did ANYONE actually see it???
Maybe the PPT cancelled his appearance by threatening to take his prize back. :(

(if you don't know what I'm talking about see
USAGOLD (10/21/99; 13:17:09MDT - Msg ID:17101)
Nobel Winner Mundell to Propose "Gold Anchor" on the Lehrer Report Tonight)

Thanks for any info,
Q.
ORO
(10/21/1999; 20:17:11 MDT - Msg ID: 17132)
Noise for scrappy
When its quiet here, go lurk in other places if you don't have anything else on your mind.

Noise is nicer than silence.
For constant golden banter (much meaningless, much good:
http://www.kitcomm.com/cgi-bin/comments/gold/display_short.cgi#start

Here at the HOF and the Gilded Opinion
http://www.usagold.com/THEGILDEDOPINION.html
http://www.usagold.com/ANOTHERPAGE.html
http://www.usagold.com/halloffame.html

Lots of stuff at Sharefin's
http://business.fortunecity.com/wrigley/585/Markets/Master.htm

Also Kaplan's
http://www.goldminingoutlook.com

And, of course
http://www.gold-eagle.com/

Take a read of Ascani's "gold in Deflation"
http://www.gold-eagle.com/research/ascanindx.html

Scrappy
(10/21/1999; 20:35:33 MDT - Msg ID: 17133)
Thank you, ORO.
I just love this place.The aura here is good. The teachers are wise, and I am inspired.

Maybe it's because I first started lurking here the first week of october. Maybe it's because I feel I've found a source for answers to SOME of the secrets of the universe.
Maybe it's because my dog just doesn't fill the void left by my kids growing up and going away. (or mostly away). Maybe it's jsut simple addictin.

But, I love this place.

However, I'll go lurking at the sites you suggested, I'll be brave. I hope I can figure out how to type in addresses and get there!

Thanks again, ORO! :}
TownCrier
(10/21/1999; 20:38:18 MDT - Msg ID: 17134)
After the Close: the GOLDEN VIEW from The Tower
In today's VIEW we have the pleasure of a special guest speaker, so to make room for his remarks, we'll keep our Wall Street review to a minimum.

You've probabably already heard much of the DOW's woes today were blamed on IBM for warning that the next few quarters of earnings will be adversely affected by Y2K. After paring deeper intraday losses, the DOW ended down 94.67 (-0.91%) on heavy volume that exceeded a billion shares traded. As the markets looked vulnerable, Fed Gov. Edward Kelley, who is a voting member of the Federal Open Market Committee, tried to cheer the market regarding the possibility of a future rate hike by saying the Fed "cannot and does not, and does not intend to, target asset prices." On the NYSE, new 52-week lows outnumbered new highs 320 to 24. In the credit markets, the Bellweather Bond lost 8/32 in price, raising the yield to 6.352%.

The dollar fell �0.65 to �105.58 and lost 0.63 of its own cents against the euro, which climbed against the dollar to $1.0802.

Spot gold took its cue today from derivative traders who continue to sell contracts in search of the psychological threshold of $300, selling the price down about two bucks for the fourth straight day. The last quote for spot gold in NY was $303.50, down $1.80. We turn to Bridge News to see what was on the traders' minds today...

NY Precious Metals Review: Dec gold down $1.8 after 3-week low
By Melanie Lovatt, Bridge News
New York--Oct 21--COMEX Dec gold futures settled down $1.80 at $305.50 per ounce, managing to trim some losses after a mid-session dip to a 3-week low of $302.20. Gold fell as players decided to try and probe $300 support. It was also undermined by increases in lending, illustrated by the lease rate slip. Rumors that central banks were selling added to the downwards pressure.

"There is growing talk in the market that central banks are putting a lid on it -- dealers are convinced that's the case," said Bill O'Neill, analyst at Merrill Lynch. He pointed out that "freer lending" was also putting gold under some pressure. Increased lending has pushed lease rates lower, with 1-month lease rates at 1.75% today, down from 2.25% Wednesday and 3% at the beginning of the week.
Nevertheless, while lease rates have slipped, they are still at relatively high levels, given that under 1% is more typical for 1-month gold.

[The latest gold lease rates...
1-month 1.9580%
2-month 2.1670%
3-month 3.2220%
6-month 3.1800%
12-mnth 3.2870% Now, back to the report...]

The gold slide gathered pace as Dec slipped under sell-stops at $305. "People are fishing around for support and it seems that for now there will be a controlled and orderly pullback and test of support," said one trader. "It's really not 'if' we will test the $300 level, but 'when'," he said, but added that $295 is expected to hold.
"If $295 holds and we then snap back over $300, this market will still look good," he said. "We've got people looking to test support right now, but if they can't push below $300, it could easily spring higher again," said one trader.

Lennie Kaplan, chief bullion dealer at LFG Bullion Services, agreed that if the $295 support level holds, the uptrend will essentially remain intact. "Lease rates are off and investor interest is subdued, but I'm not concerned unless we move under $295," he said.
David Meger, senior metals analyst at Alaron trading, said that most market observers see support at $298-302 basis Dec, with spot support seen at around $300. Gold and silver both managed to edge up from their lows on light fund buying, said Meger.
Meanwhile, the dollar today provided little direction for gold as it seemed to move sideways against both the yen and euro. While the Dow Jones Industrial average pulled back from early session highs, its slip did not appear to be providing gold with much support, although if it continues to slide, it could help gold move higher.
***
Reprinted at USAGOLD with permission. For details please go to:
http://www.crbindex.com/reviews/index.htm
No further reproduction without written permission
---
After traders' efforts yesterday, COMEX open interest in the December gold futures contract closed down 3136 positions to 115,523 contracts. OI for October saw one position closed to 113, and over all contract months through June 2004, the total open interest lost 2,590 to 220,500. This morning, yet another Oct contract holder announced intentions for delivery, bringing the total to 2,513 contracts for the month.

In our review of COMEX vault action, we saw the 2,020 ounces that were yesterday transferred from Registered to Eligible stock withdrawn altogether today from the COMEX depository at ScotiaMocatta. And while we also saw12,554 ounces withdrawn from the vaults yesterday, today 22,702 ounces of Registered gold were wheeled out of Republic National under our watchful eye...leaving 860,125 ounces.

With the expiration of November delivery crude futures, we now turn our attention to the December contract. Today, December crude settled up 13c at $22.61 helped by supportive comments made by Venezuelan Minister for Energy and Mines Ali Rodriguez, who today said he does not rule out the possibility of extending the current accord on crude oil output cuts among OPEC and non-OPEC producers which expires March 2000.

Prices established by futures traders are one thing, the Real World is yet another. Here is a solid look at two distinct sides of the real world as oil is concerned.

First up, the Democratic presidential candidate, Vice-President Al Gore, pledged at a campaign event in Rye, N.H. that he will "do everything in my power" to ban all new offshore oil drilling in various federal waters, even if companies already have been given offshore leases from the government. Gore said, "I will take the most sweeping steps in our history to protect our
oceans and coastal waters from offshore oil drilling. I will make sure that there is no new oil leasing off the coast of California and Florida." Gore added, "I will go much further: I will do everything in my power to make sure that there is no new drilling off these sensitive coasts--even in areas already leased for drilling by previous administrations."

Well, if the U.S. is hamstrung in future efforts to meet its own voracious energy needs, we'll have to cut back, and also look elsewhere. Looking elsewhere, one would be better served by turning to the most natural source rather than trying to squeeze blood from a turnip. In this regard, The Tower thought these excerpts from a speech by Saudi Oil Minister Ali I. Naimi were particularly relevant, in the presentation of the Saudi views on oil, stability and economics. Long time visitors to this Forum will likely appreciate this added insight. FWN presented the text excerpted here, originally delivered by Ali I. Naimi at program presented by the Houston Forum, described as "a non-profit organization that regularly presents guest speakers from all walks of life."
Mr. Naimi, the podium is yours...

"Ladies and gentlemen, from time to time, we read and hear comments
about Saudi Arabia's oil policy that do not always reflect the facts.
So today I would like to clarify a few things and to talk about the
foundation and goals of our oil policy. Within this context, I'll also
address the Kingdom's oil industry expansion plans, as well as our
relations with consumers, other oil producers and related industries.
Saudi Arabia's oil policy is founded on four simple facts: high oil
reserves and an ability to produce at low costs; spare production
capacity; a national economy closely linked to the industry; and a stable
political and economic system driven by moderate and dynamic policies.
These four cornerstones work together to form a stable and consistent oil
policy.

Let's look at each factor in closer detail. Saudi Arabia's recoverable
oil reserves currently stand at 261 billion barrels--one-quarter of the
world's total. And in the years to come more oil will likely be found in
Saudi Arabia than anywhere else in the world.
Along with the advantages of this enormous oil reserve base, Saudi
Arabia's cost of production is one of the lowest in the world. Today, our
all-inclusive cost of production is less than $1.50 per barrel, while the
global average cost is about $5 per barrel -- and in some areas more than
$10 per barrel.

We also have a great advantage when it comes to adding new reserves,
or increasing production capacity. It costs Saudi Arabia less than 10
cents per barrel to discover new reserves, while the cost in some other
areas of the world can be as high as $4.

These two factors -- high reserves and low costs -- are tremendous
benefits, an immense gift from God. We believe that God's gift must be
managed prudently for the advancement and prosperity of our nation, and
for the peace and well-being of people worldwide.

This leads me to another cornerstone of Saudi oil policy.
We have installed the infrastructure required to meet not only our
current and projected production demands, but also to meet global
emergency needs.
Today, we are producing at only about 70 percent of our daily production
capacity, with about 3 million barrels of available oil production
capacity on standby.

Maintaining this spare capacity has a cost. Saudi Arabia's willingness
to bear these costs illustrates its strong commitment to the stability of
the world's oil market.
Ladies and gentlemen, having discussed two elements of Saudi Arabia's
oil policy, I would like now to talk about the two other factors: The role
of oil and the oil industry in the Saudi economy, and the political system
and economic policy of our country.
Today, oil's share of our gross domestic product is about 35 percent,
and its share of the Government's revenues is about 75 percent. Oil's
contribution to the value of our export is almost 80 percent.

The major challenge is to use our comparative advantage as a
springboard for the creation of wealth by different sectors and sources.
We are concerned about our high dependence on a single natural
resource. Yet having oil as the foundation for our economic strength is
not unlike other countries who have also relied at one point of time on a
dominant commodity or industry. Cotton, gold, wheat, coffee, tea and
textiles, for example, all helped build nations and made possible new
opportunities. By using the comparative advantage of their resources --
natural or otherwise -- these countries have enjoyed economic expansion.
Our comparative advantage is a strong base of hydrocarbon reserves favored
by low production costs.

Ladies and gentlemen, the strength of Saudi Arabia's oil industry and
our national march forward are the result of a stable well-established
political system with a clear economic policy. Since its founding almost
70 years ago, Saudi Arabia has been one of the world's most consistently
dependable countries -- especially so in the Middle East where we stand
second to none.

Free schooling and free medical services are all provided by the
State. The government also builds and maintains a first rate
infrastructure, including airports, railways, and a national road system.
It takes special care to ensure that water, electricity, fuels and
communications are extended to all areas, for both private and commercial
use.
We all should take note of the fact that the Saudi Government
constantly reviews the structure and processes of our economic policies
and organizations.
We do our utmost to keep our systems and institutions competitively
up-to-date.
By doing so, our policies and goals reflect the changing needs of Saudi
Arabia, as well as related global economic developments.

As I said before, one of our primary policy goals is to achieve a
stable international oil market. Let me explain what that means to us:
Wide and rapid swings in prices are undesirable. We are quite aware that
since the opening of the oil futures market in the early 1980's, and the
end of fixed oil prices in the mid-80's, prices have bounced up and down--
not only daily and weekly, but hourly. In this completely free market,
with the financial tools like futures and options, volatility is the norm.
Yet these trends in what are known as paper markets reflect only one of
the factors affecting oil prices.

Wide fluctuation is not good for producers, consumers or investors.
After all, they're the core of the market -- not the traders and
speculators. We believe that oil price fluctuations of more than 10
percent are not a healthy sign. A stable oil market means a reasonable
income for public, private and state-owned oil producers, yet not so high
as to restrain global economic growth or the needs of developing or
advanced countries.

Ladies and gentlemen, I am sure that many of you would like to know:
What is the right price for oil? I doubt that any two people within the
oil industry would give the exact same answer. Yet we all know the wrong
price. When the price of oil dropped to around $10 a barrel last year, all
of us in the oil industry, and outside as well, knew it was the wrong
price. Oil producing and exporting countries faced hard times, while oil
company stoc k shares and profits declined sharply. Oil production in some
areas was shut in or otherwise declined.

Equally important, or perhaps more alarming, is the change in the flow
of investment, which impacts the future of the petroleum industry. It has
been reported that oil investment this year has fallen by more than 20
percent worldwide. This decline will not reverse itself immediately, even
though the price has recovered in recent months.

Nobody expects a shortage of oil supply in the near future. However,
the drop in investment will disrupt the development of new oil fields and
the search for new deposits, as well as retard the steady growth of
production and production capacity. Undoubtedly, the investment crisis
would have been harsher had low oil prices continued for another year.
We know that a continuation of last year's low prices would have had a
severe and adverse impact on oil producers, oil companies and the industry
as a whole. In turn, this would have had a negative impact on the world's
economy.

One thing is for sure: Saudi Arabia, for reasons stated earlier, cannot
accept a low oil price. Yet it cannot defend the world oil price all by
itself, but only in cooperation with other producers. We have tried doing
it alone in the past and it did not work.
Along with some of the other producers, we have successfully avoided a
major catastrophe in the oil industry. I am sure that cooperation among
oil producers, both OPEC and non-OPEC producers, will continue in pursuit
of this goal of a lasting, stable market.

Ladies and gentlemen, I would like to turn now to the future of Saudi
Arabia's oil industry, especially in light of our recent discussions with
international oil companies about possible investments in the energy,
hydrocarbon and petrochemical sectors in Saudi Arabia.
As you all know, Saudi Arabia is an open country for foreign
investment, open to new ideas and opportunities. Concerning energy and
hydrocarbon industries, we are looking for investors who meet our needs
and can get a good return.

Opportunities for investors in the energy sector of Saudi Arabia
clearly exist. His Royal Highness Crown Prince Abdullah identified these
kind of investments very clearly as "something good for Saudi Arabia and
good for the oil companies -- a mutual benefit for both."
The benefit of such investments in Saudi Arabia would not be in the
finding of new oil or increasing our production and capacity. We already
have plenty of reserves and idle capacity. Any production increase is
subject to our commitments with other producers, especially within OPEC.
What we need, then, is not someone to come and produce oil and gas and
sell it to others. We need integrated projects, where each link of the
chain adds value. These projects could involve petrochemicals,
electricity, water desalination and so on. In other words, the needed
investments are those which compliment our industries, our national
companies, not replace them.

Ladies and gentlemen, let me summarize by re-emphasizing the four
cornerstones of Saudi oil policy: high reserves; low cost of production
and development, coupled with the unused production capacity; an economy
closely linked to oil production and price, and finally, a stable
political system with a dynamic and moderate economic policy.

These four factors are closely interrelated and drive our oil
activities, both nationally and internationally. We promote sustainable
growth in oil use, which can be created by balancing supply and demand in
both the short and long terms. We strive to achieve a reasonable and
stable oil price, which makes for a healthy and growing oil industry,
providing oil producers with a reasonable income while contributing to
global economic growth.
On this subject of oil-derived income, I would like to mention two
final points. First, on the average, the governments of oil producing
countries receive about 20 percent of the total proceeds from the economic
value represented by a barrel of oil, while the governments of consuming
countries in Europe for example receive about 75 percent through taxes on
gasoline and other petroleum products.

The second point is that Saudi Arabia fully realizes that it is highly
dependent on oil income. While we are working to increase this income, we
are also working hard to find income sources other than oil. We intend to
realize oil income increases through the combination of fair prices and
production levels, and through the full utilization of all our hydrocarbon
resources.
And that's where the possible investments in Saudi Arabia come into
the picture. A number of these, as I noted, are currently being assessed
for joint projects at home and abroad.

To conclude, I am optimistic about the future of the oil market and
its stability. I also see a great advancement and development for our
industry and for Saudi Arabia.

Thank You"

(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.

And that's the view from here...after the close.
turbohawg
(10/21/1999; 20:41:11 MDT - Msg ID: 17135)
$360 gold
A/FOA are not the only ones to have identified $360 as a critical juncture in the gold market. In an interview last week, Robert Prechter had this to say :

TonyM says:

GEC says: I would like to get your price projections for the next bull market in gold. I know you are looking for another wave down to below $200.

BobP says:

I've had $185 for a target for a long, long time. Right now, we think the sharp jump is all or part of wave B of Y. If it goes past $360, we may have to reconsider

Mr Gresham
(10/21/1999; 20:49:59 MDT - Msg ID: 17136)
Scrappy
Thanks for the encouragement, Scrappy. An eminently reasonable plan, as things are going. Hmmmm...

Now how far down I-5 did you say you were, and at what truck stop was it? (No, I wouldn't drop in uninvited...)

To get to web addresses given in text here without so much typing, you can highlight the address with your mouse's cursor, copy the text you've highlit by hitting Ctrl C, click on the address field in your browser, drop (Ctrl V) the address into the field. Then hit Return, and away you go!

(And THAT's what consumes half the time here, going off on delightful chases to see what my classmates are reading these days -- Howe, Mundell, etc...)
TownCrier
(10/21/1999; 20:51:17 MDT - Msg ID: 17137)
Most Small Chemical Plants Surveyed Not Y2K-Ready; Temporary Shutdown Urged to Minimize Chemical Accident Risks
http://biz.yahoo.com/prnews/991021/dc_center__1.htmlIn a Press Release by the Center for Y2K and Society, the Center announced that "a Texas A&M survey of small and medium-sized chemical plants found that only 13.5% are ready for Y2K, while nearly all are vulnerable to problems."

"In light of this report, immediate action is needed to reduce the risk of Y2K related leaks, explosions and fires at chemical and petroleum plants, the nonprofit Center for Y2K and Society urged today.
The Center recommended that most chemical plants should be required to take a "safety holiday" immediately before and after January 1."

"'Unless there are strong safety reasons not to, chemical plants and petroleum refineries should be required to shut down during the transition to the new year and slowly re-start their operations with skilled engineering and safety experts on-site,' urged Norman L. Dean, executive director of the Center. Such safety holiday measures have already been announced by a number of facilities in both the U.S. and Canada."

Additional findings of the survey were that 4.1% of the surveyed firms indicated a potential for a "catastrophic event."
Bill
(10/21/1999; 20:52:16 MDT - Msg ID: 17138)
andrew the kiwi
IMHO is right! No one KNOWS whats going to happen, not even FOA. I do see the retracement reaching 295 or so. Then I think it will stagnate for awhile and start slowly rising after dec contracts expire we could see the next leg of our explosion. Kind of hurts, doesn't it, seeing the value drop to where you could have bought back much cheaper? I know, I feel the same way though, I made my plan "for" the Dec timeframe and were still very much on track. I feel much better being on board than to have missed the train altogether. I think FOA is right about when it goes... it will go fast.
And don't feel to bad about those DOW puts.... as long as they atleast run into Jan. I think well both be in the money and the few points we could have saved will be very insig. Good luck
Chicken man
(10/21/1999; 21:21:11 MDT - Msg ID: 17139)
SteveH - Repos....
My understanding is the fed "holds" the paper for countries that buy US debt.....that way no one can sell without the fed knowing about it.....so rather than company A,it might read "country A"......now who was the buyer and who was the seller....? IMHO the fed played the middle man and stuck both parties for a "fee"......central banking can sure be fun...?
Scrappy
(10/21/1999; 21:37:01 MDT - Msg ID: 17140)
Another 'thank you'!
Mr. Gresham,
Don't get fat eating at every truck stop in Oregon trying to find me! None of 'em are any good except ours. :} Also, there is more than one highway in Oregon. Logical assumption, though.

Thank you for the lesson in computer operation. My daughter is very impatient, and rather enjoys watching me squirm as I try to figure it all out. Just wait 'til the next time she's struggling with calculus! The ungrateful brat! Who needs her, anyway? I've got you folks! :}
Scrappy
(10/21/1999; 21:37:22 MDT - Msg ID: 17141)
Another 'thank you'!
Mr. Gresham,
Don't get fat eating at every truck stop in Oregon trying to find me! None of 'em are any good except ours. :} Also, there is more than one highway in Oregon. Logical assumption, though.

Thank you for the lesson in computer operation. My daughter is very impatient, and rather enjoys watching me squirm as I try to figure it all out. Just wait 'til the next time she's struggling with calculus! The ungrateful brat! Who needs her, anyway? I've got you folks! :}
Scrappy
(10/21/1999; 21:43:24 MDT - Msg ID: 17142)
Sorry for the double post, all
And, I'll try to be quiet, now.At least until I have something useful to say, (like after I've been studying this for another year or so?} Thanks for your patience!:}
andrew the kiwi
(10/21/1999; 21:51:53 MDT - Msg ID: 17143)
Bill
thanks for your timely thoughts bill, maybe time in a week or two to buy a few more feb calls, they are likely to be giving them away by then!

then again if au shoots through $360 the commex could face default and closure as already discussed, and these things will still be worthless....
Black Blade
(10/21/1999; 22:05:34 MDT - Msg ID: 17144)
Just a few analyses of potential Y2K problems
http://www.thebullandbear.com/This link has a few interesting Y2K scenarios and dicusses a few problems experienced with Y2K. Also has a few good articles on gold and gold stocks. So far s&p futures are flat and Au down (-1.70). It appears that tomorrow is shaping up to be rather boring. But who knows, anything can happen overnight.
Gandalf the White
(10/21/1999; 22:09:39 MDT - Msg ID: 17145)
Question for SCRAPPY
Do you wind surf too ?
<;-)
Skip
(10/21/1999; 22:42:38 MDT - Msg ID: 17146)
Media Bias
It is interesting to note how CNN has been influencing the public regarding the stock market with their apparent bias.

During last Friday's plunge, they were ( in their own way ) encouraging people to avoid selling...which would compound the drop in the DOW.

Early this week, I heard one commentator urge people to avoid selling in a manner that might cause panic selling. Then today, on Headline News, they made a point to EMPHASIZE that the "average" stock investor is age 47, and uses a "buy and HOLD" strategy (emphasis mine). It seems as though the media is actually giving INVESTMENT ADVICE!!! ...and I can't help but wonder how many people might really be angry at these media commentators if the stock market has a major correction ( or a crash ) and wipes out profits that could have been realized had these same people not listened to such advice? Doesn't the SEC have something to say about giving direct stock advice without a SEC license??? Don't some of these talking heads on CNN, etc., walk a thin line of legality here?

Will some of these "talking heads" be in serious trouble if and when the stock market bubble breaks?

--Skip
elevator guy
(10/21/1999; 22:43:25 MDT - Msg ID: 17147)
Earth.
Thank you for your response. I hope others will indulge a breif foray into a non-gold subject.

So it would seem that we can radiate some heat energy away into space by photons, and perhaps other atomic particles.

I still dont have a feel for how it is that the earth radiates away as much energy as it receives.

Well, I'm way out of my league here. I know a little about elevators, and a whole lot less about everything else.

"Oh man, so ignorant of that which he knows best!"
-Shakespeare

I'm not going to pursue this line of questioning/reasoning any further, since this is not the forum for it.

Thank you for your answer, and I'll have to give it a little bit more thought. As with many good posts, the points you make require more than just a cursory glance, which is about all I have time for right now.

Thanks for walking down that road with me for a bit. It was fun.
elevator guy
(10/21/1999; 22:44:52 MDT - Msg ID: 17148)
@Yellin of Troy
That last post of mine was not directed at "Earth".

It was meant for Yellin of Troy, but I forgot to label it as such.
THX-1138
(10/21/1999; 23:52:26 MDT - Msg ID: 17149)
Companies, pharmacists warn against hoarding of drugs for Y2K
This story makes me want to move to Alaska. I like the last couple of paragraphs where it talks about the electric company not linked to a network grid.


Companies, pharmacists warn against hoarding of drugs for Y2K
Wednesday October 20, 1999

By BRIAN O'DONOGHUE
Staff Writer

Stockpiling prescription drugs in anticipation of year 2000 shortages is not only unwise, according to a local pharmacist, but some drug companies are also making
plans to block such hoarding.

"Pharmaceuticals are a critical issue to many people whose very lives rely on the timely purchases of needed drugs. This has led to panic notices all over advising
people to stock up with a year's supply of medicines," said pharmacist Gerald Brown in his report to the Fairbanks North Star Borough's Y2K Task Force.

"As it turns out, pharmaceutical companies are not going to let us do that. The manufacturing companies will only allow us to order 125 percent of our usual order..."

Brown, who works at Fairbanks Professional Pharmacy, noted the pharmaceutical quotas in his report to the borough's Y2K Task Force.

The task force, formed by the borough assembly in September 1998, spent the past year assessing the public and private sector's preparations against problems that may arise from the
so-called Millennium Bug, a label broadly applied to software flaws that could disrupt operations in computers or digital processors incapable of handling the date change from 1999 to
2000.

The Interior appears well positioned to minimize the bug's bite, chairman Dan LaSota noted in the task force's fall 1999 report.

"I am confident that no major disruptions in Fairbanks or Alaska will take place. I say that not because potential Y2K disruptions were not a real threat," LaSota wrote, "but because a
great many people and organizations paid the matter serious attention."

Brown's caution against drug hoarding, which he said he based on notices from some of the large manufacturers, is aimed at keeping Alaskans from bringing trouble upon themselves.

"The companies have pumped up production. They're going to allow us a 25 percent buffer. That should be enough for adequate stocks," said Brown, observing that it's up to pharmacies
and doctors to keep nervous clients from needlessly depleting local drug shelves.

"It would be like if everybody started making a run on the bank," he said.

Holding drug purchases to a reasonable schedule also has a medicinal benefit, he said. "We have controlled conditions here. And we rotate our stock to preserve freshness. If it's sitting in
your house above a hot sink, it's going to degenerate."

Dick Holm, owner of North Pole Prescription Laboratory, said the subject of Y2K-related drug restrictions wasn't mentioned during a national convention he recently attended. But he said
he wouldn't be surprised to see drug companies start limiting orders.

"I know it's a big concern, and not only for drug companies. If people start panicking and hoarding we're going to be in trouble," he said.

Many insurance companies have rules limiting the duration of prescriptions eligible for payment. "I don't know of any company that will pay for a year's supply at a time," Holm said. "A
patient's condition can change along with the nature of the prescription."

In Holm's view, it's up to pharmacists to use professional discretion.

"Just because a doctor is willing to write a large prescription doesn't mean a pharmacist has to fill it."

In a separate section of the task force report, borough emergency services chief Bill Schecter also cited hoarding as perhaps the Interior's main point of vulnerability to Y2K-inspired
disruptions.

"The greatest concern at this point may be the fear of consumer reaction," Schecter wrote. "Hoarding of foodstuffs at the last minute and other fear-induced behavior could prove to be
a self-fulfilling prophesy with regard to shortages. However, efforts are being made to assure local residents that our community is in good shape and prepared."

In some respects, the Interior's isolation should shield the region from the Y2K disruptions possible in parts of the country possessing fully integrated regional utilities.

As Schecter observed in his section of the report: "Unlike many areas Outside, our local utilities are not connected in a massive grid. While there is a connection between Fairbanks power
and Anchorage power, GVEA is prepared to cut the Intertie and generate its own power. Our local refinery assures us fuel will be topped off and the emergency supply adequate to
provide power for many days in the worst case scenario."

One of Golden Valley Electric Association's big generators in North Pole is being deceived, as a precautionary measure.

"The brains of one of the combustion turbines that runs on fuel oil has its clock set to the year 2000 already," Brad Evans, the utility's systems dispatch manager, reported to the borough
task force. "When the date comes around to Dec 31, 1999, it will actually be rolling over to 2001."
THX-1138
(10/21/1999; 23:54:21 MDT - Msg ID: 17150)
Forgot the link
http://www.newschoice.com/Webnews/fbkmnrfpg0/99-10-20_b1drug20.asp?PUID=1259.2Oops, Hit the button too fast again.
SteveH
(10/22/1999; 02:25:14 MDT - Msg ID: 17151)
Fed
http://biz.yahoo.com/rf/991021/bfo.htmlRichmond Fed talks of equity and inflation.

***

chicken man

I met a person who told me that major corporations who have lots of cash use repos as a better and safer return on their excess. He was suprised to here that the collateral requirementts on the other side of the equation had been loosened such that the Fed would except less than the traditional collateral items of the past. Didn't we hear that they would accept any type of collateral (even the kitchen sink)? What that tells us is that corporations in need of funds can pledge less than valuable assets and in event of default leaves valueless goods to back up the transaction. Risky and inflationary. True?
SteveH
(10/22/1999; 02:38:00 MDT - Msg ID: 17152)
repost
www.gold-eagle.comrepost from above link:

Christian
(nasdaqbubble) Oct 22, 01:59

i agree and i have said it a trillion times, the only way out of this mess and ensuring the bubble grows bigger into election year is to print more money.

You also notice the ecb didn't raise rates. I said in my last post that one should watch cb's around the globe. Monetary decisions might be swaded by leveraged players wrong on gold and u.s t-bonds. If the u.s follows with a no-showin nov. and another in dec. due to y2k concerns then the market could tighten toward your magical bubble-pricking 7% level.

The point folks is simple. To keep the equity market going takes greater and greater injections of liquidity which is inflationary. Not a new concept. If they decide to tighten which is not written in stone yet then the bubble gets pricked and overvaluation makes this event ugly.
. I used 7% to let people know that if the market doesn't blow up soon and equities are supported then money will continue to flow out of bonds ...which eventually crushes stocks. Remember,trying not to beat a dead horse...but i said this a trillion times. Thereis not enough liquidity to support both the u.s equity and bond market. The bubble could get pricked at 6.5% instead of 7% because the level of overvaluation is greater at those rates then stocks valuations were relative to rates in 94....Think about this....japan saw the bubble pop with rates at 6%.
Bottom line- if 7% is your exit point on equities or rate at which equities in your estimation will crash then you might get caught with your pants down as this house of cards could easily tumble at 6.75%.


SteveH
(10/22/1999; 02:43:40 MDT - Msg ID: 17153)
Platinum
http://kitco.com/platinum.graph.htmlPlatinum, she shows up $10!!! $430.00 (eventhough the www.mrci.com shows January plat. at $414). I believe this is backwardizations as the URL price is $16 higher. Thoughts?
chan
(10/22/1999; 03:06:43 MDT - Msg ID: 17154)
bullion prices in singapore
despite the current POG weakness, and the weak exchange rates USD/SGD in favour of SGD (singapore dollar), bullion prices has not moved anywhere near in proportion to those factors here. thought you guys may want to know. rgds
Netking
(10/22/1999; 04:17:29 MDT - Msg ID: 17155)
POG
http://www.kitco.com/gold.graph.htmlFOA - Thanks for your reply to my question yesterday.
All - Looks like $300 is at risk of being breached when NY
opens today. We'll be getting close to support levels
from which to launch "wave 3" very soon.
regards NetKing
SteveH
(10/22/1999; 05:49:07 MDT - Msg ID: 17156)
reprieve (temp)
Friday October 22, 7:10 am Eastern Time
New Ashanti reprieve valid to end-Monday
LONDON, Oct 22 (Reuters) - An extension of a standstill agreement negotiated by Ghanaian mining company Ashanti Goldfields Co Ltd with its gold hedging counterparties is valid until 5:30 p.m. on Monday (1630 GMT), people familiar with the situation said on Friday.

Ashanti said late on Thursday it had won a further short-term reprieve but did not specify how long the extension would last....

The temporary agreement for banks to waive margin calls on its loss-making derivatives contracts had been due to expire at the close of business on Thursday, after being extended by 72 hours last Monday.

ORO
(10/22/1999; 05:53:30 MDT - Msg ID: 17157)
Forgotten events and coincidences - Buckler's analysis
http://www.the-privateer.com/welcome.htmlA few things from the 1st July issue of the Privateer I got sent to me in an ancient mailbox, lost among the junk.


In that issue, Bill Buckler gave the following general view.

1. The US governments has had its credit card cut. In March 99, with the landing of the first bombs in Kosovo. This is manifest in the EU (and everyone else for that matter) refraining from buying Treasuries since March 98, and selling them off slowly since March 99.
2. The US in general and the Clinton administration in particular have become persona non grata in the international community. Dealt with in polite manner, but disregarded. Military "follies" on CNN driven humanitarian missions are greeted with alarm and repugnance.
3. The US is now expected to repay its outstanding debt. This is not news, as the miraculously balanced budget is being used to do just that. Social security is just a lie. All the cash goes to the pay down of debt.
4. The world is organizing around the US, skirting it by direct contact of Europe and South America, without any US intermediation whatsoever.

Events:
March 24, 1999
Berlin Conference the greatest aggregation of heads of state since WWII, 60 participants. The US was not invited.
Issues: 1. Europe is one, at peace. 2. Russia and its former allies are welcomed in. 3. South America is to start a new political and economic relationship with Europe.
US started the Kosovo campaign on the same day.
US/Brit calls for the IMF to sell its gold reach a fevered pitch.
Gold starts moving up and is slammed down just before the the conference begins.
Oil prices skyrocket.

28 June 99
Rio de Janeiro EuroZone and Central/South America. Heads of State level, 48 participants. US is not invited.
Intend to create a free trade zone for the EU and SAm.
Clinton puts forward a policy of debt elimination within 15 years, claims that government surplus will lower interest rates, increase business investment, create jobs, raise wages. Prior to the 90s, the US leadership has always claimed the same results would come from deficit spending.
Prior to conference, UK makes anti EU noises, after Clinton's speach, Blair turned to Europe for discussion of future UK participation in the EMU.

Russia and China, after their very rough political treatment by the US, have joined with Europe.

Buckler proceeds to recount the discord between the poppular US political perception and that of the rest of the world.
US: We won the cold war. Lets' binge.
World: don't need them anymore, good riddance. How do we extricate ourselves from this?

US boom.
Buckler points out that the 80% capacity utilization in the US is a recessionary figure. During a boom in the REAL economy, production stands at the high 80s.
So where is the boom ocurring?
Debt boom.
Americans are partying on money borrowed from abroad and from within the country.
New savings are non existent. Americans are dipping into their savings.

On the limits of debt. Buckler puts the limits on debt accumulation at the point of it consuming all disposable income of the debtor. For a nation, this is the point where the exportable portion of an economy is just sufficient to cover the principal and interest payments, running a positive balance of payments.
In US government, this means that surplusses (not from taxation of bubble capital gains but from real income) will be used to cover the debt payment while the government will provide minimal services.
In the private economy, it is export or die of hunger. Production, design, engineering, technology, pharmaceuticals will export. The economy of selling to the American consumer, who is continuously sinking into debt, will evaporate. Prep your gold for spending during fire sales in all of retailing, be assured that Builder's Square and Venture stores are only the first.

Buckler foresees an agreement to keep the rate of conversion of the $2.7 trillion in foreign held Treasuries to a constant level where dishoarding of treasuries by CBs is done in careful coordination. He thinks that the money will go either to the purchase of US exports, or to the purchase of "anything of value" in the US.
Among the things to be bought with the new cash in official hands would be gold and Euros.

Since the private sector has nothing to do with its "eurodollars", and these are not quite controllable, wouldn't that money go after gold and goods?

Wish I knew he was thinking along these lines, a subscription would have saved me lots of time.


RossL
(10/22/1999; 05:54:40 MDT - Msg ID: 17158)
gold charts and options data
http://www.mrci.com/special/gold.htmI noticed this morning that MRCI has a new page for goldbugs.
ORO
(10/22/1999; 06:03:46 MDT - Msg ID: 17159)
New Global Short estimates for end 98
http://www.bis.org/publ/otc_hy9906.pdfDue to newly reorganized BIS site, I managed to find the elusive numbers for the total OTC figures. Note that these are based on an assumption of 100% short. In US numbers the correlation indicates that at least 75% is a short position.
Price proportionality seems to indicate that that is the case - overwhelming majority is short.

In any case, this includes positions after netting. Raw positions are probably significantly greater but would net out. Exchange traded paper is not included in these figures.


http://www.bis.org/publ/r_fx98statanx.pdf

http://www.bis.org/publ/r_fx98.htm

Category Notional amounts outstanding
end-March end-June end-June end-Dec
1995 1998 1998 1998
Tonne gold as 100% short
FORWARDS AND SWAPS 7229 15521
OPTIONS SOLD 2828 6343
OPTIONS BOUGHT 3056 5865
TOTAL NET CONTRACTS 12053 23610 20010 19453
GOLD $ per oz. 380 300 300 291
Millions of $
FORWARDS AND SWAPS 88318 149705
OPTIONS SOLD 34545 61179
OPTIONS BOUGHT 37330 56565
TOTAL NET CONTRACTS 147256 227721 193000 182000
TOTAL CONTRACTS (NOT NET) 160193 267449


RossL
(10/22/1999; 06:11:03 MDT - Msg ID: 17160)
Buckler
ORO

"Buckler foresees an agreement to keep the rate of conversion of the $2.7 trillion in foreign held Treasuries to a constant level where dishoarding of treasuries by CBs is done in careful coordination. He thinks that the money will go either to the purchase of US exports, or to the purchase of "anything of value" in the US. Among the things to be bought with the new cash in official hands would be gold and Euros."

Sounds quite inflationary for the $US
Cavan Man
(10/22/1999; 06:33:57 MDT - Msg ID: 17161)
TC 17134 (and FOA)
RE: Saudi Arabia

Could another "income source" possibly be gold? In the coming transition away from the US/IMF, could Saudi Arabia become a major international economic player; this in addition to their history of recycling petrodollars through international banks as detailed so well by Aristotle?
Number Six
(10/22/1999; 06:37:34 MDT - Msg ID: 17162)
Bullish on Gold and Silver :)
A Quick Reminder... :)

The International Harry Schultz Letter

"The premier international financial, socio, geopolitical & philosophical newsletter"


Gold
Glitters a Gain! Oh, how sweet it is! After years of immoral & illegal manipulations by bullion dealers, bullion banks & bullion brokers, aided by certain govts, gold broke loose. The price-fixers haven't given up; they still don't want a free mkt for gold, but they know they're in for a battle royal. There is so much to tell I'm in the same position as with Y2K reports. I've got 1000 pages of notes, but limited space, so (as with Y2K) I'll suggest (below) how U can get more info & how to keep up on the daily gold in-fighting. It's a very exciting, bloody battlefield I assure U. The stage was being set for a price breakout before the Euro central banks (CB) made their dramatic announcement that CB's would freeze/limit gold sales & halt gold loans for 5 yrs. The news ricocheted around the world in minutes & bullion burst its 20-year shackles. But, as Sunil Madhok, of UAE, says on http://www.gold-eagle.com , "The CB's didn't do this to help gold bulls. But they didn't want the bears slain (so they permitted some sales). They had no option. Speculators (eg, NY bullion banks & the anti-gold mafia) were hammering gold with no regard to the massive supply/demand gap. If CB's hadn't acted, the imbalances would have proven catastrophic (in light of the huge short position)." Pressure was also being brought to bear on Euro govts by developing gold-producing nations. And GATA was revealing the illicit tactics of the dealers/bankers. UK's fluky gold sale was being exposed as a political favour. Blair was in hot water.

Gold mines who hedged (sold gold forward or bought puts) heavily, found themselves in trouble, as we forecast, & we don't bleed for them; we said it was like eating your young. Some were "forced" into it by bullion banks who threatened them with lower credit rating if they didn't. Blackmail! Shows how vicious the greedy price-fixers are. Ashanti Gold was example. Gold rose $8, but stock fell $4 same day. Margin calls killed them, only avoiding bankruptcy, so far, via the bankers "Red Cross." Goldman Sachs was Ashanti's "brilliant" dealer who got them short over their head. Barrick is another over-hedged mine & stock is under-performing non-hedgers. Stockholders screaming for true mkt exposure info.

The price-fixers keep feeding the press & producers misinformation about the size of the gold short position, hoping to jawbone the price down. Ted Arnold apparently gets paid for trashing gold, as he has for years. Other mistaken info (intentional or otherwise) comes from Chase, Deutsche Bank, JP Morgan, AIG, Goldman, says Bill Murphy of GATA (Gold Anti-Trust Assn) who calls this "one of the great financial scandals of all time." CNBC/CNN give lots free airtime to gold bad-mouthers, but won't let Murphy speak. Of course, TV is owned by insiders. Freedom of the press has always meant freedom for insiders to press their case.

For true stats on gold mkt, contact John Hathaway at the Toqueville Gold Fund & Caeser Bryan at Gabelli Gold Fund. For daily update on the gold war, download free at popular http://gold-eagle.com , & subscribe to GATA website, the attack force for gold freedom at Lemetropolecafe.com or US fax: 413.528.6903. GATA also needs contributions for its anti-trust fight against price-fixers. 2 Hslms sent big cash last mo. Thank U. Need more. If U want goldfreedom & goldhigher, send $. �Murphy foresees $600 gold a bit later. Says Fed is biggest worry; the price-fixers want Fed to intervene; report is they already have, selling gold futures. But gold genie is out of bottle, & aside from setbacks, it's unlikely the gold bull mkt can be stopped. As a chartist I note, basis London PM fix, a pullback to 289 would be a 50% normal technical retracement of recent up-swing & a great buy-more spot. But U'd have to place orders now, not after the event. Traders hope for pullback to 300-310. One day soon U'll wake up to a $100 overnight rise, so don't be naked out. Producer buy-backs are coming. �As with Y2K, I've only used 10% of my notes, so please access gold fax/web sites. The gold war has barely begun. We'll win/lose battles, but win the war & get a free gold price. PS: Bill Gates bought 10% of a silver company. Silver will be exploding also. :-)



Harry Schultz
http://www.ihsl.com
hsl.mentor@skynet.be
Tel +32 (for Belgium) 16 533 684 -- Fax +32 16 535 777
Postal address: HSL, PO Box 622, CH-1001 Lausanne, Switzerland

12 October 1999
FOA
(10/22/1999; 07:05:02 MDT - Msg ID: 17163)
(No Subject)
http://www2.techstocks.com/~wsapi/investor/reply-11663620Some people have held this view for a long time. Now it's becoming more main stream. See link for story:

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

"""Now that gold isn't a surely bearish play and could conceivably rise toward $350 or even $400 an ounce over the next 12 months, gold bars and coins are preferable to gold stocks, Mr. Lucas believes. The next safest gold bet would be an investment in a mine that either doesn't use the derivatives market or transparently explains its hedging"""
Viper
(10/22/1999; 07:20:44 MDT - Msg ID: 17164)
Gold
Good Morning All! I recieved this from a friend via e-mail this a.m., thought you might like to take a look.
Happy Trading!


500 by November?
Posted Thursday, October 21, 1999 at 09:51 AM EST
by James Turk
Freemarket Gold & Money Report

As expected, aggressive bidding emerged at the Bank of England auction on September 21st. Also as expected, once the $262 resistance level was broken, Gold was driven quickly higher by a missive short covering rally.

Is the rally over? No, not yet. In fact, I think it is only beginning. Here are my targets. At a minimum I expect Gold to touch at least the $350-$360 area. At a maximum? Well, who knows? But I would not be surprised if this rally climbs all the way back to $500, a price not seen since 1987. What's more, we won't have to wait long to reach these higher prices.

The peak price of this rally, whatever that level turns out to be, will I expect be reached within the next 4-5 weeks. What? Gold at $500 by November? Yes, it is a realistic possibility.

A bear trap has been formed, which has developed pretty much as expected. What happens now? Everyone who sold Gold when it broke through the major 17-year support zone below $280 must now buy it back, It's a classic bear trap, and it was formed during what in all likelihood will prove to be Gold's bear market low. In other words, I don't think we will ever see Gold once again trade under $280 per ounce. A bold statement?

I don't think so because we know that Gold is fundamentally very undervalued. When looked at from this point of view, all I'm saying is that we will never again see this extreme level of undervaluation, which is not an unreasonable conclusion. So far Silver has been very quiet, letting Gold take center stage. However, don't be lulled into complacency because beneath the surface, Silver is bubbling along, and is very near a boil. The lid is about to fly off this boiling pan as well. Silver is ready to break out of its massive 13-year accumulation pattern. We could see my long-standing $10 target by November, along with $500 Gold.


RossL
(10/22/1999; 07:27:19 MDT - Msg ID: 17165)
Squeeze
The Oct contract for COMEX gold is in backwardation to the Dec contract, meaning it now costs more to contract a buy for gold for October delivery as opposed to December. It will be interesting to watch if a mini-squeeze develops before closing time next week on the 29th. This could foreshadow the big event at the end of December.
TownCrier
(10/22/1999; 07:28:09 MDT - Msg ID: 17166)
Fed official says price dangers must not be ignored
http://biz.yahoo.com/rf/991021/bfo.htmlAlfred Broaddus, president of the Federal Reserve Bank of Richmond, gave a firm warning yesterday: "The risk that the U.S. economy could overheat in the period ahead cannot be dismissed, despite rising productivity and other 'new economy' developments. [...] I do believe it is a material risk in the outlook that needs to be taken seriously."

"The apparent reawakening of the global economy could present adjustment problems in the months ahead," and Mr. Broaddus said that was particularly true if the buffering effect brought about through capital inflows were to slow more. The article interjects here that investors are in fact beginning to park their funds elsewhaere.
"In short, if the growth of U.S. demand exceeds the sustainable growth in U.S. supply, the international economy may be less able and willing to absorb the spillover than in recent years, which could foster inflationary pressures in the U.S."
Cavan Man
(10/22/1999; 07:51:25 MDT - Msg ID: 17167)
RossL
Hello. Who is this Buckler fellow?
Chicken man
(10/22/1999; 07:55:58 MDT - Msg ID: 17168)
RossL - 29th...?
Contract Specifications: SI, COMEX
Trading Unit:
5,000 troy ounces
Tick Size:
.5�/troy oz. = $25.00
Contract Months:
Jan, Mar, May, Jun, Sep, Dec
Trading Hours:
8:25 A.M. to 2:25 P.M. for the open outcry session
After-hours futures trading is conducted via electronic trading system beginning at 4 P.M. on Mondays through
Thursdays and concluding at 8 A.M. the following day.
On Sunday, the electronic session begins at 7 P.M.
All times are New York time.
Last Trading Day:
The close of business on the third last business day of the maturing delivery month

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

This is for silver but its all the same date(gold'silver and copper)..... LTD for plat was Tue......
TownCrier
(10/22/1999; 07:58:29 MDT - Msg ID: 17169)
Words from the Federal Reserve...an excerpt
http://www.bog.frb.fed.us/boarddocs/speeches/1999/19990114.htmRemarks by Michael J. Prell
Director, Division of Research and Statistics
At the Charlotte Economics Club, Charlotte, North Carolina
January 14, 1999

"...In concluding, I want to assure you that I haven't forgotten that I promised you a ten-point list. So let me cite Notion Number Ten, which is that the Fed has learned how eradicate the business cycle and how to ensure eternal bull markets in stocks and bonds. I hope that I shall not be viewed as disloyal if I express a little skepticism that my bosses really have achieved quite that degree of insight and power.

But, given that one hears something akin to that thought being expressed by people with some frequency these days, might one not ask, in all seriousness, whether a new sort of moral hazard hasn't been introduced into the macroeconomic scene. Might people--business managers, consumers, investors--be taking risks that they would not have taken were it not for an exaggerated confidence in the ability of the Fed to cushion the economy and financial markets against any and all shocks? If so, there conceivably could be a greater potential instability in the system than is readily apparent at this time. Of course, in expressing that concern, I may simply be showing the propensity people who have been around central banks for a long time have for looking for something to worry about when the times are good.

Obviously, there are many other issues we could discuss today. There's no shortage of question marks as one examines the prospects for the U.S. economy. But isn't that really almost always the case? How else can we explain the fact that it has become a cliche of forecast presentations that "the outlook is clouded by unusual uncertainty"?"
Cavan Man
(10/22/1999; 08:05:02 MDT - Msg ID: 17170)
CM 17161
Mr. FOAAm I interpreting correctly from TC's report yesterday?
RossL
(10/22/1999; 08:08:57 MDT - Msg ID: 17171)
Replies
http://www.nymex.com/markets/cont_all.cfm?cid=15&cont_name=term_schedCavan Man

See ORO post 17157

Chicken Man

See the above link for info on COMEX gold
TownCrier
(10/22/1999; 08:26:49 MDT - Msg ID: 17172)
Fed comments on electronic money...some interesting excerpts
http://www.bog.frb.fed.us/boarddocs/speeches/1999/199909172.htmRemarks by Governor Edward M. Gramlich
Before the Electronic Payment Symposium, University of Michigan, Ann Arbor, Michigan
September 17, 1999

Although the United States economy seems to be leading the world in the adoption of new computer and internet-based technology, the picture is not uniform. The United States is not at the forefront in the adoption of electronic money systems, one area that would seem most eligible for the information revolution. Adherence to traditional payment systems, check and cash, is very strong. The United States is the only developed country in the world where check use is still increasing, with the number of checks written growing at a rate nearly as fast as the overall economy.

Use of cash is extensive as well. Americans still use cash for about three-quarters of all transactions. The total U.S. supply of coin and currency now comes to $550 billion, about one-third of which is actually circulating in this country (the remainder is held abroad). But even after subtracting estimated foreign balances, the supply of outstanding coin and currency comes to $670 per capita, which strikes most people as incredibly large.

[Large, that is, until the digital stuff gets corrupted or is cheated beyond reliability. -TCrier]

Historical Antecedents

The idea of using technology to improve the efficiency of the payment system is very old. World commerce has seen an evolution from barter to valuable metals, to paper money, and to checks. In the United States, as early as 1853, more than a half-century before the Federal Reserve System came into existence, private banks in the New York area formed an exchange and settlement system that economized on the movement of paper and settlement balances. In 1970, some of these arrangements were automated and became the basis for a wire transfer system called the Clearing House Interbank Payments System (CHIPS). CHIPS is still the leading clearing and settlement system for large dollar interbank payments (average size of $6 million) originating in international trade and finance.

When the Federal Reserve System came on the scene in 1913, one of its early tasks was to eliminate gold transfers and exchange rate differentials between the dollar and gold across the Federal Reserve Districts. The Fed created a "goldwire" system that involved inter-District settlements through the Gold Settlement Fund. This system quickly gave way to a telegraphic system for adjusting reserve balances. This system in turn evolved into a highly automated and centralized Fedwire system to handle large volumes of high-value payments settled in reserve balances on a real-time basis. The Fedwire system is the key interbank settlement system for the federal funds market. Average payments are around $3 million, but the system is also used for much smaller time-critical payments.

[That historical description shows how gold could conveniently function as money today, with the benefit of curtailing the ability of monetary officials/governments to cheat the public through money supply inflation. -TCrier]
USAGOLD
(10/22/1999; 08:35:06 MDT - Msg ID: 17173)
Today's Market Report: Ashanti Stay of Execution on a Short Fuse
MARKET REPORT(10/22/99): Gold down another $2 in the early
going....Ashanti's stay of execution has been deadlined at 5:30 London
time, Monday -- a surprisingly short fuse .....That gives them the
weekend to patch together a deal under pressing circumstances and an
interesting cast of characters. There are "helpers" including Prince
Alwaleed, a "stopper" in Lonmin which owns 32% of the ailing mining
company, "nationalizers" that might find it necessary to protect Ghana's
most productive asset from foreign takeover, and "pouncers" like Gold
Fields and Anglogold just waiting for a chance at the properties sans
margin baggage....... And then there's the bankers: Word is that UBS,
the huge Swiss bank, remains the most adamant about getting its margin
money -- some $65 million. And one can hardly blame them. Any further
uptick in the gold price would put Ashanti underwater for
good.............The fact that the banks put Ashanti on a short fuse
like this tells us they have no confidence in the merger talks. Had
Ashanti been given something approaching a reasonable amount of time to
put a deal together, I would have thought the parties want to save the
company. As it is, I have to say the Ashanti mess is being pushed
rapidly to closure -- and whatever that portends.......We could be going
to the wall here, fellow goldmeisters, and today's down market might be
the last desperate attempt by the shorts to find a place to cover before
Ashanti gets the rug pulled............We'll see. As always with this
type of analysis you need to know that the foregoing is just an educated
guess based on what's surfaced. Who knows what intrigues are occurring
behind the scenes...... Don't forget we are talking about 10 million
ounces of gold that will need to be covered one way or another if this
deal goes into the trash can -- that's 320 tons.....Speaking in less
than veiled tones, a London dealer put it this way as reported in
Reuters London this AM: "It (the price trend) could all change in a
heart beat if there's a close out or any other big news." Another dealer
said, "It could be explosive." Reuters adds this: "Fresh news of miner
hedging difficulties or pressure to close out loss-making positions
could be enough to spark a rally while signs of sliding prices might
trigger producer sales."......We are going to leave it at that this
morning. There's little else in the news, but the above is more than
enough. It could be an interesting four days ahead of us. Stay tuned at
the FORUM for further breaking news and we will see you here
Monday................Have a good weekend, all. MK

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.
YGM
(10/22/1999; 08:52:50 MDT - Msg ID: 17174)
Mundell/Lehrer Newshour Interview.
Well that was a double no-show. No Jim, No Robert. Of course the powers that be wouldn't want a Nobel Laureat on TV telling the world that Y2K may cause a currency collapse and that we should view Gold as the saviour or stabilizing agent. I would hope that Mr Mundell will get his message out another way or better yet still be featured on Jim Lehrers show. I won't hold my breath tho! Maybe Mr. Mundell would talk to GATA or thru GATA. I suppose we all await the day that Clintons long slimy tentacles thru the power structure get cut off at the neck. Freedom of the press my ass!----YGM.
Leigh
(10/22/1999; 09:09:39 MDT - Msg ID: 17175)
Farfel's Speech
http://www.gold-eagle.com/editorials_99/dvcohen102399.htmlThe above link contains a speech entitled "The Gold Market as a Metaphor for America." It was given by none other than -- Farfel!

(Please forgive me if this link has been posted before.)
Cavan Man
(10/22/1999; 09:10:44 MDT - Msg ID: 17176)
YGM
The fish stinks from the head down.
YGM
(10/22/1999; 09:27:12 MDT - Msg ID: 17177)
Clinton & 3rd Term?
http://216.46.238.34/showinside.shtml?a=1999/8/29/171120Maybe not impossible!!---YGM.
SRXtreme
(10/22/1999; 09:37:19 MDT - Msg ID: 17178)
On 9/28/99, somebody bought 60,000 December gold 390 calls
http://www.mrci.com/qpday.htmHumm.. Someone is pretty sure Dec Gold is gong Over $400.
On 9/28/99, somebody bought approximately 60,000 December gold 390 calls. On 10/21/99, there are approximately 162,692 Dec calls between the 260 and 400 strike prices. These options all expire on 11/12/99. Gold's implied volatility has traded at all-time highs over the last month and the current open interest is close to all-time highs.

TownCrier
(10/22/1999; 09:43:54 MDT - Msg ID: 17179)
The status on banking reserves and Fed operations
http://biz.yahoo.com/rf/991022/kk.htmlCurrency in circulation for the week ending Oct 20 increased, which bucked the trend of previous years.

The Fed has added enough reserves via 90 system repo agreements that an economist expects the Fed may not have to do much this first week of the new reserve maintenance period, but that the add need was skewed toward next week.
Leigh
(10/22/1999; 09:45:44 MDT - Msg ID: 17180)
YGM
In 1984 Arkansas passed a constitutional amendment changing the governor's (Clinton's) term of office from two years to four. He's capable of anything.
TownCrier
(10/22/1999; 09:53:00 MDT - Msg ID: 17181)
Fed expands list of acceptable collateral
http://biz.yahoo.com/rf/991022/mu.htmlThe U.S. Lender of Last Resort is now accepting post-dated personal checks from bank managers and also gold class rings. The world's most prominent bank has become little more than a two-bit pawn shop.

"Hold me, Mamma, I'm scared."
TownCrier
(10/22/1999; 10:18:16 MDT - Msg ID: 17182)
FOCUS-Ashanti wins third reprieve as bullion dips
http://biz.yahoo.com/rf/991022/nx.htmlMostly old news in this "new" article for you Ashanti watchers out there.
PH in LA
(10/22/1999; 10:21:16 MDT - Msg ID: 17183)
On with the Game!
"today's down market might be the last desperate attempt by the shorts to find a place to cover before Ashanti gets the rug pulled............" MK (10/22/99; 08:35:06MDT - Msg ID:17173)

This thought is seen fairly often. But its validity seems highly questionable to me. Let's say that this gambit were tried (ie, push the price down to secure an opportunity to cover outstanding short positions). Everything else being equal, the very act of covering the same number of shorts that had just been sold to lower the price would push it right back up to the same level again. Trying to cover a significant portion of a separate outstanding short position would gun the price immediately. In a heartbeat the buyers (read, short coverers) would be contributing to the very danger they fear... a runaway price. No more short covering would be possible without incurring the very losses they are trying to avoid. This is the reason why FOA (and others) talk about the shorts being "trapped" in their positions. They need a major change in sentiment in order to unload their excess short-sold baggage to new longs. This was what the long-standing publicity campaign of orchestrated idiotic announcements of Swiss sales, central bank selling, "just another commodity" statements by prominent undiscovered criminals like Martin Armstrong was all about. Suck in the "greater fools" by selling them what had been sold already. Now, after the explosion since the Washington Agreement Announcement, there is no sentiment change just waiting to reassert itself again. These guys are toast. Sooner or later they will have to recognize reality, admit their mistakes (which can only be described as one of the greatest human follies of all time), take their medicine (by declaring bankruptcy) and go to jail, where they have belonged all along.

For many years, they have been congratulating themselves for being smarter than the rest of humanity. But it was all a trick... Smoke and mirrors. It was dishonest. It was wrong. Now people are starting to understand it, from the Nobel Proze committee (by nominating Robt. Mundell) to Reginald Howe, FOA, ORO, Bill Buckler, Bill Murphy, Farfel... the list grows longer every day. (I can hardly wait until even dolts like LGB get the idea.) Some very prominent people are going to jail...

There is nothing they can do about it now. The time for that is long gone! As FOA says, let's get these dead chess pieces off the board and get on with the game!
Cavan Man
(10/22/1999; 10:33:31 MDT - Msg ID: 17184)
Mr. PH
Great post! (last)
USAGOLD
(10/22/1999; 10:46:48 MDT - Msg ID: 17185)
PH in LA
I see your point. It's a good one and well-stated. So where does it all end under the scenario you describe?

Ashanti is slightly different from some other mine hedge books in that it is subject to margin call. Though we are not privvy to all the otc hedging deals, except when mining companies disclose them (something hedge funds are not subject to), I am told that the Ashanti deal is not the norm. The margin requirement was put in place because of the political/economic volatility in Ghana. Margin is not required in all hedge deals. Little did they know that the destabilizing volatility would come from outside of Ghana. At some point, the calls or forwards have to be filled either with corresponding paper, physicals or both. What I don't get is how the same banks making the margin calls were willing to let Ashanti sell 10 years of production (10 million ounces) forward at below $300. To me, that's difficult to justify, or even comprehend. Did Ashanti really believe that gold would stay below $300 for the next decade given what's going on around the world? Weren't the seventeen or so bankers getting the financial statements? How could they let this go on? The whole thing mystifies me. Didn't they think there might be a problem with this? Or are these Masters of the Universe so arrogant that they believe they could hold down the price of gold forever? As I have said in so many words before, there must be some kind of split developing between the central banks and their counterparties otherwise the European Central Bank wouldn't have made the September 26 announcement. I throw these questions around with my friends in the industry and they tell me that I give too much credit to the central bankers. That the left hand doesn't know what the right hand is doing, etc. I don't buy that argument. I think they knew full well what they were doing, and in the end, that might precisely be the reason why Ashanti is being pushed to the wall. Maybe now the counterparties are reading the handwriting on the wall and, at least in the case of Ashanti, moving towards cleaning up the mess.

By the way, these are some of the reasons this Ashanti situation has grabbed my attention. I really do believe that if it blows up, we could be right back in the same market dynamic of a couple of weeks ago.
TownCrier
(10/22/1999; 10:50:25 MDT - Msg ID: 17186)
The World Islamic Trading Organisation...some light reading for the weekend
http://www.murabitun.org/WITO/index.htmlThe world is a big place, and from The Tower we see many people, many cultures. Gold figures into life abroad much more prominantly than most Americans are aware. This site may help broaden your horizons if you are new to the Round Table (many of our "old timers" are already aware of this.)
ORO
(10/22/1999; 10:53:51 MDT - Msg ID: 17187)
Vix index
Vix just hit an intraday low of 22.27, coming close to the "must buy puts" area of 20.

This is showing that complacency and bullish confidence far outstrip caution and Risk/reward calculation. i.
Chicken man
(10/22/1999; 10:55:54 MDT - Msg ID: 17188)
RossL _ Thanks....got that one bookmarked...!
I've read about the "customary 2 day" delivery before and this explains it......mighty important day to watch...!
But the price on the deal is Wed....then 2 days to cover your bet...?

Check out Nov LTD...on the 24th due to turkey day...
PH in LA
(10/22/1999; 11:03:24 MDT - Msg ID: 17189)
Cleaning up the Mess
Yes! Michael...Exactly!
"Maybe now the counterparties are reading the handwriting on the wall and, at least in the case of Ashanti, moving towards cleaning up the mess."

Except it is the CBs that are pushing the counterparties to the wall. They must have had that intention from the very start of this whole game. There could never have been any other outcome... The question was always "when" not "if". But it will never be the "counterparties...cleaning up the mess." They are the mess! Now it is the really big guys moving to "clean up the mess". The only possible "end under the scenario (I) describe" is higher prices. That is what the big boys intended all along. The guys who are "the mess" will eventually be bankrupted and jailed.

We're not going to miss them!
YGM
(10/22/1999; 11:03:38 MDT - Msg ID: 17190)
Islamic Gold Backed Dinar---Revisited from old posting.
http://www.users.dircon.co.uk/~netking/murabitn.htmI'll repost this for those watching the Arab links to Gold----------YGM.
The New Islamic Dinar [May 18th 1998, Rev. June 30th 1998, Feb. 10 1999, Mar. 24 1999]


Jump to [this page]:
Introduction, May 18th 1998
News from Umar Vadillo, May 19th 1998
News from Umar Vadillo, June 30th 1998


News Links:
Just in from the Islamic Mint - Ahmad Gross: Official launching of the Islamic Gold Dinar and Silver Dirham in Dubai, Mar 23 1999 [Thanks Silverbaron]

A new form of currency based on the age-old principle of 100% precious metal backing is being launched.
Arrangements have already been made for the manufacture and distribution of this currency. The potential impact of a new non-fiat currency which may become popular amongst the world's many muslims is not insignificant, yet there is practically no reporting of the subject in the news media. It is obviously a topic worthy of discussion! There are, I am sure, also many non-muslims who would support a currency free from government fiat and financial usury.

The home page of the Islamic Dinar may be found at:
The Islamic Dinar Home Page

Incidentally, on February 8th 1999, it was announced that "Dow Jones launches Islamic Market Index" [Feb 8], "to track companies whose businesses operate in line with Islamic principles. Called the Dow Jones Islamic Market Index, the global equity index tracks 600 stocks from 30 countries with total market capitalization of $7.5 trillion."

Gold-Eagle has also added an article on the Islamic Dinar, which may be found at:
The Islamic (Gold) Dinar [25 Nov 1998]
"The ISLAMIC DINAR is now being privately used in more than 22 countries and is currently being minted in four countries..."

According to Umar Vadillo, "the Islamic Dinar is the end of Islamic Fundamentalism"!

The following text describes recent events in Malaysia- for more information about the Islamic Mint and the new Dinar, please see the reference links [Ed.]

By Umar Vadillo & Mahmud Lund (Forwarded By "Silverbaron", May 18th 1998 and reproduced with permission)



"My name is Mahmud Lund. Please allow me to introduce myself as a director of the Islamic Mint. Umar Vadillo has asked me to communicate with you, give his greetings and the news about his recent trip to Malaysia. To quote from his report, entitled: The Islamic Dinar in Malaysia"

"An historical step was made a few days ago by the Islamic Party of Malaysia with more than 500,000 members and the Government of Kelantan (A state in the NE of Malaysia) when they adopted the Islamic Dinar as part of their policy."

"In a public event on the 28th of April, in the city hall of Kuala Krai in Kelantan, members of the Central Committee and other senior members announced the decision to introduce the Islamic Dinar as part of the party policy."

"Then the same day in the evening in a large gathering of 10,000 people in the mini-stadium Kelaburan, the Chief Minister of Kelantan personally endorsed the establishment of the Islamic Dinar as the currency of the Muslims."

"In a talk which I was invited to give at this gathering there was a resounding acclamation for the choice of the Islamic Dinar over the US Dollar as the currency which the audience would choose for themselves. I finished my talk with the words, "Allah does not say in the Qur'an, 'US Dollar or Malaysian Ringgit'. Allah says, 'Dinar' and 'Dirham'. If we use the Islamic Dinar prosperity will come to us; if we accept the US Dollar misery will come to us. Let us say from Kelantan to the world "The Islamic Dinar is our currency. No more inflation. No more Soros." A flood of people came afterwards wanting to immediately take dinars and dirhams."

The PS follows:

"The Islamic Dinar is on its way to becoming the currency of the Muslim peoples. And, Allah knows best, it could once again become the currency of all people who are tired of being cheated."

"The Islamic Mint acknowledges the many requests we have had for purchase of the Dinar and the Dirham and ask your patience as we proceed methodically towards a successful world-wide launch in significant numbers for these most important coins, a real money! We hope to be able to fill orders in the near future. Please visit the Islamic Mint for news updates."

"Thanks once again, Sincerely, Mahmud Lund."



News from Umar Vadillo, May 19th 1998

"All the Directors of the Islamic Mint are gathering in Dubai to establish the first Islamic Wakala (Agency) of Dubai. This institution will support the use of the Islamic Dinar as world currency by enabling anybody to open accounts in Dinars and Dirhams, thus allowing account holders to make payments to other account holders from anywhere in the world. This is another step towards returning towards a real currency. The response so far is being overwhelming."

News from Umar Vadillo, June 30th 1998

We had a month full of success for the Islamic Dinar. I can now say that the Islamic Dinar will become the currency of the Muslim nation. We have crossed the point of no return. It is now only a question of time.

The support is coming from everywhere. The Mufti of Egypt, one of the most reputable personalities of the Islamic world is now in favour of the Islamic Dinar. It follows a translation of an article from the Arabic Newpaper 'Al-Bayan' from Dubai (United Arab Emirates) about the Mufti and the gold and silver.

From Morocco to Indonesia, we are receiving more and more support from the Islamic authorities. One thing you have to bear in mind is that the Islamic Dinar is the end of Islamic Fundamentalism, that sickness that twisted the spirit and the law of Islam. Islamic Fundamentalism is as distant to Islam as puritanism is to the teachings of Jesus, may Allah be pleased with him.

From the first of September a system of accounts 100% based on Dinars (gold) and Dirhams (silver) will be in operation. The new institution called Islamic Wakala or Islamic Agency is inspired on the traditional wakils or agents in Islam. Most Muslims traders in the days of the Islamic Dinar had their own agents in the key trading cities. They hold accounts, made payments, transfer money and merchandise under the instructions of the trader they represented. The Islamic Wakala therefore will be not a bank, but a means to make the Islamic Dinar function as a world currency. Unlike banks, our aim is to keep the gold in the pockets of the people, which is the safest place in the world. The Islamic Wakala will maintain in accounts only whatever is the minimum required to facilitate instant payments accross the world for those who need it. It will not intend to replace the use of the physical currency, but on the contrary it will encourage the use of the physical currency. No lending will be involved. No usury will ever again touch our Dinars and Dirhams. This is the end of the banking system.

Time to remember that Allah says in the Qur'an:
"Allah has permitted trade and has forbidden usury"
(Qur'an, 2, 275)

Al-Bayan
Friday 22 May 1998:


The Mufti of Egypt calls for linking the Islamic economy to gold and silver in order to face the American dollar



Cairo - 'Al Bayan' office 21 May 1998: Dr Nasr Fareed Wasel, the Mufti of Egypt demanded that Arab and Islamic countries reinstate the monetary policy which has historically been practiced and endorsed by Islam and which is based on linking all the monetary and economic transactions to gold and silver, pointing out that this policy will lead to the establishment of a powerful Islamic economy capable of facing up to the international economic blocs. This is so because the policy is based on stable standards, which enable clear definition of the current and future rights and obligations on the local and international levels of transactions.

He also pointed out in the seminar, which was held in the Islamic Charity Association in Cairo, under the title "Financial Transactions and the Monetary Policy in Islam", that paper money, which appeared more than 150 years ago, has caused monetary and financial turbulence which has corrupted international relationships and usurped rights and obligations. He explained that the United States of America is trying to control the world economy by force, without considering other countries' rights. This has led the European countries, through the Common European Market, to establish a monetary policy which can compete with and confront the American domination.

He added that in 1945, during the Bretton Woods Conference, the countries of the world tried to reinstate the standard of gold and silver. The IMF and the World Bank were established at that time in order to supervise and monitor that policy, except that this trial ended in failure, and in 1971 the rules that governed the world monetary policy were scrapped. Consequently, the US dollar broke its last ties to gold and silver, and the price of gold per ounce increased from $35 to more than $800, then declined to around $380.

The Mufti described how that since that time, the US dollar has been ruling international monetary policy through force of arms. As a result, the just rule of recognizing rights and obligations between various countries of the world ceased to apply, and the only option left for them was to reconcile their monetary policies with those of the USA. On the whole this has led to large increases in the average inflation in most countries of the world.

---------End of Article--------

This article is history, because the Arabs had never been exposed to this matters before. Would you imagine if they would demand gold for petrol? You better get ready.

The Islamic Dinars are very soon coming to the US.

Regards,
Umar Vadillo
Islamic Mint and Islamic Wakala

References
�The Islamic Dinar Home Page �Murabitun Home Page �ISLAMIC DEVELOPMENT BANK (IsDB) Banque islamique de d�veloppement
RossL
(10/22/1999; 11:08:18 MDT - Msg ID: 17191)
Masters of the Universe
USAGOLD said:
"Or are these Masters of the Universe so arrogant that they believe they could hold down the price of gold forever?"

Yessir, I believe this statement. Never underestimate the hubris of these people!
Felix the Cat
(10/22/1999; 11:14:05 MDT - Msg ID: 17192)
(No Subject)
http://www.usagold.comFirstly, I want to give apologize to everyone in the forum ---- I' m not good in English. I'm young in age (and also younger than this forum). If someone say that I've not enough knowledge to talk about Gold, I can't agree. Remember that the beginning of the mountains was dust. Okay! Come to our topic,

I cannot totally believe that the POG will up to US$500 within these few months.
Anyone heard that news ---- MAYBE (Just a suggestion right now) the HK Government will setup the Gold warehouse on March in 2000s. As we know that there is a BIG difference between the POG of US (US$302+) and HK (US$390+). In that time (the Gold warehouse of HK is built-up), the POG of Asia should be balanced and more nearly to the POG of US.
Yes, the demands of the physical gold should be increase for that exchanges. BUT don't forget that ---- the leaders of the gold-dippers are Businessmen.
Also, please look at the stock market of HK, the efforts of HWL sold the "Orange" to Mannesmann, the actions of raise capital for business enterprises (Tracker Fund of Hong Kong, etc) and the increase of Euro. Those are counting the money. So,

How to make the POG to THAT level under those pressures?


F. C
YGM
(10/22/1999; 11:32:03 MDT - Msg ID: 17193)
Town Crier & Your Islamic Link---
This excerpt sticks out most prominently--Thanks for adding another piece of the puzzle. Some of us may get an insight as to the finished work by many contributions of the pieces missing from view--------YGM.


Restoration of the Islamic Dinar and the Dirham. The Shariah world-Currency of all Muslim and free of Inflation. One chicken at the time of the Prophet, sall'allahu alayhi wa sallam, cost one dirham today in Istanbul one chicken costs one dirham. 1400 years later the inflation is zero. When people before were free to chose, they universally chose gold and silver. Gold (dinar) and Silver (dirham) are the traditional coins of the Muslims when they were free. The acquisition of this elemental right will eliminate paper-money and will restore gold and silver as universal mediums of exchange.
Gandalf the White
(10/22/1999; 11:37:54 MDT - Msg ID: 17194)
Welcome Fexix the Cat !!!
Thanks for joining us here at the FORUM ! You now provide a look behind the "bamboo curtain" that we at the FORUM have not been able to see before! Yes, HK will soon a gold trading center, BUT that may well have no change of the price of GOLD to the individuals on the STREET ! I understand that the price of GOLD is controled by the Chinese Gov and not the shop holders. Please tell us where one can purchase a Panda and what it would cost in HK ? Also, to whom would one be able to sell a Panda and what is the selling price ? --- SOOOOO many more questions.
Please educate us, young wise one, Felix.
<;-)
Gandalf the White
(10/22/1999; 11:40:00 MDT - Msg ID: 17195)
Felix NOT Fexix !!
Oh -- Only if I could learn to type !
<;-)
Diewarzu
(10/22/1999; 11:53:43 MDT - Msg ID: 17196)
BOE's November Gold Auction?
Would someone please post or email to me (diewarzu@aol.com) the specific date of the next BOE gold auction in November??? I can't seem to find it anywhere. Thanks in advance.
Felix the Cat
(10/22/1999; 12:00:23 MDT - Msg ID: 17197)
Reply to Gandalf
As I know that ---- In HK, ONLY Po Seng Bank does that exchange(If you sell a few coins, needn't any requitement)
And for the selling price, should be later to tell yous because here is midnight ,the banks are closed!

Thanks!

F. C
Gandalf the White
(10/22/1999; 12:30:46 MDT - Msg ID: 17198)
More info please, Felix
You say that the price of say a one ounce Au Panda costs about US$390. in HK at the Po Seng Bank -- and here (USA or Canada) we may buy these same Pandas at shops for say $335 or so. (bullion price + commission)
This means to me that the price of Au in HK is 20% more valuable that here in the USofA !
Can you explain this ?
Felix the Cat
(10/22/1999; 13:06:24 MDT - Msg ID: 17199)
To Gandalf
No,US$390+ is the price of physical gold in HK, not the price of Panda(1 onz). For the price of Panda, sorry I don't know right now. And also cannot explain that --- Why there is a big different between the POG of US and HK.

Anyone else can been ans?

Thanks

F. C
TownCrier
(10/22/1999; 13:10:31 MDT - Msg ID: 17200)
EU Eastward Expansion Will Boost German GDP by 0.4%, Study Says
http://quote.bloomberg.com/pgcgi.cgi?T=markets_newsfeat99.ht=&ptitle=EMU%20Top%20Stories&touch=1&s=bba15bf4989d2be4c89b7c5bea58efe1The rigors of determining an optimum currency zone...evaluating whose participation is beneficial and productive, and who would only be dead weight on the balance sheets.
TownCrier
(10/22/1999; 13:29:55 MDT - Msg ID: 17201)
Reuters' Quarterly Poll of Economists-Dollar's woes to continue into 2000
http://biz.yahoo.com/rf/991022/ql.htmlU.S. economists revised their forecasts sharply lower for the dollar's exchange rates vs. the euro and yen.

One economist said, "The downward momentum is so strong in the dollar, that it will be very hard to change it." Another said, "The dollar had got a relative boost when foreign economies were weak -- and now it's only fair as their economies come back to life that the dollar should suffer."

TownCrier
(10/22/1999; 13:37:21 MDT - Msg ID: 17202)
Reuters' Quarterly Poll of Economists--Large U.S. trade deficit seen growing larger
http://biz.yahoo.com/rf/991022/qg.htmlChristopher Low, chief economist at First Tennessee Capital Markets in New York, gives his view: "We won't see a marked improvement until we have a dramatic slowdown in domestic demand, which would most likely occur in a recessionary environment, which I don't foresee. There's (also) not a whole lot that can happen on the international scene that will change things. ... Unfortunately, the trade deficit is here to stay for the rest of the economic expansion."

You heard him, folks. Let the shopping spree rage on!
Yellin' of troy
(10/22/1999; 13:40:42 MDT - Msg ID: 17203)
exchange money and storage money
I notice in recent posts a tendency to emphasize the store-of-value function of money, especially gold, and to treat the daily-trade exchange function and value as less important, indeed unimportant to the point of hardly real. Boosters of gold are trying to shift attention to its strong point: Gold has ceased to be exchange money but remains storage money, more or less, so you talk up the latter. But you have got it backwards. Mere storage money is the weak, partial version of money, and is especially inept at producing or sustaining the kind of huge price increase that such talk supposedly justifies.

Certainly the ability to store value -- meaning both physical integrity, if necessary, and especially price -- is a useful attribute, and the demand for a good that has it will be greater than it would be otherwise. This storage-demand will be added to the use-demand and exchange-money-demand, if any, and result in a higher price. But then, as in the exchange-money case I discussed earlier, if other people were to cease to regard it as a good store of value, and the storage-demand dropped, so would the price, and it would in fact be not such a good store of value. So storage money is sort of like a longer-term exchange money: You take exchange money today because you believe it will still be exchange money, with about the same price, tomorrow when you want to spend it; you put or hold wealth in storage money today only because you believe it will still be storage money, with about the same price (or higher) a year or 20 years from now when you need it. This means that storage money is vulnerable to the same sort of reverberant doubt and desertion I discussed for exchange money: If the price drop that would result from loss of confidence is too big, the storage function is unstable.

But the instability is far worse for mere storage money than for true (exchange) money. For an important feature of real money is that everyone uses the same: At any time and place there are at most a few kinds of money in circulation, and often, and in some ways ideally, only one. The choice of a money is a collective choice, which you can't do much about on your own. So a true money has few good substitutes, and the cost of doing without is high; so people desert it only when the risk from holding it is even higher. But lots of things are pretty good stores of value, and there is no pressure for uniformity; you can hold gold while he holds real estate and I hold whole wheat. So it is rather easy and cheap to switch from one form of wealth/storage to another. So the relevant comparison is to the risk of the least risky other forms of wealth (complicated on both sides by the possibility of having a diversified portfolio). If increased anxiety has recently driven up the price of gold (as a "safe" store of value) by a factor of ten, then you are risking something like a 90% loss of your wealth if you keep it in gold and other people change their minds, as the reverberance makes it likely they will. Whereas there's nothing near a 90% chance of my wheat spoiling or his real estate being confiscated or totally trashed. At such prices, the balance of risk will be against gold.

Moreover, for basically the same reason (lack of near-monopoly status), there is no hysteresis in storage-money demand as there is in real money. Real money is self-perpetuating -- there is an inertia, a permancence to it. Gold will have a harder time becoming real money than simply increasing in popularity as storage money, but if it ever succeeds, its new status will have a good chance of "latching." If gold becomes real money in some crisis, then when the crisis is over, gold may very well still be money, as hard to dislodge as the dollar is now. But if all that happens is that people in a panic during a crisis run to gold as a store of wealth, then when the crisis is over, the anxieties relieved, that demand will vanish and the price will return to something like its pre-crisis level, probably even lower since the spike may cause some long-lasting changes on the supply side. This easy reversibility of the whole process means that if you buy or hold gold at the crisis price, you face not just a possibility of losing much of its value if other people change their minds, but a practical certainty that they will and you will. The only question is when. The price isn't going to hold out till normalcy returns, either: Other people can foresee the drop, too, and will try to sell ahead of it, and when everyone wants to sell before everyone else, that drop could come almost any time, even during a continuing crisis. Moreover, at the same time gold is overpriced, all sorts of other things will be amazingly cheap, as distressed owners need to sell or panic too much. It will be possible to buy real wealth -- cars, houses, factories and shops; yes, even shares of stock in them -- for pennies on the dollar or grams on the ounce of gold. "The time to buy is when the blood is running in the streets." All the more reason to trade out of gold in the middle of the crisis; all the more reason to worry that the POG may plunge any day.

In such conditions, gold will still be insurance: If you ever need to bribe some inspector or commissar or corporal, gold is great, and if you need to run for your life with only what you can carry, gold is pretty good (though maybe not so good as diamonds). But as a long-term store of wealth, it will be hopeless. Gold will be a very short term decision, something you rejudge every day against the different risks of other tactics. It won't get you safely to next year, just to tomorrow. But for that purpose, exchange money is usually excellent, since that self-perpetuating quality makes it really very likely it will still be money tomorrow (at least in your currency zone), and without very much loss in value (unless it is being grossly mismanaged). Moreover, exchange money is what you use all the time, so you automatically pick up lots of information about it, like how fast it is depreciating. Whereas keeping up on gold and its prospects is something you will have to do specially and expensively (especially during a crisis). Security it's not. Peace of mind it's not. It's hardly storage money at all, more like a specialized asset.

Gold is a cyclical investment. It's a great way to get safely from a giddily euphoric pre-crisis era (like now) into the crisis. As a lifetime reflex, it sucks. You can't eat your gold; its use is that you can trade it for other things when you want to. So its main attribute, practically its only important one (apart from physical durability), is its price. Buy it when it's cheap, sell when it's dear. (Except a little.)

I am assuming, of course, that the crisis will end. If you think modern civilization is dying, if you expect the 21st century to be a Second Hundred Years War, then put everything you can into gold and guns and political influence. Assuming you would want to go on living in the New Dark Ages. I wouldn't. There is also a serious chance that people will come out of the crisis with a permanently darker vision of the world, a permanently higher worry level, and a permanently higher POG. But still nothing like its crisis (or predicted) peak, so the argument above will still go through. And there is at least as much chance that we will come out on the other end of the crisis into a spirit of immense confidence and put our wealth into a can-do building of the next stage of Progress. That's what Americans have usually done.
TownCrier
(10/22/1999; 14:14:57 MDT - Msg ID: 17204)
FOCUS- Schwab's Web site down for third day in a row
http://biz.yahoo.com/rf/991022/u9.htmlReuters report says "Online brokerages this year have suffered outages in part because of the immense popularity of Internet stock trading."
By an extension of logic, the Stock Market itself must be due for an "outage" due to its immense popularity, too, eh?
Reuters goes on to explain that the brokerage web sites are particularly vulnerable to crashing when investors flood them with orders, notably at the start of the day's trade.

Just imagine everyone heading for the door at once. The higher it climbs, the easier it is to spook the herd.
TownCrier
(10/22/1999; 15:33:03 MDT - Msg ID: 17205)
Hear ye! Hear ye! We have a true marksman among us! A *>>BULLSEYE<<*!!
The previously unknown target's mark was revealed as the last slip of COMEX trading paper wafted gently toward the floor...December gold futures last settled a contract at $303.30. One arrow was found to be the envy of all others, firmly in the clout. View for yourself the three arrows that flew the truest flight.

el St.One (10/17/99; 15:09) >>>>>-----303.30------>>>>

diston5 (10/17/99; 19:40 ) >>--------$304.00----------+>>>

Goldiehawk (10/17/99; 18:45) ==========305.60========>>>>>>

As it was promised, "A French 20 franc (Rooster) gold coin goes to the marksman placing his arrow closest to the December COMEX gold futures contract closing price on Friday, October 22, a silver Eagle goes to each of the next two closest," so it shall be...courtesy of Centennial Precious Metals / USAGOLD (Thanks MK!)

Congratulations to Sir el St.One! Might he perchance tell us what we may expect for the price of the "trader's gold" one week hence? And what of "street gold?" Might it yet be found to fill our pockets?

Congratulations also to Sirs diston5 and Goldiehawk. We value your predictions, too!

Thanks to all who participate in the Castle's Autumn Games. We enjoyed your participation, and hope you will answer any future call to revel again in this realm of gold!
Chicken man
(10/22/1999; 15:34:41 MDT - Msg ID: 17206)
Yellin of troy - that was quite a yell...!
Great post...! a little greanspeakish,but the points are true.....like the "sell when dear" part....of coarce that is true of any class of assets one owns in the walk through life......could tell you of a good case of NOT "selling when dear" when the chicken man fed cattle on the farm in the '70s....road 350 head of holstein steers from .80 to mid .50 and had to buy feed to boot...! did not recognize the "when dear" part of the cattle cycle.....cost me a bunch....!

The part about the use of money...we all have to admit that we pay our taxes in paper(or electronic)....we pay our morgage with the same stuff....and ALL of our daily and monthly bills with it.....so unless the gov collapses totally (even in Russia you can pay with rubles) we all need legal tender...we "want" gold but we "need" legal tender..!
My main concern is the ever increasing supply of the greenbacks(a la Germany from 1918-23)...at that moment holding gold as asset would be nice...it was for Amchell Rothchild...eh?
Looking foward to your next post..!
Tanglewild
(10/22/1999; 15:43:24 MDT - Msg ID: 17207)
tnt
I would think things could get hoppin and poppin in november with the expiration of dec options and also the proposed gold auction with the bank of england which could very well be oversubscribed bigtime.(i dont think they have announced the date yet) as well as further adjusting of hedge/bb/mines accounts. gonna be mighty interesting the next few weeks. any thoughts?
tw
CoBra(too)
(10/22/1999; 16:26:31 MDT - Msg ID: 17208)
Nw legislation appeals Glass-Steagall Act!
Glass-Steagall Act, implemented 1933 at the height of the banking crisis drew a line between commercial banks, securities firms and insurance co's, in the aftermath of the 1929 crash and the ensuing depression. It also allowed the newly formed SEC to enforce strict rules on the securities business, which Arthur Levitt already deplored.

This strikes me as being particular ironic in its timing at the height of a debt and stock market bubble not seen since the heady days of the 20's.
Aside from irony, its rather scary witnessing even Rep. Jim Leach being (Senate Banking Committee) overjoyed at this breakthrough. The only breaktrough I would envision is for the PPT and the market manipulators have now the legislative blessing to go on doing exactly that, without the burdensome watchdogs of SEC, CFTC and Anti Trust Admin. The FED and Tsy, who have been the driving forces behind this scheme (scam)are now openly siding with the crony capitalists casino mentality - and only to prolong a doomed system, stumbling from one more severe systemic risk to the next.

If I would have needed another clue to avoid Wall Street more than the plague, now I've got that too.

Physical gold, unhedged producers and something similar to YGM's (BTW:Hi, havn't talked to you for some time!) alluvial deposits is where I'm going to weather the coming tempests.
Best CB2
CoBra(too)
(10/22/1999; 16:43:18 MDT - Msg ID: 17209)
should have read: New legislation "repeals" Glass-Steagall ...
Sorry it's not so much the bloody foreigners than the bloody typing!
Thank you CB2
phaedrus
(10/22/1999; 16:57:14 MDT - Msg ID: 17210)
@Felix the cat regarding $390 Hong Kong gold
Felix: You aresaying that the spot price of gold in Hong Kong is US $390. With all due respect, I don't see how this is possible. Here is why:

Because if it were true, arbitrage traders would be buying spot gold in USA or London at $300, selling it at exactly the same time in Hong Kong for $390, and walking away with a risk-free $90 per ounce in their pocket.

It is literally impossible for such a wide spread to occur in any globally traded commodity, due to the constant action of arbitrage traders. In fact, arbitrage- the practice of buying and selling equal quantities of a good at the same time in different markets to make a risk free proft- can be so intense and competitive that discrepancies as small as a tenth of cent can be pounced on when potential volume of product is great enough.

Clarification on the Hong Kong price would be appreciated.
YGM
(10/22/1999; 17:05:38 MDT - Msg ID: 17211)
CavanMan, Leigh --- Yes we "ALL" must be vigilant.
This is for you.- As we've seen what the 'Head' of the beast is capable of in Politics and Finances- We must not forget that he "IS" capable of this-------(history repeats?)
.............................................................................................




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


"By virtue of the authority vested in me by Section�5(B) of the Act of Oct.�6, 1917, as amended by Section 2 of the Act of March�9, 1933, entitled "An Act to Provide Relief In the Existing National Emergency in Banking, and For Other Purposes", in which amendatory Act Congress declared that a serious emergency exists, I, Franklin D. Roosevelt, President of the United States of America, do declare that said national emergency still continues to exist and pursuant to said section do hereby prohibit the hoarding of gold coins, gold bullion, and gold certificates within the continental United States by individuals, partnerships, association and corporations...

All persons are hereby required to deliver on or before May�1, 1933, to a Federal reserve bank or branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion and gold certificates now owned by them or coming into their ownership on or before April�28, 1933, except the following:

(b) Gold coin and gold certificates in an amount not exceeding in the aggregate $100.00 belonging to any one person; and gold coins having a recognized special value to collectors of rare and unusual coins...

Section 9. Whoever willfully violates any provision of this Executive Order or of these regulations or of any rule, regulations, or license issued thereunder may be fined not more than $10,000, or, if a natural person, may be imprisoned for not more than ten years, or both; and any officer, director, or agency of any corporation who knowingly participates in any such violation may be punished by a like fine, imprisonment, or both.

FRANKLIN D. ROOSEVELT
THE WHITE HOUSE
April 5, 1933"


****Excerp from Don McAlvany article-- 'A Better Way To Own Gold.' Thanks Don, you had the Gold scam nailed down (among other things) long ago.
YGM
(10/22/1999; 17:19:38 MDT - Msg ID: 17212)
CoBra(too)
yukongold@yknet.yk.caHello; yes it's been some while since we talked. My curiosity is perked now and I'd like to hear about your placer venture. I'm currently seriously reviewing all I have learned of (off N. A. continent) remote placers in S.Amer & Africa, with an eye to the future. Nationalization and Socialistic tendencies of Canadian Gov't scare me if Au moves above $800.00 - $1,000.00 p/oz mark. Write if you have time. Regards--YGM.
Chicken man
(10/22/1999; 17:39:44 MDT - Msg ID: 17213)
phaedrus - a bad leg of the arbitrage....
I think felix is right.....you are selling the gold to the mainland....they are paying with remimbi (yaun ? ) and you have to sell this curriency for dollars to complete the arbitrage.....it costs you to get out of the yuan leg of the deal.....their curriency is not redeemable out side their border......
About the macdaddy...you are right about more profit making moves in T-bonds (look for new contract highs in bonds.....!) .......but any kind of move in the Eurodollar would cause a lot of damage due to its size.......a 5% move would be equal to 200+ BIL...wereas the whloe comex gold market is worth 5 bil......see what I'm trying to get at...?
Leigh
(10/22/1999; 17:47:27 MDT - Msg ID: 17214)
YGM
Hi, YGM. I can see Clinton or Gore BELIEVING they can sign an Executive Order and voila! the American people line up to turn in their gold. It won't work. People aren't as guillible as they were back in the Thirties, especially after FDR's nasty trick of revaluing gold higher after the confiscation was over. I think the government would look idiotic trying to go after gold owners. What are they going to do -- bulldoze your back yard looking for five or ten ounces? How would they know if you still had it? Maybe you bartered it away or bought Euros with it.

Hopefully Another and FOA will be right, and gold owners will be honored and sought after because holding Euros will be frowned on. Plus, if all our gold goes underground (literally!) to avoid a confiscation, the government will lose the chance to collect lots and lots of taxes.

I don't know...a rational person would think this, but Clinton isn't exactly rational. Does anyone think he's losing his mind, after that awful press conference of last week and his lonely golf game on a rainy night this week?
Tomcat
(10/22/1999; 18:38:15 MDT - Msg ID: 17215)
Liegh:Confiscation

Hello Liegh. I found you last post on confiscation interesting.

Leigh, I don't think the government needs to come looking for gold. The government can either tax sales and transactions that occur with gold or make gold sales and transactions illegal. The minute you suggested to someone that you want to exchange your gold for something you would be wondering if the person with whom you are bargaining can be trusted.

If the government wants to make gold unpleasant they can do it. My opinion is that the chances of this happening for gold is much higher than for silver. This would only occur if times got pretty rough but one of the reasons I hold gold and silver is because times could, IMO, get rough. Gold is a very political asset. I hope FOA is right about gold competing with euros.
CoBra(too)
(10/22/1999; 18:46:33 MDT - Msg ID: 17216)
-Re David Cohens "Gold Market as a Metaphor for America"
@ Leigh -Hilarious, can't wait for part II. -Ferraris on patched wheels - coincidence, Ferraris bent rules only a centimeter at latest Formula One World Championship Race in Malaysia - verdict tomorrow 11a.m Paris Time! - who is bending the rules by miles on the worlds biggest casino and suppressing the "weight watchers international" - POG!

Still can't come to terms with a US congressional panel agreeing on a bill for banks, securities firms and insurers to merge and sell each others products! A wave of takeovers
is to be expected (Citigroup spokesperson) - a wave of nausea is hitting me (CB2). Let's unite the USSR of A into one company and incorporate the same in the Virgin(ia) Islands. Most of the hedge funds are already there, happily expecting to meet up with their friendly and amalgamated counterparty.

@ YGM - will respond soonest - time for finaal nightcap - cheers!
Regards to all and have a great wekend CB2



megatron
(10/22/1999; 18:52:09 MDT - Msg ID: 17217)
YGM
Yes,certainly the Canadian gov't ultra-socialist bent is scary enough for gold holders, but what about the people dumb enough to think they'll only pay 40% taxes on their RRSP when they cash in? Does anyone actually believe this?
They will be cleaned out by hook or by 'crook'.
Leigh
(10/22/1999; 19:00:12 MDT - Msg ID: 17218)
Tomcat
Yes, I agree they can forbid the use of gold, but what good would that do? Wouldn't their end objective be to get their hands on it?

But remember what FOA said, the Gold Eagle program started to try to get gold into the hands of the American public. If I remember FOA correctly, he said the government knew what was coming down the road (fiat currency failing, I guess). (FOA, please correct me if I'm wrong.)

Besides, people smart enough to buy gold aren't going to let a tyrannical law prevent them from using what is rightfully theirs. I'll bet a HUGE black market in gold will develop.
YGM
(10/22/1999; 19:06:26 MDT - Msg ID: 17219)
Leigh & Tomcat
Hi; Hope you're right. I have strong roots and family ties in the great US of A. Maybe he'll just appeal to the unmatchable patriotism of your citizens at some point. No I also don't think they'll go digging but this N.W.O. and "his" capabilities do provoke paranoid thoughts. Being geographically far removed doesn't improve my view of the future either. I guess as we share the troubles today we'll share the future tommorrow.-- Regards-YGM.

GO GATA & GO Physical & I'm Goin for a Beer.
Leigh
(10/22/1999; 19:14:48 MDT - Msg ID: 17220)
Tomcat
Sorry to belabor the point, but just in case you're interested, I went back and found where FOA was talking about outlawing gold:

FOA 9/26/99 #14424

"The trading and owning of 'street gold' by the US public will be encouraged, not outlawed. Any demand that raises the gold price further will be welcomed as a "new concept" to save a contracting economy. This was the real reason the Gold Eagle program was started in the first place! Political bases covered when the time comes."

(There's a lot more interesting information in that post.) Hope FOA's right!
Tomcat
(10/22/1999; 19:31:35 MDT - Msg ID: 17221)
Leigh

Hi Leigh, you asked. "Yes, I agree they can forbid the use of gold, but what good would that do? Wouldn't their end objective be to get their hands on it?

Good question. Unlike some other countries, 90% of folks here in the US obey a respect the law and authority. Thus, I would expect that 90% of the gold would be turned in. I also think 70-80% of the guns would be turned in as well if the laws demanded it. Trouble is, the 20-30% of the remaining guns are a lot of guns and could cause many an official to take care. Not so for gold; if the government got 90% of it then they would be delighted.

I have been in several situations that were a bit dangerous. I was shocked to see people around me fall apart. It made me wonder about how tough inexperienced folks can be. In times of trouble, most folks don't run from the law; they run to it!

BTW, I don't think any of youd points are belabored. I enjoy your posts. They have refreshing sense of spontaniety.
Leigh
(10/22/1999; 19:36:24 MDT - Msg ID: 17222)
Tomcat
Yeah, but I think most of us gold owners are rebels! We're not sweet trusting little sheeples!
TownCrier
(10/22/1999; 19:39:03 MDT - Msg ID: 17223)
After the Close: the GOLDEN VIEW from The Tower
With less than ten weeks until the proving ground of the Grand Uncertainty (a.k.a. Y2K), the stock market investors remind the eyes in this here Tower of a school of fish or flock of small birds. They all dash in one direction, only to turn on a dime and head the other way with equal haste for no apparent reason. For quite awhile now, the DOW has been making big movements back and forth, but not really getting anywhere, meanwhile the market internals continue to degrade, and anyone would likely agree that the DOW has far more reason to fall than to climb an equal percentage higher. On this seemingly good day that saw the Dow Jones 30 Industrial Average finish up 172 point, with advancers outnumbering decliners by 2 to 1, on the extreme ends (where the true story is often revealed,) there were 225 issues reaching new 52-week lows while only 53 were propelled to new highs.
+
Charles Payne, president and chief analyst at Wall Street Strategies is quoted by The Street.com with this revealing notion: "we've been in a bear market if you're in the wrong stocks. Last year there were more losers than winners, this year it's a lot more." But then he stands on his own brain and this comes out of his mouth: "It's tough to say we hit a bottom but the beauty is there is still so much money on the sidelines that can come in." Anybody who's anybody knows there is no money *IN* the stock market, and therefore, it is ALL always on the sidelines (except for the stuff in limbo as a stock order is being cleared.) Market capitalization is the dollar value acheived by multiplying the market price of the most recent share traded times the total shares outstanding for each company.
+
If you buy stock, your money is not "in" your shares, but is instead in the share seller's pocket...to do with as he pleases, such as buying gold, bread, or a new car. Investors who have come to view their stock portfolio as a superior substitute for savings may one day wake up homeless, their only shelter from the cold and rain being a newspaper with a startling headline and articles explaining the concept of liquidity. It was only a week or so ago that a trader said it was getting very difficult to execute large block trades. When will these fish turn downward again? Just give it an instant in time. When confronted with others' notions of a new bottom being in place with last week's fall of the DOW, John Bollinger, president of Bollinger Capital said, "I don't buy it. The function of a rally in a bearish environment to convince as many people as possible. My forecast is for volatility though I believe it will have a downside bias due to a hostile monetary environment."

Well, John, whatever those hostilities may truly be, there was no hostility to be found in the Fed's "love in" today, in which they said send us your tired, your poor, your downtrodden, and we'll send you cash. Well...not quite that. The Fed said that effective immediately it would accept as collateral at its discount window: investment-grade rated certificates of deposit and deposit notes, investment-grade commercial paper, triple A-rated collateralized bond and loan obligations, and triple-A rated mortgage-backed securities. But in an attempt to signal that this was not a necessary reaction to Y2K liquidity concerns, the Fed was quick to point out that they will be taking this junk on a permanent basis as opposed to their earlier measures to relax collateral requirements for its daily system repo operations which are designed simply to span the end of the year, ending in April. Sure...whatever you say, we'll smile and nod. Bond traders weren't sure at first what to do with that news, and in the end the Bellwether Bond finished up 2/32 in price, the yield relaxing slightly to 6.350% which is still near two-year highs.

Currency traders continue to say with unified voice that the fate of the dollar is one and the same with the fate of the DOW. For example, "Just close your eyes and follow the Dow," was uttered today by Lou Milonni, senior trader at Asahi Bank. "People were loading up on euro/dollar as if it were running out of style Thursday, while today they couldn't drop it any faster." See? Like a school of fish or flock of small birds...turning on a dime for no apparent reason. Something so fickle is no sign of strength, The Tower assures you. The dollar closed equivalent to �105.77, up 0.16 yen, while the euro closed equivalent to $1.0684, down 1.16 cents.

Let's turn to Bridge for the thoughts of derivative traders who successfully engineered a full week of consecutive days in which they brought the price of the December contract down by two dollars a day, plus or minus some pocket change. After the spike up on market fundamentals, (fundamentally DIFFERENT, that is) it is reassuring to see that they can't bring about a corresponding paper spike down.

NY Precious Metals Review: Dec gold dn $2.2;hit fresh 3-wk low
By Melanie Lovatt, Bridge News
New York--Oct 22--COMEX Dec gold futures settled down $2.20 at $303.30
per ounce after just managing to edge below Thursday's $302.20 low to slip
to a fresh 3-week low of $302.10. However, action was mostly sideways and
volume was thin amid subdued conditions, traders said.
Traders noted that gold saw a small uptick at the end of the session,
primarily on short-covering by locals ahead of the weekend. "It held the
magical $302 area, but it's not bouncing much," noted one broker.

"There was a decent climb on the close, but it was just profit taking
on local short positions that had been pressing the market down all day
long," said David Meger, senior metals analyst at Alaron Trading, noting
that overall it was "another snoozer."
He sees support at the $298-302 zone, although others are expecting a
test of $295. "There's light trade volume and gold's still suffering from
technical pressure. There has been little fundamental news and as of late,
it's continuing a slow fade to the downside," said Meger.

In the news, the Kuwaiti government said that it is to lend 79
tonnes--all its officially reported gold holdings--into the market.
Market sources were not surprised, given the recently high lease
rates. Gold 1-month lease rates have slipped over the last week as more
lending has trickled into the market to take advantage of the higher lease
rates. They were at 1.50% today, down from 1.75% Thursday, 2.25% Wednesday
and 3% at the beginning of the week.

[Our table of today's gold lease rates through 1 year ...]
1-month 1.8600%
2-month 2.0675%
3-month 3.1180%
6-month 3.1800%
12-mnth 3.2860%

Traders said that the market would continue to watch the Ashanti
situation.
There is still concern over the fate of the London-listed Ghana gold
mining although this week it renewed its short-term standstill arrangement
with its hedging counterparties as merger talks with Lonmin continued.

After the recent sharp spike in gold prices, Ashanti has been liable
for margin calls from its hedge program. If it can't work out its problems
and has to face margin calls, it could cause a domino effect, sending gold
prices higher as banks scramble to cover any exposure, a trader said.

Nevertheless, the lower gold price this week has provided some relief
for the company, said Bill O'Neill, analyst at Merrill Lynch. "It's been
good for Ashanti it takes a bit of pressure off them," he said.
***
(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN.
---
The commitment of traders was announced as of Oct 19 , 1999 (and changes from Oct 12.) As you can see, the position of the speculators remains net short, and even more interesting is the relative absence of chance in position. The comercials have a much larger stake, but are fairly evenly divided between long and short, also with little change in position from the previous week. Like deer in the headlights, as we once said many weeks ago on a different matter.
non-commercial____Long___(Change)___Short___(Change)
long or short only___35,601__(-121)____52,897___(174)

In the following table of COMEX gold futures Open Interest yesterday, notice how there was a net closing of 1,345 December contracts. This happened as 1,345 existing shorts and 1,345 existing longs effectively squared their positions against each other. In the meanwhile, COMEX futures volume stats reveal that a total of 35,071 of these December contracts were traded...and we can see it was into mostly newcomers' hands. Basically, the name of the contract holder was simply changed on most of these as the postion was sold to someone new--otherwise, open interest would have changed.
+
About as clear as mud, huh? Anyway, the point The Tower is trying to impress upon you is that yesterday's December contract price change of $1.80 had nothing to do with longs exiting or new shorts or whatever. It had everything to do with the sell-side of these paper contracts showing up at the trading counter more earnestly than the buy-side. The price of the contract is set on supply and demand among the buying and selling sides of the contract. You can also look at the changes in price as similar to a bookie changing the point spread on a football game to entice more betters for one team or another to keep his books even. Gold is not being sold here (and neither are football teams), but for the present time, the price quoted on physical gold (spot price) takes its cue from the going "point spread" established on the derivatives (gold futures) market. While supplies last, "street gold" can be gotten at the "trader's price" of $301.20 (plus premium) as last quoted in New York today.
+
Contract__Open-interest . . (Change)
October________111 . . . . (down 2)
November_______14 . . . . . (unchanged)
December______114,178 . (down 1345)
total thru 6/04__219,926 . (down 574)

COMEX must be gearing up for the day of reckoning...the honoring of contracts that called for physical rather than cash settlement. After two days of sizable gold withdrawals from Registered inventory, today we see 22,702 ounce deposited among the Eligible inventory. Total Eligible stock now stands at 109,106 ounces while Registered stock totals 773,721 ounces.

October contract delivery intentions total 2,514 so far for the month. Final notice day is October 28.

Positive statements from OPEC countries of possibly extending oil output cuts beyond March 2000 was cited along with strong technicals as the reason behind todays 84c surge in the December crude contract, which settled at $23.45.
Regarding the supportive OPEC news, it's nice to see Venezuela has (at least temporarily) dropped its nonsense about establishing a price band, and they joined Kuwait as the latest fresh voice to weigh in on the possibiliity of an extention to the production cuts--under which it had been agreed earlier this year by OPEC and certain other major non-OPEC oil producers to reduce world supply by approx 5 million barrels per day. Venezuela's deputy energy and mines minister, Alvaro Silva Calderon said it could be extended past the Mar 31 deadline "if necessary," and says that there have been no indications as a result of the cuts that OPEC countries have lost market share to other producers. He also gave assurances that Venezuela is fully complying with its output cut pledge, and that the level of compliance among the other producers is above 90%. Elsewhere today, a senior Kuwait oil official said that Kuwait would support an extension of production cuts beyond March 31 if such a move were necessary because the curbs would facilitate stabilization of the oil markets and promote a "fair oil revenue." Hopefully you've already read yesterday's GOLDEN VIEW for more on that account.

And that's the view from here...after the close.
Leigh
(10/22/1999; 19:46:13 MDT - Msg ID: 17224)
TownCrier
TownCrier: That was one of the BEST "After the Close" Reports you've ever done! I loved the sentence about the investor sleeping with a newspaper over his head!
TownCrier
(10/22/1999; 19:48:20 MDT - Msg ID: 17225)
U.S. Treasury Bonds Have Fourth Losing Week on Inflation, Rate Concerns
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=blk&bt=blk&s=4118382c74343f7fb80c2b6ff41965efAND foreign disinvestment (or disinterest at least)? Supply, supply, supply...
TownCrier
(10/22/1999; 19:53:54 MDT - Msg ID: 17226)
Thanks Lady Leigh. Wish I could type 'em as fast as you apparently can read 'em!
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=blk&bt=blk&s=72c7dbf9bd92920650fc9fe4dcb25736HEADLINE: Nasdaq, NYSE to Extend Hours of Trade Reporting, Quote Systems Next Week

Building the perfect beast.
(A larger one, at the very least!)
TownCrier
(10/22/1999; 20:02:32 MDT - Msg ID: 17227)
Eye candy for the pleasure of all knights assembled here this evening
http://www.austrian-mint.com/e/gold.htmMK and the rest of the Castle (Centennial Precious Metals) has a good relationship with the fine folks that made this incredible vision.

This TownCrier's own savings of bullion and pre-'33's only looks that impressive if viewed through binoculars. The Tower is working on it, with more carts on the way.
Cavan Man
(10/22/1999; 20:48:20 MDT - Msg ID: 17228)
Yellin': History & Current Events
Hello and welcome to this fine forum of intellect myself not included. From my perspective, there are many reasons to buy gold the least of which is the thread worn so well here by our good friend FOA and supporting cast of characters.

One simply cannot postulate and theorize about the value of gold in a vacuum. Your posts are certainly well conceived. However, you make no accounting for the loss of value in the good old dollar since WWII. If you do not embrace the history of the dollar as reality, you practice the art of self deception. The fact is and history has shown us that all fiat currencies eventually fail; call it "product life cycle" if you will. The dollar cannot defy the odds indefinitely and certainly will not evolve into a new paradigm. History can show us the future believe it or not.

Moving ahead; consider current international economic and monetary events. Clearly, the Euro block is moving away from the US$. Facts are facts madame.

The oldest money in this world is moving in the opposite direction of your Thoughts. I hope you reconsider.

Kindly.....CM

Moving ahead
Tanglewild
(10/22/1999; 21:03:13 MDT - Msg ID: 17229)
Towncrier: An echo
And the echo said...TOWNCRIER, YOU ARE VERY MUCH APPRECIATED BY ALL. THANK YOU!
Black Blade
(10/22/1999; 21:36:37 MDT - Msg ID: 17230)
Leigh and Tomcat
Even if confiscation were to occur or a requirement that the sheeple hand over their gold to some authoritarian regime, it would do nothing but create a new class of criminal, much like what we find in the failed "War on Drugs". Goldbugs and holders of gold would simply go "underground" into a blackmarket economy. In fact, physical gold may become even more valuable. The authoritarians can't win the "War on Drugs", why would anyone think that they could win a "War on Gold"? I think that Leigh is right, that the sheeple were "more" gullible in the 1930's, though that doesn't say much for the sheeple of today. In the 1930's the sheeple were suckered into false notions of "patriotism" and "for the good of the country" and other worthless notions, while the government stole their future and the future of succeeding generations. If anything, confiscation schemes would only result in the creation of a new market, a "black market", the only market consistent with freedom loving people, also known as the "Free Market". Ronald Reagan stated that "you can not beat the free market", that is an admission that control of illicit markets (such as the drug trade) is doomed to utter failure.
Gold confiscation would result only in a greater value attributed to gold much like the "risk value" factor attributed to the price of illicit drugs. Gold confiscation a real problem? I think not!
Black Blade
(10/22/1999; 21:43:36 MDT - Msg ID: 17231)
Tomcat
I should have also stated that you were quite right with regards to silver as an alternative holding. We do note of course that silver was exempt from the confication scheme put into place by the totalitarians in the 1930's. Good point!
diston5
(10/22/1999; 21:48:54 MDT - Msg ID: 17232)
Thank you very much, TownCrier, USAGold, MK,
for the great honor of 2nd place in the most recent contest. My arrow must have been guided by some inspiration. Some "2nd-rate" comments on POG: it still looks like we're in a bullish pennant formation, with next target around $400. The steady dollar-or-two daily decline is actually very bullish, implying exhaustion of sellers and orderly retreat by us noble defenders of Au. It is not impossible for POG to first sag below $300, but I almost can't see it staying below $390 by year-end. Another pennant should follow around $400 in early '00, and then ?!?!?
Scrappy
(10/22/1999; 21:52:21 MDT - Msg ID: 17233)
Anyone-re. silver ;
also, purchase of goldmine stocks Has anyone figured out if that rumour re: Blll gates buying all that silver was true? If so, why would he buy so much silver, and not gold?

Also, I was reading an old post of FOAs', 9/26/99, (thank you, Leigh), and he said that at some point during this bull run on gold, one would want to sell some of their physical and buy stock in a goldmine that had survived the 'work-out' period. Wouldn't now be a good time to buy stock in a mine like, say goldfields or harmony, that we know are clear of short covering? Did I misunderstand? So far, I've only heard 'buy physical', and was wondering why others were still playing with paper. Forgive my ignorance. Thank you.
Number Six
(10/22/1999; 22:05:46 MDT - Msg ID: 17234)
Rumours of rumours :) .... an AuPEC Cartel???
I'm sure we have all heard thse rumours - I would have thought the Denver GM Conference would have given the "players' plenty of face to face skullduggery-time...

Hmmm... let's see, what is due to happen next Wednesday :)

I wonder if we'll get another "announcement" over this weekend??? :)

Fingers crossed...

P.S.

PH in LA!!!

You da man!

Jail would be too good for the thieving B*******!

As you said, things are hotting up and the really Big Boys may have planned all this... what better way to force the POG up quickly and explosively (to strike a fatal blow to the shorts and Co.) than to encourage, albeit indirectly, the formation of an AuPEC (tm) like cartel :)

Thoughts?

============================================================



Several rumors have emerged in recent days that a new international gold cartel is close to announcing their formation. It would attempt to limit future gold production among its members (similar to OPEC) to counter the manipulations of the central banks. It is said to be made up of non-US gold producers lead by South Africa's Goldfields, and Anglogold (two of the world's largest producers). This announcement would
potentially re-ignite the powerful rally that we had already seen as the direct result of other
announcements. I suspect that if it is true, a good time for their announcement is NOW, as today's expiration of options on the futures has driven prices down. This would support the initial shock of forcing newly re-established shorts to run for cover.

Mitch Harris
MARKET TREND REALITIES, Reality Check Update
Black Blade
(10/22/1999; 22:14:38 MDT - Msg ID: 17235)
Srappy and Mr. Gates
Bill Gates bought 10.3% of Pan American Silver (PAAS) for approximately $16.5 milion through his holding company. He has joined other noted billionaires in acquiring PM's. Is this for Y2K related reasons? He joins George Soros who has a large position in Apex Silver (SIL), and Warren Buffet who had bought in excess of 130 million oz silver. As far as selling physical to by stock, I would only ask why? Physical is the ultimate portfolio insurance, and stock in PM's is to take advantage of leverage should the price of PM's rise. I hold both physical and stock, but the advantage of each has to do with fundamentally different reasons. Physical is in my portfolio should there be a need for barter or a collapse of the economic system as we know it, and yes, even for a possible investment gain. Whereas stock is for speculation and investments purposes only. If you have physical then why sell? If you wish to play the "game", use any extra cash to accumulate a few shares of good solid mining companies. There are several out there, but be careful, there are also scams. Remember Bre-X? Delgratia? Golden Rule? etc. There are several good companies such as Harmony (HGMCY), Agnico-Eagle (AEM), Stillwater (SWC), Franco-Nevada (TSE-FN), Placer Dome Gold (PDG), Apex Silver (SIL), etc. just to name a few. Buit personally I would not sell physical to acquire stock. I can't tell you what is a good investment for you, but do a little homework and determine your risk tolerance. Good luck!
Scrappy
(10/22/1999; 22:34:06 MDT - Msg ID: 17236)
Black Blade
You are 'gold'!
Thank you once again, sir. Fortunately, (or not), my tiny nest egg is just that-can't afford to even think about stocks, But I was curious, as I do have a buddy that plays in the markets. Thank you for that advice as well, (was that yesterday or the day before?) I am resting easier, knowing that he picked a good company, (harmony), based on my sudden excitement with gold, (I get buggier and buggier every day.
What do you people DO with these darn antennae? They keep getting in my eyes!)
Thanks again, you are contributing to the education of scrappy in a big way!
Black Blade
(10/22/1999; 22:37:46 MDT - Msg ID: 17237)
Number six
I like your handle! Would this be in reference the "The Prisoner" starring Patrick McGohan(?) in the late sixties series? As far as a Au cartel, I'll believe it when it happens. It would be an interesting idea though. Debeers has the diamond cartel, OPEC has the oil cartel, why not GOPEC (Gold Producing and Exporting Countries)? Aside from it being illegal in the US, it could come to fruition if based offshore and a few major players went along. I think that there is enough opposition, including producers, to stop any such cartel from forming.
Chris Powell
(10/22/1999; 22:45:23 MDT - Msg ID: 17238)
Calm before new storm in gold
http://www.egroups.com/group/gata/264.html?An exchange at GATA.
Black Blade
(10/22/1999; 22:48:14 MDT - Msg ID: 17239)
Scrappy.....hold on to your antennae!
It is true that large stock purchases are generally for those who can afford to by blocks of stock (100 shares or more), but for the "small" or "beginning" investor, there are other possibilites. There are diversified PM funds such as Midas Fund (MIDSX), Lexington Goldfund, etc., Lexington also has a Silver fund, Lexington Strategic Silver (STSLX) which just dropped it's requirement for a load. Also one could accumulate shares of a few Au companies through a DSP or DRIP at minimal cost (like making your own PM mutual fund if you like). Just a thought if you were interested though.
As far as the antennae are concerned, I found that a little bees wax from the shoe store allows me to slick mine back fairly well ;-)
Number Six
(10/22/1999; 23:03:55 MDT - Msg ID: 17240)
AuPEC/GOPEC
Hi Black Blade,

I can see you are a person of taste, yes, The Prisoner from the 1960's with Patrick McGoohan being "Number Six" incarcerated in "The Village" - I am also a big fan of Lotus cars and used to race Caterham/Lotus Sevens back in Blighty :)

With Physical being in negative supply I would have thought a controlled cut-back by even a select few major mines would have an impact - at any rate It's about time miners fought back to protect their industry from the "leaches"...

These rumours do persist - no smoke without fire?

I believe that those "in the know" are accumulating at these firesale prices - I also believe y2k will be the catalyst for a springboard for the POG - i.e. now or never, moves to be played now by the Big Boys,as they may not be able to move so assuredly after y2k if banking and market infrastructures break down or are degraded...

We live in interesting times :)
Black Blade
(10/22/1999; 23:04:09 MDT - Msg ID: 17241)
C. Powell and Kaplan
I too was surprised at the castigation that S. Kaplan recieved for his investments decisions. He is playing the market as a contrarian investor. True, the COMEX is a limited source of information, but we deal with a generally opaque market where much of the trade occurs on the OTC. I can not fault him because he takes a different approach to the market. It would be good if the markets were transparent so that investors could have all the information. After all are we not contarian investors ourselves. The talking heads in the media bleat "all is well" while many of the sign posts are pointing in the opposite direction. Kaplan thinks that he can time the market, and wish him the best. Timing the market, any market, is at best pure luck especially in an opaque PM market. As you said, the risk is great.
Number Six
(10/22/1999; 23:17:07 MDT - Msg ID: 17242)
Kaplan and Silver
Also I hope that Kaplan has got it all wrong about Silver - I am a Ted Butler advocate and am waiting for a price explosion with Ag, hopefully so that I can leverage the Silver and buy some more Gold :) that's the plan anyway...

$10 for Silver would be a nice start... :)
Gandalf the White
(10/23/1999; 00:50:09 MDT - Msg ID: 17243)
Help Please
I have heard of comments related to "Farfel's Letter" -- somehow I have missed it ! --- Can someone please send me in the correct direction ? This next week looks to be one of the most interesting for a LONG time. Let's get Physical!!
<;-)
Number Six
(10/23/1999; 01:04:15 MDT - Msg ID: 17244)
Farfel's piece...
http://www.gold-eagle.com/editorials_99/dvcohen102399.htmlGandalf,

believe it is at Gold-Eagle, check out the link, a most refreshing, nay superbly apt article, and I'm very much looking forward to the next installment(s)! :)
Black Blade
(10/23/1999; 02:26:31 MDT - Msg ID: 17245)
Y2K gets even stranger and soon, more desparate
http://www.wbn.com/y2ktimebomb/4E/CR/4e9942.htmWhen a Seattle reporter complained that companies were hesitant to reveal their Y2K status, CNN's news director David Bernkopf and other experts urged reporters to keep trying, even if it meant publicly embarrassing authorities who are keeping silent.

In an interview with Reuters and in testimony to be presented to a U.S. Senate panel next week, Bruce McConnell said a picture was emerging of failures that may bounce slowly from one sector to another.

Even Jim Lord, the Y2K analyst best known for his release of the Navy's report on potential rollover problems within water and power systems across America, doesn't see the real effects of the Y2K Problem materializing for many months into 2000.

During a recent presentation Lord said:
"In my judgment, January is a spike in the pain graph for Y2K, but I think the peak of Y2K discomfort happens as much as nine to 18 months down the road. I think the worst part of Y2K is far, far into the future than January.

I do think we will have a spike in January, and that's going to be basically because of the embedded system part of the problem. But I think we have an accumulation of economic effects that go on for a significant period of time afterwards. And the January thing is going to be largely forgotten, in my judgment, when you look back at the history of Y2K. And I think that the worst part of it comes at the end of the true end of the millennium, around the end of the Year 2000."

"People are surprisingly cooperative on this because they don't want a panic," said Bernkopf, according to the Bauder story. This is an interesting viewpoint, coming from the cable news network that along with USA Today, NBC News and other major dailies played up the story about Maine's DMV identifying Year 2000 vehicle models as "horseless carriages" because their computer system misinterpreted the date.

As the Year 2000 date becomes dominant in computer systems across the globe, undoubtedly there will be more humorous and innocuous stories such as Maine's DMV problem. But the real story resides elsewhere. There's no end to the story angles.

"The man at the heart of efforts to manage the world's Year 2000 problem predicts phones and lights will work just about everywhere as the new century dawns but fallout from the so-called Y2K computer glitch will eat away at economies for months.

'Y2K-caused effects on daily life will be complex and more chronic than acute,' said Bruce McConnell, director of the International Y2K Cooperation Center, a World Bank-funded, United Nations-backed clearinghouse."
SteveH
(10/23/1999; 03:03:37 MDT - Msg ID: 17246)
Mundell
Once must ask why did Prof. Mundell receive the Nobel prize? He was a gold bug, he believes the Euro is important and eliminates the desire of the Europeans to affect monetary reform. I have resurrected his speach from earlier posts and URL posits. Why? Well...you decide. (which European country and who are the members of the board who chooses the Nobel winners? [i will bet they are European])

Also, from within his speach one can clearly see the roots of A and FOA, eh?

The International Monetary System in the 21st Century:
Could Gold Make a Comeback?
Robert A. Mundell
Columbia University


http://www.columbia.edu/~ram15/LBE.htm

selected snippets:
...Currently, there is no point in talking about international monetary reform. There is no game for international reform now, because the name of the game right now is the Euro. Is there going to be a European Monetary System or not? I bet there will be, and I feel that something will come about in 1999 that will qualify as the embryo of a European money. Because of this prospect, Europeans do not want to talk about international monetary reform. IF the United States started to talk about international monetary reform now, Europeans would interpret it as an attempt on the part of the United States to break up their play for a European money. But the United States would not talk about international monetary reform now anyway, because a superpower never pushes international monetary reform unless it sees reform as a chance to break up a threat to its own hegemony. The dollar liabilities of the United States have been rising by bushels and bushels. From a national standpoint, the United States is never going to suggest an alternative to its present system because it is already a system where the United States maximizes its seigniorage.
...That is what happened to the international monetary system in the 20th century. One country outstripped the others and caused a new framework. This occurred when the dollar domain became bigger and bigger and was allied to the prestige of gold with the anchored dollar standard from 1915 to 1924. The dollar became the center of the system and the world started to base its reckoning on the dollar rather than gold as the unit of account in that system.

...The devaluation of the dollar in 1934 undervalued the dollar against gold as long as U.S. price inflation was moderate. With Bretton Woods in 1944, the international monetary system was supposed to enhance equality among countries, but still the dollar was used as the unit of account. That system broke down due to, as always, the perennial problem of disciplining the central power. The more powerful the superpower becomes, the more it is tempted to expand beyond its international monetary potential and exact seigniorage from it clients (or victims?). Other countries became exasperated and moved to flexible exchange rates in the 1970s. They thought that it would at least set them free from reliance on the dollar. But they were completely wrong, just as Milton Friedman was wrong when he predicted that under flexible exchange rates countries would not need reserves. Countries need more reserves today under flexible exchange rates than they ever needed under fixed exchange rates. The main reserve they use if dollars, with a little exception for German marks which are used heavily in Europe's exchange rate mechanism (ERM).
...Where is all of the money that the Federal Reserve has created? The total amount of United States' currency outside banks is nearly $400 billion. If Americans held that currency, they would hold a great deal more purchasing power than anyone else in the world. They would have currency preferences that would be astonishing. But we know that is not the case. Americans, because they ten to have more credit cards and bank accounts, ten to hold a smaller amount of currency relative to their incomes. Nobody knows precisely where the $400 billion is. No one can track it down, they can only estimate it. But most of us think it is outside the United States, being used as the international currency of the world.
...The European continent, as a country, will have a GDP that is probably 10% to 15% larger than the United States. The European Community will produce a currency that is internationally important. Geographically, Europe is more convenient to all of the former Soviet Union countries,. Africa and the Middle East than is the United States. The single Eurocurrency will become very important.
...There will also be a role for gold. The total amount of gold mined since the days of Nefertiti is about 3.5 billion ounces (120,000 tons). One billion ounces is in the central banks, more than another billion ounces is in jewelry, and the rest is in speculative hoards. This last holding is why Alan Greenspan says he looks at gold whenever he gets a chance. I look at three things for signs of inflation in the economy: I look at the money supply, I look at interest rates, and I look at gold. You can see this in the bond market. If there is a big outbreak in the price of gold, you know that there is an increase in inflationary expectations and people will start to sell bonds, sending interest rates up. The stock of gold in the world is going to maintain itself as a viable reserve asset for a long time to come.
...The more countries start to think about gold as an index, as a warning signal of inflation, the more the monetary authority will try to keep the price of gold from rising. Imagine that tomorrow the price of gold rises form $350 to $400. Don't you think that immediately the Fed will see that as a signal of an increase in inflationary expectations and the need to tighten? Europe has already done that. There are long periods when it appears that Europeans have been stabilizing gold whenever the dollar has been depreciating against gold. This will be a major factor in moderating the exchange rate fluctuations between these two great blocks. This is vital to Europe, because nothing could make Europe more uncomfortable than to have big fluctuations in the Dollar-Euro exchange rate. Looking at gold would be one way to circumscribe these fluctuations.
...Let me just conclude with a final thought: Bismarck once said that the most important event in the 19th century was that England and America spoke the same language. In the same spirit, the most important event in the 20th century was the creation of the Federal Reserve System, the vehicle for the spread of the dollar. Without that, you would not have had the subsequent monetary events that took place. Let us hope that the most important event of the 21st century will be that the dollar and the Euro learn to live together.
SteveH
(10/23/1999; 03:31:50 MDT - Msg ID: 17247)
ORO and Buckler
ORO,

I didn't say anything but that post from Buckler yesterday was most significant. Good find. Sadly it gels.
Number Six
(10/23/1999; 04:13:18 MDT - Msg ID: 17248)
SteveH, ORO, FOA, anyone care to comment?
I posted the piece by James Turk on another y2k site, and the following exchange took place.

Dick Moody has been around a while and is firmly convinced that Gold is ina head-lock...

Any comments?

here Goes...

============================================================

500 by November?
Posted Thursday, October 21, 1999 at 09:51 AM EST

by James Turk

Freemarket Gold & Money Report

As expected, aggressive bidding emerged at the Bank of England auction on September 21st. Also as expected, once the $262 resistance level was broken, Gold was driven quickly higher by a missive short covering rally.

Is the rally over? No, not yet. In fact, I think it is only beginning. Here are my targets. At a minimum I expect Gold to touch at least the $350-$360 area. At a maximum? Well, who knows? But I would not be surprised if this rally climbs all the way back to $500, a price not seen since 1987. What's more, we won't have to wait long to reach these higher prices.

The peak price of this rally, whatever that level turns out to be, will I expect be reached within the next 4-5 weeks. What? Gold at $500 by November? Yes, it is a realistic possibility.

A bear trap has been formed, which has developed pretty much as expected. What happens now? Everyone who sold Gold when it broke through the major 17-year support zone below $280 must now buy it back, It's a classic bear trap, and it was formed during what in all likelihood will prove to be Gold's bear market low. In other words, I don't think we will ever see Gold once again trade under $280 per ounce. A bold statement?

I don't think so because we know that Gold is fundamentally very undervalued. When looked at from this point of view, all I'm saying is that we will never again see this extreme level of undervaluation, which is not an unreasonable conclusion. So far Silver has been very quiet, letting Gold take center stage. However, don't be lulled into complacency because beneath the surface, Silver is bubbling along, and is very near a boil. The lid is about to fly off this boiling pan as well. Silver is ready to break out of its massive 13-year accumulation pattern. We could see my long-standing $10 target by November, along with $500 Gold.

-- Andy (2000EOD@prodigy.net), October 23, 1999

Answers
Andy,
James Turk has been around for years saying the same-O-same-O. Gosh, it's scary, reading something so similar to what he and other "goldbugs" wrote back in 1985 ... to the effect that we'll never see Gold below $300 again once it gets back over $300...buy now before its too late... and then of course gold managed to get over $400 in the next 3 to 4 years. These guys are absolutely "nutso." IMHO.

Gold is not looking so good technically. In fact, while there might be a bear trap, the oscillators are on the verge of turning around & giving a major bear signal. The chart formation after this past week's action is now looking more like the market is going to go back and retest the lows. NOW... THIS IS NOT NORMAL. THE CHARTS ARE SHOWING ABBERRANT AND ABNORMAL PATTERN FORMATIONS. THIS IS TELLING ME THAT SOME POWERFUL PEOPLE ARE HEAVILY MANIPULATING THIS MARKET TO THE DOWN SIDE.

If these manipulators have that kind of power, then they have the power to solve the little problem of meeting physical gold demand. As I stated on another thread some time back... I suspect that the Feds have called in the Soros's and Bill Gates or anyone else deemed to be attempting to corner the market and were probably warned and maybe even had their lives threatened and told to obey or else. They've probably also been told to back off the demand for physical metal. It's one way to solve the gold crisis or shall I say, turn it into a non-event.

-- Dick Moody (dickmoody@yahoo.com), October 23, 1999.


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

Dick,
I agree with you - it's not normal, and the stakes are indeed high. OTOH the BIS/EURO group are not exactly pussycats either, perhaps they have more up their sleeve than the Fed does?

You have to admit, 15 ECB's getting together to announce a 5 year moratorioum on gold sales, the WGC statements, Mundell the EURO Goldbug getting the Nobel Prize for Economics - WHAT timing :)

I don't think it's as cut and dried as you think this time Dick.

Following this Gold action will be the currency wars... and the dollar is looking horrendous at the moment.

Interesting times... :)

============================================================

And to muddy the waters the extraordinary treatment meted out to Ashanti, and rumours of Kuwait's gold going to who knows who???
Number Six
(10/23/1999; 04:24:57 MDT - Msg ID: 17249)
One More Thing - THREE KINGS
Am I the only onw who thinks the timing of the movie "Three Kings" is absolutely uncanny with respect to the developing Kuwaiti Gold situation...

Talk about "Wagging The Dog"... :)

Just a coincidence?
RossL
(10/23/1999; 05:23:36 MDT - Msg ID: 17250)
Silver and Bill Gates

Scrappy

Gates' purchase of a silver mining company stock could be diversification or pure speculation.

There has been a push by the "greens" to remove Pb (lead) from the manufacturing process in the electronics industry. The standard solder that is used to make electrical connections is 60% Sn (tin) and 40% Pb. This amount of lead in your computer is of no hazard to you right now. It is a hazard during the manufacturing process and also after it gets thrown in a landfill.

All of the proposals that I have seen for a replacement of Sn/Pb solder combine silver with tin and several other metals. This would increase the industrial demand for silver in the new century. I have no idea if this is why Gates is buying silver, but it is plausible...
Number Six
(10/23/1999; 07:00:51 MDT - Msg ID: 17251)
Repost from Gold-Eagle...as FOA said yesterday, gold is becoming more "mainstream"... :)
Flash!! Flash!! Big News!! Dennis Gatrman Bullish on gold-


Big Barrons Article


(richard640) Oct 23, 08:42

One of the most influential and eagerly awaited publications on Wall St. each morning is the Gartman Letter-an erudite compilation of insights and reporting about news events around the world (some say it's on a par with the Richard640 Market Advisory). To quote Gartman--"Once I would end every speech by saying gold is a worthless metal-I'm not bearish on gold any longer".Of course, Dennis isn't going to wax idiotic-he thinks in terms of only $400 gold-but we know better, but we'll haggle about that later-That such a major figure, in Barrons, puts the kosher stamp on gold is great news for our cause!! I don't know if his remarks--"Starting last year, I began telling people that the age of owning paper is behind us. The age of owning stuff lies ahead. I mean commodities,gold and silver, the producers of stuff. I want to be long currencies of producers of goods and commodities. I am looking for relatively pure silver plays like Pan American Silver and Apex Silver mines...". As, I said, I don't know if these remarks will ignite gold Sunday evening, but it is certainly a major breakthrough for the gold camp to have such an infuential advocate. Dennis also says "One of the first rules of trading is when something doesn't go down on bearish news, you probably shouldn't be bearish anymore......gold didn't fall on the day the Bank of England sold its second tranche of gold."He sees a bear market lasting a year and a half(a slow grinder) taking the Dow down to 7500. The 2nd piece of news-although not as momentous, is the market letter of my good friend Ken Gammage-The Richland Report-An excerpt of it is on the Marketwatch page of Barrons-Ken says Alan Greenspan stated that he will manipulate the price of gold and Ken quoted A.G.s' Statement that we all know so well. I am very pleased to see our case getting increasing exposure in the mainstream media. Thirdly, I felt Alan Abelsons' mentioning that I.B.M. had run out of "tricks" to phoney up its earnings was rather significant-Speaking of fraudulent earnings, I contacted the Prudent Bear fund and sent them Bill Parrishes material charging Microsoft with running a veritable Ponzi Scheme with regards to their earnings-I'll keep you posted if anything comes of that. Please recall that David Tice and his pit bull accountant got heavy coverage a few weeks ago on CNBC when they "outed" a companys' earnings and the companys' stock dropped like a lead baloon-So if Tice will enter the fray with Bill Parrish, things could get quite interesting. Yesterday I got an E-mail from a Tice executive requesting that I call them. so they seem to be interested. More Anon-have a great weekend.

SteveH
(10/23/1999; 07:07:19 MDT - Msg ID: 17252)
Number 6
With all due respect to Mr. Moody, the gold market today is not an easy one to understand. Even Steve Kaplan changed his negativism of the rally to where he felt that it would go down but maybe not so badly. We have all been over the A Priori of this gold market, some not in so many words but nonetheless, we have seen the basis of the gold market's dilemna: A BIS/Euro v US$/IMF battle for reserve currency. (Battle conotes that all players are in it for their lives so may not be the best word, perhaps positioning would be better). From Mundell we can see the movement towards the Euro had its roots back in the early 70's when President Nixon took the US off the gold standard. Europe realized then that the US's (in their opinion) self-serving interests were not those of the Europeans and laid plans to protect themselves. What we are seeing today, from all appearances, is the crescendo of that planning. I don't think they purposefully 'battle' the dollar, rather I believe it is the result of the Euro's existence. The world has room for one 'reserve' curency, not two -- or perhaps it has room for two, but the market share of the one must equalize with the other, which means the $ must lower and the Euro must rise. Because the Euro is less-debt ridden than the dollar, it follows that the Euro should be valued at least twice that of the dollar if not more.

Gold enters into the picture because somehow the US$/IMF faction after 1971 didn't know how to deal with gold. It was obvious that other CB's were keeping their gold. This probably mystified a few US CB heads at the time. In the end, the Jamaica Accords set the record straight for Gold's role: the Mid-East wanted gold if it was going to provide cheap oil. Since oil is what the world used to power itself that by default left gold in the picture, but US$/IMF be damned if they would let it rise, because that would make the dollar look weak and as was seen in 1979-80' when oil did bid for gold in the open. We all saw what the price of gold did very quickly, it went up to $852/ounce.

I believe the events we see unfolding today are the direct result of other countries not wanting the US to continue to push the dollar as the reserve currency and with that all the baggage that comes with it, such as the IMF indebtedness of third world countries, lack of financial discipline, changing foreign policies, lack of committment or long-term goals, politcal expediency instead of long-term currency stability.

The on-going bubble, the use of derivatives, hedge fund irresponsibilties, foreign currency raids by large dollar factions, and US money managers forgetting the role of gold in world financial affairs (as a reserve asset and not a money-earning asset) upset the rest of the world. We are seeing the backlash to some of this irresponsbile behavior. I believe it is that simple.

So to say that Gold is set up for a big bear market contradicts the A Priori spoken of above. I believe the world beyond the US has spoken and said that gold is important to the world and don't mess with it. Should a big push come along to drive gold lower as Mr. Moody infers then I would see the following happening, which would likely reverse the push downwards rapidly:

-- Gold Cartel would be formed (and may already be in the works).
-- Oil would bid for gold directly again.
-- Some countries would openly sell dollars.
-- Some large stock faction unfriendly to the US might prick the stock market bubble in an unfriendly manner.
-- OPEC et al would lower production quotas more.
-- Who knows what else?

As you can see the world coconstitutes itself in that it is one big family in which all members deny their membership. When one member gets out of line (notwithstanding the power or financial prowess of that member) the rest of the world reacts in a way to bring that party back in the fold. This is what is happening and gold plays a central role because it is believed by most of the family to be the glue that holds all currencies together and because those who have the oil believe that, live by it, and will protect their gold because when their oil is gone, they have to have something to show for it.

When you view the world from the above perspective, you now understand the Ashanti gold stories, you see why Kuwait might put 79 tons in foreign account hands, why Mr. Armstrong bad talked gold so much, and why the US$/IMF faction is delaying the chess moves of the BIS/Euro faction. So Mr. Moody sees but one piece of the puzzle, doesn't have the big picture, and even though might get a short-term down trend correct will be left holding an empty hand as world events slip through his hand like water. IMO.
Phos
(10/23/1999; 07:37:32 MDT - Msg ID: 17253)
Hedging effects
There is column in Canada's Golbe & Mail by Rob Carrick. Saturday's edition has a story on two stock portfolios which outperform the market by buying the large caps only. Two gold producers were included in the portfolio - Barrick and Placer Dome. He quotes the % gain since Dec 31, 1998 for each stock. Both companies are hedged but Placer Dome far less so. Barrick's increase in that timeframe is 3%, Placer Dome's is 24%. Says something about the market's reaction to hedging, I would think. I wonder if anybody at Barrick reads the Globe and what their reaction to this would be?
Aggie
(10/23/1999; 07:45:43 MDT - Msg ID: 17254)
Number Six
concerning leverage in silver. Now $1000 buys about 200oz. of silver or 3.33oz. of gold. When silver hits $10 and the 200oz.of silver is worth $2000 will you be able to buy 3.33oz. of gold at $600. Will there be a buyer for $10 silver. Will anyone sell their gold for $600. I made a switch last week with no problem.
Cavan Man
(10/23/1999; 07:58:13 MDT - Msg ID: 17255)
SteveH
That was teriffic.
Cavan Man
(10/23/1999; 08:00:16 MDT - Msg ID: 17256)
Minor Curiosity
Republic Bank recently changed the fees it charges for storage (at least for their smaller customers). Rate was a flat $50 and now is minimum $60 or 1% of market value whichever is greater.
sstins
(10/23/1999; 08:28:10 MDT - Msg ID: 17257)
News from Bloomberg
Gold Conference Sounds Cautious Note as Hedging Draws Scrutiny


Denver, Oct. 23 (Bloomberg) -- Investors at this week's annual gold conference in Denver weren't as euphoric as the metal's recent price surge would suggest.

Instead of celebrating the past month's 13 percent gain, gold executives and their shareholders were nervously fixated on hedging contracts, which companies use to try to protect themselves against erratic price movements.

Hedging programs were called into question this month after rising gold prices -- usually good news for producers -- sent shares of Canada's Cambior Inc. and Ghana's Ashanti Goldfields Co. reeling. Both companies entered into contracts betting prices wouldn't rise in the months ahead, and their stocks got hit when they did.

``I have a better understanding of this whole hedge book issue, and it's going to help me restructure my portfolio,'' said Gil Atzmon, portfolio manager at U.S. Global Investors Inc., a San Antonio-based mutual-fund company that has US$140 million invested in gold and gold equities.

After most presentations at the conference, whose attendees included AngloGold Ltd., the biggest producer, and Barrick Gold Corp., ranked No. 4, investors buttonholed managers to ask about one thing: hedging. It's an aspect of their business some companies often don't fully disclose.

Some investors, newly enlightened about the risks of hedging, said they favor producers that do little or none of it. Companies that hedged usually do so by arranging to lock in at least some of their sales at a fixed price.

``I will increase my exposure in companies that have more exposure to a rising gold price and decrease in those that have given up that exposure by overhedging,'' said Atzmon.

Companies are responding to higher gold prices in a variety of ways. Some, such as Echo Bay Mines Ltd. of Englewood, Colorado, and Johannesburg-based Gold Fields Ltd., said they're reducing their hedge positions. Battle Mountain Gold Co. plans to hedge more.

Others, such as Franco-Nevada Mining Corp. and Goldcorp Ltd., aren't hedged at all and have no plans to start. Cambior said in its presentation that it's looking for partners and considering selling its base-metals business to boost shareholder value. Ashanti didn't attend at the conference.

Gold Soars

Gold prices soared after Sept. 26, when 15 central banks said they will limit gold sales for the next five years. Gold- company executives aren't cracking open the champagne yet.

Many companies that gave presentations this week are still calculating their reserves at US$300 an ounce -- below the current price of US$303.

Investors are also skittish about where gold is headed. Mark Johnson, fund manager for the US$100 million USAA Gold Fund based in San Antonio, said that investors had taken about US$4 million out of his fund in the previous two weeks, a period during which it rose 29.3 percent, lifting it to a 21.7 percent gain this year. His was the top-performing gold fund last year.

``People closest to the market are totally skeptical'' about gold's rise, said Peter Palmedo, who runs the US$100 million Sun Valley Gold Funds in Sun Valley, Idaho. Still, he expects gold to go to US$375 an ounce by the end of this year.

Hedging concerns aside, interest in gold stocks has surged in recent weeks. The conference was a sell-out, drawing 400 people, about half of whom are investors and analysts, said forum's director Michele Ashby.

``A set group of gold investors always attend, but the generalists don't normally come,'' she said. ``That's new blood for us.''

Ashby, who has directed the conference since 1989, is aware of how fickle gold's popularity can be. ``We went from being the metal that people hated to the best performer on the Street,'' she said. Investors ``wouldn't have come when gold was at US$250 (an ounce), but we've been getting calls from some people we'd never heard from, and some who we've been mailing invitations to for years.''

Gold now trades 7 percent below its 52-week high of US$326 an ounce reached on Oct. 6.

Oct/23/1999 10:08



(C) Copyright 1999 Bloomberg L.P.



ORO
(10/23/1999; 09:07:23 MDT - Msg ID: 17258)
Yellin' of troy Exchange and storage Money
1. Gold has not ceased to be an exchange money. The decline in popular use in the West has more to do with governments holding the hoards of their citizens, sometimes obtained through confiscation. It is used in the US, but most often outside the US as Exchange money in many forms (not just coin). It has not lost the perpetuation momentum you speak of. The US dollar and all other currencies, are only useful as a liquid store of value when coupled with an interest payment in the form of a bank deposit or bond.

2. To a great extent, you are observing today an unsustainable condition, in which obligations of both government and banking were accepted as equivalent to gold (and other PMs) though are in reality unredeemable. Anybody following the reality of the physical markets will tell you that the paper has displaced much gold from liquid holdings into holdings that require less liquidity. As Gresham's law indicates, the cheap money (paper gold) displaces the dear money (gold) into hoards and outside the countries in which this paper is accepted. The price slide of the past decade is part of the terminal effects of Gresham's law, where all displaceable gold has left the country or gone into hoards, and all that is left is paper. The paper (a) inflates the supply, while (b) its value is further discounted to reflect its impending default. Mundell gives a great discussion of this (without the default issue).

3. The 10 fold price rise bringing up reverberant doubt regarding a possible 90% plunge in price has much to do with marginal production costs, since these will place the floor for the bid price in case of there being fear of massive dishoarding. Current production costs to meet current demand (which has not been a large scale monetary demand) are more than triple the figures quoted by gold miners and probably quadruple. It has been met in part by conversion of physical holdings to paper holdings.
Some details- I estimate that at current prices, annual demand is actually 4500-5000 tons including paper, which was supplying about half. Depletion of the richer mines is nearing completion after some years of operation at 125%-140% of design limits necessary to keep mines operating (increased production depletes rich ore leaving lean ores behind, thus increasing future production costs, often at factors of 5:1 and up to 20:1). The sustainable production price is then at a level of about double current prices, just to meet half of the demand level. If paper gold were no longer accepted, full demand would fall on physical production, raising the price further. From the few companies that keep reserve estimates for prices significantly above the current price, it seems that a doubling of supply requires a further doubling of prices, if not complete use of low grade ore bodies (5 fold increase to 20 fold increase in price). On these issues alone, one sees an increase of production costs. If much consumer demand falls, it would be overwhelmed by monetary demand for liquidity, and more. Thus a sustainable production cost would be at least quadruple the current price, and would easilly rise to 5 fold or more. Beyond that, it is anyone's guess. I can say that below 5000 tons per year, demand can be met with less than a 10 fold rise. Beyond this demand level, any production cost is possible up to 20 times the current level. Beyond 20 fold, all demand should be met in the 10000 ton per year range.
Timing details- In the case of the rise we envision, the first three to five years will see a decline in gold production rates rather than an increase. In the years following this period, new production will come online.

4. Storage money is indeed like a long term exchange money. Which is why one wants to avoid government controlled assets for this kind of period. The history of political and professional decisionmaking in the monetary sphere has not given anyone the slightest reason to expect anything less than massive and lingering disaster at least once in a modern lifespan. War and civil unrest are as dangerous as they have ever been. Doomsday events are more likely today than they were during the cold war. In Civil and foreign war, one must have a money that is unrelated to any government. I am sure the Poles that held Reichsmarks to diversify their Zloty were very disappointed in the war.

5. Instability of gold relative to what? Long Bonds? National fiat currencies? Is a predictably declining value with unpredictable rates of decline somehow preferable? The twin dangers of funny money are (a) inflation, which kills bonds values and (b) deflation that puts strain on banking and reduces safety of deposits. And this is in peace time only. What does one do in war? What about oil shocks?
On a generational time-span, there is a likelyhood of both happening. The lifespan long Kondratief cycle includes both, and its amplitude is exaggerated in fiat money regimes.

6. Diversification. Most of the long term research indicates that over long times and broad geography, one finds only a diversification between gold, and all other financial assets. All other assets depend on the currency value (bonds, bank deposits, stocks) or the health of the credit markets/banks (e.g. real estate).

At this point, the question is not whether gold will be a safe money at 10 fold in real terms, but just how safe and how much safer than alternatives. I think the issue comes down to being able to find the floor under the price after the 10 fold increase occurs. I think that a long term 50% drop is the worst anyone would have to worry about.

The perpetuation of fiat money is a political confidence issue that has only managed to work for 10 of the last 30 years of pure fiat money (yet with partial gold backing retained by all major currencies but the Yen). The aftermath of a currency crissis permanently changes perception of the particular currency, and of currencies in general. There is no return to pre-crissis levels of confidence. It takes a long time to build confidence, and a very short time to loose it. This is an irreversible process for all practical purposes. Once this happens, there is indeed a situation such as you describe:
"The only question is when. The price isn't going to hold out till normalcy returns, either: Other people can foresee the drop, too, and will try to sell ahead of it, and when everyone wants to sell before everyone else, that drop could come almost any time, even during a continuing crisis. Moreover, at the same time gold is overpriced, all sorts of other things will be amazingly cheap, as distressed owners need to sell or panic too much. It will be possible to buy real wealth -- cars, houses, factories and shops; yes, even shares of stock in them -- for pennies on the dollar or grams on the ounce of gold. "The time to buy is when the blood is running in the streets." All the more reason to trade out of gold in the middle of the crisis;....."

The gold would probably not fall "significantly" against currencies because the reserve structure of the mark to market regime introduces a government interest in supporting the POG in its own currency, a first in monetary history. I still don't know how to wrap around this one. I can only say that government=distortion to my mind, and somewhere, a steep price is paid for this kind of action.

Tomcat
(10/23/1999; 09:51:04 MDT - Msg ID: 17259)
Nomination for the HOF

I would like to nominate SteveH's post #17252 for the HOF for the following reasons:

1. It provides a brief summary of the overall picture of the world gold situation.

2. It helps the reader separate strategic gold forces (associated with the world wide dissatisfaction of the US$/IMF) from the tactical moves gold moves (short covering, mining hedge covering,). Simply, it helps one separate the forest from the trees.

3. What is summarized in this article will be as true next year as it is today.

Peter Asher
(10/23/1999; 09:55:13 MDT - Msg ID: 17260)
Second Tom's motion
Steve! that was a masterpiece of clean data and analysis.
Journeyman
(10/23/1999; 10:34:40 MDT - Msg ID: 17261)
PPT prototype?
"As an example, the US Treasury Department can and does buy andsell US Dollars in an attempt to influence the Dollar's exchangerate in the interbank market. The money for those transactionscomes from the Treasury's Exchange Stabilization Fund, a fundestablished in 1934 and purposely created free from Congressionalintervention and audit. If Treasury officials decide that the USDollar is priced too high in the interbank market, it can sell USDollars in the market. As the supply of Dollars in the marketincreases, the price should decrease and the exchange rate shoulddrop. [etc.] ... Stabilization of a currency through the purchaseand sale of a country's currency by its central bank is known aspegging. -International Group Trading Ltd., Customer Booklet(1-800-891-4332)Regards, Journeyman
Julia
(10/23/1999; 10:39:21 MDT - Msg ID: 17262)
Everyone, ANOTHER, FOA and U S Bonds
Hi everyone. Have been keeping up as best I can these busy homeschool days. The castle has supplied me with many golden nugget thoughts from so many great thinkers. Thank you. It's been nearly a year since I first stopped in here and I owe so much to the Knights and Ladies who meet here to discuss gold and other issues.

ANOTHER & FOA - I've been a student of your THOUGHTS! and owe you my families future. Thank you both from the bottom of my heart.

BONDS - Would someone explain what happens to U S Savings Bonds that have matured and are held in a safety deposit box when the U S dollar collapses. Are these to be thought of exactly as cash?

Thanks,
Julia
Leigh
(10/23/1999; 10:56:05 MDT - Msg ID: 17263)
Welcome Back, Julia!!!
Hi, Julia, what a wonderful surprise to have you back! I have thought about you so often and hoped you were at least reading the Forum.

How is the homeschooling going? I had to put my son in Christian school this fall because he was ornery and wouldn't do his work. When my husband returns and finally transfers to shore duty we may try homeschooling again. My son's problem is that he thinks his dad is smart and I'm dumb, so maybe I'll let my husband do the teaching.

Are you ready for Y2K? Please let us know what you've been doing! There are actually some more females at the Forum now -- Angel, Scrappy, Granny, Buttercup, and others.
Gandalf the White
(10/23/1999; 11:59:48 MDT - Msg ID: 17264)
Welcome BACK, "Yellowbird"
I hope you got your #1 chair back as the TableRound is getting larger all the time. Many newbie posters have come out of the shadows and now share their thoughts at the Table. Some I know have joined us from SE Asia and OZ Land and DownUnder too. -- Tis a worldwide audience now, so come on all you other lurkers, pull up a chair and let us hear your thoughts, stories, and educate us in your knowledge of the most important subject of GOLD !
<;-)
SteveH
(10/23/1999; 12:06:45 MDT - Msg ID: 17265)
Protecting gold
http://www.washingtonpost.com/wp-srv/WPcap/1999-10/20/077r-102099-idx.htmlBS

Note: what he proposes is against the 2nd, 5th, and 14th amendment. Problem is when he puts it into law only a victim of the law who has the money to fight it in a court of law will overturn this. This AG is irresponsible and misses the mark. He is doing this for political mileage. At what point will we sue car manufacturers for killing people? Propane lighters, Toasters, toothpaste manufacturers? Come on people, now...if you don't like the 2nd amendment write another one but don't let folks take away our rights because they know better than us what our rights our.

If you were anyone of those victims you would likely have given all your gold for a gun to shoot back. (with all due respect).

PS. Savings bonds, do they earn interest after they mature? Otherwise they are just like dollars in the matteress pulled out years later.

Thanks Peter, CM, and TC.
Julia
(10/23/1999; 12:30:36 MDT - Msg ID: 17266)
SteveH, Gandalf,Leigh
Steve - Thanks, I thought bonds were cash. Do you see problems cashing them in if the dollar tanks?

Gandalf - Hey there my friend. You have a memory like an elephant to remember me as "Yellowbird." We've been watching this gold market awhile together, yes? and looking forward to a nice ride up, aren't you?

Hi Leigh - you've been doing such a good job challenging our Knights and Ladies to remain steadfast, chivalrous and gallant in our fight for gold.

Yeah, we've been preparing for 1 &1/2 years but we are going out in a few minutes to grab up a few more groceries we want to have on hand. Back later.

Thanks.
Julia
Tomcat
(10/23/1999; 13:05:09 MDT - Msg ID: 17267)
ORO

Hello ORO, thanks for post #17258. In it you concluded with:

"The gold would probably not fall "significantly" against currencies because the reserve structure of the mark to market regime introduces a government interest in supporting the POG in its own currency, a first in monetary history. I still don't know how to wrap around this one. I can only say that government=distortion to my mind, and somewhere, a steep price is paid for this kind of action."

I agree. Currencies that have a reserve structure that mark to market sound great. "Mark to market", what a great term; brings to mind "free market, fairness, and all that good stuff.

The problem is that it isn't true.

To what market will gold be marked? Will it be a paper gold market; a paper gold market which is not a free market? Will it be a market where one has BBs and PPTs working their magical wonders to create more paper illusions? Will it be a market that is associated with a stock market that grows on high tech tulips?

And then, if an honest and free gold market was created, a market to which gold could marked, would we have a need for CBs?

Despite being a topic that is "difficult to wrap around" I would appreciate any more thoughts you have on the matter.
FOA
(10/23/1999; 17:01:18 MDT - Msg ID: 17268)
One long post.
ALL:
I also read the article in Barron's offering Mr. Gartman's views. Thanks to poster "Number 6" for placing some of it here (also welcome to you, sir). It is indeed a benefit for all of us to find the gold story becoming more mainstream. Slowly the future effects of the ECB deal is sinking in. Still, I think most all established analyst are going to be very surprised at how this eventually plays out.

As gold begins it's rise, the numbers will verify to many traders that another bull market is intact. Each in their own way will attempt to gain from the price run. That is until the price starts to run "out of sight"! You see, the gold market began to change back in the late 80s and early 90s and that evolution has shaken everyone that followed it.

Too date anyone that has invested in gold using the "traditional" vehicles has been "dead wrong"! If I had to guess, it would not surprise me to find that 95% of these players have lost their shirts on a "net basis over 10 years". Even the shorts lost money as none of them saw gold ever falling so far. Often switching sides to catch the turn-a-round that never came.

Truly, investing in gold "as an industry" or "as a long leverage play" was not the game to be in recently nor will it be for the future. Because gold has entered a new era that will eventually find it being held as "private money" in the form of "real wealth". Something our "extended generation family" has never seen or understood. More on this in a minute.

Onward:

A very large group of world investors have been buying physical gold for many years. These people have been "dead right" on "their reasons" to buy gold. Another has said that "events will prove the wisdom of their ways". I agree with this even more so as real actions slowly prove their
assessment.

On the other hand a very broad spectrum of "gold bulls" can be seen on the side of the GATA group. They believed in gold as an inflation hedge and a good "supply / demand" investment situation. I'm sure most of them own bullion to some extent, but am guessing that most of their "working money" was involved on the industry side (gold shares). Truly, this segment of the community has found their investments on the wrong side of a political currency transition that was destine to change the gold markets for the rest of our lives.

Most everyone that analysed gold from a "dollar devaluation" standpoint was sure that gold (and the producing industry they brought into) would soar from such an event. Few could accept that for the dollar to fall from world reserve status would also require the total destruction of the "dollar paper gold market". Nor could they imagine how the years preceding this would see the world flooded with "dollar paper gold contracts". Yet, as this progressed over many years we saw how the political manipulation that GATA rightly exposes was being used in a way that will "eventually" destroy the confidence in the dollar. For truly, in today's world, if one loses the ability to contract for gold in us currency then the reasons for holding dollars at all begin to fade. From a country that runs a never ending trade balance deficit, foreign dollars and the interest they earn become a purposeless hold. If dollars can never flow on a "net" basis into the US in a trade surplus situation, the end result must be a bubble of dollars with no home or value.

Political currency war as seen in simple sequence:

Build a bubble within the dollar gold market by selling paper gold far and wide. By selling paper derivatives of gold we free up official and private physical stocks of bullion to quench the demand for coins, bars and fabrication deficit. Because the world gold market is priced in modern terms by "derivative contract", flood the paper market and drive the price lower. In an never ending circle, the market expands in ownership as the price falls.

"Coat Tail" this process on the IMF/Dollar need to lower gold to support it's currency with a low inflation perception and the political will to proceed is reinforced. For those major bullion buyers of the world (oil) that would object to this, build a new currency upon the standard of a future "free world" gold price that can become a trade settlement reserve item.

Once the "timeline" of the dollar is near the end of it's mathematical ability to expand world trade, destroy this "new fractional reserve gold market" by adopting "self liquidating rules" into the official sector lending game. With this turn, oil and gold prices begin a dollar rise from which there is no return. Eventually, the world gold markets, as built in dollar reserve contract terms can no longer function. As events slowly sink in, all foreign held dollars (mostly held in US treasury form) are liquidated from dollar terms by buying physical gold and Euros. For without contract gold, in functioning form, physical must eventually be bid at any price!

In real time production, we see this beginning in the US fed buying US treasuries almost everyday in an attempt to stop the rise in rates. A rise that comes without inflation. Truly, a rise that comes from "reserve currency competition".

Onward:

For today, the modern gold investor faces a dilemma in concept! None of them have ever seen a gold market that finds it's total demand coming from buying "physical gold" as a "wealth money" asset! Buying that arrives in official as well as private sources. In their (gold bugs) limited
experience with so called "free market gold" dating from 1975, physical gold buying was never the full price driver. The price always rose from, at best a 50/50 mix of paper leverage buying and physical buying.

Nor can they envision gold rising so much, so fast, even before dollar price inflation takes hold. Our total "real life" education about gold prices ($100 to $800) were all explained as "dollar price inflation" dynamics. Never was it approached as gold becoming a new parallel "private reserve
asset". Just like stocks, bonds and currencies.

Add to this, the very real prospects of their "gold price making markets" falling into complete turmoil and dysfunction. Every Western investor knows how to convert and spend their stock and bond portfolio. Yet, the concept of actually selling some personal gold to a private dealer, without an official quoted market, is seen as an "end time event".

Thoughts!

During the next five years, physical gold is going to outlast and out perform not only the current world derivative gold market, but outlive a large portion of the stockholders equity in most gold mines. During the "death throes" of the gold marketplace, the dollar price could be all over the map! Simply put, most short term traders and long term paper gold (gold stocks included) investors
will be eaten alive as we witness a transition unlike anything ever seen. How can one be ready for this? Some people are 80% gold bullion, 20% in the few largest unhedged mines (only 3 or 4 exist) and hold plenty of cash that is expected to devalue greatly. Their mindset is ready for gold to be priced somewhere between 0 and infinity! In other words, gold in their eyes will outlive it all.

Some writers do a wonderful job of proposing that gold is dead and holds little more use than a tradable commodity. The most eloquent poster, Mr.Yellin of Troy, has produced many fine articles that expound the current feelings of Western life as expressed in it's need and view of gold. Still, all of these concepts were built using the "American Experience" of the last hundred years or so. I submit that this has been little more than an "experiment in progress" that only now comes to completion. In the end, the laws of nature always control out destiny and the outcome is distilled into this common reality:

"The only real earthly wealth is one we touched in person as all honour is fleeting"

Further:

Is this how it works?

When a major Middle East oil producer lends it's last 79 tonne of gold into the marketplace, one should know he will get that gold back. After all they are not like you or I or the average globe trotting hedge fund. They are the oil producers for the next hundred years!
As I offered before, that gold was loaned for a "HUGE" concession that will never be made public. For the marketplace to approach them is indicative of the massive strains in the lending arena. Because these people will not lend "CHEAP"!
Understand the dynamics that are now in effect. Somewhere gold lenders and gold contract derivative holders are exercising the very limits of their "fine print" to get their gold back in "allocated form". As the brokers in between these deals have lost the ability to "control" their
counterparties, their firms must use their own capital to buy physical gold and blow up the price or "borrow" it in order to cover their old lenders. It's no contest and is done "off the retail lending market" so as to not gun the rental rates.
In the past, the news of 79 tonnes lent into the marketplace was an announcement of fresh supply to lower the gold price. Today, these announcements are for the purpose of replacing defaulted loans. It's important to understand that on an ongoing basis, these new loans do change
everything as the broker now must eventually cover this new loan "from it's own book".
The present fear is that gold lenders that cannot regain their bullion will start buying on the physical marketplace as they call their lawyers to discuss just compensation. This is the only kind of fear that will compel some "expensive deal making" with people that usually don't lend.

Also:

Every central bank in the world is looking at it's reserve dollar holdings and watching this latest gold spike. I can tell you that they are closely analysing this new risk because the potential exists to cut them out of the gold market at what was perceived low prices. As the Euro gains use, dollar reserves will become a huge dead liability. Especially if the BIS is stopping inter bank gold sales!
Truly, for China the risk is clear. I expect them to become more active in buying "defaulted gold commitments" that can function except for the lost margin, even if the price paid is much higher than market. The recent deal making by a large Arabian investor will lead the way.
In some ways this action is a precursor of a two tiered market for gold. With future delivered "higher priced street gold" taking the form of "defaulted new mine production". We shall see.

Thanks for reading and discussing FOA


seeker
(10/23/1999; 18:15:53 MDT - Msg ID: 17269)
FOA where will the gold come from
FOA. Could you help me to understand this?

Kuwait is now lending their gold into the market, fully expecting to get all of this back. Isn't this just adding fuel to the fire? Where will the gold come from to pay this loan back if there isn't any gold to be had now? Do you see gold shorts eventually going to the comex type markets of the world trying to get gold from the other shorts of the world, or will they look elsewhere?

Thank you kind sir, your posts do greatly illuminate this table round
megatron
(10/23/1999; 18:35:32 MDT - Msg ID: 17270)
FOA
Sir, how do you see the short term value/movement of the Swiss franc against the $US playing out in a quick rise POG situation? Thank you.
Cavan Man
(10/23/1999; 18:38:39 MDT - Msg ID: 17271)
FOA
Which stocks? (please) (thank you)
Leigh
(10/23/1999; 18:49:42 MDT - Msg ID: 17272)
Farfel's Speech - Part 2
http://www.gold-eagle.com/editorials_99/dvcohen102599.htmlIt's now ready for us to read over at Gold-Eagle.
Cavan Man
(10/23/1999; 19:31:51 MDT - Msg ID: 17273)
Leigh
How did you know that was "F"? Sure is his style!
Leigh
(10/23/1999; 19:51:33 MDT - Msg ID: 17274)
Cavan Man
On the day of the first Bank of England auction, Farfel wrote a letter to the London Daily Telegraph, which was published. SlangKing on Kitco saw it and posted it. Farfel signed his real name to it.

To Farfel -- This is a great speech! Just wondering how your audience reacted to the information about gold. Did they believe what you told them, and do you think they will act on it?
Scrappy
(10/23/1999; 20:15:02 MDT - Msg ID: 17275)
Thanks, BlackBlade
I think, for now, at least,I will heed your best advice, and of course, FOAs', and stick with physical, when I am able to stick at all.

BTW, got the antennae problem covered, and I figure the wings will come in handy when the 'winds of gold' blow hurricane-force, but about these extra legs.....:)
Scrappy
(10/23/1999; 20:27:08 MDT - Msg ID: 17276)
RossL
Thanks,for the input on why Mr. Gates, et. al., might be buying into so much silver. It seems a likely reason why so much 'big' money might go to silver, when world economies seem to be 'going gold'. After all, they may be rebuilding quite a chunk of the computer empire after January, eh? A chance for them to 'start over again' and do it 'right'? hehehehe..
I'd be willing to bet, however, the 'big' money has probably been adding to their hoards with huge bars and nuggets by the ton. Again, just curious. Thanks.
MKL
(10/23/1999; 20:30:59 MDT - Msg ID: 17277)
Mass Email-Sending Form for US Congress, Senate
http://www.scfirearms.org/mailer/fed/mail_rep.htmlI've seen some links recently for various methods of broadcasting email messages to congress, etc.

The link I've provided above will take you to a good one. It's intended for 2nd Amendment biz, but can be cleared out and a message entered for Gold biz, too.

FWIW

MKL
MKL
(10/23/1999; 20:43:27 MDT - Msg ID: 17278)
More Off-Topic Gun Stuff
http://www.calnews.com/archives/Metcalf13.htm
Forgive me for the OT post. I had wanted to post this a few days back when it was a topic of discussion, but the registration process took longer than I had expected, and my plan to post this link was sort of put on the back burner for a while.

The link will take you to an account of the massive gun-buyback program which passed through Australia recently. The statistics regarding the large numbers of firearms *not* turned in are eye-opening and probably won't be reported in the mainstream US media.

FWIW

MKL
Number Six
(10/23/1999; 20:47:22 MDT - Msg ID: 17279)
SteveH - your analysis...
Steve,

Simply brilliant! I would like to third this analysis, along with Tomcat and Peter Asher, to the hall Of Fame.

Steve, I forwarded this off to dick Moody - I will let you know if he replies...

With FOA and ANOTHER leading the way, backed up with the fine minds on this forum such as evinced above, we can't go wrong :)
Canuck
(10/23/1999; 20:49:22 MDT - Msg ID: 17280)
Cavan Man
Your guess on the 3 or 4 'unhedged' mines?
Gold Fields?
Franco-Nevada?
Newmont??
Number Six
(10/23/1999; 21:15:17 MDT - Msg ID: 17281)
Aggie - Silver leverage
Hi Aggie,

I have got completely out of the paper gold market (sold my DROOY, HGMCY and GOLD), luckily just before they took that recent hit.

I have a certain amount of gold coins/bullion already bought at an average of I guess about $280 or so. Done deal.

So I am gambling that when gold takes off again, silver will coat-tail it. I may be wrong :)

This is a big gamble. I have contracted for 30,000 ounces of silver (not through COMEX or whoever contols silver) with a downpayment of 20% of the price. The silver is real and is warehoused for me at Scotia.

If silver drops below say $4.50'ish I'm wiped out. However every 10 cent move over $5.50 or so nets me about $3,000. so if silver goes quickly to $10, that would net me $135,000 leveraged at 5 to 1. I would then hope to sell the silver and buy Gold at $5-600 or whatever it is by then.

To recap - now, today, I could buy 110 ounces or so of gold at $300.

In my scenario above (I should be so lucky :), I would be able to buy about 280 ounces of gold at $600 a pop.

Of course I may miss the boat. There may not be the gold available to buy. The silver may not move at all or may even drop. A lot of ifs. At any rate I will close out my positions by December. Want to be completely out of the markets before Y2K.

If I get out and get my original stake in silver back in December I will be able to buy 55 or so ounces of gold at $600. If I can get it... :) Still not too shabby as I believe the revaluation over the next "timespan" will dwarf this value :)

If Ted and Marion Butler are right, Silver could hit, who knows, $50 +...

Or not :)

I need to go and lie down :)
elevator guy
(10/23/1999; 21:30:08 MDT - Msg ID: 17282)
@FOA
Why will gold stocks be a risky place to be? Is it because the fact that they are quoted or exchanged in dollars, will subject them to the viscisitudes of turmoil coming to all dollar denominated instruments?

And if so, why is it not reasonable to assume that if the dollar is undergoing devaluation, then all items priced in dollars must be adjusted to compensate for the changes, and therefore dollar denominated gold mining stocks will also be adjusted in pricing to a new equilibrium price, which will still yet reward the bearer with an increase in value, as compared to the value level at which the stock was bought, and the new value of which not only reflects the devaluation of the dollar, and also the real gains made from the increase in the POG?

Or is it more like this: Two people are playing chess, and there is an earthquake. A few white pieces fall off the board. The player on the black side, who was losing, claims that all is the same as before, and wont credit the white player accordingly.

From my silly little illustration, we could see how it is that some market players may not "cough up" what is due, adjusting properly for dollar devaluation, to those who would sell back their dollar denominated securities.

Would it be as if you had a stock that was $10 to buy. Then the dollar goes through a 50% devaluation. After the change, the stock should be priced at $20. But you can't sell it for $20, because the market only wants to give a price of $12. But to me, as a novice, it seems unlikely that an open market would not adjust to any changes in the value of a dollar.

Is this the type of shenanegans, from which you conclude that gold mining stocks are not a safe place to be, during the coming changes to gold and the dollar, or am I missing something else?
Scrappy
(10/23/1999; 22:13:50 MDT - Msg ID: 17283)
FOA
Sir, if you please,Forgive my 'raw beginner' state of mind. But, as I am understanding things, very simply, of course, it would seem that the rest of the world, has in fact, stated that we are going to go to a gold standard, (of sorts). Individual currencies' value will be based, to some degree on the gold stores of respective countries, plus, (I am geussing), the value of goods/services that each country has to sell to the other countries, less the debt the country may have. (remember, I am in kindergarten, here, trying to understand what PhD.'s are saying).
Gold will be, (is?) the only constant common denominator amongst the countries, as the value of goods and services changes with needs & desires.
It would seem to me, that the rest of the world is trying to eliminate currency based on debt, (a good plan).
But, if this is the case, what is to become of the U.S.? The only currencies we have are I.O.U.'s. Will U.S. workers be paying off U.S. debt for the next century or two?
Or, (more likely), will we be forced to return to a partial gold stndard, or even a nothing-but-gold economy, just so we don't starve to death? Will the rest of the world allow us to come into the new playing field 'even?' How will this all be dealt with? (bearing in mind, that about the only 'products' the U.S.A. has anymore are miniscule compared to what we import. We are a nation of paper-pushers-what value will that be in the new scheme of things?)
Forgive me if I am sounding foolish-but I am suddenly afraid for all of us very spoiled citizens. Indulge me, please?
DD
(10/23/1999; 22:32:28 MDT - Msg ID: 17284)
Y2k in a nut shell
http://www.resilientcommunities.orgHi All - I ran across this article by Paul Ray at the above site. It's really good in that it lists pretty much all of the potentially nasty surprises that might be lurking beyond the 00 celebration. The only thing that seems a little odd to me is that Ray talks only of a "resession" based upon Y2k raining down on the party goers. He must be from the Ed Yardini school of Y2k prediction. Best, DD
Felix the Cat
(10/23/1999; 23:24:24 MDT - Msg ID: 17285)
phaedrus
Sorry Sir, I'm not professional, so can't update the information day by day. You can check it out in this website: www.gold.org.cn

Xie Xie

F. C
Gandalf the White
(10/23/1999; 23:58:59 MDT - Msg ID: 17286)
More INFO Please, Felix the Cat
Ni Hao F.C. -- Thanks for the URL for HK Gold ! --- Please tell me that I am not reading the Chinese language correctly, but this seems to show that Gold = US$302.4 and Silver = US$5.21 and Plat = US$ 432 together with the prices of Thursday to the left. These prices are well within line of the COMEX closing on Friday. Please advise from where the higher price comes in your thinking. Perhaps if you could also translate some of the wording in the BOX and some of the items in the writing below it would help us to better understand. Xie Xie
<;-)
Number Six
(10/24/1999; 01:01:26 MDT - Msg ID: 17287)
More Gold Stories - New York Times
http://www.nytimes.com/library/financial/sunday/102499invest-strategies-col.htmlFOA -

Many thanks for today's long post - each one has plenty of "meat"... I am beginning to get a smattering of understanding of these events thanks to the posters on this forum - thank you one and all...

Meanwhile Gold has made todays New York Times...

============================================================

In an Inflation Measure, a Way to Plan for Gold

--------------------------------------------------------------------------------
Related Articles
The New York Times: Your Money
Forum

Join a Discussion on Investing
--------------------------------------------------------------------------------

By MARK HULBERT

"What makes gold soar will eventually make stocks swoon."

That simple truth explains much about the recent downward path of the stock market. The gold market came to life well in advance of the Dow's most recent correction, which started in late August.

The price of gold is up 20 percent since it began its rise on July 20, despite weakness last week. Moreover, gold mutual funds gained an average of 19.2 percent during the third quarter, according to Lipper Inc., the research firm, after a 2 percent increase in the second quarter, the first time in four years that gold funds have produced back-to-back quarterly gains.



The New York Times

Poor Performer
Gold has been in a long bear market since early 1988. Not coincidentally, that period has been excellent for stocks. Recently, however, gold has come back to life.
Source: Bloomberg Financial Markets
--------------------------------------------------------------------------------

Many investors may not make the connection between the rise of gold and the selloff in stocks because they see gold's rally as artificial. That is not entirely unreasonable, because the sharpest part of the rally was seemingly prompted by an external event that did not have much to do with gold's economic fundamentals -- the announcement on Sept. 26 by European central banks that they would limit their sales of bullion.

The rally has been propelled further by another nonfundamental factor: Short covering from traders who had been aggressively shorting gold.

Still, after studying gold forecasting models tracked by The Hulbert Financial Digest, I have concluded that the fundamental cause for gold's rally was not the central banks' announcement, but increasing inflationary pressures, against which gold is a traditional hedge. In fact, one of the most successful models bases its buy and sell signals on inflationary trends, and it had turned bullish on gold in mid-September, well before the steepest part of the rise.

This forecasting model was devised by the Institute for Econometric Research of Fort Lauderdale, Fla., a newsletter publisher. The model is simple, based not on the absolute inflation level but on whether or not inflation is accelerating.

Specifically, it compares the Consumer Price Index's most recent 12-month percentage change with the corresponding reading three months earlier. If the most recent reading is higher, then the model is bullish, and investing in gold funds and shares is recommended.

For example, the Labor Department announced in mid-September that the Consumer Price Index was at 167.1, or 2.3 percent higher than it was a year earlier. In June, three months before that announcement, the index was at 166.2, or 2.1 percent higher than in June 1998.

The model thus indicated that inflation was accelerating, and it issued a buy signal for gold. (That trend was supported by the consumer price report last Tuesday, which showed inflation over the previous 12 months at 2.6 percent; in July, that figure was 2.0 percent.)

Because conditions were already ripe for a bullish move in gold, I believe that if the central banks hadn't provided the straw that broke the gold market's bearish back, sending gold prices up 14 percent in a week, something else would have. Those who analyzed the inflation data might well have seen what was coming -- 11 days ahead of the central banks' move.

Though the institute's record is not perfect, it is impressive. Over the last 15 years, by my calculations, an investor who switched a portfolio in and out of the gold market on the model's signals would have gained 2.6 percent, annualized. That doesn't seem striking until it is compared with the 0.2 percent loss, annualized, that he would have suffered by buying and holding bullion.

Picking specific gold-mining stocks is trickier. Many companies sell their gold production in the futures market. The hedging protects against declines in gold's price. But it means that they won't be benefiting immediately from higher gold prices. That is why one of the favorite mining companies among gold newsletters is Franco-Nevada Mining of Toronto, whose policy is to not hedge its production.

Among newsletters I track, the most-recommended no-load gold fund is American Century Global Gold. The stocks it holds are geographically diversified, use different hedging strategies and represent both high- and low-cost producers.


Mark Hulbert is editor of The Hulbert Financial Digest, a newsletter based in Annandale, Va. His column on investment strategies appears every other week. E-mail: strategynytimes.com.




Number Six
(10/24/1999; 02:05:36 MDT - Msg ID: 17288)
Steve - got a reply from Dick Moody re. your HOF post :)
Steve, got a reply from dick (to which I replied), took the liberty of saying you were *not* a gold salesman :)

Actually, it took me a little by surprise, as Dick started talking about some heavy subjects which I am actually quite familiar with...

here goes...

============================================================

Wow, what did I do to deserve all this attention? I'm just a an old retired trader in the metals who made some editorial opinions to bring to mind the 20 years + worth of the same old same old goldbug salesmanship. The arguments remain as they always have...oh a few details change here in there but its still basically the same old pitch but with a different wrapper. All this fuss reminds me of a joke my wife likes to tell.

A young blond-haired mother was getting on a city transit bus carrying her baby. As she boarded the bus, the driver commented that she had the ugliest baby he'd ever seen. The young mother was indignant but moved to the back of the crowded bus to find a seat next to a well-dressed businessman. As she was getting situated she told the businessman that the bus driver was extremely rude to her and she felt that she ought to go back up there and give him a piece of her mind but she failed to tell him the reason for his rudeness. The businessman was sympathetic though, and said: "Lady, go right ahead on up there and tell that man off, and I'll look out for your monkey."

Now that joke seems somewhat similar to this here forum discussion. I am just not sure whether I'm the driver or the businessman but I guess Andy, maybe we have one ugly, gold-monkey in those gold price charts.

Now you're 'analyst friend' stated:

"So Mr. Moody sees but one piece of the puzzle, doesn't have the big picture, and even though might get a short-term down trend correct will be left holding an empty hand as world events slip through his hand like water. IMO."

No, Andy, actually I see the ALL of the picture. Your friend apparently either is a gold salesman who's income is derived from selling gold, or he's not seeing the biggest of all pictures. I don't think he sees the picture that stems back to before the dawn of mankind.

Andy, there are powers that be that are beyond national borders. These are the NWO boys. They wield immense power and control. They are in control of gold. They hold a genuine supernatural power over the gold markets. In fact, they take their marching orders from the same source that gave the orders to Hitler, Mussolini, Hirohito, Lenin, Stalin, and Chairman Mao, to name a few. They have funded all sides in all wars. Their ultimate source of power is NOT Human and it is extremely EVIL. Yes, I do mean supernatural in the real sense of the term. These fellows have an agenda to establish a one-world government. They will accomplish this and rather soon I suspect. Their plans apparently require gold to remain extremely undervalued. IF, this is so, then they'll be able to easily hold down the price of gold. It's no sweat for them to do so, no matter what the circumstances. They're out to set up the structure for a great world dictatorship that will fulfill Biblical prophecy. This would be a set up for the Antichrist. In reality, they don't realize that they are but pawns of the "beast."

Now, my friend, THAT IS THE BIG PICTURE. That perspective compared to the picture shown by your friend simply tells me that your friend has only a small sliver of the cosmic picture. So what does that have to do with the price of tea in China??? i.e. Gold??? Somebody has exerted great power to manipulate the gold market in the past 30 days. Powers that seem to go beyond normal ability.

Now how does that apply to gold? Well, as I've said before, the most recent price bar charts are showing an unusual pattern formation in the daily price bars. The problem remains that when we look at the daily-price bar charts for December Gold we see a really "ugly" pattern developing in the last month of action. This pattern is (IMHO) clearly showing signs of manipulation. I mean we saw a clear and present "flag" formation developing. By now, that flag should have fully developed and the market should have or be in the process of seeing $380.00 gold (basis Dec of 99 contract). Instead we see it drooping to $300 on an inverted saucer-like pattern of a flag. Now, maybe it's just my old age but I don't quite remember ever seeing a foiled flag pattern take such a shape in any other kind of market price chart. Thus, I assert the manipulation is still present and I suspect if the control is still there now in the wake of the current "crisis" then either the crisis was never as bad as perceived or TPTB have been far far underestimated. I think it's the latter but it might be the former.

These "powers" may eventually allow gold pricing to float higher and may even let it do so this next week. My oscillators are NOT YET signalling a BEAR Market...but the oscillator lines are very close on some oscillators. The actual chart pattern of daily price bars on Dec 99 gold do show a bearish pattern that needs oscillator confirmation IMHO before I'd feel comfortable shorting in here. BUT, I suspect that if Dec gold closes below $300 for 3 days this next week... LOOK OUT DOWNSIDE here we come. Even if it doesn't and does turn and instead it goes up...well I don't think we'll see anything radical in gold price swings this year...though it's still possible to go up to $400 or so...at least technically speaking its still possible. That might change by the end of this week as technicals are constantly shifting.

Remember, these guys make the rules. They have an agenda. They are setting up a socio-economic religious structure to encompass the whole world. They wish to enslave the whole world. They will only partially succeed. They think they're doing us all a favor. They will bring in a "messiah" to save us all from ourselves, unite the world and perhaps protect us from some unknown enemy from beyond planet Earth. In so doing, the price of gold apparently must remain artificially low. Otherwise they'd have let gold run its natural course long ago...or certainly in the past 30 days. Had they not compressed the gold market, gold would likely be at least at the $400 to $500 level by now, and maybe higher.

NOW, of course this all assumes that stories we've heard were actually true and as severe as represented. I question the depth of the problem. I don't question the ability of TPTB to hold down the prices of gold or keep the Dow Jones 30 Industrials from collapsing. As I said, they wield enormous power and are not to be underestimat- ed. Fortunately, they will ultimately fail at the hands of Divine Intervention, but we're a long ways from that point.

For now we're not sure when their little pageant's opening curtain for the first act will take place. It seems as though we're ready for the curtain to rise, but maybe that's just the Mayberry Civic Band I hear warming up... and not the orchestra... I'm not sure, but I thought I saw Barney Fife with a Tuba just a minute ago.

Again, Andy, and all...remember that those promoting/selling gold are just salespeople with something to gain either directly or indirectly from you purchasing gold, or silver or whatever other product they're also pushing. Take what they say with a grain of salt and investi- gate. Go back and read the 15 and 20 year old newsletters and find out how remarkably little they've changed. They're still the same old arguments just dressed in different clothes. All the while, they are failing to realize who's in control and calling the shots.

-- Dick Moody (dickmoody@yahoo.com), October 24, 1999.


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

Hello Dick!
Thank you so much for such a lengthy reply - I NOW know where you are coming from and we are on the same path, believe me.

"Wow, what did I do to deserve all this attention? I'm just a an old retired trader in the metals who made some editorial opinions to bring to mind the 20 years + worth of the same old same old goldbug salesmanship. The arguments remain as they always have...oh a few details change here in there but its still basically the same old pitch but with a different wrapper. All this fuss reminds me of a joke my wife likes to tell.

A young blond-haired mother was getting on a city transit bus carrying her baby. As she boarded the bus, the driver commented that she had the ugliest baby he'd ever seen. The young mother was indignant but moved to the back of the crowded bus to find a seat next to a well-dressed businessman. As she was getting situated she told the businessman that the bus driver was extremely rude to her and she felt that she ought to go back up there and give him a piece of her mind but she failed to tell him the reason for his rudeness. The businessman was sympathetic though, and said: "Lady, go right ahead on up there and tell that man off, and I'll look out for your monkey."

####### LOL! #######

Now that joke seems somewhat similar to this here forum discussion. I am just not sure whether I'm the driver or the businessman but I guess Andy, maybe we have one ugly, gold-monkey in those gold price charts.

Now you're 'analyst friend' stated:

"So Mr. Moody sees but one piece of the puzzle, doesn't have the big picture, and even though might get a short-term down trend correct will be left holding an empty hand as world events slip through his hand like water. IMO."

No, Andy, actually I see the ALL of the picture. Your friend apparently either is a gold salesman who's income is derived from selling gold, or he's not seeing the biggest of all pictures. I don't think he sees the picture that stems back to before the dawn of mankind.

####### Whoaa. Hold your horses. He is NOT a salesman, and has no axe to grind as regards running up the POG (as I have been accused of trying to do many times on this forum)... #######

Andy, there are powers that be that are beyond national borders. These are the NWO boys. They wield immense power and control. They are in control of gold. They hold a genuine supernatural power over the gold markets. In fact, they take their marching orders from the same source that gave the orders to Hitler, Mussolini, Hirohito, Lenin, Stalin, and Chairman Mao, to name a few. They have funded all sides in all wars. Their ultimate source of power is NOT Human and it is extremely EVIL. Yes, I do mean supernatural in the real sense of the term. These fellows have an agenda to establish a one-world government. They will accomplish this and rather soon I suspect. Their plans apparently require gold to remain extremely undervalued. IF, this is so, then they'll be able to easily hold down the price of gold. It's no sweat for them to do so, no matter what the circumstances. They're out to set up the structure for a great world dictatorship that will fulfill Biblical prophecy. This would be a set up for the Antichrist. In reality, they don't realize that they are but pawns of the "beast."

####### OK. Now I get where you are coming from and I agree with you 100%. I have posted (and of course been ridiculed) many many times on this forum on these matters. I have read widely on this subject and listened to a lot of folks, done my research and asked many questions... #######

Now, my friend, THAT IS THE BIG PICTURE. That perspective compared to the picture shown by your friend simply tells me that your friend has only a small sliver of the cosmic picture.

####### i will forward this to him and let him answer that :) #######

So what does that have to do with the price of tea in China??? i.e. Gold??? Somebody has exerted great power to manipulate the gold market in the past 30 days. Powers that seem to go beyond normal ability.

Now how does that apply to gold? Well, as I've said before, the most recent price bar charts are showing an unusual pattern formation in the daily price bars. The problem remains that when we look at the daily-price bar charts for December Gold we see a really "ugly" pattern developing in the last month of action. This pattern is (IMHO) clearly showing signs of manipulation. I mean we saw a clear and present "flag" formation developing. By now, that flag should have fully developed and the market should have or be in the process of seeing $380.00 gold (basis Dec of 99 contract). Instead we see it drooping to $300 on an inverted saucer-like pattern of a flag. Now, maybe it's just my old age but I don't quite remember ever seeing a foiled flag pattern take such a shape in any other kind of market price chart. Thus, I assert the manipulation is still present and I suspect if the control is still there now in the wake of the current "crisis" then either the crisis was never as bad as perceived or TPTB have been far far underestimated. I think it's the latter but it might be the former.

These "powers" may eventually allow gold pricing to float higher and may even let it do so this next week. My oscillators are NOT YET signalling a BEAR Market...but the oscillator lines are very close on some oscillators. The actual chart pattern of daily price bars on Dec 99 gold do show a bearish pattern that needs oscillator confirmation IMHO before I'd feel comfortable shorting in here. BUT, I suspect that if Dec gold closes below $300 for 3 days this next week... LOOK OUT DOWNSIDE here we come. Even if it doesn't and does turn and instead it goes up...well I don't think we'll see anything radical in gold price swings this year...though it's still possible to go up to $400 or so...at least technically speaking its still possible. That might change by the end of this week as technicals are constantly shifting.

Remember, these guys make the rules. They have an agenda. They are setting up a socio-economic religious structure to encompass the whole world. They wish to enslave the whole world. They will only partially succeed. They think they're doing us all a favor. They will bring in a "messiah" to save us all from ourselves, unite the world and perhaps protect us from some unknown enemy from beyond planet Earth. In so doing, the price of gold apparently must remain artificially low. Otherwise they'd have let gold run its natural course long ago...or certainly in the past 30 days. Had they not compressed the gold market, gold would likely be at least at the $400 to $500 level by now, and maybe higher.

####### I go along with your scenario and what you are saying. But one has to ask the question, why do the Illuminati WANT the POG so low? I think I know the answer (in fact we all do if we trust and listen to our innermost intuition)... what is your take on this Dick? #######

NOW, of course this all assumes that stories we've heard were actually true and as severe as represented. I question the depth of the problem. I don't question the ability of TPTB to hold down the prices of gold or keep the Dow Jones 30 Industrials from collapsing. As I said, they wield enormous power and are not to be underestimat- ed. Fortunately, they will ultimately fail at the hands of Divine Intervention, but we're a long ways from that point.

For now we're not sure when their little pageant's opening curtain for the first act will take place. It seems as though we're ready for the curtain to rise, but maybe that's just the Mayberry Civic Band I hear warming up... and not the orchestra... I'm not sure, but I thought I saw Barney Fife with a Tuba just a minute ago.

Again, Andy, and all...remember that those promoting/selling gold are just salespeople with something to gain either directly or indirectly from you purchasing gold, or silver or whatever other product they're also pushing. Take what they say with a grain of salt and investi- gate. Go back and read the 15 and 20 year old newsletters and find out how remarkably little they've changed. They're still the same old arguments just dressed in different clothes. All the while, they are failing to realize who's in control and calling the shots.

####### Point taken. I feel that this time is different, that we are in THE END GAME (in many more ways than one), but, again, point very well taken...

Thanks again Dick for your thoughts. I feel you are 95% correct. however, if you think about it, those forces that believe that the POG should be set free, are by default anti-Illuminati, no???

Count me in!

Cheers!

#######

-- Number Six aka Andy - AUVENGER@cs.com

============================================================
SteveH
(10/24/1999; 04:25:35 MDT - Msg ID: 17289)
Not a debate
Number 6,

Thanks for sticking up for me. Interesting comments, he made.

The NY Times? article was interesting.

What is different about this gold market that didn't exist in the 79'-80' rally in gold is the speed of information flow. What took eight years then to develop (71'-80') will like only take a year or two maximum, and most of that is already used up. The speed of the internet and movement of information through that unique (in a historical perspective)medium is much akin to yelling fire in a theater. Once word gets out (and it has), gold will move quickly. We shall see. (Your NY article is mainstream press and I saw a Denver mainstream article yesterday).

GATA, for the first time, reproduced the latest FOA post and sent it to all their members. Congratulations FOA.

The Believer
(10/24/1999; 05:22:50 MDT - Msg ID: 17290)
FOA,Andy,Dick...
I read FOAs' post last night and loved it.
Thought it was one of his most clearly stated to date.
This morning when I checked my mail, sure enough,
Chris had sent it to me from GATA.
Congratulations FOA.
Andy, I do believe Dick and yourself are on the right track.
Let the others chuckle and berate your thoughts on
the "end game", but I too think it has started.
Some may think, well if the big boys are controling
the game to this extent, and they'll continue to hold
down the POG,where can "money" be best placed?
We all know the answer, it hasn't changed.
If stock markets tank, and curriency does the same,
gold will still be the best place for safe keeping.
Stocks and fiat money can turn worthless overnight...
but gold will never,can never,become worthless.
Keep up the fine posting...my best to you all.
SteveH
(10/24/1999; 05:55:25 MDT - Msg ID: 17291)
Protecting gold
http://www.calnews.com/archives/Metcalf13.htmBefore anyone gets sick of Second Amendment stuff, remember that the Fourth Amendment protects against illegal seizure (including gold) and if we are to let the anti-gun control lobbies have their way with the Second Amendment of the Constitution of the United States of America, what is to protect us from having their way with the Fourth Amendment. The fact is that the Supremem Court has not ruled specifically on the 2nd Amendment to clarify its meaning. In the meantime, gun-control advocates are having a hey day until that happens, when they are likely to find out that the Second Amendment and the Fourth need the same protection we are given under the first and that gives the right to say these words (mind you). But an Appelate Court in Texas (5th District) did rule and here is what it means according to them (as I understand Precedent and this isn't legal advice, this is better than law in the States that fall under the 5th district):

U.S. News 6/7/99

Rights and wrongs of guns
More city challenges and a crucial court case test the limits

BY ANGIE CANNON


When Sacha Emerson sued her husband for divorce last August, she also got a restraining order from a Texas judge to keep him away from her. She alleged that Timothy Joe Emerson had threatened to kill her lover. Typical divorce nastiness? Maybe, but what happened next was anything but typical and could become a crucial weapon in the nation's gun wars.

Emerson was arrested for possessing a gun while under a restraining order. In early April, U.S. District Judge Sam Cummings threw out the charge, ruling that it violated Emerson's Second Amendment right to bear arms. The decision�the first ever by a federal court asserting an individual's right to carry a weapon�sets the stage for a showdown between gun-rights proponents and gun-control advocates that could get dirtier and have far greater significance than any action Congress may take. It's also a battle that both sides have been trying desperately to avoid, because there's absolutely no way to predict who would win.

Last week, as the nation was still reeling from shocking school shootings, the high- profile legal and political assault on guns continued. House Republican leaders indicated they would embrace the modest gun-control measures passed by the Senate. Los Angeles, San Francisco, and other California cities joined a swelling municipal lawsuit movement against gun manufacturers. And everyone wondered where the once static gun debate was headed next.

Blurred lines. The ultimate answer may come from this obscure Texas case wending its way through the federal courts, a case that could determine the meaning of the Second Amendment. "It has potentially catastrophic consequences,'' says Carl Bogus, a law professor at Rhode Island's Roger Williams University. The reason: If the case makes it to the Supreme Court, as some believe it may, and the court decides individuals do, indeed, have a constitutional right to bear arms�no matter what� "the hands of the American people would be tied in attempting to regulate arms,'' says Bogus. Or not�if the court were to go the other way and rule that carrying guns is not an individual right. And therein lies the danger: For all the rhetoric swirling around, there's currently no court decision clearly defining the limits of the law, as there is in other political wars, such as those over abortion (Roe v. Wade) and campaign finance (Buckley v. Valeo). And so it is that Cummings's ruling has quietly blown the lid off the already contentious controversy over the Second Amendment, which states: "A well-regulated militia, being necessary to the security of a free State, the right of the people to keep and bear arms, shall not be infringed.'' What exactly did the Framers mean? One group�the states' or collective rights school�says it allows only states to maintain militias. The other school says it protects an individual's right to have guns. Over the years, the federal courts consistently have said that the Second Amendment protects collective�not individual�rights. Until now.

The Supreme Court has not ruled on the Second Amendment since 1939. In that case, United States v. Miller, a fellow named Jack Miller had been charged with carrying a sawed-off shotgun across state lines. The court refused to dismiss the charge, ruling that the shotgun would not have been used by a militia. Gun-control advocates say that opinion shows that the Second Amendment protects militias, which Congress has defined as state National Guards. Gun-rights forces, especially the National Rifle Association, have said it backs individuals' rights.

In recent years, the high court has hinted it might be willing to revisit the Second Amendment. Justice Clarence Thomas, in particular, has raised the possibility, noting that a "growing body of scholarly com� mentary indicates that the 'right to keep and bear arms' is . . . a personal right." If the Supreme Court were to establish an individual right to bear arms, "it would throw into doubt a lot of very sensible gun laws,'' says Dennis Henigan, legal director of the Center to Prevent Handgun Violence. "Some would survive. Others would not. It would be a terrible shame.''

Using what works. Yet even though the Second Amendment is often invoked in political debates, gun groups have shied away from using it in court. "If you are litigating cases, you raise the issues that judges are most likely to rule your way,'' says Stephen Halbrook, a Fairfax, Va., lawyer who has represented the nra in several cases. Instead, gun lawyers have relied on more suc� cessful arguments, such as those about due process, interstate commerce, and even the First Amendment. "The courts are hostile to the Second Amendment,'' says Bob Cottrol, a law professor at George Washing� ton University. "Liberals don't like guns and conservatives don't like rights, and that's often how the Second Amendment falls through the cracks.''

After losing in the lower courts, the gun groups tried a new approach. "They have packed law reviews with article after article espousing the individual rights theory,'' says Henigan. "It's been a concerted strategy to try to undermine the broad judicial consensus against the individual rights theory. It has not worked so far� until the decision by this federal judge in Texas.''

It could take years for the Texas case to finally be resolved. Meanwhile, city lawsuits continue to pile up against gun firms. In Washington, the House seemed poised to follow the Senate's lead this month by tightening restrictions on firearms sales at gun shows, requiring handgun trigger locks, and raising the age of gun buyers from 18 to 21. The House is also likely to push for tougher enforcement of these and existing federal gun laws.
onlychild
(10/24/1999; 09:32:14 MDT - Msg ID: 17292)
Steve H
Bravo Steve, thanks for reminding those at the table that the first and fourth amendments (as well as the rest of the bill of rights) are so important to every goldmeister that sits here. The second amendment was indeed intended to be an individual right, "the People" are the same "People" mentioned elsewhere in the bill of rights. In the days of the writing of the Constitution, "militia" meant any able bodied man between 16 and 60. By contrast, a militia organized by the government was a "special militia" or a standing army. There are many notes, diaries and newspaper articles that still exist from those times that affirm this. Thank you for your continued effort to keep us abreast of those that would take away our God given rights. The Constitution does not give rights, it is meant to serve as a guarantee of God given rights.
Mr Gresham
(10/24/1999; 10:14:23 MDT - Msg ID: 17293)
Dick Moody #17288
Well, I can almost see and hear Church Lady (Dana Carvey) now:

"Satan. Manipulating the gold market. Bad, bad Satan. Stop it, Satan! Let my bullion go."

Thought there was something funny in those charts...

Almost makes it not worth getting out of bed in the morning, eh? Satan on your case? Well, heck -- it's only Satan keeping me down. Now that I know...

(Just for the record: I think the human tribe creates its own "Satans", individually and en masse. Just look for mass hypnosis in its many forms, and you'll be tuggin' on one o' them debbils. Only thing you can do -- get up and take a swing at one of them, right there in front of you. Our forum's doing a pretty good job on several fronts, IMO.)


Leigh
(10/24/1999; 11:05:42 MDT - Msg ID: 17294)
Number Six
Dear Number Six: I'm glad that Dick Moody wrote so frankly about these topics. The Bible tells to expect these occurrences and says that evil will abound in the last days to an extent never before seen on earth. Mr. Moody and I are very much on the same page.
Leigh
(10/24/1999; 11:22:41 MDT - Msg ID: 17295)
Just Found on Kitco
Date: Sun Oct 24 1999 12:19
Fafner (What a coincidence!) ID#303266

KUWAIT (AP) - The United States will upgrade two air bases and an army camp it has been using in this oil-rich state at a cost of around $173 million, Defense Secretary William Cohen said Sunday.

Speaking here before he departed for Jordan, Cohen said the price was still "a general figure" and it has not been decided how it will be allocated.
Peter Asher
(10/24/1999; 11:41:11 MDT - Msg ID: 17296)
Good find Leigh
That comes out to $72 per oz. invested in military infrastructure. Not a bad service charge, or finder's fee,on a gold loan.
Leigh
(10/24/1999; 11:54:07 MDT - Msg ID: 17297)
More on the Kuwait Story
AzusaGold just posted the rest of the story:

KUWAIT (Oct. 24) - The United States will upgrade two air bases and an army camp it has been using in this oil-rich state at a cost of around $173 million, Defense Secretary William Cohen said Sunday.

Speaking here before he departed for Jordan, Cohen said the price was still "a general figure" and it has not been decided how it will be allocated.

"What we want is an upgrade in the capacity of the bases to accomodate those troops and make sure that we have the kind of ramp space and other types of facilities that would accomodate a large influx of aircraft should it be necessary," Cohen told reporters.

Under a 10-year agreement Kuwait signed with the United States after the 1991 Gulf War, several thousand American troops are stationed in Kuwait with pre-positioned weapons and aircraft, ready to defend the small state from Iraqi aggression.

The troops use a camp in Doha, outside Kuwait City, while the warplanes operate out of Ali Al Salem and Ahmed Al Jaber air bases. They help patrol the no-fly zones imposed on Iraq after the war.

Cohen said he and Kuwait's emir, Sheik Jaber Al Ahmed Al Sabah, "totally agree there should be no change in our Iraqi policy until Iraq complies with its obligations, including the full accounting of Kuwait's POWs."

Kuwait claims Baghdad is still holding some 600 Kuwaitis and other nations from Iraq's seven-month occupation that was ended by the Gulf War. Iraq denies the claim.

....
Peter Asher
(10/24/1999; 12:05:35 MDT - Msg ID: 17298)
2nd Amendment
From 'Atlas Shrugged', "someday you will find that words have exact meanings" (Francisco)

"A well-regulated militia, being necessary to the
security of a free State, the right of the people to keep and bear arms, shall not be infringed."

First, none of the argument I have seen addresses the phrase, "Well regulated militia." That would have to be a body of people united in a common community cause. And, per "Well regulated", under some form of imposed discipline. If this was intended to address the right of an 'individual' to bear arms it would have been a very different statement. If you substitute the word individual, for the word people, you get an illogical sentence.

Certainly, Law abiding and honest individuals should have the right to bear arms, but trying to say this is written in to the Second Amendment is an exercise in futility. It just doesn't say so. Trying to ring an implied meaning out of a piece of the constitution, is the last refuge of an incompetent political debater!

While we are on this subject, I'd like to try out a little philosophical riddle I developed to separate the Men (and Ladies) from the sheeple. � "Can you tell me the difference between a law abiding citizen, and an honest man?"
Lafisrap
(10/24/1999; 12:24:14 MDT - Msg ID: 17299)
Keeping spot down

Gold lenders who see the near-term future spot price of gold as likely to rise, are likely to refuse cash settlement offers. Conversely, if gold lenders see the near-term future price of gold as likley to fall, they are likely to be more willing to settle in cash at the current spot price.

Probably obvious to most; however, this explains why people with an interest in keeping the paper gold markets alive have an interest in keeping the spot price of gold trending down.

American Gold Eagles are still generally available from coin dealers, current price: approx $325. The potential on the up side is large. The probability for a large drop is smaller. So, probably a good time to buy.

I sure do need gold to go to $30,000 per ounce.

Lafisrap
Dave
(10/24/1999; 12:24:39 MDT - Msg ID: 17300)
Peter Asher Ref # 17298
The difference between a law abiding citizen and an honest man:

Law abiding is simply doing things right.
An honest man is one who does the right things.
Peter Asher
(10/24/1999; 12:34:42 MDT - Msg ID: 17301)
Dave
I like that, and fast too. 9 minutes to find, read. create and post. Very impressive.
Gandalf the White
(10/24/1999; 12:39:29 MDT - Msg ID: 17302)
More discussion with Felix the Cat
Hello Felix --- The HK webpage that you provided us is very interesting, and I am looking forward to seeing the HK market open and the page being active. I note in the "English" mode that the price of Gold in Both NY and London are in the term "aunce", which of course is the Chinese translation of the English word "ounce" or "TROY oz.", while the price of gold in HK$ will be stated in the Chinese term "liang". Am I correct in guessing that that gold may be sold by the "gram" in HK ? -- Like the GREAT ONE says, "We watch this market together, Yes?"
Thanks F.C.
<;-)
Felix the Cat
(10/24/1999; 12:54:29 MDT - Msg ID: 17303)
OH! We have a BIG different "Culture of Gold exchange" between US & HK �K
In HK, we have two kinds of the Gold---- one is "99 Gin" (=0.99 pure gold), and the other is "Sie Gin" (=0.9999 pure gold). For the prices of them, "99 Gin" is about US$359.7+ per "Liang" (=1.10+onz), "Sie Gin" is about US$411+ per "Liang".
We only get the "paper" when we buy "99 Gin". (At least, in the bank that I have account in there.)
So, the words of "physical gold" refer to me as "Sie Gin"
If someone get the wrong signal in that, sooooo sorry !

Thanks for Gandalf that let me know that "Culture" deference.

Xie Xie

F. C
rsjacksr
(10/24/1999; 13:20:02 MDT - Msg ID: 17304)
Peter Asher Ref # 17298
http://www.usagold.com/cpmforum/tools/post.htmlThe militia didn't issue weapon (guns). The weapons came with the ablebodied personal who formed the militia.
SteveH
(10/24/1999; 13:38:25 MDT - Msg ID: 17305)
Protecting gold (for Peter)
Peter,

This is from Appelate 5th district:

part of a national community or who have otherwise developed sufficient connection with this country to be considered part of that community. See United States ex rel. Turner v. Williams, 194 U.S. 279, 292 (1904).

The Court has also held that given their contemporaneous proposal and passage, the amendments of the Bill of Rights should be read in pari materia, and amendments which contain similar language should be construed similarly. Patton v. United States, 281 U.S. 276, 298 (1930), cited by David Harmer, Securing a Free State: Why the Second Amendment Matters, 1998 BYU L. REV. 55, 61 (1998). The Court's construction of "the people" as used in the Second Amendment supports a holding that the right to keep and bear arms is a personal right retained by the people, as opposed to a collective right held by the States. Thus, a textual analysis of the Second Amendment clearly declares a substantive right to bear arms recognized in the people of the United States.

SteveH
(10/24/1999; 13:40:33 MDT - Msg ID: 17306)
Protecting gold (for Peter)
Peter,

oops, it cut of some from the last post. Here is the full rendition of the Textual Analysis from US v. Emerson:

A textual analysis of the Second Amendment supports an individual right to bear arms. A distinguishing characteristic of the Second Amendment is the inclusion of an opening clause or preamble, which sets out its purpose. No similar clause is found in any other amendment. Stanford Levinson, The Embarrassing Second Amendment, 99 YALE L.J. 637, 644 (1989). While states� rights theorists seize upon this first clause to the exclusion of the second, both clauses should be read in pari materia, to give effect and harmonize both clauses, rather than construe them as being mutually exclusive.

The amendment reads "[a] well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed." U.S. CONST. amend. II. Within the amendment are two distinct clauses, the first subordinate and the second independent. If the amendment consisted solely of its independent clause, "the right of the people to keep and bear Arms, shall not be infringed," then there would be no question whether the right is individual in nature. David E. Johnson, Note, Taking a Second Look at the Second Amendment and Modern Gun Control Laws, 86 KY. L.J. 197, 200 (1997-98).

Collective rights theorists argue that addition of the subordinate clause qualifies the rest of the amendment by placing a limitation on the people's right to bear arms. Id. However, if the amendment truly meant what collective rights advocates propose, then the text would read "[a] well regulated Militia, being necessary to the security of a free State, the right of the States to keep and bear Arms, shall not be infringed." However, that is not what the framers of the amendment drafted. The plain language of the amendment, without attenuate inferences therefrom, shows that the function of the subordinate clause was not to qualify the right, but instead to show why it must be protected. Id. The right exists independent of the existence of the militia. If this right were not protected, the existence of the militia, and consequently the security of the state, would be jeopardized. Id. at 201.

The Supreme Court recently interpreted the text of the Second Amendment and noted that the phrase "the people" in the Second Amendment has the same meaning in both the Preamble to the Constitution and in the First, Fourth, Fifth, and Ninth Amendments. United States v. Verdugo-Urquidez, 494 U.S. 259, 265 (1990). The Court held that the phrase "the people" "seems to have been a term of art employed in select parts of the Constitution."

The Second Amendment protects "the right of the people to keep and bear Arms," and the Ninth and Tenth Amendments provide that certain rights and powers are retained by and reserved to "the people."

* * *

While this textual exegesis is by no means conclusive, it suggests that "the people" protected by the Fourth Amendment, and by the First and Second Amendments, . . . refers to a class of persons who are part of a national community or who have otherwise developed sufficient connection with this country to be considered part of that community. See United States ex rel. Turner v. Williams, 194 U.S. 279, 292 (1904).

The Court has also held that given their contemporaneous proposal and passage, the amendments of the Bill of Rights should be read in pari materia, and amendments which contain similar language should be construed similarly. Patton v. United States, 281 U.S. 276, 298 (1930), cited by David Harmer, Securing a Free State: Why the Second Amendment Matters, 1998 BYU L. REV. 55, 61 (1998). The Court's construction of "the people" as used in the Second Amendment supports a holding that the right to keep and bear arms is a personal right retained by the people, as opposed to a collective right held by the States. Thus, a textual analysis of the Second Amendment clearly declares a substantive right to bear arms recognized in the people of the United States.
Cavan Man
(10/24/1999; 13:48:32 MDT - Msg ID: 17307)
Mr. Gresham 17293
You missed it; the forest from the trees.
Leigh
(10/24/1999; 13:57:13 MDT - Msg ID: 17308)
FOA
Hi, FOA! As usual, I've printed out your post from last night and have been reading it over and over to try to understand it better. You said, regarding the transition unlike anything ever seen:

"How can one be ready for this? Some people are 80% gold bullion, 20% in the few largest unhedged mines (only 3 or 4 exist) and hold plenty of cash that is expected to devalue greatly. Their mindset is ready for gold to be priced somewhere between 0 and infinity! In other words, gold in their eyes will outlive it all."

As you are aware, this is what many Forum people are doing. Would you consider this a good strategy, or can you suggest a better one? Thank you!
nickel62
(10/24/1999; 14:02:33 MDT - Msg ID: 17309)
The "Emperor indeed has no clothes" or adequate risk analysis for that matter!
The latest edition of Grant's Interest Rate Observer had the following unbeleivable quote from John Reed the longtime chairman of Citigroup: "Where the models tend to go wrong ,is in failing to anticipate 'second order effects.'Thus although Citibank had on direct exposure to Long-Term Capital Management,it was a primary lender to half the companies that constituted the rescue committee."

"We were in over our heads with everyone of the furms that did have direct exposure to Long-Term Capital,"
said Reed. "It would have reverberated through the system in about two nanoseconds. None of these firms had the capital to sustain the losses."
Anyone that still wonders why the Federal Reserve bailed out the LTCM bunch can pretty much see from this quote. Also it shows the inter-related nature of todays situation and the likelihood that the unstopable crisis is probably not as far away as many of the lemmings think.
nickel62
(10/24/1999; 14:04:44 MDT - Msg ID: 17310)
The "Emperor indeed has no clothes" or adequate risk analysis for that matter!
The latest edition of Grant's Interest Rate Observer had the following unbeleivable quote from John Reed the longtime chairman of Citigroup: "Where the models tend to go wrong ,is in failing to anticipate 'second order effects.'Thus although Citibank had no direct exposure to Long-Term Capital Management,it was a primary lender to half the companies that constituted the rescue committee."

"We were in over our heads with everyone of the furms that did have direct exposure to Long-Term Capital,"
said Reed. "It would have reverberated through the system in about two nanoseconds. None of these firms had the capital to sustain the losses."
Anyone that still wonders why the Federal Reserve bailed out the LTCM bunch can pretty much see from this quote. Also it shows the inter-related nature of todays situation and the likelihood that the unstopable crisis is probably not as far away as many of the lemmings think.
GFD
(10/24/1999; 14:05:25 MDT - Msg ID: 17311)
Whither The Dollar
FOA. I have just finished reading your missive yesterday. To say that the boys at the BIS can pull a 'coup' and dislodge the US dollar from it's primacy as the world reseverves currency is a statement that needs to be examined in light of the true strengths of the the USA as it exists today. And it is certainly NOT the dollar.

The true strengths are military and technological. Currently there is nothing out there that can touch the US military and it is a tool that is being used exentsively to ensure the US keeps it's place at the top of the pyramid. The latest events in Kuwait are a reminder of this. More about this later.

The other area of strength is technological innovation, particularly software and digital electronics. Here the US has a lot of closer competition. The problem with the way the deficit is counted is that it does not take into account export of intellectual property in exchange for physical property. If trade numbers truely took this into account I think the numbers would be a lot closer.

I write this as someone who owns a lot of bullion and would never touch a 'net stock'. However, I hold bullion because of the supply demand deficit and not because of imminent geopolitical shifts.

If the US dollar collapses it will be in the time frame of Another - decades - not in years, quarters or months.

Having said that, I find the timing of the announcements of Kuwaits loan and a renewed US presence in Kuwait to be "highly auspicious". One interpretation is that of desperation. Another interpretation is that of realpolitic - the US quietly reminding certain parties where the real power lies.
susannah morgan
(10/24/1999; 14:20:54 MDT - Msg ID: 17312)
Conspiracy Theories, Number 6
Hello Ladies and Knights of the Forum. I have been reading and absorbing the posts here for several months, not writing because inevitably, my questions are answered by many of you intelligent before I've wirtten them down. Thank you all very much for contributing to my education in the gold market.
Today, I must make a comment to Number 6 and his friend, the retired metals trader.
Sirs; with all due respect and also the possibility that you are serious in your belief of the Big Picture, wherein super natural evil beings are manipulating the price of gold as a step in their plan to introduce the Anit=Christ, who do you think you're kidding here?
Your scenerio has all the elements of a new X Files. Of course, you have freedom of speech on this and other forums, and so do I. I am therefore commenting to the effect that any new lurkers out there should not let this idiocy denigrate the postings of the many well informed and serious gold investors on this site.
If you, No 6 & friend, have an agenda to make the USA Gold Forum a laughable affair; you can stop now.
Leigh
(10/24/1999; 14:29:16 MDT - Msg ID: 17313)
GFD
Dear GFD: Regarding the U.S. military -- ten or fifteen years ago your statement would have been very true. It still is, but not as much so. The military now is underfunded, overworked, and subjected to ridiculous social engineering that is causing a terrible loss of morale.

Underfunded: Commanders are constantly telling stories of machines being "cannibalized" for parts because there is no funding for new parts. This is true; my husband is a military officer and I hear these stories all the time. Enlisted personnel are so underpaid that many families are on food stamps.

Overworked: My husband has worked 13 to 18 hours a day year after year, as have many other service members. Many boats at his base are so understaffed that it is a close call as to whether they should be going out on missions at all. Our troops are sent all around the world on missions that do not involve interests of the United States at all, wasting manpower, money, and machines.

Social Experiments: Gays in the military. Women in combat and on ships and submarines. Social workers asking family members and teachers to "hotline" about families that may be under stress (which of course only causes more stress when a social worker shows up at the door). Political correctness at all times.

This is Clinton's military.
Gandalf the White
(10/24/1999; 14:36:45 MDT - Msg ID: 17314)
Thank you Felix the Cat !
NOW we at the FORUM better understand the operations of the HK Gold market and sales to the common person on the street. WOW, that is quite a difference between 0.99 and 0.9999 purity in price. Please now tell us (after the markets are open this week) and when you have time what the one ounce 0.9999 Au PANDA is selling for at the Bank and what the street price is received for the sale of a PANDA.
Thanks
<;-)
Leigh
(10/24/1999; 14:40:09 MDT - Msg ID: 17315)
susannah morgan
I think you're posting at the wrong forum. MK expects us to be kind and polite to one another. We don't always agree with each other on every issue, but we try to be nice. Your post was downright rude.
searching
(10/24/1999; 14:42:55 MDT - Msg ID: 17316)
Gresham 17293
Study your bible and you will see that this is the end times chain of events that will happen. Whether this is the that time I do not know. But if economic turmoil in the world is followed by someone rising out of Eastern Europe or Rome to save and unite the world then you can get out your Bible to see what will happen next. Also the Bible says that we should have Gold.
elevator guy
(10/24/1999; 14:44:08 MDT - Msg ID: 17317)
Big Picture
Susannah, Michael Kosares has explicitly asked that no religious refrences be made at this Forum. Although I feel discussion of God should not be constrained, I abide by MK's wishes because this is his website.

Occasionally, mention of God pops up in the course of discussions, because it is tied intrinsically to the belief systems of many of us. MK has allowed these slight passing refrences to stand, presumably because they did not rise to the level of proselytizing.

The refrence to Bible prophecy in Number 6's post hardly even approached anything close to proselytizing. Your flaming post, however, takes direct aim at Number 6, and ridicules his beliefs, and describes his beliefs as "idiocy"
You can express you difference of opinion in a more chivalrous manner than to resort to name calling.

I for one feel that your belittling attack shows no respect for the rights of others to believe what they choose, and goes way beyond the bounds of mutually respectful discourse.

Michael Kosares has the authority to decide what is posted here, not you. You don't have to attack those who have different beliefs than you.
elevator guy
(10/24/1999; 14:58:07 MDT - Msg ID: 17318)
@Susannah
One of the great patriarchs of this forum is "Another".

There is reason to believe that he is a Muslim.

Muslims also believe in God, and they believe that Satan exists, and has control over many political systems.

Another shares his thoughts with many people, even allowing Christians to hear his wisdom, although he may not share all our beliefs.

Although he has a different backround, and may not agree with some tenents of the Christian faith, he chooses not to put up walls of division, and chooses to share his insights with others in a harmonious, enlightening atmosphere.

His direct involment with us gives us knowledge that we might not otherwise have, and we are glad that he does not let animosities overcome his desire to help his fellow man.

If you have any idea who Another is now, you should take a cue from his behavior, and allow differences to exist, without making a federal case over a person's beliefs.
elevator guy
(10/24/1999; 15:02:09 MDT - Msg ID: 17319)
Correction: "tenets", not "tenents"
.
RossL
(10/24/1999; 15:39:54 MDT - Msg ID: 17320)
In defense of Susannah
I do not believe her post was out of bounds. Her post is within the realm of a free exchange of ideas.

I do not believe there are supernatural "beings" manipulating the price of gold. Anyone out there with evidence to the contrary, please bring it to my attention...
elevator guy
(10/24/1999; 15:42:08 MDT - Msg ID: 17321)
@RossL
Do you think that belittling name calling has a place at this Table Round?
RossL
(10/24/1999; 16:04:37 MDT - Msg ID: 17322)
@elevator guy
Quote
"Do you think that belittling name calling has a place at this Table Round?"

I am confused. Please quote the sentence that you believe to be "belittling name calling".
megatron
(10/24/1999; 16:06:23 MDT - Msg ID: 17323)
Susanna morgan
Tnank you, thank you!! The last thing we need more of are irrational idiots ranting about 'the beast'. Don't feel bad. I've been verbally 'slapped' for the same complaint. I look forward to hearing your rational posts.
Leigh
(10/24/1999; 16:16:16 MDT - Msg ID: 17324)
MK
MK, please advise. I personally was shocked at susannah's hostile post, especially coming from a new poster. Do you think this is the kind of communication we should have on the Forum? Do you not feel that kindness should be the guiding principle here?
SteveH
(10/24/1999; 16:16:24 MDT - Msg ID: 17325)
Protecting gold
Peter,

Now that the Supreme Court and the Appelate Court have ruled the Second is an individual right, it now carries the same priveledge as the 1st and 5th Amendment, which in essence means that any CCW board denying an otherwise law-abiding citizen their right to bear arms is actually denying a Civil Right and under Title 18 and 42 USC any violation of a civil right guaranteed by the Constitution is grounds for suit with Attorney fees allowed at best and at worst a crime (in the case of two or more people on a board conspiring to deny a Civil Right guaranteed by the constitition) punishable by up to ten years in prison. That is what separates the gun industry suits against the tobacco suits, by the way. It is essentially denying the right of the citizen to bear arms by infringing the source of supply by infering that manufacturer is responsible for any and all injuries or deaths by weapons they make.

(Note: remember that as a right we have an obligation to honor no matter the social cost, however, I say, if one doesn't like the Second Amendment it is always possible to bring about another one through the Constitutional amendment process, imho)

It is ultimately going to be decided in the courts but I believe most all Americans were brought up under a common understand that the Second Amendment protected their individual rights and would be suprised or appalled the first time to find out that prior to 1990 the Courts actually ruled in favor of the Second being a State right and that indeed was why CCW laws remained on the books for so long.

Netking
(10/24/1999; 16:21:00 MDT - Msg ID: 17326)
POG
...beautiful sunny morning here & the POG is steaming along quite nicely @ $301-60. Whether we hold to Kaplins level of retracement or not in the short term you can sense things are about to ignite & explode not implode.

One thing about reading the 'manufacturers handbook' is we find out that the good guys win by the time you get to the end!
RossL
(10/24/1999; 16:26:17 MDT - Msg ID: 17327)
@Leigh

I am appalled at your response to Susannah. You have not attempted to debate the point. Your response is to censor. Why is this?


Just Weight & Measures
(10/24/1999; 16:27:02 MDT - Msg ID: 17328)
'Manufacturer's Handbook'?
Netking,

When it comes to gold, the good guys have been loosing for almost 20 years, ever since I first started buying that yellow stuff!

Also, What is this 'Manufacturer's Handbook' you mention?
SteveH
(10/24/1999; 16:27:23 MDT - Msg ID: 17329)
Bloomberg
www.kitco.com"...Gain in Gold Prices Spurs Investor Interest, Prompting New Equity Funds

London: Gold and the companies that mine it are attracting investors' interest, prompting some fund managers to create new products, after the metal ended a three- year slide with its biggest 10-day gain since 1982. Magnum Global Investments Ltd., a Bahamas-based hedge fund, said last week it is starting the Goodwin Gold Fund to make money from both rising and falling gold stocks, mainly in South Africa, the world's largest gold producer. The new fund will be managed by Nick Goodwin, formerly of Fedsure Asset Management. A Sept. 26 announcement that 15 European central banks will limit sales and lending of their gold reserves for five years sent gold up a fifth from a 20-year low a month earlier. That boosted some gold stocks, such as Harmony Gold Mining Co., which rose as much as 55 percent as investors rushed to profit from the turnaround. ``We've certainly seen many more investors asking about gold funds in the past few weeks,'' said Graham Birch, who helps manage more than $1 billion in mining sector equities at Mercury Asset Management, a fund-management company owned by Merrill Lynch & Co. Requests for presentations and information on gold ``are surging,'' he said."

megatron
(10/24/1999; 16:29:17 MDT - Msg ID: 17330)
Ross L
Because you can't have a rational discussion with a person who believes in 'the beast', plain and simple.
Canuck
(10/24/1999; 16:32:32 MDT - Msg ID: 17331)
Mr. Moody
I'm sorry to hear that the devil is manipulating gold, I guess I'm out, I'm cashing out tomorrow.

This thing is hard enough to follow, let's assume that the
mean ol' devil is not involved. Let's stay reasonable focused.
MKL
(10/24/1999; 16:47:35 MDT - Msg ID: 17332)
Individual Rights
As I understand it, if we consider all the amendments in the Bill of Rights besides the second one, they all place limitations upon the power of the government... not the individual. Assuming consistency on the part of the writers, how could it be reasonable to assume that the second amendment does otherwise? That is, since the other amendments were clearly in place to limit the power of the government, it makes absolutely no sense to assume the second amendment was designed to limit the rights of individuals. The writers of the Consitution and the Bill of Rights were not a bunch of dims...

FWIW

MKL
Roark
(10/24/1999; 16:50:35 MDT - Msg ID: 17333)
The Big Picture
Please forgive me, but I cannot let this day end without responding to the current dialogue regarding the supernatural forces at work in the gold market.

For the last several months of my lurkage on this and other gold forums, I have noticed the abundant references to the "sheeple," good ol� "Joe Six Pack" who slumbers while the financial world (a.k.a. Wall Street) burns. To us "serious" gold investors, the sheeple are mainstream Americans � the majority, if you please � who have bought the big lie that the bubble will never burst. That the sheeple do exist and are being methodically manipulated towards the abyss many of us on these forums find little difficulty accepting.

Is it such a big deductive leap from where we already are to allow for the possibility that some cohesive, unified force is behind such manipulation? Do we not already make reference to the "cabal?" We just haven't decided upon the nature of this force, or cabal.

I for one do not believe that our five senses allow us to fully experience our planet (let alone our universe) in its entirety. But just because we cannot detect the presence of a thing does not mean it does not exist.

Anyone with access to a long-term commodities chart book will find that gold has been behaving in a most unnatural way for at least a decade. Likewise have many commodities such as the grains been guided by unseen hands down, down, down to the point where you must question the existence of any free markets.

To Susannah, I say that people aren't as stupid as they used to be. Beware, the "bewildered herd" is beginning to stir. And you will find that the old ploys of censorship and intimidation will no longer do the trick like they did in the good old days.

Thanks to the internet, the world's first true free press, the veils of illusion are dropping with each passing day, and not a moment too soon. Thanks to those of you who cannot handle it, I am pleased.
Leigh
(10/24/1999; 16:55:17 MDT - Msg ID: 17334)
RossL
Because susannah was not earnestly looking to open a dialogue with Number Six or Dick Moody. Her goal was to state that she didn't like what Mr. Moody had to say, and she used ugly words to make her point. Words like "idiocy," "agenda to make USA Gold Forum a laughable affair," "who do you think you're kidding here?," and so on. I have nothing against honest debate, but susannah wasn't looking for an honest debate.

Most of the Christian posters here are very familiar with the end-time prophecies in Revelation which foretell the rise of a one-world ruler, a one-world religion, forced subservience, natural disasters, pestilence, and starvation. The information can be found in the Bible and in prophecy books found in Christian bookstores. We know where you, susannah, and megatron are coming from; have any of you researched this topic well enough to take on a debate about it? (Though I suspect MK wouldn't appreciate that.)

Why don't we give MK a chance to comment?
Gold Power
(10/24/1999; 16:56:10 MDT - Msg ID: 17335)
Making Sense of it All

I am trying to get a grip on the scenario FOA is laying out. In order to do that, I need some questions answered.

Anyone who can help with this, please feel free:

First, FOA states: "For gold has entered a new era that will find it being held as "private money" in the form of "real wealth." This is something our "extended generation family" has never seen or understood."

It appears to me that gold has always been held as private money for real wealth and that the only difference in what we see today is that it is being done on a larger scale by a fewer players than what we have seen in our lifetime. Regardless of the reason it is being done, it is being done.

Can someone tell me how and in what ways gold is being held as private money and as real wealth that was not done before?


Second, FOA also stated: "Truly this segment of the community has found their investments on the wrong side of a political currency transition that was destined to change the gold markets for the rest of our lives."

Many gold stocks have far outperformed gold so far. It is unknowable at this point how they will perform relative to gold from here on out. So this appears to be wishful thinking. Can anyone explain this to me in a way I can understand?

Third, FOA states: "Few could accept that for the dollar to fall from world reserve status would also require the destruction of the "dollar paper gold market." Nor could they imagine how the years preceding this would see the world flooded with "dollar paper gold contracts." Yet, as this progressed over many years we saw how the political manipulation that GATA rightly exposes was being used in a way that will eventually destroy the confidence in the dollar. For truly, in
today's world, if one loses the ability to contract for gold in U.S. currency, then the reasons for holding dollars at all begins to fade."

I do not understand that there is an intrinsic tie between the dollar as a reserve currency and the dollar paper gold market. How is it that the dollar paper gold market had to be destroyed in order for the dollar itself to be destroyed?

Also is FOA saying that the world was flooded with dollar paper gold contracts in order to bring down the dollar, or is he merely noting that each has happened, and not necessarily in concert?

Also, how is it that the acceptance of the dollar is tied to the gold price being quoted in dollars? I mean, people hold yen, marks, francs, and Euros without having gold quoted in those currencies. So it is not clear to me how the two are tied together.

Fourth, FOA also states: "Build a bubble within the dollar gold market by selling paper gold far and wide. By selling paper derivatives of gold we free up official and private physical stocks
of bullion to quench the coin, bar, and fabrication deficit. Because the world gold market is priced in modern terms by "derivative contract," flood the paper market and drive the price lower. In a never-ending circle, the market expands in ownership as the price falls. "Coat-tail" this process on the IMF/dollar need to lower gold to support its currency with a perception of
low inflation, and the political will to proceed is reinforced. For those major bullion buyers of the world (oil) who would object to this, build a new currency upon the standard of a future "Free World" gold price that can become a trade settlement reserve item. Once the timeline of the dollar is near the end of its mathematical ability to expand world trade, destroy this new fractional reserve gold market by adopting self-liquidating rules into the official sector lending
game. With this turn, oil and gold prices begin a dollar rise from which there is no return."

I have several questions about these paragraphs. (1) Is FOA saying that some entity or entiies planned and executed a trap for the U.S. dollar and that these steps were meticulously followed as if in a script? (2) Is he saying the gold derivatives were purposely invented so that private physical stocks of gold could be purchased by these large players? (3) Are these large players the ones ANOTHER said had cornered the gold market?

FOA has outlined what appears to me to be a vast conspircacy against the dollar. If that is his position, would someone say that outright for all to see?

By the way, I sure hope he's right about the rise in interest rates coming from dollar liquidation as a reserve currency. That will really shake up the old apple cart.

One quick question: ANOTHER told us the dollar and gold would rise together. FOA seems to believe gold will rise while the dollar declines. Any comments?


Fifth, FOA also states: "In the limited experience of the gold bugs with "free-market gold" dating from 1975, physical gold buying was never the full driver of price. The price always rose from, at best, a 50/50 mix of paper leverage buying and physical buying. Nor can they envision gold rising so much, so fast, even before dollar price inflation takes hold. Our "real life" education about gold prices ($100 to $800) was explained entirely as "dollar price inflation" dynamics. Never was it approached as gold becoming a parallel private reserve asset, just like stocks,
bonds, and currencies."

Well, gold has only moved up $85, back to a position of reality after having been artificially depressed from the paper gold derivatives. It will not surprise me to see investment entities, such as hedge funds, turn and take a long position in gold derivatives. I think the physical buying that has been done, while it's been a record, was not enough to push the price up. It took the lifting of the artificial depressant, gold derivatives. So, I don't think enough has occurred to say that physical demand alone has been responsible for the price rise.

Also, I can't see where buying gold as a parallel private reserve asset is much different from buying gold because of dollar price inflation. The two seem quite similar to me.

Can someone explain the difference more adequately, please?

Also, I do like his statements about gold, oil, and interest rates rising -- normally signs of inflation -- before the market sees price inflation across the board.

FOA also writes: "During the next five years physical gold is going to outlast and outperform not only the current world derivative gold market but also outlive a large portion of stockholder equity in most gold mines. During the death throes of the gold marketplace, the dollar price
could be all over the map. Simply put, most short-term traders and investors in long-term paper gold (gold stocks included) will be eaten alive as we witness a transition unlike anything ever seen."

If I were a skeptic, I'd say FOA has just given himself an "out" in case the price of gold doesn't go up anytime soon. Why will the dollar price be all over the map? Why wouldn't the price move in an orderly and clear-cut direction -- up, if we are in a transition unlike anything ever seen?"

Sixth, FOA states : "They (the Kuwaitis) are the oil producers for the next hundred years."

Correct me if I'm mistaken, but I thought ANOTHER told us that Arab oil would be depleted within 40 years and this is the reason the Arabs entered into the gold/oil deal in the first place. Is that accurate? And is FOA taking a different stance on the situation than ANOTHER?

FOA also states: " ... for these people (the Kuwaitis) will not lend cheap. Understand the dynamics that are now in effect. Somewhere gold lenders and gold contract derivative holders are exercising the very limits of their fine print to get their gold back in allocated form. Since the brokers between these deals have lost the ability to control their counterparties, their firms must use their own capital to buy physical gold and thereby blow up the price, or else "borrow" it to cover their old lenders. It's no contest and is done outside the retail lending market so as to not gun the rental rates."

It would sure be good if we could see some evidence that these statements are true. What we see is a falling price and falling lease rates with the Kuwaitis providing a large sum of gold to the gold-leasing market. I am hopeful tha tFOA's perspective is accurate. I just wish it were verifiable.

Finally, FOA states: "Every central bank in the world is looking at its reserve dollar holdings and watching this latest gold spike. I can tell you that they are analyzing this new risk because the potential exists to cut them out of the gold market at what was perceived to be low prices."

What does this mean? How do central banks see that the spike in the gold price can possibly cut them out of the gold market at what was perceived to be low prices." Any help with this
will be greatly appreciated.

I hope no one sees me as a naysayer. I am not. To me, reading the words of ANOTHER is like having a conversation with an old friend. I simply want to understand what I am reading and much of it I don't understand.

Thank you,

GOLD POWER
Canuck
(10/24/1999; 16:57:14 MDT - Msg ID: 17336)
Dick Moody
This is part of the post from this morning that has touched off some nerves today:

--------------------------------------------------
Andy, there are powers that be that are beyond national borders. These are the NWO boys. They wield immense power and control. They are in control of gold. They hold a genuine supernatural power over the gold markets. In fact, they take their marching orders from the same source that gave the orders to Hitler, Mussolini, Hirohito, Lenin, Stalin, and Chairman Mao, to name a few. They have funded all sides in all wars. Their ultimate source of power is NOT Human and it is extremely EVIL. Yes, I do mean supernatural in the real sense of the term. These fellows have an agenda to establish a one-world government. They will accomplish this and rather soon I suspect. Their plans apparently require gold to remain extremely undervalued. IF, this is so, then they'll be able to easily hold down the price of gold. It's no sweat for them to do so, no matter what the circumstances. They're out to set up the structure for a great world dictatorship that will fulfill Biblical prophecy. This would be a set up for the Antichrist. In reality, they don't realize that they are but pawns of the "beast."
----------------------------------------------------------

I read this post several times and I cannot see the DIRECT
relevance in regards to our discussions. Ms. Morgan's response, IMHO, was triggered from the religious innuendos of Number 6's post. A few posters have since retorted replies both negatively and positively to the initial post and I believe if Mr. Kosares was concerned he would of stopped this business this am.

Gold is possibly manipulated by 'Supernatural Forces' or it's not.

Let's move on.
megatron
(10/24/1999; 17:03:30 MDT - Msg ID: 17337)
logic
Because someone believes in god or the beast doesn't make them 'right', it just means they think they're 'righter'.
I for one couldn't care less about Anothers religion. If he makes statements about gold based on 'fear of the beast' he's in for a big surprise. He seems to be making the mental connections based on logic not superstition. If not then he and other 'paranoids' will get what they asked for.
A colusion of gov't officials is NOT the BEAST!!! Grow up!
Aragorn III
(10/24/1999; 17:08:19 MDT - Msg ID: 17338)
Catching up
I have been catching up over the past week of reading, but in trying to reach the summit of current discussion I feel as one walking up an avalanche...the bountiful supply of new additions ever sweeping me farther downhill despite my efforts. Fortunately a big project is winding down and time will be on my side for replies promised to ORO and yellin' of Troy.

canamami, thank you for your response in this post (10/12/99; 16:18:35MDT - Msg ID:16174):
<<"Sentiment is important to the POG, and gold's role. If enough people are convinced the POG will go down, and act on that belief, the POG will go down. So too, if everyone decided tomorrow that gold were worthless as money, it would be worthless as money. It is because gold possesses certain characteristics that it has been and continues to be viewed as store of value and also, to an extent, a unit of exchange. Let us use a hypothetical: If mountains of cheaply mined pure gold were discovered tomorrow, such that supply was so great that any scarcity value or use for gold were wiped out, gold would be worthless.">>

In your talk of the Price Of Gold and its fate teetering on the brink of public confidence, your benchmark yardstick to measure this value is apparantly viewed as something sacrosanct? ;-) I suggest for your consideration that the Price Of Gold reflects more upon the value of the currency than it does upon the value of gold. How else may we make sense of one ounce of gold that may at the same time today be purchased for 300 U.S. dollars, 280 euros, 173 Latvian lats, 2,883 Mexican pesos, 7,730 roubles, 31,752 yen, 13,020 Indian rupee, 2,055,000 Indonesian rupiah, or 142,650,000 Turkish lira? You might agree that it is quite a wide world after all, and the sentiment you recognize as important for North Americans might be viewed as inconsequential to the populations of India, Turkey or Indonesia.

Let us take another look at your hypothetical, and with appropriate modification we will give it the stress test and stand it on its end: "If institutions capable of cheaply creating fiat currencies were discovered tomorrow (though I suggest these banks already exist today!), such that supply was so great that any scarcity value or use for currency were wiped out, currency would be worthless." From that I will let you draw your own conclusions, but will suggest that the mountain of gold in your original example would prove less disruptive to world economics than has been brought about by the many international "paper mountain" money makers.

You are quite correct that human sentiment is the important factor in dertermining value, but as one who holds gold, you can take comfort in knowing it is the collective sentiment of ALL people, and on the world theatre, gold plays to a wider audience than does the dollar. We may sleep well, my friend.
Leigh
(10/24/1999; 17:14:35 MDT - Msg ID: 17339)
Canuck and megatron
You guys, the whole point is NOT whether the Bible is true or not. The debate here is whether someone has the right to be unkind on this Forum.
Cavan Man
(10/24/1999; 17:18:04 MDT - Msg ID: 17340)
To Leigh
Better, to withdraw; keep your powder dry for another day and time.
Cavan Man
(10/24/1999; 17:23:17 MDT - Msg ID: 17341)
Dear FOA
I have been considering your thoughts and those of your friend for some months now. These I have considered in the context of additional analysis and investigation undertaken by Aristotle, Aragorn, MK, ORO and Mr. SteveH. You may not be 100% on target but IMHO, you're darn close. While forces and circumstances might intervene in the interim, I simply cannot disagree with your analysis of world political, economic and monetary events.

As we say on the rugby pitch, I'm "with you".

You sure don't need to hear anyone say that but, it made me feel good! Have a teriffic week.......CM
el St.One
(10/24/1999; 17:26:05 MDT - Msg ID: 17342)
The Bullseye >>>>--303.30---->>>
Looks like I should take a couple of days off more often. As on old saying goes, dumb luck is better than no luck at all. I arrived at the right figure, but not for the right reasons. I had expected Gold futures to bottom a little lower, if they had I could feel better about next week. I think next week will unfold with the big news stories.
My guess is the D.C. dollar saviors have more surprises waiting for us. Barring any major Gold news I expect Gold to drift a little lower, before turnig up. I would like to see a spike bottom, enter day, closing near the highs for the day. Throw in some breaking positive Gold news, or Bond/Stock bad news and we will be back on track for some big moves up.
I should quit while I'm ahead, but for the record, no big news this week and Gold will bottom below 296 and close the week near current levels. Longer range (year end) 400 +/- 50 with a solid floor at 350.
Back to the bullseye, maybe this will change my luck, I have been snake bit in the markets lately, mostly my own fault. I usually call things right, but have not taken small gains, only to watch them reverse into losses. Still swinging for the cheap seats, even though I know better.
I believe FOA And Another on this one (GOLD) is going out of the park so far it will be hard to find, maybe impossible.

Thanks to all, I'm honored to be included in such great company. el
Netking
(10/24/1999; 17:35:51 MDT - Msg ID: 17343)
@Just weights & measures
Your Question Sir; "...Also, What is this 'Manufacturer's Handbook' you mention?"
I know our kind sponsor MK prefers we focus our discussions on Gold but briefly I was referring to that mentioned in the second paragraph of Leighs message #17334, The Bible.
regards Netking
susannah morgan
(10/24/1999; 17:48:27 MDT - Msg ID: 17344)
APOLOGY
Hello All! Please accept my sincere apology for offending anyone's religion. I have had the good fortune to become well versed in not only the King James version of the Bible but also the Koran in my studies of relgion and philosophy. I am not looking to debate religion on this forum or any other forum. One's spiritual developement can only be personal. However, that being said; let's look at the viewpoint from which I was speaking earlier: This is a forum about gold. If I was looking to understand the current gold market, or if I was looking to purchase gold bullion from the folks on this site, and ran into a discussion about supernatutural beings manipulating the price of gold, I would be inclined to click off; run actually!
I have a habit of saying what I see. In my view there are times when there is no flowery way to call a spade a spade. Kindness in my view has many forms. If the emperor has no clothes, are you being kind to pretend you do not see?
el St.One
(10/24/1999; 17:53:48 MDT - Msg ID: 17345)
My last Post
Looks like I should not have taken a break while writing that one. I contradicted my self between start and finish. On the other hand thats shows how fast my mind can be swayed short term. Longer term big news will cause big swings. Next week, quite big boys can't use all of their ammunition too soon. el
Mr Gresham
(10/24/1999; 18:18:29 MDT - Msg ID: 17346)
Oops!
"Oops!" (quick post before call to dinner)

I feel like I'm "back in school" and it's one of the finest classes I've ever had the privilege of joining. The intellectual stimulation of "peering behind the curtain" is a pure pleasure to share with the minds who gather here. Thank you all for bringing your best Thoughts into our company.
Leigh
(10/24/1999; 18:19:05 MDT - Msg ID: 17347)
susannah morgan
Dear susannah: Again, my point was not that you offended anyone's religion. It was that your language and accusations were unkind.

The first item in MK's "Guidelines and Prohibitions" states that slanderous and derogatory remarks are not acceptable. I felt that the things you said about Mr. Moody's post were very derogatory, if not slanderous. The Forum is big and well-rounded enough for a lot of different opinions. Most lurkers have sense enough to understand that USAGOLD does not share the opinion of every poster here. But we're all allowed to say what we think, as long as we're polite. I felt that your post went far beyond that. Perhaps a more tactful approach will serve you better in the future.
jinx44
(10/24/1999; 18:27:59 MDT - Msg ID: 17348)
Where are we???
I thought this was USAGold?? It is starting to sound like kitco! What a shame.

Mention the Bible or God and the knees jerk in unison.
The Believer
(10/24/1999; 18:28:25 MDT - Msg ID: 17349)
Susannah Morgan, elevator, megatron,etc.......
Ms. Morgan,
DD
(10/24/1999; 18:30:16 MDT - Msg ID: 17350)
High emotional content
Hi All - It's been an interesting day at the round table today, no? It's interesting that every once in a while someone says something that sparks a strong emotional responce in others. Then, we play ping pong with the emotions while adding more fuel to the fire. This happened when we got on the "Stagflation" defination. It became little about defining the term, but much more about strong feelings and justification of positions. NO BIG DEAL! This type of stuff happens all the time in life. I think it's closer to the truth to say that we all have strong opinions and personal buttons to be pushed than to say that one opinion is wrong and another right. Occasionally, some of our buttons will get pushed on the forum. I suggest we all take a few deep breaths, forgive the perceived transgressions and get back to enjoying the powerful banter that this forum represents. By the way, I don't agree with either side of the Big Picture issue. I just know how much I appreciate all of your points of view. With great love and respect, DD
Goldspoon
(10/24/1999; 18:42:04 MDT - Msg ID: 17351)
A YEN for Platinum
In my exploits the last few days i learned something..
If you look at a chart of the YEN vs. the Dollar and then look at a Platinum price chart.... They are Twins!! It appears as though the value of the YEN is the biggest mover for Platinum....Makes sence in this way...Japan is the biggest user of Platinum jewlery.. The greater value the Yen the higher the demand for platinum jewlery...

The recent up move of platinum was followed by the XAU but not the physical gold price... a lot of wheeling and dealing going on in gold spot.... im' not sure the past is a good indicator of the future at this point....
Peter Asher
(10/24/1999; 18:45:58 MDT - Msg ID: 17352)
susannah
You are the third person in as many months to begin their posting career here by admonishing us that this is a Gold (Only) Forum. This Forum has come to have broader spectrum of commentary than Gold per se. People have expanded the discussion to all aspects of economics and the various believe systems that control and are controlled by them. I personally am dedicated to this site (and post only here) because it is a "Philosophical" format. In fact, I like to believe that I have been partly responsible for making it so.

The content of the Archives would probably print out to four thousand pages by now, so naturally new people may not have a full overview of our wide range of topics, our understandings and our friendships. Usually if a post of topic is of no interest, the silence by which it is received is sufficient to deter the subject. If it's really out of line, Michael will make it disappear, sometimes also in total silence, the only clue being a missing post number.

Those who wish to be part of a Forum that is strictly gold oriented can find that format at Gold Eagle. I believe I speak truly for most of us here, when I say we are dedicated to furthering our understanding of Gold, the other metals, the economy, the economic manias and manipulations, the plots and conspiracies that might really exist: The exchange and suppressions of wealth and ideas. And also getting to know and understand each other.

The Internet has given us a via for forming into groups of common interest and common cause in an incredibly profound new paradigm. I said to Michael way back, (and he concurred) that I felt I had more in common with people here than most that I know in everyday life.

When you find yourself thinking in attack mode, read it through a few times and decide if you would talk that way to a friend, a lover or perhaps an errant child.

Sincerely � Peter A.
The Believer
(10/24/1999; 18:53:53 MDT - Msg ID: 17353)
Ms.Morgan,elevator guy,megatron,etc....
Ms. Morgan,
My goodness,what a sharp tounge directed at a subject
you would seem to care very little about. The subject
of God that is...
As a rather new poster to this list myself I have tried to
show respect for the postings of those that have gone before me. Please my dear, at the least we can be kind
to each other. I would not think we all have to agree.
But a little diplomacy goes a long way to open up the
lines of communication. That is, after all,why we are all here.
Idiocy denigrating the postings?
A laughable affair?
Please, surely you are capable of better...
Thank you Leigh, for speaking up for fair play.
Megatron...why is it that one cannot have a rational
discussion with those that believe in God and the devil.
Too childish for you?
elevator guy, I did not know M.K. had asked that
God not be brought into the conversation. Thanks for
letting me know...a shame real feelings and beliefs must
be hidden in a public forum
CoBra(too)
(10/24/1999; 18:56:38 MDT - Msg ID: 17354)
FOA's message reprinted at Gata -
@ FOA, Sir, I feel Chris Powell's introduction to your latest post gets as close as anybody can describe your efforts: "read it carefully. I have a feeling that FOA gets as close as anyone gets to what is going on behind the scenes around the world".

I agree and would particularily stress the derivative paragraph, that the world gold market is priced by derivative contracts (as opposite to the physical supply/demand "equation"). The "gold carry trade", while originally being intended as an instrument to keep the POG in check, became so heavily overused by BB's and hedge funds, including certain producers -some may have been bullied into this situation, while others smugly played the game along with the W(olf)all Street pack - that this ploy in itself it became THE systemic risk. The systemic risk of the overextended US $ as hegemonial reserve currency for the world.

The numbers are staggering. $ 80 - 120 trillion in "bets" on
rocket scientific mathematical formulas - are the rock solid
and mostly off balance sheet potential future("s") liabilties, where Wall Streets (and some others - LBMA, Deutsche Morgan G., UBS to name a few) fat cats became and are becoming fatter. Putting these numbers into perspective
it suffices to state that annual global GNP amounts to about $ 30 trillion.
Todays derivative game is predominantly of US origin, i.e. the derivative risk and overleveraging constitutes a systemic risk to the US money center banks and hence for the US $, a currency having overstayed its usefullness as amply demonstrated in the latest meltdowns of SE-Asia etc.

History may view this latest carry trade in gold as irony - the only historical measure of value, constraining fiat money technocrats in their quest to supply the system with paper promises upon more promises of more paper until they also believe their own scam of a new paradigm of eternal unperturbed growth - as gold was misused, misjudged, manacled and verbally downgraded by the same forces, installed to advocate monetary stability to ensure fundamentally sound economies. While it was "politically correct" to officially repeal and denounce the ancient role of gold as the only stabilization in floating rate currency systems, the derivative (counter-) use, wellcomed early on, not only backfired, but led to an unsolvealble situation for the US $ and its debt bubble.

(The repeal of Glass-Steagall by a senate panel points in the same direction-miss your comments!).

Late night post - so please forgive incongruencies (if that's a word) - regards CB2
JCS
(10/24/1999; 19:09:48 MDT - Msg ID: 17355)
susannah morgan (10/24/99; 17:48:27MDT - Msg ID:17344)
RE:
susannah morgan (10/24/99; 17:48:27MDT - Msg ID:17344)
APOLOGY
Hello All! Please accept my sincere apology for offending anyone's religion. I have had the
good fortune to become well versed in not only the King James version of the Bible but also
the Koran in my studies of relgion and philosophy.

**************
2 Tim. 3:7 "Ever learning, and never able to come to the knowledge of the Truth."

Good luck
elevator guy
(10/24/1999; 19:10:53 MDT - Msg ID: 17356)
@ any one who will listen
If any lady or gentleman would like to know more about fufilled Bible phophecies, and yet-to-be-fufilled prophecy as it relates to the end times, please feel free to obtain my e-mail address from Michael Kosares.
I am always open for discussion on this topic, so long as we take it off-line, out of respect for Mr. Kosares' wishes.
Leigh
(10/24/1999; 19:12:43 MDT - Msg ID: 17357)
Goldspoon
Welcome back, Goldspoon!! We've missed you, and we're all craving to hear your words of wisdom about platinum. What are the gnomes in Zurich going to do this week?
SteveH
(10/24/1999; 19:13:30 MDT - Msg ID: 17358)
Gold Power
You have asked many good questions. I will defer to FOA, who I am hopeful will tackle your many questions. I want to see the answers myself.

Peter. Good words.

El St. One ---> congrats.
Netking
(10/24/1999; 19:19:10 MDT - Msg ID: 17359)
POG
http://www.kitco.com/gold.graph.htmlSpot continuing 'steady as she goes'. What's the school of thought on POG for this week?
I guess Monday's "bail out" meeting at 5-30PM(I think) may give some direction for the very short term.
Chris Powell
(10/24/1999; 19:29:56 MDT - Msg ID: 17360)
The Hatfields meet the McCoys in Denver
http://www.egroups.com/group/gata/269.html?A report on the Denver Gold Group conference
by GATA Chairman Bill "Midas" Murphy.
GFD
(10/24/1999; 20:39:05 MDT - Msg ID: 17361)
Leigh
Leigh, I was speaking in a relative sense. Your point is well taken. Your point about 'over tasking is well taken. I was thinking about mentioning this issue but I didn't have the time. The US military is definitely under a stress that cannot continue for much longer before a significant implosion in capabilities occur. I wish you and your husband well.
Leigh
(10/24/1999; 20:52:57 MDT - Msg ID: 17362)
GFD
What a kind thing for you to say! I hope I didn't undermine the point you were making.
Number Six
(10/24/1999; 21:07:12 MDT - Msg ID: 17363)
I seem to have disturbed a hornet's nest :) My apologies.
Hello All.

I feel as if I should be the one to apologise here.

Although I have been a lurker for quite some time on this site, I have only been posting for the last week or so, and am still getting used to the ebb and flow at it were...

Let me just give you a quick background to all of this and perhaps as Canuck says we can put this to bed and move on.

I am a confirmed GoldBug. Before I "saw the light" I spent a couple of years researching the Y2K problem in great depth, and am one of the "regulars" on Ed Yourdon's Timebomb 2000 Forum - by that circuitous route I began studying the gold and precious metals markets with a y2k bias. My background is in Airline realtime reservations systems, I'm currently on a major Airlines y2k project in Denver, and I spent the last six years working for VISA in San Francisco on their realtime worldwide financial systems.

Bottom line - I believe, like the BIS in Switzerland, that the international Banking system of systems is in serious danger of failure at rollover. Ditto the likes of COMEX, NYMEX etc. etc. Possible bank runs. The whole enchilada. The problem of imported bad data and cascading cross defaults is very very real IMHO. Systemic lock-up.

Hence my distrust of digital money, my accumulation of gold and silver, and my desire to be "cashed out" of all digital money and "paper gold" before rollover. (BTW I'm still trying to track down a copy of the movie "Rollover" without sucess I'm afraid - quite a coincidence don't you think, especially with regards to FOA's prediction of a POG explosion?)

So I've been posting at the y2k forum for many many months on Gold and why people should accumulate it as a form of safe haven, from a y2k perspective. And only just recently a retired ex-metals trader by the name of Dick Moody responded to my posts in great detail. I had been espousing FOA and Another's views, and Dick basically came along and started replying that we were all basically wrong, and that per his lifelong 15 charts Gold would do such and such ... at such and such a time ...

I basically retorted to Dick that HE was wrong, that gold was a seriously manipulated market, and that Technical Analysis could not be applied to it. In an effort to clear up some misunderstandings, I posted at USAGOLD a couple of our conversations and threw it open for anyone to comment.

FOA did very briefly, and then SteveH replied yesterday with his brilliant HOF overview. I relayed THAT off to Dick, and this is where it gets interesting.

Dick came back at me with his view of the world that we inhabit now - a very wise and studied viewpoint, (Gnostic?), if I may say so, that went far beyond economics and geo-politics. I was quite unprepared for this, but seeing as Dick brought the subject up I felt bound to reply, as I did, and forward Dick's reply back to SteveH.

So there you have it. It just so happens that Dick's philosophy of life almost exactly mirrors my own - and I had no idea about this beforehand. For those of you who have pooh-poohed all this, Dick is not actually referring to Satan, or the Devil, or Bible prophecy as such (of course, ultimately he is in a very rounabout way). He IS referring to dark forces that have ruled this orb for thousands of years, if not longer, and are still at work today in all countries at the highest levels. He is referring to the NWO/Illuminati/Secret Society boys, who at the uppermost levels communicate with supernatural forces.

I believe that this is the case but I don't want to get drawn into this, on this forum. Perhaps this is not the time or place, I don't know, I am a newcomer and will defer to the status quo here - and thank you Peter Asher for your last viewpoint with which I concur.

So again, sorry to have muddied the waters here, that was not my intention AT ALL, neither was it my intention to make this forum a "laughing stock"...

Thank you Leigh and the rest of you who pointed out that the attack on myself and Dick was uncalled for. I do appreciate it, as I felt quite bad this evening reading the day's posts and felt that I had made a terrible faux pas...

Over to you Michael, I hope this explains my reasons for posting on these matters.

Let's get back to GOLD :) (and Silver too, bot forgetting The Horse with No Name!)

Thank you all for your patience :)

Andy aka Number Six
Al Fulchino
(10/24/1999; 21:16:53 MDT - Msg ID: 17364)
Number Six! This is Number One.
You handle yourself admirably, please stay on. You are part of our group.
golden
(10/24/1999; 21:50:36 MDT - Msg ID: 17365)
el St. One
Please reiterate - I am confused.. Are you saying if there are big stories from the Dollar savers, gold will go down? if stock and bonds go down, then gold will go up? What about silver.
DO I have it right?
There have been posts about the stock market, silver and gold all being at a point ABC. Does that mean that they are all ready to go up?
My head is spining.
Peter Asher
(10/24/1999; 21:59:01 MDT - Msg ID: 17366)
Today's fuss
A may have mentioned this before, but I was once told that the two subjects forbidden to be discussed by visitors to inmates at mental institutions are, Relatives and Religion.

Religion, by nature, is dogmatic. When one holds a religious belief, they do not wish to debate it. That's the essence of a "Belief." Likewise when one's belief is stated as an absolute to another person, then in effect, that other person's belief is being argued about. So, crossing over to claiming theological causes for our subject matters is what triggers these disputes. Interesting that two days after a news item about Illinois banning the word "Evolution" from the public school curriculum, we have our very own "Scope's Monkey Trail" pitting creationists against evolutionists.

"The Devil" means many things to different people. But it is basically a religious term for the evil nature man is capable of. Many secular synonyms exist, "Primal Forces, "The Animal side of Man", The Reactive Mind", and the most recent attempt "Chemical Imbalance." If you want a really mind blowing fantasy theory of the Devil, find a copy of Arthur C. Clarke's "Childhood's End."

The important thing is to refrain from stating Theological viewpoints as absolutes. Actually, we probably should refrain from stating anything as an absolute. But I am not absolutely sure about that!
ET
(10/24/1999; 22:03:46 MDT - Msg ID: 17367)
Gold Power


Hey Gold Power - how's it going? If this post comes out screwed up
it's because it's my first effort with emacs, a Unix text editor that
is new to me. I had to laugh when reading your post to FOA.
Sometimes I have a hard time understanding what he's saying also. I
think sometimes FOA is trying to explain the concept of money to those
with only fiat experience and background. Money can be a difficult
concept to put your arms around at times. Many thanks to FOA and all
the others that take the time to try to explain a tough concept.

Many moons ago Turbohawg, now an occasional poster here, had it right;
keep it simple. I believe the only thing we really need to keep in
mind when analyzing this apparent wealth of info and statistics is
that most of what we term money out there is nothing more than debt.
If the debt can be serviced going forward in a credible fashion which
doesn't arouse the suspicions of 'the Sheeple' or 'Joe Sixpack', then
those that foist this monetary scheme on the world will continue to do
so. However if the day comes when it is apparent to the casual
observer that the money in his pocket is better spent as soon as
possible to retain any purchasing power, then things will change
rapidly as most will attempt to lock in tangible value. What is
probably somewhat unique about the current circumstances is the fact
that the world's 'money', the US dollar, has become the suspect
currency. This hasn't happened in quite awhile as the dollar has been
perceived as strong versus most currencies. If I have read Another
and FOA correctly, they are saying that the time has come when a
different 'money' might better suit the majority of people in the
world. In other words, an economic war fought on the basis of the
world's money itself.

If they are correct, the ramifications are not good for those
holding the 'wrong' money at the 'wrong' time. Indeed, holding any
derivative or claim in the 'wrong' currency holds the possibility of
default if too many try to move to something different at the same
time. The only way they will not be correct is if the world
decides to stay with the dollar as the world's 'money' and there is no
move to gold as a preferable instrument.

At this point in time, given the debt position of the world relative
to the governments' ability to create money to service that debt and
the possible ramifications of y2k, whether real or perceived, it seems
a bad time to make any bets on the status quo remaining that. It is
certainly possible that the dollar may reign for some time to come as
it still comprises the largest amount of currency in circulation.
Before the dollar is to go down, something else will have to be there
to take its place. I can envision a number of scenarios over the next
year or so that could be bullish for the paper currencies and several
that would be bullish for the hard assets. I see few that would be
bullish for confidence in general.

I still see this shaping up as an inflationary depression of unknown
magnitude. As confidence slips, the demand for money (any money),
will likely fall as demand for goods and services falls. Since most
money is represented as debt, this creates a situation where
governments are forced to monetize (buy back their debt for new
currency) their debt, putting even more currency in the marketplace.
As the Stranger will tell you, this extra currency will find itself
chasing the current demand for goods and services thus raising prices
(inflation). The only question is over what time frame we see this
play itself out as we seem to be seeing it happen now to some degree.

At any rate, I don't think we'll have long to wait to find out if this
will be a once-in-a-lifetime event as A/FOA predict. I think all
things being equal, their scenario is well-reasoned and likely
reflects the political view in some circles. However, y2k could throw
a wrench into the most well-laid plans.

ET
Gandalf the White
(10/24/1999; 22:04:10 MDT - Msg ID: 17368)
Thanks, PeterA
I AM sure of this!
<;-)
Peter Asher
(10/24/1999; 22:08:11 MDT - Msg ID: 17369)
Silver
Friday's charts on gold and silver showed distinctly different patterns. Almost mirror image, with gold down two and silver up six (Comex trading day, start to finish) Now, tonight, spot silver is down three and Dec. Silver is up three. Comments?
Number Six
(10/24/1999; 22:11:53 MDT - Msg ID: 17370)
Very encouraging news from Bill Murphy
http://www.egroups.com/group/gata/269.html?Towards the tail end of his Denver shenanigans report this caught my eye as i'm making a silver play at the moment...

"16,000 silver long silver specs were taken out on this
setback. As always, the silver specs are mega-long and
will probably stay like that all the way up. What is
important here is the open interest has washed out once
again close to that hard-core level of 75,000
contracts. That is why I think the price of silver
should start to move up again very soon."

============================================================

And this one lloked most "interesting" as it tends to support my y2k Banking views... and those of the BIS...

"Harry Schultz spotted an interesting comment by Jude
Wanniski, the noted economist, on Gary North's Y2K site
(www.garynorth.com). Wanniski was talking about
potential global financial and banking sector systemic
failures due to Y2K-related breakdowns:

############################################################
"This is why the dollar must be fixed to gold prior to
Y2K or Greenspans's 'century date change,' to reduce
this gigantic problem by simplification."
############################################################

Not sure exactly what this means... looks promising though :))

Any thoughts?
Black Blade
(10/24/1999; 22:28:54 MDT - Msg ID: 17371)
Leigh and post #17313
Generally the new military has degenerated quite a bit. The funding isn't really there. Yet, we have congressmen who are generally criminal by their very nature such as Trent Lott who pilfers Pentgon funding for naval vessels to be constructed in his state. Even though these vessels (light carriers)are not wanted or desired by the navy. This results in the depletion of funding available for other critical areas of national defense. Clearly Mr. Lott is a criminal, bordering on treasonous. Military personnel are underpaid, in my own family, there are relatives who served in the officer ranks whose own families were receiving food stamps. One point though, women are restricted from serving on submarines, but may serve on carriers, tenders, frigates, etc...Does give a whole new meaning to "Love Boat" doesn't it?
Black Blade
(10/24/1999; 22:38:39 MDT - Msg ID: 17372)
Religion and guns......hmmm, what a mix!
Personally I have no problem with religion, but it's not my "bag" man! This is a gold forum and we have been asked by MK to refrain from religious posts here. Just think of it as we are all brothers and sisters with a common goal...enough said.

SteveH, your posts are quite interesting on the 2nd amendment. I have my CW, however, for several years I carried my "gear" on my person without one. What's the point of carrying a scrap of paper for the priviledge of self-defense if you only intend to protect yourself. In that case "better judged by 12, than carried by 6".
Golden Truth
(10/24/1999; 22:40:48 MDT - Msg ID: 17373)
GOLD BOOMING AGAIN?
P.O.G up a whole 5 cents, Yipee this is sure turning out to be a hold of a Lifetime. Only problem is who's lifetime are we talking about???
If it wasn't for me owning 5 Dec $390 GOLD calls and selling four of them at $500 a contract i still would be down thousands of dollars!!!

I have to agree with "Richard 640" over at "G.E" tonight about not worrying if an earthquake or a meteor or the the collapse of the American economy is going to happen before i finish posting this. Some way to live your life eh? In that case Richard 640 is right. We all might as well take the Gas Pipe and breath deeply, maybe that is the point of all the Doom and Gloom posters here. To Kill us off with all the negativity. I thought Gold was a good insurance policy but it seems to me the under writer is somewhat Evil! in their intentions.

If that is the case i will personally fight to the death all that are involved in this charade. I don't think i'll be alone in this either.
If this is what GOLD is starting to represent i don't want any part of it any longer. I think i will start to sell my physical metal as its turning out to be one big Joke!!
Has anyone ever thought that if the markets do crash we could end up in a depression and the P.O.G could be worth alot less tomorrow if we truly go back to a true scale of measurement? If all our assets are inflated meaning real estate etc. I say GOLD is inflated as well. Think about it !
Also if the "EVIL" cabal? is manipulating the P.O.G what makes any of us here think the Governments wouldn't throw us into a depression or War just to spite the manipulators that are trying to over throw the U.S dollar??
Are we all being tricked here? I'd say it would be all to easy to do. How can you win at a game when you don't even know what the rules are? I've never seen so much lying and cheating in all my life, in the end it can only lead to more WAR and fighting. This GOLD shorting, Mines selling forward, and lets not forget all kinds of derivative contracts too complex for the common man to understand.
So i think next year when the P.O.G is back below $250 and we are all told not to worry because its not the real P.O.G I say it is! especially when you go to sell. So again its only the holder of the actual physical that loses money!
What ever it may be? Also as always the paper shorters or the ones buying "put options" will profit.

P.S i doubt anyone can prove me wrong, because no one really and truly knows? Do they? I'll pick up this thread of thought in March or April of next year only to find that we are just as lost then as we are today!

Now thats the Golden Truth! G.T
blueboy
(10/24/1999; 23:16:36 MDT - Msg ID: 17374)
Price of Gold
I'm not much of a businessman, but if I owned a gold mine I wonder if I would rather get $300. oz. for my gold or $400. oz.? That must be a tough question! These miners are sitting there watching the price of gold go down! For what purpose? Why not spend a little money to get the price of gold going back in the right direction, toward $400. Even if they lose money in helping to get the price going back up they would more than make it back by selling gold at the better price!

I really believe that all of this has to do with "the powers that be" wanting to take over many of the smaller mines. Remember when all of the banks were selling every other week? There was to many many that they didn't control so they bought them out. In talking to some bankers they said they think that at some point in the future there will only be about 7-10 banks. Could be they want the mines in their hans with all of the mines being owned by 7-10 of their companies!! And the miners are not smart enough to figure this out!
DD
(10/24/1999; 23:17:05 MDT - Msg ID: 17375)
Number Six
Hey Number Six - You're quite the gentleman. Please continue to post here. You're a fine addition. I, too, have been working for the last two years on Y2k stuff. I also believe that it's going to be a much bigger problem than the poor sheeple have been led to believe. Every time I start to question the potential severity of 00, I remember the rotting turd in the punch bowl - GLOBAL INTERCONNECTIVITY!! Both in data interchange and supply chains. Yikes!! I think I'll buy some more food, another cord of wood and a few gold coins. Best, DD
Golden Truth
(10/24/1999; 23:43:07 MDT - Msg ID: 17376)
P.O.G AGAIN!
If you liked the P.O.G when it was up a NICKEL or 5cents your going to love it Now, Down 65cents again!
Like i said very shortly after the rally, GOLD will be capped at $300/oz for the rest of the year.
Happy short selling days are here again it's Offical.
G.T
Peter Asher
(10/24/1999; 23:51:35 MDT - Msg ID: 17377)
Golden truth
http://www.kitco.com/gold.graph.htmlClick on this and you'll feel better. Also, don't get concerned on anything that happens before London opens. There is real truth here in the saying "Don't sweat the small stuff" (As in Asian markets)
Peter Asher
(10/24/1999; 23:53:21 MDT - Msg ID: 17378)
Whoops!!
A five minute reversal!!
Simply Me
(10/25/1999; 00:08:15 MDT - Msg ID: 17379)
Welcome, blueboy!
You've got it. IMHO that's the bottom line all the global forces are fighting for. Once you've got all the banks and all the gold (including the stuff in the ground), you essentially have control of the armies and the armaments (these are very expensive) and the government (good politicians are expensive, too).

It is fascinating to watch the battle through the eyes of the wonderful posters on this forum. Especially, FOA and Another, because I believe they have "magic binoculars"
that see inside many of the largest and most hidden gold maneuvers. Their generosity in sharing this information with us astounds me and gives me hope that not all "the big players" count us little folk as pawns and numbers.

By the way, what's the count on large banking chains that are still U.S. owned? Last I heard, few to none.

As Townie says...be a nation unto yourself, get some gold.
(I sure hope I'm attributing that quote correctly.)

I would also suggest following the Second Ammendment arguments here. In my view, when only the police and the criminals have guns...us regular citizens will become the victims of both. (I'm not a 'survivalist'...just an old "hippie" turned proper who retains a rebelious streak.)I take martial arts classes just in case all other means of defense are taken away.(My flying side kick is laughable,
but my judo throws have received compliments.)

What's the point to all this rambling? I think, blueboy, that you've come home. You are among kindred spirits here.
Some vociferous, others mostly silent. But whether the conversation is technical, philosophical, heated, dry or silly...it's always "gold" for your soul.

el St. One: Greetings! and Congratulations on winning the gold with such a true arrow!

simply me






Number Six
(10/25/1999; 00:31:52 MDT - Msg ID: 17380)
Crunch day today... LBMA fears...
http://www.telegraph.co.uk/et?ac=000401090230472&rtmo=wQ0tltnb&atmo=99999999&pg=/et/99/10/24/cnmine24.htmlMeanwhile, senior Bank of England officials are now involved in negotiations at Ashanti as a critical standstill agreement on margin calls over its forward sales of gold comes up for renewal this week.

Ashanti has suffered massive losses on its gold trading activities in recent weeks following the sharp rise in the gold price last month. A Bank spokesman confirmed its involvement yesterday amid concern over the impact that a breakdown would have on the London bullion market, the biggest in the world.

A break-up of Ashanti, one of the world's top five gold producers, would send shock waves through the precious metals markets and the gold industry worldwide, with the attendant risk of pushing other heavily hedged producers into an emergency sell off.
Gandalf the White
(10/25/1999; 00:33:26 MDT - Msg ID: 17381)
Not to Worry, PeterA
The Kitco chart is going yoyo again ! -- FOREX shows only one trade below $300 at $299.90 and now the trend is up and heading into the London opening. Keep smiling!! $300.80 now
<;-)
Gandalf the White
(10/25/1999; 00:39:52 MDT - Msg ID: 17382)
(No Subject)
News on the AEL front - WHERE are you Townie ?Barrick in offer for Ashanti mine says www.telegraph.co.uk
<;-0 ---- Sure, why not? that way the splash will be really large when ABX goes under!!
<;-)
ORO
(10/25/1999; 00:43:14 MDT - Msg ID: 17383)
Sudden death and "Removal"
Remember the SAf mining minister?
"Lonmin already owns 32 per cent of Ashanti and thought it had official backing until the Ghanaian Minister for Mines and Energy was suddenly removed. ..."
From Blumeberg.

Perhaps this is part of the purge of the US associated officials in the many victims we find out of jobs or just plain dead.

Anybody remember the mass firing (resigantion) of the EU executive branch?
Lafisrap
(10/25/1999; 01:04:12 MDT - Msg ID: 17384)
Thinking aloud
Who is trying to keep the paper gold markets alive?
Proposed answer: those who stand to gain from it staying alive. Someone.

How does Someone stand to gain from keeping the paper gold markets alive?
Proposed answer: Someone is the keeper of the casino.

Why do the paper gold players keep playing?
Proposed answer: They are greedy, they thrive on the excitement, they are gamblers, addicted. They think they have inside information that gives them an edge.

The casino is the LBMA. Someone profits from the LBMA's existence. Perhaps Someone extracts a percentage of each LBMA transaction, like a casino proprietor. The proprietors
act to keep the price of gold trending down. They act to
keep the game alive.

If the price of gold rises, players will want to settle in gold. But there is too little gold to settle their accounts. Thus, the LBMA transactions would cease. The casino proprietors would no longer extract their percentage. The game would stop and all would remark that the emperor
has no clothes.

Without interruption, paper gold would become worthless. However, interruptions do occur, such as the "Washington Announcement" that preceded the recent rise in the price of gold. If the price of gold can be spiked in a controlled way, and then allowed to fall, then spiked, then allowed to fall, etc., perhaps the LBMA can continue indefinitely.

I sure do need gold to go to $30,000 per ounce.

Lafisrap
Golden Truth
(10/25/1999; 01:25:34 MDT - Msg ID: 17385)
TO PETER ASHER
Thanks for mentioning not to sweat the small stuff and that asia is a small market, but the P.O.G is now in the two hundreds again at $299.75. Boy for a small market they've already knocked off a couple of bucks from fridays close.
I think for the first time since i started buying GOLD 10 months ago i to am going to buy some "put options".

I,am tired of playing the dutiful GOLD coin buyer only to get srewed by the paper futures market. Thats where all the money is, and there is a saying that says "follow the money"
Right now the money says i want the P.O.G to go down!
This whole idea of the market blowing into little bits is quite an angle to sell physical GOLD.

If it is true it's going to take quite along time to happen with lots of profits to be made before or ever it does!
I say a "SUCKER NO MORE" puts and calls all the way Baby!
Then i will buy all the GOLD i want and at the lower prices also. We are heading for a "MAJOR DEPRESION" thats why the Banks allowed GOLD to be sold so low so as to provide Liquidity to the World.
They found out it wasn't working and were getting close to giving all there GOLD away for free so they had no choice but to stop.
Even the price of oil isn't real some OIL companies have profits that are up 530% and there shares are still only trading at half of what they were a couple of years ago.
WHY? because nobody believes this increase in the price of OIL is real.
If we see a depression CASH will be KING as all other assets plummet in value. That is why they are artifcally holding up the price of OIL and now GOLD. To stave off the coming depression.
The World is consuming less, as we all have gotten older and the baby booms are over, because traditional families have been destroyed.

Look around, the World is slowly starting to implode, look at all the Mergers. Every single day you hear of one. WHY? it's because its the only way they can survive what is coming!
Just look at farms they are really suffering, some say its like the 1930's all over again and they produce the most important commodity on Earth FOOD! They are buying retail and selling wholesale.
The U.S Governments woundn't re-inflate because that would admit the U.S dollar was the "rotten turd in the punch bowl" that it really is. So instead they are trying or will put the entire World into a Depression as long as they can protect the Precious strength of the "American dollar" on the backs of every person on the planet.

Its no wonder the "EURO" dollar was started i think its forcing the"Excited States" to inflate to save the World economies from a Depression.
Yet in the mean time it will destroy the U.S dollar, but will save the planet from utter rack and ruin.
If the EURO succeeds the P.O.G will go into orbit, yes i believe that, but if it fails due to the U.S governments manipulative ways the dollar will be saved and cash will be KING but the entire World will be its slave for all time and in a very deep depression!
Choose your sides carefully because this is going where only Eagles Dare!!

You can see why some people have put their wealth into GOLD but if the "EURO" fails they will be selling their GOLD for American dollars at $100/oz. Now the U.S will have a strong dollar via the cheap GOLD they bought off all of us.
See the plan yet?
Back to you Peter Asher. Thoughts?
G.T
Golden Truth
(10/25/1999; 01:41:10 MDT - Msg ID: 17386)
TO Number Six
Very important link you posted looks like $270/oz here we come. Time to buy those put options.
I personally hope the L.B.M.A turns to VAPOUR! and the P.O.G goes to at least $600/oz. Then i might feel more comfortable about it really going up from there, but until that happens seeing is believing.
G.T
Gandalf the White
(10/25/1999; 02:03:48 MDT - Msg ID: 17387)
It looks like a GOLDEN day Monday!
My crystal ball shows that Spot the Dog relaxed to a single trade at $299.90 and has now is starting the London operations at around the $302 mark. TIS far too late for the Hobbits and me -- so it's all yours SteveH !
<;-)
turbohawg
(10/25/1999; 02:19:05 MDT - Msg ID: 17388)
Y2K rumor
Word has it that Chase Bank of Texas (more widespread ??) crashed their computer network 3 weeks ago while upgrading, during business hours, to a Y2K compliant system � system was down for 2 days � putting a lot of business� in a bind and costing Chase some $$.

Apparently, the network has been operating properly since.

Anyone got more details ??
nickel62
(10/25/1999; 02:29:55 MDT - Msg ID: 17389)
Golden Truth Settle back and take a breather your missing the point in a big way!
The beauty of this site is that there are many news and academic articles that are referenced here everyday. If you would read just a few of them you would understand that believing that the dollar is going to crash and yet you want to be in cash rather than gold is contradictory. The entire picture of this market has changed after the events of the last two months and trying to panic the other readers into believing in $100 gold being an iminent possibility is absurd. The shorts are trying to find gold where ever they can and that includes the over hedged producers witness American Barricks announcement tobid for Ashanti's new Tanzanian mine. They obviously need more unhedged gold to cover their own A**. Speaking of which you wouldn't happen to be a gold trader by any chance?Yes the forces that be are scrambling to cover and yes they are currently holding down the market spot price.But you can bet that the other people in the world are beginning to see the potential of squeezing their now exposed little manipulation right out of this world. Maybe not $30,000/ounce but how well do you think your paper market strategy of puts and calls will do if the major producers who are over hedged can't deliver at $600/ounce. Still think that a put and call strategy is such a good idea? Call from whom? You got an unhedged gold deposit under that LBMA of yours in London? The squeeze is on and the tide has clearly shifted away from the control of those Masters of the Universe who thought they could control every market. The time has come to put your faith in physical and unhedged gold companies and watch the fun as Sodom and Gomorah come unwound. Cheers.
SteveH
(10/25/1999; 02:33:31 MDT - Msg ID: 17390)
Gandalf
I relieve you, Sir.
Number Six
(10/25/1999; 02:39:52 MDT - Msg ID: 17391)
Black Monday?
Interesting post from Kitco. Just when you least expect it - WHAM, the crash will hit... :)

============================================================

"Jupiter as the star that never was is the next largest body in the solar system to the sun. At this time, it is at it's periphelion ( the point of closest approach ) in it's orbit around the sun. Coincidentally, or not, the Earth at this time lies directly on the line joining the sun and Jupiter, "in opposition". As a consequence Jupiter is the brightest it will be as seen by earth observers in 12 years, just above the horizon in the east after sunset and rising. Also any forces exerted by Jupiter will at their strongest and in direct oppostion to those of the sun. This coming at the time of a full moon, which also acts in direct oppostion to the sun with the measurable effects of tides, weather, etc.

Can we expect any strange behaivourial effects exhibited by humans, who are arguably the most sentient of the life forms on earth, during this phase?

IS IT TIME FOR ANOTHER STOCK MARKET CRASH?

no one believe's it, so it is here, BLACK MONDAY."
SteveH
(10/25/1999; 02:48:42 MDT - Msg ID: 17392)
Stratfor
www.stratfor.comI go this in email. Worth the read and imo a good contrarian indicator (all is well, so it isn't). What do you think? They almost mention gold, but not quite. Could they be right?

***


What's going on in your world? Find Out.
Visit Stratfor's Global Intelligence Center
http://www.stratfor.com/world/default.htm
___________________________________________

OTHER FEATURES ON STRATFOR.COM

Pastrana Hedging his Bets Ahead of Peace Talks
http://www.stratfor.com/hotspots/colombia/default.htm

Southeast Asian Nations Call the Shots
http://www.stratfor.com/asia/commentary/m9910231510.htm

Syrian Succession Crisis Hampers Peace Process
http://www.stratfor.com/MEAF/specialreports/special16.htm
__________________________________


STRATFOR.COM
Global Intelligence Update

Weekly Analysis October 25, 1999



Whither the American Boom?

Summary:

Is the bull market over? Every time the U.S. markets do anything
but hit new highs, this becomes a chorus. We do not know what the
stock market will do. If we did, we'd be rich. Our interest is in
what the economy will do. The markets and the economy are certainly
overdue for a major correction and a short, sharp recession. In
some ways the United States needs one for its long-term health. But
the fact is that, whatever happens to the markets in the short run,
the core indicators do not point to recession. The financial
markets remain liquid, with positive free reserves, while the yield
curve remains positive. Serious structural realignments do not take
place in this sort of environment. The forces that created the boom
in the first place remain, it seems to us, in place.


Analysis:

For the past few weeks, the burning question in the world of
economics has been whether or not the United States is about to
enter a recession. The question has been driven by the performance
of the American stock market. The performance of the stock market
is, of course, not identical to the performance of the economy, but
in the past it has been a decent view of how the economy has
performed. It also, therefore, is not a bad indicator of how the
economy might perform in the future. The behavior of the stock
market, particularly in a country like the United States, in which
capital formation and the equity markets are tightly linked, is by
no means a side issue.

That said, we must remind our readers that while Stratfor does
economic forecasting, we do not do stock market forecasting. If we
could do stock market forecasting, we would not be working for a
living. Nevertheless, since we are interested in the dynamics of
the international system, the health of the American economy is a
critical issue for us. As the behavior of the stock markets is tied
up with the health of the American economy, we cannot ignore their
performance.

Let us begin with the obvious. The Standard & Poor's (S&P) 500
closed Friday, Oct. 22 at around 1300, having fallen from a little
more than 1400 in July. This drop raised speculation that the bull
market - underway since 1982, but which began its intense upward
move in 1995 - may be coming to a close. Last year at this time,
the index was below 1100. Five years ago, the same index was below
500. So, the S&P has given up about one-third of its approximately
25 percent gain for the year. In the last five years, the index has
nearly tripled in value, rising from below 500 to 1400, only giving
up 10 percent of these gains in the recent losses.

Based on those statistics, the temptation would be to dismiss all
of this with a giant yawn. The American stock market has been
surging for a generation, and roaring for the past five years.
During that time, we have seen other corrections. For example, in
the summer of 1998, the S&P 500 fell from 1200 to below 1000, a
decline of about 25 percent, equaling most of the gains of the
previous 12 months. In 1996, it fell by 10 percent, from just below
700 to just above 600.

This summer's decline, at its worst, was only about 10 percent.
What do people expect - a rocket to the moon without any
turbulence? In fact, it is extremely bullish that pessimism kicks
in as quickly as it does. Consensus Index, which tracks market
sentiment, reported bullish opinion fell from 30 percent two weeks
ago to only 20 percent this week. Market Vane reported a less
dramatic decline from 29 to 25 percent. These numbers indicate
investors are not only pessimistic, but the growth of pessimism is
accelerating and reaching rock bottom levels. When you get down to
the area of 20 percent, just about everyone able to form an opinion
has gone bearish or neutral.

Following contrarian theory these sentiment figures are bullish. If
everyone is pessimistic, the market can't go down. It can't go down
because everyone has acted on their pessimism and sold their
stocks. There is no one left to sell. This assumes that sentiment
and action go hand-in-hand, an assumption we find fairly
reasonable. That means we should be near bottom for this down turn.

There are some other reasons for being, if not optimistic, then at
least not pessimistic. The first is the liquidity of the banking
system. The Federal Reserve Bank, which controls America's money
supply, has a measure called Net Free Reserves. Net Free Reserves
is a measure of how much surplus cash is kicking around in the
system, once all of the credits and debits of the system have been
totaled. The actual number is not all that important - especially
as it bounces around and is revised and never really settles down.
However, whether this number is positive or negative is important.
A positive number means there is liquidity in the economy. A
negative number means liquidity is drying up. This has become an
extremely boring indicator, because it has been generally positive
for a generation. But then, so has the stock market. Serious bear
markets tend to correlate, for obvious reasons, with Fed policies
that pull money out of the economy, creating credit squeezes. The
Fed has not given us a serious credit squeeze in nearly a
generation. It is not giving us one now. That argues against a
serious bear market.

There is another argument closely linked to Net Free Reserves: the
shape of the yield curve argues against a bearish turn. The yield
curve is a display of the cost of money borrowed for various
periods of time. For example, at closing on Oct. 21, three-month
U.S. Treasury Bills carried a yield of 4.96 percent. The yield on
six-month bills was 5.03 percent. Ten-year treasury notes yielded
6.18 percent and 30-year bonds yielded 6.35 percent. Prime
corporate bonds were yielding more than 8 percent.

Interest rates may be trending upward, but the yield curve remains
positive. During the late 1970s, yield curves were negative. Short-
term rates were higher than long term rates. This was bearish. With
short-term rates high, investors looking for safety could abandon
the long-term bond markets and, with them, the stock market. Money
markets provided safety, liquidity and higher rates of return.
Long-term rates higher than short-term rates are bullish,
encouraging long-term investment and capital formation.

Two factors create negative yield curves. The first is the Fed. It
has tremendous influence over short-term rates and much less
influence over long-term rates. When the Fed wants to drive up
interest rates, it can drive up the short-term rates, but the long-
term rates may not follow. This can create a negative yield curve.

The second is borrowers' fears of locking into long-term rates. As
instability and uncertainty develop, borrowers increase short-term
borrowing and decrease long-term ones. Theoretically, investors,
seeing opportunities at the short end, should pile their money in
and bring down the short-term rates. The Fed can override that
tendency; also, in an overheated economy, demand so outstrips
supply at the short end that rates go up anyway.

That just hasn't happened yet. The economy is certainly hot, and
the Fed has tightened money. But the yield curve has not flipped
negative. This indicates that the financial markets can still
accommodate the demand for money from businesses, without causing
distortions in the yield curve. It also means both speculators and
investors in the stock market - tempted though they might be to
find other, safer havens for their money - don't have anywhere to
go. The bond markets carry substantial risks should interest rates
rise, and the short-term markets are relatively unattractive on
both an absolute scale and psychologically.

In our view, the foundations for a bear market are not yet in
place. Investor sentiment is too negative, the financial system is
too liquid and the yield curve is positive. At the same time,
several serious clouds hover on the horizon.

The first is simply time. The current economic expansion has been
underway for a generation. It took a downturn in 1991-92, costing
George Bush his job. Even if we accept that the United States is in
an unprecedented long-term boom - which we do - there ought to be
more downturns within that boom.

Recessions are healthy for long-term growth. They originate in
rising money costs as businesses expand and consumer demand
quickens. As the cost of money rises, competition among businesses
for scarcer and more expensive money increases as well. Weaker
businesses, with lower rates of return on capital, cannot afford to
borrow and end up either cutting back operations or going bankrupt.
More efficient businesses can borrow. This clears the field and
channels money toward more efficient businesses. Recessions may
hurt, but not having them can result in the Asian disease.

>From the historical record, we are overdue for a short, sharp
recession. Indeed the Fed seems to be nudging the economy in that
direction, in increasing interest rates; but it has not moved the
Net Free Reserves negative. However, the markets are not acting as
if a recession is near. The cost of money is rising, but not to a
culling level. The yield curve refuses to flip negative. Such
behavior usually indicates that a recession is not imminent.

In showing no indications of imminent recession, the financial
markets are telling us that the traditional calendar for the
business market does not apply. They are not saying the business
cycle is dead. They are saying traditional post-war theories of
timing don't apply.

Another cloud on the horizon, perhaps a more serious one in the
long run, is the rise in commodity prices - particularly in oil
prices. Stratfor has argued that one of the foundations of the
generation-long boom was the collapse of commodity prices across
the board to record low levels. The decline in commodity prices
reduced the cost of production for industrial countries
dramatically, tilting the advantage from producers to consumers.
The rise in commodity prices indicates two things. First, that
demand for commodities by expanding economies like that of the
United States has finally raised prices. Second, that as commodity
prices rise, the advantage might tilt back to producers, and
consumers might start experiencing significant inflation once
again.

This should be bearish. But here again, the bearishness is
mitigated. Going into this summer, one fear was deflation. All of
Asia was suffering from deflation caused by excessive, inefficient
industrial capacity and extremely low consumer demand. This was
compounded by banking systems and financial public policies, which
were driving prices downward. Deflationary pressure appeared to be
spreading around the globe. The oil price bounce is, in a perverse
way, a positive factor. By counteracting deflation, it could
actually help stabilize the system.

On balance, therefore, the Stratfor view is this:

* The United States is undergoing a short-term correction in a
long-term bull market of unprecedented proportions. Speculative
fever, extremely high price earnings ratios and the appetite for
profit all argue for a pause in the bull market. At the same time,
sentiment figures indicate that a great deal of the enthusiasm has
been beaten out of the market. We are continually startled by how
quickly sentiment turns negative at the slightest correction. We
find this lack of confidence in the market quite bullish, as it
provides a self-correcting balance.

* The foundations for a mid-term recession lasting a year or so are
simply not yet in place. They could materialize fairly quickly,
particularly if the Fed wants to impose a recession, but they are
not there now. The Fed is maintaining liquidity in the financial
system and the yield curve is positive. Interest rates are rising,
which may cool growth, but the market is not behaving as if a
recession were near at hand.

* The rise in commodity prices should be a negative. However, given
the deflationary threats and fears of this summer, the rise in
commodity prices may even be a positive sign, if it doesn't get out
of hand. With the Asian and European economies sluggish at best, we
do not see the rise as a significant threat.

* There certainly ought to be a recession some time in the next 36
months, and we would not be surprised to see it sooner rather than
later. This is based on the timelines of previous economic
expansions. We see this expansion as extraordinary, but it will not
abolish the basic laws of capitalism. Under these laws, pruning
back the economy is, in the long run, a positive development rather
than a negative one.

In short, the United States appears to remain on the path it has
been pursuing for a generation. It is quite likely that the stock
market will take a serious break from the past five years of
growth. Indeed, we may well be that we will not again see such a
sustained and intense bull market as sustained and as the one from
1995-1999. That is not the same as saying that the U.S. economy
will crash. We simply do not see the evidence.

It is important to understand the dramatically unexpected pattern
that has developed in the global economy. Rather than moving
together, it has fragmented along geographical lines. Asia, the
United States and Europe have all pursued radically different
economic paths, sometimes behaving as if they were living on
different planets. Even within geographical regions, there have
been differences. Germany's economic performance has been very
different from the United Kingdom's. Japan has behaved differently
from South Korea.

The fragmentation of economic activity into geographical elements
is based on the fact that, economically, what goes on within a
nation remains more important than what goes on between nations;
Japanese domestic economic structure and policy determine Japan's
fate. The U.S. economy has operated under its own power for the
past several years, and it will continue to do so. In our view, it
may not expand as it did in the past. It may even make a cyclical
contraction. But there are no structural shifts evident to us that
would indicate the expansion begun in 1982 is coming to an end.
Cooling off is not the same thing as crashing.


(c) 1999, Stratfor, Inc.
__________________________________________________

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SteveH
(10/25/1999; 02:55:38 MDT - Msg ID: 17393)
Bothersome
I know what was bothering me about that article. It in no way acknowledges the Euro/Dollar gig (and I have told them). Nor does it address Gold or Yen carry. Nor does it speak to Fanny Mae, Freddy Mac et al credit funds ending up in the markets. Nor does it factor in Y2K money expansion by the Fed for liquidity purposes. Nor does it factor in the extreme negative breadth of the stock markets. Nor does it factor the negative savings rate of the US household or their record high debt levels. Nor does it factor the possibility of oil going to $30/barrel. Nor does it factor in a gold market on the verge of explosion (physical) and a possilbe implosion (paper). Other than that it was a great article (might consider airing on CNN along with the rest of the chearleading going on there, oopss...I am being cynical, not!
Number Six
(10/25/1999; 03:05:35 MDT - Msg ID: 17394)
OIL Heading to $25 +
http://www.crbindex.com/curquote/crbquote.mhtmlI remember FOA saying to watch OIL. Gold will follow... (and, I hope, silver :) )

Take a look at this chart. Also OPEC just announced they would NOT increase production quotas. Mexican analysts are predicting $30bbl by the end of the year... personally I feel it will be higher as y2k worries sink in...
nickel62
(10/25/1999; 03:24:09 MDT - Msg ID: 17395)
The "Emperor indeed has no clothes" or adequate risk analysis for that matter!

The latest edition of Grant's Interest Rate Observer had the following unbeleivable quote from John Reed the longtime chairman of Citigroup: "Where the models tend to go wrong ,is in failing to anticipate 'second order effects.'Thus although Citibank had no direct exposure to Long-Term Capital Management,it was a primary lender to half the companies that constituted the rescue committee."

"We were in over our heads with everyone of the firms that did have direct exposure to Long-Term Capital,"
said Reed. "It would have reverberated through the system in about two nanoseconds. None of these firms had the capital to sustain the losses."
Anyone that still wonders why the Federal Reserve bailed out the LTCM bunch can pretty much see from this quote. Also it shows the inter-related nature of todays situation and the likelihood that the unstopable crisis is probably not as far away as many think.
Number Six
(10/25/1999; 03:29:53 MDT - Msg ID: 17396)
STRATFOR - have they been "got at?"...
Hi Steve,

Like complete MORONS (and I use this term advisedly :) ), they are not even factoring in Y2K...

How can this be?

I used to read STRATFOR regularly, I even wrote to them a long time ago complaining that they were completely ignoring the y2k effect - no answer - and they haven't changed their tune one iota.

Contrasty this with CIA reports, the leaked US Navy assessment, martial law plans being talked about openly in Canada and the UK... DOD liaising with Russia to contain nuclear ICBM "accidents", Oil delivery problems from the wellhead to shipping to refining to JIT delivery to your gas pump - the BIS warning of financial lock-up... etc. etc. etc. I could bore you to tears with y2k facts and figures...

Yet STRATFOR blithely ignores all this - I find this incomprehensible...

They got Kosovo wrong too.

I can't take them seriously I'm afraid...
Number Six
(10/25/1999; 04:15:56 MDT - Msg ID: 17397)
STRATFOR and IBM
Back to STRATFOR.

Take IBM last week. They tanked +/- 20% on y2k fears, and an estimate of a 40% drop in sales in 2000.

How come STRATFOR couldn't figure this out?

IBM is merely the first of many blue chips that will take y2k hits.

Incomprehensible...unless....... nah, couldn't be, could it... nah...
Number Six
(10/25/1999; 04:22:40 MDT - Msg ID: 17398)
Yep - STRATFOR - they are a CIA front ...
Occam's Razor.

Only explanation :)
Leigh
(10/25/1999; 04:48:14 MDT - Msg ID: 17399)
Black Blade
Hi, Black Blade. Did you know Trent Lott was in attendance at last summer's Bilderberger meeting? Or that he was sent in to Clinton's office before the Kosovo bombing to try to talk sense to Mr. Clinton, only to emerge five minutes later supporting the bombing? You may be quite right in your assessment of him.

About women on ships and submarines -- a hotbed (pun not intended) of iniquity. In many cases you're talking about teenagers just out of high school with raging hormones. There are many young girls who start up relationships with men sailors to avoid advances from their female shipmates. Women on submarines isn't a reality yet, but the social engineers are working on it. They haven't give up hope.
Canuck
(10/25/1999; 05:09:33 MDT - Msg ID: 17400)
Golden Truth and anyone else that's worried
A few months ago I was all over the map. I was into PM's one week then back to Nasdaq the next. Week three took me to cash and then the cycle repeated; I had turned into a
'week trader'. Guess how much money I made, zero, nada, Jack
Squat. I took a week off (the trader business) and reviewed
all the posts of the elite and realized that the BOE sale of
Sept. 21 was very bullish for gold. Why did the POG rise with supply of 25 mt? That is very contrary to supply/demand
characteristics, futhermore Goldfields bought 12.5% and Anglogold had placed a bid. Why are mines buying gold?

It was then I began to turn the corner, I purchased my first physical. Corner # 2 was obviously Sept. 26; I finalized my purchases. I now sit 20% Gold Fields, 40% physical and 40% cash, 0 bonds, 0 stock. I now feel it prudent to lie low until after the rollover. The time I have saved, from being glued to my 'week trader' job, is now well spent preparing my house and my family for the
ensuing debacle.

I have also mentally prepared myself for the near 'no-lose'
scenario. If gold drops back to say $250 I will lose $30 per onze. If gold hits one-tenth of the magical/mythical $30,000, that is, $3,000 per onze I will retire at the ripe
old age of 39. I told my wife 2 or 3 weeks ago that the POG
will be between $200 and $10,000/oz. in the next 2 years. I asked my wife for her thoughts. She said, "You have been taking alot of chances on the stock market hoping to double your money....how much have you made?"

I put an onze into her hand and said, "Don't lose that, it's
30 grand!!"

SteveH
(10/25/1999; 05:33:03 MDT - Msg ID: 17401)
Unbiased
www.kitco.comrepost with comment:

Here is what unfettered information wins you. Here is a person who doesn't have a political agenda and look what happens:

Date: Mon Oct 25 1999 06:25
FtLaud (top amateur analyst picks gold/ earnings due out this week) ID#348242:
Copyright � 1999 FtLaud/Kitco Inc. All rights reserved
from CBS marketwatch:
Top amateur picks gold
Heard the buzz about the newest stock picking Web site? Iexchange was launched this week, and it takes armchair analysis to a new level by ranking all those anonymous stock picking voices on the message boards and in the chat rooms by how well their picks actually perform.
A visit on its launch date found the top ranked stock picker who goes by the handle "Geo" with what the site figures is a 44 percent average return and an annualized rate of return at 342 percent. Pretty impressive numbers, but then again, Geo's big picks are gold stocks, and gold has enjoyed a nice recent run. Geo says Central Bank gold selling has masked the fact that gold demand is surging and the deficit between new mine production and consumption is 1000 tons a year.
Among Geo's picks: Agnico-Eagle Mines, Ltd ( AEM: news, msgs ) , with a target price of 10 by Nov. 5 and 11.25 by Dec. 3. Also on Geo's list, Battle Mountain Gold ( BMG: news, msgs ) and Barrick Resources ( ABX: news, msgs ) .

Earnings due out this week:
Tues.: Homestake Mining
Wed.: Battle Mountain Gold
Black Blade
(10/25/1999; 06:45:05 MDT - Msg ID: 17402)
Black Monday?
s&p futures sliding downward, now -6.70. Au edging up (barely) +$0.50. Lower opening on Wall Street I suspect. I'm not sure about Kuwait loan being a loan. Islamic belief is anti-usury (ie no interest). hmmmm...Me thinks it is sold!
phaedrus
(10/25/1999; 06:54:46 MDT - Msg ID: 17403)
@Steve H re stock picking / small world
Steve:

Ironic; "Geo" happens to be my boss.
Tomcat
(10/25/1999; 07:41:28 MDT - Msg ID: 17404)
SteveH: Stratfor

I often read Stratfor to see how they slant their story without bringing in fundamentals like: the POG manipulation, Oil, inflation, and Y2k.

They do an amazingly good job of avoiding major issues. At first I thought they were just sophisticated writers who were ignorant of their basics. Then I realized they were skilled at avoiding major issues. They are concerned with countries all over the planet but hardly mention Y2k where the computer glitch impacts will be the greatest.

They have an agenda but I am not sure what it is.
TownCrier
(10/25/1999; 07:47:15 MDT - Msg ID: 17405)
Strauss-Kahn sees Japan reserves 'more balanced'
http://biz.yahoo.com/rf/991025/fp.htmlFrench Finance Minister Dominique Strauss-Kahn recently met with Japan's Finance Minister Kiichi Miyazawa and then told reporters "I think of course Japan is willing to have a more balanced distribution of its reserves." The remark was in regard to a question about Japan's willingness to increase the proportion of euros among the nation's foreign reserves.

At $272 billion (believed to be held primarily in U.S. dollar denominated bills and bonds) Japan's foreign reserves are the world's largest. Too bad...so sad...their gold could fit in a thimble, and it would seem that the avenue to add additional gold is no longer an available path to travel.

Elevate your own status beyond that of an economic superpower by getting yourself TWO thimbles full of gold.
phaedrus
(10/25/1999; 07:54:37 MDT - Msg ID: 17406)
@Tomcat re Stratfor
Your observations on Stratfor are interesting.

I receive Stratfor's bulletins also and I read them with great interest at first, but after a while I pretty much stopped paying attention because they almost never give any information that has more than a passing correlation to the markets I trade.
TownCrier
(10/25/1999; 07:56:12 MDT - Msg ID: 17407)
Paper says UK's Brown sounding out top IMF job
http://biz.yahoo.com/rf/991023/x.htmlRumors are circulating that IMF chairman Michel Camdessus may throw in the towel early next year, although his term of office is not due to expire until 2002. Britain's Chancellor of the exchequer, Gordon Brown, was appointed chairman of the IMF's powerful Interim Committee last month, and is the rumor-mill's focus as Camdesus' replacement.
TownCrier
(10/25/1999; 08:12:18 MDT - Msg ID: 17408)
Ecuador debt moratorium widens
http://biz.yahoo.com/rf/991022/1p.html"The nation has decided to confront its public debt issue with a global strategy. It's in the process of renegotiating its Brady bonds, Eurobonds, Paris Club and internal debt."--Ecuador's Finance Minister Alfredo Arizaga

Why risk the fate of your savings in the hands of your national financial ministers? Use gold and be a nation unto yourself...a citizen of the world.
TownCrier
(10/25/1999; 08:17:34 MDT - Msg ID: 17409)
Fed says it refrained from open market operations
http://biz.yahoo.com/rf/991025/kn.htmlAs stated last week, analysts expect the Fed to stay on the sidelines during the first half of this new two-week reserve maintenance period.
elevator guy
(10/25/1999; 08:50:04 MDT - Msg ID: 17410)
What the smart insider money is doing
If you remember, when Hillary was going around the country espousing national healthcare, behind the scenes she was shorting pharmacutical stocks. The stock prices yinged on the threat of government control, and when the nat'l health care thing blew over, the stocks yanged again. The turn is very much driven by the media press release timing.

Well, I don't think that play is over yet, because this morning it was injected by the nat'l media that President Clinton is supporting government control of perscription drugs. Not that he could actually get it written into the budget, but the statement makes its ripples nonetheless.

It seems to me, then, that the secret to the smart money is learning how to take advantage of the hoopla, and make money off both the yin and the yang of commodities and stocks. Insider timing I have not, but I can see the man behind the curtain, if only by cause and effect.

What is the name of the pharmacutical stock index, anyone?
TownCrier
(10/25/1999; 08:52:57 MDT - Msg ID: 17411)
ECB's Issing Says Eurozone Prices Are Stable
http://quote.bloomberg.com/pgcgi.cgi?T=markets_newsfeat99.ht=&ptitle=EMU%20Top%20Stories&touch=1&s=733b6ace6c33896b0d63aa4a52b86342Otmar Issing, European Central Bank Chief Economist, said that after ten months with the new currency, "Price stability is being maintained in the euro area. General economic conditions such as growth and employment are improving."

In regard to the exchange rate versus the dollar, Mr. Issing said, "I must stress that the ECB has no target or favored level of the exchange rate of the euro," however he stressed that the euro had the potential for "strong external value."
TownCrier
(10/25/1999; 09:16:58 MDT - Msg ID: 17412)
Somebody's trying to tell somebody something here...
http://quote.bloomberg.com/pgcgi.cgi?T=markets_newsfeat99.ht=&ptitle=EMU%20Top%20Stories&touch=1&s=26ad3ecba5b375778cead5694f39a706Bundesbank Vice President Juergen Stark:
"A central bank must pursue internal price stability. That
doesn't mean that it should be indifferent to large fluctuations
in the external value of its currency.
In the case of the euro, it is essential to declare an
unambiguous commitment to a strong-currency policy."

"It is obvious that the euro has a vast potential both as
an international portfolio currency and as a major reserve
currency.
If the euro is to gain an enhanced significance in this
area -- and I repeat it has every potential to do so -- it will
largely be at the cost of the U.S. dollar. The euro has the
opportunity of winning a greater share in the reserve portfolios
of central banks around the world."

He elaborates on an important point regarding proposals to create a single agency for government bond sales throughout the 11-country currency union:
"by pooling debt issuing, one would also pool
risks and liabilities of the debtors. This would be a violation
of Article 103 of the European Union Treaty (ex-article 104b of
the Maastricht Treaty), which prevents governments from assuming
any liability for other governments' debt.
Such sharing of liabilities, in my view, could create
moral hazard that would undermine the credibility of the new
currency. The result would be higher rather than lower long-term
interest rates, leading to higher borrowing costs for member
states."

The world now has a clear choice. Whereas the dollar is managed to benefit the U.S., the euro must be managed more nearly as a neutral currency. Those of us with dollars would be well-advised to consider a graceful exit from reliance on them as a means of storing value. Gold fits the bill nicely as the universal monetary asset.
USAGOLD
(10/25/1999; 09:23:06 MDT - Msg ID: 17413)
Today's Gold Market Report: Ashanti Decision Due Shortly
MARKET REPORT(10/25/99): Gold was in a holding pattern in today's
early going with all eyes on the Ashanti situation. Bullion banks have
given Ashanti til 5:30 London time today to hitch itself to a suitor, or
face margin calls that would essentially put it out of business. Now
there is speculation about a breakup of Ashanti and a disposal of key
properties............ The London Daily Telegraph reported Sunday that "a
break-up of Ashanti, one of the world's top five gold producers, would send shock waves
through the precious metals markets and the gold industry worldwide, with the attendant
risk of pushing other heavily hedged producers into an emergency sell off." The Telegraph
says that "senior Bank of England officials are now involved in negotiations at Ashanti as a
critical standstill agreement on margin calls over its forward sales of gold comes up for
renewal this week...A Bank spokesman confirmed its involvement yesterday amid concern
over the impact that a breakdown would have on the London bullion market, the biggest in
the world."...........The Ghana government asked for three weeks for Ashanti to line up a
merger partner. The consortium of 17 bullion banks on the hook for the Ashanti positions
gave them the weekend.........In the London market trading was quiet with market players
no doubt in a quandary over what was going to happen next with Ashanti. Beyond the
Ashanti situation, we have options expiry on Wednesday in the London over the counter
market and the bullion market is expected to "remain volatile," according to a Swiss trader
quoted by Reuters this morning.........Lease rates continue to track down mostly a
reflection of bullion returning to the central banks and a lack of activity..........The
Committment of Traders report is due out 12:30 Mountain time.........That's it for now,
fellow goldmeisters. We'll update if anything interesting happens in London in the next few
hours.

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.
phaedrus
(10/25/1999; 09:43:00 MDT - Msg ID: 17414)
Ashanti news doesn't look promising
December gold just broke 300. Silver was up and is now down.

Looks like the Ashanti news was lousy.
Gandalf the White
(10/25/1999; 10:30:01 MDT - Msg ID: 17415)
Thanks SteveH !
I'm BACK ! <;-) --- Looks strange this morn ... Everyone is sitting on their hands awaiting the signal. -- What will happen to AEL today? -- IF it is another delay, will the powers find more gold for favors to assist someone to CYA's ? -- At this time -- 9:20+ PDT --- Spot the Dog had fallen to $US297.90 before now at $298.90 -- GC9Z fell to $299 even and is now again at $300. -- While in the stocks paper -- of the only ones that the Hobbits watch -- CDE BMG and AEL are up 1/16th. all the others are down ! AEL -- UP -- WHY ? --- Maybe I will go back to sleep.
<;-)
Tomcat
(10/25/1999; 10:36:35 MDT - Msg ID: 17416)
TC: Stark's Remarks re the Euro.

Great find re Bundesbank Vice President Juergen Starks' remarks about the euro. Every day it seems that the euro folks are becoming more and more blunt about the stand they are taking.

The Europeans don't have to torpedo the Good Ship Dollar; it will sink of its own debt-weight in the turbulant Sea of Unbalanced Trade.
Broken Oak
(10/25/1999; 10:36:54 MDT - Msg ID: 17417)
I like this subtlty
The Telegraph says that "senior Bank of England officials are now involved in negotiations at Ashanti as a critical standstill agreement on margin calls over its forward sales of gold comes up for renewal this week...A Bank spokesman confirmed its involvement yesterday amid concern over the impact that a breakdown would have on the London bullion market, the biggest in the world."........
Tomcat
(10/25/1999; 10:44:18 MDT - Msg ID: 17418)
USAGOLD: re lease rates and gold returning to the banks.
Thanks for your summary on Ashanti this morning. Michael, could you expand on you remark:

"Lease rates continue to track down mostly a reflection of bullion returning to the central banks and a lack of activity..."

Is so much gold flowing back to the lenders that it is driving down lease rates? I thought the shorts were having a hard time covering. Are they actually getting their short positions covered?
Gandalf the White
(10/25/1999; 10:53:53 MDT - Msg ID: 17419)
Well after looking at the Sheeple's markets ---
DOW down 143 to 10,324 === Long Bond pushing 6.4% rate --- S&P down 15+ === and the PPT not puching the Futures as hard as Friday === HOT sectors now highest % losers on the day so far, === WELL maybe GOLD is not doing so badly after all. == WE await the AEL announcement!
<;-)
JCS
(10/25/1999; 11:00:17 MDT - Msg ID: 17420)
Gandalf the White (10/25/99; 10:53:53MDT - Msg ID:17419)
Also,
Dollar getting whacked;
floor traders in bond pit see 6.70-.75 as next major level.
Can only help our cause and crush the shepple's cause.
I believe the Sycamore IPO was the final straw. Borders on insanity and a bubble of that magnitude MUST SOON DEFLATE!!
All given IMHO.
phaedrus
(10/25/1999; 11:11:28 MDT - Msg ID: 17421)
A note to bondwatchers
Bonds are getting whacked today for two reasons:

1) Further pessimism in regards to interest rate rises after hawkish comments coming from the ECB (European Central Bank)

and

2) Fear of Thursday's employment cost index report. Bond Traders are esentially in limbo, holding their breath as they wait for this number.

Thursday may prove to be either a bearer of relief or a bloody day of reckoning for bonds. With stockmarket action following suit.

TownCrier
(10/25/1999; 12:36:10 MDT - Msg ID: 17422)
Chicago Fed's Moskow says Fed needs to be vigilant
http://biz.yahoo.com/rf/991025/r4.htmlWhen someone like Fed Bank of Chicago President Michael Moskow says something like he said today, "There is reason to think that our good (economic) performance also reflects more permanent changes that may be occurring in the economy," you know the end is nigh. When they must fall back on "new paradigm" to explain a part of the business cycle, you know they've lost whatever modicum of control they may have once had over the situation.
ganymede
(10/25/1999; 12:37:47 MDT - Msg ID: 17423)
I think I finally see FOA's point
I think I'm finally getting to understand what FOA is talking about. Its not, as we all know, that he is not stating his position well. It is that he sees the market in a different way from most of us and seeing it "his way" is essential to understanding all the little details of his posts.

I think that his reference to the future emergance of a "two-tiered gold market" in his latest post is a good place to start. The two tiers that he speaks about are a physical tier and a derivative or paper-gold tier. Today these two markets are supposed to be one and the same. You can theoretically buy all the physical gold you want for pretty close to spot (ie. a gold eagle for spot + $15). This assumes perfect trust in the marketplace, that all paper gold can be redeemed for physical. It has lately become apparent that this is not completely true. If you want to buy 100 gold eagles you can, but if you want to buy 100 tons of physical gold you are going to have a problem.

If I buy paper-gold in the futures market I get a generic contract. I don't know who is really selling. Is it a gold mine like Harmony or it is a hedge fund? Up until lately it didn't matter. Now it does. This is evidenced by Kuwaits assertion that it loaned its gold to a reliable bullion bank (implying some are not reliable). We now have a situation where all paper-gold is not equal. In fact, when the two-tiered market does emerge paper-gold will have to be graded similar to corporate bonds. Some gold contracts will be as good as physical gold, some like junk bonds. The junk will be sold at a severe discount because the prospect of real deliver will be much lower. The source of the contract will be the key to its grade. Since all contracts today are generic then all have to be treated as junk and repriced accordingly.

Note that when I say all contracts are junk I'm not talking about contracts the big players like Kuwait hold. They deal with the source they like, not COMEX or some other spot market. They don't hold generic contracts.

Now to stocks. Most of us think that when we buy a gold stock we are somehow getting a share in their massive reserves. That is both true and false. It is true that you get partial ownership of the company but it is also true that you become a creditor of the company. And where do you stand in the line of creditors? At the very back. There is no connection between you the stockholder and physical possession of any of the company's reserves. This is why FOA sees gold stocks as just more unreliable paper. In fact stocks are probably the most unreliable paper-gold in the whole paper hierarchy.

Now back to the present unified gold market. As long as the price of physical gold is tied to the paper-gold market gold will be a bargain. Once these markets are separated, holders of physical gold will get their reward. That separation cannot be far away given the level of distrust we see growing in the market today.
There is no excuse for holding paper gold except out of greed (you hope to achieve some leverage). With the market changes that FOA sees coming survival not enrichment will be the order of the day. The greedy gold bugs will be in the same gutter as the internet stock holders. FOA is too polite to put it in those terms but I'm not.

Tell me if I've misrepresented something here.

USAGOLD
(10/25/1999; 12:49:47 MDT - Msg ID: 17424)
Hi Tomcat...
Thanks for the opportunity to expand on a theory I've been toying with....

During the Denver Gold Group conference at least two well-known mutual funds and/or investment advisory groups publicly proclaimed a desire to cater to the "unhedged" or "conservatively hedged" mining companies. This theme seemed to permeate everything that happened in Denver last week. Nothing motivates mining executives like doing what it takes to pump up the value of their stock. Chris Thompson of Goldfields is leading the way in this regard and making his company very attractive to mutual fund managers. The mutual fund managers in turn are being pressured by fund buyers (the public) to make sure their gold mining funds contain unhedged producers. That is why several have said they are either cleaning up their funds by sorting out the short players or starting new funds which included only the unhedged or conservatively hedged companies.

In turn, several mining companies, in my view, as a result are essentially closing down their books or trimming them wherever possible. Gold is being returned to the central banks as this process unfolds making more gold available in the lease market. Thus rates are tracking back toward the 1% benchmark.

Right now you have two companies in serious trouble -- Cambior and Ashanti -- that are now operating under standstill agreements. If they were not under these agreements, their would be strong demand for leased gold and rates would go back up. And that could very well happen if Ashanti gets the rug pulled today.

The clear message though is that the gameboard has changed.

A. Several mining companies are getting out of the hedging game because they don't want to end up like Ashanti. Imagine what it is like for Ashanti executives dealing with that mess. Would you like to deal with that on a daily basis? If you are able to get out of the mess, you're getting out of it. If you are trapped by it, I think you are going to have a rought go of it over the next several months. Lots of questions from the press and stockholders are going to have to be answered because public understanding of what has happened with gold mining shares is at an all time high.

B. The central banks, particularly the European banks, have removed themselves from the gold leasing league and that's where most of the available gold resides. This is another message not lost on the astute mine company executive.

C. The Bank of England, it now appears is playing a central role in the Ashanti affair because of the exposure of its counterparties. This goes back to the reasons I offered the first day of the BOE announcement as to why they would have decided to sell gold at that time. More and more comes out on this issue as time goes on. It does not surprise me that Gordon Brown would like to move to Washington and head up the IMF. Look what he's done to the pound and the Bank of England. We still don't know who's responsible for the BOE sales -- the government or the central bank. Each still blames the other and Gordon Brown wants out of London ostensibly because Blair says he wants to remain Prime Minister for several years thus thwarting his ambitions. Frankly, I don't think he could win in Britain even if Blair were out of the way. So what else is going on there?

D. What all this means from my perspective is that no matter what happens with Ashanti and Cambior and the bullion banks and all the other players in the short run, in the long run the gold carry trade has been sent its merry way, and this is a major long term bullish development for physical gold owners. The field of players is simply thinning to the point that it is no longer sustainable. This doesn't mean that the shorts will roll over and die, but it does mean that we are approaching the end game. I expect to see substantially higher numbers in the COT as we go along on the short side and where it all ends I don't know. At some point, the shorts are going to have to take their losses. All they are doing now is buying time. Without sufficient gold to keep the carry trade a growth industry, it will eventually die. The only question remaining is how is the trade going to be unwound.

As yet the Ashanti announcement hasn't been made. Were they waiting for COMEX to close?
TownCrier
(10/25/1999; 12:56:45 MDT - Msg ID: 17425)
A really good read by BBC business correspondent Rodney Smith
http://news.bbc.co.uk/hi/english/business/the_economy/newsid_479000/479985.stmHe makes delightful references to the "hard-headed fund managers" who are powering the stock market, and that their biggest fear is that the Goldilocks economy is changing without them seeing it. He cites one analyst to tells his clients 'if you can't see the risk, don't worry about it,' and invests them 85% in the market. He cites another analyst who warns his clients 'it is ALL risk out there,' and puts them 85% in cash and bonds.

Rodney Smith says such disparate views are not unlike those in place before Black Monday which had no visible trigger for the crash...no-one saw the interest rate-move by the Germans as significant until it was too late. He summarizes very well the similarity found in nearly all crashes..."Maybe the biggest similarity is that we can never see where they are coming from - or when."
phaedrus
(10/25/1999; 13:09:33 MDT - Msg ID: 17426)
@USAGOLD re COT
Just a note:

You mentioned that you are still awaiting COT figures. But the latest commitment of traders figures came out this past Friday (the 22nd), and the next set is not due out for another two weeks. Am I missing something here?
sstins
(10/25/1999; 13:17:15 MDT - Msg ID: 17427)
Precious Metal Mutual Funds
USA Gold,

Thank you for your post.

Would you or anyone else care to recommend a few PM mutual funds that would be worth looking into. Preferrably those that tend to focus on unhedged mining companies along with an emphasis on acquiring bullion.

Thank You,

Steve
Golden Truth
(10/25/1999; 13:19:27 MDT - Msg ID: 17428)
TO nickel62
Hello nickel62!In your post Msg ID:17389 to me you mention a few items that definitely need the "Golden" light of day to shine down on. First you mention that me wanting to be in cash rather than GOLD is contradictory.If you would of read all my posts you would realize i,am 100% in GOLD and that i hope the L.B.M.A turns into "vapour" and the P.O.G goes so high it never comes down.

My point here is that wishing this happens and whether or not it does is two different things. You then go on to say i should and i quote "If you would read just a few of them you would understand that believing that the dollar is going to crash and yet you want to be in cash rather than gold is contradictory" end quote.
With all due respect to you i have read all the "academic reports" here and at Gold- Eagle and i suggest you do also.
The fact still remains that the only true contradiction is the P.O.G goes lower indicating a stronger dollar. This sure doesn't indicate that they are losing control and the dollar is crashing, another contradiction in it self, Yes?

There for i maintain that just because everybody wants the dollar to crash,doesn't mean it will. Now who are the biggest advocates of this happening? I'd say it's everyone that holds bullion,definitely not people that are into cash and stocks. P.S thats alot of people! I think all this talk about destruction of the U.S dollar is an excellant way to strike "FEAR" into peoples minds. Fear is a very strong emotion in fact it is the 2nd strongest emotion the only stronger emotion is "LOVE"
If there truly is a problem with our currencies why can't the message be presented openly and lovingly why always with fear and the Devil? I say we have an aggenda here and its chock full of lies what do you think it might be?
To sell more GOLD and prevent mine closures and job loses?

This brings me back to deflation once again and why? If the U.S dollar is in trouble? there best bet would be to go for a depression. One that would see the dollar survive in the end! Do you really think they will inflate on purpose and destroy the confidence of the U.S dollar, i think not!

You also mention Quote "The shorts are trying to find gold where ever they can and that includes the over hedged producers witness American Barricks announcement to bid for Ashanti's new Tanzanian mine. They obviously need more gold to cover their own A**. End Quote.
Firstly Barricks is Canadian not American with it's head office in Toronto,Canada. As to why the Barrick snakes want to acquire Ashanti. You state it is to get more unhedged gold.
Sorry the last time i checked all of Ashanti is HEDGED and they are up to their necks in alligators. I say Barrick wants to acquire Ashanti is to make sure they don't try and cover and then expose Barricks short selling practices by causing a rise in the P.O.G
Kind of like covering up one Murder with another Murder and they plan on murdering the P.O.G due to there stupid forward selling. What else can they do without gunning the Price??
The best they can hope for is to drag this out as long as possible so they can reduce the upside damage.
Thus market is insane, because what GOLD producer in their right mind? wants to hold down the price of their product?
It just shows the amount of manipulation in the GOLD markets.
This brings me to my final point about being careful and not being like me and 100% in GOLD. Just in case GOLD doesn't go to $30,000/oz and does go to $100/oz. Nobody knows for sure that it can't go either way. I suggest 50% GOLD and 50% cash just in case! So far i've seen no shortage in GOLD when i go to buy? Also i've not seen "M.K" comment on any shortage here or even a percieved shortage in the near future?

To answer one last question, No i,am not a GOLD trader but i wish i were so i could bring the balance of truth here. Yet if the P.O.G keeps dropping yes i will trade in 50% of it for cash. I also will play by the current system and that involves "puts and calls" until i see otherwise.

Like i've said before on this forum talk of "GOLD now rising" is cheap, but it takes real money to buy Booze!
At this time the real money i've made and converted into GOLD was in options.
The person who inspired me was a fellow over at G.E who goes by the name of "Richard 640" he has been in the market for 27 years and is an extremely stand up guy!
While we are all debating and showing how smart we are to each other them guys over at G.E are busy making money and then buying all the GOLD they want.
How is the fool here?
Have a profitable day. I know the Puts i bought this morning just got $3 dollars closer to being in the money!
G.T :-)
sherlock
(10/25/1999; 14:07:21 MDT - Msg ID: 17429)
why own gold
the reason that we all desire to own gold, was aptly stated by town crier, that a decision must be made....how to store wealth, that the dollar benefits the US, the euro is a more neutral currency, and that Gold fits the bill. (sorry town crier if I didn't get it word for word, but its close). Gold in and of itself is a poor investment. I quit getting upset about the ups and downs in the price, and try to remember that I choose to own it as an insurance policy. BTW, this is my first post, so go easy on me, lol. I enjoy all of your posts.
ORO
(10/25/1999; 15:16:07 MDT - Msg ID: 17430)
Golden Truth - The fate of currencies
There are significant problems with your view of possibilities to save the dollar.

In order to maintain the dollar, (1) the US must be willing to go further into debt and (2) the world must be willing to allow it to do so. (3) Also, the emerging market nations must be convinced that they can and should maintain their dollar denominated debt. (4) Government must forgo seigniorage revenue.
I consider these all to have no significant chance at all. However, all of these must be fulfilled to great extent in order to allow the dollar to remain stable.

Otherwise, the US must face these problems:
1. The US (private, financial and government) is overleveraged externally. The US has an enormous foreign debt problem. The current accounts deficit must be turned back to positive territory just in order to just cover the net interest payments on the debt.
2. The money, in essence, has already been "printed" in the form of FDIC, Pension insurance, Government securities, Agency securities, etc.. that are a promise to print money to cover the debt.

Generally, without increasing debt, the economy must grow phenominally quickly, or the government must print money. Failure to do so would cause collapse in the banking sector. The two short periods in which this debt growth was let down was in the early 80s banking crissis (remember Continental Bank?), and later during the 89-91 recession and banking crissis.

From what sense can be made of the Fed's actions of the recent past, there is an attempt to provide the necessary liquidity to the system without hurting the $. Thus, even your shoe laces can be monetized, but the interest rate is being raised in hopes that the extra dollars flowing out of monetization are repatriated into the US through lending at a higher interest. So far, it isn't coming back that way, but through exports. The fact that US exports are (finally) getting a bid is price inflationary.

Because of these issues, the fate of currencies is to decline. The fate of the dollar, as was the case for the Won and the Ringit, is tied to the fact of the US being a debtor nation. With prospects for reducing the external demand for dollars for trade settlement because of the Euro, the future decline should be steeper than it was for other debtor nations.

If you find any argument to the countrary, I would love to blieve it. Unfortunately, there has yet to be a single one I could hang a hat on.
phaedrus
(10/25/1999; 15:19:24 MDT - Msg ID: 17431)
Ashanti's Conspicuous Silence
When gold started dropping earlier today, I thought it was 'cause Ashanti got bailed out.

But I was wrong, there has been no news on the subject at all. The deadline came and went almost six hours ago, and there is still nothing on Reuters or Bridge News (our office has 'em both, and I just checked 'em both).

This conspicuous silence makes me cautiously hopeful. You would think that if Ashanti were triumphant they would have trotted the news out right away and enjoyed giving gold a further stomp.

Instead, mum's the word. This is out of character. Unless maybe they are giving the big boys some time to position themselves before the bombshell hits. I don't want to be sensationalist here, but I wonder....

Any you other folk have thoughts on this strange silence?
TownCrier
(10/25/1999; 15:46:48 MDT - Msg ID: 17432)
Welcome aboard, Sir sherlock!
It's always nice to have someone confirm that these cries from the rooftop are being heard. Keep your fingers crossed for a steady internet connection to facilitate a timely delivery of the GOLDEN VIEW. My kingdom for an ISP that isn't overwhelmed on Mondays and Tuesdays! Anyone else find those evenings to be the peak hours for usage?
CoBra(too)
(10/25/1999; 17:23:01 MDT - Msg ID: 17433)
Snippet on Savings Rate?
The savings rate turned negative in the US, allegedly in the 3rd. Qu. of 1998 - whatever that means? The average US citizen has nil cash savings, but is indebted to his mortgage bank, credit card institution, investment bank and other, collateralizing and most probably leveraging his home, financial assets and even his wages in order not to miss the great opportunity to average a minimum annual 20% return.
Return? ROE, hardly - the only return on equity will be a downturn and suddenly - as is the case with Ashanti and Cambior - a hefty margin call on "virtual", unreal assets, where prices will cascade when the music (-unacceptable $-debt growth) stops.
80 million Germans represent (part of) the other side of the coin, having saved DM 251 billion only last year and will have per capita cash holdings of DM 73.000 (37.000 Euro) by the end of the year. Admittedly, some is in other financial assets too, but primarily we're talking about cash savings accounts.

No news on the Ashanti drama?
Regards CB2


SteveH
(10/25/1999; 17:48:10 MDT - Msg ID: 17434)
phaedrus
Phaedrus,

How does Geo, your boss do it? Weez wants to knows.

Long term bond hit 6.40%. Didn't we hear that 6.4x% was a 20 year high? Or what is?

CNNfn folks are thinking Y2K and down trend, but expect a big rally in new year. I watched CNN's Moneyline (didn't mention gold as usual) before hitting the net and noticed that they blamed the bond on todays DOW drop. And I lauged when they blamed the down bond on the European announcement about inflation. (EURO v. Dollar) At some point even CNNfn will figure it out. Not enough dots for them yet.

Logic:

gold has risen to within a 1:1 relation with the DOW at least two times this Century. Prediction: I see gold at $4,000; Dow at 4000. Any others?
SteveH
(10/25/1999; 17:59:24 MDT - Msg ID: 17435)
Peter, I take it for awhile!
Dec gold now...$300.10
SteveH
(10/25/1999; 18:06:43 MDT - Msg ID: 17436)
Dec. gold on the rise...now $300.30
www.kitco.comrepost:

Date: Mon Oct 25 1999 19:23
korondy (Lease Rates) ID#275166:
Copyright � 1999 korondy/Kitco Inc. All rights reserved
Do NOT be fooled by the drop in lease rates. It only means there is gold available for leasing. This will ALWAYS be the case.

Lease rates are dropping not because there is more gold available for leasing, but because there is less demand for it to be leased. If you are looking for answers as to why this is, just look at the chart of the 30-year T-Bond. One year ago, it ( US99Z ) was fetching 132+, today it settled at 111. So if you leased some gold one year ago, sold it for 300 - 310, bought T-Bonds with the proceeds, you are SOL. You pay 2% on the gold lease, earn 5% on the bond ( +3% so far ) , about even on the gold short, but down 25% on the bond! Net is a negative 20% plus! Step right up, want some more? The gold carry trade is more profitable than ever ( lease rates are down, t-Bond rates are up ) -- so why is it not happening? Smart money KNOWS: either bond yields are going up ( prices falling ) , or gold prices are going up, or both. Do not be mislead. Know what you are looking at!
SteveH
(10/25/1999; 18:08:03 MDT - Msg ID: 17437)
Gandalf, Peter,...
You folks awake?

Gold (in Dec.) now $300.40!

(Ashanti???!!)
SteveH
(10/25/1999; 18:11:02 MDT - Msg ID: 17438)
Ashanti
www.kitco.comrepost:

Date: Mon Oct 25 1999 20:09
FOX-MAN (fwiw...COMEX gold warehouse stocks dropped 11,620 to 871,207 ounces) ID#330280:
****@@**** __



Date: Mon Oct 25 1999 20:09
AzusaGold ($ 305 is key number for Ashanti Goldfields Co Ltd. Is no news good news or Bad?) ID#255250:
Copyright � 1999 AzusaGold/Kitco Inc. All rights reserved
BoE declines comment on gold mines rescue report


LONDON, Oct 25 ( Reuters ) - The Bank of England declined to comment on Monday on a newspaper report that it intervened on behalf of gold producers threatened by losses made in the derivatives markets after the recent gold price rally.

The Independent on Sunday reported the Bank had asked several banks to give mining companies extra time to repay debts incurred after the gold price surge hit positions they had taken to hedge against price falls.

The Bank declined to comment on the details of the report, but a spokesman said: "It is frequently the case in major city episodes that the parties like to discuss the situation with us and the Bank is always happy to talk to them."

Ghana's Ashanti Goldfields Co Ltd, struggling with big losses on its gold hedge book, last week won a third margin call reprieve until close of business on Monday, industry sources said.

Ashanti itself said late on Thursday it had secured a "short" extension of the standstill agreement from counterparties after a previous 72-hour extension expired, without specifying a timescale.

Ashanti's case for a stay on margin calls has been helped by a decline in gold prices which has reduced the losses on its hedge book to a more manageable level.

If gold stays below $305 Ashanti does not actually face margin calls since its losses are covered by an existing revolving credit facility.

But with gold still volatile its liability could easily shoot up if prices rise. At $325 an ounce it faces margin calls of some $270 million, rising to $500 million at $350 an ounce, mining analysts said.
DD
(10/25/1999; 18:16:41 MDT - Msg ID: 17439)
When the going gets tough
Hi All:

Having created, grown and lost a number of businesses over my 30 year career (God, that sounds old). I have been where the shorts are today. I've been leveraged to the max in the hope that business would take off and been met by unforseen recession or other calamity. I've seen prices plumet and factory utilization fall away like sand against the tide. What did we do? Whatever we could. ANYTHNG!

The first thing the shorts must do is to buy time. Where do you get time? From your lenders. How do you get it? Any way you can. Beg, borrow, steal, liquidate, work deals and all angles, threaten to default (threaten in privite and let them know that the actual default will be public), call in favors, pray, cry and try not to kick the dog. That's exactly what they're doing IMHO. It's what I'd do.

Then, the their next step is to make the best casserole possible from the load of chicken @#$# that has been dumped on on their heads. If it's not a casserole, then soup. If not soup, then gruel or a feather duster or at least manure for the new garden.

The key thing to remember about dept is that the more of it you have, the fewer options too. There's not enough hula dollars to bail out every leveraged big shot who's going to bet caught in this potential bon fire of the papers and their mutant ninja derivitives. There may be a hundreds of LTCM type situations out there just waiting to be lever launched face first into the dirt. And how many bonds and stocks must the Fed buy (both directly and indirectly) to keep the lid on this paper pressure cooker under high heat? And what happens when the rest of the world runs like a scalded dog from the kitchen and what the US has been cooking up? Opps. The lever works both ways. Who would'a thunk it.

So, the moral of this story? Expect our short buddies to do whatever they can to buy time. At least until they play our favorite song, "Short people got nobody. Short people......." Best, DD
SteveH
(10/25/1999; 18:24:22 MDT - Msg ID: 17440)
Ashanti
www.bbc.uk.coDid you know: (note the April 99 date)

Friday, April 2, 1999 Published at 19:48 GMT 20:48 UK


World: Africa

Ashanti king crowned

The Ashanti fortunes were built on gold

By West Africa Correspondent Mark Doyle
The new King of the Ashantis, Nana Kweku Duah, has begun initiation rites in the central Ghanaian city of Kumasi.




Among other ancient duties, the new king must learn how to conduct regal ceremonies and how to wear his royal apparel.

And by tradition, the Queen Mother - an all-important figure in Ashanti matrilineal society - will introduce the King to the sacred place where the Golden Stool, or throne, is kept.

The Ashanti king's Golden Stool is formed from solid gold, mined from a part of Ghana which is still one of the world's richest gold-producing areas.

Built on gold

Nana Kweku Duah became the 19th Asantehene, or head of the Ashanti empire, through a complex process of royal consultations.

The Ashanti Queen Mother and the ruling Asanteman Council decided who would become Asantehene after a mourning period for the late incumbent.

Otumfuo Opoku Ware II died in March after 30 years in power.

Built on the wealth of gold reserves, the Ashanti empire has wielded power in the region for over 300 years and put up fierce resistance to British colonial rule.

The leader of the Ashanti empire is one of the most important traditional rulers in Africa, widely revered beyond the borders of modern-day Ghana.

Modern duties

Modern-day Ghana is a republic with a democratically-elected government, but most Ghanaians are proud that their royal history has been kept alive.

Their new king will be tutored in modern as well as traditional affairs.

One of his titles translates into English as "Keeper of the Land", and many modern-day decisions, such as where farms or factories are built, have to have royal approval.

This combination of traditional and current powers makes the Ashanti king an immensely powerful figure.


ORO
(10/25/1999; 18:34:41 MDT - Msg ID: 17441)
DD - Phrase of the day
"papers and their mutant ninja derivitives"

Just love it
JCTex
(10/25/1999; 19:22:32 MDT - Msg ID: 17442)
DD: when the going gets tough
"God, that sounds old": it is. Methinks you and I have similar years, and bruises. The only thing that I would add to your chicken&*#@ soup recipe is something that FOA said several days, ago. "I don't have to outrun the bear. All I have to do is outrun you."

If I were the CEO of one of these other highly-hedged gold "mining" companies, I would be looking at Ashanti and wondering if I had just been outrun. If I were a stockholder, I would be asking the CEO how the track-meet was going.


Trader_vic
(10/25/1999; 19:42:01 MDT - Msg ID: 17443)
(Another way to add money to your portfolio as the price of gold rises.)
At this low point in the gold bull cycle, we should focus on planning for the future and how to handle the profits that will be generated....I know that some of you are saying that "This guy must be crazy...What profits", trust me they will be there just like everyone is saying...it's just a matter of time and time is what we have to use wisely...just like planning...

For those of you who have your gold stocks in an IRA of some kind, now is
the time to convert your IRA into a ROTH IRA...of course, there are
ramifications to this recommendation...you are taxed on the current
value of the stocks transfered into the ROTH IRA...BUT...in 5 years all of
that stock is tax
free and with any considerable gain, you could save yourself a fortune
in taxes on those stocks...For example...Say you owned 10,000 shares of
HGMCY at
a transfered rate of $7, you would be taxed on the $70,000 of
transfered value....which may cost you $15-$20,000...NOW say after 5 years,
HGMCY is at
$70/share, you will have avoided $630,000 of taxed income for a net
savings to you of over $160,000!!! I mean, if the gov't wants to screw us
with a
manipulated gold market, we might as well have them pay for a good part
of it, right??? Also, if gold does go to $3,000/oz, the numbers that I have
just
quoted you will be WAY LOW!!! This could be substantial to your long
term retirement goals, let's take advantage of this GOLDEN OPPORTUNITY!!!
Solomon Weaver
(10/25/1999; 19:47:34 MDT - Msg ID: 17444)
asset inflation vs. goods inflation
Being an economics neophyte I wonder if I have the following right.

The Federal Reserve has been out there fighting inflation. But there is one kind of inflation which they love - asset inflation. By this I mean when the price (value) of homes and the value of stocks rise.

Since Americans sell their homes often, this also means that the banking system needs to keep issuing more new money to help people buy homes at higher prices.

Once an expansion dies, is it not true that consumer costs as well as assets deflate?

Is it possible that the amount of liquidity destroyed in a large stock market meltdown (and longer term meltdown of urban home prices)could mean that the POG would fall in dollar terms...as the numbers of free dollars are destroyed?

FOA
(10/25/1999; 19:53:55 MDT - Msg ID: 17445)
Reply
seeker (10/23/99; 18:15:53MDT - Msg ID:17269)
-----Kuwait is now lending their gold into the market, fully expecting to get all of this back. Isn't this just adding fuel to the fire? Where will the gold come from to pay this loan back if there isn't any gold to be had now? Do you see gold shorts eventually going to the comex type markets of the world trying to get gold from the other shorts of the world, or will they look elsewhere?------

Hello seeker,
Where will the gold come from? Well, we must know that these broad "official" announcements don't give the details of the transaction. Just as many gold mine (stock) owners are finding, a simple statement like "we are 30% hedged through 2004", doesn't really tell us what they did. There was a lot more to the transactions than the public report discloses.
The same is true with the entirety of the modern gold markets. Weather lending, leasing, forward selling or trading large scale OTC futures, puts and calls, our gold market is a complex network of interrelated commitments. For the most part we can just call it a huge derivative marketplace or paper gold for short.
The Kuwait 79 tonnes could be: (a) sold outright into the physical market (b) held on account for them in "allocated" form as they sign a contract to place the gold in "unallocated" form if needed (c) held in a BB account for the benefit of Kuwait as OTC puts and calls are balanced against the holdings (d) held in a BB account for the benefit of Kuwait as OTC future contracts for delivery are
written against the holdings (e) sold not on the street, but directly to the bank as the BB writes a derivative contract back to Kuwait for delivery (f) too many more to Offer??? My point is that the gold doesn't necessarily flow. Usually these deals are leveraged into paper gold many times
the actual amount.
However, that is not what this one was about. Somewhere in that maize of paper gold above, some lenders were saying "we will have our physical" "NOW"! So, as is usually the case when a business contract slips into the crisis stage, someone in the community gets a slice of their capital
taken off. The contract is filled at a big premium to market. I think we have seen (in the US news) how some of that premium was paid in this deal. Certainly, that was only part of it!
Back to your original question: If a crisis of supply erupts, Kuwait will get it's gold back because someone less important will be denied theirs! In other words, if two contracts are to be filled and gold is available for only one. The paper you hold will go without. Nothing new, as the world has worked this way from the beginning.
Seeker, You should read / learn / study more about how Comex works. They are not a gold warehouse, rather a paper gold hedging arena. If the world trading houses cannot fill an order, comex would be the last place to look for it.

Thank you for discussing FOA
FOA
(10/25/1999; 19:56:02 MDT - Msg ID: 17446)
Reply
Cavan Man (10/23/99; 18:38:39MDT - Msg ID:17271)
FOA
Which stocks? (please) (thank you)

Cavan Man,
The very largest ones that are not hedged. Preferably, they are also long gold! You know one I have mentioned. Truly, if one must play these stock papers, don't trade them. Expect the swings in the paper gold markets to price these mines all over the place until the market disintegrates! During this time these true "blue chip" mines will move far away from the others in price. However, bullion will still outperform the mines by a wide margin. No one is going to trade any kind of gold paper and come out with enough cash to net out more bullion than they started with. The dynamic of this bull is going to unnerve every paper trader that thinks they can make money against bullion. We have but to count the chips five years from now to see this truth. Until then we stand and watch this
unfold.
Thanks FOA



megatron (10/23/99; 18:35:32MDT - Msg ID:17270)
FOA
Sir, how do you see the short term value/movement of the Swiss franc against the $US playing out in a quick rise POG situation?

Hello and welcome megatron,
They still trade it like like the old hard currency it was. But times have changed and the franc is getting ready to enter the EMU. Even the EURO will not run against bullion until much later. Yet, none of us can hold 100% bullion, so one should consider the next world reserve currency and
position themselves now?

THANKS FOA


FOA
(10/25/1999; 19:57:57 MDT - Msg ID: 17447)
reply
elevator guy (10/23/99; 21:30:08MDT - Msg ID:17282)
@FOA
Why will gold stocks be a risky place to be?

Hello elevator guy,
We have covered this area many times before. Simply put, when this new gold market runs as never before seen, shares will under perform bullion because they only represent the ownership of a business not money reserves. As a mining business, they must overcome the negative effects of a
banking crisis, massive cost inflation and taxes old and new. Their dividends will never return the equivalent of the increase in bullion nor will the equity. Most investors do not retain a good historical perspective between government confiscation and government regulation. Production
regulation and taxation are a different control of mine reserves that greatly impacts stock values. Many stock promoters often try to inject the "confiscation issue" as one for bullion holders while ignoring this other dynamic as it pertains to mine shares. The race will be for bullion and large international players will discount the leverage of mine reserves in terms of the crisis financial atmosphere they must invest in.
Even so, some mines will be sought after as they will be perceived as the best positioned of the lot and the last to be interfered with.

Anyway, it's a long hard subject that many will pay dearly for as this transition proceeds.

We will talk again on this. FOA

FOA
(10/25/1999; 20:00:19 MDT - Msg ID: 17448)
reply
Scrappy (10/23/99; 22:13:50MDT - Msg ID:17283)
FOA
--------------------
Gold will be, (is?) the only constant common denominator amongst the countries, as the value of goods and services changes with needs & desires. It would seem to me, that the rest of the world is trying to eliminate currency based on debt, (a good plan). But, if this is the case, what is to become of the U.S.? The only currencies we have are I.O.U.'s. Will U.S. workers be paying off U.S. debt for the next century or two? Or,(more likely), will we be forced to return to a partial gold stndard, or even a nothing-but-gold economy, just so we don't starve to death? Will the rest of the world allow us to come into the new playing field 'even?' How will this all be dealt with? (bearing in mind, that about the only 'products' the U.S.A. has anymore are miniscule compared to what we import. We are a nation of paper-pushers-what value will that be in the new scheme of things?) Forgive me if I am sounding foolish-but I am suddenly afraid for all of us very spoiled citizens. Indulge me, please?---------

Hello Scrappy,
I think you are seeing some things in the right light. It would have helped if you could have lived in several other countries that carry major inflation's all the time. In this one could easily see how things are handled as your nations currency is destroyed. People do learn from others and survive the worst. It's always better if one can plan ahead!
This downturn for the dollar has been building for 20+ years. Some people say they have heard this all before and buying gold is just an old story. Well, the dollar currency has been inflated off the face of the earth during this 20+ years and it's comming price inflation will reflect that fact. The Euro is going to allow everyone to see just how much this currency has been over saved as an international reserve. Oil prices will lead the way because oil replaced the "dollar gold standard" in 76. Just as gold spiked when we went off that standard, oil will spike next as it moves to back the Euro. Physical gold will simply explode because no nation will try to stop it as this unfolds. Every
Western citizen has the right and obligation to retain their life savings against such changes and gold is the historical way we do it. Even so, one must be prepared to watch our modern gold price creating marketplace be destroyed during this process. Just as Germans of the old order were told
not to trust the Mark to show long term value, we must not trust the current gold price to indicate the value of gold.

Thanks FOA



Solomon Weaver
(10/25/1999; 20:01:39 MDT - Msg ID: 17449)
trader_vic and Roth IRA
Hey trader

One of the greatest unknowns in the coming year of two will be if the US tax code remains the same.

Most of the y2k pessimists believed that the IRS will have massive problems...if enough people believe this and "change their habits of filing" it is possible that the US Treasury has immense problems raising enough proceeds. If employment is severely affected, tax proceeds fall too.

One favorite activity of jounalists writing columns for magazines like Fortune, is to get out a calcualtor and clarify why one tax protection strategy is better than another.

If there is a bank holiday declared, one of the first assets will be frozen are all tax deferred accounts, including IRA, Roth, 401K, Government Pension, etc. This will be done in the name of protecting our money. In a dollar collapse, it may be made illegal for certain tax deferred accounts to hold foreign assets.

Being around 40, I expect that by the time I get ready to retire there will either be no official retirement age, or better yet it will be over 70.

In due respect, if you are truely considering "to Roth or not to Roth, that is the question", I suggest you step one step back and ask yourself about the larger picture.
Cavan Man
(10/25/1999; 20:05:56 MDT - Msg ID: 17450)
Dear FOA
I was watching the price of gold slide a bit tonight so.....I went to see some of the real stuff and did the jingle/jangle. Now, I feel good! (I knew that I would!)
Kind regards to you this evening...CM
Cavan Man
(10/25/1999; 20:10:23 MDT - Msg ID: 17451)
Dear FOA
Does the US have any options? Won't a wobbly US economy have negative repercussions around the world? This is the only question you have not satisfactorily answered for me. Thank you.
Scrappy
(10/25/1999; 20:26:27 MDT - Msg ID: 17452)
Thank you, FOA
So, I believe I'm hearing you say that we, the people,all of the people, (especially us USA'uns) are definitely in for some hard times. Our cars and plastics, (and other oil-dependent products), are going to become more and more, 'luxury' items. We better be ready to eat biscuits without gravy for some time to come. Our government/governing corporations are going to look REALLY bad!
Next question. Do you think there is a fair chance, because the powers that be do not like to look bad, that y2k will perhaps, be made out to be worse than it really will be, thus providing a handy scapegoat? Perhaps expediting this whole situation, as well as providing a 'better image' (oh, so high on the list of American priorities)?

I thank you immensely, sir, for your insights and enlightenment. From the bottom of my heart. A giant who cares about 'sheeple'!
FOA
(10/25/1999; 20:28:28 MDT - Msg ID: 17453)
reply
ORO (10/25/99; 18:34:41MDT - Msg ID:17441)
DD - Phrase of the day
"papers and their mutant ninja derivatives"
Just love it

ORO,
Ha! Ha! Yes, that was good.

Cavan Man (10/25/99; 20:10:23MDT - Msg ID:17451)
Dear FOA
Does the US have any options? Won't a wobbly US economy have negative repercussions around the world? This is the only question you have not satisfactorily answered for me. Thank you.

Cavan Man, Sure! The whole world economic structure is going to shake. This is one of the reasons why gold will run as commerce fails. Because everyone is going to lose something from this. Unlike past downturns, this one will find people looking for what is perceived as a "last man
standing asset". In the same light "fortress Euroland" will look like a survivor to investors.
For the sake of the most people, I hope the gold market is "taken out" on the down side not the upside. In this way many average citizens will have a shot at the remaining tradable reserves before it all changes. I know this is not good for gold bugs to hear, but it won't last that long.

I'll be going now. Will reply / discuss later. FOA


JCTex
(10/25/1999; 20:37:49 MDT - Msg ID: 17454)
FOA
Why on earth are you and ANOTHER willing to explain to us night after night on this site?? I suspect our appreciation is obvious, at least, I hope it is. Just in case, "thank you very much."
714
(10/25/1999; 20:40:19 MDT - Msg ID: 17455)
FOA
With all due respect, you say that, "Most investors do not retain a good historical perspective between government confiscation and government regulation. Production
regulation and taxation are a different control of mine reserves that greatly impacts stock values."

Couldn't regulation and taxation impact bullion holders as much as mining companies, if not more? Are you a citizen of the USA? In America, politicians talk up free markets, but readily interfere in them when deemed necessary. The whole real estate market in America is very much shaped by tax policy (homeowner deductions). What leads you to believe that the market in bullion would remain unfettered? Or am I reading you wrong?

FWIW, I hold a large portion of my meager assets in bullion, for a variety of reasons, not the least of which is my critique of usury.
Chris Powell
(10/25/1999; 20:43:51 MDT - Msg ID: 17456)
Bank of England bails out the shorts; is Fed doing the same?
http://www.egroups.com/group/gata/271.html?Also, a good story from Canada's National Post
about the Kuwait gold sale:

http://www.egroups.com/group/gata/270.html?

TownCrier
(10/25/1999; 20:58:11 MDT - Msg ID: 17457)
After the Close: the GOLDEN VIEW from The Tower
Stocks blamed their lows today on weakness in the bond market. Bonds started lower in a simple continuation of their deteriorating condition on no news and low volume, but when some key levels were hit that offered the highest yields Treasuries have seen in over two years, a short covering rally was launched that pared the days losses to end even on the day with a yield at 6.350%. And as bonds rallied, stocks were lifted off their lows. It's almost frightening how fickle these markets have become.

The DOW lost 120 points today (-1.15%), but the Nasdaq managed to end essentially unchanged. On the New York Stock Exchange decliners outpaced advancers by 3 to 2, and there were 268 new 52-week lows versus 44 new highs. On the Nasdaq there were 2,136 decliners and 1,869 advancers; 179 new lows vs. 94 new highs.

The low volume on the bond market would tend to indicate that traders are in a holding pattern for Thursday's key economic data (Q3 Employment Cost Index and GDP) and also a speech to be delivered by Fed Chairman Alan Greenspan after the markets close.

On the currency battlelines, a round of dueling rhetoric revealed Treasury Secretary Summers to have little more than the same ol' anemic mantra...speaking in Beijing, the SecTreas said a strong US dollar "continues to absolutely be our policy." In this "battle of giants," we reported earlier in the day some comments from the other side of the pond that warrant repeating here. First, Otmar Issing, European Central Bank Chief Economist, said in regard to the exchange rate versus the dollar, "I must stress that the ECB has no target or favored level of the exchange rate of the euro," however, he also stressed that the euro had the potential for "strong external value." This sentiment was not only echoed, but the ante was raised when Bundesbank Vice President Juergen Stark said, "It is obvious that the euro has a vast potential both as an international portfolio currency and as a major reserve currency. If the euro is to gain an enhanced significance in this area -- and I repeat it has every potential to do so -- it will largely be at the cost of the U.S. dollar. The euro has the opportunity of winning a greater share in the reserve portfolios of central banks around the world."

So what should you choose? Gold, of course. Given the apparent state of affairs, a nation may find it difficult to add significantly to reserves without shattering the present illusion of low gold prices, but an individual can certainly take advantage of these prices for a handful of ounces. (On that regard, French Finance Minister Dominique Strauss-Kahn recently met with Japan's Finance Minister Kiichi Miyazawa. In regard to a question about Japan's willingness to increase the proportion of euros among the nation's foreign reserves he said, "I think of course Japan is willing to have a more balanced distribution of its reserves." Given the ECB's concern about M3, The Tower is certain that all parties involved would prefer Japan's diversification of reserves through gold, but as we first provided this Reuters report, we suggested that that avenue was apparently not an available option.)

Thanks to the efforts of derivative traders, spot was quoted down another $2.70 today at $298.50. The Tower thinks this trend of seemingly harmless $2-losses per day may continue upon the best efforts of the traders until the wheels fall off without warning. The two following items might point you to appreciate the disconnect between the market's physical reality and the market's price illusion.
+
First, Reuters reports from London on a Sunday report of The Independent that the Bank of England had asked several banks to give extra time for payment on hedging positions by mining companies that have become threatened by losses on derivative markets in the wake of the recent gold price run-up. Although the BOE would not comment on the details of The Independent's report, a spokesman said, "It is frequently the case in major city episodes that the parties like to discuss the situation with us and the Bank is always happy to talk to them." Ghana's Ashanti Goldfields Co Ltd has been the high-profile poster child of mining companies that have been struggling with big losses on its gold hedge book, and last week Ashanti was granted a third margin call reprieve until close of business on Monday. The Reuters report indicates in Ashanti's case, if gold stays below $305, Ashanti does not face margin calls because its losses are covered by an existing revolving credit facility. However, with volitile gold prices their future is tenuous. At $325 an ounce Ashanti faces margin calls of $270 million, while at $350 an ounce mining analysts say these margin calls would rise to $500 million.
+
And second, we have the comments of gold traders themselves as reported in today's Bridge Precious Metals Review. And to further prep you for the antics of derivative traders, here's an earlier-than-usual look at today's oil report. In this first day of trade after Friday's big rally, NYMEX December crude futures slipped 10c to $23.35 on low volume. One trader described the scene like this: "Friday was paper action--that's why the market moved nearly a $1.00. Today it was mostly locals picking each others' pockets."

"Paper action"...that's rich. Here's some more "paper action" in the gold futures arena...

NY Precious Metals Review: Dec gold dn $2.8 after new 3-wk low
By Melanie Lovatt, Bridge News
New York--Oct 25--COMEX Dec gold futures settled down $2.80 at $300.50
per ounce after slipping to a fresh 3-week low of $299. Traders said that
the players were trying to push gold under $300 support in the hope of
triggering sell stops. However, the session was quiet, gold slipped only
briefly under that level and was helped off the lows by weakness in
equities and the dollar.

Players looked for sell stops, but they were not able to trigger many,
noted Leonard Kaplan, chief bullion dealer at LFG Bullion Services. He
said that he would only "get worried" if Dec slips under $295-296.
Lease rates also continued to slide, with 1-month at 1.4%, compared to
Friday's 1.5%. However, 1-year lease rates remain relatively strong at
3.14%.

"Light specs and funds would not let go until they'd put it below
$300, trying for stops, but the first penetration of $300 didn't set off
widespread selling," noted James Steel, analyst at Refco. He noted that
good trade buying had absorbed the selling when gold dropped under $300.
David Meger, senior metals analyst at Alaron Trading, said that
players "fished for stops at $301 and $299.50." Only light stops were
found below these levels and players seemed disappointed by the price
move, he said. "After this the market snapped back, but there was not much
else and trade was thin," he added.

Options-related activity is also expected to anchor prices around
$300, with that level said to be the main strike price for Wednesday's
Over-the-Counter options declaration. Meger noted that while prices could
move above and below $300, they would continue to hug the $300 level. "It
will be like a magnet for prices," he said.

Meanwhile, players were waiting for today's Commodity Futures Trading
Commission commitment of traders report on gold futures and options, which
is set to be released sometime this afternoon.

[We'll interject with that data now that it's available--see last Friday's GOLDEN VIEW for the futures-only data...
-Oct 25--Commitments: COMEX gold futures/options
As of Oct 19, 1999. (Changes from Oct 12) In contracts of 100-troy ounces. Source: CFTC.

non-commercial________Long (Change)_____Short (Change)
long or short only_____46,638 (-3,547)_____13,862 ( -381 )
long or short spread__146,586 (-7,509)_____146,586 (-7,509)
commercial_________213,740 (10,878)_____293,984 (-1,720)
Total______________406,964 ( -178 )_______454,432 (-9,610)
non-reportable position_85,149 (-9,070)______37,681 ( 362 )
Total open interest____492,113 (-9,249)_____492,113 (-9,249)
percentage held by:
large traders__________82.7%_________________92.3%
small traders__________17.3%_________________7.7%
...and now back to the Bridge report...]

Also, many are awaiting news from UK-listed Ghana gold producer
Ashanti. The Financial Times reported that the company has given new
proposals over the weekend to the banks involved in its derivatives
business. After the recent sharp spike in gold prices, Ashanti has been
liable for margin calls from its hedge program. If it can't work out its
problems and has to face m argin calls, it could cause a domino effect,
sending gold prices higher as banks scramble to cover any exposure,
according to traders, although recently lower gold prices have provided
the company with some respite.

Also, Canadian gold miner Barrick and South African gold producer
AngloGold have reportedly made competing bids for Ashanti's promising
Geita mine in Tanzania. Barrick is not commenting on the matter.
***
(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.
---
Here's a vital reminder of the perils and hardships involved in earning each new ounce of dear-bought gold from the ground...reported in a separate article by Bridge:
Johannesburg--Oct 25--South African gold mining company Anglogold does not expect any production losses as a result of the rockfall at its Bambanani mine on Saturday in which 2 miners were killed and a third was still trapped underground, presumed dead, according to company spokesperson James Duncan. -----Viewed in this real-world context including human tragedy, doesn't it strike you as inappropriate that the paper futures markets can push the price around with indifference--prices based only on the supply and demand for that same contract paper?

In the COMEX world of gold derivatives, two more contract positions announced delivery intentions, bringing the October total to 2,516 contracts so far. Open interest remaining on the October contract was unchanged at 111 as of the end of Friday's trade. OI in the December futures fell by 3015 to 111,163 contracts on volume of 23,289. Total open interest on all COMEX gold contracts stood at 217,869, down 2057 on volume of 29,000.

In your free time you might ponder what might happen if a similar percentage of the December open interest calls for delivery comparable to what was seen for August - October. Just compare the open interest given above (times 100 ounces per contract) to the amount of metal on hand at the COMEX depositories, not all of which is necessarily up for grabs. After today's withdrawal of 11,620 troy ounces from Registered inventory, 871,207 ounces remain. Hey, maybe a dose of reality might return to the gold market after all.

And that's the view from here...after the close.
elevator guy
(10/25/1999; 21:20:21 MDT - Msg ID: 17458)
Thank you FOA
Please excuse me for not picking up on the situation with gold stocks, from earlier discussions.

I remember general sort of talk about gold stocks, but my head must have been in paper heaven at the time, seeing how I missed the most meaty and serious points of the issue.

Thank you for your response!

When is gold going to shine again, my trusted friend?
elevator guy
(10/25/1999; 21:47:13 MDT - Msg ID: 17459)
Period piece on CNN
Saw an interesting piece on Ghengis Khan, (sp?) and how he and his Mongrels (!) took over by brute force.

I had to smile a little when the narrator said that gold and silver were confiscated, and Mongol paper currency handed out for trade! How chillingly similar to 1935?, and maybe tomorrow as well. The more things change,.......
jinx44
(10/25/1999; 21:57:33 MDT - Msg ID: 17460)
Ganymede and your understanding.......
I liked your rendition of 'why hold the physical'. Very nicely put and a contribution to the forum. THX
THX-1138
(10/25/1999; 22:24:19 MDT - Msg ID: 17461)
Something up with Goldman Sachs? Check today's volume trades.
http://quote.yahoo.com/q?s=GS&d=1dLook at the huge volume today. A block trade of about 375,000.
I wonder who sold?
ORO
(10/25/1999; 22:37:58 MDT - Msg ID: 17462)
THX 1138
I wonder who bought.

Is that a Haffler amp?
Golden Truth
(10/25/1999; 22:57:57 MDT - Msg ID: 17463)
TO F.O.A
Hello F.O.A i have one question for you!
Your comment in your MsgID:17453 says and i quote.
"The whole world economic structure is going to shake" unquote.
My question is why is there most of the time, a element of "Fear" and doom in your posts. Is this meant to scare people into believing something that they normally wouldn't to effect a desired outcome psychologically.
We all know "psychological warfare" provides systematic efforts to affect morale, Loyalty,etc, especially of large National groups! My point is as much as i truly do like you F.O.A can't you be more open and specific instead of so vague can you not even hint of the big day if that is even so?
Thankyou as always G.T
THX-1138
(10/25/1999; 23:04:28 MDT - Msg ID: 17464)
Reply to ORO
What is a Haffler amp?
Bonedaddy
(10/25/1999; 23:10:16 MDT - Msg ID: 17465)
Sherlock, Who's to blame?
Sherlock, wonderful first post. Welcome to the forum. You say much with a few words. I agree with your rationale to hold some gold as insurance. Isn't that the responsible thing to do? With our other "investments" such as homes, boats, and automobiles, insurance is required by lender or by law! Markets are subject to caprice and outrageous fortune, promises to pay are defaulted on every day. Is it not our duty to protect ourselves, as well as our debtors, from financial calamity by holding a portion of our net worth in GOLD?? But alas, insurance isn't a "performing asset", so why not take the premium to the casino where it can earn an acceptable rate of return? When it all comes down, as it eventually always does, the result will be the equivalent of a natural disaster striking from coast to coast. The sheep will bleat at the shearing. (Nooobody tooold uuuus!) There will probably be congressional investigations. Senator Snit: "See here now, just why was there no investment insurance? If re-elected I'll propose legislation, blah, blah,....children, blah, blah, ....elderly, yada, yada,....retirement...." Congressman Pompous: "Why isn't the currency backed by GOLD? This is an outrage I tell you, and outrage!"
DD
(10/25/1999; 23:54:10 MDT - Msg ID: 17466)
JCTex
It's nice to know that there are some other old goats running around on the forum. I'd like to tell you I started my business career at age 9, but that would be stretching the truth a little. I was actually 4........24 that is.

As far as outrunning my fellow CEOs, I'm beginning to think that running a gold mining company or BB should require some form of hazzard pay. Most had to follow the "make the quarter at any cost or lose your job/bonus mantra." If things go badly now, it may be that most of them are running from the bear only to lemming off the cliff. "Look everyone. While the slow of wit/foot are being eaten by bears, I'm learning to fly. Whee!" Best, DD
Netking
(10/26/1999; 00:11:24 MDT - Msg ID: 17467)
Latest GATA report
http://www.egroups.com/group/gata/271.htmlBANK OF ENGLAND DECLINES COMMENT ON RESCUE . . .
Gandalf the White
(10/26/1999; 00:28:58 MDT - Msg ID: 17468)
Sorry SteveH !! -- Had to grandchildren sit this evening.
Well the resistance point of $295 for Spot the Dog has been hit this evening as shown on FOREX at $295.10 at about 22:00 PDT. --- Tis now about $295.90 at a little after 23:00 PDT. IS THIS the low ? IT sure fells like it to the Hobbits !!! -- GC9Z has bounded off the low of $296.6 about one $ at 23:00 too. -- BTW, Where is the AEL announcement ? -- The last of the Hobbits went out and got their pocket coin today after the close and they ALL are now going to sit back and sing "Swing Low Sweet Chariot" -- They loved that "manufacture's handbook" quip from a day or so ago too. --- Grand group of folks here at the FORUM. -- Please keep the ideas flowing. --- OK, SteveH, it's yours again.
<;-)
Golden Truth
(10/26/1999; 01:31:27 MDT - Msg ID: 17469)
GOLD DOWN $1.50
I,am sure glad GOLD is down another $1.50 since i bought my put options yesterday, i,am now going to cheer the price all the way down until i,am in the money again.
Then i,am going to buy more GOLD what an excellent game once you know how it works.
P.S "If you can't beat,em join,em"
Have a profitable day all :-) G.T
Netking
(10/26/1999; 01:51:48 MDT - Msg ID: 17470)
Thunder from down under?
http://www.kitco.com/gold.graph.htmlLooks like the 'Plunge Protection Team" have arrived in Sydney.

Although we may not like to admit it, Kaplans analysis of the POG (and where it's heading) is uncanny & accurate - he again has shown why his analysis beats some of the big players, hands down.
SteveH
(10/26/1999; 03:59:04 MDT - Msg ID: 17471)
repost
www.kitco.comrepost from above link:

Date: Mon Oct 25 1999 22:35
ArmGold (How the skin on your back is making money for the Banker) ID#216395:
Copyright � 1999 ArmGold/Kitco Inc. All rights reserved

Let us start from the assumption that the bank in question has 10 ounces of gold

Let us also assume that this bank via paper games has lent out 100 ounces of paper gold ( contracts agreements what have you but 90 ounces of paper to 10 once gold )

Since most people trade the paper and very little take delivery of the REAL GOLD everything is fine right? I mean they are earning interest on 90 ounces of gold they don't even have. Just imagine how wonderful it would be for you if you could earn interest on a bank account that you don't even have. Don't make a mistake, your wild dreams are reality for the bankers! They are making money out of nothing and we are paying them for nothing :- ) . If someone wrote a book on this subject matter the librarian would certainly make a mistake and place this book in the fictional section. Sounds too good to be true but it is reality non the less.

Now the price of gold goes up!
Now Margin calls are being made!

Who is making these Margin calls? You guessed it the Bankers!
Who holds most of the 90 percent that is not backed?..You guessed it the Miners!

So what does all this mean? For starters the banks are not in as bad of trouble as some have stated they are in. The most fundamental thing people have missed here is that the banks are still making tones of money! That's right even with nothing they are still making tones of money! They are making margin calls on the mines! It is them who have agreed to buy gold from the miners that were originally forced into this by the Bankers themselves. So not only are the miners paying the central bankers for the gold that belongs to themselves but now they are forced to pay even more to the very same bankers that forced them into that predicament! And people talk about the Mob in a bad way!

Now what happens if the mine can't pay the bank in the gold promised? Well for starters the Bank will simply restructure the loan or the agreement and simply charge the miners more interest for delays, for restructuring and all the rest of the ways they see fit in skimming the profits of the Miners. If Ashanti is called on to make do and they can't possible make the payment, then the loan they took out at say 3% is now refinanced and agreed upon at say 6% Ashanti has no choice but to agree or fold! They don't want to fold so they hand more profits over to the Bankers and the company as well as the stock holders suffer while the Banker makes more money!

This is all good and dandy till people outside of this game start to buy physical. This is the only area that the Banker can't control and this is the only area that the bank will loose money in. However ma and pa are slaves to CNBC and the spin control keep the public in check. Not only that but the 10 ounces in reserve is enough to keep people supplied and perhaps even dumped to make the price go down and deter joe shmoe from thinking about buying up the 10 ounces.

In a rising market there is still another way the supply problem will be met. Say Ashanti is tired of paying 6% and wants to give the Banker some of the gold. So say for the sake of Assumption and Simplification Ashanti is the one holding 90% and they give the bank 10 ounces to lesson the position. Now the Central banker has 20 ounces available to meet demand. And as joe public rushes to get more gold, more gold is available again on the backs of the Miners and shareholders and hence there is no shortage of gold for joe public to make the price skyrocket. This is also not counting all the small miners that are not hedged and wind up providing more gold.

Since the banker is basically an Investor in the Gold mine it is very hard for Ashanti to fail. If big companies fail then the Banker really looses money, so the companies will be saved at a greater cost not to the Banker but to the company and it's shareholders. Hence now the bank becomes even a Bigger investor in the gold mine. All this is very hard to break because of the reasons stated above. What we need is a really weird anomaly to happen before the Bankers grip is lost. But lets not kid ourselves the Grip that they have and how it is structured is pure profit for these guys. One way or another joe shmoe will get enough gold as to make the price not rise enough to hurt the all important Banker.

I sometimes wonder why I'm an investor? Why not all of us get together and start a bullion bank? After all I dare anyone here at Kitco to give me one example of one other endeavor that can make you large sums of money on 900% of what you don't have?

Kind Regards
Armgold
SteveH
(10/26/1999; 04:15:35 MDT - Msg ID: 17472)
repost
http://www.streetsignal.com/london.htmSounds like this 008 fellow from London has been sipping brewskies with FOA/Another:

snippet: 1) the Europeans agreed to stop lending gold to prevent further loss in the value of their reserves. The resulting volatility explosion was a planned event meant to further undermine the US dollar and cause headaches for Wall Street banks and hedge funds that had been actively shorting the euro 2) George Soros had been plugged into the above and was a massive long player and still holds a big position, with full intent to squeeze some competitors (eg Tiger) shortly. 3) The Saudis have been huge buyers (I can confirm this is a fact - don't know why though) and are involved in the Euro thing as a repeat of their huge win in silver in the 1970s (see Bunker Hunt's squeeze). etc etc etc I am trying to illustrate that the market is pretty complicated and the gold price is like a window on to the credit flows of the world. It has been used as a funding mechanism by hedge funds (massive shorting to buy bonds) and a a profit centre for bullion banks and gold producers. The smart in-crowd made stacks on the way down and are giving some of it back on the way up - I am not shedding too many tears.

SteveH
(10/26/1999; 04:20:27 MDT - Msg ID: 17473)
repost
http://www.ft.com/hippocampus/q2b4612.htmThis is a good day of posts:

Date: Tue Oct 26 1999 04:03
SlangKing (HSBC quits Ashanti role ) ID#274240:
Copyright � 1999 SlangKing/Kitco Inc. All rights reserved
Confirmation that HSBC has resigned came as the 16 banks with which Ashanti conducts its derivatives business considered proposals from the company about changes to the structure of its hedge book arrangements.

Ashanti now has no broker but is being advised by Goldman Sachs on the bid. Yesterday's meeting with the banking consortium continued beyond the 5.30pm moratorium granted to the company by the banks entitled to ask for around $270m in margin deposits.

Advisers and ministers from the government of Ghana, which has a 20 per cent holding as well as a golden share in Ashanti, arrived in London yesterday to review the situation.

They were meeting the board of Ashanti and the hedge book counter-parties yesterday afternoon.

The delegation is also expected to consider proposals of interest in parts of Ashanti or the business as a whole that have emerged in the last week.


Felix the Cat
(10/26/1999; 04:21:04 MDT - Msg ID: 17474)
The price of Pandas was devalued SO FAST!
Maybe I was not checked out the price of Panda (1oz) for a LONG time (2or 3 weeks). Today, the price of that is HK$2412 (=US$310+)---- I checked out in Po Seng Bank at 15:00/26/10
BUT I am SURE that the price of Panda was HK$3000 (=US$381+) at before. It was devalued so fast, isn't it?

Anyone can tell me WHY? Was that the Boom of Gold?

Xie Xie

F. C
SteveH
(10/26/1999; 04:25:04 MDT - Msg ID: 17475)
ORO
www.kitco.comDate: Tue Oct 26 1999 02:17
ORO (@ArmGold - Bullion Bankers) ID#71231:
Copyright � 1999 ORO All rights reserved
There are two elements to the issue-

1. Gold banking - where the bank has no direct exposure to the price, but has both "assets" and "debts". Usually, they borrow short term and lend long term. They also make "available on demand" promises to their depositors. The major risk is illiquidity, that is simply a problem in rolling over their borrowings short term or long. Their secondary risk ( till now ) was the risk of borrower default ( hedge funds and mines etc. ) .
You might say they shorted gold, but they have also gone long. As with any banking process, there is a cyclical expansion and contraction of gold credit. This time, they went overboard with the extensions and must have more gold debt growth to prenvent a liquidity crisis. Alternatively, they may add to reserves by buying on the market.

2. Trading desks. These desks may have a directional bet going and is no different from a hedge fund. This is the kind of activity in which a Goldman Sachs trading desk would do. Even then, the pressure to reduce risk causes all kinds of dynamic hedging strategies to come up with a, supposidly, limited risk strategy.

What we see today is an unwinding of the gold debt bubble as depositors withdraw and the bamk goes into a rush to cover them with new borrowing or purchases of gold through the open market.,
Julia
(10/26/1999; 06:23:20 MDT - Msg ID: 17476)
FOA
Hi FOA,
Thank you for keeping an eye on this forum and encouraging us during the hard times as we try to grasp what is going on with gold.

My question is concerning your statement made to megatron in message #17270:

" Even the EURO will not run against bullion until much later. Yet, none of us can hold
100% bullion, so one should consider the next world reserve currency and
position themselves now?"

My question:
FOA, how does one invest in the EURO now?

Thank you,
Julia
nickel62
(10/26/1999; 07:17:46 MDT - Msg ID: 17477)
Bond market is down 25% over last 12 months likely to continue
The steady erosion of the US bond market over the last year and the high probability that it will continue makes it impossible to recreate the downward pressure on the gold price over time. The "Gold Carry Trade"was needed to make the manipulation of the gold price work without it there isn't enough profit motive to make the paper short selling work.The following is a repost from earlier as long as this situation continues the price of gold will not be able to be held down artifically for more than a breif period of time. Even the Federal Reserve cannot hold back the ocean. This is probably the last chance in your lifetime to see gold worth less than $300 US dollars. Buy enough to pay of your mortgage on your house as it goes to equilibrium at $1785/ounce. Cheers

Date: Mon Oct 25 1999 19:23
korondy (Lease Rates) ID#275166:
Copyright � 1999 korondy/Kitco Inc. All rights reserved
Do NOT be fooled by the drop in lease rates. It only means there is gold available for leasing. This will ALWAYS be the case.

Lease rates are dropping not because there is more gold available for leasing, but because there is less demand for it to be leased. If you are looking for answers as to
why this is, just look at the chart of the 30-year T-Bond. One year ago, it ( US99Z ) was fetching 132+, today it settled at 111. So if you leased some gold one year ago,
sold it for 300 - 310, bought T-Bonds with the proceeds, you are SOL. You pay 2% on the gold lease, earn 5% on the bond ( +3% so far ) , about even on the gold short,
but down 25% on the bond! Net is a negative 20% plus! Step right up, want some more? The gold carry trade is more profitable than ever ( lease rates are down,
t-Bond rates are up ) -- so why is it not happening? Smart money KNOWS: either bond yields are going up ( prices falling ) , or gold prices are going up, or both. Do not
be mislead. Know what you are looking at!

The importance of this observation can not be overstated. Stop worrying and take advantage of the shorts weakness like they have been taking advantage of us over the last five years.
Phos
(10/26/1999; 08:09:36 MDT - Msg ID: 17478)
Thursday - day of reckoning
http://www.individualinvestor.com/tbd/anfdt_frm.asp?ff_id=3268TAUB TALK: Thursday's Triple Threat

From Individual Investor: Editor Steve Taub explains why he's worried about Thursday. REALLY WORRIED.
phaedrus
(10/26/1999; 08:21:34 MDT - Msg ID: 17479)
December gold at 29500
bleah.
Twice Discipled
(10/26/1999; 08:29:57 MDT - Msg ID: 17480)
Gold Confiscation - NOT!
I don't know about you all, but I am getting very aggravated with the sheeple attitude regarding Clinton or any other president ordering confiscation of gold.
I realize this happened with Roosevelt, but I would hope we have learned from history and would not be sheeple as the elite would have us bow before them. Confiscation by a US president represents a dictatorship and I do not believe we live in this type of country YET! I will never give my gold up to a ruthless dictator! This is the United States of America. If we do not stand up and fight if this were to occur, we do not deserve to call ourselves Americans. Our forefathers would be ashamed of us in that many of them gave their lives to fight tyranny and oppression.
The constitution outlines our liberties and only we can give them up. We should have a government FOR the People, BY the people and OF the people. Standup people! Don't let the government (or a presidential dictator) take our freedoms from us.

Ron Paul seems to be an adamant backer of gold, why don't we band together and ask him to introduce legislation prohibiting confiscation of gold. Or maybe even a bigger picture - prohibiting dictatorial executive orders from infringing on the individual rights granted by the Constitution. This should not be needed, but may need to be re-iterated to those with over-ambitious thoughts.

Sorry for this outburst, but I have read many conversations here and on the other board about confiscation and a well of anger burst forth from me.
phaedrus
(10/26/1999; 08:35:03 MDT - Msg ID: 17481)
december gold hits 292
glory be.

is it just me, or do these markets suck?
USAGOLD
(10/26/1999; 08:35:47 MDT - Msg ID: 17482)
Today's Gold Market Report: Ashanti Silence Deafening; Comfort for Correction Weary Gold Investors
MARKET REPORT(10/26/99): Gold broke $300 in its southerly trek with
traders looking to the $295 level as a support zone......Overnight in
London gold traded as low as $294.38 then rebounded to close the morning
session at $297.95...... Expectations are that the market will stay at
this level until after option expiry in London tomorrow...... FWN
reports T. Hoare's Rhona O'Connell as saying: "There are widespread
expectations of support around $295 and certainly the buying from Europe
this morning would tend to underpin that belief. However, this was
largely short covering and we will feel much more comfortable when the
physical market returns in size, which it has yet to
do."..............The Asian market was slow with technical trading the
dominant factor........... Strangely, there has been no news on the
Ashanti front. The deadline set by the banks on the Ghana mining
company's margin calls passed about mid-day yesterday with no
announcement..... The euro dropped to $1.06, a four week
low..........Some gold investors expect gold to go up in a straight line
without correcting. The following from an AP report offers some support
and counsel for those concerned about the recent correction: "We're in a
correction mode right now (in the gold market) following the huge runup
we had," said Joe Foster, portfolio manager of the Van Eck gold funds in
New York. "This is not totally unexpected to see us go into a fairly
steep correction when you consider how quickly it ran up." But the
longer-term outlook is bright. "Fundamentally, nothing has changed,''
said Matthew Ford, metals analyst for U.S. Global Investors Inc. in San
Antonio. "I think traders are just sitting on their hands temporarily as
traders and the mining companies themselves try to cover their
shorts.".........In my view, the market is simply waiting for the next
chapter of the Ashanti saga. At the same time, the market may already be
discounting a unfavorable outcome for Ashanti raising the question:
"What is the upside potential should the outcome be unfavorable for the
mining company?"............. The silence surrounding yesterday's
deadline is deafening.........That's it for today, my fellow
goldmeisters. We will update if anything interesting happens.

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.
sherlock
(10/26/1999; 08:52:08 MDT - Msg ID: 17483)
ups and downs in life, and in price of gold
American Heritage Dictionary:
faith: a confident belief in the truth, value, or trustworthiness of a person, idea, or thing.
OK, gold is down today. Rejoice! You can buy more for less. You must keep the faith. At some point, it will go up. When it does, the demand will be out of this world, and people will want it, unable to get it any price. It wont be available. While you may "lose" a little today, you will laugh all the way to the bank someday in the future.
phaedrus
(10/26/1999; 09:03:33 MDT - Msg ID: 17484)
gold breaks below 290, silver back in the teens
Ashanti and the BOE are probably popping open the champagne right now.

Just my opinion, but to me saying that "it will go up again someday!" is crap comfort and that it's best just to grit one's teeth at times like this.

congratulations to golden truth on his puts by the way.
USAGOLD
(10/26/1999; 09:11:33 MDT - Msg ID: 17485)
Ashanti News: Outcome Still Up in Air
http://www.globeinvestor.com/archive/roc/19991026/BUSINESS-ASHANTI-CAN.htmlMarket reading favorable outcome for Ashanti?
USAGOLD
(10/26/1999; 09:14:42 MDT - Msg ID: 17486)
Japan Recommends Food Stockpile for Y2K
http://www.globeinvestor.com/archive/roc/19991026/BUSINESS-YK-JAPAN-CAN.htmlRan into this while looking for Ashanti news.
The Stranger
(10/26/1999; 09:17:09 MDT - Msg ID: 17487)
290.00 Bottom
I'll go out on a limb and call this the bottom. Perhaps later I'll have time to explain why.
ORO
(10/26/1999; 09:25:39 MDT - Msg ID: 17488)
Phaedrus Ashanti and dip in POG
I think this dip has to do with the Ashanti deals revolving around the Kuwaiti gold infusion, Russian promises, and a plan by BinTalal and co. to save their gold supplies from the BBs and the idiocy of Ashanti hedge managers.

The gold is probably being used as a part of the bail out. It will sit in the BOE vault while the Oil Royals get their hands on more Ashanti future production (and Cambior's too - probably).

The key technical is a reversal - preferrably a nice vertical one, out of this spike down to a surge above 295. Best to get the new shorts while the stops are new.

We have now $3 jumps (either way) that are reminiscent of the squeeze of a few weeks back, of course in the other direction.

I consider this the main spike down capitulation, and expect the price to reverse soon - probably with a small spike down to a new low at 285. The 0.618 retracement many techs are waiting for will then have been fulfilled.
sherlock
(10/26/1999; 09:41:07 MDT - Msg ID: 17489)
crap comfort
Hey, I lost too, I bet more than most! I have choices, you have choices. You can sell, and then your anxieties are over, or you can hang in there. I'm sure not going to complain about it though, no one held a gun to my head to buy gold. I did it willingly, and to provide a safety net.
elevator guy
(10/26/1999; 10:01:32 MDT - Msg ID: 17490)
Rollercoaster!
Quite a wild ride we are having in gold!

I put $5000 in options, and have cashed out $25,000. If I had sold out at $325, I would have made $100,000. But I was influenced by greed, and waited!

I still have some February calls, and am hopeful something will blow up before expiration.

We've heard it time and time again, "Never risk more than discretionary capital when investing in futures and futures options."

If you followed that rule, you should not have too much to cry about right now, presumably.
Aristotle
(10/26/1999; 10:31:17 MDT - Msg ID: 17491)
Swimming in the Sea of Tranquility
Hi everyone. Found the briefest of moments to stop by before I must be dashing off again. Days like this are great--if you're not leveraged to your eyeballs on Gold derivatives or stocks, that is. When you've got simple metal, your emotions aren't all churned up when you see the price take a dive like today. In fact, it confirms better than anything else could the reality that the derivative markets are clearly setting the price for the physical markets. Nothing has changed worldwide--the ECB is utilizing Gold as their supreme reserve asset, at the Asian people are buying gold at a record pace. Price movements like this signify little other than the fact that the traders are selling paper Gold derivatives and essentially nobody is buying them. Hence, the price falls, and the physical gold gets snapped up that much faster by the rest of the world.

I expect that the typical American is holding out on Gold purchases until it is demonstrated that they will definately get a dollar-return on their investment. They will be in for a rude awakening. You can be sure that under the international currency strains of the day, the U.S. Government will do all that it can to prolong the illusion that the dollar is stronger than its true merits would allow. By the time the dollar turns sour like so much old milk, the physical Gold market will have been completely plundered while the gettin' was good by the rest of the world and the various Gold-hearts that frequent this excellent roundtable. Price-drops like today's simply demonstrate how out-of-whack the balance is, and the further off-balance, the sooner it all topples down. The more I see, the more I doubt there will be any warning before the Gold market as we know it seizes up and the world stands around until a free market can be sorted out. I doubt that during the transition anyone will be eager to part with their real Gold. Gold in hand is your only guarantee--meanwhile all others would be waiting for adjudication to reveal what their paper derivatives might entitle them a claim to...which might point them to nothing more than a bankrupt counterparty. We'll...at least I tried to warn you about going down that road.

Gold. Get you some--and be at peace. ---Aristotle
phaedrus
(10/26/1999; 10:44:28 MDT - Msg ID: 17492)
@elevator guy re cashing out
I agree with your sentiments. I too cashed out a modest chunk of my options when gold was around $330, but am still holding on to most of 'em (none of them december, either, fortunately). In hindsight it would have been nice to have taken more profit, no doubt, but who's to know what will happen when? And if I am right, my short-term pain will have been rewarded.

And so we wait, with the patience of Job. (Or, as best an approximation of it as we can muster.)
DD
(10/26/1999; 10:47:06 MDT - Msg ID: 17493)
Latest on Y2k
http://www.prorege.com/north/6606.htmlHi All - This is a very good read for anyone interested in the current status of the Y2k mess. I'm still trying to figure out how these statistics can lead the researcher to the conclusion of a 2-3% negative growth in GDP. Must be another desciple of the Ed Yardini school of Y2k. Best, DD
USAGOLD
(10/26/1999; 11:30:08 MDT - Msg ID: 17494)
The Big "Why?" One opinion.....
http://www.globeinvestor.com/archive/roc/19991026/BUSINESS-CANADA-GOLD-CAN.htmlIf this is the case we could be looking at a one-day wonder :

----------

"Analysts said sharp selling in the bullion market was triggered by reports that Switzerland would stick to a plan to create a humanitarian fund with the proceeds from the sale of 500 tonnes of gold." Globe and Mail 10/26

----------

But I think there's more to it than this. Still watching the Ashanti situation. If the Swiss are going to sell gold, and that remains a big "if", then we all know by now they will do it judiciously. That's why I say a one day wonder, but once again, I don't think this is the real reason for today's down spike.
Buena Fe
(10/26/1999; 11:42:40 MDT - Msg ID: 17495)
Aristotle (10/26/99; 10:31:17MDT - Msg ID:17491)
Brilliant .......Simply Brilliant!!!!!!!
Gandalf the White
(10/26/1999; 11:55:51 MDT - Msg ID: 17496)
Ari, YOU have done it again!
Oh if only I could think and setforth my thoughts in written words a little like you !!!! -- YES, indeed that only reason that the HUGE volume of sales today on the COMEX have pushed down the "Street price of PHYSICAL Au" is that there are far fewer buyers that wish to have the PAPER on the COMEX. Oh, for another payday this month !! No need to keep looking for the "reason", MK -- Ari has spelled it out for us again. -- Turbulent times do portend the change in the happyness of the Hobbits !! -- and TIMING is not to be worried about, IF one has the "gold in the hand". --- OH, I see the LIGHT ahead, but can wait.
<;-)
sourdough
(10/26/1999; 12:03:14 MDT - Msg ID: 17497)
PRECIOUS METALS STOCK ,STOCK EXCHANGE
Good morning Jim, took your suggestion and brought my question here.
I am interested in the possibility of creating an electronic "precious metals stock, stock exchange".
What I have in mind is the ability to open an account with such an exchange, place my precious metal stocks in my account. I could then put "cash" in my account by offering whatever currency I happen to hold, this would then be immediately converted to gold, denominated in grams at the prevailing spot price. The exchange would purchase physical gold with this currency, and place it into their holdings. This gold could not be touched in any way, no lending leasing, or derivitives on it in anyway. This gold is mine.
Now gold stocks who have paid their listing fees (in gold, to the exchange) are allowed to trade in gold currency (denominated in grams). When I go on the internet pull up a quote on stock abc, the bid /offer is in grams, with equivalent values being listed in what ever currency I select, to remove initial confusion. I can then offer my abc from my portfolio at ----gms. If a purchaser is found, the stock is transferred to his account, the grams from his account transferred to mine. An equivalent trading charge "priced in grams", say its comparable to a canadian discount brokerage, being all trades in a stock for one day being a price of 25-30 dollars. A rough figure could be used for comparison of 2 grams of gold. This 2 grams goes to the exchange for expenses , company surveillance, and profit. I expect this would have to be a public company (the precious metals stock exchange).
If I understand correctly, we would then be withdrawing gold supply on every trade, a positive to using this exchange. Cash grams in my account would be prone to any profit or loss from increase /decrease in gold price.
I expect with the volumes the exchange would be dealing with, the conversion of fiat currency to gold by the exchange would be possible at a rate comparable to large volume traders in the spot market. (positive)
I am now in gold currency completely backed by physical gold in the exchange. I am protected from the weaknesses of paper currency. I am trading precious metal stocks in their own currency, while enforcing the idea that gold is not just a commodity but a currency. With the electronic wonders of the internet, their is no reason, precious metal stocks worldwide, should not avail themselves of this market, it would be to their own benefit, and stockholders could demand it. Perhaps to the extent, this might become the main exchange for trading these type of stocks, wordwide. The potential profits (dividends) to the public company investors in the exchange could be quite good. These dividends payable in grams of gold.(positive). With the profits generated, investors could have better surveillance and resource stocks could gain in repute. (positive) (a lot of people won`t go near the vse, ase, etc. If the company or its management screws up, their banished. (positve).

A lot of gold ,backing trading accounts will be required and withdrawn from the physical supply. (positve)
When the account holder, wishes to withdraw funds from his account, exchange grams of gold to U.S., CAN, MARKS, YEN, BAHT or wharever, the physical backing would have to be sold, but, the trading profits (2 gms)might allow a large part of the gold to remain.
It might also be possible for the exchange to issue "100% gold backed notes instead of other currency. This might help in the come back of gold as a currency of its own. This would be the most secure currency going., it might be loaned on interest, used as collateral ,and gain acceptance as a good as gold currency worldwide.(positive)

I don`t know if this is possible, I would like a discussion on the possibility, would it have to be offshore? who would we get to regulate and inspect the physical in storage. where would the "precious metals stock "'stock exchange trade, on itself ? denominated in grams. How about it guys, possible? want to go for it? MUST WE GO FOR IT?
P.S. A Gold play and Internet play combined. Perhaps the people who sign up for an trading account and the companies who list, should get first whack at shares in the exchange company. After all income from advertisng company websites, newsletters etc. to a niche market (gold investors worldwide) may defer a lot of operational expenses.
signed seditious.


aunuggets
(10/26/1999; 12:23:51 MDT - Msg ID: 17498)
Street Gold...the real world
Like many, I've watched this forum over the weeks and months, but chose to read silently and take in the good education afforded by the mixing of minds. Although the gold markets are not new to me as many of you, I still manage to learn a great deal from the thoughts of others, and appreciate those thoughts whether we always agree or not.

A couple of nights ago, I was pondering the seemingly distant past, when we could but British Sovereigns at the corner coin shop for ten dollars, Mexican 50 Peso pieces for $42.00 or so, the so-called "bullion coins" before the introduction of the Krugerrands, Maple Leafs, Eagles, etc. and the years before the "legalization" of gold again in 1974. Seems like only yesterday to many of us, but ancient history to the young. Even prior to the so-called "legalization" in '74, gold was always available, although perhaps at a steeper premium than what we see today in most "street gold".

Over the years alot has changed, with the advent of "paper gold" markets, and I can't help but snicker at some of these markets now when most of those involved never stop to realize that most of that "action" is nothing more than a once-removed form of our own fiat paper system, i.e. nothing backed by nothing "making" or "earning" more nothing. Never been one to trust such a system myself as to any thinking person, the pitfalls are obvious. What could be more devistating to your personal finances than playing musical chairs with a dozen people and only 2 chairs ? What do you do when the gig is finally up (and it will be eventually) and only the physical holders can manage to grab the remaining chairs ? Feel like you're left holding the bag ? Even the bag would have more use and value than the remaining shreads of paper.

And what ever happened to simplicity for simplicity sake ? Charts, graphs, models, ad nauseum, may be all well and fine for keeping yourself busy, but over the years I have yet to see anyone or any "system" that could predict ANY market with any semblance of accuracy, let alone the gold market. Wishful thinking and hype (either positive or negative) tend not to sway the real markets much. On the contrary.....seems the worse we want it, the more it moves....in the OPPOSITE direction. But as Will Rogers once said of stocks, "only buy it if it goes up.....if it don't go up, don't buy it !" If only it were THAT simple.

Many times over the years I've noticed certain patterns in the price of spot gold, "street gold" if you will. Not what many would see as useful in the high-tech world of paper trading. But recently, for instance, when the market first showed it's signs of new strength and the spot price of gold was on the rise, I payed a visit to one of the nearby coin and bullion dealers just to see what was "in the air". Everyone was selling, nobody buying. The supply of street-coins was better than it had been for a very long time. Joe-six-pack and friends were getting out as fast as the price was rising, and that seemed to be the pattern everywhere. Want to buy some gold ? No problem ! Of course we were looking at the "small-scale" operators and not the "tonnage-traders", but the small signs like this seem to be a pretty reliable indicator of a reversal in the market sometime pretty soon. When you can walk into any pawn or coin shop and buy all the coins you want, it's time to wait. On the other hand, if you try to buy and can't find any, you better start looking a little harder and hang on for a wild ride. Alot of those Joe-six-packs out there aren't quite so ignorant as some of us have come to believe.

Another thing I'm sure we've all noticed is the correlation in market spikes and dips. Without fail, there is almost always a good spike in gold prices before the next major dumping, and a fair dip just before the next major spike. Problem is figuring out whether you are looking at the spike before the fall, or the dip before the bull. Of course you can look at the charts after the fact, and see it all too clearly. Future charts would be much more useful than chart futures.....

And then there is Kaplan. (grin)

Get Gold.....REAL Gold.
Phos
(10/26/1999; 12:36:42 MDT - Msg ID: 17499)
@Sourdough - #17497
http://www.e-gold.com/Have you looked into e-gold? This is something like you are describing. You can open a gold account there and pay with gold. See the link. Trouble is, gold is a little more volatile than currencies these days. Deposit currency, get gold.
Broken Oak
(10/26/1999; 13:07:35 MDT - Msg ID: 17500)
Keeping a long term perspective (don't follow the bouncing ball).
Its not 'Sing Along With Mitch" time. We all loved to see POG streak skyward. In reality there are many covert things which drive this small market (physical), many of which we do not see very well. Instead of focusing on the day to day or even week to week action we need to keep ourselves in a long term and global perspective - years and nations, not minutes and dollars.

I buy physical gold and silver for these reasons: it is tangible, precious and useful; it is recognized as valuable worldwide and it is timeless. There is no doubt in my mind that gold is far more precious and scarce than paper money. Regardless of the machinations of manipulators, or the fluctuations of figiting fixes, Gold and silver will outlive them all.

In the end (which is always a new beginning) gold and silver will outlast the wicked plans of deceitful people. Is there any doubt that liars will meet a bad end? They will fall into the pit that they have dug for others.

That is a fact. It happens in every generation. There is no getting around it.

Gold and silver are true measures. They are not foragable or corruptable. A simple test will determine thier purity. A simple measure will determine their mass.

Take heart in the long term. Take a larger view and don't let deceivers trouble you.
beesting
(10/26/1999; 15:00:02 MDT - Msg ID: 17501)
Sourdough Msg.17497 P M Stock,Stock Exchange.
Sourdough, you asked for discussion about your idea.

It is a great idea,however all the players would have to live offshore.Here is why. Every citizen of every country is bound by the laws and rules,of the country they live in.
In the U. S. all profits are taxed,all dividends are taxed,inheritances are taxed, etc. Federal,State'sometimes County are the taxing agencies.If Government agencies decide to collect taxes due in Gold, how long before the people have none and Governments have it all?

As Sir Aristotle stated many months ago physical Gold ownership makes the owner a," SOVEREIGN" (one that exercises supreme authority withen a limited sphere).
If the Sovereign owners of physical Gold could operate their own Stock Exchanges and trade amongst themselves with no regulating authority,(Gold as Cash only)the Exchange might work, but how long before the unscrupulous find a way to destroy the Exchange.(AS they have done right now in, supply=demand=price-Gold economics)

Keep posting,this is only my 2 grams worth.....beesting
CoinGuy
(10/26/1999; 15:33:10 MDT - Msg ID: 17502)
AWFULLY QUIET AROUND HERE THE LAST FEW DAYS
Sometimes silence is deafening, are you guys busy selling? I would hope not. The stock market has been acting very strange as of late. Doesn't seem to know if it's coming or going, same wth PM's. I truly believe we have moved into a new paradigm; The "Twilight Zone".

Where nothing is as it seems...

Gold @ 290? Don't know what to think...

cOiNgUy
Goldspoon
(10/26/1999; 15:39:05 MDT - Msg ID: 17503)
Gold -Platinum ...On Sale .... Limited Supply... Hurry for a short time only!
This pull back in prices is what new buyers (Fund Managers)have been waiting for.... Some of the general investment comunity have become recently aware of the shorts plight VIA Barrons and others. This fresh money will now pour into the gold market...
The shorts and their alies will now wish they had not created this pull back.
Platinum will pop right back up due to the Yen's continued strengthening..
Silver looks strong and is ready for gold/platinum's company to make a fresh run....
"It is always darkest before the dawn of a new day"
Gold/Platinum may consolidate tomorrow... my prediction is that we are less than 48 hours before the next leg up!
canamami
(10/26/1999; 15:50:32 MDT - Msg ID: 17504)
The POG's Future, If Any?
The Stranger, it makes me feel better that you're calling a $290.00 bottom, as I greatly value your opinion. Hope you're right.

As for me, this causes a major decline in morale. It now appears obvious that some significant amount of gold has found it's way to the market, to kill the short-term lease rates and drive down the POG; this now is clearly the better explanation for what is happening. This could still be the bottom for the POG, if the European agreement has altered the underlying fundamentals and psychology. Contrariwise, gold is still to a great extent a "psychological" currency, and if the "enemies" of gold can drive back the price so easily after the Sept. 26 announcement, many investors will be scared off the rigged gold game forever. This is important because a great rally in the POG requires that "non-goldbug" investors eventually take part in the market. If even the Sept. 26 announcement cannot give rise to a rally of some permanence, I fear it's lights out for those of us who invest in gold shares, etc., because the "trend" investor will ignore gold rallies, thereby ensuring the rallies fail in the face of the "shorts'" counter-attack, which gives rise to a further lack of confidence in gold, and so the process and vicious circle continues. The POG needs some firepower on the demand side to overwhelm the shorts, not just a crimp in supply. If gold is such a great reserve asset for CB's, valued by much of the world, why weren't the CB's of Japan, China and Taiwan buying it hand over fist when it was (and still is) dirt-cheap?

I'm not as negative as I sound, just in a bad mood and playing the devil's advocate. That being said, if this isn't the final blow-off, I suspect we are in serious trouble. It could very well be that the world cares no longer for gold. The weaknesses of the fiat currencies and the lunacy of the equity markets is irrelevant if the vast majority of economic humanity decides that the equity markets and fiat currencies are superior to gold as stores of value - i.e., that gold is even less reliable than the other alternatives. One serious question: If the truth of our goldbug position is so self-evident, how come we've been routed in the markets for so long? Obviously, a lot of people disagree with us.

The possibility that gold may win eventually is not overly comforting. Patience carries with it a transaction cost. As Keynes replied to his friend who said "In the long-run it comes back" after unwisely investing everything in the market just before the 1929 Crash: "In the long-run, we're all dead".
andrew the kiwi
(10/26/1999; 16:13:59 MDT - Msg ID: 17505)
Bill,Trader-vic
clearly the short sellers have the opportunity to settle their positions in this market, whether this is the bottom or simply a short term correction time will tell. As discussed, perhaps the paper market will continue to be discounted from here? Bill, are you active in your tactical asset allocation or simply fine tuning your long term or strategic position?
Cavan Man
(10/26/1999; 16:15:50 MDT - Msg ID: 17506)
FOA 17453
So honey, I met all these guys at the Forum; you know, online. Two of their names are Another and FOA....

Dear FOA:

About this shaking thing; have you read Batra's newest book? Do you agree with the inflation/deflation scenario or, are your reasons for forecasting a "shake" entirely different as expressed in your writings? Here's why I ask.

Due to extended family obligations, I have been unable to start my own business (a lifelong goal) for about ten years. Situation is relatively normal now; have a teriffic concept, well-researched and a solid business plan. I am ready to roll! I really want to roll! However, there is this small consideration about some sort of "shake" expressed in many quarters. Would you advise more patience?

All: I welcome any and all comments.....thanks!

Oh PS: I know it is a lot tougher to be a complete optimist but, I simply have a bad feeling about how things are stacking up. For me, it is an intuitive thing.

Angel
(10/26/1999; 16:26:18 MDT - Msg ID: 17507)
Ari...you silver tongued devil
Please don't dash off again. I throughly enjoy your posts. You definitely have a calming effect on me and I'm sure many others at the forum. Your ability to start from the beginning when explaining something is the mark of a great teacher. Maybe that's why you chose your handle. Thanks.

Goldfly.....I'm trying to catch up with about three weeks of forum reading....impossible. 16 Tons is a masterpiece. You done ole cousin Ernie proud. Gotta get ready for work. This work business is really interferring with my gold education.

Nightrider
(10/26/1999; 16:32:51 MDT - Msg ID: 17508)
Confussing ?????
This is crazy A Fed Governor States that he is worried about inflation and Gold Goes Down $10.00 BUCKS! Want is going on????
Skip
(10/26/1999; 17:02:39 MDT - Msg ID: 17509)
canamami (Msg ID:17504) The POG's Future, If Any?
Your message unfortunately echos my own discouragement over the fact that there is ALWAYS SOMETHING to drive a nail into every single gold rally...even the one that we all thought was the BIG one. While everything seems to indicate that the shorts must cover and let the big rally begin, I still can't help but wonder: "what's next?"

There is so much DISinformation in the world today that it's even getting difficult for me to believe anyone anymore regarding stocks, bonds, gold stocks, all PM's, etc. However, no matter how many years of hardship that the shorts have cause me, I refuse to sell out.

My current plan is to neither buy nor sell until the outcome becomes clear (if and when that ever happens). In my opinion, the gold market is NOT responding to the laws of supply and demand.

Those of us who believe in God or a Higher Power can pray that our patience is someday rewarded, although I wish that could happen in a way that does not bring the masses down into the poorhouse. I believe it is a TRAGIC shame on the USA that the DOW bubble has been allowed to grow to such unreasonable heights at the past and present expense of gold bugs and future expense of those who get caught in the DOW's crash.

It is looking more and more like a lose/lose situation for all of us common people. As I said above, I'm afraid to buy and I'm afraid to sell...so I'll hold'em and pray that I never have to fold'em.

--Skip
sourdough
(10/26/1999; 17:15:37 MDT - Msg ID: 17510)
BEESTING MESSAGE 17501
Thanks for responding, the posting in relation to taxation, raises a question for me. guess i better deal with that before anything else.
I buy a piece of a company that looks for shiny rocks, I give you one shiny rock for your piece of the company. Hopefully they then find a lot of shiny rock. I then sell my share of the company for 2 shiny rocks. At what point does this gain of 1 shiny rock become taxable? when I convert the shiny rock to a currency. Or is the shiny rock money already and taxable by the respective governments as capital gains on currency.
If so, i guess its not only a commodity but MONEY.

I had thoughts that even the rumor of a go ahead with a worldwide market trading in gold would cause a hell of a shakeup. I don`t think it would be necessary to give the governments any gold. Give them back their own stuff.If I`m lucky enough to make a few grams, which ARE taxable as capital gains, the exchange could handle the transfer of incoming currency in somebody elses account being transferred to me in exchange for the grams I require to exchange for currency to holiday /pay taxes/ whatever.
its the question of what to do with all the gold accumulated by the exchange as commissions on trades. Would they mint it and pay dividend in this form. if the internet costs broke even on advertising, there would be operating costs but the amount of gold in commissions could really add up. Any idea, how much gold we`d be talking (potential reduced supply) with a major market share of precious metal stock trading? For instance what $ amount is generated in trading commissions on the RESOURCE STOCKS,on the mse,tse,ase,vse, ndq (bb)and all the others too numerous to mention. I think we are talking a lot of grams here, plus the gold that remains in accounts in relation to the 5%asset factor in physical.
sorry if I`m not clear, trying to get my head around something, I don`t know enough about.
CoinGuy
(10/26/1999; 17:24:18 MDT - Msg ID: 17511)
S&P VS. T-BILL
I just heard Bob Pisanti on CNBC state that 3 mo. t-bills have outperformed the S&P for the last 6mos. Interesting, I think I'll stick with those weekly rollovers.

S&P - .3%
T-BILL - 2.5%

Also, looks like Sue Herrera got a nip and tuck job; anyone?

Coinguy
Scrappy
(10/26/1999; 17:33:08 MDT - Msg ID: 17512)
Aristotle,
the calm voice humsamong the chaos and thunder. The cacophony of those who drown, in their own panic, even as your hand is reaching to soothe. Oh, the fear.
I am lucky, I know. Never had much, so not so much to lose. And the teachers I have found; surely they are gifts of the Almighty.
Still, I stand with my own uncertainty, my own hopes, my own fears. And I am grateful for the hum, the easing of the strain, as the dance goes on. As new giants take their places, I see they stand not, in
in the court of the powermongers. And I am soothed by the hum.
blueboy
(10/26/1999; 17:41:18 MDT - Msg ID: 17513)
TO : SIMPLY ME
The best thing that will come out of this whole gold thing is that more people will understand that there is no free market, and that the U.S. is not free, and that it will only get worse, until the people decide to stand up and take this country back! Have you ever read "The Protocols"? Written over 100 years ago but they have done exactly what they said they would do!!
Roark
(10/26/1999; 17:53:15 MDT - Msg ID: 17514)
On the falling POG...
It's those dam� lizards!
Last week it occurred to me that the shorts would be very happy if gold could be driven down well below 300 and held there while the December �99 paper gold options expire on Nov.12. After the 12th, gold would then presumably rise on cue.

Just a gut feeling, nothing more.
My best wishes to all.
Gandalf the White
(10/26/1999; 18:09:45 MDT - Msg ID: 17515)
Roark may be correct !
Spot the Dog just got CLOBBERED at US$287.20 !!!
Poor ol'e Spot.
<;-(
Gandalf the White
(10/26/1999; 18:32:31 MDT - Msg ID: 17516)
WOWSERS !
Now at 5:30 PDT poor Spot the Dog has hit a low of 285.80 !!
<;-(
ORO
(10/26/1999; 18:34:45 MDT - Msg ID: 17517)
Roark
I agree with this observation of the way the market works- I have done option analysis with a number of stocks. The price tends to move towards the point of minimum payout. I can run the spreadsheet on the gold and silver markets.

I will add that there is an "inevitability" to this kind of action.
1. Each call sold, allows the buyer to short gold/futures since the buyer is covered by the calls.
2. The market players tend to maneuver the gold price through the sale of further calls, that get the metal price down, and through the sale of futures contracts. They can only do this effectively if the futures sell at a positive forward rate. As long as arbitrageurs can do their job it works. If physical market liquidity is damaged, the paper game is halted.

RossL
(10/26/1999; 18:44:10 MDT - Msg ID: 17518)
Roark
The option writers will be happy to run some sell stops and have some calls expire worthless. IMHO, The option writers are usually COMEX locals, not necessarily same people as the speculator shorts playing the gold carry trade. The option writers are lucky this Ashanti deal is dragging on and the two groups have some synergy for the moment. I don't know how long that coalition will last. There is a european option expiring tomorrow. The COMEX locals can manipulate a thin market, but they can't turn the tide if some big shorts run for cover. Especially since a call writer may have to go long a futures contract to cover his obligation.
Silver Tongue
(10/26/1999; 19:09:17 MDT - Msg ID: 17519)
Gold
From the pessimism oosing from this site as well as from Kitco it would appear that Steve Kaplan is right on the mark about the price of gold. This would portend a nice move up. If we could just loosen our sphinxter muscles now enought to invest.
16-penny
(10/26/1999; 19:11:45 MDT - Msg ID: 17520)
timeing
gold will end its recent slump.well above $255 if it gets to 275/280 its time to do some bargain buying big time
The Believer
(10/26/1999; 19:23:53 MDT - Msg ID: 17521)
POG....
C'mon people...
If you are into gold for a fast run-up and sell
like some E-bay play or the latest IPO you're
not thinking....
Be calm...you're in the right place
"We will watch this gold market together-no?"
Canuck
(10/26/1999; 19:30:21 MDT - Msg ID: 17522)
POG
To Skip and canamami,

While on the Y2K prowl and searching for gold info. I stumbled onto USAGOLD. I have listened to all the theories submitted by all and while in complete agreement, I can't help but wonder if the demand side will overpower the forces
that drive gold down. I myself will 'hold 'em' to see what the rollover brings.
Canuck
(10/26/1999; 19:40:32 MDT - Msg ID: 17523)
To : elevator guy
Congratulations on your profits!!

I wonder, since you mentioned and if it's not to forward of me, if you could explain your call option in terms of the strike price, expiry, premium etc.

Where does one buy a 'call option' (in Canada) on a commodity like oil, grain, cotton? Suppose one thought that
oil, because of Y2K induced problems was to hit $35/barrel
how does one buy this 'option'?

My 'online discount brokerage' appears to have options for
stocks but not commodities.

Thanks in advance.
megatron
(10/26/1999; 19:41:57 MDT - Msg ID: 17524)
unseen hand
It's THE BEAST, I tell ya, just look at the charts!
andrew the kiwi
(10/26/1999; 19:43:05 MDT - Msg ID: 17525)
the turning point or a dead cat bounce!
GOLD B$291.50 S$293.00
USAGOLD
(10/26/1999; 19:43:36 MDT - Msg ID: 17526)
A bit of diversion....
According to our Summary Report for the month of October thus far:

USAGOLD has received an average of 8000 visits per day thru the home page and 12000 page hits per day from 69 countries worldwide including Canada, Australia, New Zealand, Belgium, South Africa, Germany, Austria, United Kingdom, Singapore, Malaysia, Switzerland, Netherlands, Israel, Japan, Saudi Arabia, the United Arab Emirates and of course, the United States, to name a few. It would probably easier to try to run a list of the countries not represented here.

We also had visits from several International Organizations, the U.S. Military, and high traffic from Educational Institutions, primarily universities.

The USAGOLD Forum itself receives over 5000 hits home page hits daily from all over the world and has received over 300,000 page hits so far in October (through yesterday).

New hits have come so far this month from over 130 separate referring domains (like Yahoo or Excite) and 264 referring pages all over the internet.

Interestingly, our second biggest day so far this month came yesterday with the price falling -- over 26,000 total hits. Our biggest day -- over 28,000 hits -- came on October 4, Day Six of Gold's Big Breakout, with the price rising proving that those who come here do so for information and usable opinion no matter the market direction.

It is a rare day that somebody from USAGOLD Forum is not quoted somewhere else on the internet, and it is quite often the case that subject matter from this Forum sets the agenda for the day's discussion not only in the various gold venues but other economic/financial venues on the internet. There is a rarely a day that goes by that some investor calls the office to tell us how much they enjoy the internet and simply wanted to call to express their gratitude. We know for a fact that this website is read, digested and analyzed by movers and shakers on Wall Street and at brokerage and financial firms across the nation and around the world.

Quite a report card for something that started out as simply a personal interest and fascination with the internet.

Quite a report card for a great group of people.

The Knights and Ladies who assemble at this mighty oaken Table Round.

Now that I've totally intimidated all of you with your own fine report code, let me say something you've heard here before.

Let the discussion continue........
Roark
(10/26/1999; 19:50:13 MDT - Msg ID: 17527)
Gandalf the White, Oro, RossL
I have noticed that the COMEX "Paper Boys" telegraph their punches...only in reverse. For instance, after Spike broke out of his yard, the gold futures contract margin was raised not once, but twice. This only happens when a long-term bull market begins. When COMEX raised the margin, they were certifying to the thundering herd that the POG would continue to rise (but not right now. Oops! Sorry, futures longs).

Today's action would seem to find Spot back in his yard and leashed to the fence post. But wait! I do not believe this for a minute, because the Dec. call options can be taken out even in the mother of all bull markets. I truly believe they have the means to do this (and what a splendid way to shake out the weak hands), but only temporarily. In the end, Spot will break out once more and will not come home for a very long time.

Does anyone know whether the gold futures margin has gone back down with the falling POG? Has COMEX let its shields down? If the margin remains the same, it is IMHO bullishly significant.

Keep your powder dry.
USAGOLD
(10/26/1999; 19:50:37 MDT - Msg ID: 17528)
correction
In the second last sentence I meant to say report "card" not "code".

Thanks all.
andrew the kiwi
(10/26/1999; 19:59:17 MDT - Msg ID: 17529)
margins/premiums
Roarkgold futures margin and the margin on trading spot gold have NOT changed, perhaps reflecting continued volatility.
Black Blade
(10/26/1999; 20:03:48 MDT - Msg ID: 17530)
Just another strange day
s&p futures down -7.60, Au up +2.60 (so far) to $201.50. The ECI (employment cost Index) comes out on thursday. Tomorrow could be interesting as markets anticipate the ECI. Also changes to the DOW index could mean a more volitile index with the addition of Intel (INTC), Microsoft (MSFT), Home Depot (HD), and SBC Communications (SBC). These guys will stop at nothing to manipulate the numbers and keep up appearances. The A/D line continues to deteriorate in this bear stealth market.

CoinGuy: I think your right, Sue Herrera(CNBC) seems to have been gone for awhile, looks like she went to the Fat Farm. I also noticed that CNBC didn't hammer on the drop in Au today. A good sign? hmmmmm.....
Black Blade
(10/26/1999; 20:07:25 MDT - Msg ID: 17531)
OOPS Au at 291.50
Much beer, less sleep! Last post should be Au up +2.60 at $291.50
Just Weight & Measures
(10/26/1999; 20:17:25 MDT - Msg ID: 17532)
Roark
Spike is not restrainable. 2000 years ago a suite of clothes was roughly worth 1 oz. of gold. In 1967 when I was born the POG was $35.00 per oz. roughly equivalent to the price of a suite of clothes. Today the POG is $290.00, roughly equivalent to the price of a suite of clothes. Ten years from now when a suite of clothes is $30,000.00 the POG will also be $30,000.00.

Everyone always wants everything instantly. Good things are worth waiting for and it will be very good when Spike breaks his most recent shackels and moves much higher. Just wait till people have to choose between a piece of paper that has Bill Clinton's promise behind it and the nice solid feeling that a oz. of the wonderful yellow stuff gives the palm of your hand. Just keep those printing presses going Mr. Clinton! Spike is not restrainable, at least in the long run.
Trader_vic
(10/26/1999; 20:22:02 MDT - Msg ID: 17533)
andrew the kiwi - response on short position
IMHO, the short position is feeling it's oats thinking that all is well again and that the game is afoot...I have seen this before back in 1982 when silver went from $6 to $9 then all the way back to $6...at that point I bought and silver went to $16...I think that that is what we have here...If there are others like myself, I already have open buy orders in the gold market to buy at various levels if they are hit, $286 is one of those levels...this creates a floor in the market so that taking out a support level is more difficult...but obviously if you have 72 tons to sell, the small order buys are not going to stop a runaway train!! But for me it represents a positive risk reward at that level....Short covering is down when there is panic in the streets or when the shorts just give up because they can't make any money at it...I believe that this market will be a roaring bull sometime soon and I don't know when, but I suspect that the shorts are going to have to cover when this Ashanti deal is taken care of and there is no reason for more gold to come onto the market at these prices...at that point you will see the REAL short covering begin, remember, the big boys have not yet covered and are just waiting to see what happens next...If you are in physical, then you can just sit back and watch the show, OR, you could buy some more!!! To me, it's a buy of a lifetime!!!!

As always advise is only worth what you pay for it, in this case....nothing!
FOA
(10/26/1999; 20:26:03 MDT - Msg ID: 17534)
Comment
Aristotle (10/26/99; 10:31:17MDT - Msg ID:17491)
Swimming in the Sea of Tranquility

----------------
Nice of you to see the forest and not just the trees, Aristotle! There is a whole world of people out there that "like you" do not trade gold money using the Western mind's logic. Good post, sir!
------------

ALL: I have several things to say about the paper movements, but must post and reply another time.

FOA
DD
(10/26/1999; 20:36:59 MDT - Msg ID: 17535)
The diversion of paper and physical??
Hi All -

Just a thought. Really a question. If Another, FOA and other great thinkers at this table round are right, there will come a time when paper gold and physical will diverge. My guess is that when these two paths diverge in a yellow wood, there will be a time when it is not noticed or maybe even noticeable.

I mentioned in an earlier post that the shorts must be doing all they can to buy time. Today, a whacky day in the yellow wood to say the least, it feels like we're getting closer to a divergence. What will cause this divergence? Simply that there is not enough physical to cover all the paper. Paper goes down in the "markets" while physical goes up because of want or need of it for all the various reasons we've pondered at length.

If Another and FOA are right, it is my understanding that the two road must diverge in the yellow wood. Repeat, MUST!
The sheeple of western thinking know only one road, the one paved with paper. This path may see the price of gold go lower or even much lower. However, this is the road to ruin, a pot hole invested ride with each flat being reinflated with a fresh blast of paper.

It takes great courage and faith to stay the course when the deck seems stacked perfectly against freedom and personal choice/sovernty. However, if we must ride along side the paper horse while holding strongly to the golden reins in our hands, we will come to a fork in the road. And we will look back at these times with a sense of pride and say:

Two roads diverged in a yellow wood and I, I took the one less traveled by. And that has made all the difference.

Best, DD
Trader_vic
(10/26/1999; 20:37:44 MDT - Msg ID: 17536)
Solomon Weaver (10/25/99; 20:01:39MDT - Msg ID:17449)
Thanks for the response and sorry that I'm getting back to you a day late, but I don't get a lot of time in the chat rooms...

You have a very valid point, as the gov't changes the rules of the game, so goes the best laid plans of men and mice... Knowing that the gov't has continuously lied to the American People, I wouldn't be surprised, but sometimes you have to work with the legal tools that you have at hand and hope for the best...It's sort of like driving a NASCAR race and speeding thru an accident in front of you at 200 mph, you just start praying and hope that the good lord pulls you thru OK!! If you are right, the rewards are significant, if you are wrong, you are no worse off...(assuming that you can use the previously paid takes as tax credits the following year!)...Then again, if we had off-shore accounts, maybe we wouldn't have to worry about it.....thought for the day.
Trader_vic
(10/26/1999; 20:39:45 MDT - Msg ID: 17537)
The subject of my last message was on ROTH IRA's
I'm sorry for the lack of bridging the continuity...
SteveH
(10/26/1999; 20:47:07 MDT - Msg ID: 17538)
For the record
Why do I post here?

First, I am upset that gold is manipulated at my expense and can say something about it.
Second, I am upset that my gun rights are manipulated at my expense and can say something about it.
Third, I like the ambiance and other posters, and can say something about it.
Fourth, I remember that no one has the right to say I don't have a right to bear arms (they cancel each other out) without infringement, and I can say something about it.
See one through four.
SteveH
(10/26/1999; 20:51:25 MDT - Msg ID: 17539)
repost
www.kitco.comDate: Tue Oct 26 1999 17:15
she-gold (Mundell on y2k and gold: CBSmarketwatch. (fix exchange rates and the price of gold??)) ID#252407:
Copyright � 1999 she-gold/Kitco Inc. All rights reserved
Nobel winner on the euro and Y2K
Fix exchange rates around turn of the year, Mundell says

By Marshall Loeb, CBS MarketWatch
Last Update: 10:43 AM ET Oct 26, 1999 Personal Finance News
Marshall Loeb Library

NEW YORK ( CBS.MW ) -- Robert Mundell has long been known for his role in helping to create Reaganomics, the tax-reducing architecture of the Reagan administration.

"The only thing I'd fault ( Alan Greenspan ) for is talking too much about the stock market."
Robert Mundell,
Nobel prize winner


Lately, the Nobel prize winner in economics and Columbia University professor, is recognized for his work on the euro, the new currency shared by 11 nations in Europe. See Part 1 of the interview.

Mundell praised the Federal Reserve's vigilance and expressed concern about worldwide effects of the year 2000 computer bug when I talked to him recently in New York. See video of the interview.

CBS.MW: What should be our policy on gold?

Mundell: I would like to see a free market in gold in the U.S., with no state or local sales taxes. I'm not talking about jewelry but investment gold. I'd like to see gold as a third alternative to the two reserve currencies -- the dollar and the euro. Any country then could peg its currency to gold -- in case the U.S. or Europe ever go on an inflation binge. But we could never use gold as a monetary asset so long as it is taxed.

CBS.MW: What should be our monetary policy now?

Mundell: Steady as she goes.

CBS.MW: You don't think we should raise interest rates?

Mundell: No. But if new information develops that there's an inflation bear out there, I might change my mind. The risk right now is not inflation but that we're maybe going to see the end of the boom. That's the bigger risk.

CBS.MW: Do you think the Federal Reserve policy is pretty good?

Mundell: Alan Greenspan has been excellent throughout this whole period. The only thing I'd fault him for is talking too much about the stock market.

CBS.MW: What will be the impact of Europe's new euro currency, which you had a role in creating?

Mundell: The euro will give the Europeans more glue and cement to form their own policies.

CBS.MW: Will your winning of the Nobel Prize help speed the adoption of your ideas and policies?

Mundell: It will happen outside the U.S. A lot of people here don't like my tax cut ideas. They want to keep a highly progressive tax system.

CBS.MW: Will Y2K upset everything?

Mundell: Y2K may cause us some problems. It's like a meteor hurtling to earth. It might hit us, and it might not; we just don't know. But enough people who have studied it think that it is potentially very serious, very damaging. I'm thinking of controllers at airports and of seaports around the world. Seaports depend almost wholly on computers to coordinate the schedules of ships coming in. If computers give false signals, there could be lot of confusion.

CBS.MW: So what can we do about it?

Mundell: The President should direct his Secretary of the Treasury, Larry Summers, to convene a meeting of the finance ministers and the central bankers of the U.S., Canada, Britain, Japan and the 11 European countries that use the euro. They should stabilize monetary exchange rates and the price of gold for a period from about a month before to two or three months after January 1.

CBS.MW: That means that the value of individual currencies and the price of gold would be fixed for that period of time?

Mundell: I recommend that. It is important to remove any unnecessary uncertainty ( surrounding Y2K ) . One element of unnecessary uncertainty is volatility in exchange rates. This ( proposal ) would be very helpful because any changes in exchange rates would become enormously more difficult to deal with when computers go down. In the absence of computers, we would not be able to very effectively manage a system of 200 currencies floating in value around the world.

CBS.MW: How are you going to ask for your prize money?

Mundell: I'm going to ask for it in euros.

CBS.MW: And why do you prefer ( euros ) to the dollar?

Mundell: Because I think that in the first 9, 8, 6 months of this year, the euro went down and now I think the euro has gone down too far. It undershot ... the direction....

I look forward in the next year or so to an expansion and a rising euro and a falling rate of the dollar against the euro.
SteveH
(10/26/1999; 20:53:22 MDT - Msg ID: 17540)
Dow Jones Industrial Average adds
MS and Intel to the fold. Why?
Black Blade
(10/26/1999; 20:53:23 MDT - Msg ID: 17541)
SteveH
On your #4, people do have the right to say such. But they also have the right to be wrong! I really do enjoy your posts. Keep up the good work!
SteveH
(10/26/1999; 20:55:16 MDT - Msg ID: 17542)
Corrections (thanks to LanMan
www.kitco.comLan Man--Sears, Union Carbide, Goodyear and Chevron are out. Microsoft, Intel, Home Depot and SBC Communications are in.

DJIA
beesting
(10/26/1999; 20:56:42 MDT - Msg ID: 17543)
Anyone care to speculate on the plunging "spot" price of Gold.
Kuwait pays for past,present, and future protection from Saddom Hussian, with 49 tonnes of Gold to the Bank of England and cohorts(BB's).
The Bank of Englands cohorts immediately create thousands of paper Gold 100oz contracts,and begin to sell worldwide,on all paper Gold Exchanges,forcing the "spot" price of Gold to plummet.

Ashanti is saved from default because they don't receive margin calls when Gold drops below $305 per ounce, all orchestrated by a small number(11???)of bullion banks and thier cohorts.

Does GATA have a case against these guys?
Is this price fixing, or price manipulation on a worldwide scale?
Should the Gold industry with many thousands of dependents(miners etc.)hire it's own police force to enforce supply side economics concerning above ground pricing of refined Gold?
Stay tuned this is better than a soap opera.....beesting
Peter Asher
(10/26/1999; 21:00:24 MDT - Msg ID: 17544)
Test
Forum won't open up beyond title portion
Scrappy
(10/26/1999; 21:02:36 MDT - Msg ID: 17545)
What happened?
Everythings' gone!Why does this eerie stuff always happen to me?
beesting
(10/26/1999; 21:03:35 MDT - Msg ID: 17546)
Anyone care to speculate on the plunging "spot" price of Gold.
Kuwait pays for past,present, and future protection from Saddom Hussian, with 49 tonnes of Gold to the Bank of England and cohorts(BB's).
The Bank of Englands cohorts immediately create thousands of paper Gold 100oz contracts,and begin to sell worldwide,on all paper Gold Exchanges,forcing the "spot" price of Gold to plummet.

Ashanti is saved from default because they don't receive margin calls when Gold drops below $305 per ounce, all orchestrated by a small number(11???)of bullion banks and thier cohorts.

Does GATA have a case against these guys?
Is this price fixing, or price manipulation on a worldwide scale?
Should the Gold industry with many thousands of dependents(miners etc.)hire it's own police force to enforce supply side economics concerning above ground pricing of refined Gold?
Stay tuned this is better than a soap opera.....beesting
Scrappy
(10/26/1999; 21:04:51 MDT - Msg ID: 17547)
What happened?
Everythings' gone!Why does this eerie stuff always happen to me?
beesting
(10/26/1999; 21:15:03 MDT - Msg ID: 17548)
Anyone care to speculate on the plunging "spot" price of Gold.
Kuwait pays for past,present, and future protection from Saddom Hussian, with 49 tonnes of Gold to the Bank of England and cohorts(BB's).
The Bank of Englands cohorts immediately create thousands of paper Gold 100oz contracts,and begin to sell worldwide,on all paper Gold Exchanges,forcing the "spot" price of Gold to plummet.

Ashanti is saved from default because they don't receive margin calls when Gold drops below $305 per ounce, all orchestrated by a small number(11???)of bullion banks and thier cohorts.

Does GATA have a case against these guys?
Is this price fixing, or price manipulation on a worldwide scale?
Should the Gold industry with many thousands of dependents(miners etc.)hire it's own police force to enforce supply side economics concerning above ground pricing of refined Gold?
Stay tuned this is better than a soap opera.....beesting
beesting
(10/26/1999; 21:16:35 MDT - Msg ID: 17549)
Anyone care to speculate on the plunging "spot" price of Gold.
Kuwait pays for past,present, and future protection from Saddom Hussian, with 49 tonnes of Gold to the Bank of England and cohorts(BB's).
The Bank of Englands cohorts immediately create thousands of paper Gold 100oz contracts,and begin to sell worldwide,on all paper Gold Exchanges,forcing the "spot" price of Gold to plummet.

Ashanti is saved from default because they don't receive margin calls when Gold drops below $305 per ounce, all orchestrated by a small number(11???)of bullion banks and thier cohorts.

Does GATA have a case against these guys?
Is this price fixing, or price manipulation on a worldwide scale?
Should the Gold industry with many thousands of dependents(miners etc.)hire it's own police force to enforce supply side economics concerning above ground pricing of refined Gold?
Stay tuned this is better than a soap opera.....beesting
beesting
(10/26/1999; 21:20:16 MDT - Msg ID: 17550)
Anyone care to speculate on the plunging "spot" price of Gold.
Kuwait pays for past,present, and future protection from Saddom Hussian, with 49 tonnes of Gold to the Bank of England and cohorts(BB's).
The Bank of Englands cohorts immediately create thousands of paper Gold 100oz contracts,and begin to sell worldwide,on all paper Gold Exchanges,forcing the "spot" price of Gold to plummet.

Ashanti is saved from default because they don't receive margin calls when Gold drops below $305 per ounce, all orchestrated by a small number(11???)of bullion banks and thier cohorts.

Does GATA have a case against these guys?
Is this price fixing, or price manipulation on a worldwide scale?
Should the Gold industry with many thousands of dependents(miners etc.)hire it's own police force to enforce supply side economics concerning above ground pricing of refined Gold?
Stay tuned this is better than a soap opera.....beesting
beesting
(10/26/1999; 21:28:50 MDT - Msg ID: 17551)
Anyone care to speculate on the plunging "spot" price of Gold.
Kuwait pays for past,present, and future protection from Saddom Hussian, with 49 tonnes of Gold to the Bank of England and cohorts(BB's).
The Bank of Englands cohorts immediately create thousands of paper Gold 100oz contracts,and begin to sell worldwide,on all paper Gold Exchanges,forcing the "spot" price of Gold to plummet.

Ashanti is saved from default because they don't receive margin calls when Gold drops below $305 per ounce, all orchestrated by a small number(11???)of bullion banks and thier cohorts.

Does GATA have a case against these guys?
Is this price fixing, or price manipulation on a worldwide scale?
Should the Gold industry with many thousands of dependents(miners etc.)hire it's own police force to enforce supply side economics concerning above ground pricing of refined Gold?
Stay tuned this is better than a soap opera.....beesting
16-penny
(10/26/1999; 21:40:08 MDT - Msg ID: 17552)
test
cant get todays fourm to show up
16-penny
(10/26/1999; 21:40:39 MDT - Msg ID: 17553)
test
cant get todays fourm to show up
elevator guy
(10/26/1999; 21:42:14 MDT - Msg ID: 17554)
test
test
elevator guy
(10/26/1999; 21:42:29 MDT - Msg ID: 17555)
test
test
CoinGuy
(10/26/1999; 21:46:27 MDT - Msg ID: 17556)
More market jitters ahead?
Gold is actually up in overseas trading(+1.70). The Nikkei is down (310), and the S&P's are down (8). Tomorrow maybe interesting.

After a slaughter in the bullion market, I had to take some time to regroup, and keep my head straight. I should be used to these gyrations by now. Better than sitting at 255-260 trading range for 6 months. At least more exciting.

Coinguy
CoinGuy
(10/26/1999; 21:46:49 MDT - Msg ID: 17557)
More market jitters ahead?
Gold is actually up in overseas trading(+1.70). The Nikkei is down (310), and the S&P's are down (8). Tomorrow maybe interesting.

After a slaughter in the bullion market, I had to take some time to regroup, and keep my head straight. I should be used to these gyrations by now. Better than sitting at 255-260 trading range for 6 months. At least more exciting.

Coinguy
Gandalf the White
(10/26/1999; 22:03:11 MDT - Msg ID: 17558)
TEST
<;-)
The Stranger
(10/26/1999; 22:03:39 MDT - Msg ID: 17559)
Let's Pull Over for a Moment and Take a Look at the Map
Throughout the 1990s, developing nations were showered with easy money loans from bankers who took it for granted that, if the loans ever turned sour, the IMF would bail them out. This careless approach to allocating capital created temporary overcapacity in numerous industries making it difficult for borrowers ever to fully repay their loans.

Smelling the blood that was about to be spilled, highly leveraged speculators stepped in and began mercilously destroying the currencies of those nations which appeared to be at greatest risk. Measured in those currencies, prices for everything inevitably went sky high, sending many of the hard working, newly-middle class people in places like Indonesia, Thailand and Korea back into poverty for the first time in a generation. Asia was now in a serious recession that threatened to contaminate every other highly indebted developing nation on the planet. It was the fear of this contamination which caused a run for U.S. dollars which, in turn, made worldwide DOLLAR prices sink and U.S. bond yields dip to their lowest levels in many years.

For only the second time this century, the dollar was being threatened with deflation. Oil was at $10. Gold was below $300. The CRB was at 20 year(or more)lows.

With so much money now pouring into the U.S., and import prices slipping (as an inverse function of the dollar's strength), Americans were, in 1998 and early 1999, treated to a sort of economic harmonic convergence. At the same time that we were being flooded with foreign money and cheaper imports, the Fed was stoking the fire by allowing the supply of money in the banking system to erupt. After all, we didn't want the "Asian Contagion" to take us down with it, did we? So, instead, we just opened the throttle and counted on the good ole U.S. to be the engine that would pull the entire world economy.

Did it ever work! The Gross World Product, which was expected by many to actually shrink this year, now appears to be growing instead at a rate of about 2.5% Whew, that was a close one. But, before we get too excited, let us not forget that this apparent success has fixed it so that overpriced U.S. financial markets are no longer the only game in town. In fact, right now, foreign money is packing up and heading home to seek better opportunities.

Just as night follows day, the whole situation is being reversed. Instead of making new highs, the dollar is now threatening multi-year lows(see the daily chart in the Wall Street Journal, pg. C1), which, in turn, is reinflating import prices. And, instead of making new lows, the CRB is now up by double digits this year. Oil is up more than 100%, and, for all our ranting and raving, gold has, so far, arguably outperformed both stocks and bonds.

Perhaps the greatest of all ironies in this drama, is that American bonds would be doing even worse were it not for the Federal Reserve Board, which is in there every week buying them. Why? Because AG is trying to alleviate the run on the dollar, which is now taking place at a world near you(as Aristotle might say).

And why is this an irony? Because when the Fed buys bonds, they do so by creating still more money, and what is more money if not the very root of the problem in the first place?

So, obviously, the cycle is still underway. In the weeks and months ahead, inflation reports will continue to indicate rising prices, bonds will probably continue to struggle, and, I'm sorry to say, the dollar will continue to fall. The one bright spot in all of this, of course, is that our exports should continue to pick up, which should help reduce the trade imbalance and keep U.S. employment strong. In time, this will, in fact, contribute to a dollar recovery, but that is still down the road a ways.

Like everybody else here at the Forum, I can only guess why gold is having fits again. But, under the scenario I am painting here (which, by the way, jibes with what I have been posting here all year long), there is no fundamental reason whatsoever why gold should trade below $300 anymore. So, my advice to anyone who finds himself back in agony mode these days, is, when you get a day like today, find something else to concentrate on. And, for Pete's sake, don't add up your losses. They are only temporary anyway. Whoever is trading gold for dollars is trying to make water run uphill as far as I'm concerned. And the lower the POG goes, the harder that will be to accomplish.

The Stranger
(10/26/1999; 22:04:25 MDT - Msg ID: 17560)
Let's Pull Over for a Moment and Take a Look at the Map
Throughout the 1990s, developing nations were showered with easy money loans from bankers who took it for granted that, if the loans ever turned sour, the IMF would bail them out. This careless approach to allocating capital created temporary overcapacity in numerous industries making it difficult for borrowers ever to fully repay their loans.

Smelling the blood that was about to be spilled, highly leveraged speculators stepped in and began mercilously destroying the currencies of those nations which appeared to be at greatest risk. Measured in those currencies, prices for everything inevitably went sky high, sending many of the hard working, newly-middle class people in places like Indonesia, Thailand and Korea back into poverty for the first time in a generation. Asia was now in a serious recession that threatened to contaminate every other highly indebted developing nation on the planet. It was the fear of this contamination which caused a run for U.S. dollars which, in turn, made worldwide DOLLAR prices sink and U.S. bond yields dip to their lowest levels in many years.

For only the second time this century, the dollar was being threatened with deflation. Oil was at $10. Gold was below $300. The CRB was at 20 year(or more)lows.

With so much money now pouring into the U.S., and import prices slipping (as an inverse function of the dollar's strength), Americans were, in 1998 and early 1999, treated to a sort of economic harmonic convergence. At the same time that we were being flooded with foreign money and cheaper imports, the Fed was stoking the fire by allowing the supply of money in the banking system to erupt. After all, we didn't want the "Asian Contagion" to take us down with it, did we? So, instead, we just opened the throttle and counted on the good ole U.S. to be the engine that would pull the entire world economy.

Did it ever work! The Gross World Product, which was expected by many to actually shrink this year, now appears to be growing instead at a rate of about 2.5% Whew, that was a close one. But, before we get too excited, let us not forget that this apparent success has fixed it so that overpriced U.S. financial markets are no longer the only game in town. In fact, right now, foreign money is packing up and heading home to seek better opportunities.

Just as night follows day, the whole situation is being reversed. Instead of making new highs, the dollar is now threatening multi-year lows(see the daily chart in the Wall Street Journal, pg. C1), which, in turn, is reinflating import prices. And, instead of making new lows, the CRB is now up by double digits this year. Oil is up more than 100%, and, for all our ranting and raving, gold has, so far, arguably outperformed both stocks and bonds.

Perhaps the greatest of all ironies in this drama, is that American bonds would be doing even worse were it not for the Federal Reserve Board, which is in there every week buying them. Why? Because AG is trying to alleviate the run on the dollar, which is now taking place at a world near you(as Aristotle might say).

And why is this an irony? Because when the Fed buys bonds, they do so by creating still more money, and what is more money if not the very root of the problem in the first place?

So, obviously, the cycle is still underway. In the weeks and months ahead, inflation reports will continue to indicate rising prices, bonds will probably continue to struggle, and, I'm sorry to say, the dollar will continue to fall. The one bright spot in all of this, of course, is that our exports should continue to pick up, which should help reduce the trade imbalance and keep U.S. employment strong. In time, this will, in fact, contribute to a dollar recovery, but that is still down the road a ways.

Like everybody else here at the Forum, I can only guess why gold is having fits again. But, under the scenario I am painting here (which, by the way, jibes with what I have been posting here all year long), there is no fundamental reason whatsoever why gold should trade below $300 anymore. So, my advice to anyone who finds himself back in agony mode these days, is, when you get a day like today, find something else to concentrate on. And, for Pete's sake, don't add up your losses. They are only temporary anyway. Whoever is trading gold for dollars is trying to make water run uphill as far as I'm concerned. And the lower the POG goes, the harder that will be to accomplish.

Bonedaddy
(10/26/1999; 22:23:22 MDT - Msg ID: 17561)
Militia clause defined
Military Law Review Spring, 1992
Posted for Educational use only. The printed edition remains canonical. For citational use please visit the local
law library or obtain a back issue.

THE MILITIA AND THE CONSTITUTION: A LEGAL HISTORY
by William S. Fields* & David T. Hardy**

I. Introduction

In examining the subject of the militia and the Constitution, a number of important issues immediately come to mind--the "federalism" issue of state versus national control of the militia, the "checks and balances" issue of
presidential versus congressional control of the national military establishment, the issue of the political
compromises reached in an effort to overcome the inherent weaknesses of the Articles of Confederation, and the paramount issue of civilian control over the military. To the Framers of the Constitution, the militia issue of perhaps the greatest significance, however, was the more fundamental question of the nature of the militia as a legal and political institution. Although less obvious to us today, that issue went to the very essence of the military's role inthe new democratic republic and figured prominently in the debate over the ratification of the Constitution.

Nowhere in the Constitution is the term "militia" actually defined. Yet, when the Framers of the Constitution
referred to the militia in the text of the document and the ratification debates, they had very definite ideas of what they meant. Their concept of the militia as a legal and political institution was a product of English heritage, as it was modified by the uniqueness of the American experience. It differed radically [p.2] from our own concept. Specifically, what we think of today as the militia--that is, the National Guard--would have been viewed as a "standing army" by political leaders of the Revolutionary era.

At the same time, however, the Framers' concept of the militia was not static. Throughout the period of the
Articles of Confederation and the early republic, changing political, economic, and strategic realities were forcing a reexamination of the militia's nature and role. This reexamination occurred along lines similar to what had occurred
in England less than a century before. The language relating to the militia that the Framers ultimately chose for inclusion in the Constitution and Bill of Rights sought to reconcile the traditional Anglo-American view of the militia with the uncertainties of changing circumstances. The end result was a set of provisions that proved to be
sufficiently flexible to endure the test of time and to accommodate the changing needs of the new nation.

The purpose of this article is to examine the role of the militia in the legal history of the Constitution and Bill of
Rights. In doing so, it will emphasize the common-law origins of the militia as a legal and political institution, and
the militia's role in the development of Anglo-American democratic institutions and the concept of individual
liberties.
II. The English Background

A. Common-Law Origins of the Citizen Militia.

The citizen militia is one of the most ancient of Anglo-American institutions. Sir William Blackstone credited Alfred the Great with the development of the militia system, stating: "It seems universally agreed by historians, that King Alfred first settled a national militia in this kingdom, and by his prudent discipline made all the subjects of his dominion soldiers . . . ." [1] More recent historical research, however, has suggested that the origins of the early militia can be traced back at least to the seventh century and, in all likelihood, "the obligation of Englishmen to serve in the . . . peoples' army is older than our oldest records." [2] Clearly, the citizen militia, as an institution with a legal identity of its own, had existed for centuries prior to the Norman Conquest.
[p.3] The Saxon militia, known as the fyrd, was a "general" militia composed of all able-bodied men. In times of emergency, it was called out only in districts actually threatened with attack. Service in the fyrd was usually of
short duration and the participants legally were obligated to provide their own arms and provisions in accordance with their socioeconomic standings.
blueboy
(10/26/1999; 22:24:16 MDT - Msg ID: 17562)
MORE THINGS DOWN
Now just look.....lean frogs down 2 cents, what else can happen?? Wha? Oh! My wife said thats hogs! Sorry.
Bonedaddy
(10/26/1999; 22:24:37 MDT - Msg ID: 17563)
Militia clause defined
Military Law Review Spring, 1992
Posted for Educational use only. The printed edition remains canonical. For citational use please visit the local
law library or obtain a back issue.

THE MILITIA AND THE CONSTITUTION: A LEGAL HISTORY
by William S. Fields* & David T. Hardy**

I. Introduction

In examining the subject of the militia and the Constitution, a number of important issues immediately come to mind--the "federalism" issue of state versus national control of the militia, the "checks and balances" issue of
presidential versus congressional control of the national military establishment, the issue of the political
compromises reached in an effort to overcome the inherent weaknesses of the Articles of Confederation, and the paramount issue of civilian control over the military. To the Framers of the Constitution, the militia issue of perhaps the greatest significance, however, was the more fundamental question of the nature of the militia as a legal and political institution. Although less obvious to us today, that issue went to the very essence of the military's role inthe new democratic republic and figured prominently in the debate over the ratification of the Constitution.

Nowhere in the Constitution is the term "militia" actually defined. Yet, when the Framers of the Constitution
referred to the militia in the text of the document and the ratification debates, they had very definite ideas of what they meant. Their concept of the militia as a legal and political institution was a product of English heritage, as it was modified by the uniqueness of the American experience. It differed radically [p.2] from our own concept. Specifically, what we think of today as the militia--that is, the National Guard--would have been viewed as a "standing army" by political leaders of the Revolutionary era.

At the same time, however, the Framers' concept of the militia was not static. Throughout the period of the
Articles of Confederation and the early republic, changing political, economic, and strategic realities were forcing a reexamination of the militia's nature and role. This reexamination occurred along lines similar to what had occurred
in England less than a century before. The language relating to the militia that the Framers ultimately chose for inclusion in the Constitution and Bill of Rights sought to reconcile the traditional Anglo-American view of the militia with the uncertainties of changing circumstances. The end result was a set of provisions that proved to be
sufficiently flexible to endure the test of time and to accommodate the changing needs of the new nation.

The purpose of this article is to examine the role of the militia in the legal history of the Constitution and Bill of
Rights. In doing so, it will emphasize the common-law origins of the militia as a legal and political institution, and
the militia's role in the development of Anglo-American democratic institutions and the concept of individual
liberties.
II. The English Background

A. Common-Law Origins of the Citizen Militia.

The citizen militia is one of the most ancient of Anglo-American institutions. Sir William Blackstone credited Alfred the Great with the development of the militia system, stating: "It seems universally agreed by historians, that King Alfred first settled a national militia in this kingdom, and by his prudent discipline made all the subjects of his dominion soldiers . . . ." [1] More recent historical research, however, has suggested that the origins of the early militia can be traced back at least to the seventh century and, in all likelihood, "the obligation of Englishmen to serve in the . . . peoples' army is older than our oldest records." [2] Clearly, the citizen militia, as an institution with a legal identity of its own, had existed for centuries prior to the Norman Conquest.
[p.3] The Saxon militia, known as the fyrd, was a "general" militia composed of all able-bodied men. In times of emergency, it was called out only in districts actually threatened with attack. Service in the fyrd was usually of
short duration and the participants legally were obligated to provide their own arms and provisions in accordance with their socioeconomic standings.
blueboy
(10/26/1999; 22:26:51 MDT - Msg ID: 17564)
MORE THINGS DOWN
Now just look.....lean frogs down 2 cents, what else can happen?? Wha? Oh! My wife said thats hogs! Sorry. Lean, means there's no gold in them!!
Quabbin
(10/26/1999; 22:50:35 MDT - Msg ID: 17565)
Otter in strife over gold speculation losses
http://www.kitco.com/_a/news/2404.htmOk, I don't know who Otter is, some of the terms are foriegn to me, and I have to assume the dollar figures used are of an unclarified non-US dollar denomination....
However, there must be some relevance to this story. We knew the squeeze was huge, yet only Ashanti and Cambior have been exposed. And only to the degree that a little harmless illegal intervention can smooth it all over.
There MUST be a much more explosive story waiting in the shadows. Is THIS one?!?!?
canamami
(10/26/1999; 22:55:36 MDT - Msg ID: 17566)
Test
test
TownCrier
(10/26/1999; 22:58:47 MDT - Msg ID: 17567)
After the Close: the GOLDEN VIEW from The Tower
Woof! Tough day to be away from the safety of The Tower rooftop, but some ground duty called. Now that I'm back up here, scanning the horizon for the GOLDEN VIEW reveals there wasn't a lot of important news today other than the $10 drop in gold price...but that wasn't exactly "news" so much as it was a "trading event." Upon returning to this news reporting post here at The Tower, I was met by a somber doorman who said gravely that our gold had lost 3.2% while I was afield. "Fetch the scales!" I called. "We must weigh The Tower's gold!"

NO CHANGE...right down to the milligram.

Well, as quaintly impractical as that story may seem to some of you who profess to be living in The Real World where dollars are what counts, I ask you to produce the Real Foundation upon which your real world dollar is built, and THEN try to tell me who is living the more fanciful existence. Until such a foundation materializes, we'll just keep on addin' to the pile of golden Tower savings. It seems we weren't the only ones taking stock in our gold reserves today. The European Central Bank announced that their own total gold assets remained unchanged at �114.988 billion.

Mining stocks sure took a beating, and those of you who play that game have our sympathy...the Philadelphia Stock Exchange Gold and Silver Index slid 6.1%. Our sympathy doesn't run too deep, though, when we take full consideration of the mentality of the market. Case in point: even after the Ashanti debacle and continuing saga, we have this report by Bridge News of the antics of a fellow miner...
New York--Oct 26--Battle Mountain Gold Co. said it has taken advantage of
the rising market to hedge a total of 300,000 ounces of production for delivery
over the next 4 years, or about 19,000 ounces per quarter. As well as part of
its 90-day gold sales program, the firm could be required to deliver 15,000
ounces of gold in the fourth quarter of this year at $320 an ounce.
+
We'll say no more, as that speaks for itself.

In the financial markets, traders and investors are reluctant to swap their cash for bonds until the results are out for the third-quarter data on employment costs and GDP. The long bond dropped 13/32 in price, raising the yield to a fresh two-year high of 6.371%. Ward McCarthy, a managing director at Stone & McCarthy Research Associates, told Bridge "We are in a bear market that is not going to end until there is some sign the Fed has finished what it's doing," said . "Right now, I don't think that's the case." He thought whatever action the Fed might take on November 16, we should expect nothing short of the Fed funds rate being raised to as high as 6-1/4% by early next year.

In a smooth transition from our topic of bonds to stocks, one trader said that stocks were "still keying off the bond market," which is technically weak, "if not broken." (And although other currency traders have completed this circle by claiming that the dollar is keying off the DOW, the dollar actually held up well against the euro, it tanked against the yen.)

The DOW lost 47.80 points (-0.46%) while the Nasdaq nearly managed to break even yet again, losing just 4.48 (-0.16%).

What IS the DOW, anyway? If you thought you knew before, its time to go back to school. Usage of the term "DOW" generally refers to the Dow Jones Industrial Average, an "average" (actually a complex formula) involving the stock prices of 30 of the most prominent (and therefore representative???) of America's "industrial" companies in various sectors. The DOW, as a general index of market performance, is actually the creation of Dow Jones & Co Inc., publisher of The Wall Street Journal. They've apparently decided a change is in order, so starting Monday the formula will change along with the replacement of Sears, Roebuck and Co. (the No. 2 U.S. retailer--on the DOW since 1924), Union Carbide Corp. (a top chemicals company--on the DOW since 1928), Goodyear Tire & Rubber Co. (the world's largest tire company--on the DOW since 1930), and Chevron Corp. (the No. 3 U.S. oil company--also on the DOW since 1930). Freshly added components to the DOW will be Microsoft Corp. (the world's top computer software maker), Intel Corp. (the No. 1 computer chip maker), SBC Communications Inc. (the No. 1 U.S. local phone company), and Home Depot Inc. (the world's largest home improvement retailer).
+
For what it's worth, Peter Cardillo, Westfalia Investments' director of research, said of the shakeup, "the Dow is still made up of 30 stocks and obviously the fact remains that it is not a great indicator of what the rest of the market is doing." Amen to that. The handful of stocks making up the market index has been a smoke and mirror distraction to the fact that the broader market (sans certain internet issues, etc) has been a corpse for many months now. Today's stats are typical. On the New York Stock Exchange, declining stocks beat advancers 1,875 to 1,159; and on the extremes, new 52-week lows numbered 301 while new highs totaled only 37 stocks.

Speaking of smoke and mirrors, in the gold realm we have the gold derivative markets providing a distraction to real gold investors. Here's a quick review of a thought we offered in yesterday's GOLDEN VIEW:

"Thanks to the efforts of derivative traders, spot was quoted down another $2.70 today at $298.50. The Tower thinks this trend of seemingly harmless $2-losses per day may continue upon the best efforts of the traders until the wheels fall off without warning. The two following items might point you to appreciate the disconnect between the market's physical reality and the market's price illusion."

My, how quickly the wheels start to wobble! The paper market was sold into disarray as the clever pro's brought the price low enough to finally trigger a wave a sell-offs from rookies and the Johnny-come-lately's who bought in after gold's first price surge took it near $300 per ounce. This wave of selling took the going December contract price down $10.10, and spot prices quoted in NY responded dutifully with a drop of $9.60 to $288.90.

Gold lease rates continue to fall, with the one- and two-month annualized rates near 1.5%, while the rates beyond three months still exceed 3%. We're really not surprised. The Tower consensus is that the wheels fell off on many gold lending arrangements when the rates skyrocketed to 10% after a prolonged stint near 5%. We expect that gold lending operations are not as they once were, and that the quoted rates are somewhat fabricated out of whatever remains of this market. From your own experience, just because a lender will quote you an interest rate, it doesn't automatically follow that he will grant you a loan. With the ECB backing off from this arena, and when you consider the wheelings and dealings among Ashanti and its counterparties and intermediary banks, you can see how things needed always be as they appear. In Ashanti's case, with margin calls approaching $270 million during gold's recent spike, but with only $70 million in available capital, it would appear that something should already be past the breaking point for that company. But noooooo.... An Ashanti spokesman said in a Reuters report, "Discussions [with counterparties] are moving forward in a constructive mood." Although details were unavailable, a source said, "If (the counterparties) agree with the proposals, or even if they amend them... then what we will see is margin-free trading, so that the current liquidity crisis would be over."

If you can accept a change mid-contract that would allow for "margin-free trading," I'm sure you'll have no trouble conceiving of gold lending limping toward liquidation/settlement under bogus lease rates.

One industry specialist offered a great quote in this Reuters piece:
"A hedge book shouldn't devastate the company if the gold price jumps. It's supposed to be an insurance. Once running the hedge book becomes more important than the actual mining business then you've got a problem."

We still recall the e-mail we received here at The Tower from MK three to six months ago when Ashanti Goldfields announced its quarterly earnings...mostly on hedgebook operations than on mining operations. Michael's comment was an expression of disbelief at this mode of operation for, in his words, "Ashanti Gamblingfields." You nailed it, MK.

Here's Bridge's eye on the paper side of the gold markets...

NY Precious Metals Review: Dec gold dn $10.1 after 1-month low
By Tina Petersen, Bridge News
Washington--Oct 26--NY Dec gold futures settled down $10.1 at $290.40
per ounce after hitting a 1-month low of $289.60 in the morning session.
Traders said gold was pressured lower by dealer sales after stops were
triggered below $295 and continues to suffer under the weight of long
liquidation by the funds.

Traders said the selloff today was sparked after gold broke through
support on Monday at $299 and closed at $300.5. "The dealers came in and
really pushed prices down after it fell below $300, and there were no
buyers to offset it," said a trader.

Stops were triggered at the $298 level and then large stops again at
around $295. "That started the big liquidation break on the downside," a
trader said.
He said that most of the trade had thought gold would hold support at
the $295-298 area. "Everyone waited for the market to test that area, and
we're all discouraged that it went through it." Support now is seen at
$286-288 and then heavy support at $275.
Traders said they were not surprised that prices fell to the $295
level, which is a 50% retracement from the $339 achieved on Oct 5.

"It didn't hold [at $295] as well as we might have thought," a trader said.
"I'm just hoping we won't see much lower than $275."
An analyst said this technical selling "reemphasizes that the gold
rally is a structural rally as opposed to monetary or inflationary rally."
He said he does not think gold will hit its old lows again and believes
the market should see support at current levels.

Traders said that physical demand for gold has declined. "The Asia and
India markets were destroyed by the higher prices," a trader said.
"Everyone is now wondering if they can recover."

[For the record, nobody in The Tower has any idea what that nonsense means, unless it's referring to derivative markets rather than physical markets. After all, was the market for real oil "destroyed beyond recovery" after the oil price more than doubled? No.]

Also pressuring the market is a decline in 1-month lease rates to
about 1%, vs 1.4% on Monday; the strength of the stock market; and the
upcoming UK Treasury gold sale in November.
Market players said they are expecting further long liquidation in the
near term after the latest commitment of traders report for gold futures
and options revealed the market is still heavily net long.
As of the Monday's commitment of trader report, which tracked activity
of futures and options positions over the 2-week period ending Oct 19, the
specs are heavily net long by 32,776 contracts. "This showed that there
was a lot of potential for [gold] to break down at those numbers," said a
trader. "There was a significant amount of liquidation by the longs since
that report, and I think there's still a lot more to come," he said.
***
(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN.
---
At the Scotia Mocatta gold depository for COMEX, a total of 801 ounces were withdrawn (705 ounces from Registered stock, 96 ounces from Eligible), but also today in another transaction, 10,802 ounces were deposited within the ranks of Eligible stock, possibly in preparation for delivery on some of the 2,517 contracts (251,700 ounces) for which delivery intentions were announced (one new contract added this morning). Of the 881,208 ounces housed by COMEX, 119,812 are Eligible stock and 761,396 are Registered.

Tomorrow, October 27, marks the termination of trading on the October gold futures contracts, October 28 is Last Notice Day, and Last Delivery Day is this Friday, October 29th. As of yesterday, October open interest dropped by one contract to 110 on volume of 8. November open interest was unchanged on no volume at 14 contracts, and the December open interest dropped 14,081 on volume of 24,714 to 97,082 contracts. Total open interest on all COMEX gold futures through June 2004 stands at 204,424 down 13,445 after yesterday's trading.

On NYMEX trading, energy futures suffered through another lackluster session. December crude weakened 16c to $23.19 at the close ahead of the release of American Petroleum Institute data. Traders expected crude stocks last week to be unchanged to down 1.0 million barrels, but the subsequent release of data showed stocks up 3.420 mln barrels in latest week. Brokers immediately called that data neutral to bearish, with support coming from larger than expected declines in distillate and gasoline stocks.

We'll keep our fingers crossed that Jeff gets the Forum server kickstarted soon, then we'll see what the next day holds.

And that's the view from here...after the close.
Quabbin
(10/26/1999; 23:10:06 MDT - Msg ID: 17568)
Otter in strife over gold speculation losses
http://www.kitco.com/_a/news/2404.htmOk, I don't know who Otter is, some of the terms are foriegn to me, and I have to assume the dollar figures used are of an unclarified non-US dollar denomination....
However, there must be some relevance to this story. We knew the squeeze was huge, yet only Ashanti and Cambior have been exposed. And only to the degree that a little harmless illegal intervention can smooth it all over.
There MUST be a much more explosive story waiting in the shadows. Is THIS one?!?!?
canamami
(10/26/1999; 23:28:40 MDT - Msg ID: 17569)
test
test
canamami
(10/26/1999; 23:28:47 MDT - Msg ID: 17570)
test
test
Goldiehawk
(10/28/1999; 01:05:17 MDT - Msg ID: 17694)
Test
To find out why there is no access available to yesterday Wednesday discussions
Fasolt
(10/28/1999; 01:07:18 MDT - Msg ID: 17695)
Fasolt
If you can hie your hiney out of the "lick your wounds and
pray for the end of the world camp," I think the time has
come (to quote the walrus) to buy some good, unhedged gold
stocks.
Fasolt
(10/28/1999; 01:07:34 MDT - Msg ID: 17696)
Fasolt
If you can hie your hiney out of the "lick your wounds and
pray for the end of the world camp," I think the time has
come (to quote the walrus) to buy some good, unhedged gold
stocks.
Fasolt
(10/28/1999; 01:08:18 MDT - Msg ID: 17697)
Fasolt
If you can hie your hiney out of the "lick your wounds and
pray for the end of the world camp," I think the time has
come (to quote the walrus) to buy some good, unhedged gold
stocks.
USAGOLD
(10/28/1999; 01:26:54 MDT - Msg ID: 17698)
Test

TEst
Gold Dancer
(10/28/1999; 01:57:27 MDT - Msg ID: 17699)
Gold



I have here in front of me a chart of gold in South Korean Won.
After a spike bottom in mid 97 it made a fast recovery just like gold in US dollars recently. It then had a
correction that is the same A-B-C that gold has just gone through including having the B leg higher than
the top of leg 1. It is called an irregular correction.

After the end of that correction the price of gold went from $275 to
$550 in what looks to be 6 weeks.

Now, Frank Veneroso has just said that the shorts have not had the time or the volume to cover. A few
of the mines have covered there hedges and that is about it.

We also know that Foreign Countries are behind in their Y2K problem.

We also know that the gold manipulation is now well out into the open.

We also can figure out the the vultures are circling looking for easy prey and easy money. They know
just were to go for it too.

We also know that the Hedge Funds are worried about liquidity at the end of the year in the markets all
over the world.

So the question is...could we see $560 gold by the end of November?

We will know soon enough but with gold holding its $7 gain tonight all hell just might be breaking lose
in the gold markets!!!

I MUST go to bed now. Be back tomorrow. Could be an exciting 6 weeks coming up.

Gold Dancer
el St.One
(10/28/1999; 03:20:01 MDT - Msg ID: 17700)
Test Test Test
Either I'm lost or ya'll are lost, I found Tuesday okay but no joy for Wed or Thur.
Gold is up over $7 over $300 as last I looked.
Thur And Fri could be a holdon for another hi-g ride. Hope so. el
Goldspoon
(10/28/1999; 04:09:12 MDT - Msg ID: 17701)
i'm MAD as HECK and YOU should be TOO here's why...***
http://infoseek.go.com/Content?arn=a0496reuff-19991027&qt=&sv=IS&lk=noframes&col=NX&kt=A&ak=news1486Let the world Know and pass it on The BOE took the Kuwaiti
gold and used it to engineer a one day dive to cause the options to expire worthless..... This game was rigged!!!!
Buying call options is like playing a carnival game!!!!
***Don't play dead on this one... speak up and don't let this die.. Don't let em get away with this!!!!!!

``In saving Ashanti Gold Mines, it (Britain) saves the Ghanaian economy. It doesn't want Ghana...to fall over, because otherwise it's going to have to finance its recovery,'' Goode said.

This increased pressure on the Bank of England to push the price of gold down, he said.

But the most immediate concern was the expiry of a large number of ``in the money'' over the counter call options later on Wednesday.

BIG PLAYS SEEN IN COMING NEW YORK TRADES

On Goode's reckoning, 3.8 million ounces of call options, at a gold price of US$290.00, fall due for delivery Wednesday night.

That will require the covering of three million ounces, with only 800,000 ounces presently available in the market, he said.

``A three million ounce shortfall has got to come from somewhere tonight.''

Other analysts said this could account for gold's price partial recovery on Wednesday.

One reason for gold's sharp price fall on Tuesday night was pressure by the Bank of England to get the price below $300.
ss of nep
(10/28/1999; 04:56:10 MDT - Msg ID: 17702)
TEST


Hey, what happened to the 27-th of OCT. ?

The Invisible Hand
(10/28/1999; 04:57:32 MDT - Msg ID: 17703)
Yesterday (Oct. 27, 1999)'s archives
I can't open yesterday's archives. Am I the only one?
tg
(10/28/1999; 05:15:50 MDT - Msg ID: 17704)
FOA or anyone who can help
Have been lurking for a while and thought I might put in my 2cents worth.
The Swiss are an intelligent lot with strong connections to the BIS. If FOA's scenario of the future of gold is correct than where and how does the intended sale of Swiss gold fit into the grand scheme ?
I hope I'm not asking a question that has already been answered
ss of nep
(10/28/1999; 05:57:58 MDT - Msg ID: 17705)
WHAT's THIS ............ from kitco



Date: Thu Oct 28 1999 07:24
Cage Rattler (Hmmmm ...) ID#33182:
US currency should include tracking devices that let the government tax private possession of dollar bills, a Federal Reserve official says. The longer you hold currency without depositing it in a bank account, the less that cash will be worth, according to a proposal from Marvin Goodfriend, a senior vice president at the Federal Reserve Bank of Richmond.





Gandalf the White
(10/28/1999; 06:13:23 MDT - Msg ID: 17706)
(No Subject)
ss of nep's post on Mr. "Goof-fellow"Today this same person is now a Jr. Vice President !
<;-)
FOA
(10/28/1999; 06:26:55 MDT - Msg ID: 17707)
(No Subject)
Jeff or USAGOLD,
Saved all of it through my last post below. Some 145K of posts. If you need it let me know soon, I'll have to call someone to send it.

FOA (10/27/99; 20:12:33MDT - Msg ID:17679)

---------
TG(10/28/99; 05:15:50MDT - Msg ID:17704), will reply much later. thanks FOA
elevator guy
(10/28/1999; 08:10:34 MDT - Msg ID: 17708)
The cabal is alive, but for how long?
Its egregiously obvious that the colluding cabal, by calling in favors from the BOE, and Kuwait, have once again manipulated the price of paper gold downward. They held it artificially low, below $300/oz, to let some shorts escape, by letting the 300 calls expire worthless. How much more obvious does it have to get, before the elected and appointed officials that supposedly over see these markets are forced by shear shame, and fear of God, to step in and stop this gross manipulation.
There seems to be no one "at the helm", who has a shred of honesty or integrity. The fact that such criminal manipulation goes on unabashedly, proves that the writers of options are nothing but carnival operators, who encourage the foolish hopefuls to "toss a ring over the bottle". Their little game is nothing but a sham, which is proved by this latest maneuver.
I would recommend that everyone pull their money out of options, stocks, and all paper investments entirely, and show them that we know the game is rigged. Real physical gold is our only stand for freedom.
And for once the game went the other way, when the ECB capped gold sales. Think of all the money the shorts have made, by putting miners out of work, swindling mines, wrecking little investors, and trashing the gold market in general. After all this misery they inflicted, you think they would have the class to let the longs have a breather, if for nothing else, than to lend some credibility to their little carnival market of paper contracts.
But nooooo, they have to call out the PPT, call in favors, and suppress the price even more, to save their little asses. It is so immoral, it stinks to high heaven.
Some day there is coming a day of reckoning, a day of judgement. It will be a very hard place to be, for those shorts. Have you heard of the expression; "Between a rock and a hard place"?
phaedrus
(10/28/1999; 08:24:16 MDT - Msg ID: 17709)
go wall street go
Below is an excerpt from the WSJ on today's numbers. It
basically explains what you do to keep the party going:
monkey with the figures any way you can to get the savings
up, count software upgrades as an 'investment' rather than a
business cost, and finally get your employees to prepay
their own wages by giving 'em stock options instead of cash,
thus beefing up your earnings and allowing the government to
say wage costs are down at the same time. It's all spelled
out in the excerpt below.

I was once skeptical that government numbers could be
blatantly manipulated in secret. But they don't have to be
manipulated in secret. They are doing it right out in the
open with Wall Street's blessing.


From the WSJ:

All of Thursday's figures reflected a comprehensive overhaul
in the way the government calculates the GDP, making changes
in the figures back to 1959. The GDP revisions showed the
economy grew at a significantly faster rate in recent years
with an increase in 1998 of 4.3% and even bigger 4.5% rise
in 1997, the fastest surge in economic activity in 13 years.

The changes also show lower inflation and Americans saving
more than previously thought.

The nation's personal savings rate -- savings as a
percentage of disposable income -- which had dipped to
record lows in negative territory was 2.1% in the third
quarter under the new calculations.

Under the new GDP methodology, savings associated with a
worker's government pension plan will be counted as personal
savings, rather than government savings. That doesn't affect
the GDP, but it does boost the nation's personal savings
rate.

The other major change the government made in its GDP
calculations was a redefinition of how to account for
business spending on computer software. Previously, these
purchases were considered a raw material and not counted as
part of GDP. Under the new approach, business purchases of
software are considered an investment and do add to the GDP
totals.

The government in its overhaul also changed the base year
for prices from 1992 to 1996.

All the various changes show the GDP growing at an annual
rate of $8.88 trillion in inflation-adjusted dollars in the
third quarter of the year. Before adjusting for inflation,
GDP in the third quarter totaled $9.28 trillion.

Employment Cost Index Rises 0.8%

In the Labor Department's report, the employment-cost index
-- the government's broadest measure of labor costs -- rose
just 0.8% between July and September after registering a
1.1% second-quarter gain that was the biggest in eight
years.

The gain was slightly smaller than Wall Street expected and
suggests that employment costs remain stable despite the
tightest labor market in three decades. Economists surveyed
by Thomson Global Markets called for the index to rise 0.9%
in the third quarter.

In the year through September, the government said,
employment costs also declined -- to 3.1% from 3.7% in the
year through September 1998.

The relative stability in employment-cost growth, moreover,
has coincided with dramatic gains in corporate profits in
the third quarter. Wall Street estimates call for corporate
profits to rise 22% in the third quarter, compared with 10%
in the second. Those numbers show that corporate profit
margins are widening despite gains in labor costs, analysts
said, implying that companies aren't under pressure to pass
on the higher labor costs to consumers.
Luv_G7
(10/28/1999; 09:08:27 MDT - Msg ID: 17710)
Answer on Swiss Gold Sales
The Swiss plan to sell 1300 tons of gold falls under the 2000 5 year ton cap announced by the European Central Banks. The remaining portion of the 400 tons that the British are going to sell also falls under the cap. The market has already anticipated these sales. The 2000 ton cap over 5 years will barely satisfy the current and future demand for gold, I believe there's a current deficit of 2000 tons a YEAR (not 5 years), and that doesn't even include the thousands of tons that the market is still short physical. And remember that this 5 year cap is going to be satisfied at a rate of only 400 tons a year.

Relax. Supply and demand will carry us to much higher prices.

TownCrier
(10/28/1999; 09:09:32 MDT - Msg ID: 17711)
YESTERDAY's "After the Close: the GOLDEN VIEW from The Tower"
Once again, we've stumbled across a bit of news that helps demonstrate the separation between derivatives and real things. For those of you stuggling to come to terms with our discussion of "paper gold" (often used in reference to gold derivatives such as futures and options), this tiny quote from TheStreet.com might help reinforce the point that the reality of the underlying element which inspired the derivative can occur/exist independent of whatever "bets" the traders make through their efforts on these futures markets. Case in point:
+
---"The fed funds futures contract listed on the Chicago Board of Trade was lately pricing in a 72.9% probability of a Fed rate hike, from 5.25% to 5.5%, at its next meeting (Nov. 16). Yesterday, the November fed funds contract was pricing in the same chance of a rate hike."---
+
It's not hard to see in this example that in NO WAY do folks with positions in futures contracts on fed funds actually OWN fed funds. In case this is new to you, "fed funds" is the jargon for the interest rate at which banks will lend excess reserves to each other. (At their FOMC meeting the Fed decides what the target rate should be for this type of interbank lending.) Further, it should be clear to you that no matter what contract postions and resulting prices are established as traders vigorously attempt to hedge various financial fallout from FOMC decisions, these derivatives in NO WAY affect what decision the Federal Open Market Committee makes.
+
Similarly, the prices established by the supply/demand market forces for gold futures contracts offer very little reflection on shifts in the supply and demand of the physical gold. Much of the talk around here is that not only is the low "trader's price" on gold contracts masking the underlying voracious demand for gold worldwide, but that by providing for a highly visible "gold" price that is artificially low, the futures contracts are helping to further fuel the record setting pace of real gold demand. Obviously, the good times roll (if you are among the world's population capitalizing on the opportunity to acquire gold cheaply) until sufficient gold can no longer be located to satisfy the demand. That's the point at which the "street price" for delivered gold separates suddenly from the "trader's price" on a (likely very sharp) reality check.

In other areas where things are not as they seem, 30 industrial stocks daily have their prices dumped into a formula we call the DOW, and today the DOW closed 92 points higher at 10394.89 (+0.90%). Behind all that fluff, of all stocks traded on the New York Stock Exchange today, more companies reached new 52-week lows (234) than reached new highs (30).

U.S. Treasuries got a boost today on the overseas/overnight announcement that the Bank of Japan would accept Treasuries as collateral for purposes of Y2K funding from December 1st 'til January 31st. The 30-Year US Bond got a boost of 22/32, dropping the yield to 6.323% on this first good day for bonds in recent memory. In euro-land, data revealed a larger than exepected increase in their broader money supply (M3), supporting the market's expectations that the ECB will now certainly respond with a rate hike at their November 4th policy meeting.

U.S. bond traders remain on edge over tomorrow's release of GDP and employment cost index data. The Reuters survey of economists reveals a forecast that third-quarter GDP will rise to a brisk 4.7 percent annual rate of growth (as compared to Q2's 1.6% rate of growth.) Because traders acknowledge that Fed officials are very concerned about tight labor markets leading to wage pressures, they are more concerned about the ECI data. Forecasts look for a third-quarter increase of 0.9% (following Q2's 1.1% increase.) Traders expect bonds would react quite negatively to a GDP gain larger than 5% or ECI above 1%. Keep those numbers in mind as you watch the day unfold tomorrow.

Also of significance tomorrow is the 7:30 p.m. EDT address by Federal Reserve Chairman Alan Greenspan to the Business Council in Boca Raton, Florida. The Fed chairman will be speaking on technology and the economy, so although it seems like a tame topic, the Fed Chairman has come to the stage in his career where he tends to send warnings as he deems necessary from whichever soapbox presents itself. He may say nothing revealing, but the markets will tune in just to be sure.

In Ashanti news, up for grabs is its Geita mine in Tanzania. FWN reports that the company is interested in selling the mine after the jump in gold prices brought about margin calls from 17 hedge-book counterparties which the company was unable to meet, prompting Ashanti to beg for time on the payments. Potential suitors were listed as UK's Lonmin PLC, Canadian group Barrick Gold Corp, Canada's Placer Dome and South Africa's Anglo Gold. Ashanti was said to be in "constant, but progressive and constructive talks" with these parties, though no deals have yet been struck. Although the gold price has since relaxed below Ashanti's margin-call level, the potential for additional price volitility was cited as Ashanti's motivator to pursue this sale as "a way out."

We'll give the fingers a rest from typing and take a short stroll around The Tower's rooftop while turning things over briefly to Bridge News to tell us what went on in the gold derivative markets today...

NY Precious Metals Review: Gold up $3.8 on short-covering
By Tina Petersen and Darcy Keith, Bridge News
Washington--Oct 27--COMEX Dec gold futures settled up $3.8 at $294.2
an ounce on short-covering and bargain hunting following Tuesday's big
sell-off.
Traders said gold was technically oversold after losing $26 since Oct 18.
While some said they still think Dec may slip to $275 in the near term,
others expect gold to consolidate then move higher as fresh long positions
are established.

Traders said there was some dealer buying in London which spilled over
into COMEX. "Gold basically ran out of selling," said a trader. "It was
technically oversold, and now we're seeing short covering."
Market players said some big shorts had been waiting for a significant
pullback before they covered their positions. "The sell-off in the open
interest and stop-loss selling recently paved the way for a bounce today,"
said a trader.
Also providing support for the market is a slight rise in 1-month
lease rates to about 1.14%, versus 1% Tuesday. Traders also noted that
they are seeing a slight recovery in Asian consumer demand.
Some still predict Dec will inch down to $275, but others said gold
should continue higher as players cover short positions and as fresh longs
come into the market. "A lot are waiting to see how low prices go before
they come in as fresh longs," said a trader, adding that "we see strong
support at $290."

However, an analyst said that the market may want to consolidate and
stabilize around these levels. "I can't say we are out of the woods yet,"
he said.
Leonard Kaplan, chief bullion dealer at LFG Bullion Services,
predicted that prices will stabilize or slip slightly in the near term
then will "probably go higher." However, he noted that a lot of the
outlook depends on lease rates and other considerations.
One dealer said gold was simply taking a breather today as the
over-the-counter gold options declaration in London kept many players on
the sidelines worried about volatility.
Thursday, he said, will be a more interesting day. Most likely, he
said, players will pressure prices lower, trying to fill in a gap that
extends to $287.10.

[Spot prices reacted as expected to today's price movement of "trader's gold," and New York last quoted a price for real metal at $292.20, up $3.30 per troy ounce. However, as we took a final look across the Pacific Ocean before shouting this report into the night sky, spot prices were currently being quoted up an additional $5.
We'll now continue with an additional excerpt of an interview by Bridge of Homestake Mining's CEO Jack Thompson...]

Homestake: Recent gold price dip only a correction in uptrend
By Melanie Lovatt, Bridge News
New York--Oct 27--The recent pullback in gold prices is only a
correction in the turnaround to higher prices, said Jack Thompson,
Homestake Mining's chairman and chief executive officer. However, he said
that "it doesn't matter if gold stays at current prices or goes back up
because in either circumstance, the company can provide shareholder
value."
He anticipates that it "won't take long" before the lending liquidity
in the gold market reaches a limit. This would push up gold lease rates
again and then the gold price itself, he said on a conference call to
analysts.
Thompson noted that he had originally predicted gold lending would
reach a limit in 1.5-2 years time. However, with the recent announcement
that the European Central and Swiss banks will limit gold lending, this
limit is more likely to be reached within 6 months or even 6 weeks, he
said.
Thompson said he was nevertheless disappointed by gold's dip from its
recent highs, noting that "people's hopes were spiced up when the price
ran up." However, he said that the "jury's still out" and suggested that
the current dip is simply a correction in an overall turnaround to higher
prices.
***
(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.

There was a small chance within the COMEX gold depository today as Scotia Mocatta had 2,797 ounces withdrawn from Eligible gold inventory, leaving 117,015 ounces in Eligible stock and 761,396 ounces Registered. Total delivery intentions announced so far on October futures held firm today at 2,517 contracts (251,700 ounces). Today was the last trading day on that particular contract, and tomorrow marks final notice day, with Friday as the deadline for delivery.
+
At end of trade yesterday, the open interest on October futures increased by 2 contracts to 112 on volume of 15. December open interest increased by 12,678 on volume of 57,140 to 109,760 contracts. Total COMEX futures open interest increased yesterday by 13,492 on volume of 63,905 to 217,916.

And in our remaining sector, NYMEX crude futures see-sawed around, settling down 27c at $22.92 per barrel for theoretical December delivery. US Department of Energy data gave contract longs a bit more hope than yesterday's API data which indicated a rise to crude inventories last week of 3.420 million barrels. The DOE data showed a rise of only 300,000-barrels in crude stockpiles. To revisit the theme with which we began, that derivatives tend to take on a life of their own and dance to their own tune, we offer FWN's quote of a trader remarking on the closing price of the December futures contract:

"This is not a good close for crude but we did hold support at $22.90. If Dec crude had failed to hold support, the contract could have broken through the gap between $22.84-$22.90 and plunged to test $22.70."

You'll agree...there wasn't much about real supply and demand for oil to be found in that commentary for price movements. It's all about itself, but with the occassional cold, hard, reality check of the real world.

And that's the view from here...after the close.
she-gold
(10/28/1999; 09:10:59 MDT - Msg ID: 17712)
phaedrus
Thanks for the post, Phaedrus. It confirms, to me, what i have suspected. Americans and their government consider 401k plans (heavily invested in the stock market) to be "savings", and not investments, something akin to the proposal to invest a proportion of social security "trust fund" into the stock market. As this ponzi scheme seems infalible, what's the problem with calling your 401k pension plan "savings".

But what if it's not infallible? It never has been in the past. What if money/investments leave the country. What if y2k is real and corporations are not able to reach their growth levels which are required to sustain their stock prices and stocks must be valued according to ancient indices (ie. P/E ratio).

I tell my friends to get out of securities, but with 401k rules, it's not easy without heavy penalties and taxes. I wonder if this was the government's plan/idea all along.

To be honest, one must give credit to the USA. They are the most inovative and aggressive businessmen in the world. But you have no memory. You haven't lived in times of hyper-inflation, and your currency has/is stable. Having been raised in latin america, i can tell you we've always had to keep our savings/values in hard commodities - apartments, gold, etc,- AND in dollars. And OUR philosophy has been not to OWE money. If you could poll the generation who lived through the 29' crash, they might have the same philosophy. y2k and the coming reality that e-commerce ain't gonna make a GM out of eBay will be shocks to Americans and their "savings".

i've learned so much from everyone here, thanks!, and especially FOA/ANOTHER.

Question for FOA: What's up with the EURO - why is it going down?
USAGOLD
(10/28/1999; 09:11:12 MDT - Msg ID: 17713)
Today's Gold Market Report: Producer Buy Backs, Physical Purchases in Asia, Cambior Standstill
MARKET REPORT(10/28/99): Gold continued its rally gaining momentum
in the overnight markets after a turnaround in New York yesterday. Gold
hit $303 in Australia with producer buy backs and strong physical buying
in the Far East associated with various year end cultural holidays being
cited as the chief features. "It's running through technical support and
resistance levels like a hot knife through butter," said Leonard Kaplan,
chief bullion dealer with LFG Bullion Services........Amidst a deafening
silence on the Ashanti situation, Cambior, the other mine company in the
gold news these days, announced a new standstill agreement through
November 26, 1999 with its creditors. For all appearances, Camior has
traded a security interest in its Doyon Mine for the one-month reprieve
on it margin calls. From what I can tell, if Cambior can't pay its
margin calls -- or if the yellow goes higher from here -- the company
gives up the property. Then what? Throw another deed on the table? It
also agreed that it cannot alter its hedge book without the approval of
its creditors. It appears that all Cambior has gained by all this is
time sprinkled with hope that the yellow metal will go lower -- a
strange position indeed for a mining company that should benefit not
suffer from a run-up in gold prices...............Meanwhile Gold Fields
registered a loss for last quarter resulting from squaring its hedge
book. Chris Thompson, Chairman and Chief Executive Officer, said in a
press release, "Having recovered its hedge position, Gold Fields is now
well positioned to benefit from the expected strengthening in the gold
price.".........That's it for today, fellow goldmeisters. Have a good
day.

This month's News & Views explores in detail the reasons for gold's
recent run-up including the actual text of the Washington Agreement, a
document signed by Europe's central banks which the World Gold Council
thinks inaugurated "A New Gold Market". We also include top gold analyst
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she-gold
(10/28/1999; 09:11:23 MDT - Msg ID: 17714)
phaedrus
www.usagold.comThanks for the post, Phaedrus. It confirms, to me, what i have suspected. Americans and their government consider 401k plans (heavily invested in the stock market) to be "savings", and not investments, something akin to the proposal to invest a proportion of social security "trust fund" into the stock market. As this ponzi scheme seems infalible, what's the problem with calling your 401k pension plan "savings".

But what if it's not infallible? It never has been in the past. What if money/investments leave the country. What if y2k is real and corporations are not able to reach their growth levels which are required to sustain their stock prices and stocks must be valued according to ancient indices (ie. P/E ratio).

I tell my friends to get out of securities, but with 401k rules, it's not easy without heavy penalties and taxes. I wonder if this was the government's plan/idea all along.

To be honest, one must give credit to the USA. They are the most inovative and aggressive businessmen in the world. But you have no memory. You haven't lived in times of hyper-inflation, and your currency has/is stable. Having been raised in latin america, i can tell you we've always had to keep our savings/values in hard commodities - apartments, gold, etc,- AND in dollars. And OUR philosophy has been not to OWE money. If you could poll the generation who lived through the 29' crash, they might have the same philosophy. y2k and the coming reality that e-commerce ain't gonna make a GM out of eBay will be shocks to Americans and their "savings".

i've learned so much from everyone here, thanks!, and especially FOA/ANOTHER.

Question for FOA: What's up with the EURO - why is it going down?
TownCrier
(10/28/1999; 09:36:17 MDT - Msg ID: 17715)
U.S. Economy Grew at 4.8% Rate in 3rd Quarter
http://quote.bloomberg.com/fgcgi.cgi?ptitle=U.S.%20Economy&s1=blk&tp=ad_topright_econ&T=markets_fgcgi_content99.ht&s2=blk&bt=blk&s=c8b5c72d7a623af29f0db57674a28b60Third quarter growth was the fastest pace yet this year for the U.S economy, but apparently, because analysts expectations were "on the money," the stock markets are soaring. It gets to the point where it doesn't matter what the data reveals about inflation or deflation...of utmost importance to the markets is how close the analysts are able to predict the data to be released. Gads, what a fine recipe for eventual disaster.
TownCrier
(10/28/1999; 09:41:28 MDT - Msg ID: 17716)
U.S. Employment Cost Index Rose 0.8% in 3rd Quarter
http://quote.bloomberg.com/fgcgi.cgi?ptitle=U.S.%20Economy&s1=blk&tp=ad_topright_econ&T=markets_fgcgi_content99.ht&s2=blk&bt=blk&s=a77af39cb76fbb1f1fde3ad7e6a5d9edSame thing that was said for the GDP data earlier also applies to this release of ECI data.
TownCrier
(10/28/1999; 09:52:46 MDT - Msg ID: 17717)
Fed adds $4.530 billion reserves to the banking system via tri-party overnight system repurchase agreements systems
http://biz.yahoo.com/rf/991028/lg.htmlAs analysts expected, the Fed was able to coast during the first half of this two-week reserve maintenance period, but now they've had to come off the bench and get in the game, helping banks turn various collateral into cash.
sherlock
(10/28/1999; 09:53:15 MDT - Msg ID: 17718)
stock/401K/shegold/phaedrus
having been thats a big BEEN an employee of a large fortune 100 company who now no longer exists due to inept upper managers, I found myself in the following predicament some 8 yrs ago. My 401K worth 10's of thousands? reduced to 0. why? because the money in it was a: company stock, b: company donated. my stock options, stock grants, value = 0. Same reasons. The company knew it was going down so it asked us managers to take a pay cut, and the difference was given in stock. We accumulated a chunk. All worth 0. We all thought we were going to be rich! The financial problems would go away, and the stock would go up. WRONG.
20 yrs ago, no one would have ever imagined this company going down. After this happened, I had some serious financial problems, and no "savings" to cover them. I had an IRS levy, which wiped out my wages, and cleaned out a few thou from bank acct. I later straigtened it out, and got my money back from the IRS, but my point is this: lots of americans are in the same boat I was. They think they are rich because they have all these employee benefits, and are too arogant to think anything bad could happen to them. WRONG. I learned a valuable lesson, and learned the value of gold bullion! It survives all of these problems, including levys/garnishments/liens/judgements. I had a friend run a red light on accident, causing an accident. He was sued and lost for 233k more than he had ins for. Guess what? He filed BK, and lost everything. GOld survives that. ITs private, its portable. Its volatile right now, but you dont/wont care if a crisis comes along and you need it. You'll be thankful you had/have it.
TownCrier
(10/28/1999; 09:55:16 MDT - Msg ID: 17719)
That's right...
you can never have too many systems.
;-)
(and they are both Y2K compliant according to the tests we'll be doing next year.)
TownCrier
(10/28/1999; 10:04:43 MDT - Msg ID: 17720)
Yesterday's (Wednesday) forum...10/27/1999
Jeff was notified last night of the problem. If the previous day was any indication, the posts submitted during the downtime were also saved, and should appear with the rest of the day when he arrives to nudge the computer into action. Hopefully!
If not, let me be the first to thank FOA for having saved the day up through the first 145K. When we here from Jeff, we'll let you know if we need you to e-mail the file for the archives.
TownCrier
(10/28/1999; 10:26:14 MDT - Msg ID: 17721)
Morphing into real assets from financial assets...What is Warren Buffett telling us?
http://cbs.marketwatch.com/news/current/erdman.htx?source=blq/yhooPaul Erdman of CBSMarketWatch takes note of Warren Buffett's recent direction of investment choices and says, "Obviously he is moving from financial assets to real assets. In other words, he is pulling in his horns from the stock and bond markets."
Atahualpa
(10/28/1999; 10:41:30 MDT - Msg ID: 17722)
Questions for FOA
First, a word of thanks to this Forum and yourself for merely existing. It has been a long time since I was here, but I have dropped by now and then to reinforce some concepts learned over the last year or so.

Many peruvians are benefiting from this rise in the price of gold. Not only miners and mine workers, but also the general labor force, since the private pension fund's largest equity holding is a local unhedged gold producer.

However, your misgivings regarding the paper gold markets have been nagging me relentlessly over the past few weeks. Do you think it would be a wise idea for peruvian pension funds to lobby for physical gold to be included as an asset class worthy of investment ? Maybe we could buy directly from the local producers. Do you know of any similar experiences ? I would be delighted to hear your thoughts.
TownCrier
(10/28/1999; 10:55:37 MDT - Msg ID: 17723)
Y2K Closing 1,000 Schools
http://currents.net/newstoday/99/10/28/news15.htmlLooks like baby sitters will also be in high-demand / short-supply after year 2000!

John Koskinen, chair of the President's Council on Year 2000 Conversion, said, "A lot of school systems are cutting it very close, a lot of them aren't going to make it and some of them are going to be in difficulty."

Koskinen also pointed out the potential for "loss of a lot of research data" stored on college professors' individual computers.

The Tower wonders...if college prof's can't figure out how to protect their own data, what hope is there for a world run by minions that they trained in the first place?
DD
(10/28/1999; 11:04:29 MDT - Msg ID: 17724)
Sherlock - Growing Experiences
Hi Sherlock - Great post. Right on the money. I, too, have seen many "managers" run companies into the ground, including myself. In my case, I went down with the ship because I owned the company. My current consulting profession allow me to see intimately into companies in trouble. I ususlly don't get hired unless there are real problems and high levels of pain. The two issues that seem to get most companies into trouble are over expansion/leverage and short term, what's in it for me management thinking. What's missing in management is leadership that understands not only numbers, but, more improtantly, how to grow teams and people. Notice what is taking us as a country to the brink. Leverage, debt and what's in it for me thinking IMO. Managers/"leaders" don't care that millions of good people, like you, worldwide are being devastated in order for the big boys to fulfill a never ending need for more $ or power. It's a flawed system that spits out nearly anyone who doesn't think and act in a self-serving manner. My best to you. I'm sure you grew a lot from your difficulties and are a better person for them. Best, DD
USAGOLD
(10/28/1999; 11:52:22 MDT - Msg ID: 17725)
Interesting statement from Normandy's de Crespigny
One our clients faxed over an article from today's Financial Times (London) by Gillian O'Connor with the following opening paragraph:

"Gold remained at just over $290 an ounce at both the morning and afternoon fixings. Robert de Crespigny, chairman of Australia's biggest gold miner, Normandy, attributed the latest fall to bank manipulation designed to protect option exposures."
ax
(10/28/1999; 12:09:56 MDT - Msg ID: 17726)
PROPORTIONAL HEDGING

When evaluating a gold mining company from the standpoint of a good value at a given share price, since Sept. 25 1999, it
is the hedge book which has become a signicant criteria.
Before Sept. 25 in general the larger the hedge book, the better the financial prospects of a gold miner, and since Sept. 25, the more questionable these same prospects.

There are other factors which bear on how much a hedging program should affect the value of a gold miners share price:

1. recent average earnings/share

2. recent average dividend yield

3. the size of the company

The size of the company is very important in that a large
gold mining company, which in recent years has usually contracted certain unprofitable operations, has the capability of re-opening certain previously unprofitable areas of operation. If not that, the larger company has the
resources to relatively quickly expand production by other means: such as acquisition, buying up of minority interests (eg Gold Fields purchasing the rest of St. Helena), construction of new facilities on currently owned properties
etc.

A large company can actually maintain a hedge program which
is not overly large in proportion to the gold mining company's production, and can expand that production to take advantage of higher prices and still maintain certain
hedge obligations at fixed future prices. In other words
it can have the advantage of both, protection on the downside ( as recently we have seen may be prudent) and by expanding production, take advantage of much higher gold prices which undoubtedly will come.

ax
TownCrier
(10/28/1999; 13:39:44 MDT - Msg ID: 17727)
(AP) Many See Lottery As Way to Wealth
http://biz.yahoo.com/apf/991028/savings_po_2.htmlThis headline goes a long way to explaining the prevailing mentality of the population, and the reckless Wall Street investment behavior.

The article says that 27% of Americans believe the lottery holds thier best opportunity to build wealth for retirement rather than a regimen of dutiful, incremental saving and investing. That percentage jumps to 40% among households with incomes of $35,000 or less. I'll tell you what...you earn that kind of cash in a third world country and you'd OWN everything as far as the eye can see. What's with these people??!

"Most people don't have a plan they operate day to day and paycheck to paycheck," said financial services firm Primerica's chairman, Joseph Plumeri.

You've got to read this one. The stats are frightening on the low levels of household savings. And of course, the government's solution to any eventual problem is to make money more readily available. Cash out and "gold in" while you can still get a good exchange rate. Yikes!
megatron
(10/28/1999; 13:48:12 MDT - Msg ID: 17728)
towncrier
In a related issue, listening to business radio in the AM is so innoccuos I can't help but laugh. Especially Bloomberg.
Someone gave a 2 sec. statement about inflation. 2 sec! They didn't say who it was! Why put it on ? Obviously so the sheep will go to work with that blurb in the back of their head. It's getting ludicrous.
TownCrier
(10/28/1999; 14:37:36 MDT - Msg ID: 17729)
Sir megatron
I'd love to share some other thoughts for you, but I've got to be gettin' down to the store for few lottery tickets.

A guy's got to retire SOME day, ya know?
phaedrus
(10/28/1999; 14:41:01 MDT - Msg ID: 17730)
jaw dropper
This article was posted on another site. I don't know how many of you guys have seen it- if it's already been posted here I apologize. When I first read it I thought it was a joke. Then I started feeling sick.


Federal Reserve Wants
Tracking Devices To Tax
US Currency!
By Declan McCullagh
http://www.wired.com
10-27-99

WASHINGTON - US currency should include tracking devices
that let the government tax private possession of dollar
bills, a Federal Reserve official says.
��
The longer you hold currency without depositing it in a bank
account, the less that cash will be worth, according to a
proposal from Marvin Goodfriend, a senior vice president at
the Federal Reserve Bank of Richmond.
��
In other words, greenbacks will get automatic expiration
dates.
��
"The magnetic strip could visibly record when a bill was
last withdrawn from the banking system. A carry tax could be
deducted from each bill upon deposit according to how long
the bill was in circulation," Goodfriend wrote in a recent
presentation to a Federal Reserve System conference in
Woodstock, Vermont.
��
The 34-page paper argues a carry tax will discourage
"hoarding" currency, deter black market and criminal
activities, and boost economic stability during deflationary
periods when interest rates hover near zero.
��
It says new technology finally makes such a scheme feasible.

"Systems would have to be put in place at banks and
automatic teller machines to read bills, assess the carry
tax, and stamp the bills 'current,'" the report recommends.
��
Goodfriend said in an interview that banks might place a
kind of visible "date issued" stamp on each note they
distributed. "The thing could actually stamp the date when
the bill comes out of the ATM," he said.
��
Congressional critics say they would oppose any such move.
��
"The whole idea is preposterous. The notion that we're going
to tax somebody because they decide to be frugal and hold a
couple of dollars is economic planning at its worst," said
Representative Ron Paul (R-Texas), a free-market proponent
who serves on the House Banking committee.
��
"This idea that you can correct some of the evil they've
already created with another tax is just ridiculous," Paul
said. Other economists say a carry tax is not a wise plan.
��
"This is going beyond taxing banks for holding reserves.
It's taxing the public for holding currency too long. That's
even more wild an idea," says George Selgin, a University of
Georgia economics professor who specializes in monetary
policy.


tg
(10/28/1999; 14:41:16 MDT - Msg ID: 17731)
to Luv_G7
I think you've missed my point regarding the intended Swiss gold sales.
What I am asking, is why would the Swiss who I am sure are privy to similar information as FOA (because of their strong connections to the BIS)would want to sell any amount of gold

Would you sell an asset if it was about to become as scarce as hens teeth and go through the roof in price
JCS
(10/28/1999; 14:47:38 MDT - Msg ID: 17732)
Email message from GATA
Came in about 2 hours ago:

Subject:
BULLETIN !!! MIDAS !!! BULLETIN !!!
Date:
Thu, 28 Oct 1999 13:57:14 -0400
From:
LePatron@LeMetropoleCafe.com

Le Metropole members,

>From the horses mouth: As we suspected and alerted Cafe
members: producers are covering some of their forward
sale positions.

It is the Australians. They started last night and are
buying RIGHT NOW. As our source told us, it is the RIGHT
people buying here.

Tomorrow is month end. Word is spreading. "Clean up your
your upside forward sale exposure and get your books in
order." Shareholders do no want even want to think about
more Ashantis or Cambiors.


Dec gold last traded at $301.

All the best,

Bill Murphy
Le Patron
http://www.LeMetropoleCafe.com





TownCrier
(10/28/1999; 15:07:09 MDT - Msg ID: 17733)
U.S. money supply vs. last week
http://biz.yahoo.com/rf/991028/xo.htmlThe Federal Reserve announced these money supply figures versus the previous week:
M-3 rose $14.0 billion to $6,295.7 billion.
M-2 rose $7.1 billion to $4,598.3 billion.
M-1 was down $100 million to $1,096.8 billion.
ORO
(10/28/1999; 15:15:23 MDT - Msg ID: 17734)
Phaedrus
Not a jaw dropper for anybody who takes the funny money as that which it is.

They inflate money anyway, so that through inflation you are forced to deposit money into the bank (or spend) or loose its value.

This just makes it happen more quickly.

I think any attempt to do this will bring large cash users to look to alternative currencies, perhaps gold and silver.

It definitely would cause the cash dollar to loose much of its international use.
JLV
(10/28/1999; 15:17:02 MDT - Msg ID: 17735)
TG
The Swiss gold sales still have to pass voter approval. It remains to be seen if these sales will ever take place.

The Bank Of England has another auction scheduled for Nov. 29th (400 tons).

I believe there is a problem here for BOE. If they hold the sale as planned and it is 12X oversold (as the last one was), the POG will likely go up, and again, the BOE will have sold another 400 tons of The Queen's gold at a pretty hefty discount.

If the BOE cancels the sale, the POG will SURELY go up and BOE will look somewhat foolish. At least they will still have Her Majesty's gold.

Regardless of whether the Swiss and BOE sales go through, the Washington Agreement on gold essentially limits CB gold sales to 400 tons per year for 5 years, counting Swiss and BOE sales already planned. That is a total of 2000 tons over 5 years. Current demand is exceeding supply by roughly 2000 tons PER YEAR, and the longer the POG remains below fair market value, the more demand will outstrip supply.

Nature abhors such imbalances.
TownCrier
(10/28/1999; 15:18:36 MDT - Msg ID: 17736)
The Fed announces U.S. banks free reserves figures
http://biz.yahoo.com/rf/991028/xb.htmlCommercial banks were said to have free reserves of $853 million per day in the two weeks ended October 20, versus free reserves of $1,101 billion in the previous two-week period.
TownCrier
(10/28/1999; 15:22:05 MDT - Msg ID: 17737)
Ahem...uh, JLV?
The Bank of England auctions each move only 25 tonnes at a shot...ballpark 400 total if they see their announced plans through to the end.
ORO
(10/28/1999; 15:25:40 MDT - Msg ID: 17738)
TC m123
http://www.federalreserve.gov/releases/H6/Current/Growth rate is down from 10% early in the year, to 7% now (y/y) and 5.5% annual rates recently.

No wonder they are monetizing.
DD
(10/28/1999; 15:41:24 MDT - Msg ID: 17739)
Bonds/Euros
Hi All - I have a question. My mother has some bonds, both corporate and tax-free governments. With what's going on here verses what is going on in Europe, I was wondering if it's possible to buy bonds demoninated in euros the interest of which can be converted and paid in dollars here in the US? Does anyone know where I can get some answers to this question? Then, all I have to do is convince my hard-headed mother that something she's never heard of is better/safer than those household names in the DOW that have been faithfully paying that 8%. I wonder what the bonds will be worth when things get away from the big $$ boys. Yikes! Also, does this idea of moving from $$ denominated bonds to euro denominated ones have any merit? I may be grasping at straws. Thanks, DD
canamami
(10/28/1999; 15:48:06 MDT - Msg ID: 17740)
Various
To The Stranger: You were right! Dead on! You said it bottomed, just when it bottomed. A direct hit! You is 'da man.

Everyone: A nice rally in the POG, according to Bill Murphy at least partly due to Aussie hedge covering. One question: What happened to the price of crude - i.e., why the fall in crude futures? Does this turn of events for the Fifth Horseman have future consequences for the POG?
JLV
(10/28/1999; 15:50:31 MDT - Msg ID: 17741)
Town Crier
Yes, that should have been 400 total, sorry.
phaedrus
(10/28/1999; 15:54:42 MDT - Msg ID: 17742)
@ORO re jaw dropper
My surprise came more from the audacity of the guy to make a suggestion like that public than the actual proposal of itself.

Combined with the government's open and blatant manipulation of statistics through their changes in how they calculate GDP, today was like a one-two punch for me. I've always known the game is rigged, but up to now they kept their tricks under wraps and behind close doors. Now they're out in the daylight and still no one gives a damn. They're not even trying to hide their activities anymore, they're just telling us that 1 + 1 = 3 to our face and everyone is cheering them for it.
Goldspoon
(10/28/1999; 16:02:33 MDT - Msg ID: 17743)
Goldspoon's Golden Rule....Comes True...
Remember Goldspoon's Rule? "He who has the Gold makes the rules BUT He who has the Might decides what Gold is and Who has it".... The Might that be decided Wednesday's Gold price would be and that The holders of $300 dollar call options would have no Gold!!!!

Score..Gold Knights-1....Black Hearts-1...

Thanks DAVE... Religion and Oil,Politics,Supply and Demand will ALL play a part in Gold's ultimate destiny!!

Gold prices are not set in a vacuum... That! should be obvious to Anyone after the Might flexed their mussels Wednesday...

The Great Gold Wars Have Begun!!!... Bring it ON , i say!!! ..i've got Physical Gold and will Beat it into a Sword!!!! Black Hearts... take Heed..Your Paper will burn in the Fires of Hell!! before this GOLD KNIGHT turns his gold over to the likes of YOU!!!

It is They who drew First Blood, by their greedy Black Hearted Ways!!! Freeeeeedom i Say!!!!! It is not about Gold.. IT never has been... it IS about Justice, Fair Play, Honor and Honest Money!!... It appears the only way that Black Hearted men can be kept at bay, is what Thomas Jefferson knew!!!
"If the Banks ever control the money supply... you will awake one day and own Nothing"!!(paraphrased)
OWN GOLD WHILE YOU CAN!!!! OR YOU WILL... OWN NOTHING!!!
Blow your Trumpets!!(tell the whole world) let every man, woman and child know they have had their heritage stripped by evil men!!! Thomas Jefferson cries from his Grave!!! Freeeeeeeeedom!!!! Awake!!! Arise!!! RE-TAKE our economic Freedom !!!! All we have left of Freedom is the Shell, a Ghost, an Aperition of what our Fore Fathers bought with their Very Blood!!!! JOIN ME!!!! Draw Your Gold Swords and run the Black Hearts thru with the TRUTH!!!! TRUTH will Stand when the World is On Fire!!!!! Freeeeeedom i SAY!!!!!!!!! THE TRUTH BE KNOWN!!!!!
JLV
(10/28/1999; 16:12:05 MDT - Msg ID: 17744)
Let's try this again.

CORRECTION: The BOE auction amounts should have read as follows:


@TG

The Swiss gold sales still have to pass voter approval. It remains to be seen if these sales will ever take place.

The Bank Of England has another auction (25 tons), scheduled for Nov. 29th (400 tons total if all auctions are completed as planned).

I believe there is a problem here for BOE. If they hold the sale as planned and it is 12X oversold (as the last one was), the POG will likely go up, and again, the BOE will have sold another 25 tons of The Queen's gold at a pretty hefty discount.

If the BOE cancels the sale, the POG will SURELY go up and BOE will look somewhat foolish. At least they will still have Her Majesty's gold.

Regardless of whether the Swiss and BOE sales go through, the Washington Agreement on gold essentially limits CB gold sales to 400 tons per year for 5 years, counting Swiss and BOE sales already planned. That is a total of 2000 tons over 5 years. Current demand is exceeding supply by roughly 2000 tons PER YEAR, and the longer the POG remains below fair market value, the more demand will outstrip supply.

Nature abhors such imbalances.

phaedrus
(10/28/1999; 16:27:19 MDT - Msg ID: 17745)
@Goldspoon
Say Goldspoon-

A gold sword would be pretty damn heavy, would it not?
Buena Fe
(10/28/1999; 16:32:39 MDT - Msg ID: 17746)
Soon to be a common pratice!
http://cbs.marketwatch.com/archive/19991028/news/current/futures.htx?source=blq/yhoo&dist=yhooGold futures glitter

Gold futures climbed as Australian dealers purchased the dollar-denominated metal as a hedge against Australia's weakening dollar, according to Alaron.com's senior metals analyst, Dave Meger. See major currencies.

RossL
(10/28/1999; 16:36:17 MDT - Msg ID: 17747)
The Great Gold Wars Have Begun!!!... Bring it ON , i say!!!

Goldspoon, heft that golden sword at exactly 10AM Eastern time, because that's when the evil ones are showing up every day.

Phaedrus, If the Fed implemented the expiring dollar plan, the sheep who now unquestioningly accept green paper money might wake up! It would be a short-lived experiment and a rush to real money.
Horatius
(10/28/1999; 16:45:14 MDT - Msg ID: 17748)
First Post
After reading a number of posts about the euro and the dollar, and the problems of wealth preservation, I wrote a few thoughts of my own to add to the mixture.


In 1958 a prominent American, Robert Welch, made the following
four predictions about our financial affairs:
(1) Greatly expanded government spending, for missiles,
for so-called defense generally, for foreign aid, for every
means of getting rid of ever larger sums of American
money - as wastefully as possible.

(2) Higher and then much higher taxes.

(3) An increasingly unbalanced budget, despite the taxes.

(4) Wild inflation of our currency, leading rapidly toward
its ultimate repudiation.

Robert Welch was able to make these predictions with assurance
because, after many years of research, he knew that there was an
international force of great power and wealth, which Dan Smoot
called the Invisible Government, dominating world affairs while
concealing their existence, and working with patient gradualism to
establish the 200 year old goal of a one world socialist dictatorship,
as well as a one world currency and a one world, atheistic religion.

The first three of these remarkable predictions have been occurring
continually, and with increasing intensity, throughout the 41 years
since they were written, as we all know too well. Now that a
potential competing currency has been created, possibly to replace
the dollar as the world's reserve currency, we may be in the final
stages of the destruction of the dollar, as many of the participants in
the gold forum believe.

Possibly the reason for the European Communities announcement,
limiting the sales and leasing of gold, was to put the world on
notice that they intend to have some gold backing for the euro, and
would support the price of gold to make their 13,000 tons more
valuable for that purpose. If the euro were perceived as a sounder,
more valuable currency than the American dollar, the huge dollar
reserves held in all of the central banks throughout the world would
soon be converted to the euro, and the value of the dollar would
fall rapidly and precipitiously.

In an article entitled "What Is Money", written in 1970, Robert
Welch also wrote the following:
:
"The next and final step in the plans of the Conspirators
with regard to money is undoubtedly to absorb all the
moneys of the world, including the American dollar, into
one international currency. For this would be a mighty
step towards bringing about that one-world slave empire
which the Insiders plan to rule.

"It is our expectation, therefore that somewhere along the
road to repudiation and complete worthlessness of the
dollar the Insiders will offer the American people, and
those of all the other nations that are suffering the same
affliction, the gleaming possibility of accepting a formally
established international currency as a means of achieving
fiscal stability. In the beginning there most probably
would be a gold reserve behind it, or the pretense of one,
so as to make the opportunity so much more attractive.

"But the gold itself will almost certainly be buried away
quite soon in the vaults controlled by the ruling clique.
Redemption of this international currency in gold, or even
any possession of gold by private citizens, will
undoubtedly be forbidden. The same process of stealing
by the one government from all of its subjects, from
dilution of even the supposed value of this currency, will
soon begin again and will be carried out very fast. And in
a comparatively much shorter period of time than it has
taken to ruin the American dollar, the international
currency will lose all real value completely and will
become simply and solely fiat money.

"This will be only one of many means by which the tyrants
at the top will maintain their unceasing and brutal control
over every aspect and activity of the total lives of all the
men and women on earth."

To preserve my wealth, I believe that the best thing to do is to
invest in gold, and I have done so. But I know this will only
preserve it temporarily. The only way to preserve it permanently is
to eliminate the power of the Invisible Government over our affairs,
and restore the system of limited government the Founding Fathers
created for us, exactly as it was in the beginning.

This still can be done, but it will require the prompt awakening, and
arousal to action, of a very great number of somnolent Americans,
because we are now in the 9th inning of this ball game and the
Invisible Government is ahead 100 to 0. Visit The John Birch
Society web site at www.jbs.org to find what you can do to help
the patriotic remnant already working to keep America free and
independent, and secure all of our rights, including our rights to
property, liberty and life. After working in this cause for many
years, I know there is no other way.
Jeff
(10/28/1999; 17:50:22 MDT - Msg ID: 17749)
Yesterday's posts
The posts from yesterday are up. The formatting is very basic. I re-wrote a lot of the code for archiving and for posting today. I'll keep my fingers crossed :-)_
Number Six
(10/28/1999; 17:59:30 MDT - Msg ID: 17750)
Cross Posting from Kitco - The Silvermeister Speaks :)
PANDORA'S BOX

Considering the tumult in the gold market over the past month, a review is in order. It's not often that you see a
major asset class move from a 20 year low to a 2 year high, in a matter of weeks. The fact that it was gold,
arguably the most emotional asset class, added to the drama. And the fact that there was more emotion among
the professional and institutional investment community, including the mining world, rather than among the public
at large was noteworthy. The gold price explosion stemmed from the joint statement by 15 Central Banks that they
were effecting a cap on sales and lending. More on that a bit later, first, let's review.

Over the past six months, I have written a good number of articles whose central theme was the distortions caused
in the gold and silver market by the practice of leasing/forward selling. No surprise there - it's all I've ever written
about on these pages for the past 2 or 3 years. But in the past six months, I embarked upon a campaign of
specificity in the hope of terminating the decade-old downward price manipulation of gold and silver. I figured that
if I could narrow the discussion down to a specific manipulator, I would stand a better chance of exposing and
proving the fraud, than if I continued to analyze on a broad and general level. For the manipulator I chose Barrick
Gold Corp. For good measure, I singled out the Commodity Futures Trading Commission ( CFTC ) as the prime
regulator who was dropping the ball by not ending the manipulation. Barrick was chosen because of their high
visability and rich public record in hedging matters, the CFTC, because their number one mandate is to guard
against manipulation.

When I review the charges and language that I used towards the CFTC, I am somewhat taken back myself at the
force and emotion that I displayed. That subsequent events have justified my rage at the CFTC for clearly evading
their mandate brings very little pleasure. My fervent desire still, is to see them do their job and end the
manipulation. The hallmark of a manipulated market is to suddenly lurch into disorderly trading conditions, just
what we've seen in gold. It will be interesting to see at which point the CFTC can no longer pretend that all's well
in the metals, and enters into the fray. My guess is sometime after the expiration of December COMEX options on
gold and silver, when their short selling benefactors are off the hook. That this key government watchdog has sat
by, while innocent parties and the markets themselves have been irreparably damaged, will be their mark of
shame for years to come.

If you remember, my central theme with the CFTC was that leasing/forward selling was manipulating the market
and simultaneously, destroying the legitimate practice of hedging. In particular, I charged that the selling of more
than one year's production was a specific violation of the Commodity Exchange Act. In spite of my unwavering
conviction that what the mining companies were doing was certainly not hedging - even I was surprised that two
weeks and fifty dollars would see two mining companies, Ashanti and Cambior, effectively go bankrupt. If you think
that is too strong of a word, let's substitute the word "restructuring". Be sure to know, however, that restructuring in
this definition means, "screw the shareholder", a.k.a., bankruptcy. The sad truth is that when the Grim Reaper of
Margin visits each and every one of the short sold miners, it will be the financial interests of the existing
shareholders that will be sacrificed first. Let's face it, in the battle between the interests of the bankers and counter
party creditors aligned against existing shareholders - it's no contest. I would like to emphasize this point - miners
brought to their knees by shorting will not see their reserves in the ground disappear, but the inevitable
restructuring will strip existing shareholders of ownership going forward. What a rotten deal - management and
their bankers blunder badly, and the innocent shareholders are turned into bagholders. That the CFTC blew an
important opportunity to prevent this from happening years ago will serve as further testimony to their failed
stewardship. If the miners were truly hedging, as they contend, and as the CFTC pretends, you wouldn't see
bankruptcies on the first two-week rally. This is anything but hedging. That the CFTC has sat by and let this
happen is shameful. Shareholders who remain passive while their investment is threatened by short selling will be
as rudely awakened as were their counterparts at Ashanti and Cambior. This is not the time to hold mining
companies with open gold and silver short liabilities. Puts, no problem. Forward sales and short call options, big
problem.

Nowhere is the problem bigger, now that Ashanti has been eliminated as a living, breathing short seller, than it is
at Barrick Gold. In their third quarter earnings report and conference call, they confirmed that not only had they not
covered any shorts during the 20 year low prices of the entire quarter, they actually added substantially to their
short position. You have to love these guys - of the 5 or 6 articles I've done on them since May, I've had to revise
their short position higher in each subsequent article. As of 9/30, Barrick is up to 18 million ounces of gold sold
short ( 14 million ozs forward, 4 million calls ) . That is the equivalent of 5 full year's production and 22 per cent of
annual world production. They've increased their short position by almost 50% during the first 9 months of this
year - a year of the lowest gold prices in two decades. While I have no question about it - I ask you to decide if
they have lost their collective mind. To do that objectively, consider my words and actions versus Barrick's words
and actions over these past few months. Then, you decide who's crazy.

I remind you ( although not from any petty human emotion ) , that I wasn't just pounding the table at sub $260 gold.
What I did was much different - at least, I've never seen it done before. This was not just a buy gold or silver
recommendation. What I did was publicly accuse Barrick of manipulation and fraud, in addition to succumbing to
terminal stupidity, in the strongest terms available. I petitioned the SEC, the CFTC, Barrick's auditors ( Price
Waterhouse Coopers ) , Barrick management, and Barrick shareholders and employees. I wrote well over 10,000
words on Barrick on this site alone. To this day, I am amazed they haven't moved against me for libel - but they do
know that the truth is not on their side. What I said clearly was that Barrick wasn't hedging. Selling short five years
worth of production is not hedging. I would hesitate to call it a speculation, as the term in some contexts, connotes
reasoned risk-taking. That Barrick's outsized short was held and added to at 20 year unadjusted price lows,
denotes lunacy. Out of concern to innocent employees and shareholders, I offered the only possible solution -
convince management to immediately cover the short and restore Barrick to the world-class gold producer it is
capable of being.

But this management of Peter Munk and Randall Oliphant ( Barrick's Chairman and CEO, respectively ) , see it
differently. They are addicted to short selling. They hedge with no regard to price. Rather than admit that the $60
gold move cost their commodity account a billion dollars, they are reduced to defending their position by claiming
Barrick's shorts are somehow different than those of other miners. Folks, a short is a short. A naked call is a naked
call. Gold in the ground that will take years to extract, does not convert a naked call into a covered one, no matter
how many times Barrick, or their crooked bankers, proclaim it. They are trapped in what increasingly looks to be
the commodity blunder of all time. Having missed the bottom by a billion dollars, Barrick can't stomach the thought
of admitting they misjudged the market and cover now. This is the real danger to shareholders and employees,
management frozen in a trading nightmare. A rapid move to $500 in gold would equate to an additional $3 billion
hit to their commodity account. What do you expect them to say? Would you expect this - "Damn, that Butler was
right, we should have covered below the cost of production, after all, it was there for four months. This hedging
business isn't panning out like we thought"? Current management has demonstrated that they have no right to run
this company.

This hedging business isn't turning out the way any miner, or investment or central banker, or regulator thought.
And all because of Pandora and her box. Pandora is the joint announcement by the 15 Central Banks on Sep 26
to curb the leasing of gold. As I've written in the past, it's my opinion that the announcement came because leasing
had drained the CB's vaults so dramatically, that they were forced into the statement. But the $60 price explosion
in gold that resulted from the announcement was not in the CB's game plan. This move in gold seriously impacted
the institutional and professional gold world. Using as a naked short position an amount of 500 million ounces ( I
think conservative when including leasing/forward selling, COMEX futures and calls, the much bigger OTC, the
LBMA, and all the gold bank certificates worldwide, etc. ) , the math isn't complicated. For the $60 move, a resultant
loss/gain of $30 billion was created. Thirty billion dollars, in a highly concentrated market, and the only casualties
were Ashanti and Cambior? I don't think so. Losses of hundreds of millions and billions of dollars are littered
among the bullion banks, mines and other counterparties. This is not a guess, this is simple arithmetic. That
someone is keeping a lid on this news is disturbing. It is not possible that there are not money-center financial
firms that have suffered serious losses. Major defaults on physical metal commitments exist just below the surface.
You can rest assured this was not what the Central Banks had in mind when they made their announcement.

What the central banks had in mind was sending a clear signal to the bullion banks and the metal world that
leasing's time was up. It was not physically possible for them to extend leasing indefinitely, so they thought their
disclosure would guide the market accordingly. But what the central bankers misjudged was the fact that there
could be no soft landing at the true end of leasing/forward selling. It either existed, or didn't exist - you're either
pregnant or you're not. There are no degrees in leasing, there are net new leasing supplies coming to market on a
daily basis, or there are no net new supplies coming to market. For a few days after the announcement, there
were no new net supplies of metal coming to market via leasing. That's why the price exploded $60. Afterwards, in
a panic, the central bankers drew back from the precipice and released more leasing supplies, lest the market
start running $60 everyday. So, now we are at a temporary stalemate. But the key word is temporary. For fifteen
years, demons and serpents and vermin in the form of massive gold and silver short positions by the thousands
were stuffed into the box. One or two escaped when the lid was briefly lifted by the CB announcement, before
being shut again. The lid on Pandora's Box, hastily repositioned, is no permanent fix. After all, how many Kuwait's
are out there? How many national treasures can be sacrificed to the leasing gods? In spite of vicious engineered
selloffs, the lid is on for only a short while, not just because the central banks don't have the ability or the will to
continue this stupid and manipulative practice. There's even a better reason why it's all over, but the shouting, for
leasing.

The unreported key aspect of the announcement was to render leasing/forward selling as non-viable to the other
participants in the leasing daisy chain - the miners, bullion banks and other short selling speculators. It did this in
two ways. One, the announcement was a clear indication that leasing supplies going forward were not available.
With the long-term prospect of supplies turned off, plans for new forward and other short selling were abandoned.
Two, the sudden price increase and disasters in the mining world, proved overnight that the one way short sell bet
was the wrong bet. Believe me, of the hundreds of mining companies who hold an open short exposure ( maybe
95% of the mining community ) , there is not one who's prime current focus is not on their short sale. Right now, and
for the immediate future the hedge book will be the only concern. Over night, the perception of what a hedge book
is, has done an about face in every miner's mind. As well it should. Only those miners who move aggressively to
close any and all short exposure will be spared the coming short inferno. Forget about Barrick and any other
stubborn shorts, they're toast. Only a fool will not see that the leasing handwriting is on the wall. So here we have
supply restricted, and the concept of forward sales finally discredited - this is the recipe for a bull market of historic
and violent proportions. It's another way of saying many buyers and few sellers for as far as the eye can see. The
metal excitement has just begun. Because the hedge book question is mostly unresolved, physical gold and silver
are the best bets, by far. Get them now.

In closing, I would like to announce the launch of my new advisory service - Butler Research -
http://www.butlerresearch.com>http://www.butlerresearch.com It's a twice-monthly newsletter and daily commentary on the issues I've discussed
on these pages. It is targeted at the metal professional and substantial investor, and will go much deeper and
stronger into these same issues. I think and hope that I will add value to your effort of rationalizing these markets.
It will be all content and opinion, zero fluff. As you might expect, it will be mostly "outside the box" thinking. The
real test of analysis in the gold and silver markets is not just in recognizing the outstanding value that currently
exists, but in adapting to the historic journey that lies ahead. I think I can assist you on that journey. I would like to
thank Vronsky and Westerman for the opportunity of presenting my opinions here, and intend to continue to
submit articles in conjunction with my new service. Thank you for taking the time to read and think about what I've
written. Good luck to us all.


Ted Butler
October 24, 1999
Number Six
(10/28/1999; 18:23:23 MDT - Msg ID: 17751)
Reemember what FOA said the other day about "self liquidation"... COMEX/LBMA spring to mind...
Date: Thu Oct 28 1999 12:15
ted butler (Another Wonderful Milestone) ID#317184:
Copyright � 1999 ted butler/Kitco Inc. All rights reserved
COMEX Gold open interest for futures and call options combined just passed the 800,000 contract mark - 80 million ounces. Gold thus joins it's brother silver as being only the second commodity in world history to have a published open interest that is greater than world annual production. Of course, silver still holds the record because its open interest is greater than either world production or world inventories. If you think about this for a moment - it is almost a virtual guarantee that the COMEX will fail eventually. You can't have a derivative market bigger than the underlying market - it's not nice to fool mother natural law of common sense.

Try to remember this when the CFTC or the COMEX announces that the shorts can't deliver.
Canuck
(10/28/1999; 18:42:04 MDT - Msg ID: 17752)
Goldspoon
Your post last night was awesome. It's seems that when a critical point is reached with the POG the evil, dark SOB's
move the POG to a price where the SOB shorts can escape.

Yes, Goldspoon, draw your sword and decapulate the heads of the monster, free POG and free the value of gold for it has been controlled by these corrupt villains.
Just Weight & Measures
(10/28/1999; 18:43:02 MDT - Msg ID: 17753)
Number Six #17751
Ted,

I appreciate the commentary and information on Barrick. I sold my shares partly in response to some of your posts. In addition, I learned that Brian Mulroney was on the board of directors for Barrick. His record as the PM of Canada and his association with other scandals is enough to not own shares in any company that he is a board member of.
sourdough
(10/28/1999; 18:54:01 MDT - Msg ID: 17754)
nessage 17750 comments on Barrick (Munk)
What I find interesting about Barrick`s (MUNK) GOLD SALES PROGRAM. It must have been determined that the price of gold would continue to fall (it did), also lease rates would be low.
The interesting part,with BARRICK (MUNK)so sure of falling gold prices, how could he possibly resist taking advantage of the gold carry in respect to TRIZEC HAHN ,his real estate business, which also happens to hold 30 million Barrick shares. I would think consideration would have been given by TRIZEC`S BOARD, in light of Barricks program ,to borrow gold,on real estate collateral, sell it pay of mortgage debt, and be left with interest costs of more like 1 to 1 and1/2 % (lease rate). Also I suppose it would be necessary to purchase some gold calls just in case. How many gold calls was it Barrick sold, by the way.
Anyway, what do I know, just wondered how Munk could resist an opportunity to use a play like that in his "pride and joY" TRIZEC HAHN. Especially in lite of the "going private" rumors in the press a couple weeks ago.3rd quarter conference call on results and future strategy for Trizec next week, could be interesting.
Canuck
(10/28/1999; 18:57:02 MDT - Msg ID: 17755)
Barrick
Thinking out loud
Is there any possibility that Barrick and/or any other 'super-hedger' flooding the market? When does Dec. Comex expire? What or who is going to 'supply' to bring
the Dec. Comex 'in-line'?
Canuck
(10/28/1999; 19:05:54 MDT - Msg ID: 17756)
POG
From my observations:

Of the 24 trading days since the Sept. 26 ECB annoucement
gold has dropped (9:00am EST-4:30pm EST) 15 times.

What is New York doing?
Just Weight & Measures
(10/28/1999; 19:25:44 MDT - Msg ID: 17757)
@Goldspoon #17743
Ladies and Gentlemen,

I'de like to draw your attention to Goldspoon's 17743 post and nominate it for the Hall of Fame. Goldspoon, in an indignant and chivilrous manner draws attention to the heart of the matter. "Its not about Gold.... It never has been... It is about Justice, Fair Play, Honor and Honest Money!" Bang on Goldspoon. Not an dry intellectual analysis (they have their place), but rather an emotive call to action to all you knights and ladies out there. May the black hearts who continue to promote fiat paper money, who continue to violate the eighth, burn with their precious paper in hell.

megatron
(10/28/1999; 19:37:35 MDT - Msg ID: 17758)
Ted Butler article
Ted, your way too rational, pal. Those commodity police are no different than ANY and EVERY stupid, lazy, gov't employee. The odd's of them correctly assessing, let alone correcting the situation are NIL. The ironic beauty of their stupidity is that we'll be laughing our ass's off in a tax shelter before they stop playing minesweeper and read about it in a newspaper! Your article is too real and perceptive.
You need to use words like paradigm and wellness and sharing way more to interest anyone in gov't in your opinion.
Rhialto
(10/28/1999; 19:54:37 MDT - Msg ID: 17759)
Canuck/Barrick hedge
I also wonder about the Dec option expiration, altho if yesterday's manipulation by the BOE is a clue we don't really have to wonder.
I have a question. In 1997 Barrick forward sold at $420 an ounce. I recall a similar above market price forward sale announcement sometime this year. I think that there must be some additional consideration by the purchaser than just simply the right to buy at an out of the money price. I think the answer may lie in the language of a producer forward sale contract. Do you know where a copy of one of these is? On the web?
SteveH
(10/28/1999; 20:09:38 MDT - Msg ID: 17760)
Incredible
is all I have to say about this...at a time when we are scraming foul they just don't get it?

Date: Thu Oct 28 1999 21:29
AzusaGold (New CFTC Head Plans Fewer Rules on Financial Futures) ID#255250:
Copyright � 1999 AzusaGold/Kitco Inc. All rights reserved



Chicago, Oct. 28 ( Bloomberg ) -- Regulation of financial futures contracts traded on U.S. exchanges must be reduced, the government's chief regulator of those markets said, signaling a dramatic shift in his agency's role.

The Commodity Futures Trading Commission ``must embark on a process that may result in major deregulation of the financial futures markets, beginning with those contracts that compete directly with ( over-the-counter ) derivatives,'' William J. Rainer said today in his first major speech since becoming chairman of the commission.

His comments answer complaints by the Chicago Board of Trade and other U.S. exchanges that government regulation of their markets gives an advantage to electronic trading systems and over- the-counter derivatives, which are growing as the trading volume at some exchanges shrinks.

Futures lawyers at a conference sponsored by the Chicago- Kent College of Law welcomed Rainer's remarks as an insightful proposal to reform archaic laws, while noting that a lot of problems remain to be resolved. For instance, futures investors and brokers, such as Morgan Stanley Dean Witter & Co., have said the government needs to make sure exchanges put customers first, rather than members.

``He's captured a very tortured history and simplified it in a way that will help the industry move forward,'' said Ken Raisler, a partner at Sullivan & Cromwell in New York. ``There are a host of problems and there are a lot of details to be worked out.''

CBOT Applauds

CBOT President Thomas Donovan applauded Rainer's ``progressive vision'' for regulation of futures markets. ``The principles of fairness and efficiencies Chairman Rainer embraces are the foundation of the regulatory reform guidelines the CBOT has proposed for the last 10 years,'' Donovan said.

Under Rainer's plan, which will be formally proposed for comment in a few weeks, exchanges could introduce new contracts and rules without government approval, he told his audience at the conference. Right now, the commission must approve any new contract or exchange rule, which can take from 10 days to a year.

In addition to helping established exchanges, the reduced rules will lower the barriers for new exchanges and increase competition in the futures and derivatives markets, Rainer said.

Commission officials will examine ways to further deregulate financial futures, which are less prone to manipulation than commodity futures, he said.

The convergence of the over-the-counter swaps market and the financial futures markets has created legal uncertainty in the OTC market and has ``distracted us from the task of reforming regulation of the futures markets,'' he said.

Over-the-counter derivatives, like futures, are based on an underlying commodity, security, index, currency or other asset. They are traded by banks and other institutions without government regulation.

Legal Certainty

The government must restore legal certainty to OTC derivatives, which should not be covered by the futures laws, Rainer said. A report on derivatives from the President's Working Group on Financial Markets, expected in early November, will address how to do that.

Congress is also examining how to rewrite the futures laws to reduce burdens and ensure legal certainty for derivatives, a project lawmakers will take up next year. Rainer's predecessor, Brooksley Born, sparked opposition on Capitol Hill and Wall Street last year by starting a review of derivatives regulation, which critics said increased legal uncertainty.

The CFTC's priorities are also ``to enhance economic efficiency and competition, . . . to encourage innovation in technology for the markets,'' and to reduce systemic risk, none of which are being met now, Rainer said.

For instance, the agency should encourage clearinghouses for the OTC derivatives market, he said.

The old reasons for regulating the futures markets don't apply to financial futures, he said. Those, found in the law governing commodity exchange regulation, are to protect the ``price discovery function,'' which establishes a price for a commodity; to prevent manipulation; and to ensure that investors have a way to transfer risk.

Financial Futures Are Different

``One of the fundamental shifts the CFTC needs to make is to recognize that financial futures are not the same as metals futures, energy futures or agricultural futures,'' Rainer said.

One conference attendee said it's increasingly difficult to distinguish between financial futures and commodities.

``These distinctions are artificial,'' said Gary DeWaal, general counsel at Fimat USA Inc. ``The march toward eliminating distinctions between products will accelerate.''

For instance, traders sometimes take simultaneous short and long positions in gold futures, meaning their profits depend on interest rates, not gold prices, DeWaal said.

There are difficulties in letting exchanges set their own rules, said John Davidson, a managing director at Morgan Stanley. Futures brokers would like to make trades away from the exchange floors, although exchanges won't allow it, he said.

``The existing exchanges have an oligopoly,'' Davidson said. ``I'd be more comfortable in freeing them up for approvals for new rules if they didn't have this oligopoly.''

Overall, the conference participants praised Rainer's willingness to make sweeping changes.

``This man has all the right intentions,'' said Jane Kang Thorpe, of Orrick, Herrington & Sutcliffe in Washington.

Tanglewild
(10/28/1999; 20:15:42 MDT - Msg ID: 17761)
dates-options, futures
Here's a few dates for ya...
Last trading day for Nov. GOLD futures is Nov.24th
Last trading day for Dec. options is Nov.12th
Last trading day for Jan. options is Dec. 10th
Last trading day for Dec. futures is Dec. 28th
SteveH
(10/28/1999; 20:16:36 MDT - Msg ID: 17762)
humor
www.kitco.comrepost:

Date: Thu Oct 28 1999 20:15
Retch (Gold manipulation) ID#37056:
Copyright � 1999 Retch/Kitco Inc. All rights reserved
I know that you guys have never seen me type here before but I decided that I can't keep it from you any longer. I am the one that has been manipulating the price of gold. The last time I put in an order for gold the next day it jumped up $60. Since then a few things like my car note and my girlfriend has been keeping me from driving the price up again. I know you think that I am a legend in my own mind but hear me out. Every time I buy the price goes up. So I will put in an order for a few ounces of Pandas tonight and the Hong Kong market is going to soar!! Later I will probably purchase some sovereigns just to screw over the BOE!! That'll learn em. Also with risk to making my rent payment, I will wipe out the warehouse at comex. I do this for the good of all you gold bugs. I just hope my girlfriend doesn't want to go anywhere tonight. Alas I believe that with every ounce I purchase, that is another ounce I have screwed the shorts out of. Until I discover otherwise, I am the manipulator of gold, I don't want to hear stories of the cabal or how your chart is waving at you!! Follow me my friends and buy all you can today, because we are going for a ride tomorrow.
YGM
(10/28/1999; 20:46:28 MDT - Msg ID: 17763)
My Best Unread Mail----After being away for a few days----
GO GATA & Bill Murphy, "I received a phone call late today from one of the
United States' foremost attorneys. This distinguished
individual was formerly with the Justice Department.
His partner used to be affiliated with one of the
regional Federal Reserve Banks. All I can say now is
that they told me they are fed up with the manipulation
of the gold market and they want to know how they can
help get this out into the open. In my role as
Chairman of the Gold Anti-Trust Action Committee,
I am going to meet with them in the very near future."

Le Metropole Caf�

All the best,

Bill Murphy
Le Patron
http://www.LeMetropoleCafe.com
Solomon Weaver
(10/28/1999; 20:59:50 MDT - Msg ID: 17764)
technical request
Request to some of you old-timers on this forum

When someone references a post by number, is there any way to access it in the archives?

In addition, does this forum have any type of search functions, for example allowing one to search for all posts made by a given author?

Poor old Solomon

17743
SteveH
(10/28/1999; 21:05:01 MDT - Msg ID: 17765)
Solomon
No there is no way I know to search and you must just keep going back to a date and narrow it in as best you can. Good luck.

This just in a repost from kitco:

Date: Thu Oct 28 1999 22:58
AzusaGold (Greenspan Warns on Inflation, Productivity) ID#255250:
Copyright � 1999 AzusaGold/Kitco Inc. All rights reserved
By MARTIN CRUTSINGER
.c The Associated Press

WASHINGTON ( Oct. 28 ) - The U.S. economy has benefited in recent years from a significant upturn in the growth of productivity which has helped keep inflation under control, Federal Reserve Chairman Alan Greenspan said Thursday.

But Greenspan warned the Fed must be particularly alert to any signs that productivity gains are faltering and be ready to contain inflationary forces that could derail America's long period of prosperity.

Speaking to the Business Council, made up of chief executives from some of America's largest corporations, Greenspan did not directly address whether the central bank was preparing to raise interest rates when policy-makers meet again next month. But he left no doubt that Fed officials are on heightened alert.

He said the extra vigilance was needed in part because the U.S. economy was in uncharted waters with productivity - the amount of output per hour of work - accelerating in recent years after two decades of lagging gains.

Private economists said Greenspan gave no clear signal in his remarks about what the central bank may do next. Some noted that Greenspan did discuss the fact that long-term interest rates set by market forces have already risen this year and this increase could be working to slow economic growth.

''This process of containment may already be significantly advanced,'' Greenspan said in citing the impact higher market interest rates could be having.

But other analysts said Greenspan did not seem to be closing any options, either in raising rates or leaving them unchanged, and much will likely hinge on upcoming economic reports between now and the November Fed meeting.

''I think Mr. Greenspan still views the risks as tilted toward the upside with the potential for higher inflation still there,'' said David Jones, economist at Aubrey G. Lanston & Co. in New York.

The higher U.S. productivity growth has allowed the Fed to let the economy grow at faster rates without worrying about inflation sparked by rising wage demands.

If workers are more productive, then employers can afford to pay them more for the increased output without being forced to raise product prices.

Greenspan linked the upturn in productivity in recent years to the massive amounts of spending businesses have done on new types of equipment and innovations to keep ahead of the competition.

''But how long can we expect this remarkable period of innovation to continue?'' Greenspan asked in his prepared remarks, copies of which were made available in Washington.

''A leveling out or decline in the growth of productivity would have a profound effect on the intermediate outlook should it occur,'' Greenspan said. ''The rate of growth of productivity cannot continue to increase indefinitely. At some point it must, at least, plateau.''

When that occurs, Greenspan warned, the current tight labor market could quickly translate into inflation pressures if wages continue to rise.

''That scenario of rising cost and price pressure is one policy-makers have dealt with before, and the actions called for, while by no means easy, are readily discernible,'' Greenspan said - in an obvious reference to the Fed's ability to slow economic growth by raising interest rates.

On previous occasions, Greenspan has said the Fed is ready to move promptly at the first sign of accelerating price pressures to raise interest rates to slow economic growth to a more sustainable pace.

The Fed has already raised the federal funds rate, the interest that banks charge each other, twice this year and many economists believe that a third rate increase will occur when Fed policy-makers next meet on Nov. 16.

Greenspan suggested that a rise this year in long-term interest rates, which are set by market forces, may already be working to slow economic growth and relieve some demand pressures.

''Going forward, the Federal Reserve must monitor not only this response, but also the evolving capacity of our economy to meet higher levels of demand,'' Greenspan said.

''Maintaining balance between these forces will be essential to preserving the stable price environment that has provided a firm foundation for this period of extraordinary innovation and progress in the U.S. economy,'' he said.

AP-NY-10-28-99 2108EDT
Rhialto
(10/28/1999; 21:08:01 MDT - Msg ID: 17766)
Barrick hedging
Help. I am trying to understand mine hedging. If a mine forward sells gold production for the year 2001 at a price significantly higher than todays market price, this could mean that someone is willing to pay a premium for right to buy the gold plus "interest". But could it also be a premium for the committment because the purchaser is able to lend/sell the same gold more than one time. Is this the reason for the premium over spot? I read once that bullion banks lend the same gold up to 10 times, and "buy" insurance to cover the acturarial risk of default. Is this the pressure in the Ashanti/BB situation, and if so, is the BB's liability 10(+/-) times Ashanti's? Thanks
SteveH
(10/28/1999; 21:16:35 MDT - Msg ID: 17767)
Deadly Force and protecting gold
I was reading a brochure from Florida's Div. of Licensing re: deadly force.

It doesn't mention gold or protecting it but does say:

Florida law justifies use of deadly force when you are:

-- tring to protect yourself or another person from death or serious bodily harm;
-- trying to prevent a forcible felony, such as a rape, robbery, burglary or kidnapping.

Retreating appears to be a necessary first step in any use of deadly force of self-protection. It cites examples of where one didn't run or retreat or try to run or retreat and the persons went to jail. An important concept. They speak of the Castle doctrine that says the home or work is an exception and you don't have to flee as long as you are in danger of death or great bodily harm or you are preventing a forcible felony. They used an example where a fellow argued with his neighbor in the hallway between apartments. Even though the fellows foot was in his door, he was convicted of manslaughter as he should have tried to enter his apartment and close the door. A car was not a Castle for purposes of the law. Interesting concept that one would hope never to use in protecting gold.

BTW, Florida allows a permit for anybody who is a US Citizen not just a Florida citizen.
SteveH
(10/28/1999; 21:27:38 MDT - Msg ID: 17768)
repost of a repost
www.kitco.comDate: Thu Oct 28 1999 23:11
AzusaGold (Ghana President wants role in Ashanti future -- FT) ID#255250:
Copyright � 1999 AzusaGold/Kitco Inc. All rights reserved



LONDON, Oct 29 ( Reuters ) - The President of Ghana, Jerry Rawlings, wants to play a leading role in determining the future of Ghanaian mining company Ashanti Goldfields Co Ltd, the Financial Times reported on Friday.

In written answers to questions from the paper, Rawlings said: ``As a government we are concerned that in resolving its current problems we should protect the national interest against those who would want to collaborate to manipulate such situations to their advantage.''

The government of Ghana owns 20 percent of Ashanti, which has been facing financial instability following recent rises in gold prices. Its troubles stem from margin call obligations or sums to be paid to counterparties when gold prices fluctuate.

Ashanti, the object of an $800 million bid from British metals group Lonmin Plc, is engaged in talks with its counterparties in a bid to unwind hedged gold positions.

``The gold of Ashanti is a symbol of our national sovereignty and we will not do anything that is tantamount to a betrayal of posterity,'' Rawlings added.

Three other gold mining companies -- Placer Dome Inc of Canada, and AngloGold Ltd and Gold Fields of South Africa -- are also believed to be interested in Ashanti.

21:52 10-28-99

Copyright 1999 Reuters Limited.
law
(10/28/1999; 21:29:30 MDT - Msg ID: 17769)
Canuck, Rhialto, Ted B, Megatron, Steve H, FOA
Trying to catch up on reading posts...very interesting, but very time consuming!

If Barrick sold forward at $420 an ounce in 1997...
1. If they sold call options...
a. How many could they have sold, because the highest
gold price was around $350 at the beginning of the
year and ended at $280--that far out of the money
would not have brought them much per option!
b. And who would have bought that many at that price?

2. Did they buy "puts"? Expiration?

3. If they contracted with a Bullion Bank(BB)(Goldman
Sachs)...I agree, an example of a forward contract
would be interesting to see.

Ted B...Terrific!
Megatron...Well said!
Steve H...Thanks for the humor!
Just Weight & Measure...I'll second your nomination for
Goldspoon's Msg.#17743...If there's a section for emotive
expression...
FOA...Thank you for your continuing updates and assurances!


Question: If any one may know...at what strike price are most of the nearby call options sitting now?
PH in LA
(10/28/1999; 21:40:00 MDT - Msg ID: 17770)
Looking for the light
"Date: Thu Oct 28 1999 19:56
Isure (@ Greenstone Gold) ID#368244:
Thats a very frightining article by Butler, but something is wrong... thats fer sure... looks more and more like ( boy am I gonna get blasted ) that Another guy just might know of what he speaks..."


The handwriting on the wall gets clearer and clearer! Even the most mindless critics from the old days when Another was driven off the Kitco forum are starting to see the light. Well, it was bound to happen sooner or later.

Speaking of lights: Until FOA (or ORO, Aragorn, SteveH or anyone else) offers a better explanation for the recent action in gold, it sure looks like the idiots who sold 3 million ozs of $290 calls have won themselves a battle, even as they march stupidly towards total loss of the war.

Was it mere cooincidence that gold fell relentlessly day after day with the biggest push downwards just hours before expiration to close within pennies of $290? Just in time for the expiration! Did the perpetrators of what surely must rank as one of the greatest follies of all time feel anything but stupid as they leased and sold the Kuwaiti's gold like there was no tomorrow, just to get out of the consequences of their greedy selling of calls at $290 ? Well, I hope they did, because all those sales must be covered sometime. What do they have planned for that day? Or do they just figure they will all be in jail before then?

The war will never be won this way!

No, their blatantly obvious manipulation leaves them with both feet shot right off. Who could possibly take their stupid options seriously after this? Only a greater fool! Buy options in a supposed "market" environment in which the sellers have the power and means to manipulate those options into expiring worthless, no matter what the laws of supply and demand dictate? Who are these guys, anyway? How did they get to be so stupid? Or were they just born that way?

So we take another giant step towards Another's forcasted breakdown of the dollar-denominated world gold market system...

(In the words of FOA) "On the road..."
Chicken man
(10/28/1999; 21:46:42 MDT - Msg ID: 17771)
law - take a peek at the #'s
http://optionsanalysis.com/inewf.htmEnjoy...!
TownCrier
(10/28/1999; 21:48:15 MDT - Msg ID: 17772)
After the Close: the GOLDEN VIEW from The Tower
Americans love to take chances on the longshot. Either that, or else we are disturbingly deficient in practical financial sense. Maybe both? A survey released today by the Consumer Federation of America and the financial services firm Primerica indicated 27% of Americans believe their best chance to obtain $500,000 in their lifetime is by winning a lottery or sweepstakes. The survey revealed that fewer than one-third of those polled by phone (1,010 Americans 18 and older--conducted July 22-25--margin of error +/- 3%) could imagine that $25 invested weekly for 40 years at 7% would exceed $150,000. (In fact, it would total $286,640.) Primerica Chairman Joseph Plumeri concluded from the poll, "If Americans understood that their chances of winning a big lottery jackpot were 10 to 20 million to one, but that they could accumulate hundreds of thousands of dollars through regular saving, more families would put $50 away rather than spending it on gambling or unneeded consumption."
+
Only 47% of those surveyed believed that saving and investing some of their income was the most reliable route to wealth. Can you believe that?? A companion study of household wealth was also released with these survey results that was made from an analysis of the latest Census Bureau data (1995). The study seems consistent with the attitudes of those polled. It found that the median savings of American families was only $1,000 when adding the values of bank accounts, stocks, and bonds, while subtracting household debts such as credit cards. (Values of home equity, mortgages, or pension/retirement plans sponsored by employers were not included.) CFA's executive director, Stephen Brobeck, said banks and brokerage firms are partly to blame that many Americans don't realize even small amounts of money can be beneficially put aside. "There are decent savings options out there for any household." He said further, "There are a number of households that will have a very difficult time under any scenario," but that "in every income class there are savers and there are spenders ... there are still, even in the lower-income classes, a minority who save and accumulate wealth."
+
Unfortunately, the survey stopped where it did. It would have been interesting to see what majority feel that gold is a luxury item only available to the wealthy. That seems to be a common perception we encounter. But just as Mr. Brobeck says savers can be found even in lower-income classes, we need to look no further than World Gold Council statistics of various Banana Republics and underdeveloped nations to confirm that even these people see the importance of savings, and manage to accumulate gold as a store of wealth...immune to national currency devaluations. Focusing on the 1,000 dollar figure as the median hosehold savings, we wonder how many American households can boast of a modest collection of ten gold sovereigns? In attempting to steer a sensible course through financial decisions, it seems our nation has collectively lost its rudder.

We offer those stats and thoughts in an effort to explain the sense in investors' decisions that result in a 227 point gain for the Dow Jones Industrial Average (+2.19%), a 73 point gain on the Nasdaq Composite index (+2.59%), and a whopping 46 point gain to the S&P 500 (+3.53%). There is no fundamentally sound concept that you're missing...it is merely a gambling mentality, just like the lottery. Millions play the lottery...one person wins.

At 1,124,683,000 shares traded on the NYSE, this was the fifth-heaviest volume day ever. At 1,248,976,000 shares, this was the 10th heaviest for the Nasdaq. In a quick look at other indices, the Dow Jones Transportation Average gained 3.2%, and the Dow Jones Utility Average gained 1.3%. Joining the party was the 30-year Bond, gaining a point in price to 98-9/32, dropping the yield to 6.243%. Today's gains to stocks and bonds all came early on the release of GDP and ECI data that did not reveal anything more shocking than analysts had forecasted. Once these gains were attained, the rest of the day was spent on the high volume exchange of shares with little additional price movement. And even on this euphoric day where NYSE advancers swamped decliners by 2,365 to 1,643, new 52-week lows still beat new highs by 135 to 75. Analysts shook their heads at the markets' response to today's economic data, and remained firm in their belief that the Fed would in fact be hiking interest rates at their November 16 meeting of the Federal Open Market Committee.

Moving on to derivatives, this was our best find of the day... FWN reported that William Rainer, chairman of the Commodity Futures Trading Commission told reporters after a speech for the Commodities Law Institute that the CFTC was now "very close" to issuing for public comment new rules that would allow futures exchanges to adopt new bylaws and new contracts without the need for prior CFTC approval. Rainer, a former bond trader (the first CFTC chairman in years with direct market experience), shared his vision that the CFTC should evolve into a less intrusive regulator of US futures markets. This is what makes this our best find of the day...
+
In his speech, Rainer emphasized that "the CFTC should treat financial futures in a fundamentally different way than
futures based on metals, agriculture or energy." Further, FWN wrote:
----He said he was skeptical that the "remote possibility of manipulation" justified the current level of regulation for financial futures. He also said that financial markets did not rely on financial futures for price discovery, which is one of the fundamental principles of US futures regulation.----
+
Why do we find this important? Because it is yet one more voice (an informed authority, no less!) telling you that "price discovery" on metals, agriculture, and enery is determined on the futures markets (supply vs demand of contracts between long and short postion-takers). He contrasts this with the huge financial markets in which the direct trading of bonds provides for the price discovery that sets the tone for the futures markets. Understand? Good, because it is an important concept to grasp, especially when the physical reality of an oil or gold market may be on the verge of moving to the forefront in the price discovery role. That's what we mean when we refer to "street price" (as in Main St., not Wall St.) for real gold, versus the current price-setting "trader's price" for gold derivatives. This will seem very apparent when you read our more thorough oil report today...served up precisely to show this point.
+
This might also help you see things a bit more clearly. CFTC chairman Rainer was asked for his view on the Shad-Johnson Accord which is a law that prohibits U.S. futures exchanges from listing futures contracts on individual stocks. He said there were "large, difficult and complicated" regulatory issues to work out, meanwhile the U.S. securities exchanges and the SEC are "very much opposed to the idea of permitting single stock futures." Think about that. What legitimate purpose would be served by having futures contracts on IBM or Microsoft stock? Although some may disagree, The Tower feels this same opposition should hold true for gold...no need for a futures market. All price discovery operations should involve real gold changing hands...otherwise, the parties would not even be recognized as participants in the gold marketplace.

This will make you smile, as we turn to Bridge for their daily chat with the familiar faces. Gold was up nicely today, and the spot price on gold was last quoted in NY at $298.40, up $6.20 per ounce...

NY Precious Metals Review: Dec gold up $6.2 on fund buying
By Darcy Keith, Bridge News
New York--Oct 28--COMEX Dec gold futures settled up $6.2 at $300.4 an
ounce after trading in a wide range of $294.8-$303.0. Dec gold hit its
highs overnight on Australian producer buying before retreating in morning
COMEX trading, traders said. The contract later regained its luster on
late afternoon fund buying to close not far from the highs for the day.

The late burst of fund buying was said to be linked to thoughts that
more producer buying would emerge overnight.

With gold's recent downturn below the $300 level, producer buy-back
activity has increased, traders said.
"With gold at $286, producers were given the opportunity to cover
their positions and a series of buy-backs followed," one trader said.
"This puts gold in limbo, however. We will see more producer selling
at over $300 from those who had not been facing problems with their
hedging positions, while at below $300 we will see producer buying from
those who have exposed positions," he added.
The broad trading range today was linked in part to a pick up in
options volatility, with good interest seen in calls above the market,
said sources.
"Gold was very well supported by the trade on the breaks today on
COMEX," said Bill O'Neill, director of futures research for Merrill Lynch.
He said gold showed impressive resilience in the face of today's
weakness in oil prices and a tame US Employment Cost Index report, the
broadest measure of wage, salary and benefit costs. The ECI rose by 0.8%
in the third quarter, well below the 1.1% increase in the second quarter
and less than the 0.9% increase that economists had expected.

"The market is still concerned with the tightness scenario, and this
was reflected in the interest in options above the market," said O'Neill.
"It's all part of the process of moving into a higher trading range."

Doris Hildebrandt, gold dealer with the Toronto Dominion Bank in
Toronto, said "the funds are really getting behind this now," but added
that $299-302 will be pretty tough resistance for spot gold. Following
that, $305 and $308 will be resistance levels to watch, she said.
But other traders contend that breaking through chart points is no
longer an obstacle for gold.

"It's running through technical support and resistance levels like a
hot knife through butter," said Leonard Kaplan, chief bullion dealer with
LFG Bullion Services.

One-month lease rates are remaining at just above 1%, sources said,
although some suggest physical demand is starting to pick up amid this
week's lower prices.

[For what it's worth, you'll want to notice the near 1% jump in gold lease rates for the 2-month time period while all others remained close to even on the day...]
1-month 1.3100% (-0.098)
2-month 2.3530% (+0.843)
3-month 3.2050% (-0.006)
6-month 2.9830% (-0.057)
12-mnth 3.1500% (-0.005)

Kaplan suggested that gold was poised for an upturn. "There's a sense
of firmness in the market," he said. "There are major shorts out there and
they will have to cover on the dips in the market."
In the news, Canada's Cambior said it has entered into a standstill
agreement with its hedging counterparties and lenders. The financial
parties have agreed to defer Cambior gold delivery obligations under all
hedging contracts maturing during the standstill period.
***
(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.

[[[[[[[[At end of trade Tuesday, the open interest on October futures increased by 2 contracts to 112 on volume of 15. December open interest increased by 12,678 on volume of 57,140 to 109,760 contracts. Total COMEX futures open interest increased yesterday by 13,492 on volume of 63,905 to 217,916. ]]]]]]]]

Today was an active one of reshuffling at the COMEX gold depositories. Yesterday marked the last trading day on the October contract with today being the final notice day, tomorrow the deadline for delivery. Of the 109 contracts that were still in open interest as of yesterday, they all opted for physical rather than cash settlement, bringing the delivery intentions for the October futures to 2,626 contracts (262,600 ounces). The metal was moving at the COMEX vaults to be sure. First of all, 22,702 ounces of Eligible gold inventory housed as Scotia Mocatta was transferred to Registered inventory. Then, 65,364 ounces were withdrawn from their Registered stocks and trucked through the fresh autumn air and sunshine to be received at the sister depository at Republic National. So after all was said and done, and all the sore backs were tended to, there was no net change in weight under COMEX guard, though the owners have surely changed on some of these 878,411 total ounces.

At yesterday's close of trade, there were 14 November contracts in open interest, and 107,897 December contracts yet to be settled.

And finally, to help you see how the market forces within the futures markets provide for the price discovery with little regard for the real, underlying commodity/asset, here is an unaltered excerpt of the Bridge Oil report...

NYMEX Oil Review: Crude plunges 5.4% in technical sell-off
By Mary Chung, Bridge News
New York--Oct 28--NYMEX energy futures tumbled in a technical sell-off
today with Dec crude plunging more than $1.00 to an intraday low of $21.63
and extending four sessions of losses. Dec crude settled down $1.24 at
$21.68.
After three disappointing closes, participants lost patience and
confidence in the market as 3 waves of selling pushed Dec crude down to
its lowest levels since Oct 12.
"You saw the disintegration of the market today," a broker said. "Lots
of stops were triggered."
Dec crude tumbled early after breaking through support at $22.50,
which sparked the first round of selling. "We knew we were going to be in
trouble when it broke through that level," a broker said.
The second wave of selling proved to be even more violent, with Dec
crude plummeting to $21.80.
"The sky was falling. There was just a lot of selling today on
technicals.
You had guys pushing this market down," a broker said. "The second wave of
selling came below 22.45."
Near the end of the session, the Dec crude started to crumble again,
breaking through $21.80, which triggered more stop-loss orders to sell and
helped dragged down the complex.
***
(c) Copyright 1999 FWN Reprinted at USAGOLD with permission.

Paper is only paper. Reality, anyone?

And that's the view from here...after the close.
Black Blade
(10/28/1999; 21:51:32 MDT - Msg ID: 17773)
Tomorrow is the anniverary!
s&p futures +6.00 and Au down -0.40. Looks like tomorrow might be an up day for the markets if these numbers hold. Also tomorrow is the 70th anniversary of the "Big One" on Wall Street" when the DOW plunged 12% on "Black Tuesday" on Oct. 29th, 1929. With the "repeal" of Glass-Steagal", this re-opens a can-o-worms that led to the great depression. Just a little something to sleep on tonight. Interesting though isn't it? the POG goes down just before expiration of option on wednesday, relieving the counterparties of theirs "problem" of coughing up 5.8 million oz. of Au, and the day after the POG rises over night to about $300. Coincidence? I think not! Where is the CFTC? hmmmmm......
law
(10/28/1999; 21:53:42 MDT - Msg ID: 17774)
FOA...Question!
As a history, psychology, and geography teacher, I enjoy your philosophical posts immensely...I have come to believe the "western mind" has come to be much to arrogant and dispassionate toward what is occurring in the rest of the world...I agree with Goldspoon...it's not just about gold.

Anyway...to the question: Do you believe that if someone has the financial resources (given your stance on "paper")that it would be advisable to purchase options with the intent to exercise, if in the money, in order to keep pressure on "shorts"?

Strive for a compassionate world!
Tanglewild
(10/28/1999; 21:54:47 MDT - Msg ID: 17775)
Law
Strike prices in Dec. gold call options are in $5 increments from $220 to $355 (10 dollar increments before and after that). the closest now being the $300 as the last tick it was $300.80
hope this helps
tw
Tanglewild
(10/28/1999; 22:05:28 MDT - Msg ID: 17776)
Black Blade
I believe the CFTC is having dinner, drinks and a few laughs with the PPT.
They and politicians go together...(we don't care about rules, regulations or ethics...we care about big money.)
Netking
(10/28/1999; 22:20:56 MDT - Msg ID: 17777)
Analysis from Kapland
Good afternoon - Some words of wisdom from Mr Kapland for you to digest;

SUMMARY: My current outlook has been lowered to SLIGHTLY BULLISH for gold and its shares. Although the fundamentals and long-term
picture are as bright as ever, the XAU is severely and systematically underperforming the yellow metal itself, especially on rally days, actually
declining slightly on Thursday even as December gold futures surged $6.20. Gold's volume is often higher on down days than on up days, which is
usually a precursor to lower prices. In addition, those analysts who are usually most wrong about gold's future price performance are currently the
most vocally bullish. It would not be at all surprising to see gold eventually go below $280 and the XAU go below 60. A rally in stocks and bonds
might serve as the kiss of death for gold's short-term performance as many investors will feel that they don't need a hedge against inflation. The
strong performance of unhedged mining shares is also a cause for concern; many of these shares are actually trading at higher prices than they were
when gold was at $320. Before any strong rally in gold, the unhedged producers are usually the weakest performers, as investor skepticism about the
prospects for a gold rally scares share buyers away from the uncertainty of always selling at the spot price. One strongly negative factor is the number of
analysts who now say that gold is a good investment "as long as it remains above $285." If gold is a really good investment at $292, then it should be an even better
investment at $282. If people are actually listening to these analysts, then there will be a lot of sell stops just below $285 which could eventually trigger a final wave
of stop-loss long liquidation. On the plus side, commercials appear to be finally accumulating gold healthily on dips. Traders' commitments show commercials,
primarily experienced multinational corporate treasurers, going more and more heavily long the U.S. dollar against most major currencies; a rising dollar is usually
negative for gold. Traders' commitments also show commercials long very few commodities or currencies which usually correlate positively with gold, which is of
course an intermediate-term negative for the yellow metal. Bonds may recently have bottomed, and rising bonds are very bad for gold since a certain critical mass of
money often switches back and forth between fixed income securities and the yellow metal. Keep an eye on the JOC commodities index. If it breaks below its
200-day moving average then look out below. On the other hand, if it can regain its 100-week moving average then gold should find support so long as the other
bearish factors can reverse themselves in time.
Black Blade
(10/28/1999; 22:25:29 MDT - Msg ID: 17778)
To hedge or not to hedge....That isn't even a question!
I see that Kaplan has concerns over the unhedged mining shares outperforming the hedged mining shares. After the Ashanti and Cambior fiascos, it seems that anyone with a longterm outlook on gold mining shares would obviously gravitate toward unhedged mining companies. Some would claim that Barrick has a position where $385 is the average forward sold position. However, this also includes the yeild from invested treasuries over a prolonged period of time. The actual forward position if called is closer to $325 according to some analysts opinions that I have read in the past. I don't know if this is necessarily the case but it is something to consider. Barrick did not address this adequately in their most recent conference call. Perhaps FOA may be right about the "Street Price of Gold" vs. the "Paper Price" after all. Look what happened today: Dec. contract up $6.20 and XAU with a slight decline. hmmm....
Solomon Weaver
(10/28/1999; 22:25:32 MDT - Msg ID: 17779)
golden cloud has silver lining


Let me start by saying that I am amazed at the amount of material which flows across the USAGOLD FORUM page every day�as well as the high level of good vibrations which everyone gives to others ideas�.like sitting down on a cold winters night next to a nice fire and a glass of well aged whiskey and asking things about human nature�.the nature of passion and war and the pipedreams of politicians.

I am no economist, actually I am a biologist, so forgive what might be a na�ve analysis�.on the other hand, I am just an average Joe in some way, a little guy, worked hard, set some money aside, never dream of being a Warren Buffet. This may be my greatest qualification.

The topic I ponder today is the re-monetization of precious metals. Can it really happen?

GOLD CLOUDS HAVE A SILVER LINING.

I do not need to educate anyone here about the general history of gold. I do not need to go into detail about the great history the coffers of gold have played since the Egyptians built pyramids, nor how the Aztecs and Incas found it in rich veins and smelted beautiful objects of worship. Nor how citizens of Tailand fashioned immense statues of Buddah from pure gold. I do not need to remind anyone here how the Cathedrals of Europe we guilded with gold and the chalices were made of gold ornamented with precious stones. Maybe, as a biologist, I might educate you that the science of modern biology is immensely dependant upon the field of chemistry, which evolved from the science of Alchemy, where the great challenge was to convert lead to gold. (Beyond that, to the real alchemist, lead represents the lower aspect of man, bound in pain and suffering to the heavy material aspect of the world, and gold represents the highest aspect in man, liberated in joy and love to fly with the Angels and see with the eyes of god). Gold is deeply interwoven into the myths of humanity.

Gold, once found, does not decay. Gold may be reincarnated over and over again by smiths who simply melt it down, and reform it into the image of their age. One small aspect to ponder is that gold has usually taken the shape of a god, some type of mystical art form, and possibly placed on an alter. It is often fashioned into some small sculpture of beauty which allows it to adorn the human body�to be worn as a sign of beauty and wealth. The use of gold as a simple coin of the realm is a more recent development, albeit an important one. As a great tribute to the elegance and love of beauty present in the modern world, most of the Aztec sculptures have been transfigured by the hands of skilled artisans into very beautiful rectangular blocks which have very carefully been inscribed with numbers and placed in deep sacred vaults where all may marvel at their beauty. This rectangular image of god has become so popular that much of the newly mined gold is quickly fashioned into the same form.

At the beginning of civilization, gold coinage perhaps allowed large organized empires like Greece and Rome to build stable trade. Now, at the Zenith of Civilization, we might need it again. Please let me define zenith in this use. The earth is a limited little ball. Humanity has (over?) populated most of it, and trampled over the rest. What were once different continents and nations is melting into one immense pot of mixed values and a massive flow of goods. What were once hundreds of diverse economies and currencies is melting into something new, with yearly digital capital flows 10 times the international GDP chasing changes in interest spreads of a few hundredths of a percent. Voices in this forum, with brilliant arguments, conclude that the only international currency which can serve the future is gold because it is not a political metal. Through a great and painful birth, the global economy will shed the frail placenta of US dollars, which has nourished it during the 50 years of gestation. Like a placenta which is discarded and rots, the dollar will pass on and be no more remembered as attention moves over to the golden sparkle in the eye of the newborn child.

Large national governments (particularly those who physically loaned out their gold under the famous leasing agreements) may find that in a world with massive dollar based defaults, where possession is 90% of the law, and where multiple certificates in dollars have been issued on much of the gold, the defaults on their gold will make it impossible for them to transition gracefully into a gold standard. Some nations like Switzerland may become extremely wealthy (which is a curse in disguise). It is pretty clear that the battle to hold on to concept money will be intense and the final blitzkrieg will be in defense of the dollar (or maybe the EU). Just like the Russia of today is owned primarily by the former communist elite, the world of tomorrow will still be held by many of today's rich and influential families. It is fairly easy to calculate that the US gold reserves equate to a little more than one ounce of gold per US resident. In a similar fashion, the average per capita gold ownership in the world is about 0.25 ounces. It is extremely difficult to consider this gold being distributed out into anything close to a per capital equilibrium. One of the great hallmarks of an international currency will be that it must be extremely easy to come by if it is going to be used as the means of payment for a major share of transactions in a global economy (easy come easy go, the recipe for high monetary velocity). Ownership of gold will have to be democratized before it can be real money again. Here I don't mean confiscated and redistributed, I simply mean that the very concentrated reserves of immense wealth will have to be distributed out such that everyone can have enough in his pocket. If there are enough poor and goldless outside of the system it will not work. This is a great conundrum in the arguments towards the transition to a gold standard.

Now comes the silver lining. Silver. There are voices here who think that silver will tarnish where gold will shine. But silver is the potential money of the masses. Imagine a world where the purchasing power of gold (in real terms, adjusted for currency changes) is ten times higher than today. A little coin the size of a dime will be enough to pay a months rent or buy a couple months worth of groceries. Silver, at about 1/20th the value of gold will once again return as the way to pay for a meal or buy a pack of cigarettes. Silver will make change for gold�like it did in the past. Just like the legions of us little guys hold up the world where the big guys build their estates.

OK, there are those who will argue that the new standard will be such that transactions occur digitally by computer. In that way, it will be possible to transfer minute increments of gold from one party to another. The digits of course will represent a right to demand payment in gold (sound familiar?). The digits will of course be preferred because they can move over telephone lines, where gold has to be carried. Digits can pay for a newspaper or a coffee. The problem with this system is that there is always some danger that some guy like Bill Gates or an Arab Oil Sheik will start to redeem the digits, demanding delivery. So, in order for this to actually work, such that people do not make this demand, a certain fraction of the physical metal must also circulate. If the world wants a stable gold standard, there will have to be an internationally recognized gold coin (perhaps about � ounce in size) which can be given hand to hand. Perhaps about 10% of the world's physical gold will have to be minted in this form. But this coin will still be quite rare to the little guy (like a $1000 bill). Therefore, if the world wants a stable gold standard, there will also have to be an internationally recognized silver coin (perhaps the size of a quarter) which can be given by the little guys hand to hand. Something the little guy can afford. And since there are billions of little guys in this world, that means a **** of a lot of these silver coins. Then, there can be all manner of fiat paper and fiat coin, which allows physical claim on silver. The only restraint being that no paper may be issued for which there is not 100% backing in gold or silver held by the issuer of the paper. A quarter ounce silver coin might equilibrate at about the purchasing power of a $10 or $20 bill today. Smaller change would be issued on a national basis and have the local flavor (a bit like the tradition of keeping state license plates on motor vehicles). Larger transactions would be handled by multiple silver coins, gold coins, or digital transfers of gold.

How important is the physical coinage in a digital world? My opinion, "very important". Just take a look at the way money works in America. It is very common today to see a little cup of pennies next to the cash register in small stores. At the same time, there is an average of about $4 worth of pennies per person (about $1 billion face value). This is because the purchasing power of a single penny is so low that we constantly remove it from our pockets in the evening and use it to line our sock drawer (hoarding by laziness). So, the average Joe and his wife and two kids have 1600 pennies laying around the house (by the way, the FED has no reserve of pennies � much to heavy to send around). Quarters are the hard workers of the coin system. It is not unusual to reach into a pocket and find more than a half dozen�they are always coming in handy for a soda or coffee machine. Although the FED does not publish (probably doesn't really know) how many quarters there are, it is not an unreasonable guess that the total $ value is not really that much more than pennies (perhaps $2-3 billion). The reason here is that the little sock drawer hoard of coins is scrounged through every so often to get some lunch money for the kids or to pay a babysitter. The expedient scrounger is usually grabbing out the quarters first. After that comes the $1 bills. This we know because the FED tells us: � of the number of newly printed bills in an average year are one dollar bills. This is because they wear out fast. There is about $9-10 billion face value of one dollar bills. Although half the bills, they represent only about 2% of the $500 billion dollar US Dollar currency circulation. (Note: Overseas dollars weighted towards 50s and 100s�singles are primarily used in the USA for day to day business at retail level). Also note that the printed dollar currency only represents approximately 5-7% of the total money supply. If we are generous, and estimate that the total face value of all coinage and singles is $20 billion, and in the next thought consider that this coinage and singles supports a 7 trillion dollar money supply and similar GDP, it is clear that the "small change" only represents about 1/3 of one percent. Truly a trifle. Yet, imagine New York City (and all those cab drivers from some North African nation which keep the banking and insurance executives getting from one appointment to the next) functioning without being able to make change. Imagine the credibility gap which would occur if the institution of small change were to collapse. Imagine the billions of little people all over the world, who can't afford a computer device (for electronic transactions) who rely on billions of little cash transactions per day. There are still countries where people keep a lot of savings at home because the banks collapse in hard times (which are not rare in their locale).

Any international monetary system is going to need to have coins (might not need bills), even if it is only under 1% of the total face value of the international money supply. If the world decides to base the digital part of the game on silver and gold reserves, best to have enough representative coin � in order to convince those billions of little guys that it is not another sham. The easiest to start with is a silver coin. Silver coins will also be good because they will actually circulate (like a $20 bill) rather than sit in a safe at home (like a $1000 bill). Another aspect which predicts the emergence of a silver standard in advance of a gold standard is that silver mines are predominantly found in the New World of North and South America. The same region has a massive amount of debt. One good way for the USA to bail out of a massive treasury debt and the political debacle of having mismanaged the worlds primary reserve currency would be to enter a treaty with individuals who own T-bills that those bills would be converted to claims on future production of silver. The unfortunate result might be political takeover of the silver mines, but in the long run, it might be better if the FED manages the silver mines and forgets about managing fiat money production.

On top of a silver standard, where the annual production of silver each year was regulated like a money supply, it is possible to allow gold to float on its own. Gold will always represent a more concentrated form of physical wealth�why not have gold trade quoted in silver rather than dollars? Also, this would imply that the ultra wealthy and the large governments who own gold could take their leisure in letting go of their gold?
law
(10/28/1999; 22:27:38 MDT - Msg ID: 17780)
Options
Thanks Chicken Man...appreciate it!
Chris Powell
(10/28/1999; 22:29:15 MDT - Msg ID: 17781)
A few things posted at GATA tonight
http://www.egroups.com/group/gata/272.html?A few posts at GATA tonight....

The one above has some dribs and drabs of
intelligence from the last few days.

But also....

Bill Fleckenstein's encouraging comments about
gold and silver:

http://www.egroups.com/group/gata/273.html?

And a poem for the people who do the real work
in this business:

http://www.egroups.com/group/gata/274.html?
Black Blade
(10/28/1999; 22:41:03 MDT - Msg ID: 17782)
Y2K food for thought
Analysts' new fear: Y2K the movie
Worries about a War of the Worlds reaction on Y2K

By Richard Wolf, USA TODAY

The experts preparing against technological mayhem in 2000 are worried.
Not about the mayhem. They're fretting about a movie.
NBC will air next month Y2K, a made-for-TV film that forebodes disaster at the turn of the third millennium. Power failures sweep the Eastern Seaboard. Commercial jet instruments fail. A nuclear power plant teeters on the brink of a meltdown.
Not only that: ATMs won't spit out any cash.
Variety magazine calls it "a disaster picture that imagines near-apocalyptic results."
The New York Times bills it as "a movie for the chronically panic-stricken."
This is not what Y2K wonks expect to happen in the wee hours of Jan. 1, and they're worried viewers will react to Y2K the way listeners did to Orson Welles' infamous radio depiction of Martian landings in The War of the Worlds.
"I'm hoping it doesn't become something like crying 'Fire!' in a theater," says Mike Benzen, president of the National Association of State Information Resource Executives. "Nuclear plants aren't going to melt down. Airplanes aren't going to fall out of the sky. We don't want to see people greatly altering behavior."
After years of preparation, experts say most critical systems in this country are ready for the new millennium.
You wouldn't know it from Y2K. The movie, which airs Sunday, Nov. 21, at 9 p.m. ET, stars Ken Olin as a systems-failure expert working for the federal government. As New Year's Eve turns into a catastrophe, he urges that all planes be grounded, then gets caught up trying to prevent a nuclear plant outside Seattle from melting down.
NBC says no one has tried to stop the movie from airing. It begins with a reminder to viewers that it's fiction, not fact. "In no way are we promoting it in a way that we feel would frighten the public," NBC spokeswoman Rebecca Marks says.
However, Lou Marcoccio, research director for the Gartner Group, one of the leading consultants on Y2K, says people who watch the movie might be influenced to buy a home generator, pull their money from the bank or overstock groceries. These are the types of actions that most Y2K experts counsel against. "I think it's absolutely wrong to depict a worst-case scenario of what can occur," Marcoccio says. "It will impact people's thinking."
Otto Doll, South Dakota's commissioner of information and technology, says NBC is motivated by money. "They're out to make a buck, just like anybody else," he says. "There's nothing wrong with that. Heck, it's the American way."
Some government watchdogs aren't at all concerned about Y2K the movie.
"Entertainment is entertainment," says Don Meyer, spokesman for the Senate's special panel on Y2K. "How much of a social impact do made-for-TV movies really have?"

Gold Power
(10/28/1999; 22:52:54 MDT - Msg ID: 17783)
Goldman-Sachs
Most of you probably have seen this already, but here is part of a message from Chris Powell of GATA



"Tonight Bill got word reliably that Goldman Sachs,
the usual prime orchestrator against gold, is buying
all the shares of Buenaventura it can find in Peru and
getting very long as the price declines.

"Powers bigger than you and me are repositioning
on the long side. We're better off than we were
a month ago and the greatest danger is that of
being shaken out in fear."

I seemed to be wrong the last time, but I haven't given up on Goldman-Sachs as a lead indicator.

Gold Power
Golden Vanity
(10/28/1999; 22:58:25 MDT - Msg ID: 17784)
On the lighter side.
I hope you all know by now that the gold game has changed.
Remember the last ten years of the stock bull market!
To get positioned if you are not, (YMBTD) you must buy the dips. Using every
opportunity when it knocks. One just knocked last week, the 79 tons
brought to (bear) prior to options expiration. This IMHO, is the times
of which you must be aware. You don't have to be a chartist just listen for
a bearish fundamental announcement and strike.
I buy bullion...and sleep like a baby. Your down side is limited if you buy the right
face value coins... to no more than $150 an oz. Big deal!! Many here have
$400+ gold and ridden it to $260 or so. The up side is unlimited?? (30,000ish).
Or at lease Peace-O-Mind...what's the value of that?....Same answer UNLIMITED!

Also..If the price goes down for extended periods of time, (I don't think so), have
some jewelry made from those coins or bullion..or better yet take up a skill and
make some yourself...It doesn't take an genius to make something beautiful out
of gold, it's already beautiful, doesn't need much help...in fact, I'll guarantee you
it will up the value and your wife will be veeeeeery happy with your decision to
own gold.
Don't worry, be happy......with gold!
Black Blade
(10/28/1999; 23:04:31 MDT - Msg ID: 17785)
For 2 oil-rich nations, Y2K efforts in pipeline
A little long, but since the world runs on oil!

By Richard Chac--n, Globe Staff, 10/26/99

ARAGUANA, Venezuela - The skyline along this hot and arid peninsula, which lies between the northern coast of Venezuela and the island of Aruba, is dominated not by buildings but by an endless maze of metal.
More than 940,000 barrels of petroleum flow through miles of pipes, tanks, and ovens and onto supertankers each day, most of it destined for the East Coast of the United States.
At the core of this carefully orchestrated movement of oil through twisted steel, large banks of computers monitor every step, making the world's largest oil refinery a crucial laboratory for one of the world's most important technological experiments.
From Venezuela to Beijing, governments and corporations around the world are scurrying to solve the Y2K problem, all with varying degrees of optimism. As is widely known, on Jan. 1 older computers may interpret the year '00 as 1900 instead of 2000. If the Y2K bug is not fixed, specialists warn, there could be computer crashes and disruptions in service from utilities, businesses, and governments.
The effects of a computer meltdown would be devastating for countries like Venezuela and Mexico, Latin America's biggest oil producers, whose economies depend heavily on how much petroleum they sell to the United States. For Americans who get most of their oil from Latin America - and who are being assured that most critical systems in the United States are now Y2K-compliant - an oil supply disruption could mean everything from higher prices at the gas pumps next year to long-term fuel shortages.
Officials at both Petroleos de Venezuela, S.A. (PDVSA) and Petroleos de Mexico (PEMEX) sound confident when they talk about their Y2K conversion strategies. Both companies, which are state-controlled monopolies, say they have updated more than 95 percent of their computers.
But even the most optimistic programmers admit they won't know whether their preparations will work until that Saturday in January.
''Everything from our payroll to the pipelines and our health clinics is run mostly by technology,'' said Luis Paredes, Y2K project director for PDVSA in Paraguana. ''We've taken care of just about everything, but there are so many possibilities of what could happen at midnight.''
To underscore the concerns that something could happen on New Year's Day, both corporations have developed dozens of contingency plans to cover virtually every aspect of their operations. PEMEX alone, which delivers about 1.3 million barrels of oil a day to the United States, has prepared 281 different emergency responses in case anything goes wrong.
At the PDVSA refinery in Paraguana, which was created in 1997 when two separate refineries were connected by a 15-mile pipeline that runs alongside the main highway, technicians have been working since mid-1998 to update their computers.
Most of the crude oil here comes from wells around Lake Maracaibo and the Gulf of Venezuela to the southwest. When it arrives, it is cleaned, cooked, distilled, and mixed with additives that produce everything from unleaded gasoline to kerosene and propane gas.
The mixtures are then stored in massive tanks that must preserve the proper chemical combination of each product. From there, the final products are sent via a spaghetti bowl of narrow, silver-colored pipes to the docks for delivery onto waiting tankers.
To cut labor costs and modernize its systems, the Venezuelan operation, like many US oil companies, began investing billions of dollars more than 20 years ago to automate nearly every step of the production process from the well to the tanker.
But relying so much on technology has also made it more vulnerable to any glitch that might occur. So far, PDVSA has spent more than $200 million to adapt its entire computer system.
''There's an understanding that this is not just a technical issue, but a serious business matter,'' said Ivan Crespo, Y2K director at the company's headquarters in Caracas. ''If something goes wrong, it could affect our ability to deliver to our clients or the way we pay our suppliers.''
By contrast, PEMEX, which gets most of its heavy crude oil from offshore platforms in the Gulf of Mexico, has not invested as much in technology - it even exports most of its heaviest petroleum to the United States for refining - meaning that while its production processes may not be as advanced as PDVSA's, it faces less Y2K risk. Experts say the company's financial departments are the most dependent on computers.
''It still has many systems and computers that must be Y2K compliant,'' said Alredo Jalife-Rahme, an international relations professor at the University of the Americas in Mexico City who has studied PEMEX's operations. ''They say they've solved nearly all their problems, but it is a very closed institution and we haven't had any outside observer who can verify what they've done.''
To help remedy their Y2K problems and to reassure their American clients, both the Venezuelan and Mexican firms have collaborated with national and international Y2K commissions, such as the American Petroleum Institute's Year 2000 task force.
Ron Quiggins, the task force chairman, said the US petroleum industry is about 90 percent compliant, based on its last quarterly survey. What's more, he added, any disturbances that might happen abroad from the Y2K bug probably won't be immediately felt because the United States has about three months' worth of oil reserves saved up.
''We are basically a risk-based industry, so this is nothing more than managing another risk,'' said Quiggins. ''But unlike the electricity and telephone industry, we can store fuel even if our supply chain is cut off.''
George Baker, a petroleum industry analyst in Houston, agrees up to a point. Although any temporary glitches in Venezuela and Mexico could be made up by domestic producers without any dramatic surge in retail gas prices, that could change if companies try to profit off the fears of scarcity.
''This industry has some irrational components, and scarcity has a market value,'' Baker said. ''Even if the underlying reality is that there is enough fuel, gasoline marketers know how to work a scarcity scenario at the pump.''
For many US petroleum industry officials, the biggest concerns about foreign providers like PDVSA and PEMEX are not so much about the companies' Y2K strategies but about whether their respective governments, suppliers, and banks will be ready.
A US Senate report released in August concluded that Venezuela was 12 to 18 months behind schedule in adapting its most critical government and business systems, mostly because of the political and economic turmoil that has gripped that country. It also predicted that 33 percent of all Mexico's computer systems would fail because of Y2K problems.
Mexican officials dismiss such reports as ''misinformation.'' And they argue that more than 5 million computers in three major sectors - government, financial, and nonfinancial - have been successfully converted.
''We benefit from the fact that many of our most important systems are concentrated in a small number of organizations, like PEMEX,'' said Antonio Puig Escudero, president of Mexico's Institute on Statistics, Geography and Information, the federal agency that oversees the country's Y2K commission.
Even if all this Y2K anxiety ultimately turns out to be more hype than crash, Puig notes that there has been a benefit to all that worrying.
''This has been a huge challenge for us, but here has been an unexpected positive impact,'' Puig said. ''This has increased our cultural awareness of computers.''

Number Six
(10/28/1999; 23:11:39 MDT - Msg ID: 17786)
y2k = "Get Out Of Jail Free Card"...
KUDOS everybody, let's keep the pressure up and get the word out on this manipulation throughout the net.

We should all crosspost important explanatory articles to our other favourite web sites.

Word is gradually getting out about gold and silver IMHO, and Ted Butler's article is typical of what we should be cross-posting on Prudent Bear, AOL, Silico Investor etc. etc. et cetera...

To get to my point...

PH in LA said, and hit the nail on the head...

"Was it mere cooincidence that gold fell relentlessly day after day with the biggest push downwards just hours before expiration to close within pennies of $290? Just in time for the expiration! Did the perpetrators of what surely must rank as one of the greatest follies of all time feel anything but stupid as they leased and sold the Kuwaiti's gold like there was no tomorrow, just to get out of the consequences of their greedy selling of calls at $290 ? Well, I hope they did, because all those sales must be covered sometime. What do they have planned for that day? Or do they just figure they will all be in jail before then?
"

Coincidentally PH, one of my favourite sayings about y2k on the y2k forums has been that the y2k "event" itself will be a "Get Out Of Jail Free Card"... for the insiders, the movers and shakers, the cabal, the powers that be...

So the answer PH, is yes, they will attempt to buy time, as much time as possible, they will keep trying to rollover (that word again :) ) these paper contracts in the knowledge that y2k will give them an "out"...

FOA mentioned a couple of days ago that old, big, informed money had been accumulating physical gold for years...

This is certainly no real news to me or probably most of us here - what I'm saying is that certain people have also been LOOTING our national gold for years now and they are still at it - not only do they come out ahead in the paper game (as most outrageously obvious the other day!!!), they simultaneously drive the price down so that more physical gold can and could be accumulated!

As regards accumulation, yes now I admit they are just mopping up the last available, in previous years the tonnage was there for more blatant accumulation at firesale prices...

As an Englishman I am both outraged and ashamed that MY gold has been so obscenely ABUSED and LOOTED by these B@@#$%&s!

I will be watching VERY closely to see what these rapists will be doing with the next 29 tonnes - the one thing I AM pleased about is that this abhorrent activity seems to have BACKFIRED!!!!!!! ever so sublimely in their faces... :)

How sweet to watch their web collapse, if only from one corner. Only frantic activity enable the web to be repaired but it is now surely not as strong as before :)

What outrages me the most is that the likes of Clinton and Blair, our alleged representatives, not only condone this activity but be default support it.

Shame on them both, the CFTC, the Silver council, the FED/PPT... the list goes on and on...

Now I know whay they call us PEONS... sad to say...

ONE LAST THING

There is an outside chance that y2k will work to the common people's advantage if it can bring down the folks mentioned above... if it's gonna be a ball breaker for everyone, at least those with the smallest balls (Clinton and Co.) will be crushed first! Just like they lost control of the POG recently, so will they lose power from the grassroots folks when they finally wake up and realise they have been lied to by the muppets on bubblevision (CNBC), that there 401k's are now worth pennies on a devalued dolar, and that Clinton and the Inventor of the Internet (Gore) did NOTHING to warn them about y2k or any of it's international economic fallout.

(Sorry Ladies of the table, letting my Shakespearian vulgarity run away with me :)

GO GOLD, SILVER and THWTN!
Black Blade
(10/28/1999; 23:12:53 MDT - Msg ID: 17787)
"And another one bites the dust"
http://www.cambior.com/communique/cambior/1999/anglais/20_99e.htmCambior's standstill agreement to defer gold deliveries. Thanks to "Big Dog"
ax
(10/28/1999; 23:53:53 MDT - Msg ID: 17788)
DEBT BUYBACK/ GOLD

Gold Power: I missed your 10-27-99 breakdown of "Bills and Bonds -2 " because of the server problem. If you will be on line for a while I think I can clarify my point.
Peter Asher
(10/28/1999; 23:54:39 MDT - Msg ID: 17789)
Solomon Weaver (10/28/99; 22:25:32MDT - Msg ID:17779)
That was a nice piece of work there. The gold/silver standard is an evasive concept. Your essay peruses the possibilties in an very logical and easy to follow manner.

I would suggest that the HOF have a Gold (and silver) Standard essay catagory and I nominate this post for it.
Peter Asher
(10/29/1999; 00:33:45 MDT - Msg ID: 17790)
Leigh, ET, AEL
http://www.worldnetdaily.com/bluesky_excomm/19991015_xex_y2k_and_mili.shtml You will especially like this article.

(exerpt) >>> The greatest Y2K impact, however, will
be the lack of compliance of their civilian
suppliers. My research indicates that not
enough is being done to assure the Y2K
compliance of the small and medium sized
companies that make many of the spare
parts. (There those pesky things are again.)

The Department of Defense is making the
classic Y2K management error of only
taking care of the computers within their
own four walls. They are failing to assess
systems on which they have great
dependence but which they do not own or
control.

It's the spare parts, stupid!

For a military force, this has always been
the case. -----

If this spare parts crisis materializes,
several military conflicts are likely. These
would probably include China-Taiwan,
North-South Korea, India-Pakistan and
general conflagrations in the Persian Gulf
and the Balkans. Some might even call that
-- World War III
THX-1138
(10/29/1999; 00:38:58 MDT - Msg ID: 17791)
regarding the article about Taxing away dollars not spent

That article only goes to show that coins are the only way to go.
Whether it is gold, silver, or clad fiat coins.
If the taxation of dollars held too long goes into effect, then that only confirms the fact that the dollar has gone the way of Brazillian money.
Wasn't it just a couple of years ago (or is it still going on) where Brazilians were spending their money as fast as they could before they devalued?
It would also put an unfair tax upon the working poor.
just another way for greedy bankers and politicians to get more money.
How many vending machines would have to be replaced to enact the taxation policy. You would think softdrink manufacturers would be protesting because they would have to upgrade all their vending machines.

THX-1138
THX-1138
(10/29/1999; 00:42:22 MDT - Msg ID: 17792)
Republican Presidential debate
Spent the night listening to the candidates reply to questions.
The one candidate that caught my attention was Alan Keyes.
The only candidate wanting to do away with income taxes, period and return to the Constitution.
I wonder what his opinion on Gold and Silver are?
Number Six
(10/29/1999; 00:44:52 MDT - Msg ID: 17793)
Silver Lease Rates...
http://www.kitco.com/market/LFrate.htmlCross post :)

Date: Thu Oct 28 1999 00:50
Galearis (I just got back on and checked the gold chart: WELL, THERE SHE BLOWS AGAIN!) ID#430259:
But watch silver!!!!!. Lease rates, lease rates, lease rates!. THE SQUEEZE IS ON! This just might do it! BOY, IS TOMORROW GONNA BE INTERESTING! GOLD IS SET ON ITS WAY NOW. BUT WATCH SILVER, WATCH SILVER, WATCH SILVER!!!!!! Dam% I thought I was going to get a good night's sleep......
Simply Me
(10/29/1999; 01:22:51 MDT - Msg ID: 17794)
THX-1138
"Wasn't it just a couple of years ago (or is it still going on) where Brazilians were spending their money as
fast as they could before they devalued?"

That's how it was in the U.S, too...in the late '70s. Only the cause was inflation (inflation/deflation...seems to have the same effect on the working man's paycheck). In those days (oil crisis days/skyrocketing gold and real-estate days), you got your paycheck and immediately spent it because, with prices going up every week, saved dollars would only buy less in the future. So after you finished your bill-paying, food and clothing buying, you looked for some "bargain" to invest your money in. Any bargain would do, a piece of land or ten bottles of ketchup for 50 cents each. Because it was a sure bet that everything would cost more next week.

Come to think of it. Weren't those the days when everyone got used to living paycheck to paycheck and buying things on credit (because you could get the expensive object of your desire today and pay it off in "future" dollars that were worth less)?

Ah, yes...and those were also the days of the "WIN" buttons (Whip Inflation Now), the government propoganda of the times being that it was those nasty people who wanted more pay to keep up with inflation that were making this whole mess worse. It's always the other guys fault. If that darned Union hadn't asked for a raise, I wouldn't have to fight for one, too! (If you hear it again, don't fall for it...it's only a ploy to make you fight the other peons instead of focusing on REAL problems.)

I'm not just reminiscing. If a $30,000 price for gold is half gold going up and the other half dollar coming down, we're in for those days again...and maybe worse. Physical gold, silver, and maybe real estate (maybe some highly sought after antiques, art, numismatic items)...will be the only value holders again.

Don't gamble on your future. Get something of value and hold on tight. The worsening economy creeps in slowly. Even in '29, while the stockbrokers were jumping out of windows...the farmers in Wisconsin couldn't believe it would ever effect them. In '31, they believed.

If gold rises to $30,000, a nice pair of sneakers (made in China) could well cost $250.00. And if they try to stick a WIN button on you, just say no.

It's a long way down...get yourself a golden parachute.
simply me

Netking
(10/29/1999; 03:20:43 MDT - Msg ID: 17795)
POG
http://www.kitco.com/gold.graph.htmlI don't feel inspired for POG to the moon . . . yet, but it is going there eventually!
Kaplans suggestion of a "possible" move back towards $286'ish or so seems to sit with me at the moment.
The POG graph has been all over the place with no real technical strength yet from a serious chartists point of view.
Don't underestimate the power of the 'dark side of the force'(star wars & perhaps the Gold wars of 1999/2000 perhaps also)



SteveH
(10/29/1999; 04:11:14 MDT - Msg ID: 17796)
Something struck me ...
www.kitco.comrepost:

Date: Fri Oct 29 1999 01:14
Captain_Kirk (Freemen and other folks) ID#339203:
Copyright � 1999 Captain_Kirk/Kitco Inc. All rights reserved

Today, I was around talking to the five people I work most closely with at the office, about my recent discovery, in which I had come to a real understanding of the differences of the banknumbers and FRN currencies. I just knew that my arguments were compelling and therefore they could not be dismissed with a mere shrug or nod of the head. But once again, I received the basic, bland, disinterested nods of the heads, and the same non-committal blank stares. People that know me, know that if they have a question about work, that they can depend on me to give them the straight skinny, every time, and they generally like me, so I guess that's why they put up with my strange talk.

While doing the old 45 minute commute home from work, I started to churn the whole thing over in my mind, and a bit of insight slowly came to my mind. Sometimes, there are very fundamental differences between people, even people within the same culture. I came to realize that part of the reason my co-workers did'nt have any interest in some of the things that I had such a great interest in, things which I preceived as being of vital importance, was that basically, I was a different kind of person from them, in some very fundamental way. I saw this not as a bad or good thing one way or the otherr, but merely something to accept, and to understand about myself and about other people. I saw that I was of the freemen class, while they were more aligned with the proprietor, tenant, or slave class, as such is described in Adam Smith's "The Wealth of Nations". This is an over simplification maybe, but still, there are certain attributes of these different types of people, which could very well be applied to the present situation.

These folks are very happy and content with their banknumbers, and with their extreme dependence on others, type of lifestyle. When they see a piece of land, they are looking for city services, and banknumber resaleability value, while I am looking for water sources, and natural resources. When they look at Gold, they are looking at banknumber investment potential, while I am looking at gold purity, and how much can I aquire with what available resources I have at my disposal. One key difference I came to recognize years ago, was I think, encapsulated in how I interpreted the words of a particular country song, and how my interpretation was different from that of most other people. The words go like this "All the Gold...in California....is buried in a bank in Berverly Hills.....in somebody elses name..." Well, I always thought the singer was saying that even though big cities had sprung up, there was still a bunch of Gold buried in the earth in California, and that it was in a "bank" of rock or dirt, but a fella couldn't get to it, cause somebody had a house built on the dirt bank, and that now there was no way to mine the gold, because the fella who now owned the house sure would'nt let you go to digging in his back yard. For years, it never occured to me that in his use of the word "bank", he was referring to one of those banknumber "banks". I found out years later that everybody else always thought he was referring to a banknumber "bank".

For my whole life, I have worked on my own projects, worked on things which brought me satisfaction and a feeling of accomplishment. I am glad I was able to spend these last 18 months, analyzing their banknumber monetary system. I have learned much about my fellow man, but what I really learned was something that I knew all along, that their banknumber monetary system is not my monetary system. It really has nothing at all to do with me. Sure, there are a lot of banknumber people running around my neck of the woods, and they sometimes make a nusiance of themselves, but, I think now, that I can learn to live with it, and I can go back to doing my own thing, even while also wishing them all the best of banknumber trades.

So I now will get back to that project I started about 5 years, the project to start with my own two hands, and using only earth, fire, water, wind, plant and animal, to create tools, devices, and artifacts as necessary to make an advancement from my present use of stone age technology, into the technology of the iron age. Got a lot to do. My stone age bow pulls about 40+ lbs., and should be sufficient to take small game, so off I go to the forests to bag my first squirrel, so that I can harvest his hide, tan the squirrel leather, and cut out in a spiral, strips of hide to fashion a leather cord, so I can create a firebow, so that I can consitently and reliably make a fire, so that I can heat pine sap into pine pitch, so that I can preserve my milk weed fiber cords in wet weather, which are used to bind my feathers to my arrows, and so that I can make a more powerful bow and sturdier arrow, so that I can bag a deer, so that I can tan the deers hide, so that I can make my bellows, so that I can heat my fire to a hotter temperature, so that I can construct my bloomery, so that I can loose my iron from my iron ore, so that I can create my iron for my tools, so that I can create my lock, stock, and barrel for my iron age smokepole, and my iron axe, and my iron plow, and my iron nails, horseshoes, and other useful implements. Then who knows, maybe I will decide to go into the steel age, and then maybe even into the space age.

Hey, like I've said before, I watched gold for over ten years and I always knew that if it ever got below $300, it would be the buy of a lifetime. Heck, that ain't nothing, every freeman knew that. Well, It did, drop below $300, and I aquired what I needed, and got it buried safe and sound, five feet below grade. Well, got lots of work to do now, so better get to it. Adios amigos.
SteveH
(10/29/1999; 04:15:01 MDT - Msg ID: 17797)
Cambior
http://www.cambior.com/communique/cambior/1999/anglais/20_99e.htm.
PRESS RELEASE
FOR IMMEDIATE RELEASE
Montreal, October 27, 1999

CAMBIOR SIGNS STANDSTILL AGREEMENT

Cambior Inc. ("Cambior") announces that it has entered into a Standstill Agreement with its hedging counterparties and lenders (collectively, the "Financial Parties") regarding its obligations under agreements with such Financial Parties.

Under the Standstill Agreement, the Financial Parties have agreed to defer Cambior gold delivery obligations under all hedging contracts maturing during the standstill period (subject to exceptions to permit Cambior to deliver gold production against specified contracts) and to waive compliance with certain related provisions of Cambior's loan facility agreement.

The Standstill Agreement remains in effect until November 26, 1999, subject to earlier termination under certain conditions. In particular, the Standstill Agreement becomes subject to termination if Cambior fails to fulfill its obligations thereunder and may likewise be terminated by any non-defaulting Financial Party if any other Financial Party fails to perform its obligations thereunder. The Standstill Agreement also requires that Cambior present a proposal for the orderly fulfillment of its obligations to the Financial Parties over time (a "Definitive Plan") and secure a recommendation of approval for its Definitive Plan from a majority of a five-member working committee of Financial Parties by November 12, 1999, failing which the Standstill Agreement would also terminate.

Cambior's obligations under the Standstill Agreement include the obligation to grant a security interest in its Doyon Mine and related assets to secure the performance of its obligations to the Financial Parties; a commitment to provide security interests over additional assets in consideration for the approval of a Definitive Plan; a commitment to convert LIBOR borrowings under its loan facility agreement into U.S. Base Rate borrowings (resulting in higher interest payments for Cambior) and to renegotiate certain hedging-related provisions of the loan facility agreement; the obligation to submit to independent technical, financial and environmental reviews; a commitment not to incur additional indebtedness during the Standstill Period without the consent of the Financial Parties; a commitment not to pay dividends; a commitment not to sell material assets during the Standstill Period; a commitment not to modify its gold hedging position subject to such agreed measures as may be implemented to improve Cambior's aggregate position under its hedging contracts; and an obligation to pay standstill fees and related expenses to the Financial Parties and to provide waivers, releases and indemnities to the Financial Parties in connection with the occurrence of certain events.

While Cambior believes that an agreement regarding a Definitive Plan can be achieved by all parties concerned during the term of the Standstill Agreement, there can be no assurance that such an agreement will be reached. The failure to achieve such agreement, or the early termination of the Standstill Agreement for any other reason, would be likely to have a material adverse effect on Cambior and its financial results, financial condition and prospects.

Subject to the provisions of the Standstill Agreement, Cambior will also consider immediately all possible courses of action with a view to maximizing shareholder value, which action may include injections of additional equity or subordinated loan capital, asset sales, the accelerated development of priority projects, business combinations, corporate transactions and other alternatives.

Cambior Inc. is an international diversified gold producer with operations, development projects and exploration activities throughout the Americas. Cambior's shares trade on the Toronto, Montreal and American (AMEX) stock exchanges under the symbol "CBJ".

This press release contains certain "forward-looking statements", as defined in the United States Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Such risks and uncertainties are disclosed under the heading "Risk Factors" in Cambior's Annual Information Form (AIF) filed with the Ontario Securities Commission, the Quebec Securities Commission, the United States Securities and Exchange Commission (Form 40-F) and other regulatory authorities.

- 30 -

For additional information, please contact:

CAMBIOR INC.
Investor Relations
Robert LaValli�re
Manager
Tel : (514) 878-1282
Fax : (514) 878-3324 Victoria Putnam
Assistant Manager
Tel : (514) 878-8206
Fax : (514) 878-0635
Internet : www.cambior.com
E-mail : info@cambior.com
PR-1999-20


Return
SteveH
(10/29/1999; 04:22:25 MDT - Msg ID: 17798)
Greenspan yesterday



Remarks by Chairman Alan Greenspan
Information, productivity, and capital investment
Before The Business Council, Boca Raton, Florida
October 28, 1999




Your focus on technology--particularly the Internet--and its implications is most timely, because as this century draws to a close, the defining characteristic of the wave of technological innovation sweeping over the U.S. economy is the role of information.

The veritable avalanche of real-time data has facilitated a marked reduction in the hours of work required per unit of output and a broad expansion of newer products whose output has absorbed the workforce no longer needed to sustain the previous level and composition of production. The result during the last five years has been a major acceleration in productivity and, as a consequence, a marked increase in standards of living for the average American household.

Prior to this revolution in technology, most twentieth-century business decisionmaking had been hampered by less abundant information. Owing to the paucity of timely knowledge of customers' needs and of the location of inventories and materials flows throughout complex production systems, businesses, as many of you well remember, required substantial programmed redundancies to function effectively.

Doubling up on materials and people was essential as backup to the inevitable misjudgments of the real-time state of play in a company. Decisions were made from information that was hours, days, or even weeks old. Accordingly, production planning required costly inventory safety stocks and backup teams of people to respond to the unanticipated and the misjudged.

Large remnants of information void, of course, still persist, and forecasts of future events on which all business decisions ultimately depend are still unavoidably uncertain. But the remarkable surge in the availability of timely information in recent years has enabled business management to remove large swaths of inventory safety stocks and worker redundancies.

Businesses not only respond more accurately to changes in demand, they can respond more quickly and efficiently as well. Information access in real time--resulting, for example, from such processes as electronic data interface between the retail checkout counter and the factory floor, or the satellite location of trucks--has fostered marked reductions in delivery lead times and the related workhours required for the production of all sorts of goods, from books to capital equipment. This, in turn, has reduced the relative size of the overall capital structure necessary to turn out our goods and services.

Intermediate production and distribution processes, so essential when information and quality control were poor, are being reduced in scale and, in some cases, eliminated. The increasing ubiquitousness of Internet sites is promising to significantly alter the way large parts of our distribution system are managed.

The process of innovation goes beyond the factory floor or distribution channels. Design times have fallen dramatically as computer modeling has eliminated the need, for example, of the large staff of architectural specification-drafters previously required for building projects. Medical diagnoses are more thorough, accurate, and far faster, with access to heretofore unavailable information. Treatment is accordingly hastened, and hours of procedures eliminated. In addition, the dramatic advances in biotechnology are significantly increasing a broad range of productivity-expanding efforts in areas from agriculture to medicine.

One result of the more-rapid pace of innovation has been an evident acceleration of the process of "creative destruction," which has been reflected in the shifting of capital from failing technologies into those technologies at the cutting edge. The process of capital reallocation across the economy has been assisted by a significant unbundling of risks in capital markets made possible by the development of innovative financial products.

Every innovation has suggested further possibilities to profitably meet increasingly sophisticated consumer demands. A significant percentage of new ventures fail. But among those that genuinely reduce costs or enhance consumer choice, many will prosper.

The newer technologies, as I indicated earlier, have facilitated a dramatic foreshortening of the lead times on the delivery of capital equipment over the past decade. When lead times for equipment are long, the equipment must have multiple capabilities to deal with the plausible range of business needs likely to occur after these capital goods are delivered and installed. In essence, those capital investments must be structured in a manner sufficient to provide insurance against uncertain future demands. As lead times have declined, a consequence of newer technologies, less judgment about the potential alternative economic environments in which the newly ordered equipment will be functioning is needed. Accordingly, foreshortened future requirements have become somewhat less clouded, and the desired amount of lead-time insurance, in the form of what after the fact would turn out to have been a partially unproductive addition to the capital stock, has declined.

Indeed, these processes emphasize the essence of information technology--the expansion of knowledge, and its obverse, the reduction in uncertainty. The use of information in business decisionmaking can be best described as an effort to reduce the fog surrounding the future outcomes of current decisions.

Because the future is never entirely predictable, risk in any business action committed to the future--that is, virtually all business actions--can be reduced but never eliminated. Information technologies have improved our real-time understanding of production processes, reducing the degree of uncertainty and, hence, risk. This, in turn, has lessened the need for a whole series of programmed redundancies from which, in the end, little to no productive capability is achieved.

In short, information technology raises output per hour in the total economy by reducing hours worked on activities needed to guard productive processes against the unknown and the unanticipated. Narrowing the uncertainties reduces the number of hours required to maintain any given level of readiness.

But, obviously, not all technologies, information or otherwise, affect productivity by reducing the inputs necessary to produce the current level of existing products. Some information made possible by technological advance more readily contributes to developing new products that consumers value rather than to reducing the required inputs for existing products. Indeed, in our dynamic labor markets, the resources made redundant by better information are drawn to newer activities and newer products, many never before contemplated or available.

The personal computer, with its ever-widening applications in homes and businesses, is one. So are the fax and the ubiquitous cell phone. The newer biotech innovations are most especially of this type, particularly the remarkable breadth of medical and pharmacological product development. Information has armed many firms with detailed data to fashion product specifications to most individual customer needs. Owing to advancing information capabilities and the resulting emergence of more accurate price signals and less costly price discovery, many market participants are better able to detect and to respond to finely calibrated nuances in customer demand. Value added, accordingly, is enhanced per workhour.

The Internet offers an admixture of potential new goods and services and potential lower costs of production. A major part of our current GDP reflects distribution cost, and it is evident that much of that is subject to potential competitive reduction through Internet marketing. I do not perceive the end of the shopping mall, if for no other reason than I have been strongly advised that shopping is not solely an economic phenomenon. But the relationship between businesses and consumers already is being changed by the expanding opportunities for e-commerce. The forces unleashed by the Internet may be even more potent within and among businesses, where uncertainties are being reduced by improving the quantity, the reliability, and the timeliness of information, as I am sure your sessions today and tomorrow will have made clear.

The newer technologies obviously can increase outputs or reduce inputs only if they are embodied in capital investment. Capital investment here is defined in the broadest sense as any outlay that enhances capital asset values or, for that matter, even enhances the value of an idea.

But for capital investments to be made, the prospective rate of return on their implementation must exceed the cost of capital. That has clearly happened in the last five years.

In particular, technological synergies appear to be currently engendering an ever-widening array of prospective new capital investments that offer profitable cost displacement. In a consolidated sense, reduced cost is reflected mainly in reduced labor cost or, in productivity terms, fewer hours worked per unit of output.

It would be an exaggeration to imply that whenever a cost increase emerges on the horizon, there is a capital investment that is available to quell it. Yet the veritable explosion of equipment and software spending that has raised the growth of the capital stock dramatically over the past five years could hardly have occurred without a large increase in the pool of profitable projects becoming available to business planners. Had high prospective returns on these projects not materialized, the current capital equipment investment boom--there is no better word--would have petered out long ago. Indeed, equipment and capitalized software outlays as a percentage of GDP in current dollars are at their highest level in post-World War II history.

To be sure, there is also a virtuous cycle at play here. A whole new set of profitable investments raises productivity, which for a time raises profits--spurring further investment and consumption. At the same time, faster productivity growth keeps a lid on unit costs and prices. Firms hesitate to raise prices for fear that their competitors will be able, with lower costs from new investments, to wrest market share from them. Such circumstances lead to a very favorable period of strong growth of real output and low inflation.

But the degree to which the growth rate of productivity has been rising--indeed, whether in a long-term sense it is rising at all--is subject to considerable debate among economists. This results, in part, from major disputes about our national data system.

Gross product per workhour measured for the nonfarm business sector, employing the newly revised data made available this morning, rose an average 2-1/4 percent per year over the past five years, and nearly 2-3/4 percent over the past two, after averaging 1-3/4 percent over the previous two decades. Because in the past we have had episodes of similar improvements in productivity performance that failed to persist, these data, on their own, cannot be relied upon to draw broad conclusions about whether an acceleration in trend productivity is under way.

But other data are more compelling. Growth in gross domestic income has outstripped the growth of the conceptually equivalent gross domestic product in recent years, producing a dramatic widening of the statistical discrepancy. Productivity growth in the nonfarm business sector, estimated as real gross income per hour rather than real gross product per hour, over the past two years is, thus, a more noticeable 3-3/4 percent at an annual rate, 1 percentage point faster than measured from the product side.

Finally, because the measured level of productivity in the noncorporate business sector exhibits noncredible weakness for substantial spans of time, I believe data for the nonfinancial corporate sector afford a more accurate, though admittedly more narrow, measure of productivity performance. And here the numbers are still more impressive, nearly 3 percent on average over the past five years, and more than 4 percent over the past two. By this measure, productivity growth in the 1970s and 1980s also averaged about 1-3/4 percent per year. Moreover, the acceleration in productivity appears reasonably widespread among nonfinancial corporate firms beyond the high-tech industries themselves, even though gains in output per hour in the advanced technology companies have verged on the awesome.

Although it still is possible to argue that the evident increase in productivity growth is ephemeral, I find such arguments hard to believe, and I suspect that most in this audience would agree.

But how long can we expect this remarkable period of innovation to continue? Many, if not most, of you will argue it is still in its early stages. Lou Gerstner (IBM) testified before Congress a few months ago that we are only five years into a thirty-year cycle of technological change. I have no reason to dispute that, although forecasting the evolution of technology is a particularly precarious activity. It nonetheless seems likely that we will continue to experience vast advances in the application of the newer technologies and their associated increases in output per workhour.

But in gauging pressures on cost growth and prices, the critical issue is not how much of the current wave of innovation lies ahead of us, but how rapidly the exploitation of the newer technological synergies proceeds.

If, using Gerstner's figure, the remaining twenty-five years of the thirty-year cycle of technological change is exploited at a much more leisurely pace than the first five years, the rate of productivity growth will fall. To be sure, the level of productivity will continue to rise but at a slower pace.

A leveling out or decline in the growth of productivity would have a profound effect on the intermediate outlook should it occur. I say, should it occur, because evidence of a downward bend point in productivity growth is not yet evident in our most recent data. All the same, the rate of growth of productivity cannot continue to increase indefinitely. At some point it must, at least, plateau. Should, at that point, labor market tightness result in faster growth of nominal wage rates, there would be no offset from accelerating productivity. As a consequence, unit costs would likely rise, pressuring profit margins and prices.

That scenario of rising cost and price pressure is one policymakers have dealt with before, and the actions called for, while by no means easy, are readily discernible. What modern monetary policymaking has not faced for quite some time, if ever, has been a major surge in innovation--matching, if not exceeding, the other great waves this century--followed by an apparent elevation of productivity growth. Yet even these welcomed circumstances create challenges for policymakers.

Accelerating productivity poses a significant complication for economic forecasting. For many years, forecasters could assume a modest, but stable, trend productivity growth rate and fairly predictable growth in the labor force. Given the resulting growth of potential GDP, forecasting largely involved evaluating demand growth. If it appeared to be running in excess of trends in potential, the economy could be expected to eventually overheat, with inflation and interest rates moving up. In the end, the economy would, at some point, fall into recession.

With trend growth in productivity now clearly in play, the weakness of a simple demand-side evaluation of economic forces has been brought into sharp focus. It may no longer be the case that an acceleration in demand presages an overheated and unstable economy, if the demand growth is caused by growth in trend productivity. Higher productivity growth must eventually show up as increases in employee real incomes, in profit, or more generally both. Unless the propensity to spend out of real incomes falls, consumption and investment growth will rise, as indeed they must over time if demand is to keep pace with faster supply.

But consumer demand can accelerate so much that total demand could rise above even the productivity-augmented overall growth of potential. This seems to have been happening in recent years, owing to an expanding net worth of households relative to income and perhaps a perception that the recent acceleration in real incomes will continue.

This extra demand can be met only with increased imports or with new domestic output produced by employing additional workers either from drawing down the pool of those seeking work, or from increasing net immigration.

Imports presumably can continue to expand for awhile, since the rising rate of return on U.S. assets has attracted private capital inflows, particularly a major acceleration of direct foreign investment, into the United States. For the recent past, direct foreign investment inflows have almost matched the total current account deficit. But a continued widening of that deficit could eventually raise financing difficulties, ultimately limiting import growth.

In addition, over the past two years, the pool of people seeking jobs--the sum of the officially unemployed plus those not in the labor force but wanting to work--has declined from 11.2 million to 9.6 million. The number of workers drawn into employment in excess of the normal growth in the workforce has been running at the equivalent of roughly a half of a percentage point of annual GDP growth. This gap must also eventually be closed if inflationary imbalances are to continue to be contained.

Clearly, the growth in gross domestic product cannot exceed the sum of growth in structural productivity and in the working-age population indefinitely. Market pressures must eventually emerge that work to contain such unsustainable growth.

The process of containment may already be significantly advanced. Increasing demand for financing capital goods relative to domestic savings, a reflection of the previously cited imbalances, has apparently been exerting marked upward pressure on real long-term market interest rates, especially as economies abroad strengthen.

The measurement of real yields, that is, nominal interest rates less expectations of inflation over the maturity of a debt instrument, is inevitably imprecise. It depends, of course, on estimates of inflation expectations, which are very difficult to accurately pin down. But judging by yields on U.S. Treasury inflation-indexed securities, the real riskless interest rate has risen about half a percentage point for ten-year maturities since late 1997. Private long-term real rates have apparently risen even more. The spreads of corporates against Treasuries have widened significantly for investment-grade and, especially, high-yield debt over this period. As a consequence of these higher real interest rates, the ratio of net worth to income for the average household is already lower than it was earlier this year.

We do not have enough experience with technology-driven gains in productivity growth to have a useful sense of the time frame in which market pressures contain demand. Moreover, it is not clear as yet how much cumulative impact the rise in real long-term interest rates over the past two years will have on future demand.

Going forward, the Federal Reserve must monitor not only this response, but also the evolving capacity of our economy to meet higher levels of demand. Maintaining balance between these forces will be essential to preserving the stable price environment that has provided a firm foundation for this period of extraordinary innovation and progress in the U.S. economy.


SteveH
(10/29/1999; 05:04:44 MDT - Msg ID: 17799)
words
I read AG's speach. Ok. Technological innovation has increased productivity through more efficient market, less need for redundancy and inventory, and quicker market cycles. Ok. That still isn't an excuse for gold market manipulation and blatant violations of Commodity regulations and setting of expectations to drive a market ruled by expectation than reality. The October-end rally is here. The market sighs a relief and moves higher, phew! No bear market, onwards.

We shall see. Hard to say there is not a bear market when even yesterday the new lows still outpace new highs by a goodly margin. Dead-cat bounce? We shall see.

So, what is the next gold event to embarass the gold market next? eh?
Cavan Man
(10/29/1999; 06:19:59 MDT - Msg ID: 17800)
ORO
I have just read Batra's newest book "Crash". It is a compelling read all the way 'round. In the sections where he offers investment advice, he only suggests a 10% allocation in gold. It seems to me he believes the balance should be held simply in cash instruments. In the event of a collapse as he describes, paer will be needed but, 90%. I don't get it. Thank you.
FOA
(10/29/1999; 06:21:14 MDT - Msg ID: 17801)
Ashanti Goldfields Co
http://biz.yahoo.com/rf/991029/ey.html Is this the future for other (if not all) hedged mines when gold spikes through $400 and up?
ALL: I hope to find time to make replies and comments in a day or so. There is much to observe and discuss right now.


-----------LONDON, Oct 29 (Reuters) - The President of Ghana, Jerry Rawlings, wants to play a leading role in determining the future of Ghanaian mining company Ashanti Goldfields Co Ltd-----------

-----------
``The gold of Ashanti is a symbol of our national sovereignty and we will not do anything that is tantamount to a betrayal of posterity,'' Rawlings added.
---------
Carl
(10/29/1999; 06:35:09 MDT - Msg ID: 17802)
@law re gold options
http://www.mrci.com/special/gold.htmSee the above link for current open interest. (It's a big page, so wait for it to load.) Dec 390 in the big nearby open interest.
Jeff
(10/29/1999; 07:51:43 MDT - Msg ID: 17803)
Yesterday's discussion
Yesterday's discussion is ok. Will get it posted later today. -Jeff
Canuck Gold
(10/29/1999; 07:56:46 MDT - Msg ID: 17804)
Reply
FOA (10/27/99; 19:26:52MDT - Msg ID:17669)
Comment
Canuck Gold (10/27/99; 10:54:59MDT - Msg ID:17605)
Seeing things from a different perspective
------------------
Outside North America, gold may make a sympathetic rise in relation to local currencies but not
to the degree espoused by some in this forum. The only way that gold could move higher in
relation to all currencies would be if there was a total collapse of all the major currencies at
the same time. Judging by the way the ECB has rallied around gold by their declaration that it
is an important component of their reserves, it seems to me that they're positioning the Euro to
replace the dollar when the pigeons come home to roost. When the dollar takes the hit, OPEC isn't
going to tie their oil to the dollar because it will be too unstable. They may want to tie it
to gold but there isn't enough physical gold available to realistically make that a viable
alternative. That leaves the Euro which, though not officially tied to gold, will nevertheless
be proffered, and accepted, as the next best thing.

Hello Canuck Gold and welcome, In reply to your thoughts I say "fair enough", let's see how it
works out. Tell me, why do you see that there is not enough gold around to become a "viable
alternative"?
Thanks FOA

Hi FOA. With the lost data from the 27th not reappearing until late yesterday, I nearly missed
your response to my post. I would like to provide more meat to my reply than I currently have
the time to provide so please bear with me until the weekend.
Regards CG
714
(10/29/1999; 08:37:10 MDT - Msg ID: 17805)
Cavan Man
If I may be so bold as to address your question to Oro, in a "crash", the government (U.S. in my case) will prop up various paper markets in an attempt to salvage corporate assets and the tax base they provide. I believe that's why Batra, in part, isn't suggesting more than 10% in PM's. That, and the fact that all it would take is an executive order banning or taxing PM's to destroy the liquidity of those investments. As demonstrated by Leigh's post the other day, even cash held outside of a financial institution would be penalized. Clearly, we live in a highly centralized, planned economy dominated by international corporate "citizens".

We goldbugs forget that paper represents a number of things besides debt. In the Western World, assets are allocated on paper and have been for hundreds of years. I am reminded of a story once shared with me by a Palestinian regarding a land grab by Jewish settlers on the West Bank years ago (early 80's). This activist described to me how settlers moved onto land farmed by Arab farmers and challenged their titles to that property. Traditionally, property lines were determined by the planting of olive trees on those property lines. When the Ottoman Empire took control of Palestine a century or two ago, they instituted a systems of titles and registration and so on. So when the Palestinian farmers challenged the settlers' occupation of their land and it went to court, the Israeli courts demanded documentation, i.e., titles & records, which were in Istanbul and out of reach for these farmers who generally couldn't afford the trip to Turkey and the legal research involved in searching for those papers.

This is how it's done in the West whether we like it or not. That is not to say I agree with the "system", but as a practical man, I, like Batra, must take into account the importance of paper. Withdraw and ignore the "paper" system at your own peril....
megatron
(10/29/1999; 09:48:58 MDT - Msg ID: 17806)
714
A good point, showing off one of the biggest problems with property. It's not yours! If the gov't decides to take it, it's gone. Gold on the other hand can't be confiscated (from a smart person), and will certainly be of some value somewhere in any event, whether it's taxed or not. I personally don't know anyone stupid enough to tell the gov't about any PM's they own. Paper money is useful for now. Let's watch and see the next 10 years.
USAGOLD
(10/29/1999; 09:57:36 MDT - Msg ID: 17807)
Today's Gold Market Report: Still Waiting on Ashanti; A Sm Great Championall Tribute to a
MARKET REPORT(10/29/99): Gold was mostly sideways in the early going
with little in the way of news to move it in one direction or the other.
Strangely, still no news on Ashanti save a less than veiled warning from
Ghana's president, Jerry Rawlings, about the mine being an important
aspect of the national interest. "As a government we are concerned that
in resolving its current problems we should protect the national
interest against those who would want to collaborate to manipulate such
situations to their advantage." Rawling's position could complicate
resolving Ashanti's hedge book problem. Does it imply that
nationalization is a consideration? Time will tell and we continue to
watch the Ashanti situation with great interest..................FWN
quotes Rhona O'Connell of T.Hoare as saying: "There is continuing talk
of producer buy-backs and action in the forwards would suggest that some
of this (short covering) is already going on--which makes sense as the
dip below the psychologically important $300 level was probably the
trigger for such activity. The prevailing price dip should be seen as a
buying opportunity."...Several weeks ago, gold bears cited the lifting
of a Russian export tax on precious metals as good reason to sell the
metal. That tax was extended for six months yesterday with no comment by
the anti-gold group frequently quoted by the mainstream financial press.
As a matter of fact what happened to all those gold bears who got all
the free press over the past few years? Most of what they offered as
reasons not to purchase gold have turned out to be fabrications -- most
notably the contention that European central banks were going to sell a
substantial proportion of their gold reserves........Well that's it for
today, fellow goldmeisters. Its a light news day so far with activity on
the COMEX seemingly picking up as go to fetch over today's report. Have
a good weekend.

A SMALL TRIBUTE TO A GREAT CHAMPION

This morning's Rocky Mountain News showed the haunting photograph of the
bagpiper disappearing into the mists of the first fairway after the
Payne Stewart memorial service yesterday at Houston's Champions Golf
Club -- a fitting tribute to a great champion. After all the good things
that have been said about this man over the past few days, I will add
one more: Payne Stewart was a cagey competitor and a great shot-maker in
the era of the 350 yard drive.

As Payne made his way to the first tee for the final round of this
year's U.S. Open -- which he eventually won -- he was asked by a
reporter how he felt after all the par saving shots he made in the
previous round to get into contention. "Are you kidding?" asked Payne.
"With all these great young players chasing me, it's the only chance
I've got." Vintage Payne Stewart...as I say -- a cagey competitor. Those
"great young players" Payne was talking the ball could hit it a ton; but
Payne could make the shots.

I know of one more Payne Stewart story with a local Colorado flavor that
I got second hand from one of the marshals at the Aspen Chamber of
Commerce junior tournament two years ago. Each year, some of the best
junior golfers -- boys and girls -- gather from around the country at
the public course there for an important competition. Some of the pros
usually show up to render a few tips, generally give the kids
encouragement, and help advance the skills of the heirs- apparent.
Several years ago, before the days of John Daly, Greg Norman hit a 400
yard drive there during a clinic -- a shot that met with more than one
smile of golfer recognition and now resides permanently in Colorado golf
lore.

Two years ago after the first round of the tournament, Payne Stewart was
sitting in the clubhouse when one of the juniors asked him about fading
and drawing the golf ball. Payne apparently viewed this as an
opportunity. He led an entourage out on the course to give a first hand
lesson in the art of bending the golf ball around intervening objects.
With one junior carrying some carefully chosen clubs, another some golf
balls, and still another the non-alcoholic beer he had been sipping,
they walked halfway down the fairway as dusk fell where a mighty
cottonwood stood some 170-180 yards from the green. (The very same
cottonwood behind which myself and the Marshall stood while he told the
story.)

Talking all the while, Payne asked the ball caddy to drop the balls
directly behind the towering tree. Then he asked for a club. The first
he sent flying to the left of the tree, made it curve right, and then
drop neatly on the green. The second he curved to the right of the tree,
made it go left and also drop safely on the green. The third he took a
lofted club and powered it over the tree with the same result -- all of
which proved without question that there is one more than way to pull
positive results out of a golf course situation. Of course this display
of skills was accompanied with the appreciative commentary of his young
audience. The marshal called it a great moment for him and the kids
lucky enough to be there will have a Payne Stewart golf story of their
own to tell future generations.

The bagpiper disappearing into the Scottish mists transplanted to the
Champions Club in Houston contains the mythic proportion that always
seems to accompany the Great Game -- like the time the then recently
departed and great golf instructor, Harvey Pennick, was said to have
kicked the ball out from behind a tree to help his old student, Ben
Crenshaw, win the Masters Tournament. Some say they saw the ghostly
apparition do it. The bagpipe player yesterday was playing Going Home --
a song about a Scotsman finally returning to his homeland -- as he
disappeared in those mists. As I say -- a fitting tribute to a great
champion and two time winner of the U.S.Open.

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.
Selby
(10/29/1999; 10:01:07 MDT - Msg ID: 17808)
Las Cristinas
http://www.canoe.ca/FP/oct29_lascristinas.htmlInto the Freezer
TownCrier
(10/29/1999; 10:27:41 MDT - Msg ID: 17809)
This is what Mr. Batra said regarding gold in an excellent interview with J. Taylor found at USAGOLD's "GILDED OPINION"
http://www.usagold.com/TaylorBatraCrash.htmlBATRA:
I have a number of investment ideas in my book, but what I am saying is to stay away from any long term investment except gold.

TAYLOR:
Well, from the viewpoint of most of my subscribers, they will not be unhappy with the advice to buy gold since they have a vested interest in gold mining companies.
Dr. Batra is by no means a gold bug, but he told J. Taylor that the only long-term investment he now recommends is gold and gold shares. "...debt created prosperity cannot last forever. So we have gotten into this mess by: First, allowing wages to lag behind productivity and secondly by artificially bolstering demand by creating a tremendous amount of debt. All we have done is simply postponed the problem. And, since this postponement has been going on for many years, the mess is potentially catastrophic."

BATRA:
Like I say, gold is about the only thing I recommend that you purchase as a long term investment at this time. Everything else appears very risky to me. Furthermore, gold appears very well priced right now.
ORO
(10/29/1999; 10:32:16 MDT - Msg ID: 17810)
Stock market blowoff
http://www.quote.com/livechartscom/I track the stocks vs the bonds, e.g. using quote.com (spz9 /usz9), to get a picture of valuation relative to interest rates.

July 98 peak was 10.5
Oct 98 bottom was 8 (double bottom)
July 99 peak was 12.5
Sep 99 bottom was 11.25 (double bottom)
Currently 12.15

The growth of "earnings" (note that I believe these are overstated by 50% to 100% - meaning that between half to all are non existent with options compensation booted in to the accounts) was 22%. Outlook for next year's growth is much lower than it was for 99 in the same time last year.

Thus the valuation premium for the future growth would be expected to drop. Since we are 22% above last year's peak in the SP/bond ratio, and have a 40% higher interest discount rate relative to the bottom (ten year notes rather than 30 year), and the base earnings numbers themselves are only 22% higher, then the end result is a 17% overvaluation.

Comparing bottoms to bottoms in October, the ratio shows an increase of 40%.

Therefore, the expectation of the recent bottom holding is unjustified. A good bottom would reside at a point 20% lower. A reasonable one would be 10% lower - at a ratio of 10.

The Technicals of this chart indicate that a retracement to the 12.5 peak is possible, as is a jump to 12.85. This would translate into a further 3% rise in the SP500 beyond today's move.

The NASDAQ ratios are well beyond this
July 98 peak was 16.5
Oct 98 bottom was 12 (double bottom)
July 99 peak was 24.5
July 99 bottom was 22
Currently 26.2

Technicals in this chart show a possible blow off to 27-27.5, which is 2.5% above current levels.

Were the bond to improve further, the increases could be larger in proportion.
The market is now assuming a peak in interest rates has been reached. With world demand for capital growing and the US consuming 75% of world capital (yes, that is the figure) mostly for general consumption rather than capital expenditure, the expectation of lower interest rates long term is unlikely to be fulfilled. The expectation itself is also unlikely to be held for long.

Thus the stock market is discounting unreal expectations for "cooked" earnings that will only show up in the event of the stock market allowing the continued effectiveness of options compensation. This requires the average stock in the large cap arena to appreciate at least 20% annually. If the market does not grow this way, then options issued at current prices will not be in the money at the time of excercize, driving high level and information employees to demand actual cash pay. If this were to apply to internet companies next year, they will all see rapid rises in wage costs, since they have all been enjoying a rapid increase in compensation into January and April this year, and in the last few months (though not as good as in the year before). These employees will have to see a greater increase in cash compensation relative to options compensation.
TownCrier
(10/29/1999; 10:45:55 MDT - Msg ID: 17811)
Fed adds $6.000 bln reserves via 4-day tri-party fixed system RPs
http://biz.yahoo.com/rf/991029/mi.htmlAnalysts had expected the Fed to add about $4 billion to the banking system through a weekend system repurchase agreement, but the Fed exceeded these levels in both amount and length.
beesting
(10/29/1999; 10:57:32 MDT - Msg ID: 17812)
AngloGold Report for the Quarter Ended 30 Sept. 1999.
http://biz.yahoo.com/prnews/991029/anglogold_1.html FOR EDUCATIONAL PURPOSES ONLY!

From the Worlds Largest Gold Producing company ANGLOGOLD(NYSE symbol AU):
Listed:
1. Cost of production per ounce of Gold.......$209.00.
2. Complete list of forward hedging contracts.
3. Outlook for World Gold market into the year 2000.
4. Statement from company officials on offer to acquire Acacia Resourses.
Statement quote,"We are making an offer to acquire 100% of the equity of Acacia Resources,one of Australia's most successful Gold Companies.

For full report click above URL.......beesting
TownCrier
(10/29/1999; 11:13:12 MDT - Msg ID: 17813)
Euro-11 Trade for August : Statistical Summary (Table)
http://quote.bloomberg.com/pgcgi.cgi?T=markets_newsfeat99.ht=&ptitle=EMU%20Top%20Stories&touch=1&s=043ae4b0f6f5fbe1ba615a50d1de9665As you will see from this table, the single-currency member nations would not need to start with any surplus gold reserves at all...they are exporting more products than they are importing, and therefore could earn their savings/reserves over time. When your books balance favorably like this, it really helps to put you in the driver's seat.
AEL
(10/29/1999; 11:17:46 MDT - Msg ID: 17814)
Batra
TownCrier (10/29/99; 10:27:41MDT - Msg ID:17809)
This is what Mr. Batra said regarding gold in an excellent interview with J. Taylor..."

... yes, but when you pick up his book and actually read his investment suggestions for individuals, he seems oddly distrustful of physical gold, referring to it (and I am paraphrasing here, since I read it a month ago) as a risky, volatile vehicle. He did not use those exact words, but that was the impression conveyed.
TownCrier
(10/29/1999; 11:18:02 MDT - Msg ID: 17815)
Euro-11 Trade for August : Statistical Summary (Table)
http://quote.bloomberg.com/pgcgi.cgi?T=markets_newsfeat99.ht=&ptitle=EMU%20Top%20Stories&touch=1&s=043ae4b0f6f5fbe1ba615a50d1de9665European Central Bank Chief Economist Otmar Issing said, "There is no reason at the moment to cry alarm on future inflation," though there are also "no more downside risks" to consumer prices in the euro region.
TownCrier
(10/29/1999; 11:20:30 MDT - Msg ID: 17816)
ECB's Issing Says There's No Reason to 'Cry Alarm' on Euro Inflation
http://quote.bloomberg.com/pgcgi.cgi?T=markets_newsfeat99.ht=&ptitle=EMU%20Top%20Stories&touch=1&s=1cf3ca4896607ca22bef46b09396cb77Whooops! On the previous entry I provided the wrong link and title. (must be lunch time!)

European Central Bank Chief Economist Otmar Issing said, "There is no reason at the moment to cry alarm on future inflation," though there are also "no more downside risks" to consumer prices in the euro region.
TownCrier
(10/29/1999; 11:25:38 MDT - Msg ID: 17817)
Hello Sir AEL
My guess is that Mr. Batra may have changed his view slightly from the time he wrote his book to the later time at which he gave the interview. Evolving world events have a way of making gold look ever-more attactive as time goes on.

It's a great interview for sure. Check it out if you get the time.
RossL
(10/29/1999; 11:26:25 MDT - Msg ID: 17818)
10AM gold sellers

It looks like the folks who always push down the price of gold at 10AM eastern time met some buyers today. I wonder who's doing that?

Beesting - your Yahoo link on Anglogold isn't working.
Peter Asher
(10/29/1999; 11:30:42 MDT - Msg ID: 17819)
Milk Money
Date stamping Green backs would make them about as useful for legal tender as cartons of milk. As the intrinsic value would diminish day by day and then go sour, evaluating the actual value of the cash being handed over would be an absurd, unworkable task. Can't you just see the fun at the checkout counter: "I'm sorry sir, our store only takes bills no more then seven days old, you'll have to go down to the bank, pay your tax on these, and come back with new ones!"

I'm surprised this idiot didn't also suggest that instead of dead Presidents, they use pictures of missing children! --- This is one scheme that is dead on the drawing board.

BTW, the Tax is probably a side issue, It's the fractionalization potential that there really after.
phaedrus
(10/29/1999; 11:49:02 MDT - Msg ID: 17820)
Anyone else see the irony in Greenspan's speech?
Here's the most revealing paragraph of Greenspan's recent speech, in my opinion:

"The process of containment may already be significantly advanced. Increasing demand for financing capital goods relative to domestic savings, a reflection of the previously cited imbalances, has apparently been exerting marked upward pressure on real long-term market interest rates, especially as economies abroad strengthen."

Of that paragraph, the first sentence is key: "The process of containment may already be significantly advanced."

What Mr. Clear-and-Concise is trying to argue is that as the global economy comes back to life, global currencies will strengthen, exerting upward pressure on the dollar and thus on US interest rates, which will then help "contain" the red-hot US economy (and stock market).

In otherwords, interest rates are rising on their own, which is going to keep stocks and consumer spending "contained."

In otherwords, the Fed won't have to do nuthin.'

This is Al's argument. Or at least, this is Al's argument as Wall Street sees it.

He couldn't talk stocks down, (tried for years and couldn't do it), so now he's trying to talk interest rates up instead.

Now, how much sense does this argument make? Do stocks look "cantained" to you? No way. Greenspan's speech had the OPPOSITE effect- he says stocks are contained, his speech makes 'em rocket higher. He says interest rates are steadily rising, his speech pushes bond yields lower.

After this phony numbers rally and happy Greenspeak speach, the idiots with 99% of their wealth in mutual funds are going to go out and get even more credit card loans. Al couldn't have stoked this stockmarket more if he had said the Fed was going to get into a rate-slashing contest with Japan.

Is this guy a mental midget or what? For years he has tried to talk the tough talk and walk the bulls(oops)t walk, and apparently he still hasn't learned a damn thing.

Perhaps this is why the US dollar has not benefited much at all from this psycho stock rally- and why the dollar index has been dropping today even as bonds and stocks have shot up.

When inflation hits full force and the dollar craters, it'll be time to pay the piper, and he will be one big ugly piper too.

I'll give ten to one odds that Greenspan is going to go down in history as a senile jackass.
nickel62
(10/29/1999; 11:57:24 MDT - Msg ID: 17821)
Phaedrus: Great Post! Greenspan wishes he was senile.
In reality he is a completely cowardly bureaucrat who talks in circles so no one will notice that he lacks the guts to do what it is his responsibility to do. He is the Madeline Albright of the credit markets. Not as cute though.
YGM
(10/29/1999; 11:57:31 MDT - Msg ID: 17822)
GATA as a UNIFIED VOICE
http://www.gata.org/If I may steal a moment of everyones time-----
I would like to say openly in public (as my past criticism was done) that I have since inception supported Gata and it's executives 100%. I want noone who I've befriended here or at Gold-Eagle forums to doubt that. As Leigh said it should have been private. United is the stand that Gata has undertaken and although I may have made it asppear there was dissention in the ranks, such is NOT the case. Bill Murphy can use any phrase he likes as he's done more than anyone out there to unite gold-believers and expose the Cabal for what it is and who is involved.
I remain and will remain the strong advocate for Gold and Gata I once appeared to be. I have been slow in this post because I had to let the fire die down before further comments and apologies were made. BILL, I do apologize and to show my continued faith in you & Gata I will pledge another $500.00 to Gata along w/ the 3 oz of Yukon Gold you've rec'd. My greatest hope is that those sitting on the sidelines will realize that lawsuits or not, Gata IS the ONLY
Unified voice that Goldbugs have and much progress has been made but the final plunge will require alot more than the current $104,000.00. So Please think about it and make a serious pledge. Regards---YGM
GO GATA & Go Physical Gold.
ORO
(10/29/1999; 12:06:49 MDT - Msg ID: 17823)
Batra
Unlike our group, Batra pays no attention to the monetary aspects of the problems he points to. Thus, he does not see that the problem resulted from a monetary issue, and therefore, a monetary result should accompany his economic analysis.
Obviously, had the US not been issuing the reserve currency, there would not be willingness in the world to accept its' debt. By definition, the issuer of the reserve currency must provide a supply - i.e. run a deficit with holders of the reserves, otherwise it could not serve its purpose. The end result of the problem of foreign funded artificial demand is in monetization of the debt or contraction of the economy into the size appropriate to the non-artificial portion. Obviously, both should happen simultaneously - hence the inflationary depression prognostication.

Since Batra missed the monetary boat, the book would not provide a monetary solution to the problem of how to hold one's assets. If Batra were fully aware of the Euro/Gold/Yen/Dollar currency conflagration, he would have put more emphasis on gold and hard currency holdings.
Cavan Man
(10/29/1999; 12:29:22 MDT - Msg ID: 17824)
ORO
Thanks. Have you reviewed the book in a previous post? Also, I was certainly not questioning the holding of PM. What I couldn't understand is why his recommended allocation was not much higher.
phaedrus
(10/29/1999; 12:33:59 MDT - Msg ID: 17825)
small correction
In my last post I meant to say that a rise in global currencies will put Downward pressure on the dollar, not Upward. Which in turn puts upward pressure on rates. I think my meaning came through but I just wanted to clarify.

@nickel162: you think albright is cuter than greenspan? I'd say it's a tossup.
714
(10/29/1999; 12:53:38 MDT - Msg ID: 17826)
Oro
"Obviously, had the US not been issuing the reserve currency, there would not be willingness in the world to accept its' debt."

I don't understand your logic here. You seem to maintain an overly monertarist view of the world's economy. Even if the US dollar was not the reserve currency on this planet, would there not be a willingness to accept US debt? Do we not routinely accept debt from less-than-credit-worthy third world nations? The US is far and away the world's largest consumer of manufactured products. At one time, 40% of the world's automobiles were on US roads. If Japanese automakers didn't accept US debt, they simply would not be in business on the scale that they are. I am a small businessman. If I do not extend credit and accept my customers' debts, I lose a large portion of my business. Of course, international finances are much more complicated than this. Perhaps being the world's biggest consuming nation AND the most productive (at least in GNP) goes hand-in-hand with the US dollar being the world's reserve currency.

If, as AEL states, Batra views gold as a risky, volatile investment, I do not think he is far wrong. Since I began investing in it two years ago, I've watched it bounce all over the place, subjected to all kinds of manipulation and political maneuvers. Such manipulation is not bound to end, even in a bull market. And in a crash of some kind, gold will not be exempt from some kind of regulation.

Am I glad I own gold? Yes. I invested in gold for a number of reasons, including Y2K and because I thought the price was low. But I will be glad to sell it off gradually in a bull market.
Strad Master
(10/29/1999; 12:54:43 MDT - Msg ID: 17827)
FOA � response about Strads
Thanks so much for your recent response to my question. I will hang onto my little stash of physical gold. Maybe it will ultimately serve to restore all the huge losses we suffered in the stock, commodity, and PM markets.
Here is my response to your querie: My Strad doesn't vary much in sound due to changes in weather. It was made in 1728 and because it (like many Strads) has been cared for with great love throughtout the intervening years, it has remained very healthy and, indeed, in some ways it is just like it was the day it was finished. Instruments that show great sensitivity to weather changes generally have been repaired a lot, sometimes using different types of wood to hold together open cracks. Those woods all expand and contract at different rates and the more repairs there are the more those expansion/contractions tend to influence the sound. All violins are made of two types of wood - the back and ribs are generally of maple which is very hard and acts as the "soundboard" or reflector for the sound while the top is made of spruce which is quite soft and vibrates well, creating the sound. Since these woods expand and contract differently, violin makers discovered a long time ago that it is best to use a very thin rabbit hide glue to affix the top to the back and ribs. Consequently, if an extreme change in weather happens, the worst thing that befalls the violin is that the seam between the top and ribs pops open - no big deal. A heaver glue would prevent the top from being able to move and so the top would split. My Strad is very happy living in Los Angeles since the climate is quite similr to Cremona, Italy where Stradivarius worked. I must say, though, that my violin does seem to sound a little bit better on rainy days, and I do keep a little cigar humidifier in its case to keep it from drying out too much. The exact copy of my Strad that I play onc a lot is only a few years old so it barely notices any weather changes at all.
Recently I was offered $2,000,000 in gold buillion (when the price of gold was around $260) to sell my
Strad. I didn't do it - partly because of difficulties I perceived in getting the funds transferred safely through Europe, (big problems with US tax laws, etc.) but more importantly because I just couldn't bear to part with it. Maybe, someday, I might rue the decision but I figured that there is much more to life than money and I could never bring any pleasure to my listeners (or myself, for that matter) on a big pile of gold. If you are interested, please e-mail me ( Strad@zyan.com ) and I'll send you a tape of a concert. Now, you've probably learned far more than you wanted to know about violins but I'll be happy to answer any other questions you might have. All the best,
Strad
AEL
(10/29/1999; 13:00:59 MDT - Msg ID: 17828)
batra
For the record: I was not agreeing with Batra, only trying to reflect the spirit of what he wrote (which actually seemed kinda clueless and misleadingly tepid, to me...)
ORO
(10/29/1999; 13:10:05 MDT - Msg ID: 17829)
Top 25 stocks blow off
Symbol Name Capzn P/E ProjectedPE
MSFT MICROSOFT CORP 462,119,000,000 59.1 47.8
GE GENERAL ELEC CO 436,265,000,000 42.7 36.2
WMT WAL MART STORES INC 248,017,000,000 50.2 39.8
INTC INTEL CORP 238,805,000,000 34.5 27
CSCO CISCO SYS INC 233,926,000,000 114.4 57.2
LU LUCENT TECHNOLOGIES INC 193,031,000,000 63 34.2
MRK MERCK & CO INC 186,188,000,000 33.4 28.6
C CITIGROUP INC 182,812,000,000 30 17.4
XON EXXON CORP 177,560,000,000 34.6 23.3
IBM INTERNATIONAL BUSINESS MACHS 173,654,000,000 22.2 21.9
WCOM MCI WORLDCOM INC 156,648,000,000 29.3
BMY BRISTOL MYERS SQUIBB CO 154,795,000,000 44.7 33.5
PFE PFIZER INC 154,029,000,000 61.1 40.5
AIG AMERICAN INTL GROUP INC 153,270,000,000 32.4 27.1
T AT&T CORP 147,001,000,000 19.1 66.6
KO COCA COLA CO 145,214,000,000 47.4 38.4
AOL AMERICA ONLINE INC 140,715,000,000 186 139
JNJ JOHNSON & JOHNSON 139,822,000,000 41.2 30.7
PG PROCTER & GAMBLE CO 137,604,000,000 40.3 28.5
HD HOME DEPOT INC 110,575,000,000 57.7 41.8
BAC BANK AMER CORP 110,554,000,000 15.8 11.7
SBC SBC COMMUNICATIONS INC 102,674,000,000 23.8 20.7
BEL BELL ATLANTIC CORP 100,353,000,000 22.5 19.4


These have falling projected growth rates for all but 6. The following have 10% or lower projected growth rates than last year
WCOM C HD WMT INTC CSCO PFE SBC LU BMY MRK

So why the big jump and runup?

I think there are a few components, (1) There was money outside the markets, (2) The bonds had a low sentiment reading and were heavilly shorted by speculators, who covered the second good news hit, (3) End of month tape painting by the large institutionals.
Most important was the growth in short positions in the large cap techs of late. So the simple fact that there was an opoortunity to squeeze money out of them ruled the day.
The Futures were pumping through most of this action, as the significant spec shorts were run in. The futures spent time significantly above fair value in 20% of the time periods, but below only 5% of the time during the last 3 days.
Within days, if not hours, the shorts will be mostly wrung dry and money will have to come from outside. There is not enough money left to do this with.
Mr Gresham
(10/29/1999; 13:12:19 MDT - Msg ID: 17830)
Currency
http://detnews.com/1999/biz/9905/09/05090035.htmHere's the print order by the Fed for this year; I'll try to find the detailed breakdown elsewhere.

Moral of the story: Paper currency is NOT infinite. Ditch that Weimar image, with all the overprinted zeroes, at least for now.

"Normally, the Federal Reserve keeps 40 days' cash supply -- about $150 billion -- in its vaults. Now it is carrying 60 days' worth of $1, $5 and $10 bills, 70 days' worth of $20s -- which most ATMs dispense -- and 115 days' of $50s and 120 days of $100s.

"The Fed ordered from the U.S. Bureau of Engraving and Printing 11.3 billion notes of varying values this year, compared with 9.2 billion notes last year and 9.58 billion in 1997. The order will have a slightly increased mix of $20 bills for the ATMs, bureau spokesman Larry Felix said. "



Strad Master
(10/29/1999; 13:16:21 MDT - Msg ID: 17831)
Commentary requested from anyone
The following is a portion of a post from Kitco today. I would be very interested in any commentary:

"Wage inflation (is) low, bond yields and oil (are) peaking and ready to decline, and market has plenty of sidelined cash. Fund managers drive the action these days, with 401K money, growing each year, that is NOT levereged and which is intended for withdrawal decades from now. You think those fund managers are going to let that cash lie fallow when they are expected to perform with it?"
Strad Master
(10/29/1999; 13:31:55 MDT - Msg ID: 17832)
Another question
Looking at yesterday's and today's DOW chart, I am struck by a peculiar pattern, namely that the huge gain happened in the pre-open trading with the bulk of the regular day trading in a range sideways to only slightly higher. What accounts for that?
beesting
(10/29/1999; 13:36:39 MDT - Msg ID: 17833)
RossL #17818
http://biz.yahoo.com/prnews/991029/anglogold__1.htmlTry this URL for AngloGold report.One of these days I might get lucky and figure out how to operate a PC correctly.....beesting
Cavan Man
(10/29/1999; 13:42:09 MDT - Msg ID: 17834)
Multiples
Frankly, I have not looked at these in quite awhile. I am shocked by the current PE's!!!!!!!
Mr Gresham
(10/29/1999; 13:43:51 MDT - Msg ID: 17835)
Currency
http://www.federalreserve.gov/boarddocs/press/General/1999/19990813/
"Release Date: August 13, 1999

For immediate release


The Federal Reserve Board announced today it has ordered nine billion currency notes, with a face value of $67 billion, for Fiscal Year 2000.

The order, sent to the Treasury Department's Bureau of Engraving and Printing, represents a return to historical ordering patterns. Last year, the Board ordered eleven billion notes worth $267 billion to meet normal business needs and to prepare for the possibility of increased demand around the Year 2000 rollover.

The face value of the new order is considerably smaller than the previous year because the Board decided not to print additional $50 and $100 notes. The inventory of larger notes is sufficient to meet anticipated demand over the next federal fiscal year, which begins October 1.

In last year's order, the Board aimed for an increase in inventory because, even though it expects the full variety of payment options to work during the rollover, it wants the public to have confidence in the availability of cash.

"Because of increasing confidence in the readiness of the financial infrastructure, we do not anticipate extraordinary demand for cash. Nevertheless, we have taken all the appropriate steps to make sure it is available if the public wants it," said Governor Edward W. Kelley, Jr.

While currency inventory levels depend on flows into and out of Reserve Banks from the nation's depository institutions and on the destruction rate of worn-out bills, the Board expects by year-end to have well over $200 billion in Reserve Bank vaults. That's more than enough to replace all of the approximately $170 billion in currency circulating in the United States.

The Board expects inventory levels to decrease gradually next year as replacement currency enters circulation and the Bureau of Engraving and Printing delivers fewer notes. "


ORO
(10/29/1999; 13:44:01 MDT - Msg ID: 17836)
714 - Currency, GNP and debt
The US has the greatest consumer base anywhre. Does that mean that there is any reason to take their IOUs? Do spendthrifts "deserve" credit because they want to spend?

Is there an issue of creditwothiness if your customers print their own currency? The only problem is whether the currency has any value. Should you take it or not?
If the currency was necessary to buy oil, you probably would take it. If it were necessary to pay down a debt denominated in that curency, you would have to take it.

The GNP of the US does not carry meaning as stated in the government statistics. It is like the earnings of US corporations, a fake. A product of cooked books and fanciful balance book engineering.
Furthermore, a large portion of the GNP is a function of the monetary issues, since they drive the need to keep importing, that in order to fill the world's need for $ to allow payments on bloated 20 year old petrodebts to banks and to buy oil and all other $ denominated commodities. Foreign $ debt is already receeding quickly, soon there will be no need for $ to buy oil, or anything else not made in the US.
phaedrus
(10/29/1999; 13:55:39 MDT - Msg ID: 17837)
commentary for Strad Man
Strad man:

Here's some commentary on what you posted:

That post pretty much sums up why the stockmarket has gone ballistic over the past two days: keg o' cash on the sidelines looking for some action (not to mention shorts being squeezed 'til their eyes pop out of their heads).

But this rally is based on perception, not reality.

The reality is that wage inflation is NOT low. Wage increases have been disguised as stock option bonuses, which do not have to be recorded as a drawdown against profits. If This little trick alone inflates the profits of tech companies by as much as 40% and also allows the fiction to exist that there is no wage inflation.

The government also declared software purchases to be an investment rather than a business expense and calculate them now as such. This is the stupidest thing I have ever heard. Software is full of bugs, has to be upgraded every time you turn around, and even if it DOES help your business, then that will show up in your bottom line already.

The notion that bond yields have peaked is also perception (and one with which I would beg to differ). The Bonds' sharp move up in the past few days is due to a) the bogus ECI report falsely stating no wage inflation, and b) Greenspan's speech suggesting that the fed does not need to raise rates because interest rates are rising themselves.

So, here's how it goes: interest rates will soon be falling again because a complacent Greenspan says interest rates are rising again. Does this make sense. No.

As I said before, Greenspan is so stupid he is pushing interest rates down with his prediction that interest rates are going to rise by themselves. He will soon be forced to wake up and smell the stink of a burning dollar. Before long his hand will be forced whether he likes it or not.

As for oil falling, it very well may drop back into the teens again soon. But the damage is done. There is a time lag here- it takes time for changes in price to work their way into the system. Oil peaked in the $25 range just last month. So it will be months more yet before we feel the full effect of this energy spike on consumer prices. It's all shaping up to hit the market with one big kablooey at the most dangerous time. And by the time lower oil prices are back in the market, we will already be in recession or depression.

Fund managers are slavering idiots, so engrossed by this bull market that they have taken on a hillbilly mentality in their stock picks: Hey there Jethro! AOL done gone an' split, less' buy 'er up 'cause she's cheaper n' whur what she wuz yestiddy!"

Note: I apologize if I accidentally insulted any hillbillies.

ORO
(10/29/1999; 14:00:25 MDT - Msg ID: 17838)
Strad - dow pattern
It is the kind of distress pattern you see in the gold breakout, which was driven by overnight news. The thing we see is c
ORO
(10/29/1999; 14:11:55 MDT - Msg ID: 17839)
Strad - dow pattern
Sorry, Kitty just posted this after erasing most of it.

It is the kind of distress pattern you see in the gold breakout, which was driven by overnight news. The thing we see is the shorts caught by their stops being activated. The lack of arbitrage during the pre-open does not allow the futures premium to fall into the market until it opens. Thus the driver is the coverage of the short positions, which hits the market when the futures, themselves driven by short covering, finally get arbitraged at the open.

Thus the greatest fool to buy is the early short, who is squeezed by the market's rush, causes the rise in the most absurdly priced stocks, the true dud investments.
Jeff
(10/29/1999; 14:14:15 MDT - Msg ID: 17840)
Posting Down for Maintenance
I am taking down the ability to post for a while. You may also see some strange things happenning. Everything is safe, just getting some new code into place. I will let everyone know when everything is back up. -Jeff
Jeff
(10/29/1999; 14:38:30 MDT - Msg ID: 17841)
Posting Back Up
Posting is back up and yesterday's discsussion is now available. You may need to 'refresh' or 'reload' the posting page to view it. -Jeff
phaedrus
(10/29/1999; 14:45:48 MDT - Msg ID: 17842)
Euro and US Dollar Index
There was a key reversal today in the Euro after the recent
sharp decline. The december Euro made a new 4 1/2 week low
and then finished near the highs of the day, above
yesterday's close.

Now, here's what's rilly interesting: the US dollar index
also had a key reversal today- to the downside! Making 4
week Highs, and then finishing near the Lows of the day,
below yesterday's close.

Key reversals are interesting in themselves.

But to have the Euro and the Dollar both have key reversals,
in opposite directions, on the same day....

a day in which action should be bearish euro and bullish
dollar due to superstrong US markets, but instead ends up
being the reverse...

the plot thickens.


TownCrier
(10/29/1999; 15:03:15 MDT - Msg ID: 17843)
U.S. IRS acknowledges problems in Y2K preparation
http://biz.yahoo.com/rf/991029/yd.htmlIRS Commissioner Charles Rossotti wrote in a letter dated Oct. 15, "The quality of the IRS's inventory currently poses a high risk to the Y2K effort."

The contingency plan is to issue refunds manually, first to those deemed "most in need," then, to everyone else...as fast as their little pencils can fly.

I sure hope everyone here is on the side of paying some small additional tax rather than expecting a fat refund. The refund indicates you paid too much too early...and you might not be getting it back very soon.
CoBra(too)
(10/29/1999; 15:12:39 MDT - Msg ID: 17844)
re - re - lost it - sorry (I am)!since it's been i n special mood!
Started with a tale of Nissan Motors - 30 y's ago the Co was strictly assembling -Trucks -. "Mr. Nissan" decided to broaden the product line --- and went to Wall Street in order to finance a line of passenger cars - looking great on the drawing board - so the bankers asked: " Mr. Nissan, wwhen do you expect the first passenger car to roll off the line?
Mr. Nissan consulted his digital Toshiba notebook and declared:" Gentremen, it's now Aplir 1st., be sule on Jury 1st. we'rr have the filst 200.000 cals lorring off the rine!"
That SOON, wondered Goldman, amongst others.

Oh, yes, replied Mr. Nissan, Befole I folget this is the name of the cal: "DATSUN".

The morale of the story - as long as you don't have hard assets to sell - you've got to import them! R&D in the long run are "services", upgraded as in the "Nissan" example to lower (labor) cost countries.

MSFT, Intel and consorts spell total disaster on DJII - I can't believe the shortsightedness of a 100 yr plus conservative index. Repeal of Glass-Steagall means the icing on the cake (though nobody wants to know).
Good luck USA - Go gold friends .... Best CB2
aunugget
(10/29/1999; 15:30:20 MDT - Msg ID: 17845)
BATRA
AEL ID 17828 Perhaps you should read Batra's previous bookk "THE GREAT DEPRESSION OF 1990"in which he forecast that we are headed toward an economic disaster of unprecidented proportions that will occur in 1990 and continue to plague the world at least until 1996.With predictions like that, no doubt one can be confused by his writings. 'AUNUGGET'
nickel62
(10/29/1999; 15:45:14 MDT - Msg ID: 17846)
Portfolio managers and mutual fund managers slavishly follow the trend or die and are removed from the game.
The comment that Phaedrus had a few minutes ago is right on.I think it is very important to understand that almost all big money managed by professionals is cought in the same trap. The large investment houses know that every manager who doesn't stay fully invested and beat his index will rather quickly lose his job and be replaced by somebody who is less concerned about loosing all his customers money. The difference in the last eight years is that for various reasons having to do with averting a collapse in the US banking system in the late eighties and early nineties you have had an unholy alliance with the federal reserve,the large proprietary trading desks of the money center banks and the wall street firms. You buy our bonds and we'll guarantee that interest rates will go to 3% and we'll bail out the banking system and rejuice the economy. All nice and dandy and it eventually worked. The banks and brokers piled into US treasury debt at 40 to 1 leverage and a new era of "Masters of the Universe" wwas of and running.The Dow Jones stock average was pushing 3300 in 1994 and we had a little outbreak of responsible action from the Fed and it tanked the bond market and almost tipped the stock market.Then the pressure really got screwed up to gun this baby and squeeze any foolish investors who actually still thought the US capital markets were efficient allocators of capital. The long and the short of it was that stocks ceased to be ownership in corporate america and they became commodities. Piecesw of paper that could be manipulated were ever the boys in the know decided to make them go with their unlimited leverage and the majic of derivatives. They became the market just like Stalin became the market in Russia between the wars. The Vice Chairman of the Federal Reserve a very knowledgable and honest individual saw this coming and resigned saying that if the low interest rate policies and market manipulation were continued then they would create a bubble in the US stock market. He announce this in September of 1994 and the market went up four hundred points in the next three months. He resigned in January of 1995.His luck wasn't so good either after this but thats another story. The market at that time was about 3500 it seems that maybe at 10500 he had a point. The current situation is so far advanced that sll the money managers of pensions,endowments ,public retirement funds and mutual funds of all kinds are chasing two dozen ridiculously overvalued stocks that have no contact to eanings,cash flow, book value or any realistic net present value of their future earnings. They are commodoties in a large gamble being driven with the credit our own government has been fuelling into the system because they lacked the guts to do anything about the market manipulation over the last six plus years. Gutless, irresponsible,public servents who have allowed the entire financial sytem to become a hugely overleveraged gamble. The savings of our entire generation has been sucked into the game and now in the final irony you see the stocks of the very perpertrators being lifted twenty plus percent in less than two weeks. How by using the governments help to provide unlimited credit to avert whatever to squeeze the shorts in their own stocks. The very same investors who have been watching the unfolding disaster of the bubble start to implode and were rash enough to think that they still were investing in a free market. Greenspan or Albright? A toss-up.Hilary and Bill or the wunderkind Rubin who was smart enogh to know a completely mallable front man when he saw him and took us all for a ride.The best treasury secretary this century ? I think not.
Atahualpa
(10/29/1999; 15:55:26 MDT - Msg ID: 17847)
Phaedrus: re Euro key reversal
Yup, yup. I saw it, too. And it rebounded off the upward sloping support line just perfectly, as well. For anyone interested in trading currencies, we can now use the same strategy as for gold:

BUY THE DIPS, BUY THE DIPS, BUY THE DIPS!

Wow, on top of it, the Euro just gave a clear slow stochastic buy signal. Textbook kind. And the MACD is just hovering above the zero line. If the Euro moves up a bit, we may get a strong MACD buy signal. And I'm talking STRONG, because it would be around the 200 day moving average. This is going to be great to monitor.
Gold Power
(10/29/1999; 15:58:54 MDT - Msg ID: 17848)
phaedrus & key reversals
phaedrus,

I have always found that daily key reversals hold little to no relevance when they happen on a Friday. In fact, and we'll see next week if this happens, when a daily key reversal takes place on a Friday, it's a near certainty the former trend will continue the next week.

For instance, we also had a "key reversal" in December gold today. Still, I look for gold to resume its move upwards next week.

Also, the last day of the month is always a poor indicator of future activity as well, IMO. There is a lot of month-ending book-squaring going on.

Still, I hope you are correct. I'd like to see the dollar index decline and the Euro climb.

I keep remembering ANOTHER telling us that the dollar and gold would rise together.

We'll see.

Gold Power
Gold Power
(10/29/1999; 16:13:28 MDT - Msg ID: 17849)
Gold (Pollitical) Fundamentals
I am very impressed with the powerful technical blast-off that gold has provided us. Volume looks great.

The supply/demand fundamentals are as impressive as well, with a deficit of as much as 1,800 tonnes per month continually forcing a search for physical gold for the market to consume.

What really has me impressed, though, is the global political change that has occurred. The day of the ECB announcement -- a Sunday -- the front-page headline story in the Atlanta Constitution was the consternation U.S. economic officials had that the Japanese would not cooperate in lowering the yen against the dollar.

Later than night, the other shoe dropped, Euro announced it would curtail an expansion of gold loans.

The political ramifications are enormous. For the past ten years we have lived in a world where America ruled supreme.

It looks now like there are challengers to American supremacy. And they aren't new challengers; we've seen the world line up in this very political alignment before. It was called World War II.

With the Americans and the British on one side, the Germans and the Japanese on the other.

We've known for many years the Japanese were not happy with the way the U.S. conducts its affairs, especially its meddling with Japan's traditional way of doing business for the benefit of the Japanese.

Now we see that Germany is not happy, either.

That's all I can say about the facts of the situation right now. We'll watch how it plays out.

But the message for gold is clear, in my mind. American global supremacy provided for a very stable political and economic system. There was seemingly no need for gold and the discipline and stability it brings in such a world.

The fact that the system is now in trouble is a testimony to the moral and intellectual faults of the parties that have over-leveraged and manipulated it to their own ends.

The system has been wrecked from within rather than without, as when the Barbarians sacked Rome.

Of course, the Barbarians could never have sacked Rome had not the Empire fallen into the same moral and intellectual decline the American Empire has fallen into.

It appears to me that James Davidson and Richard Maybury were a decade too early in their predictions about global chaos. And if things don't fall that far, then just realize that in a world with no global policeman, the instability causes a much greater need for gold than in a stable world.

I remember hearing Rick Rule give a speech in which he said he talked to a Vietnamese client of his. Rick asked the man how Vietnamese people felt about gold. The guy told him: "There are two schools of thought on gold in Vietnam. First, those who believe in gold; they are all in America now. Second, those who don't think about gold. They all wish they could be in America now."

Gold Power
Buena Fe
(10/29/1999; 16:59:18 MDT - Msg ID: 17850)
Guessing!
What will ignite the next upswing in gold? Here's a stab at it.
1) Europe raises interest rates, which.........
2) Knocks the US$ (bonds/S&P500) to new cycle lows, which........
3) Gives gold the impetus to rally to new cycle highs!!!!!

Slowly the new paradigms crystallises in the minds of the populace:
DOW/Bonds - "sell the rallies!!!!!!!!"
Gold/Oil - "buy the dips!!!!!!!!"
CoBra(too)
(10/29/1999; 17:08:46 MDT - Msg ID: 17851)
TA friends arrived on the site 'en masse' - take cover-
MACD, Stochastics, Bollinger Bands, Elliot waves (beware Bob Prechter), Kontratieff (long & great) and many more guys want to make sure we're on the right side of trade. - I luv 'em!
Go physical and (FOA permit!) unhedged miners-CB2



Goldspoon
(10/29/1999; 17:31:52 MDT - Msg ID: 17852)
Help me draw my sword.......
It is Time!... It is time for the Gold Sword of TRUTH to be drawn from it's scabord!!! It IS a Heavy Sword... help me Draw it my Friends!!!.... The GATA is pulling on this Magical Sword that has been frozen in stone by the Black Hearts...
Together WE can pull it from it's Rocky Tomb! To slay ignorance... Help me compile a few page summary of what Honest Money was, how we lost it, and our effort to retake our Freedom!!! i and you can use this to explain to friends, neighbors, strangers, the internet... the very World what was taken from us!!!! Help me think of ways to compile this..... Pull your Swords and submitt the TRUTH... to be compiled in a short easy read... for the masses....

Another idea... the treasurers of my church will have to figure out what to do with the Gold and Silver Eagles they find in the collection plate...(smile)
Hipplebeck
(10/29/1999; 17:46:21 MDT - Msg ID: 17853)
to goldspoon
Cool dude. I am going to work on that one too. After all, we live in the world of sound bites now.
Michael
Hipplebeck
(10/29/1999; 17:53:23 MDT - Msg ID: 17854)
to everyone here
technical-schmecnical
hedging or non
in a short time, even the dopiest of us will see where exponientially expanding numbers leads to.
The next inflation scare that leads everyone running to safe havens will make the 1980's high dollar gold prices pale.
FOA
(10/29/1999; 18:21:31 MDT - Msg ID: 17855)
Lost posts?
I have early posts from #17694 to #17799 that seem to be gone. Are they lost or are they to be reposted by Jeff? Should I post them now?
FOA
(10/29/1999; 18:27:10 MDT - Msg ID: 17856)
(No Subject)
OK, I see what happened! It's all in order now. Boy, what a problem Jeff is having!
Atahualpa
(10/29/1999; 18:37:11 MDT - Msg ID: 17857)
Question for FOA
Hello from Peru, FOA. I will be quick and to the point. Over the last year or so, peruvian private pension funds have accumulated shares of a local unhedged gold producer to the point of making it the largest single equity holding in the whole fund. The strategy has worked out beautifully so far, as the returns have been great. However, in the past few weeks, your misgivings regarding the paper gold market have been nagging me relentlessly. Do you think it would be a good idea for the pension funds to lobby the local authorities and press for physical gold to be included as an investment grade asset class ? Do you know of any similar experiences ? Thank you in advance. I have learned a lot from you and this Forum, even though I have not participated actively. I dropped by on times to reinforce some concepts learned over the last year or so.
elevator guy
(10/29/1999; 18:59:21 MDT - Msg ID: 17858)
Fifi LaBoom!
I don't know how to break this to ya, guys, but Fifi La Boom, over at the Cafe, well, she likes me! As soon as I get in that place, it only takes a few moments before she starts winking at me!
Yup, Yup,.... How could anyone blame her? Beneath my gentle be-spectacled appearance, lies a real tiger. A detail that did not go un-noticed by Fifi! Good eye that Fifis got!
Trader_vic
(10/29/1999; 19:16:16 MDT - Msg ID: 17859)
(From this point forward, the shorts are just waisting their money!)
Obviously, the strong push at the close of all the precious metals is just waisted time and money for the shorts....At this point, there has
been two closes above $300/oz for Dec. and it now becomes resistance. This show of force at the close is just a last gasp effort to
make people think that gold is going nowhere...but they are fighting a loosing battle for the following reasons:

1 ) The fundamental demand for gold at the lowest level is stronger than it has EVER BEEN BEFORE!! Ask Asia, ask India, ask the
US and ask Europe!!!! These are record years for gold sales! So basicly, these shorts are fighting a loosing battle...sooner rather than
later the physical will virually disappear altogether and the panic will begin, at that point, they can only give the bulls everything they
own....The sad thing about it is that the shorts already know this and are trying to get out at the lowest possible point! It's like someone
being buried alive and they are franticly scraping at the coffin to get out alive!!!! To no avail....

2 ) All technical bottoms pretty much react this way where the bears don't want the party to end, but they haven't figured out that the
whole dynamics of the market has changed...They're pissing into the wind and it's going to end up in their face!!!

3 ) The lower the bears drive this market, the faster the end will come and the greater the UP SURGE will be, destroying them
completely!!

4 ) As you can see, their attacks on the gold market are at very strategic times and points, they no longer can sell the metal all thru the
day because they are running out of money!!! And they are running out of metal to borrow!! Why don't they just give up and save a lot
of money...OR...even better, why don't they just reverse their position and GO LONG!!!

5 ) As the old saying goes, you can fool all the people some of the time and some of the people all the time, but you can't fool all the
people all the time...MR. BEAR! THE JIG IS UP AND YOU JUST LOST!!!

Do these short sellers really think that they are going to drive us out of the gold market? Do they really think that we're going to sell our
gold or our gold shares NOW if we haven't sold them for the last 15 years? Just when the party is getting started!!! NO WAY!!!

DO THEY REALLY THINK THAT THE DEMAND FOR GOLD WILL GO AWAY WHEN THE GOV'T CONTINUES TO
FLOOD THE MARKET WITH WORTHLESS PAPER MONEY!!!

GO AHEAD MR. SHORTSELLER "MAKE MY DAY"!!! THE FASTER YOU SELL, THE FASTER WE BUY!!!
Hill Billy Mitchell
(10/29/1999; 19:33:08 MDT - Msg ID: 17860)
Phaedrus # 17837
Accidentally or intentional no offence taken. Who wants to live in a world where you can't have a little innocent fun. Shucks, hit jest wouldn't be no good a'tall.

Your words of wisdom all mixed up with er joke er two makes 'em jest naturally have more meanin'
TownCrier
(10/29/1999; 19:33:12 MDT - Msg ID: 17861)
After the Close: the GOLDEN VIEW from The Tower
To take some liberties with Apocalypse Now... "I love the smell of euphoria in the morning." It all comes down to departures from reality. The irrational behavior of your garden-variety fund managers and individual investors are playing right into the clich� "the bigger they are, the harder they fall," and those of us on the sidelines with gold are safely positioned to calmly watch the drama unfold on what is sure to be a once-in-a-lifetime event. (Except for those few who are old enough to remember 1929.)

The DOW recorded its highest close since September 20th, reaching 10729.86 at the final bell. It posted a gain of 107.33 (+1.01%) on this final day of its present configuration. As we reported earlier in the week, on Monday it will be revamped to include four new components, most notably Microsoft and Intel among them.

The Nasdaq enjoyed a record-setting session, both on volume (1,441,370,000) and on closing value (2966.43) It reached its new high on its sixth-best daily point gain of 91.21 (+3.17%).

It was an exuberant day for paper all around, not just for the index components. On the New York Stock Exchange, 1.14 billion shares were traded, advancing issues led decliners 2,170 to 974, and for the first time in memory, new 52-week low were outnumbered by new highs 84 to113.

As reported by TheStreet.com:
"The psychology of the market has changed," said one ebullient (and long) New York equity trader. "A lot of people made a lot of money the last two days. Once in a while you get it right and you've got to press your position until [the trend] changes. This is awesome."

Live it up, Sonny. The Tower would love to buy your various company shares after they prove that they can double easily from these levels. Just give us a call when you're ready to retire.

But seriously, doubts do remain on Wall St, though they are in the smaller camp. Jim Volk, co-director of institutional trading at D.A. Davidson, said "I am still skeptical. A lot of big hedge funds are taking money off the table. There's still good buying and it's not like the market is going to go down 500 points in a week, but I just think they've had enough of a play that they're ready to rest."

The bond buyers showed no sign of resting today, driving the 30-Yr Bond down to 6.149% on a second straight day of full-point gains, today's being 1-6/32. But despite the recent "traders' rules" that say the dollar follows the DOW, the dollar lost against currencies across the board. Of note, it lost 0.96 yen to close down at �104.09 per dollar, and it gave up 0.31 cents against the euro, the euro closing equivalent to $1.0543. The euro also registered gains against the yen, climbing 0.68 yen to �109.75.

Because it is such an important point to grasp as events unfold in the gold market, I offer a quick rehash of a portion of yesterday's GOLDEN VIEW. When people embark on a search for truth, they can never be too sure what to believe, and what to dismiss. Unless you are standing on the doorstep as a firsthand witness to the unfolding of events, the search for corroborating evidence can be a never-ending thing. We hope this comment by an impartial authority (impartial to the fate of gold, that is) will help you see clearly that the price of gold is not set by the supply and demand of the physical market, but rather by the supply and demand of gold derivatives--contracts which position the holder to gain or lose money based on a future price of the futures contract. Our "authority" is none other than William Rainer, chairman of the Commodity Futures Trading Commission. He delivered an address which emphasized that "the CFTC should treat financial futures [such as those for Treasuries] in a fundamentally different way than futures based on metals, agriculture or energy." He said he was skeptical that the "remote possibility of manipulation" for financial futures justified the current level of regulation; that financial markets did not rely on financial futures for price discovery, which is one of the fundamental principles of US futures regulation. Clearly, the case is clear that the aforementioned real underlying assets, including metal (gold), DO rely on the futures markets for price discovery.
+
That is important to grasp (and is why we repeated it) because there is currently a disparity between the availability-vs-demand of real gold when compared to the abundant trading of "paper gold." When real gold can't be moved adequately at the "paper gold" pricing levels, there will be a sharp adjustment in which all hell breaks loose due to the global scale of the gold derivative markets. Read on...

On a relatively slow day in these gold market, the spot price was last quoted in NY at $298.20, off 20c from yesterday, settling in the middle of the day's trading range. As we turn now to Bridge news for their brief comments on a seemingly uneventful day, be sure to take note of our interjected commentary on some action by the Bank of England that we hope you find to be as satisfying as we did. It would seem we are squarely positioned within the end game...

NY Precious Metals Review: Dec silver down 10c in late selloff
By Melanie Lovatt, Bridge News
New York--Oct 29--COMEX Dec silver futures settled down 10 cents at
$5.18 per ounce after sliding to a 2-day low of $5.17 right at the end of
the session.
Traders said that silver's move lower was technically inspired, with its
inability to pierce $5.33 resistance leading to disappointed long
liquidation.
Aside from this, precious metals were quiet amid low volume trade.

Traders noted that today's stock and bond market rallies also sapped
strength from precious metals.
Platinum and gold dipped lower at the end of the session in step with
the silver selloff, while palladium meandered higher.

Traders said that today's precious metals session was dull, with many
brokers and traders taking off at midday to watch the Yankees baseball
team celebrate their twenty-fifth World Series win with a ticker tape
parade in downtown Manhattan.

However, even with lease rates slipping further, gold stayed
"resilient" around the $300 per ounce level, said Leonard Kaplan, chief
bullion dealer at LFG Bullion Services. One-month lease rates are now at
around 0.90%, after staying at 1% on Tuesday through Thursday. They had
started the week off at 1.5%, which was down considerably on the previous
Monday's 3%.

[The TWO-month lease rate has managed to remain something of an aberation above 3% though...
1-month 1.1080%
2-month 3.0110%
3-month 2.8850%
6-month 2.8200%
12-mnth 2.9500%...]

Traders said that rumors are circulating suggesting that central
banks, especially the Bank of England, had been lending more gold to the
market in the hope that lower lease rates would keep the prices down and
help producers to cover positions.

[Aah-HA!! So NOW you know! From that passage above it should become clearer to you what the motivation is for the Bank of England...to deparately do whatever is needed to patch together a failing gold derivatives market. Please think about this. With the Bank of England in the midst of a series of auctions, all circumstances and developments reveal clearly that their goal was not to garner the highest price for their gold...to convert a "sterile asset" into a great number of dollars, euros, and yen with which to draw interest.
First, you already know that gold can earn interest. Second, the pre-announcement of the sales was a sure-bet to shake the confidence of gold-holders with the hope of stemming demand and dropping the price. And third, now you see reports of them lending in the hope to lower lease rates, which in turn is hoped to keep prices down. Does this sound like the actions of an entity that is looking out for an interest to gain the best possible return on an asset that is being auctioned? Say it with me now...."No!"
Are we upset, here at The Tower? "Hell no...we LOVE it!" We realize that this is perfect confirmation of much that has been discussed at our Round Table in regard to the gold market (as we know it) being on its last legs. Desperate times call for desperate measures, and we clearly see the desperate measures taken now by the Bank of England. Yes, folks, when the wheels come off of this gold derivative market, the only position you will want to have is gold in hand. The dollar itself will slide right along with spurious gold contracts as it will be the denominator of those failed contracts. Oh, sure, more dollars are better than fewer dollars; but gold in hand will be better than any amount of paper that tries to play as its suitable substitute.]

When gold climbed, with Dec hitting a
2-year high of $339 on Oct 5, some producers, such as Ghana mining company
Ashanti, became exposed to heavy margin calls on their options positions.
In the news, Russian Prime Minister Vladimir Putin has signed a ruling
extending the 5% export duty on precious metals for another 6 months,
Stanislav Naumov, an aide to First Deputy Prime Minister Viktor
Khristenko, said today.
***
(c) Copyright 1999 FWN Reprinted at USAGOLD with permission. For details please go to:
http://www.futuresource.com/internet.shtml
No further reproduction without written permission from FWN.

There's not much else to report from the COMEX world of gold derivatives. The October contract expired two days ago, and November is an "off" month (open interest in November futures is currently only 14). Things will likely be slow until the December futures ( open interest was down yesterday 2100 to 105,797 contracts) near their own expiry, and not forgetting, of course, the approaching expiry of the options associated with them.
Today 4,018 ounces were withdrawn from Eligible COMEX gold inventory, leaving 90,295 Eligible ounces and 784,098 Registered ounces on deposit.

There wasn't much news in the energy futures, either. December crude settled up 7c at $21.75.
Brokers are looking forward to the release of OPEC compliance estimates for October. Because last month's data put the market on a downward trend when it showed compliance had slipped by, if memory serves me right, about 60,000 barrels per day (which is an insignificant volume in this market) , the traders expect the data to be extremely important in setting the tone for November. Some are expection the data will show an improvement in compliance. One trader said, "We're looking for OPEC compliance of over 90%. That should help crude easily touch $24.00 again."

And that's the view from here...after the close.
Scrappy
(10/29/1999; 19:49:24 MDT - Msg ID: 17862)
Goldspoon
re: writing the message so the people will knowForgive me, I realize I have imposed my silly self on this awesome group of world class, independant thinkers. Since I REALLY realized this, I've been trying to listen and learn, and keep my mouth shut. But, as a mere month ago, I was one of the people you are now trying to stir, perhaps 'the words of the innocent' (ignorant?}, might help.
Number one, may I suggest that most people KNOW we are manipulated and controlled? Everyone is either waiting for the day that the government actually brings guns to the streets, or, they are in a total state of denial, or, they believe that the second coming of Christ is upon us, and God will take care of it all. Or, they just whine and complain when the state of things as they are affects them in a personal way. (Like the court system, and the local police are just money makers for the local government. To the point of fining an ELEVEN year old $50. for shop lifting a .35c piece of GUM!) When one tries to talk about the 'big' picture, or about DOING something about this sad state of affairs, they look at you like you are nuts, or say something like, "the goverment has bigger guns than we do", "the only justice is for the ones who have the money to pay the lawyer and filing fees", etc. My point being that people are angry, scared, overwhelmed, and thus, in a BIG state of denial, for sanitys' preservation, I am sure. They feel helpless, suspect that things are going to hit the fan sometime, but by golly, they are gonna get as much of 'theirs' as they can, until then, if 'then' happens.
Perhaps, if you approached this matter with the intention of presenting 'gold' as a weapon THEY CAN USE TO FIGHT THE SYSTEM, something that might hit the big boys where it counts, in their pockets, maybe you might open some ears, and get some blood going, maybe.
But, we, as a people, are spoiled, lazy, and we don't like conflict. Life throws enough conflict our way. Why seek out more battles when none of it is going to do any good anyway? What's gonna happen is what's gonna happen, nothin' we can do. (These are not my personal feelings, remember}.
Another sentiment that I have found, this among people that are preparing for a day of reckoning of some sort, (and I have heard these identical words, used like a slogan almost, by several 'prepared' types, is this: "If it comes down to my family or yours, it's gonna be mine".
In such an era of fear and selfishness, I must say, Sir Goldspoon, you are taking on another sort of monster.
I think, in your 'few pages', you must try to dispel fear, and inspire unity and action. Then you must show the people how fighting the money boys with gold is going to work. How it could work. In ninth-grade level language.
How about making it fun, to start, as entertainment is a softer, gentler way of teaching people. Then take it one step further. When gold is undeniably seen as something going nowhere but up (like in the last great gold rush), inspire them all in a peaceful attack, like, have evrybody max out all of their charge cards buying gold and only gold. After all, the incredible jump in the price of gold would more than pay for the intersest charges, yes? And play a little havoc with the banks and their electronic & fiat 'money' :}
Imagine, if you could get 250,000 to buy $1000. worth of gold, all on the same day?...:} (Smile) What would THAT do to the big boys at the bank?

You are, Sir Goldspoon, taking on a GREAT GOLD CRUSADE.
I admire your courage. I hope you win. If there is anything such a little one as I can do, please say so.
If I am being silly again, please forgive me.

Also, how about a 'beginners' gold page & forum? Something without all the technical, or, if it must be there, use it in a 'beginners' language.

All, thank you for putting up with me.
USAGOLD
(10/29/1999; 19:52:33 MDT - Msg ID: 17863)
FAFNER....
@richard640�
(Fafner)
Oct 29, 18:36

You Sir are like a WIND.
I was lurking at the USAGOLD site several days ago and your name was
prominent.
I wish that my name were prominent there.

Sir, I am from Indianapolis, Marion County.

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

Fafner, sir, your name is now prominent at USAGOLD. Not only that I would like to personally invite you to pull up a chair at this sturdy Table. My wife is from Indiana. So I guess that makes me half-Hoosier. Also, I have several prominent clients from that great state. We would be greatly honored by your presence here, Fafner. Please contribute at your comfort level, my fellow goldmeister. I think you will find the comaraderie to your liking. Please convey my regards to my good friend, Vronsky. We walk this road together. MK
YGM
(10/29/1999; 20:04:49 MDT - Msg ID: 17864)
Research Your Penny Gold Stocks on the V.S.E.
http://www.vse.ca/Default.shtmVery handy for history, acquiring company web sites and extensive info.--YGM

BTW--holding $0.10 Gold stocks such as Battlefield Mining (BFM) is cheap and that kind of paper can be held for a very long time if need be. Imagine 10 cents w/ an operational Gold mine in Zimbabwe and 20 kilometers in Witwaterstrand Basin in the middle of the 90 million oz (Sun & Oribi) deposit being developed by Augold and Pickstone Peerless in South Africa. Battlefield used to be Indomin and traded in $5.00 range. Definately worth a look see.
http://www.battlefield.ca/projects/swaf_mp.htm
SteveH
(10/29/1999; 20:14:21 MDT - Msg ID: 17865)
Time to validate...
a reality check.

First, the markets aren't overbought?

True and false, the broader index is less overbought, but major indices are truly overbought. S&P PE is 30+ to 1.

Gold isn't manipulated and the 14,000 ton is only 2000?
Venerasso and Murphy are our source on the 8-14,000 ton short. Yet, the market acts as though it's is the opposite, therefore it's false. Bank of England actions support this as being false too. Miner hedge books confirm the premise to be false. No, there is a gold short of historic proportions and it could be 8-14,000 tons.

Bond market has turned and will now improve. False, today was a dead cat bounce off of yesterday's beating of the expectation that inflation was higher than what they said.

.Com craze is here to stay and will continue with the trend of magnificent IP0's! False, Dot Com's will falter with the loss of confidence in the broader market. The movement of MS to the Dow and the removal of Chevron might in the short term accelarate the DJIA's growth but once oil crosses $25/barrell and gold $330 then Chevron might start looking might attractive.

Hedge funds and gold mines aren't overhedged and don't worry. False, Ashanti is proof enough that this is absolutely false.

No, there is too much interest in all things gold but on a subtle plane. The Stock Markets are having there way with the cash crowd for now, but the gold contigent is in the wings and wanting to come on center stage.

Reality check over. Things are as messed up as they seem. Batten down the hatches.

YGM
(10/29/1999; 20:15:36 MDT - Msg ID: 17866)
Scrappy
You're Not Alone Friend!Take the thoughts of a simple Gold Miner w/ Gr 11 education like myself and try to find where they fit in among the great minds that frequent this forum. I read so much I have little time to figure out what I can add that is constructive here. But we should all try and many of us are scrappy fellows like yourself. Regards--YGM. :-)
SteveH
(10/29/1999; 20:27:38 MDT - Msg ID: 17867)
repost
www.kitco.comCambiar repost:

Date: Fri Oct 29 1999 19:52
buff (More CAMBIOR) ID#66144:
Copyright � 1999 buff/Kitco Inc. All rights reserved
Cambior Announces 1.3 Million Ounce Gold Hedging Program Reduction

MONTREAL, Oct 29, 1999 ( BUSINESS WIRE ) -- ( ME:CBJ. ) ( TSE:CBJ. )
( AMEX:CBJ ) Cambior Inc. ( "Cambior" ) announces that it has reduced its
gold hedging position by 1.3 million ounces. This reduction, made with
a view to improving its aggregate hedging position, results from the
purchase of one million ounces of gold ( the "Purchased Ounces" ) at an
average price of approximately $300 per ounce and from the closing out
by counterparties of other positions totalling 300,000 ounces.

The one million ounce purchase was completed primarily through the
bullion markets with the assistance of various parties to the recently
executed standstill agreement ( the "Standstill Agreement" ) among
Cambior and its lenders and hedging counterparties ( collectively, the
"Financial Parties" ) . The terms of the Standstill Agreement are
summarized in a press release issued by Cambior on October 27, 1999.

The Purchased Ounces will be applied to close out contracts for the
delivery by Cambior of an equal number of ounces under its current
hedging portfolio. The close-out will occur upon termination of the
Standstill Agreement.

The above-mentioned purchase and close-outs are expected to generate a
net crystallized liability for Cambior of approximately $33 million
which will be reflected as a non-cash, pre-tax charge to earnings for a
corresponding amount in Cambior's consolidated financial statements for
the third quarter.

Under the terms of the Standstill Agreement, the above-mentioned
liability will be treated as a demand loan to Cambior by the Financial
Parties. The determination of more specific repayment arrangements will
form part of negotiations with the Financial Parties under the
Standstill Agreement regarding the elaboration of a plan for the
orderly fulfillment of Cambior's obligations to the Financial Parties
over time ( a "Definitive Plan" ) .

Cambior reiterates that, while it believes that an agreement regarding
a Definitive Plan can be achieved, there can be no assurance that such
an agreement will be reached. The failure to achieve such agreement
would be likely to have a material adverse effect on Cambior and its
financial results, financial condition and prospects.

Cambior also announces that its board of directors has appointed the
firm of Bunting Warburg Dillon Read Inc. as its financial advisor. With
the assistance of the financial advisor, Cambior will continue to
consider all possible courses of action with a view to maximizing
shareholder value.

Cambior Inc. is an international diversified gold producer with
operations, development projects and exploration activities throughout
the Americas. Cambior's shares trade on the Toronto, Montreal and
American ( AMEX ) stock exchanges under the symbol "CBJ".

This press release contains certain
SteveH
(10/29/1999; 20:30:35 MDT - Msg ID: 17868)
repost
www.kitco.comAll favors seem to be in the process of being called in. What next, eh? So drole.

Date: Fri Oct 29 1999 18:47
AzusaGold (South African Central Bank Says It's Lending Gold Reserves) ID#255250:
Copyright � 1999 AzusaGold/Kitco Inc. All rights reserved
South African Central Bank Says It's Lending Gold Reserves


Pretoria, South Africa, Oct. 29 ( Bloomberg ) -- The Reserve Bank of South Africa said it is lending gold from its reserves, a practice which traders say helped push the price of the metal down 20 percent in three years, slashing producers' profits.

The loans, about 300,000 ounces worth $90 million at current prices, represent 7.5 percent of South Africa's total gold reserves and are made to boost income for the biggest gold- producing nation. South Africa produced about 15 million ounces of the precious metal last year.

``We've done it for a number of months,'' said Lambertus van Zyl, general manager of international banking at the South African central bank. ``It's an important decision for the bank but it's miniscule in relation to total ( global ) official gold reserves.''

Gold dropped to a 20-year low of $251.95 an ounce in August on concern sales and loans of gold by central banks were increasing supply. On Sept. 26, 15 European Central Banks announced they would restrict sales and lending from their reserves to help boost the price of the metal.

Permission to begin lending South Africa's gold reserves had been given by the Reserve Bank governor and this was reflected in the Reserve Bank's accounts, van Zyl said.

``South Africa has been a pretty active manger of its reserves,'' said Tony Warwick-Ching, an analyst at Virtual Metals Research in London. ``They're experienced and skilled operators in the gold market.''

Gold fell 1 percent on Oct. 21 after Kuwait said it would begin lending all of its 79-ton gold reserve to take advantage of a curb in gold lending by European central banks.

Profits of South African gold producers, which include the world's two biggest, AngloGold Ltd. and Gold Fields Ltd., have been hurt in recent years by the drop in gold prices.

Oct/29/1999 12:46
YGM
(10/29/1999; 20:35:12 MDT - Msg ID: 17869)
Latest From The Golden Sextant.
Quiet Fri Nite, so I'll post entire comments, hope no one minds.




November 1, 1999. National Gold and Forex Reserves: Use and Misuse [still subject to minor revisions]

In the bygone days of Empire and the gold standard, the Bank of England and most others in the world knew the purpose of national gold (or silver) reserves: they anchored the domestic money supply and provided the medium for international settlements. Today national monetary reserves consist of gold, foreign exchange (mostly U.S. dollars) and SDR's at the IMF, and there is great confusion about the purposes for which they are held. Not infrequently this confusion shows itself in the view that national gold and foreign exchange reserves should be managed to increase yield rather than to stabilize the currency, support monetary sovereignty, and provide international liquidity in times of extreme financial distress.

Thus the Old Lady of Thredneedle Street, once a pillar of the gold standard, is today more frequently associated with a futile defense of the pound that enriched George Soros to the tune of one billion dollars, or the inexplicable decision to sell 415 metric tons of British gold in a manner that not only assured a poorer price than necessary, but also now appears to have resulted in sale of the first 50 tons at a multi-year nadir in the gold price. Indeed, the British auction price was so attractive that one of the world's largest gold mining companies, Gold Fields, used a winning bid to close out forward gold sales at higher prices. Unfortunately for the British taxpayer, betting against the BOE seems to have become one of the surer routes to investment profits.

Under today's floating exchange rate regime with the U.S. dollar as the key currency, different countries or groups of countries have different reasons for holding gold and dollar or other forex reserves. My prior commentary discussed in some detail the composition of U.S. and Euro Area reserves, and future commentaries will pursue further the currency competition (or war) that I see developing between these two monetary superpowers. The purpose of this commentary is to focus on other nations and where their interests may lie as this competition heats up.

Among the G-7 countries, Britain, Canada and Japan fall outside the two monetary superpowers, although Britain is a member of the European Union and thus a potential member of the EMU and the EA. This question -- whether to join the EMU -- is becoming a major political issue in Britain precisely because it forces the nation to confront a loss of monetary sovereignty, which will in any event be further undermined as the plan to reduce its total gold reserves to a mere 300 tons is carried out.

Japan holds large dollar reserves (around US$200 billion) but not much gold (754 tons), and runs large balance of payments surpluses, particularly with the U.S. While the yen is generally considered the third major world currency after the dollar and the Euro, yen balances do not constitute a very large portion of world foreign exchange reserves. For both political and historic reasons, there is considerable doubt whether a true "Yen Area" can ever be created among a significant group of Asian nations. What is more, Japan's unique trade and security relationships with the United States impinge upon its international monetary policies, making both too weak a yen and increases in its gold reserves forbidden ground.

Canada's economy is closely linked to that of the U.S., and Canada in recent years has sold nearly all its gold reserves. Accordingly, the Bank of Canada has little choice but to conduct a monetary policy reasonably in tune with that of the Fed. Indeed, just as Britain seems fated ultimately to join the EMU, Canada will probably be forced someday to abandon its currency for the U.S. dollar. By running down their gold reserves, these two nations have greatly reduced their room for manoeuvre in any currency competition between the dollar and the Euro. Perhaps that is why the new Nobel laureate in economics, born a Canadian, recently characterized as "idiotic" the gold sales carried out over the past several years by a few central banks.

Through their central banks, Japan, Britain and Canada utilize their dollar reserves on occasion to intervene in the foreign exchange markets in support of their currencies. While these interventions may act at the margin to smooth violent fluctuations, they cannot fundamentally change market perceptions of relative currency values. The simple truth is that the currency markets today are so huge that even interventions by countries with large dollar reserves backing important currencies rooted in major developed economies can be quickly overpowered. In this respect, central banks have less power today than under the gold standard when they at least in combination controlled the great bulk of monetary gold and could arrange for each other short periods in which to try to right what appeared to be temporary imbalances.

Central banks of countries with smaller, less-developed economies and weaker currencies sometimes try to "target" their currencies to a major currency, often the dollar. They struggle to earn dollar reserves and then use them to try to maintain their currency within some sort of valuation band to the dollar. But at any hint of difficulty, such as declining reserves, domestic inflation, balance of payments problems or political uncertainty, a country operating in this fashion can quickly find its entire national economy devastated by a sudden blast of negative sentiment in the foreign exchange markets leading to swift and massive capital outflows and a precipitous decline in the exchange rate. By its nature, this sort of exchange rate regime tends to breed capital controls, subtle and not-so-subtle. What is more, its management is not an easy task even for a competent, honest and politically independent central bank. For a poorly run central bank or one subject to significant political interference, targeting the dollar has typically proved a recipe for disaster.

Indeed, a long train of unhappy experiences in this respect has led certain countries, e.g., Argentina, Estonia, Lithuania, Bulgaria, to replace their central banks with currency boards. Professor Steven H. Hanke of Johns Hopkins is generally considered the leading advocate of this approach. See D. Keiger, "The Way According to Hanke" at www.jhu.edu/~jhumag/0999web/hanke.html. The currency board is empowered to issue local currency but only in direct proportion to its holdings of a reference currency. For example, in Argentina the peso is fixed at a 1:1 rate against the dollar, and the Central Bank of Argentina (now effectively a currency board) issues and permits to circulate only as many pesos as it has dollars in reserve. By selling its gold reserves, Argentina added dollars to its reserves but made more irrevocable its link to the dollar. It also effectively made the IMF its lender of last resort since that is practically the only place it can obtain additional dollars in the event of a banking crisis.

A strict currency board regime such as Argentina's operates much as the classical gold standard except that the reference money is another country's currency rather than gold. Consequently, the currency board country ties itself to the interest rate policies (and inflation rate) of the reference currency instead of the low interest rate structure (and zero inflation rate) historically associated with credible gold-based monetary regimes. If the economy of the currency board country is closely synchronized with that of the reference currency country, having the same interest rate policy normally will not be too burdensome. But if the two countries have economies than typically run on different cycles, as do Argentina and the U.S., the interest rate link can on occasion cause significant difficulties and threaten to undermine support for the currency board.

An even more complete abandonment of monetary sovereignty is represented by dollarization, i.e., giving up the local currency altogether and using dollars directly. This approach, suggested recently as a logical next step for Argentina to remove lingering uncertainty about its ability to stick with the currency board regime in the face of severe domestic recession, has been followed since 1904 by Panama with reasonably good results. However, as pointed out by Juan Luis Moreno-Villalaz in "Panama: No Central Bank, No Capital Controls, No Problem," (The Wall Street Journal, Sept. 10, 1999, p. A19), "it is not dollarization per se which has brought so much stability to Panama but rather dollarization together with a 1970 banking law that allowed Panama's monetary system to integrate with world financial markets." Panama may control the canal, but monetarily it is simply an extension of the United States.

Dollarization has also been suggested for Mexico, but any serious movement in this direction will have to overcome not only instinctive Mexican distaste for Yankee domination but also active opposition by a group urging Mexico to reestablish its own silver-based monetary system. This group operates a Spanish language website, La Plata (see Recommended Links). The site offers one article in English, "Why Are the Americans Smiling?" (www.plata.com.mx/plata/worldres.htm) by Hugo Salinas Price, the group's leader, arguing that the dollar key currency system is little more than a means for the U.S. to exact tribute from the producing nations of the world. Mr. Salinas, who built Elektra (now listed on the NYSE) from a small radio factory into Mexico's largest retailer of home durables, has turned management of the company over to his son and now makes a second career of speaking up publicly for a sound Mexican currency based on silver.

There would be remarkable irony in Mexico declaring monetary independence from the U.S. through a modern restoration of pieces of eight -- the Spanish milled dollar --, the very coin that the framers the American Constitution knew as a dollar and to which they specifically referred in that great document. Indeed, under the first coinage acts passed by Congress, the average weight of Spanish milled dollars then circulating in the new United States was determined to be 371.25 grains of silver, which remained the official weight of the U.S. silver dollar from 1792 until the dollar's convertibility into silver was terminated in 1968.

The La Plata proposal is interesting as a means not only to preserve Mexican monetary sovereignty with hard money but also to circumvent IMF restrictions on the use of gold. In 1978 the Second Amendment to the IMF's Articles, which ratified after the fact the 1971 closing of the U.S. gold window, generally sought to reduce the use of gold in the international monetary system. In this connection, it provided that member countries could link or target their currencies to anything or nothing as they saw fit except gold, which also was no longer to be used in settling balances between countries. Accordingly, any member country that fixes its currency to gold would most likely disqualify itself from further IMF support, a rather strange result given the original purpose of the IMF to help countries stabilize their currencies against a dollar linked to gold.

The IMF in recent years has tended to oppose the creation of currency boards, most notably in the case of Indonesia, and has usually required standard central bank nostrums such as high interest rates, deregulation and more open capital markets as conditions for its assistance to troubled third world economies. While Steve Forbes may be guilty of some hyperbole in describing the IMF as a sort of economic Typhoid Mary, it certainly cannot claim much success in restoring sound or stable currencies to the smaller nations of the world.

At the opposite pole from the small countries of Latin America or Eastern Europe, all linked in varying but significant degrees by geography, economics and culture to the two monetary superpowers, are the two great powers of Asia outside Japan: India, whose one billion people hold almost one-third of the world's above-ground gold supply; and China, where the three existing monetary authorities (People's Republic, Hong Kong and Taiwan) hold together approximately $250 billion of foreign exchange reserves, mostly in dollars, plus over 800 tons of gold. Finally, there are the oil-producing nations of the Middle East, endowed with the bulk of the world's known oil reserves, and all with an historical affinity for gold. These three -- India, China and the Middle Eastern oil-producing countries -- require a separate commentary. None currently possesses a world-class currency. But each, though for varying reasons, has the power to conduct its monetary affairs quite independently of American or European wishes, to ignore the IMF, and to assert on the world stage in credible fashion its own monetary sovereignty.
Scrappy
(10/29/1999; 21:06:56 MDT - Msg ID: 17870)
YGM
Thanks for the company,and the long posts on a quiet Friday night. I am obsessive about learning as much as I can while I am watching all of this happen. I'm so afraid that I'll miss something REALLY important if I stay away from this site too long, and all the REALLY inportant stuff ends up here, anyway. So I don't 'surf' too much.
(For the record, I am a 'scrappy lady'). (smile)
That's probably why I'm home on a quiet Friday night.(smile) Reading the blessedly long and informative posts put forth by yourself and SteveH.
I just love this place.
YGM
(10/29/1999; 21:27:26 MDT - Msg ID: 17871)
Scrappy
http://www.goldensextant.comI've always gravitated to fiesty ladies, but---
Alas the Lord decreed that I could only keep one and she's a keeper. (smiles) Here's the link to Reginald Howes' site if you or others haven't visited it. I know FOA does as he first
drew my attention to it. Many excellent papers here. Have a fine eve. Regards: YGM
YGM
(10/29/1999; 21:39:47 MDT - Msg ID: 17872)
Last post for tonite--
http://www.audiocentral.com/rshows/mir/default.htmlVery good synopsis of Y2k and Gold Markets from Don McAlvany at Audio Central. Good reinforcement for our seemingly paranoid thoughts on Y2K and Gold Manipulation. Well worth the 20 min listen.--YGM
**Y2K, Lies and more Lies.
**The Turbulent Gold Markets.
Scrappy
(10/29/1999; 21:43:47 MDT - Msg ID: 17873)
YGM
Glad you have a fiesty lady. (whew!) (smile) I am happy in my one-ness. I only wanted to right the record.
Thanks for the link to golden sextent. I've had trouble getting there; maybe this 'direct in' will do it, and I can then bookmark it.
Atahualpa
(10/29/1999; 21:54:00 MDT - Msg ID: 17874)
Hello, YGM
How's the mining ? Look where we end up meeting again. I am starting to diversify my gold web sources a bit more.

A big hello to Mr. Michael Kosares. Great site. Great Forum. I have always wanted to participate, but the time factor was crucial. Simply didn�t have enough. And I know just how addictive these things can be.
Jake
(10/29/1999; 21:58:17 MDT - Msg ID: 17875)
Gold Evening
Long time lurker first time poster. I am a goldbug both physical and pm stocks. I appreciate the opportunity to read and post here. IMHO the y2k panic will begin in the next 30 days and we will see some interesting times.
It's good to see the names of several old friends here.
jake
YGM
(10/29/1999; 22:04:51 MDT - Msg ID: 17876)
Atahualpa
yukongold@yknet.yk.caWell Hello! How's life in beautiful Peru? If you could email me again I'd like to keep the address this time as I may get to Bolivia this spring to do some placer testing and would swing by for a day to visit. Always wanted to see Peru as I've been to Bolivia and Columbia a few times. Good to hear from you. Best Regards: YGM
Atahualpa
(10/29/1999; 22:09:52 MDT - Msg ID: 17877)
Jake??? YGM and JAKE????
ticoperu@yahoo.comWhat is this ? A hostile takeover ? :-)
YGM
(10/29/1999; 22:10:34 MDT - Msg ID: 17878)
Hey Jake--You made it a double header.
Glad to see you here. Old home week. Hope you and Atahualpa will be frequent here w/ your sage advice.
Gold2000 is next I hope! He's being shy over there by the pretty girls in the shadows.--YGM
Jake
(10/29/1999; 22:18:45 MDT - Msg ID: 17879)
This is a comfortable place :)
Atahualpa !! Como esta ! Good to see you here. With YGM and You both here I know I'm gonna like this place.

YGM: Thanks for the tip pal. Perhaps we can show these nice folks the siwash hula when the time comes. :)
Jake
(10/29/1999; 22:20:29 MDT - Msg ID: 17880)
This is a comfortable place :)
Atahualpa !! Como esta ! Good to see you here. With YGM and You both here I know I'm gonna like this place. You my friend have provided some of the most interesting reading for me and It's a pleasure to share a soap box with you

YGM: Thanks for the tip pal. Perhaps we can show these nice folks the siwash hula when the time comes. :)
Number Six
(10/29/1999; 22:24:28 MDT - Msg ID: 17881)
Welcome... :)
Atahualpa, Jake, YGM and all.

I recognize these handles, welcome to USAGOLD, you cannot find a better Gold forum on the net!

Best regards from Andy in Denver (aka PEACH!) - "Gold Country"
HopeingII
(10/29/1999; 22:33:21 MDT - Msg ID: 17882)
I may be completely out to lunch
but, I would like to offer my observations after having watched the Gold market for only three years now.

1) The one, and about the only one piece of honestly reported news that has had a truly positive impact on the POG during the past three years was the Statement on Gold"
issued on September 26th, 1999.

2) The anti Gold camp is not throwing in the towel. Quite the
contrary, since the September 26th announcement their
actions have come right out into the open. The Ashanti,
Cambior "standstill" agreements are shouting to the world
just how rigged the Gold market is. The driving down of
the POG on Tuesday October 26th 1999 just to the point
that millions of ounces in Gold options expired worthless
is shouting to the world just how rigged the Gold market is.
The almost "laughable" announcement that Kuwait was
offering all their Gold reserves up to a "reliable" party to be
lent into the market is shouting to the world just how
rigged the Gold market is.

3) The anti Gold camp will continue unabated with these type
of activities. Do you see "ANY" regulatory body questioning
any of this crap that is going on ? No, you don't and you
won't. They will continue to suppress the POG with complete
immunity. This is such an obvious fact that at this point in
time one would have to be blind to not see it.

4) Forget supply/demand. Forget the shorts. Forget open interest.
Forget all technicals and fundamentals, this market is rigged.
The only hope for the POG to break free of the shackles of the
manipulators will have to come from further actions emanating
out of Europe. All of this is of course is IMHO.
Scrappy
(10/29/1999; 22:43:48 MDT - Msg ID: 17883)
YGM!
Look what happens! I leave this place for five minutes, and you've got all your old buddies all over the living room! :}
Welcome all!
May I suggest, if you haven't already, that you read the FORUM ARCHIVES IMPORTANT POSTS 6/99 to present. Perhaps sometime when you have an hour or so; when you are finished with 'old home week' stuff, of course. :}

Again, I cannot get into goldensextant. One of these days, I'll make it. I keep getting the "No DNS entry" thing. Must be a very busy site.
Scrappy
(10/29/1999; 23:00:07 MDT - Msg ID: 17884)
hopeing11
Did I get your handle right? Welcome home. You are in the right place. Go the forum ARCHIVES and read the important posts, 6/99 to present. May I also suggest that, if you have time sometime, you scroll through the posts from 9/26 on. They are really quite exciting, and informnative. Oh, yes. Whenever FOA speaks, listen! Again, welcome. :}
Jake
(10/29/1999; 23:00:35 MDT - Msg ID: 17885)
Scrappy
Thanks for the welcome. The place I came from has a witty, intelligent investor named Scruffy. Thought for a moment you may be an alter ego or relative of his:)
Whats your pleasure in gold? Physical? PM Stocks?
What are the hottest gold stocks today in your opinion?
Ask a lot of questions don't I? :)
Atahualpa
(10/29/1999; 23:05:12 MDT - Msg ID: 17886)
HopeingII
Good evening. I basically agree with your assesments, but I also believe that they are losing control. So far, this is a "managed" crisis. It will eventually blow up, I think. I'm not sure if the following reference has been mentioned here before, so allow me to post a quote from a book I am just beginning, Steven Salomon's "The Confidence Game - How Unelected Central Bankers Are Governing the Changed World Economy". The setting is October, 1987. Black Monday. Greenspan has landed at Dallas and is informed of the Crash. I quote:

"To not make the speech to America's bankers, his first major address as Fed Chairman, Greenspan felt, might suggest that things were really out of hand. Before departing, however, he told Manley Johnson, 'Let's convene the group'.

The 'group' was a Fed financial crisis management team Greenspan had organized upon assuming the chairmanship. The crisis team convened in the special library near Greenspan's office. It opened communications links with the Securities and Exchange Commission (SEC}, the Commodity Futures Trading Commission (CFTC), and the Federal Reserve Banks of New York and Chicago. It began gathering and coordinating information." END QUOTE.

Gathering and coordinating information. Hmph.
Number Six
(10/29/1999; 23:11:42 MDT - Msg ID: 17887)
Reply to HopeingII
Yes, you paint a very bleak, but alas, true picture.

It is absolutely mind-boggling how "they" can get away with it - but the problem of course is "they" are in cahoots with the Fed and the BOE. And London rules the roost now with the daily Gold "fix" (!) and the enormous quantity of trades going through the LBMA.

IMHO - if the Europe/BIS/Oil group doesn't reinforce their Washington Announcement with some hardball, then we will be swimming against the tide.

Personally I see y2k as being THE catalyst that will break the POG free if the BIS doesn't do something first. I see December as make or break here...

Eventually as FOA says the price will run as market dynamics come into play, but in the meantime we are all dumbfounded at how these antics are so blatantly tolerated by our "leaders"

What a joke :(

What can we do - other than support GATA to the hilt and get the word out on the net...
HopeingII
(10/29/1999; 23:17:37 MDT - Msg ID: 17888)
Scrappy

Hi Scrappy,

With all due respect and no intent to "Scrap" with you,
I probably have read every post from 9/26 on.

I lurk more than I post. However I stand by my contention.
The only thing in the past three years that has moved
the POG significantly up was the announcement on Sept.
26th. We all know that because of that announcement the
POG today should be probably in excess of $400 per ounce. Why isn't it ? Because of the manipulation. And it
will continue. I respect very much what Another/FOA say
but I think we are years away from their THOUGHTS
coming to fruitation. Your turn, Let me have it....

Cheers


HopeingII
(10/29/1999; 23:37:16 MDT - Msg ID: 17889)
Scrappy, Number Six, Atahualpa

Thank you all for responding.

I was just expressing an opinion, nothing more , nothing
less.

Scrappy, I await your reply to my last post to you.
I value your opinion.

Number Six - You mention "How they get away with it"
That's one of my points. "They" are right out in the open
now. It's like they have no fear. And quite frankly that
scares the Hell out of me. Just how powerful are these
people ?

Athualpa - You mention "The Group" Think about it,
these are groups that have some clout - No ?

I don't mean to sound pessimistic - I own Gold and Gold
Mining Company Shares. I just try to be realistic...
Jerry G.
(10/30/1999; 00:11:34 MDT - Msg ID: 17890)
First Ever Post......
First of all, Hats off to all of the fellow and loyal goldmeisters in this great forum.I thank everyone in this place for keeping me up to date on what's happening in the world of gold.Even though this is my first post, I've been lurking here for awhile. Honestly it just feels refreshing to be able to go to a place and discuss certain topics and issues all concerning the common cause. (The love of gold) I enjoy reading and analyzing FOA and another's posts, these people seem like they got a pretty good feel of what's gonna happen with our precious metal down the road. I truly respect that. With that, I remind everyone why we are here united today,....FOR THE LOVE OF KARATS.....24KARATS,,,that is. !!!VIVA ORO!!!!!!!!.............jerry.
Number Six
(10/30/1999; 00:20:31 MDT - Msg ID: 17891)
I'll drink to that!
Welcome Jerry G to the graveyard shift!
YGM
(10/30/1999; 00:27:59 MDT - Msg ID: 17892)
Hoping II & Number Six
http://www.biblebelievers.org.au/300dx.htmRe: "Just how important are these people?"

Read the Forward in the index to Dr. John Colemans'
"Index to Conspirators Hierarchy" The Committee of 300

**Note he openly identifies Henry Kissinger as a member of 300 AND the Club of Rome. Do you remember Kissingers "Faux Pas" in London awhile back where he stated in public that he was taking all his money out of the Banking system prior to Y2K? Well that news story dissapeared within hours of being published. Food for thought No?
This site requires alot of spare time to read and reread but it is well worth the effort even if some find it unbelievable.
You may have it already but few do or have read all his papers or Books. That is the sad part, he writes what noone wants to hear whilst they have their head in the sands of complacency.-------------------------------------------------------YGM.
Scrappy
(10/30/1999; 00:50:38 MDT - Msg ID: 17893)
HopeingII: Jake
ReplyMy apologies. I attempted posting twice-apparently I got caught in the midnight rollover, as I couldn't get back again, and now that I am here, I see it is tomorrow. :)

HopeingII, my apologies. I assumed you were a newcomer, as I didn't recognize your handle. You sure sounded like a native. I thought you might find validation by reading the archives.
I am going to try to keep this short, as I have to go to work in six hours. I am the beginingest of the beginners, here, but I'll give it a shot.

I believe the whole thing is going to blow soon because....
1. Y2k. The powers that be sure are being awfully ressuring about something they want us to stock up on food and cash for, aren't they? Throw this wrench into the ecisting mess, and it could very well break the bubble-camels' back.
2. Ah, the bubble. We've been waiting for it to burst for a very long time. Just how much control do 'they' have? Obviously, the rest of the world has been bery cooperative about keeping the dollar afloat. They've had to be-theworlds' economy has been tied to ours for quite some time. If the U.S. goes in a sudden heap, it will effect all. So, they're trying to unwind it all gently. How long can they conrol it? What events are out there waiting to happen, that 'they' don't see coming? Sooner or later, it WILL get away from them, also, because....
3. Somebody is going to be the new #1. For the first time in, how long?, there is a real likelihood that the U.S. will be replaced as 'king' of the money world. So, right now, all are cooperating. At least until the first moment someone sees the chance to betray all and make the big grab for what is 'theirs', or could be 'theirs'. Then, the whole thing will go. Do you really believe the world powers could be working together on this thing, and will continue to do so in peace? I don't trust them, and probably, neither do they. Oil, gold, greed, power. The whole thing has been wound up too tight for too long. She's gonna blow, and my bets are on soon. The Washington agreement and the subsequent spike in POG were the first alarm bells. How much control do they have, how long can they maintain it?

Jake, the above reply should answer some questions you have about my thoughts. I think the whole thing is just too touchy right now to get into anything but physical, even if I had the knowledge and resources to play the 'game'. And at that, who knows what 'they' have up their sleeves? Could be, at this point, that the only wealth worth holding is the sort of practical stuff one needs for basic survival. Maybe all those fanatics are right?
I'm patient, I'm not all that worried, but worried, I am.
Scrappy
(10/30/1999; 01:07:00 MDT - Msg ID: 17894)
Jake
ReplyNo, I am not an alter ego of 'Scruffy'. I'm just a gentle little person, who never lets go, when never-letting-go is called for. I am new to this whole gig-the computer, the behind-the-scenes of the economic world, all of it. I've been living my life at the 'bottom' of the pile, a 'lower-class' american worker, who happens to have a bit of a brain, not a lot of knowledge, and is loving being a part of this, even if it's just 'lurking'. I getta watch it all!
Number Six
(10/30/1999; 01:07:45 MDT - Msg ID: 17895)
YGM - Coleman...
Hi YGM,

Yes Coleman is a pleasure to read and listen to (you can hear him in the archives on www.sightings.com). David Icke has also done a lot of research on the Bilderburgers/Committee of 300/Secret Societies/the CFR/The UN et cetera. His last book "The Biggest Secret" is worth searching out. Similarly Joan Veon, Joel Skousen, Anthony Hilder and John Whitley (and Sherman Skolnick - in small doses :) ) are well worth your time listening to on the same archives. Bill Murphy fom GATA also makes an apperance on October the 5th.

No smoke without fire!
Number Six
(10/30/1999; 01:14:52 MDT - Msg ID: 17896)
An Alternative Greenspan Speech... :)
From the TB2K forum...

This poster works in the oil business and knows his stuff - BTW he also thinks JIT delivery of Oil/petroleum, and embedded chips in pipelines, will do enormous damage to the USA after y2k...

"Here's my take on Al.com's speech to the best and brightest golfers and millionaires in this country. This speech was specifically designed to take him off the hook from needing to raise rates in Nov. My comments in (parenthesis).

Friday October 29, 1:48 am Eastern Time TEXT-Greenspan speech on economy and technology WASHINGTON, Oct 28 (Reuters) - The following is the text of a speech delivered by Federal Reserve Chairman Alan Greenspan to the Business Council meeting in Boca Raton, Fla.:


Your focus on technology--particularly the Internet--and its implications is most timely, because as this century draws to a close, the defining characteristic of the wave of technological innovation sweeping over the U.S. economy is the role of information. (Translation: You are all about to realize that although you know how to jack up internet IPO's worth billions of dollars, most of you couldn't format a simple spreadsheet to save your lives. At the end of the year, this technological exuberance will come home to roost)

The veritable avalanche of real-time data has facilitated a marked reduction in the hours of work required per unit of output and a broad expansion of newer products whose output has absorbed the workforce no longer needed to sustain the previous level and composition of production. (Translation: We have fired a shitload of people by using computers to take their places) The result during the last five years has been a major acceleration in productivity and, as a consequence, a marked increase in standards of living for the average American household. (Translation: A lot of people got rich and a lot got laid off, lets focus on the get rich part shall we?)

Prior to this revolution in technology, most twentieth-century business decisionmaking had been hampered by less abundant information. Owing to the paucity of timely knowledge of customers' needs and of the location of inventories and materials flows throughout complex production systems, businesses, as many of you well remember, required substantial programmed redundancies to function effectively. (Translation: We used to have inventories but no information, now we have information but no inventories)

Doubling up on materials and people was essential as backup to the inevitable misjudgments of the real-time state of play in a company. Decisions were made from information that was hours, days, or even weeks old. Accordingly, production planning required costly inventory safety stocks and backup teams of people to respond to the unanticipated and the misjudged. (Translation: This working with inventory stuff was hard work, something today's workforce isn't familiar with at all.)

Large remnants of information void, of course, still persist, and forecasts of future events on which all business decisions ultimately depend are still unavoidably uncertain. But the remarkable surge in the availability of timely information in recent years has enabled business management to remove large swaths of inventory safety stocks and worker redundancies. (Translation: We sliced it down to nothing, and I do mean nothing. Total JIT. )

Businesses not only respond more accurately to changes in demand, they can respond more quickly and efficiently as well. Information access in real time--resulting, for example, from such processes as electronic data interface between the retail checkout counter and the factory floor, or the satellite location of trucks--has fostered marked reductions in delivery lead times and the related workhours required for the production of all sorts of goods, from books to capital equipment. This, in turn, has reduced the relative size of the overall capital structure necessary to turn out our goods and services. (Translation: It's all so fast, fast fast. As you know, I'm slow, slow slow and so I really find this JIT stuff neato, neato, neato...really stokes my old libido!)

Intermediate production and distribution processes, so essential when information and quality control were poor, are being reduced in scale and, in some cases, eliminated. The increasing ubiquitousness of Internet sites is promising to significantly alter the way large parts of our distribution system are managed. (Translation: The internet expansion is gonna kill a lot more jobs before we're done here. Thank God, I'll be gone by then.)

The process of innovation goes beyond the factory floor or distribution channels. Design times have fallen dramatically as computer modeling has eliminated the need, for example, of the large staff of architectural specification-drafters previously required for building projects. Medical diagnoses are more thorough, accurate, and far faster, with access to heretofore unavailable information. Treatment is accordingly hastened, and hours of procedures eliminated. In addition, the dramatic advances in biotechnology are significantly increasing a broad range of productivity-expanding efforts in areas from agriculture to medicine. (Translation:We shitcanned a bunch of nurses. Not much backbone left. Just a bunch of haggard underpaid people who want to help you but are stretched thin.)

One result of the more-rapid pace of innovation has been an evident acceleration of the process of "creative destruction," which has been reflected in the shifting of capital from failing technologies into those technologies at the cutting edge. The process of capital reallocation across the economy has been assisted by a significant unbundling of risks in capital markets made possible by the development of innovative financial products. (Translation: I opened this baby up with loose credit and fueled the hot air balloon of the century. I'm calling it creative destruction 'cause that's a nifty buzzword isn't it? Sorta makes you all tingley just to say it, like "inspired suicide or helpful ebola". This helpful ebola fueled an entire generation of layoff's and I am damn proud.)

Every innovation has suggested further possibilities to profitably meet sophisticated consumer demands. A significant percentage of new ventures fail. But among those that genuinely reduce costs or enhance consumer choice, many will prosper. (Translation: Lot's of dumb Bubba's are joining the net daily and getting a woody from ordering porn online, however many of these businesses haven't earned a dime, but the really good porn sites kick ass.....er reduce costs and enhance consumer choice)

The newer technologies, as I indicated earlier, have facilitated a dramatic foreshortening of the lead times on the delivery of capital equipment over the past decade. (Translation: I have created a flood of credit like Noah couldn't imagine. Money's so easy they're swimming in it.)


When lead times for equipment are long, the equipment must have multiple capabilities to deal with the plausible range of business needs likely to occur after these capital goods are delivered and installed. In essence, those capital investments must be structured in a manner sufficient to provide insurance against uncertain future demands. (Translation: I'm making up some justification for this feel-good speech that I had to give to keep the bubble going into Y2K time, so stay with me, I'm gonna utter some babblenomics.)


As lead times have declined, a consequence of newer technologies, less judgment about the potential alternative economic environments in which the newly ordered equipment will be functioning is needed. Accordingly, foreshortened future requirements have become somewhat less clouded, and the desired amount of lead-time insurance, in the form of what after the fact would turn out to have been a partially unproductive addition to the capital stock, has declined. (Translation: Nobody gives a flying shit, any business plan will fly, cause the money's easy. Show me the money! )


Indeed, these processes emphasize the essence of information technology--the expansion of knowledge, and its obverse, the reduction in uncertainty. The use of information in business decisionmaking can be best described as an effort to reduce the fog surrounding the future outcomes of current decisions. (Translation: I'm trying to make you believe we actually know what the hell we're doing here, pay attention.)


Because the future is never entirely predictable, risk in any business action committed to the future--that is, virtually all business actions--can be reduced but never eliminated. Information technologies have improved our real-time understanding of production processes, reducing the degree of uncertainty and, hence, risk. This, in turn, has lessened the need for a whole series of programmed redundancies from which, in the end, little to no productive capability is achieved. (Translation: No risk, high reward, growth without inflation...I'm walking on sunshine....whoa...and does it' feel good.....yeah...walking on sunshine.....)


In short, information technology raises output per hour in the total economy by reducing hours worked on activities needed to guard productive processes against the unknown and the unanticipated. Narrowing the uncertainties reduces the number of hours required to maintain any given level of readiness. (Translation: Only a bunch of guy's making gajillions of dollars would actually buy the idea that our productivity can continue to increase and we can continue to eliminate jobs without impacting the economy. Let me just say we are indeed masters of the universe one and all. I love you man.)


But, obviously, not all technologies, information or otherwise, affect productivity by reducing the inputs necessary to produce the current level of existing products. Some information made possible by technological advance more readily contributes to developing new products that consumers value rather than to reducing the required inputs for existing products. Indeed, in our dynamic labor markets, the resources made redundant by better information are drawn to newer activities and newer products, many never before contemplated or available. (Translation: Here's where it goes south, you need to believe that "creative destruction" won't hurt. It's a lot like "helpful ebola", ebola certainly purges the old system wouldn't you agree? And we certainly will find other things to do than interact with the dead ebola patients will we not? We just need to find some new things to focus on, that's all. The economy will go up forever.)


The personal computer, with its ever-widening applications in homes and businesses, is one. So are the fax and the ubiquitous cell phone. The newer biotech innovations are most especially of this type, particularly the remarkable breadth of medical and pharmacological product development. Information has armed many firms with detailed data to fashion product specifications to most individual customer needs.


Owing to advancing information capabilities and the resulting emergence of more accurate price signals and less costly price discovery, many market participants are better able to detect and to respond to finely calibrated nuances in customer demand. Value added, accordingly, is enhanced per workhour. (Translation: Increased Response to Nuances = Value. Ergo..Value must lead to profits? You can tell Al has never surfed a day in his life. Nuance my dipstick, Al.)


The Internet offers an admixture of potential new goods and services and potential lower costs of production. A major part of our current GDP reflects distribution cost, and it is evident that much of that is subject to potential competitive reduction through Internet marketing. (Translation: More layoff's on the way.)


I do not perceive the end of the shopping mall, if for no other reason than I have been strongly advised that shopping is not solely an economic phenomenon. But the relationship between businesses and consumers already is being changed by the expanding opportunities for e-commerce. The forces unleashed by the Internet may be even more potent within and among businesses, where uncertainties are being reduced by improving the quantity, the reliability, and the timeliness of information, as I am sure your sessions today and tomorrow will have made clear. (Translation: You will all be attending some classes here on how to use email. I hope you find it useful. While reading your email ponder your toecheese and the added value of your dipstick in the soup. Think about firing some more people as you email some porn to your cronies.)


The newer technologies obviously can increase outputs or reduce inputs only if they are embodied in capital investment. Capital investment here is defined in the broadest sense as any outlay that enhances capital asset values or, for that matter, even enhances the value of an idea. (Translation: We simply must keep the investment bankers rolling in the dough. Since these freaking companies have no revenues to speak of, we must continually pour good money after bad to keep the ponzi scheme alight. I trust that you understand how important this is to maintianing your golf games.)

But for capital investments to be made, the prospective rate of return on their implementation must exceed the cost of capital. That has clearly happened in the last five years. (Translation: We've kept the spigot on which caused the bubble to inflate, don't even think about turning it off, or even down for that matter. No one likes to lose money.)


In particular, technological synergies appear to be currently engendering an ever-widening array of prospective new capital investments that offer profitable cost displacement. In a consolidated sense, reduced cost is reflected mainly in reduced labor cost or, in productivity terms, fewer hours worked per unit of output. (Translation: Have you tried the Chardonnay, it's really quite wonderful....I'm now repeating myself....Nuances = Dipsticks = Challenges....Need more money for porn sites...blah...blah)


It would be an exaggeration to imply that whenever a cost increase emerges on the horizon, there is a capital investment that is available to quell it. Yet the veritable explosion of equipment and software spending that has raised the growth of the capital stock dramatically over the past five years could hardly have occurred without a large increase in the pool of profitable projects becoming available to business planners. (Translation: We'd have to be lying if we said this bubble could last forever...but have you tried the Chardonnay....?)


Had high prospective returns on these projects not materialized, the current capital equipment investment boom--there is no better word--would have petered out long ago. Indeed, equipment and capitalized software outlays as a percentage of GDP in current dollars are at their highest level in post-World War II history. (Translation: This thing is more overvalued than anything I've ever seen. The world is marvelling at our bubble)


To be sure, there is also a virtuous cycle at play here. A whole new set of profitable investments raises productivity, which for a time raises profits--spurring further investment and consumption. At the same time, faster productivity growth keeps a lid on unit costs and prices. Firms hesitate to raise prices for fear that their competitors will be able, with lower costs from new investments, to wrest market share from them. (Translation: It can't go on forever kids.)


Such circumstances lead to a very favorable period of strong growth of real output and low inflation. But the degree to which the growth rate of productivity has been rising--indeed, whether in a long-term sense it is rising at all--is subject to considerable debate among economists. This results, in part, from major disputes about our national data system. (Translations: Two camps, those who get it and those who don't. I'm all for the guys that get it)


Gross product per workhour measured for the nonfarm business sector, employing the newly revised data made available this morning, rose an average 2-1/4 percent per year over the past five years, and nearly 2-3/4 percent over the past two, after averaging 1-3/4 percent over the previous two decades. Because in the past we have had episodes of similar improvements in productivity performance that failed to persist, these data, on their own, cannot be relied upon to draw broad conclusions about whether an acceleration in trend productivity is under way. (Translation: The economy's fine! I'll tell you which numbers to focus on and then you focus on them. Sorta like three card monty.)


But other data are more compelling. Growth in gross domestic income has outstripped the growth of the conceptually equivalent gross domestic product in recent years, producing a dramatic widening of the statistical discrepancy. Productivity growth in the nonfarm business sector, estimated as real gross income per hour rather than real gross product per hour, over the past two years is, thus, a more noticeable 3-3/4 percent at an annual rate, 1 percentage point faster than measured from the product side. (Translation: If I throw enough of this babble at you, you're eyes will glaze over and ....have you tried the Chardonnay?)


Finally, because the measured level of productivity in the noncorporate business sector exhibits noncredible weakness for substantial spans of time, I believe data for the nonfinancial corporate sector afford a more accurate, though admittedly more narrow, measure of productivity performance. And here the numbers are still more impressive, nearly 3 percent on average over the past five years, and more than 4 percent over the past two. By this measure, productivity growth in the 1970s and 1980s also averaged about 1-3/4 percent per year. Moreover, the acceleration in productivity appears reasonably widespread among nonfinancial corporate firms beyond the high-tech industries themselves, even though gains in output per hour in the advanced technology companies have verged on the awesome. (Translation: Greed for lack of a better word, is good. This statement is so hedged it would make a priest blush.)

Although it still is possible to argue that the evident increase in productivity growth is ephemeral, I find such arguments hard to believe, and I suspect that most in this audience would agree. (Translation: Some of you know I'm lying, hell some of you in this audience know I'm lying....but have you tried the Chardonnay?)


But how long can we expect this remarkable period of innovation to continue? Many, if not most, of you will argue it is still in its early stages. Lou Gerstner (IBM) testified before Congress a few months ago that we are only five years into a thirty-year cycle of technological change. I have no reason to dispute that, although forecasting the evolution of technology is a particularly precarious activity. It nonetheless seems likely that we will continue to experience vast advances in the application of the newer technologies and their associated increases in output per workhour. (Translation: I'm giving you a bullish Gerstner quote that's older than my boxer shorts, but I wan't to make the point that even he was bullish at one time. This will go on forever...The sun'll come up tommorrow...bet your bottom dollar that tommorrow... come what may....)

But in gauging pressures on cost growth and prices, the critical issue is not how much of the current wave of innovation lies ahead of us, but how rapidly the exploitation of the newer technological synergies proceeds. (Translation: It's gonna pop, only a question of how quickly.)


If, using Gerstner's figure, the remaining twenty-five years of the thirty-year cycle of technological change is exploited at a much more leisurely pace than the first five years, the rate of productivity growth will fall. To be sure, the level of productivity will continue to rise but at a slower pace. (Translation: Gerstner, Gerstner, Gerstner....I don't care what he said about Y2K last week, he's the man....once upon a time, he was one of us....TWENTY FIVE YEARS, I'm telling you this thing's gonna go up for another HUNDRED YEARS...it's never comming down....i tell ya....)


A leveling out or decline in the growth of productivity would have a profound effect on the intermediate outlook should it occur. I say, should it occur, because evidence of a downward bend point in productivity growth is not yet evident in our most recent data. All the same, the rate of growth of productivity cannot continue to increase indefinitely. At some point it must, at least, plateau. Should, at that point, labor market tightness result in faster growth of nominal wage rates, there would be no offset from accelerating productivity. As a consequence, unit costs would likely rise, pressuring profit margins and prices. (Translation: The only downward bend is in my shorts. For those of you who try to be 'shorts' that's exactly what you'll end up with. My nuances.)


That scenario of rising cost and price pressure is one policymakers have dealt with before, and the actions called for, while by no means easy, are readily discernible. What modern monetary policymaking has not faced for quite some time, if ever, has been a major surge in innovation--matching, if not exceeding, the other great waves this century--followed by an apparent elevation of productivity growth. Yet even these welcomed circumstances create challenges for policymakers. (Translation: This mania is much like the tulip mania)


Accelerating productivity poses a significant complication for economic forecasting. For many years, forecasters could assume a modest, but stable, trend productivity growth rate and fairly predictable growth in the labor force. Given the resulting growth of potential GDP, forecasting largely involved evaluating demand growth. If it appeared to be running in excess of trends in potential, the economy could be expected to eventually overheat, with inflation and interest rates moving up. In the end, the economy would, at some point, fall into recession. (Translation: Here we go...get your Chardonnay....presenting the new paradigm! Yes, the "new paradigm" comes with a money back gaurantee....We'll double your profits, increase your personal net worth with little or no credit or business background you too can become a multimillionaire. Welcome back my friends to the show that never ends come inside come inside....Come inside the show's about to start..."


With trend growth in productivity now clearly in play, the weakness of a simple demand-side evaluation of economic forces has been brought into sharp focus. It may no longer be the case that an acceleration in demand presages an overheated and unstable economy, if the demand growth is caused by growth in trend productivity. Higher productivity growth must eventually show up as increases in employee real incomes, in profit, or more generally both. Unless the propensity to spend out of real incomes falls, consumption and investment growth will rise, as indeed they must over time if demand is to keep pace with faster supply. (Translation: There I've said it. Growth without inflation is possible. Volkker was wrong. They we're all wrong. I'm God. The god of all that I survey. I am god of the Chardonnay, my dipstick and all nuances that follow....)


But consumer demand can accelerate so much that total demand could rise above even the productivity-augmented overall growth of potential. This seems to have been happening in recent years, owing to an expanding net worth of households relative to income and perhaps a perception that the recent acceleration in real incomes will continue. (Translation: It's hard to hide the overheated economy sometimes. It bums me out.)


This extra demand can be met only with increased imports or with new domestic output produced by employing additional workers either from drawing down the pool of those seeking work, or from increasing net immigration. (Translation: We can only meet it with imports or output or workers or something....Get me some Chardonnay...I'm getting stupid up here.)


Imports presumably can continue to expand for awhile, since the rising rate of return on U.S. assets has attracted private capital inflows, particularly a major acceleration of direct foreign investment, into the United States. For the recent past, direct foreign investment inflows have almost matched the total current account deficit. But a continued widening of that deficit could eventually raise financing difficulties, ultimately limiting import growth. (Translation: The trade deficit could kick our ass. It's as high as a kite right now....so I'm pretending i don't see it. Won't you be my neighbor....)

In addition, over the past two years, the pool of people seeking jobs--the sum of the officially unemployed plus those not in the labor force but wanting to work--has declined from 11.2 million to 9.6 million. (Translation: Those not in the labor force but wanting to work....we used to call them unemployed. We're assuming about 20 million shiftless vagrants don't wan't to work,,,but we won't talk about them)


The number of workers drawn into employment in excess of the normal growth in the workforce has been running at the equivalent of roughly a half of a percentage point of annual GDP growth. This gap must also eventually be closed if inflationary imbalances are to continue to be
Number Six
(10/30/1999; 01:30:03 MDT - Msg ID: 17897)
Greenspam post abend...
Whoa!

Looks like the USAGOLD software took a dump listening to old Greenspam :)

"The number of workers drawn into employment in excess of the normal growth in the workforce has been running at the equivalent of roughly a half of a percentage point of annual GDP growth. This gap must also eventually be closed if inflationary imbalances are to continue to be contained. (Blah, blah)


Clearly, the growth in gross domestic product cannot exceed the sum of growth in structural productivity and in the working-age population indefinitely. Market pressures must eventually emerge that work to contain such unsustainable growth. (Translation: If I say this beach is safe to surf, this beach is safe to surf. Do you smell that? That smell, that gasoline smell...nothing else in the world smells like it...I love the smell of napalm in the morning!)


The process of containment may already be significantly advanced. Increasing demand for financing capital goods relative to domestic savings, a reflection of the previously cited imbalances, has apparently been exerting marked upward pressure on real long-term market interest rates, especially as economies abroad strengthen. (Translation: The worm has turned. The global economy is mending and ours is rending.)


The measurement of real yields, that is, nominal interest rates less expectations of inflation over the maturity of a debt instrument, is inevitably imprecise. It depends, of course, on estimates of inflation expectations, which are very difficult to accurately pin down. But judging by yields on U.S. Treasury inflation-indexed securities, the real riskless interest rate has risen about half a percentage point for ten-year maturities since late 1997. Private long-term real rates have apparently risen even more. The spreads of corporates against Treasuries have widened significantly for investment-grade and, especially, high-yield debt over this period. As a consequence of these higher real interest rates, the ratio of net worth to income for the average household is already lower than it was earlier this year. (Translation: The bond market's a bunch of lying pussies. But even if you believe the yeild curve, I tell ya, they're all worthless lying bastards....I've already slowed the economy. We had a soft landing, they just missed it is all.)


We do not have enough experience with technology-driven gains in productivity growth to have a useful sense of the time frame in which market pressures contain demand. Moreover, it is not clear as yet how much cumulative impact the rise in real long-term interest rates over the past two years will have on future demand. (Translation:We have never had a bubble this big, and we have no idea where it's going...)


Going forward, the Federal Reserve must monitor not only this response, but also the evolving capacity of our economy to meet higher levels of demand. Maintaining balance between these forces will be essential to preserving the stable price environment that has provided a firm foundation for this period of extraordinary innovation and progress in the U.S. economy. (Translation: Greed for lack of a better word, is good.)





-- Gordon (g_gecko_69@hotmail.com), October 29, 1999
Number Six
(10/30/1999; 01:44:15 MDT - Msg ID: 17898)
Apologies Michael...
On re-reading this I realised that gordon gecko had used a few racy words which I should have asterisked out - sorry - mea culpa.
Number Six
(10/30/1999; 02:25:16 MDT - Msg ID: 17899)
Mines and Hedging and Disclosure
An excellent article from South Africa...

GOLD HEDGING MUST BE MORE TRANSPARENT ( from S.A. MONEYWEB )

US investors are beginning to put money back into gold funds again and there is a small trickle into their European counterparts. That's good news for the industry, indicating that when volatility decreases, the flows should increase and help feed the gold bull.

But fund managers and other investors have an acute stock-picking problem, and there is only one solution. The global gold mining industry must become transparent; that is, truly upfront, about its hedging transactions and procedures. The Ashanti Goldfields $570m hedging disaster, which has placed the company on the brink of bankruptcy and Cambior, a North American mine, are the first who have "come out" and admitted excessive exposure.

But there are many more large-scale mining bears hiding in their caves. With the exception of the few SA gold miners, notably Gold Fields and Harmony, no-one is sure about the extent of liabilities of any company with disclosed or undisclosed hedge positions. Since hedging is carried out through complex derivatives, notably futures and options, leasing arrangements and generally incomprehensible banking "insurance" schemes, a large proportion of the transactions are off balance sheet. Company reports only hint about the potential liabilities. They are probably much bigger.

In short: if gold's next bull phase takes it towards $400/oz, which mines will truly benefit and which ones will be the big losers? We already have the first case study. Since September 21, when Gordon Brown's Treasury and its agent, the Bank of England claimed their auction booby prize of $255,75/oz, gold has surged by 26% to $324/oz, touching $339/oz at one stage. SA's Gold Fields, Harmony and others have doubled or more. But Ashanti Goldfields, in what seemed to take a mere down shaft journey, halved in price and is at its twelve month nadir.

It is not a matter of being wise after the event. Hedging kept many mines alive during the long bear market and the mechanism is necessary. But it must be done prudently and shareholders have the right to know the mine's policy and exposure. Frank Lucas head of Loeb Aron & Co, London based consultants and mining finance specialists, sums up: "In a rising market, the safest bet is physical metal, the next safest is the equity of a miner that transparently explains its hedging policy and gives examples as to how much profit is attributable to shareholders with gold at say, $225, $250, $275, $300 and so on. The easiest analytical bet is a gold miner with no hedges in place. Then apart from the direct effects of the bullion price, you know that you only have those other nasty risks to contend with - country, management, technical, costs.... etc."

"We need far more clarity," says Kjeld Thygerson of Lion Resource Management that advises the $100m Midas Fund in the US. "When mines say that they've hedged gold at say $350/oz, what do they mean? Is that the spot price or the futures price? How big is the book and what is the hedging policy." Hardly surprising, Thygerson and Geoff Campbell of the London based $152m Mercury Gold and General Fund are finding it "a battle" to pick the right stocks." Thygerson's front runners are SA's Gold Fields and US mines Homestake and Newmont ( which despite its disclosed hedge near the bottom of the market only has small exposure ) . Next in line are SA's Harmony, Battle Mountain in the US and Canada's Kinross. Campbell likes Placer Dome in the US and Peru's Buena Vista.

Ironically, Mercury ( which for years complained bitterly that mines were shooting themselves in the foot by hedging ) , has a 1% exposure to Ashanti. Mercury's Campbell is not the only one who's been befuddled by hedging. A perplexed broker, who believes that the share price collapse is "overdone", complained that the average Ashanti gold hedge price was "as high $389!" He changed the subject when I asked him why Ashanti's seventeen anxious bank creditors were so desperate for $260m in margin deposits.

As Lucas puts it, Ashanti and several other mining companies hold complex short long term gold positions ...equivalent in time to two election terms or more. The so-called disclosed prices contain a contango element i.e. the forward premium that includes the interest element over the period of the derivative. When spot quotes rise, forward prices rise in tandem and so do those margin calls. Where does the gold price go from here?

One thing is certain. Don't take the bullion houses' predictions too seriously. They would be ecstatic if the price "consolidated" ( what they really mean is "fall" ) . Some of the largest US bullion banks, which one must stress made fortunes in the bear market, have already lost $20m to $50m in the upheaval, according to the market. Indeed it would be very surprising if every single member of the London Bullion Market Association has not taken a knock. After all, it was they who borrowed the gold, issued the options and other derivatives and were generally pessimistic about gold's prospects. For the record, the average prediction is currently a range of $295/oz to $350/oz, against $270/oz to $290/oz, the day after the central banks deliberately surprised the market and precipitated a bear squeeze. So instead of following the experts who have their own books to worry about, examine the price action. Physical demand, predictably has collapsed, following the price surge, but gold is rock steady.

The numbers explain and note that I am not talking about the normal boring production and consumption estimates which are meaningless in a fast moving dynamic market. Estimates of gold loans outstanding ahead of the present bear debacle range from 4 500 to 9 000 tons. Let's guess that it was 6 000 tons or 192-million ounces worth $58bn. There are several numbers bandied about on mines' open positions, but I would go with Thygeson's guess of around 2 800 tons or 90-million ounces ahead of the squeeze. For each $10 rise in the price, the cost to the industry on that exposure is around $900m.

Little surprise that the mines are covering and will continue to cover. There are also rumours that hedge funds had outstanding bear positions of around 40-million ounces worth around $10bn at the market lows. The usual suspects, notably Tiger and Tudor are named, but none have confirmed the whispers, although Tiger's reported losses on all wrong calls including the Yen are reportedly huge. More likely most of the hedge fund positions were covered between $260 and $300/oz, so they are probably no longer a market factor. Indeed, some funds, including Soros are now rumoured to be long.

That leaves the physical buyers. Dubai traders have taken a bad hit because they had sold short or "hedged" in more euphemistic terms. Asian and Italian stocks are low ahead of Christmas, the Millennium, Chinese New Year in February, Indian marriage season etc. So consumers are hoping, even praying that the price will fall. Between them and mine hedge covering, it seems that demand is going to exceed supply in coming months. As was said above, don't take the bullion houses' forecasts too seriously.

By: Neil Behrmann


SteveH
(10/30/1999; 03:14:43 MDT - Msg ID: 17900)
Oro, this one is dedicated to you.
www.gold-eagle.comExecutive summary: Self-organized criticality is similar to or part of chaos theory that, in part, says events are random or occur in a chaotic manner and are interrelated. The phrase 'unintended consequence' is a similar concept to SOC but in a sense the opposite, because below, you will see SOC is much like the precursor to an event or trigger such as the butterfly batting its wings in China causing the hurricane in Florida. SOC could also be described as the build up events, once triggered, catapult through a large and free system to bring about dramatic rather than small changes, such as a fault (earthquake-type) building up pressure that suddenly releases. SOC seems to explain a system that is diverse and large that has several points of weakness and if one event does not trigger a shift another eventually will. The gold-eagle poster below seems to believe or allude to the World-financial markets as a system to which one could apply SOC theory. I find it a compelling argument and have often said in private conversation that the trigger to any downside in the Goldilocks economy in the US today would be an unintended consequence or event that would ultimately be unstoppable or in stopping any downside would ultimately trigger something else, so on and so forth. This leads to the idea of a spiraling up or down organization, or in this case economy (see writings of Bill Gates), that finds itself a victim to unintended consequences or in SOC parlance a triggered event that snaps the organization in one chaotic move changing the equilibrium to become something else. I have taken the liberty to post a few excerpts from Greenspan's Jackson Hole speech. You may find it interesting to note AG's closely followed (my guess unwittingly) the precepts of the SOC theory. Anyway you decide upon reviewing the below:

AG--"...As the value of assets and liabilities have risen relative to income, we have been confronted with the potential for our economies to exhibit larger and perhaps more abrupt responses to changes in factors affecting the balance sheets of households and businesses...Even our most sophisticated analytic techniques have difficulty dealing with the interactions among time preference, risk aversion, and uncertainty and with the implications of these interactions for the risk premiums that are embedded in asset prices. It is our failure to anticipate changes in this discounting process that much of our inability to accurately forecast economic events lies...Of crucial importance, and still most elusive, is arguably the behavior of asset markets. More broadly, there is an increasing need to integrate into our macro models more complete descriptions of the responses of households and businesses to risk--behaviors that are generally modeled separately under the rubric of portfolio risk management...The translation of value judgments into market prices is, of course, rooted in how people discount uncertain future outcomes. An individual's degree of risk aversion may vary through time and possibly be subject to herd instincts. Nonetheless, certain stable magnitudes are inferable from the process of discounting of future claims and values...The impact of increasing uncertainty and risk aversion was no more evident than in the crisis that gripped financial markets last autumn, following the Russian default...That episode of investor fright has largely dissipated. But left unanswered is the question of why such episodes erupt in the first place...It has become evident time and again that when events are unexpected, more complex, and move more rapidly than is the norm, human beings become less able to cope. The failure to be able to comprehend external events almost invariably induces fear and, hence, disengagement from an activity, whether it be entering a dark room or taking positions in markets. And attempts to disengage from markets that are net long--the most general case--means bids are hit and prices fall...Modern quantitative approaches to risk measurement and risk management take as their starting point historical experience with market price fluctuations, which is statistically summarized in probability distributions. We live in what is, for the most part, a stable economic system, where market imbalances that produce unusual outcomes almost always give rise to continuous and inevitable moves back toward longer-run equilibrium. However, the violence of the responses to what seemed to be relatively mild imbalances in Southeast Asia in 1997 and throughout the global economy in August and September of 1998 has illustrated yet again that the adjustments in asset markets can be discontinuous, especially when investors hold highly leveraged positions and when views about long-term equilibria are not firmly held...Risk aversion in such an instance rises dramatically, and deliberate trading strategies are replaced by rising fear-induced disengagement. Yield spreads on relatively risky assets widen dramatically. In the more extreme manifestation, the inability to differentiate among degrees of risk drives trading strategies to ever-more-liquid instruments so investors can immediately reverse decisions at minimum cost should that be required...History tells us that sharp reversals in confidence happen abruptly, most often with little advance notice. These reversals can be self-reinforcing processes that can compress sizable adjustments into a very short time period. Panic market reactions are characterized by dramatic shifts in behavior to minimize short-term losses. Claims on far-distant future values are discounted to insignificance. What is so intriguing is that this type of behavior has characterized human interaction with little appreciable difference over the generations. Whether Dutch tulip bulbs or Russian equities, the market price patterns remain much the same...to date, economists have been unable to anticipate sharp reversals in confidence. Collapsing confidence is generally described as a bursting bubble, an event incontrovertibly evident only in retrospect. To anticipate a bubble about to burst requires the forecast of a plunge in the prices of assets previously set by the judgments of millions of investors, many of whom are highly knowledgeable about the prospects for the specific companies that make up our broad stock price indexes...If episodic recurrences of ruptured confidence are integral to the way our economy and our financial markets work now and in the future, it has significant implications for risk management and, by implication, macroeconomic modeling and monetary policy...extreme price movements because they fail to capture a secondary peak at the extreme negative tail that reflects the probability of occurrence of a panic. Furthermore, joint distributions estimated over periods without panics will misestimate the degree of correlation between asset returns during panics....

As you can see AG believes that the complex free system economy is actually building SOC and its trigger is not only hard to find or measure, but near impossible to predict. The system comes under stress through the gold market shorting and hedging shenanigans, as folks put more money into stock-market-based investment strategies, as PE ratios gain all-time historical levels, something will trigger an event. That trigger might not be obvious when it starts, largely overlooked by all the other random noise in the system, but once it gathers momentum, crack...boom...ouch. I believe many goldbugs surmise that gold or gold's manipulation may be this trigger. Well, gold, in my estimation, is not a hidden event -- that is why it is manipulated. No, the trigger, if you will, that may bring the house of cards down, assuming it is ready for a fall, is probably on-going right now, out of our view, and when any sudden-shift occurs, we will look back and say, "Now why didn't we see that happening? I all makes sense now."

Some believe the trigger is Y2K. That is possible also. But it could also be something entirely different. FOA and Another believe the trigger is the Euro. The Euro changed the world-financial system dramatically as it is a competitor for capital market share to the dollar.

No matter what the trigger or triggers are, the grain of sand that fell that set the avalanche off, it is certainly the viewpoint here that something is amiss and the controls are being operated in wider swings. Any instrument pilot will tell you that you can't make large changes to flight controls on an ILS approach. It results in ever widening adjustments resulting in a missed approach or worse -- a crash. I perceive that just such a groping for controls is evident now. The fed makes minor adjustment in interest rates, which shows they know flight controls must be maintained in small moves. They know that the 'needle' lags their control decisions. What they also know is that certain events beyond their control: public sentiment, investor fickleness, can change on a dime and might be the same as a wind sheer affect on final approach.

Taking it a step farther, most airplane crashes occur because several random events happen at the same time, leaving little room for Pilot error or worse creating a situation that no degree of control can keep the airplane in the sky. If a landing gear won't go down, or a control surface won't budge, or a broken hydraulic pump breaks, redundant systems often save the day. But if the hydraulic pumps fails and the electricity fails and a stall-warning indicator no longer works, well you see the picture. On a ship at sea, should similar events happen, one has time to repair components and can prevent problems before they become too big.

AG sees SOC (without using the actual words) developing in the economy. He sees consumer or investor sentiment as the fickleness of the system ready to change the status quo. He doesn't really tell us what the actual event or events are that might cause a loss in confidence. I observe that the latest Wall Street practice of expectation helps to control investor sentiment. Somebody figured out that if you can establish an expectation (even if it is a horrible event) and then beat that expectation you get a short-sighted positive reaction in market sentiment. By managing expectation and consistently beating them has become a science on Wall Street. Identifying the expectation makers, identifies the controllers. If they are a disparate group of persons with no relation to each other, that is one thing, but I ask how are expectations always made known in advance of key events on CNBC, on CNN? Someone has to set expectations so someone knows if they are beat.

What is the event that will change investor sentiment, if expectations can be change to always make events seem less significant than they are? Are we so caught up in bested expectations that we find ourselves much like the Sheriff of Nottingham in the movie "Robin Hood -- Men in Tights" where he didn't want to hear the bad news so he told his aid to break the bad news to him in a good way? Have we gotten this far that our expectations disregard for the larger picture? I say yes. But that doesn't answer what is the SOC that will break the camel's back?

Is AG looking in the wrong area? Does the idea of a recession seem so appalling now because of 401K's, IRA's, that have entrenched the thought that the stock market is the new paradigm and that the market can't be allowed to refresh itself or recess itself? Frankly, I believe there are many folks who espouse that idea and that isn't healthy.

So, to end this discussion, I challenge every one of us to find the grain of sand on the hill that may cause the avalanche that might brings down the house of cards. If we can find it in time we can turn it into an expectation and beat it. Then things won't be so bad. Enjoy the below re: SOC.

SteveH







Oops, there goes the camel's back again
(TQ) Oct 29, 22:06

This is from Gary North's site:

'(feel free to mail this page)


Category:
Domino_Effect
Date:
1999-10-29 12:18:46
Subject:
A Grain of Digital Sand: How Large Systems Fall Apart Unexpectedly
Link:
http://www.ldeo.columbia.edu/~juanc/abstracts/rinaldo.h...
Comment:
This academic essay from the earth sciences applies the economist Mandelbrot's discoveries, known as chaos theory, to large systems. Call it the straw that breaks the camel's back. Don't be halfway through the Sahara when you add an extra straw.

A fractal is a spiraling, sea shell-like image that is produced by random numbers: order out of chaos.

This is posted on the Web site of Columbia University.

* * * * * * * * * * *

Fractal River Basins

Andrea Rinaldo

Centro Internazionale di Idrologia "Dino Tonini", Universit� di Padova, Italy. . . .


Self-organized criticality (SOC) refers to the tendency of large dissipative systems with many degrees of freedom to build up a state poised at criticality that is characterized by a wide range of length and time scales. SOC is now a common name for a general theory of the dynamics of fractal growth, whose main features are recalled in this lecture, especially with reference to applications within the context of earth sciences. . . .

Two related problems have interested scientists for a long time. One is the fundamental dynamic reason behind Mandelbrot's observation that many structures in nature - such as river networks or coastlines - are fractal, i.e. looking 'alike' on many length scales. . . .

One crucial feature of the organization of fractal structures in large dynamical systems is the power-law structure of the probability distributions characterizing their geometrical properties. This behaviour, characterized by events and forms of all sizes, is consistent with the fact that many complex systems in nature evolve in an intermittent, burst-like way rather than in a smooth, gradual manner. The distribution of earthquake magnitudes obeys Gutemberg-Richter law which is a power-law of energy release. Fluctuations in economics also follow power-law distributions with long tails describing intermittent large events, as first elucidated by Mandelbrot's famous example of the variation of cotton prices. . . .


A rather common reaction to catastrophic concerted actions is to find specific reasons for large events. Economists tend to look for specific mechanisms for large stock fluctuations, geophysicists look for specific configurations of fault zones leading to catastrophic earthquakes, biologists look for external sources, such as meteors hitting the earth, in order to explain large extinction events, physicists view the large scale structure of the universe as the consequence of some particular dynamics. In essence, as Bak put it, one reluctantly views large events as statistical phenomena.


Bak noted that there is another explanation, unrelated to specific events and embedded in the mechanisms of self-organization into critical states. In such states each large event has a specific source, a particular addition of a grain of sand landing on a specific spot of a sand-pile triggering a large avalanche, the burning of a given tree igniting a large forest fire, the rupture of a fault segment yielding the big earthquake, or the slowing of a particular car starting a giant traffic jam. Nevertheless even if each of the above particular initiating events were prevented, large events would eventually start for some other reason at some other place of the evolving system. In critical systems no local attempt to control large fluctuations can be successful unless for directing events to some other part of the system.


What are the signatures and the origins of the process of self-organization? Bak suggested that SOC systems have one key feature in common: the dynamics is governed by sites with extremal values of the 'signal', be it the slope of a sandpile or the age of the oldest tree in a burning forest, rather than by some average property of the field. In these systems nothing happens before some threshold is reached. When the least stable part of the system reaches its threshold, a burst of activity is triggered in the system yielding minor or major consequences depending on its state. . . .


Link:
http://www.ldeo.columbia.edu/~juanc/abstracts/rinaldo.h... '

Will the DOW Bull end, as T.S. Eliot wrote, 'not with a Bang but a whimper'?

I ask again what will trigger the gold bull? Something big or simply something seemingly trivial, but which is in reality a final achievement of a critical threshold?

Leigh
(10/30/1999; 05:10:56 MDT - Msg ID: 17901)
Whoa!! Farfel Made the Gary North Website!
http://www.garynorth.com/y2K/detail_.cfm/6550Farfel's speech can now be seen at Gary North's website! CONGRATULATIONS, FARFEL!
Leigh
(10/30/1999; 05:25:17 MDT - Msg ID: 17902)
Better Link for Farfel's Speech
http://www.gold-eagle.com/editorials_99/dvcohen102599.h...The last link wasn't a very good one if you want to read the speech. This links you directly to it.
Leigh
(10/30/1999; 05:31:17 MDT - Msg ID: 17903)
The True Link for Farfel's Speech
http://www.gold-eagle.com/editorials_99/dvcohen102399.htmlTHIS one should work. Sorry!
nickel62
(10/30/1999; 05:36:05 MDT - Msg ID: 17904)
Steve H. I wanted to thank you for your excellent post.
Your incites are greatly appreciated. It's amazing how much smarter we can become through sharing. Maybe that is the only defense we ultimately have from the controlers of expectations numerous mind games.Thanks again.
Number Six
(10/30/1999; 05:38:56 MDT - Msg ID: 17905)
So the gold price fell through $300� So what !
http://www.gold-eagle.com/editorials_99/anonymous103099.htmlMy apologies if this has already appeared on USAGOLD - if not, enjoy this over breakfast :)


So the gold price fell through $300� So what !


The bottom line that we have to remember is why it is up here in the first place, and exactly what there is out there that might suddenly turn it round again. My personal estimate (and hope, for my own career prospects!) is that gold will finish 1999 with a bang, not a whimper. I have been trying to not listen to the bearish droning and whining about the gold price for the last two weeks - as most of it is coming from self-interested bullion dealers and even gold mining companies, for one major reason: risk.

The gold price's move north of $300 caused a lot of problems in an industry self-absorbed and fatalistic, used to big contangoes and hedging as a means to profiteering in a bear market, and gold mining as a sideshow. The hedge books of companies in some cases were bigger than their market caps, and represented big unrealized potential gains at $250 gold, should the management be brainy enough to take the money and run. The simple fact is that these hedge books are still there, and I can think of at least five companies that have sold TEN times their yearly production (can you believe a gold company would be that bearish on its core commodity that it would give away production for ten years???) - only expose themselves to serious financial risk in the case of one of those hundred-year events, a gold price explosion.

What a bunch of turkeys.

My own opinion is not worth much, but I am vehemently anti-hedging. And the endless bull - management has been feeding shareholders about how safe these hedge books are - is making me feel cheated out of performance from a sector that I had written off for a lot of this year. Consequently my recommendations for good situations is limited to those with new projects (exploration companies in some cases), and to producers that haven't sold the family jewels already.

The gold price has dipped below $300/oz on light volume selling - and the usual crap from US-friendly central banks helping out beleaguered bullion dealers - and gold companies from a very tight spot (this time the Kuwaitis).

The facts driving this market at present are still the same. And I am getting pretty bullish on the gold price, and particularly bullish on some of the smaller situations that have been knocked down to bargain prices again - and in some cases trade lower than they did before the gold price rise! (e.g. Viceroy at $1.25!!!). If you are a chartist, gold has come back and filled the gap it made during its rise to $340 on that mad morning when a hedge fund covered. At $300 it is testing solid support and I believe a lot of gold companies are opportunistically looking for a chance to cover hedges, many of which involve options struck at $300. You have to remember some key facts as to why the price is as high as it is:

1) World demand is approx. 4500 tonnes per year vis-a-vis production of 2500-3000 tonnes

2) Physical demand is up 20% this year, mainly from Asian buying when the gold price tested $260.

3) Approximately 10000 tonnes has been lent out into the market to finance hedge books, many of which are unprofitable and present credit and financial risk to counterparties.

4) Counterparties (bullion & lending banks) have worn derivative debacles in Yen, bonds, swaps and copper in the last two years, mostly from hedge funds getting caught.

5) hedge funds are short to the tune of 3000 tonnes, uncovered by any production or reasonable way of covering positions, mostly through options.

6) The gold lease rates normally trade at 0.5% for 12 months. They spiked to 10% for a week, causing pain everywhere when option books started blowing up and the precious "contango" ie the premium of future prices to spot deteriorated. They still remain above 1.5%-2% and mark the new status of gold as a commodity in short supply.

7) Gold traded down to $250 because of aggressive short selling by producers, bullion banks, and hedge funds looking to make a buck from a bear market without considering the risks.

8) The marginal cost per ounce of increasing production globally is approximately $270. This represents a cutoff level where gold companies usually make a loss from extra production. This is especially true in old orebodies in Australia and South Africa. And for all the announcements you see of Barricks' Pierina producing at sub-$100, there are four projects out there with unprofitable production that have to be seriously looked at for future viability.

9) Exploration budgets are one-third or less than what they were two years ago. New ounces are not being discovered faster than they are used, and many mines have been high-grading to maintain profitability in a falling gold price (another one of the things I loathe in companies!!)

10) The announcement of the European Central Banks decision to curtail new sales, and most importantly lending will effectively limit new hedging (where can they borrow the gold from????) and actively discourage renewal of old hedges as contangoes evaporate and the bottom line reason, the profit, disappears.

11) The US economy has finally acknowledged that inflation is alive and well (implied by bond yields of 6.40%) and interest rate hikes are on the way. The US dollar is under serious pressure from other world currencies (the euro and the yen for what its worth!) due to its mushrooming deficit and the huge amount of credit creation from good old Mr. Greenspan. Gold has been shown time and time again to be a hedge against US dollar weakness.

This is why I am bullish and this is why I don't care that the gold price is under $300 again. I believe there are a lot of Ashantis out there, and most of the them will not be disclosed until we get another spike in gold -- which I believe is not too far off.

Look for a base around $295, then another event (such as a falling Dow, a hedge book explosion, a credit default, the announcement by the Swiss that they wont sell etc etc) to set it off and running. If you are a chartist, you will recognize a flag pattern and consolidation formation in the last month or so, signifying a volatility explosion in the not-too-distant future. I believe the direction of this explosion will be up, for the reasons listed.

Basically there is too much random uncertainly out there right now to not be bullish gold - stocks are volatile, bonds keep falling, the US dollar keeps weakening,Y2K is alive and well, and the world is looking increasingly like it is sick and tired of the US dollar being the only alternative. Many Asians were upset by the attitude of the US to their plight when Asia crashed, and the Europeans were mortified when their brand new currency lost 20% in its first quarter. There are big moves going on behind the scenes and I am plugged into only some of them. I have heard the following rumors:

1) The Europeans agreed to stop lending gold to prevent further loss in the value of their reserves. The resulting volatility explosion was a planned event meant to further undermine the US dollar and cause headaches for Wall Street banks and hedge funds that had been actively shorting the euro.

2) George Soros had been plugged into the above and was a massive long gold player and still holds a big position, with full intent to squeeze some competitors (e.g. Tiger) shortly.

3) The Saudis have been huge buyers (I can confirm this is a fact - don't know why though) and are involved in the Euro thing as a repeat of their huge win in silver in the 1970s (see Bunker Hunt's squeeze). etc etc etc I am trying to illustrate that the market is pretty complicated and the gold price is like a window on to the credit flows of the world. It has been used as a funding mechanism by hedge funds (massive shorting to buy bonds) and a profit centre for bullion banks and gold producers. The smart in-crowd made stacks on the way down and are giving some of it back on the way up - I am not shedding too many tears.

Hopefully, you now feel a little more comfortable about holding gold companies in your portfolio� and you should see gains in the gold price before year end (at the very least, as a Y2K spike.)

P.S. Patience!!! The gold price will base soon and move north FAST.

30 October 1999

Anonymous Author

Hill Billy Mitchell
(10/30/1999; 06:56:19 MDT - Msg ID: 17906)
phaedrus
"Preachin 'Bill he 'lows hit's good fer a feller t'be down in th' back onct n a while; says 'f hit warn't fer that we'd git t' standin' s' durned proud an' straight we'd go plumb over backerds."
Hill Billy Mitchell
(10/30/1999; 06:57:14 MDT - Msg ID: 17907)
phaedrus
"Preachin 'Bill he 'lows hit's good fer a feller t'be down in th' back onct n a while; says 'f hit warn't fer that we'd git t' standin' s' durned proud an' straight we'd go plumb over backerds."
Atahualpa
(10/30/1999; 07:46:13 MDT - Msg ID: 17908)
Slight correction, if I may. It's Buenaventura, not Buena Vista.
"...Hardly surprising, Thygerson and Geoff Campbell of the London based $152m Mercury Gold and General Fund are finding it "a battle" to pick the right stocks." Thygerson's front runners are SA's Gold Fields and US mines Homestake and Newmont ( which despite its disclosed hedge near the bottom of the market only has small exposure ) . Next in line are SA's Harmony, Battle Mountain in the US and Canada's Kinross. Campbell likes Placer Dome in the US and Peru's Buena Vista..."




The Invisible Hand
(10/30/1999; 09:20:39 MDT - Msg ID: 17909)
Nov. 12, 1999 option expiry - rigged?
http://www.mrci.com/special/gold.htmIf the whole 'game' is rigged, is Nov.12 then also rigged in advance and do we have to wait for Y2k panic or Jan 1 itself?
RossL
(10/30/1999; 09:43:02 MDT - Msg ID: 17910)
Strategic Investment
http://www.strategicinvestment.com/
The latest issue (Oct 20) of Strategic Investment by James Dale Davidson and Lord Rees-Mogg arrived in the mail Friday. Inside are several nuggets of information for the goldbugs in here. I will summarize.

Michael Belkin's "Quarterly Outlook" calls for a rally in big name internet shares before the bubble bursts, along with a good fourth quarter for gold mining shares. His favorite gold miners are Newmont, Placer Dome, Goldcorp, Meridian, and Golden Star.

Davidson's "Investment Overview" covers the recent gold rally and repeats some of the rumors about manipulation that we are familiar with. Many big players need the gold price to be $280 to $295 or they are in trouble. He quotes an analyst at JP Morgan speaking about gold derivatives:
"This market evolved in a falling price environment. We have not stress-tested how this works with a rising price. There are very few people who have lived through such volatile trading conditions in the gold market. It's hard to get your mind around the changes. No one knows how big or complex this market is."

David Tice "Strategic Short Portfolio" has a 60 year chart of stocks vs. gold, with the Dow divided by the price of gold. He gives an analysis that bubblemania will end and the chart will swing back.
RossL
(10/30/1999; 09:44:11 MDT - Msg ID: 17911)
Scruffy
About your idea to get lots of people to max out their credit cards buying gold. This would be fun to watch, but it wouldn't last long, I'm afraid. Most of those people would sell after the runup, bringing the price right back down. We need buyers in for the long haul. Gold in strong hands instead of weak hands. If strong buyers snap up all the gold while the manipulators keep trying to drive it to $290, at some point the manipulators will run out of resources. Then all the gold will be in strong hands. The day will come when all the gold price is controlled by free markets and not by manipulative bankers.
RossL
(10/30/1999; 09:45:25 MDT - Msg ID: 17912)
Nov. 12, 1999 option expiry - rigged?
The Invisible Hand - history shows that they will try. The COMEX Dec99 contract expiration will be harder for them to rig. If you must play options, You would need to hold Feb00 call options while that squeeze plays out.
USAGOLD
(10/30/1999; 10:16:47 MDT - Msg ID: 17913)
Ashanti Makes Public Announcment on Hedging Program 10/29/99
This article was published at the Kitco site by Skylark. Though not attributed, it no doubt came from Ashanti itself.
Please note that the situation is pretty much as we have described here and in our daily reports. The details will be of great interest to those following the Ashanti situation. The most telling information that can be gleaned from this is that Ashanti is running out of options and that it remains extremely vulnerable to a rising gold price. It appears that Ashanti put on some pretty large hedges at gold lows and got caught in the upswing. (I wonder who they have to thank for that. No wonder Rawlins is threatening national action.) We still have not heard an announcement on whether or not the standstill agreement has been extended, though one could assume that every time the gold price ticks up that agreement comes increasingly closer to becoming history. Also note that Ashanti has a considerable debt problem beyond the margin calls and that those notes are due soon. Though Ashanti makes much hay over its past successes with its hedge book, I could not find mention of their overall forward hedge which has been reported elsewhere at 10 million ounces -- roughly ten years of production. To me this still looks like gambling not hedging and I don't see easy solutions for this mining company. True its reserves rise with the gold price, but so does its margin requirement -- an ever expanding whirlpool. Someone will have to be willing to shoulder Ashanti's losses and look to the long term. You might note that there hasn't been any further discussion of Prince Alaweed's involvement.

Side note: Interesting fibonacci relationship between hedged and unhedged reserves -- 68% to 32%. Unfortunately the 32% represents 100% of production for the next decade.

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

Ashanti explains gold hedging crisis

Introduction
Ashanti Goldfields Company Limited ( "AGC" or "the Group" ) has noted the public concern on recent developments which have
resulted from the effect of the sudden increase in the gold price on the hedge book of the Group. As a result, the employees of the
Company and its many subsidiaries have been requested through a number of telephone calls and personal enquiries for updates. The
following is a formal attempt to answer the key issues involved in the recent developments.

What is the current state of the AGC mines?

We must first of all establish the fact that our six mines in Ghana, Guinea and Zimbabwe are all operating strongly and that the Group is
on track to attain its production targets and improved cash costs by the end of the year. At our Obuasi mine, steps have been taken by
management to reduce the negative impact of the recent strike on production and costs. A major life of mine plan which has just been
completed, should make the mine a profitable concern in about two years, to reverse the trend of losses which last year alone amounted to
over $26 million.

Our mine at Iduapriem, known as the Ghanaian-Australian Goldfields, of which Ashanti has 80% ownership, was scheduled for closure
at the end of this year. With persistent cost-cutting and other operational initiatives, the mine has remarkably turned the corner sufficiently
enough for an extension of the mine life for a further 18 months.

Bibiani mine is on track to attain its production and cash cost targets in much the same way as our Siguiri mine in Guinea and the
Freda-Rebecca mine in Zimbabwe. Recently, we reported the effects of record rainfall, which seriously diluted our solutions for
processing gold at our Siguiri mine in Guinea. Production has since been stepped up and the planned expansion of that mine will be
completed by the end of this year as scheduled.

In Tanzania, the Geita mine which is currently under construction, is to commence the annual production of over 500,000 ounces of gold
by the third quarter of next year. This is going to be the sixth mine to be added to the Obuasi mine, since the flotation of the Company in
May 1994. Thus, on the basis of the 62% of our unhedged reserves, and the successful geographical diversification of its gold
production from one site to seven sites in four countries, fundamentally, Ashanti Goldfields is in a much stronger position. With the
improved gold price, these operations are even more robust.

The falling gold price and the recent rally
The current challenges faced by the Company are therefore, simply stated, the results of the effect of the sudden rise in the spot price of
gold on Ashanti's hedge book and not a function of production inefficiencies within the group. It is also noteworthy that the Company
has never defaulted on its obligations relating to the corporate debt of US$440 million which resulted from the cost of corporate growth
explained above.
The rise in gold prices from its lows of US$250 to the current US$300 per ounce, makes Ashanti Goldfields a much stronger company
for the long-term and a more valuable asset to all its shareholders.

The Objectives of AGC's Hedging programme
AGC started its hedging programme eight years ago when the trend in the gold markets indicated a steady decline in the gold price. In
order to modernise, expand and build a world-class company into an attractive portfolio for the potential investor, the management of
Ashanti had to explore avenues to minimise the effects of a declining gold price. In the prevailing uncertainties, the hedging programme
was structured to achieve the following objectives:
to guarantee a minimum price for future production of gold and allow at the same time, shareholders to participate in potential increases in
the gold price
to guarantee debt servicing obligations, which were contracted to modernise and expand the existing mines to guarantee minimum future
cash-flows to support capital expenditure commitments
to provide, as much as possible, job security for the Company's employees to ensure additional resources for the future growth of
Ashanti
to provide additional income to make for a decent return on shareholders' investments.

Drivers for AGC's hedging policies
Ashanti's gold hedging policy over the last three years has been driven by two aims:
To protect the Company's cash flows so that it can meet its commitments in respect of operating costs, capital expenditure and debt
service.
To conduct the hedging policy in a way such that the Company can benefit from the normal increases in the price of gold.

Generally, the gold price has been declining steadily over the last six to seven years and this has prompted the Company to hedge a
percentage of its reserves in order to sustain its modernisation and growth programmes. The quantity of reserves hedged by Ashanti,
currently quoted at 38% of reserves, is within the industry norms as shown in the graph below.

Note: This information has been obtained from external sources
The remaining 62% which is unhedged, has benefited from the recent increases in the gold price and has accordingly brightened the
future of the group as a world-class gold producer.

What is hedging?
Hedging is defined as a strategy to protect a company's revenue against uncertainties due to fluctuations in market prices. Virtually every
gold producer has established a gold price risk management programme and a Board-approved hedging policy, which involves entering
into contracts with banks or counter-parties to deliver gold on certain future dates and at agreed prices. These agreed prices are usually
higher than the spot gold price, or the price which could otherwise be obtained on the gold market. This assures for the company in
question a predictable flow of usually higher income despite falling or volatile gold prices. The decline in the gold price over the last
fifteen to twenty years has highlighted the advantages of hedging for gold companies, such as AGC.
Hedging can also be compared to a car insurance policy. In this case, the premium paid is the cost involved in hedging against heavy
casualty losses and other liability claims. Companies like Ashanti, facing uncertain price changes or exchange rate risks, insure
themselves, as much as possible against losses originating from these risks. Ashanti, therefore, hedges part of its gold production against
the risk of falling prices and this enables the Company to continue its operations and planned investments. The Ashanti Goldfields
Company is not the only Ghanaian company which engages in hedging. Recently, the Cocobod announced its own hedging policy as a
safeguard against low cocoa prices.

Has Ashanti benefited from the policy at all?
Leading gold analysts from Goldman Sachs, Merrill Lynch, Nesbitt Burns, Scotia McLeod, T D Securities etc have all acknowledged
Ashanti's hedging policy as one of the very best and most transparent in the industry. Indeed, in his Sessional Address on Thursday,
15th January, 1998, His Excellency President J J Rawlings, stated among other things that:
"The continuing fall in the price of gold has led to the retrenchment of hundreds of people employed in the gold industry in other
countries. Fortunately, we have not got to such a point, thanks to the competitive nature of most of our firms on the world gold market
and the Ashanti Goldfields Corporation's hedging mechanism. However the crippling effect of the collapse of gold price on export
earnings, employment generation and economic growth should not be underestimated".
For instance, in the 1998 Annual Report, we reported on page 45 that, three of our Ghanaian mines reported operating losses of a total of
US$35.9 million. These were Obuasi US$26.7 million, Ayanfuri US$4.9 million and Iduapriem US$4.3 million. On the other hand,
hedging alone brought in US$139 million which helped to keep these three mines in business and thereby saving the jobs of over 10,000
Ghanaians.
Indeed, as a result of the sophistication and effectiveness of the hedging policy, Ashanti has realised nearly $700 million from hedging
activities over the past five years. Developing Bibiani mine in Ghana, Siguiri mine in Guinea, and the Geita project in Tanzania into gold
producing mines required huge financing. Banks that were ready to lend to Ashanti sought to reassure themselves of repayment by
requiring the Company to hedge part of the gold to be produced. Banks could not risk losing part or all of their capital in the event of
falling gold prices. Ashanti's hedge book therefore provided the security and comfort the banks were seeking before they financed over
US$100 million for the Bibiani and Siguiri mine development. Hedging income provided a further US$50 million from internal funds for
both these projects.

The financing of Bibiani and Siguiri proved so successful that the Company was able to raise another US$270 million at world-class
rates to help it develop its new Geita mine in Tanzania. This funding came in the form of a Revolving Credit Facility.
By using receipts from hedging to grow the Company, we avoided the issue of more shares for funding Ashanti's growth, which would
then have diluted the value of the Company available to the current shareholders. In other words, issuing shares would be similar to
inviting new shareholders to share the same size cake, leaving less for the old shareholders.
The current hedge book will realise an additional US$300 million over the next 15 years.

Why is there a problem then?
Even though hedging has been beneficial to Ashanti, especially in the declining gold price environment, the Group is currently exposed to
margin calls as a result of the sudden increase in the gold price.
What occurred in the week of 27th September 1999 had not been experienced in the gold market for over twenty years. Gold prices
increased by US$75 per ounce over a four-day period after the announcement that the members of the European Central Banks would
limit their gold sales to 400 tonnes annually, and 2,000 tonnes over a five-year period. Market analysts have stated that the chance of this
event happening was 1 in 1000.

What is a Margin Call?
A gold producer can enter into a contract through the hedging of its mineral reserves to be delivered at a future date at an agreed price.
Events such as strikes, perceived instability of location, strength of balance sheet etc can give the bullion dealers or the other party, some
doubts as to the ability of the producing company to deliver its product under the agreed terms of the contract. In such circumstances, the
bullion dealer who had already committed himself to other arrangements with bullion banks, may request the mineral producing company
to place a deposit or a collateral against any default in delivery. This request is what is known as the margin call.

Margin calls are usually placed in a temporary deposit which earn interest. Should the factors affecting the value of the contract become
more favourable, for example, a decrease in the gold price, part or all of the funds placed on deposit will be returned to the Company
together with the interest earned.

Margin-free Limits - How are they determined?

Before Ashanti commences hedging activities with any international bank or bullion house, referred to as counter-parties, it negotiates a
credit limit, which is similar to an overdraft facility referred to in the gold industry as a margin-free limit. This limit is the maximum
amount of credit, which the counter-party will permit before asking for a deposit or making a margin call.
Ashanti's aggregate margin-free limit is US$300 million. This is in contrast to the limits for its peers in South Africa, North America and
Australia, many of whom have margin-free limits of US$1 billion and above, or in some cases, have no limits at all.

Determination of margin-free limits: Country Risk
The location of Ashanti's headquarters and its key assets in Africa, where there is a perception of greater political and economic
uncertainty, poses a problem for Ashanti's credit rating. Due to this risk profile, the counter-parties tend to limit their total exposure to
Ghana, and the margin limits set by the banks form a cap on that exposure. If Ashanti was incorporated in the UK, North America or
Australia, it would have been granted greater margin-free limits, similar to other senior gold producers in the world, as stated above.

Determination of margin-free limits: Operational Risk

The margin-free limit is also a reflection of a company's ability to produce and deliver gold continuously for the duration of the contract.
Under Ashanti Goldfields Company's hedging arrangement, the Company has a contract with its counter-parties or the bullion dealers
under which the Company is to deliver gold at an agreed price at a future date. As a result of the recent strike action at Obuasi during
which the delivery of gold was interrupted, and other matters, the perception of the counter-parties which related to the ability of Ashanti
to fulfil its legal obligations, has been questioned, thus making the possibility of a margin call more imminent.
Example of a margin call
Let us assume Ashanti has a margin-free limit of US$4.5 million, it then enters into a three-year contract for the sale of 100,000 ounces at
a price of US$400 per ounce. If the gold price increases subsequently after the contract has been entered into, and a three-year contract
now has a prevailing price of US$430
per ounce, then Ashanti has lost US$30 per ounce ( US$400 - US$430 ) on this contract. The opportunity cost of this loss is therefore
US$3 million ( i.e. US$30 per ounce times 100,000 ounces ) . Since this amount is within the US$4.5 million limit, there is no margin
call. On the other hand, should the three-year forward price rise higher than US$450 per ounce, ( e.g. ( US$400 - US$450 ) by 100,000
ounces = US$ 5 million ) , then there will be a margin call of US$500,000 ( US$5 million � US$4.5 million ) required by the parties to
the transaction.With the recent US$75 per ounce spike in the gold price, the value of Ashanti's hedge-contracts moved from a positive
value of US$250 million to a negative value of US$570 million ( US$270 million above the Company's total margin-free limit of
US$300 per ounce ) . The counter-parties therefore threatened to issue a formal request for Ashanti to place US$270 million on deposit
with them as the margin call. Due to continuous dialogue with the counter-parties that has been taking place, the formal request has not
been made and Ashanti has not been requested to place the deposit.

The recent slide of the gold price down to US$300 per ounce has also reduced the margin call required by the counter-parties from the
original US$270 million to less than US$50 million. This has, in turn, reduced the pressure felt by the counter-parties to request a margin
to be posted by Ashanti.

However, the gold price could just as quickly rise again increasing the margin call required. That is why Ashanti has been working hard
to put in place a longer-term solution to the current requirement to post large margin calls.

Options and solutions being investigated by Ashanti Management
Ashanti's management, together with its advisers, has been reviewing all possible options available to it. These include:
i. Ignore or challenge margin calls from counter-parties
ii. Seek an extension to the Standstill Agreement
iii. Raise new financing through debt or equity offerings
iv. Seek financing and/or guarantees from the Government of Ghana
v. Procure political risk insurance
vi. Seek supranational guarantees
vii. Seek Central Bank intervention of the gold market
viii. Sell part or all of the Company
ix. Seek a possible merger ( share for share ) .

Ignoring or challenging the margin calls is deemed most inadvisable. It will take only one of the many counter-parties to decide that the
best course of action under the circumstances would be to call a margin from Ashanti. If a margin were unpaid on account of the size of
the payment required, the counter-party would be legally entitled to initiate proceedings against the Company and allow it to recover
monies owed to it.

Whilst this would be a long and drawn out process, the counter-party would be well within its legal rights under the trading agreements it
has entered into with the Company, and Ashanti would be powerless to prevent it. To prevent such a course of action, or even open up
the risk to such a course of action, would be highly irresponsible for Ashanti's management to do. This is why it is imperative that
Ashanti finds an acceptable solution with the counter-parties.

Ashanti has also been working hard to gain extensions to the current Standstill Agreement in which the counter-parties have agreed not to
call margin for a limited period of time. However, the counter-parties have made it clear that this can only be a short-term solution while
Ashanti looks for more long-term solutions to the problem. Accordingly, despite very strong pleas to the contrary, the counter-parties
have been unwilling to maintain the standstill for more than a number of days, and only on condition that longer-term solutions were
being diligently worked on.

Given the vulnerable position the Company finds itself in, Ashanti has been informed in no uncertain terms by its banks and brokers that
raising financing to help it through the current crisis is almost impossible, and will only happen after a solution to the hedge crisis is
found, but not before and as long as the Company and its various other creditors are exposed to uncapped margin calls.

Similarly, Ghana Government guarantees, if they were available, would not be sufficient to solve the problem. This is because from the
counter-parties' perspective, they are already over-exposed to Ghana risk. In the same vein, the counter-parties have felt that what little
political risk insurance is available does not adequately cover their risk which currently runs into the hundreds of millions of US dollars,
and is also unacceptable.

Some effort has also gone into exploring forms of a supranational guarantee relying on special relationships between Ghana's central
bank and those of the US or UK. However, it appears that such facilities are unavailable at the present time. Further, given the
unprecedented decision by the European Central Banks to limit sales of gold in the fu(�C$2"> ... �P�m ... ���
USAGOLD
(10/30/1999; 10:22:53 MDT - Msg ID: 17914)
The Rest of the Ashanti Announcment

Some effort has also gone into exploring forms of a supranational guarantee relying on special relationships between Ghana's central
bank and those of the US or UK. However, it appears that such facilities are unavailable at the present time. Further, given the
unprecedented decision by the European Central Banks to limit sales of gold in the future, on account of intense lobbying by developing
gold producing countries, of which Ghana was one, it was unlikely that the banks would not revert themselves on account of Ashanti's
problems.

The most viable options remaining have been those relating to the partial sale of assets to raise cash or a merger with another company to
create an entity with a much stronger balance sheet and credit position, and with the financial resources to post collateral or margin calls if
necessary.

Accordingly, the advisers are still pursuing discussions with other gold producers to arrive at the best possible outcome. These have
included Anglogold, Barrick Gold, Lonmin and other possibilities. Currently, Ashanti's 62% of her unhedged reserves have almost
doubled in value due to the rise in gold price. Ashanti could therefore be persuaded to sell a proportion of its assets, now at a higher
value, into a joint venture for the required cash to strengthen its balance sheet to be able to meet the present margin calls. The tendency is
that offers for this kind of solution have tended to
come from sources which want to pick the most profitable mines such as Bibiani, Siguiri and Geita, the proposed mine to be
commissioned in Tanzania next year and leave Ashanti with the loss making operations such as Obuasi, Iduapriem and Ayanfuri.
Further, a sale of assets, while raising cash in the short-term reduces the production capacity of the Company in the long-term, and the
Company's long term ability to produce cash flows and profits.

The advisers have also been considering a possible combination of a merger and asset disposal as the basis for convincing the lenders and
capital markets of a stronger company.

Priorities and Next Steps
Negotiation with counter-parties for extension of margin-free limits
The current priority is to negotiate higher and/or unlimited margin limits for a period of time in exchange for a consideration to the
counter-parties that is still under negotiation. Ultimately this is only possible because Ashanti has the underlying assets and management
capability to produce and deliver the gold under contract. Should Ashanti be allowed to deliver gold into its existing contracts, with no
need to post margin, the Group will net a positive cash flow from hedging over the next fourteen years ( approx. US$300 million ) .

Restructuring the hedge-book to reduce its sensitivity to spot price movements Ashanti has been working with the counter-parties over
the last three weeks to restructure the portfolio, to reduce its sensitivity to gold price and also to reduce the size so that all lenders and
counter-parties are comfortable with the limits to the hedge-books' contingent liabilities or margins. Significant progress has been made
in this area, and the counter-parties seem to be gaining greater comfort with the entire book.

Negotiation for roll-over of various debt instruments maturing this quarter Ashanti currently has debt instruments to the tune of US$125
million, which are maturing within the next month. The Group was in the final stages of refinancing all these debt instruments when the
crisis emerged. Management is therefore continuing to seek means of refinancing the different debt instruments or at least agreeing
short-term rollovers of the various facilities. This has not been smooth sailing as the lenders/creditors have now raised concern about
Ashanti's ability to repay the facilities with the current margin calls still outstanding. Fortunately, Ashanti has always insisted that all its
hedging counter-parties also participate in its Credit Facilities. The wisdom of this has been proven, since the hedging counter-parties
together hold a bulk of the US$270 million Revolving Credit Facility, and are therefore more willing to approve a rollover.

Which institutions make up the team of counter-parties and lenders?
These are some of the leading natural resources banks ( both hedging counter-parties and lending banks ) in the world with which the
Group's finance team has, over a period of time, developed strong relationships. It is this cordial relationship which has ensured a
continued dialogue in these difficult weeks. They include Chase Manhattan, J Aron/Goldman Sachs, Barclays Capital/Barclays Bank,
Union Bank of Switzerland ( UBS ) , N M Rothschild, Societe Generale, Scotia Mocatta, Credit Suisse, Dresdner Bank and Citibank.
Among the lenders from Ghana are Stanchart,
Issued by Ashanti Goldfields Ltd, 29th October 1999
Canuck
(10/30/1999; 10:59:17 MDT - Msg ID: 17915)
Question on Futures Options
Gold (COMEX) Calls

Strike Dec Jan Feb
290 13.50 s 18.90
295 9.40 14.30 16.60
300 7.50 12.50 14.60
305 5.00 10.50 12.30
310 4.30 9.00 10.80
315 3.60 7.50 9.50
320 2.90 6.50 8.20

The contract price rises over time on a given strike price.
In its most simplistic form, does this mean the POG is expected to rise? Alternatively, a $10 contract price for Nov, Dec and Jan equates to strike prices of approximately
$294, $306, and $314. Can this be seen as a rising POG?
CoBra(too)
(10/30/1999; 11:08:13 MDT - Msg ID: 17916)
SOC or the one grain of sand to many...
... or maybe the alpine dweller's fear of the ultimate snowflake, which sets off the once in several generations unthinkable killer avalanche (as happened last winter in Tyrol).

Sir Steve H., your Msg. ID 17900 is one of the finest posts among a long list of great posts you have offered to grace this round table.

While not knowing the answer to your quest, since a multitude of potential economic and financial danger signals and factors have already become clearly visible - the game goes on and the end result may become even more devastating to all.
For the last decade it has been my conviction and I am becoming even more convinced, that the enormously leveraged derivative markets, dwarfing, no degrading,global economies, stock an bond markets to mere statists. The fate of early victims, such as Orange County, Barings Bank or LTCM (and Tiger Fund?)and PEI, may be only the tip of the iceberg, though each of these failures represented a risk to the established monetary system. Maybe up to $ 120 trillion are sloshing around the global casino, financed by the major money center banks - carrying these risks off balance sheet - but still a very direct risk, as the enormous additions to the earnings of these institutions make believe. A criminally, lethal game is played out here on the backs of Joe Public.
The Yen, SFR and other carry trades have met their ultimate fate.

Now it's the gold carry trade exposing the reality of the potential greatest financial scandal and scam in history. A commodity?, no the most important reserve asset in history, already being in short physical supply for years, misused as a source for cheap money by new CB technocrats, greedy BB's, only too happy to prolong the latest earnins binge, supplied by the derivative community. The formation of the counterparty risk management group, led by GS early this year only emphasized the conception of growing risk and the abolition of Glass-Steagall may be the latest if not last straw, grain of sand or snowflake in this rigged game before the avalanche hits home.

Regards CB2




FOA
(10/30/1999; 11:13:52 MDT - Msg ID: 17917)
Reply
tg (10/28/99; 14:41:16MDT - Msg ID:17731)
I think you've missed my point regarding the intended Swiss gold sales. What I am asking, is why would the Swiss who I am sure are privy to similar information as FOA (because of their strong connections to the BIS)would want to sell any amount of gold Would you sell an asset if it was about to become as scarce as hens teeth and go through the roof
in price

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

Hello tg,

We walk for a while, yes?

The Swiss sale is a real complicated affair. There are several factions within their political framework, all working different agendas. If that's not complicated enough, these forces are interacting within the Euroland structure. So, what will be the eventual outcome and why did they
"do it"? Ha, Ha! You see this modern gold market is one huge "political chess game" and a good "international murder mystery" all tied into one.

Onward:

The Swiss economy is going to have a real problem operating within the shadow of a united Europe. With so much gold held as reserves, the franc, their currency, would become way overvalued as a trade settlement item outside the Euro arena. Yes, it would balance against the Euro well, but the Swiss Franc will never become the next world reserve holding. And that would creat a problem for them. It would be far easier to proceed into an EMU and establish themselves as a dominate financial leader within a Euroland structure. This would look to be a smart play, as some of their factions agree on this, especially so when gold makes it's initial run against all paper money, the Euro included. By converting a large portion of their gold (per the sell portion of the "Washington Agreement") into Euro reserve assets, they would still gain all the benefits of a gold
reserve that helps value a world reserve currency. And do this without killing their foreign trade (outside EMU) as continuing to use the franc would eventually do. We have to look at the direction Euroland is going to understand.

Look over here:

ORO, this is in the "for your eyes only" file.
Like this: Basically, the Euro structure is heading for
using the "free market" to value physical gold. By holding gold as a "free reserve asset" and not an actual "currency backing" asset, gold can be used in nation to nation trade settlement without damaging the money supply. In reality it is reborn as the true world class currency it always was
and independent of government treasury issues. Governments can manipulate a "paper gold" market, weather it's working as a "gold exchange standard" currency system or our present gold market. However they would not stand a prayer of a chance of working a world "free physical market". Especially the colossal "wealth money" reserve market gold would become at very high prices. In this respect it would dwarf the current trading of US treasury debt.

This is an enormous advantage over the old gold standards because, back then any country that ran a trade deficit found it's domestic money supply being drained. By treaty and international protocol if gold was shipped "outside", the local central bank had to drain cash or print "unbacked fiat" to cover the void. This process was required because each cash unit was backed by a fixed amount of bullion. The dollar at $35 / ounce as an example. This was suppose to tie the governments hands and force them to speed up or slow down the economy as the flow of gold dictated.

In reality, the in and out flow of gold worked havoc with national economies and produced boom and bust cycles. As above, rather than controlling the inflation of local currency supplies, the banks just printed money anyway and were later caught short the gold. Soon enough the
contraction arrived, even during an economic expansion built upon the real wealth of good productivity advancements. This rigid control, imparted by "fixing the gold price per currency unit" did not allow for a "higher gold price". Truly, as technological advances moved "real" GDP forward, gold should have reflected this "wealth gain" by rising somewhat in price and value as the local currency was static in price inflation. And this rise in price of gold should not have been viewed as a future price inflationary signal, as indeed it was so often the case. If gold was allowed
to rise, the currency was viewed as being devalued without taking into consideration that the local economy had produced greater domestic wealth using it's advancements. This was the main reason behind the political evolution away from gold money. Countries more so manipulated gold (even
into this day) as a way of protecting their currency values instead of working their money supply to match the technological and intellectual growth of their people and infrastructure.

Truly we see some of this demand today in the US. In spite of it's failing inflated dollars and the bloated world debt liabilities that come with it, investors attribute more value here than simple money policy could represent. A product of the modern need for digital settlement. Yes, if the currency is really hard, then production advances should "Lower" the local prices of things, not remain static. As such the fiat dollar is not "hard" and we have massive currency inflation hidden in static inflation indicators as the technological production advances cannot offer lower prices. Yet again, the need for an expanding digital currency to settle trade in this fast modern society is seen in the present demand for worthless fiat money. All of our modern advances would fail if we continue to use only digital currency without a "wealth money" trading in the background. This is /was so because there is no means to sepperate "good currency inflation" from "bad currency inflation" based upon modern advances. As such, a world reserve money based on the political needs of one society (the US), was abused as it purchased a local lifestyle based on debt, not hard work and good thinking.

Yes, a circulating "gold wealth money" will drive "fiat digital money" from circulation if they are denominated as the same. But, by allowing them to "compete" in free trade, gold would compliment the "Good" expanding digital currencies that are based upon "true economic advances".

Had money supply risen only nominally while the free trading gold price rose 2x nominally, purchasing power would have been retained in gold using it's old store of value function while the need for more digital currencies to transact advanced trade was utilized. Good inflation based on modern use! You see, our high tech world has given modern digital currencies an intrinsic value that gold, "trading in a gold standard" cannot represent today. As such they (digital currencies) must trade against physical gold in a format of the "Old World" wealth currency it used to be held for. Not be locked to each other.

Onward: for another view of the same mountain:

By allowing gold to seek it's historic money use value in a free physical market, it retains it's store of value function and use as an asset for some trade settlement, be it official international, commercial or private. In this function it still holds it's "honest weights and measures" (thanks Mr. Parks of Fame) use in evaluating national currencies. Of course it must regain a new natural money
price level first, but after that every currency will be measured by the economy that it's money represents to see if it is holding "advancing productivity value" by comparing it to gold. High speed computer trade settlement and the bookkeeping that follows it will still impart the need for digital currencies, but in this format they would be truly free to represent the economic dynamic of each nation. Even during a rising money supply, some currencies may advance in value.

Further:

For better or worse, this is the road ahead as the Euro becomes the first multinational digital money to be held in a "modern world" reserve currency system. No longer tied to the political pronouncements of one government as the needs and conflicts of many diverse peoples will be represented. Initially, gold will rise tremendously as it regains it's "wealth money" reserve function in the eyes of private and official sectors. It has been so long sense gold was really held independent of currencies as an international currency, it's rarity will require a "reprice" (or revalue) into the many thousands in current terms. As a "world wealth money" that returns from ancient times, the need and demand for
gold would be "unlimited". So too will be the use of gold as it must partially fill the voids of massive defaulted debts, inherent in our now failing dollar world.

This first run will be a benefit to Euroland as they will be called to cover the needs of many other nations that once depended on dollar based assets. But later, the world will have a reserve currency and gold to trade with and against each other. The Swiss must free up their gold by selling it for Euro reserves (in a round about way, I'm sure). In the end, weather they join the EMU or not, the ECB will eventually absorb most of the "need to sell gold" as stress becomes apparent. This settlement of many of the Euroland gold loans in Euros, will not in any way make gold less valuable. Indeed, it will keep gold liquid in the face of an initial "lock up" in contract settlement.
In the end, GATA will be proven right about the manipulated marketplace. I'm sure they will be in the middle of this as the court action begins. Still, all in all, it's strange how a new faction is now manipulating the marketplace into a "free status" to benefit them. What effect this will have on the gold mines located in the lands of the losers is another tail. We shall see.

tg, I hope this answers your question (smile)!

I will return later to make some of the older replies.

Thanks FOA




RossL
(10/30/1999; 12:14:17 MDT - Msg ID: 17918)
Question on Futures Options

Canuck (10/30/99; 10:59:17MDT - Msg ID:17915)
You are looking at the time premium of the option. The closer you get to option expiry, the less risk there is to the option writer. A good scenario then, for an option buyer would be this: Buy an option $20 out of the money just before expiration and have gold jump $40 that day. Now that's leverage!!! That would be really stickin' to to the shorts!!! Of course, the odds are more likely that you will lose all of your money. Especially since the big boys have rigged the game.
she-gold
(10/30/1999; 12:25:59 MDT - Msg ID: 17919)
head's a spinning...
www.usagold.comMy head is swimming trying to understand and learn here. Thank you and everyone here for giving me my daily education!

From what I'm able to understand... it all seems to be about RESERVES and what CB's will hold as reserves and which countries will benifit from it. Clearly, USA is making a mint having CB's hold dollars as reserves while the yanks export inflation and keep imports cheap. That americans should spend beyond their means in spite of these cheap imports is even more amazing. But since IRA's and 401ks are considered "savings", all is ok, right? until it all falls down.

There is an assumption that this must all come to an end. Aside from y2k (which i think may just do the job), i wonder if the "new" economy doesn't actually support the seemingly overblown valuations on wall street.

(someone correct the flaws in my thinking please)
What if there were no such thing as money and people worked and worked and at the end of the year the fruits of their labor (things) were divided up (unequally, of course). Now if there are significant advances in the efficiency with which people work and make/create these things (all for the same amount of work), at the end of the year there will be more 'things' to divide up. wealth is created. everyone gets more.

But since money DOES exist, how does this increased efficiency and wealth manifest itself? Couldn't a total increase in the amount of paper money and an increase in stock valuations represent the increase in consumer purchasing power resulting from this increased wealth/efficiency? Someone help me here!

FOA, i have too many questions for you... but if i might ask one.
I suspect y2k could be the mother-of-all-crises with concern to economics and liquidity of assets. The huge american external debt would seem to pose a big problem to the yanks. Yet, the americans seem to be more prepared than the Europeans and the rest of the world with respect to preparations for y2k. So isn't it plausible that a y2k-induced financial mess actually benifit USA. Flights to quality - american stocks, bonds, treasuries, dollars, etc. Isn't it possible that such flights to quality could overshadow the relative debts of the USA and stall any aspirations of the Euro taking predominance in the world community?

Help me people, my head is spinning.

(Thanks for the educations.)
PH in LA
(10/30/1999; 13:12:20 MDT - Msg ID: 17920)
Thanks to FOA
FOA:
Thank you for your supurb explanation (Msg ID:17917) on the future "floating" nature of gold's role in the Euro. It is so clear that even I have the impression that it makes perfect and incontrovertable sense.

As you say, it is all as interesting as an international murder mystery. What a story it will make! And all true! I hope part of your intention and purpose in sharing it with us is in preparation to someday publishing it in book form. It would be a best-seller... especially if it takes advantage of a free-running gold price to underline its relevance to the masses. Should be big-time movie rights to the underlying story line, too. What a tale it will be!

And, of course, the basic research will then become possible to disclose (as part of the story). Where does it all come from? (Rhetorical questions not really intended to illicit answers at this time) Can you tell us anything? Is it based in accademia? Or the real world of international finance and intrigue? Or some of both? When this is all over, and the whole story can be told, what a story it will be!

Again, my thanks and admiration, (and likely on behalf of countless readers everywhere, too). This story is fantastic... One of the best I have ever heard. (And its not even close to being over yet.)
USAGOLD
(10/30/1999; 13:22:18 MDT - Msg ID: 17921)
An Observation and a Question...
I note that the price of gold in euros has risen, just as it has risen in dollars. When the ECB published its most recent reserve valuations, the gold component had not changed. My understanding was that the ECB was marking their gold to market.

Has anyone read about or heard of a reason for this? Any input on this from our European friends? CB2? Am I operating under a misunderstanding? Maybe next report period?

Thanks.
PH in LA
(10/30/1999; 14:38:59 MDT - Msg ID: 17922)
Reply to Michael K.
MK:
I thought someone (was it FOA?) commented that the latest quarterly ECB statement had marked (or would be marking?) the gold reserves up to the new market price. Maybe whoever it was who posted it can refresh our memory.

PS. Here is where a search engine in the archives would come in handy.
TownCrier
(10/30/1999; 15:09:16 MDT - Msg ID: 17923)
Reply to MK at the USAGOLD Castle, and to Sir PH in LA
The price at which the ECB gold reserves are marked to market is established (I believe with much confidence) on the gold price from the last day of the quarter just ending. (There is an outside chance that the collective memory in The Tower has failed, and the price is from the first day of the newly entered quarter.)

For example, when the euro was officially launched January 1st, 1999, the gold reserve book value was determined by the December 31, 1998 price.

In a GOLDEN VIEW perhaps two weeks ago, we included the newly established euro-denominated value for the ECB gold reserves along with the change in value, and yes, it had risen significantly from the value it carried from June 30, onward. The September 30 remarking would have included the run up from the Sept. 26 announcement of the Washington Agreement. Earlier this week, sometime between Monday and Wednesday, we included a reminder of what the reserve value now was, but in this latest GOLDEN VIEW, we didn't supply the change, since that was felt to be old news by now and wasn't germane to the point we were trying to make.
Bill
(10/30/1999; 16:10:34 MDT - Msg ID: 17924)
Canuck
Her is a good "free" site where you can learn more about options and contracts.

http://www.thepitmaster.com/
Leigh
(10/30/1999; 16:19:28 MDT - Msg ID: 17925)
Farfel's Speech -- Part 3
Part 3 of Farfel's speech, which was featured today on the Gary North website, is now available at Gold Eagle.
pdeep
(10/30/1999; 16:53:09 MDT - Msg ID: 17926)
Digital Gold
http://www.e-gold.com/I've been lurking and enjoying the discussions on this site for a while. My thanks and appreciation to you all, and to USAGOLD for providing the site. Every time I log on, I learn something new.

I wanted to respond to something posted by FOA in the last post. If I understand it correctly, FOA makes the point that some of the value of digital fiat currencies derives from their ability to be converted into electronic form for purposes of tracking transactions. Pardon me if it has already been pointed out before, but digital gold is already in existence, is used by thousands, and is growing at the rate of 12% new accounts per month. Just go to the e-gold link and check out the site.

This in no way diminishes the value of holding physical in hand. However, it does make it possible to carry out electronically tracked transactions using e-metal digital currency rather than fiat digital currency with anyone in the world with a connection to the net. I may be optimistic about this, but save some heavy-handed governmental regulation of such trading, I believe that digital metal-based accounting will provide some serious competition to fiat-currency based electronic transactions in the future.

And it sure would be nice if a PM dealer accepted e-gold currency!
YGM
(10/30/1999; 16:57:30 MDT - Msg ID: 17927)
Swiss Banking for Computer Era
http://www.strategicintel.com

Swiss Bank Accounts Now Online

Remember those Private Swiss Accounts that were always so difficult to get...Well...Cyberspace brings the bank to your home. U.S. Officials are attempting to block U.S. Citizens from opening accounts at this exclusive Swiss service bank. This should be fun to watch...
Peter Asher
(10/30/1999; 17:27:25 MDT - Msg ID: 17928)
test
Message box not accepting pastes ??
Peter Asher
(10/30/1999; 17:37:58 MDT - Msg ID: 17929)
she-gold (10/30/99; 12:25:59MDT - Msg ID:17919)
(Psating solved)You asked >>>>>But since money DOES exist, how does this increased efficiency and wealth manifest itself?
Couldn't a total increase in the amount of paper money and an increase in stock valuations
represent the increase in consumer purchasing power resulting from this increased
wealth/efficiency? Someone help me here!<<<<

I went back through several posts of mine and edited up a composite that I hope helps answer your question. -- One of these, (1/17/99; 16:02:21MDT - Msg ID:1863) may interest you in it's entirety, as it addresses what Greenspan spoke of Thursday night, but without the 'Spin'.---------

We have, in the last two or three centuries, increased our productivity, in terms of man hours, perhaps twenty to fifty fold. Still, as a people, we have a substantial amount of the living-in-squalor that existed before the advent of the industrial age.

It seems that, as fast as the cost of products (in terms of man-hours) is reduced, the percentage of the population which profits by the holding of capital increases accordingly. Production of real resources, goods, and services is done by a smaller and smaller percentage of the people. Therefore, the obstacle to affluence and economic comfort for all productive peoples is that greater and greater portions of the population are engaged in activities which are legal, but invalid in terms of any useful product.

The status quo is has been tolerated because people have seen themselves as living better than their ancestors. This permits the wealthy and the governments to maintain the inequities that persist in our society.

According to "Asher's theory of quantitative economics," all value is based on the exchange of goods and services. People deliver resources, produce goods and perform services, in return for which they receive certificates (i.e. money) with which to acquire the same from others. Therefore, it can be seen that money may be most accurately defined as a form of bookkeeping. Assigning monetary value arbitrarily by the various aspects of financial instruments* may rob Peter to pay Paul. Nevertheless, quantities of goods and services are not changed by this. *(Note the current spin doctor phrase that calls these "Financial Products")

Unfortunately, Fiat or 'credit money' does become a commodity, a product unto itself, and much endeavor goes on in society solely for the purpose of transferring these credits from the possession of one person to that of another, even though no tangible product has been created. This is why I define the Stock Market as a "Wealth Transfer Bubble." Most trading activities exist solely to get the "highest gain" on capital, creating an ongoing maelstrom of buying and selling, derivative trading and corporate raiding, etc. etc. The product of all of this is, an alteration of how much of the goods and services produced go to each individual. So, we have the economics on planet Earth. The struggle is, not just to produce, but to receive allocation. Production, distribution, lending, taxation and "the dole", all become sources of entitlement.

The driving force behind society is economics, which can be defined as the system by which is determined who gets what. It is not supply or demand that ultimately determines the workings of contemporary economic systems: It is allocation!! This may appear to be a radical statement, but I do believe this to be a primary axiom of economics!
FOA
(10/30/1999; 19:22:13 MDT - Msg ID: 17930)
Reply
Some old items:

Al Fulchino (10/11/99; 21:18:37MDT - Msg ID:16107)
FOA///Post War Gold?
FOA? When you get a chance, I feel it is always appropriate to look further along in the chess game. I am nowhere near your understanding, yet I am also so much further along than I was. I wonder what strategies you see, or scenarios that will unfold, ***after*** this war. You and others may say to me, that I am jumping the gun, not having even engaged the enemy yet. I respect that view. However, it is never to early to realize that there always is another game or series to play. Thank you.
---------------------

Hello AL,
If you read my #17917 today, we get a picture of what is mostly before us. If you are new to the "goldbug game" it's to your advantage. Far too many "seasoned" players (traders included) are working this market with an eye on near term profits without considering it's powerful political and
currency potential. I bet MK knows this well from his many contacts. Just look at the ongoing "long money" destruction in the gold options markets. Truly, these gamblers do not know who they are dealing with. Yes they can move in and out with profits on the spikes, but they never tell us the "net
out" trade over years! Was it a sudden shift in jewellery supply and demand that stopped gold .50 short of $300 and my profits? Has to have been as no one can control gold! Oh right! One can get a better return at playing a paper game like blackjack with less risk.
As this "market destruction" process moves into better view, the swings and manipulation will only increase. Oh yes, just as in Rome with the last merchants still trying to convince the newcomers that there was unrealized value in local property; so too will options and future players
show us how to "work this move". Eventually, no one will play the game and it will end there with a whole world of investors trying to collect what they never had. Indeed, many will be happy to just get back what they had!
Just as in the past, some said that the future belonged to the dollar and not the British Pound. It's the same today with most of the developing nations seeing that the Euro has a much better future for their people than the current dollar system. It's all unspoken now, but later "visible walking assets" will create a clear trail. The actual proof is being driven home almost every day by the IMF dealings. Anyone that is plugged into the pulse of the "quiet crisis" that is out there knows where this is going.
To answer your question:
Here is how it was told to me: "If one wants to take advantage "after the war", he must be unleveraged in every way, today! Major currency transitions have a way of killing both long and short leveraged plays. No one wins in paper, not because they were right or wrong on direction, it's
because everyone runs from the marketplace. For local Americans physical gold will be the very best even if it eventually attracts a higher tax rate than other investment classes. It will still "net out" well ahead of the pact. Holding Euros will only benefit if you are going to have a second house "outside" or are travelling the world. If you are substantial and want to invest in Euroland later, a
commercial account on the continent will do well."

All this talk about riots and blood in the streets if gold rises is rubbish! Gold will gravitate into another "competitive currency with a much higher value" just as the dollar competed against the mexican Peso. Yes, citizens will lose money, go crazy, fire their political leaders and act as they always have. But, then they do this now without a crisis.
So AL, for me it's Gold, Euros, 1% silver and some of Goldspoons platinum to save face at the forum! (smile) When the dust settles, our families will gain just as other third world families were ahead holding dollars instead of local money.

I'm sure we will address this again.

Thanks FOA
YGM
(10/30/1999; 19:23:27 MDT - Msg ID: 17931)
Home for 50+% of Kuwaiti Gold????---Who Got The Rest?
| PRNews | BizWire | CCN -------------------------------------------------------------
Friday October 29, 6:56 pm Eastern Time

Company Press Release

Cambior Announces 1.3 Million Ounce Gold Hedging Program Reduction

MONTREAL--(BUSINESS WIRE)--Oct. 29, 1999--(ME:CBJ. - news; TSE:CBJ. - news; AMEX:CBJ - news) Cambior Inc. (``Cambior'') announces that it has reduced its gold hedging position by 1.3 million ounces. This reduction, made with a view to improving its aggregate hedging position, results from the purchase of one million ounces of gold (the ``Purchased Ounces'') at an average price of approximately $300 per ounce and from the closing out by counterparties of other positions totalling 300,000 ounces.

The one million ounce purchase was completed primarily through the bullion markets with the assistance of various parties to the recently executed standstill agreement (the ``Standstill Agreement'') among Cambior and its lenders and hedging counterparties (collectively, the ``Financial Parties''). The terms of the Standstill Agreement are summarized in a press release issued by Cambior on October 27, 1999.

The Purchased Ounces will be applied to close out contracts for the delivery by Cambior of an equal number of ounces under its current hedging portfolio. The close-out will occur upon termination of the Standstill Agreement.

The above-mentioned purchase and close-outs are expected to generate a net crystallized liability for Cambior of approximately $33 million which will be reflected as a non-cash, pre-tax charge to earnings for a corresponding amount in Cambior's consolidated financial statements for the third quarter.

Under the terms of the Standstill Agreement, the above-mentioned liability will be treated as a demand loan to Cambior by the Financial Parties. The determination of more specific repayment arrangements will form part of negotiations with the Financial Parties under the Standstill Agreement regarding the elaboration of a plan for the orderly fulfillment of Cambior's obligations to the Financial Parties over time (a ``Definitive Plan'').

Cambior reiterates that, while it believes that an agreement regarding a Definitive Plan can be achieved, there can be no assurance that such an agreement will be reached. The failure to achieve such agreement would be likely to have a material adverse effect on Cambior and its financial results, financial condition and prospects.

Cambior also announces that its board of directors has appointed the firm of Bunting Warburg Dillon Read Inc. as its financial advisor. With the assistance of the financial advisor, Cambior will continue to consider all possible courses of action with a view to maximizing shareholder value.

Cambior Inc. is an international diversified gold producer with operations, development projects and exploration activities throughout the Americas. Cambior's shares trade on the Toronto, Montreal and American (AMEX) stock exchanges under the symbol ``CBJ''.

This press release contains certain ``forward-looking statements'', as defined in the United States Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Such risks and uncertainties are disclosed under the heading ``Risk Factors'' in Cambior's Annual Information Form (AIF) filed with the Ontario Securities Commission, the Quebec Securities Commission, the United States Securities and Exchange Commission (Form 40-F) and other regulatory authorities.
FOA
(10/30/1999; 19:25:28 MDT - Msg ID: 17932)
Reply
Some old items:

Cavan Man (10/22/99; 06:33:57MDT - Msg ID:17161)
TC 17134 (and FOA)
RE: Saudi Arabia

Could another "income source" possibly be gold? In the coming transition away from the US/IMF, could Saudi Arabia become a major international economic player; this in addition to their history of recycling petrodollars through international banks as detailed so well by Aristotle?
------------

Hello C Man,
That is a brilliant observation and one that will be the topic of future discussions as this progresses. Please keep it warm on the "back burner".
FOA

FOA
(10/30/1999; 19:28:56 MDT - Msg ID: 17933)
Reply
Atahualpa (10/29/99; 18:37:11MDT - Msg ID:17857)
Question for FOA
Hello from Peru, FOA. I will be quick and to the point. Over the last year or so, peruvian private pension funds have accumulated shares of a local unhedged gold producer to the point of making it the largest single equity holding in the whole fund. The strategy has worked out beautifully so far, as the returns have been great. However, in the past few weeks, your misgivings regarding the paper gold market have been nagging me relentlessly. Do you think it would be a good idea for the pension funds to lobby the local authorities and press for physical gold to be included as an
investment grade asset class ? Do you know of any similar experiences ? Thank you in advance. I have learned a lot from you and this Forum, even though I have not participated actively. I dropped by on times to reinforce some concepts learned over the last year or so.
```````````````

Hello and welcome Atahualpa,
Are the pension funds part of or are important to the governments economic well being? If so they may already own "physical gold"! Get my drift? Truly, governments may make use of any advance in gold value by taxing the added value as it is mined. Perhaps returning the taxes as benefits to the local pension funds. Follow the recent Ashanti situation for direction.

Gold mines will be important to governments that are on the changing end of the Euro / Dollar action. It's a far easier political proposition to tax the mines for revenue as you placate the citizens by letting them own "savings gold". It's just the way the world works. Indeed, some countries may encourage mining "untaxed" as they tie themselves into a trade status with Euroland. The recent trade agreement between South Africa has all the earmarks of such a situation. By no means definite, it is encouraging.
Investors that now recognize the current gold market manipulations and still turn a blind eye to future gold mine regulations are in for "Another" rude awakening.

Thanks for discussing FOA
Solomon Weaver
(10/30/1999; 19:57:49 MDT - Msg ID: 17934)
Lew Rockwell on the Updated Townsend Plan to Tax Paper Currency
http://www.worldnetdaily.com/bluesky_rockwell/19991029_xclro_expiring_c.shtmlFor those of you who are following the issue on tagging currency and taxing those who keep it out of the banks, here is a post.

Poor old Solomon
FOA
(10/30/1999; 19:04:46 MDT - Msg ID: 17935)
Comment
Simply Me (10/29/99; 1:22:51MDT - Msg ID:17794)
THX-1138
"Wasn't it just a couple of years ago (or is it still going on) where Brazilians were spending their money as fast as they could before they devalued?"
----
That's how it was in the U.S, too...in the late '70s. Only the cause was inflation (inflation/deflation...seems to have the same effect on the working man's paycheck). In those days (oil crisis days/skyrocketing gold and real-estate days), you got your paycheck and immediately spent it because, with prices going up every week, saved dollars would only buy less in the future.
------
I'm not just reminiscing. If a $30,000 price for gold is half gold going up and the other half dollar coming down, we're in for those days again...and maybe worse. Physical gold, silver, and maybe real estate (maybe some highly sought after antiques, art, numismatic items)...will be the only value holders again.
---------

Hello Simply Me,
Yes, gold went from $35 to $850 or up 24 times. What you offer above was the result. So, what if gold rises some 30 times during the next five years? Same effect, no? I submit that this time, it will not go down again. In fact, it will rise further as the world elects a new reserve currency.
Will the US no longer protect it's interest in oil or other arenas if this happens? If they don't, someone else will and things will only be worse for the US economy. No, our current lifestyle has a long way to fall before it becomes "more normal". So you won't be able to buy your running shoes for $125, that are made in a 3rd world country for $5.
SteveH once said that I talk my pocketbook. Well, perhaps it's the more realistic position than "talking your current lifestyle"? Real life feelings of national peoples create the trends, not the paper opinions of traders. Let's watch how this works out "on real terms".

Thanks FOA

Be back next day, more old replies.





Leigh
(10/30/1999; 19:14:27 MDT - Msg ID: 17936)
Solomon Weaver
Dear Solomon: Thank you for your very intelligent and interesting posts. I'm delighted that you've joined our group. It is difficult, though, for me to picture you as "Poor Old Solomon" for you appear more a namesake of the wise king. Leigh
Solomon Weaver
(10/30/1999; 19:37:53 MDT - Msg ID: 17937)
What wise king shall sit at the round table
Leigh

Wisdom is in the eye of the beholder, perhaps. My handle is the name of a 1950s entreprenur who lumbered my area, supplied railroad timber, and built the house I live in. I picture him paying for the work in gold coins...

In real life, I am a modern technologist and dreamer....I didn't really want to be a gold bug...just seems like the time is right...can't wait till the crash is over with so I do some shopping for bargains in biotechnology stocks.

Poor old (young) Solomon
USAGOLD
(10/30/1999; 19:39:26 MDT - Msg ID: 17938)
From Gary North....
Everyone once in a awhile Gary comes up with something he feels important enough to send to me. This is one of them:Gary North's REALITY CHECK
Issue 43
October 30, 1999



THE IRS WON'T MAKE IT

The posting on Matt Drudge's site on October 29 was a
bombshell. Charles Rossotti admitted in a letter to
Congressman Bill Archer that the IRS has not completed a
full inventory of its systems.

The article was confirmed on October 30. Reuters
picked it up. To read it, click through.

http://www.garynorth.com/y2k/detail_.cfm/6662

Without conducting a full inventory, the IRS does not
know how many computers are deficient and in what ways.
These computers interact with each other. The IRS does not
know what it is facing. It cannot possibly have everything
fixed if its programmers do not know what systems there are
that need fixing.

Rossotti said he expected that refunds would be sent
out on time. But how can he know this? He said that the
IRS has conducted end-to-end testing. Of which systems?
How does anyone conduct end-to-end testing of a system that
has missing parts?

A year ago, an IRS office manager contacted Bill
Myers. He wanted to buy a copy of Myers' program, Order
Desk Pro, for the local office. It's a spectacular data
base program for direct-response mail-order firms. Myers'
program costs $130, plus $100 to buy Lotus Approach. I run
the Institute for Christian Economics with it.

http://www.bmyers.com

Why would the IRS want to buy this program? Simple:
the IRS has the most effective direct-mail business on
earth. The IRS mails out millions of "insufficient
payment" letters each year, telling people to send in
additional money, and it gets close to a 100% response.
The IRS doesn't even have to pay postage!

Myers told the man that his program runs on Windows.
He lost the order. The agent said that the office
computers used only DOS.

Think that one through. DOS is not compliant. To
make it compliant, you have to run it on the latest Windows
98 upgrade (which few Windows users have seen or will see).

Here is the government agency, above all agencies,
that has to be compliant in eight weeks. If it isn't, the
government will lose its revenue base when taxpayers figure
out that the IRS can no longer find them.

But don't their employers have to make quarterly
payments? Yes, but how much longer will there be
employers? Y2K threatens the entire hierarchy of
employment. Millions of unemployed people next year will
find themselves in "independent contractor" status. They
will not send in quarterly payments.

Some employed people will be forced to start working
in their off hours. We call this moonlighting. Will they
report all their income if they think they will never be
audited? Call this the moonlight sonata. It is always
played very softly.

Then there is the small business that is facing
bankruptcy. Will the owner send in a quarterly payments
check -- assuming the banks are still up -- when the money
sent in will bankrupt it? Or will small businessmen take a
chance? Why pay if the IRS can't find them, can't retrieve
files, can't know if someone has paid or not?

The IRS works on fear. Most people pay because they
think they may be audited. But they will cheat if they
think they will not be audited. In a time of crisis, they
will join a quiet, unorganized, worldwide tax revolt.


MASS INFLATION IF BANKS STAY UP

The man who persuaded the U.S. government to adopt
income tax withholding in 1943 is long forgotten today. He
was a long-time senior bureaucrat in the Rockefeller
empire. Beginning in 1922, at age 26, he went to work for
the Laura Spellman Rockefeller Memorial Fund. He had been
with the Carnegie Foundation the year before. In 1923, he
took over the Rockefeller-funded Social Science Research
Council. He name was Beardsley Ruml.

Through the wonders of the Web, we can read the 1942
Treasury paper that pushed this legislation:

http://www.taxhistory.org/civsite/Documents/Withholding/hst29049/29049-1.htm

It identifies Ruml as the author.

David Brinkley -- yes, THE David Brinkley -- has
written an excellent brief history of the U.S. income tax.
He also identifies Ruml as the mastermind of withholding.
Brinkley writes: "So it came that the government had -- and
still has -- an artesian well pouring forth a golden flood
of money requiring no effort on Washington's part."

http://www.catshouston.org/catbab.htm

One more sidelight. Ruml needed a technician to
design the specifics of the plan. Fortunately for him,
there was on the Treasury's staff a very bright, very
aggressive young economist fresh out of the University of
Chicago. His name was -- and still is -- Milton Friedman.

http://www.nr.cc.va.us/fin107/articles/11.htm

Ruml was Chairman of the Board of Directors of the
Federal Reserve Bank of New York, arguably the most
important position in American banking. He was at the same
time treasurer of R. H. Macy & Co., the huge New York
department store. Not bad! Don't you wish you could have
a two-income deal like that?

Ruml gave a speech to the American Bankers Association
in 1946. It was a summary of a major theme in his 1945
book, TOMORROW'S BUSINESS. He argued that federal tax
policy was important for setting social priorities and
restraining inflation, but monetary policy could generate
all the revenue that the government needed. The Federal
Reserve could simply create the money, buy government debt,
and the Treasury would spend it into circulation.

This is the fall-back position of the government.
This is the original quid pro quo of central banking that
goes back to 1694: the founding of the Bank of England.
The central bank promises to buy the debt of the central
government as the buyer of last resort. It simply creates
the money out of nothing.

If the IRS goes down, as it appears that it will, then
the banks, through central bank purchases of government
debt, will fill the gap. Digital money spent into
circulation by the federal government will flood the
economy. We will get mass inflation. At that point, you
had better be out of digital money and into gold coins,
silver coins, and goods. Paper money will depreciate, at
least until it becomes clear to sellers that paper money is
limited in supply compared to digital money.

But will banking survive? It's as computerized as the
IRS is. There is a very real possibility that the banks
will close, early next year, in an international cascading
cross default: banks unable to settle accounts wuth each
other. If they do close, the public will not be able to
send digital money to the IRS or any state government.
People will have no digital money. There is no way on
earth that the IRS will be able to collect taxes if its
computers are out of kilter and the banks are closed.

This means the end of every government that is
dependent on checks. Call it the end of government as we
know it, or TEOGOVAWKI (pronounced tee-oh-guv-AWE-kee),
except as an extension of the military. Martial law: that
will be the only civil law we have.

This could happen in a matter of weeks. It all
depends on the digits. I do not trust the digits. Two of
them are missing.

Ruml's scenario depended on accounting: the IRS and
the banks. This is what y2k threatens today: men's ability
to make estimates of economic value in the absence of
digital money and accurate records. We live in an
information age this year. We may not live here in six
months. From the evidence I have posted on my site for
almost three years, I conclude that my "may" is really a
"will not." I do not see how accurate information at
today's computer-supplied low prices can be maintained
throughout 2000.


MASS DEFLATION AND HOW TO MITIGATE IT

If you do not have digital money, what will you want
to own next year? Gold, goods, and currency.

But gold and goods are the hedges for mass inflation.
How can they be also hedges for mass deflation?

As the threat of collapsing bank liquidity becomes
obvious to investors, especially the very rich, they will
seek out a form of liquidity that does not depend on
digits. That means gold. It is the one asset that can
provide liquidity in a society that has lost its digital
money. Silver will work locally, but it is bulky. The
very rich cannot protect enough of their wealth with
silver. Neither can central banks.

Why own goods? Because with the breakdown of money,
there will be a breakdown of law and order. If you can
find a seller of goods that are not life-sustaining, he
will no doubt sell cheaply for currency or even food. But
how will you find him? Also, why will you be buying
today's superfluous goods? Will you really need a new
multimedia entertainment center?

What will not be cheap are life-sustaining goods. I
think fuel will be very expensive. So will water filters.

You should buy the things that you know you will need
whenever you can locate them. Buy them now, before their
imminent scarcity becomes obvious to your competitors.

The tough decision is currency. Mass inflation will
cut its value. Mass deflation will increase its value.
You can consume goods. Gold will work in a breakdown
either way. Currency is a tougher call.

I think we are more likely to get deflation than
inflation because of the vulnerability of banking. But I
could be wrong. If the banks survive, they will multiply
digital money. The Federal Reserve System will have to buy
so many government bonds that the new money will flood the
system through the fractional reserve process.

Of course, the FED could offset this increase in high-
powered money by raising bank reserve requirements, but if
it tries this, it will bankrupt too many commercial banks.
So, the FED will be caught between a rock and a hard place.


REFUNDS AND LEGITIMACY

The tax withholding system rests upon the IRS's demand
that taxpayers pay in more than they will owe the next
year. This creates a kind of IRS piggy bank: forced saving
at zero interest. (I'd call it a hoggy bank.) The
taxpayer has to file a tax form to get his refund. That's
how the IRS keeps track of people.

Destroy the typical taxpayer's hope in a refund, and
you will create a tax revolt. That is why Rossotti keeps
talking about refunds. If the public figures out that the
money is going into a digital black hole, to be lost in
cyberspace, people will stop paying. They will know that
they will not get their money back. They will fight to
keep from sending in any money. They will claim more
exemptions. They will not report side income. They will
cheat -- just as the government since 1943 has cheated them
by extracting interest-free extra money.

If the IRS goes into gridlock in a wave of confusion,
late refunds, and lost records, it will lose its
legitimacy. People will fear it less and hate it more.
Y2K threatens the U.S. government as nothing has since the
Civil War. It threatens the legitimacy of the tax
collection system.

The second month that granny doesn't get her Social
Security check, the system will lose its legitimacy.

If health care providers are not paid, they will stop
treating anyone who can't pay immediately. They will pull
out of the Medicare system. They will not be blamed by
politicians, as they would be today. Government-funded
health care will lose its legitimacy. And most hospitals
will go bankrupt.

If the system cannot give, it cannot expect to take.
But if it cannot take, it cannot give. The flow of funds
is the heart of legitimacy for the modern welfare State.
Y2K threatens this flow of funds.

Tax compliance relies on the statistically
insignificant threat of an audit and negative sanctions.
For the cheating taxpayer, the risk of an audit is low, but
the stakes are high.

Now, consider y2k. The public is being told that the
risk is low, but the stakes are high. This produces public
complacency. Nobody changes his or her behavior. But the
day that the risk is perceived as high, people's behavior
will change. They will panic. This is what the
politicians and bankers fear most of all: public panic.

If the risk of getting caught is low, but the stakes
are also low, people will stop paying their taxes. Why
will the stakes be low in 2000? Because y2k will gum up
the IRS. The IRS will not be able to get big judgments in
tax court against millions of cheating taxpayers, who will
plead ignorance. There is safety in numbers. The more
people who pull out, the lower the risk and the lower the
stakes of non-payment. Y2K will motivate millions of
people to pull out.

This is the threat in both banking and in tax
collecting. The phrase, "pull out," terrifies those who
run the system.

The threat of cascading cross defaults is far greater
than the threat of a bank run. Depositors can be stiffed
by the banks. Politicians will support this in the name of
national emergency. But when bankers stiff each other
across borders, there is no remedy. The banking system
will shut down. It will take most other systems with it.

The division of labor will collapse.

For the IRS, the threat of a massive pull-out is very
great. Once the IRS loses its clout because of its digital
blindness, it will never get it back. The IRS is hated.
It is feared. Once it is seen as paralyzed, it will not be
feared. But it will still be hated.


CONCLUSION

I think we must prepare for the disappearance of
digital money. Too many computerized systems are at risk.
There will be more announcements like Rossotti's: "Yes,
we're compliant -- fully compliant -- but we have not
finished our inventory."

This is doublespeak. The public doesn't recognize it
as doublespeak. Here is singlespeak: "Our computer is
down." That, the public will eventually recognize. It
means broken contracts, broken dreams, and broken lives.
It also means broken governments.

What will replace broken governments? Local
governments. If the banks close, the Articles of
Confederation will look like a centralized system.

Support your local sheriff. He will be the only
person between you and chaos on one side and the
unrestricted military on the other.

* * * * * * * * * *

Because of the importance of this topic, and because
time is running out fast, I encourage you to forward this
report to anyone you think should read it.
Leigh
(10/30/1999; 20:06:30 MDT - Msg ID: 17939)
Solomon Weaver
Solomon, you may not have set out to be a gold bug, but if you're like any of us you'll soon find yourself addicted! Holding a pure gold coin in your hand can make you feel like a king. Human nature doesn't change, does it?
Chris Powell
(10/30/1999; 20:21:04 MDT - Msg ID: 17940)
Three posts at GATA tonight....
http://www.egroups.com/group/gata/275.html?... But you've seen two of them
here at good old USAGold already!

GATA Chairman Bill Murphy does national
radio broadcast in Australia:

http://www.egroups.com/group/gata/275.html?


Tower sees more desperation by Bank of England:

http://www.egroups.com/group/gata/276.html?


GATA will be vindicated, Friend of Another says:

http://www.egroups.com/group/gata/277.html?
Solomon Weaver
(10/30/1999; 20:26:57 MDT - Msg ID: 17941)
To she-gold and y2k
So isn't it plausible that a y2k-induced financial mess actually benifit USA. Flights to quality - american stocks, bonds, treasuries, dollars, etc. Isn't it possible that such flights to quality could overshadow the relative debts of the USA and stall any aspirations of the Euro taking predominance in the world community?

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

Hey she-gold....just a few thoughts from a poor old guy who is no declared expert:

The only thing that is a greater shame than the great umbrella of fiat money upon which we all (Americans) thrive, is the fact that massive increments of it are loaned based not on underlying assets, but rather on cash flow...try to convince a bank to loan you money when you don't have a job (personal cash flow).

In looking at y2k, the discussion often seems to focus on money supply....in truth, it seems that monetary velocity is even more important.

If y2k causes a massive digital global financial brain haemorrage which irretrievably destroys digital portions of money supply we could suffer (until the surviving banks create new digits to replace the old).

But if y2k "only" causes the failure of 10-20% of business, an unemployment rate of 30%, and a lot of hardship for those who are still in business and in jobs, the "way" we all spend may be quite different.

Now the "way" the US government spends is by "selling" treasury paper (denominated in dollars) and they are more than overjoyed when other countries hold these papers as reserves (convertable at any time of course to digital dollars, but in the meantime, bearing interest). In the post y2k financial world, the biggest losers will be those who have debt (unless they can default with impunity). There are plenty of countries who have government debt...even higher than the USA than on a per capita basis. These countries will suffer more. But the problem with USA is that we have a massive debt, and there are massive overseas holdings of dollars (reserves). In addition, the division of labor in America has shifted away from manufacturing and towards financial services. In a world suffering from y2k induced physical gridlock, and massive reductions in cash flow, the primary economic interest will shift back to "things" for a while.

I think that many in the "investment world" might "think" that America represents a flight to quality...and the US Govt will encourage this view of course...but don't let your head spin about it too much.

Poor old Solomon
Peter Asher
(10/30/1999; 20:44:26 MDT - Msg ID: 17942)
Solomon Weaver
I'm re-posting this from yesterday with more content. The concept is truly unworkable

Date stamping Green backs would make them about as useful for legal tender as cartons of milk. As the intrinsic value would diminish day by day and then go sour, evaluating the actual value of the cash being handed over would be impossible. Can't you just see the fun at the checkout counter: "I'm sorry sir, our store only takes bills no more then seven days old, you'll have to go down to the bank, pay your tax on these, and come back with new ones!" I'm surprised this idiot didn't also suggest that instead of dead Presidents, they use pictures of missing children!

People would refuse to accept this currency at whatever remaining time span they felt was too short. The money just wouldn't work as legal tender any longer. Just as a commodity future declines in value as the expiration date occurs, so would the Greenback. If they ever tried to implement it (and I don't believe that "They" are that stupid) there would be an immediate 'man in the street' return to a Gold and silver standard. Or it might create an incredible expansion of American Express Travelers check business.

This plan is designed for increasing the base quantities for fractionalization, the tax is a secondary issue to serve as an enforcement --- This is one scheme that is dead on the drawing board.
YGM
(10/30/1999; 21:15:56 MDT - Msg ID: 17943)
Does U.S. Gov't Already Know The Truth About Y2K?
http://www.newswatchmagazine.org/index.htmBy viewing the pictures provided here, one would assume they already expect what the Gary Norths' of Y2K information predict will come to pass. Someday we all may owe Garry and a "Few" others a great debt of gratitude.
I'll voice mine ahead of time-----------------------------------------

"Thank You Gary"------You gave me a year and a half head start---------YGM.
Marius
(10/30/1999; 21:36:37 MDT - Msg ID: 17944)
RossL posts 17912 & 17918
I'd like to suggest that one go farther out in time if considering buying gold calls. Feb 00 may seem like a long way off to some, but in this game it probably won't be enough. No one can predict with sufficient precision when the next big move will come, (or how Y2K will affect this) and you don't want to be left in the dust holding options about to expire if prices haven't exploded yet. NEVER underestimate the power of the shorts to hold off the inevitable to try to shake out as many calls as possible. They're doing it right now re: Dec, and who knows who else "AG" will call when THAT string runs out?

The best advice is to go as far out in time as you can possibly afford. I held on to my Jun 00 290 calls, but liquidated my Feb's during the last run. I'd buy Dec 00's if I was considering getting on this bull now, at a strike of around 310 or 320. I won't even do that, due to concerns about how long COMEX can keep the shell game going. I plan to liquidate the June 00's as soon as the price begins moving up again in earnest. It took 2 weeks of true torture for COMEX to clear the liquidation of my Feb 00's, so I tend to believe those who predict a lockup or even collapse of the exchange.

I'm willing to spend a good bit of my Feb 00 profits on Pepcid AC while I sweat out my Junes, but I would not want you to have to join me! (Note: after cashing my Feb's I stocked up on the nectar of Mr. Daniels, plenty of the abovementioned antacid, and have determined to stay loose through this little retracement.) Best of luck, but always remember you're dealing with people & forces who won't hesitate to toss you over the side if the boat starts sinking!
Number Six
(10/30/1999; 22:08:15 MDT - Msg ID: 17945)
Old Uncle Jack
Marius - Glad old Jack is able to give you a helping hand :)

"I plan to liquidate the June 00's as soon as the price begins moving up again in earnest. It took 2 weeks of true torture for COMEX to clear the liquidation of my Feb 00's, so I tend to believe those who predict a lockup or even collapse of the exchange."

I agree with you. I see it as inevitable. If a price rise doesn't do it Y2K certainly will.

There is no way on God's green Earth that I will have ANY digital dollars on any bank computer during rollover. It will all be in physical Gold, some Silver and a chunk of coins and FRN's...

Do take seriously what the BIS in Switzerland have been saying - their last report warned the international banking community about the imported data and cross-default problem... if the Central Bank's Central Bank expects problems then they WILL be there at rollover and beyond.
Canuck Gold
(10/30/1999; 22:41:40 MDT - Msg ID: 17946)
Reply to FOA's post #17669
Hi FOA. At last I have some time to flesh out my response. You wanted to know why I think there is not enough gold around for it to become a "viable alternative". I meant as payment for oil and I'm assuming you realised what I meant and we are talking about physical gold.

I'm going to use US dollars in my calculations because that is how oil and gold are currently quoted. Let's start with oil. Current world consumption stands at around 68 million barrels per day (and rising) or 25 billion barrels per year. At US$22 per barrel that comes to US$546 billion dollars. A significant proportion of this oil is for domestic consumption by the producing countries. For instance, the US imports only about half the oil it uses, though Japan imports everything. I don't have exact figures for the total amount of oil traded between countries but I don't think that's really necessary. For arguments sake, let's be generous and say it's a little less than half. That adds up to US$250 billion dollars per year.

The estimated total amount of gold ever mined is around 127,000 metric tons. Of that, approximately 27,000 tons are held in Central Bank vaults with the remainder divided about equally between jewellery and industrial uses, and private hoards, including the couple of tons you probably have buried in your back yard (just kidding). At approximately 32,150 troy ounces per metric ton, that comes to around 868 million troy ounces. At US$300 per ounce, the current value of all Central Bank gold is around US$260 billion, or just about enough to pay for a year's supply of oil. At US$600 per ounce, you'd get two years supply. (In my initial post, I made reference to the intrinsic value of gold. I also believe there is an intrinsic value for oil and I would find it hard to believe that the values of gold and oil could diverge to allow the ratio of their relative barrel:ounce values to be much greater than 30:1.)

If we bring the annual mined gold into the equation, that gives us another 2600 metric tons. Most of this gold is currently used for jewellery or industrial processes but let's say it can be diverted for oil purchases. That would be barely one month's supply. (It might be possible to confiscate gold, but I don't think many people would be willing to go along with that idea.)

Some of the gold used to buy oil would probably come back in exchange for other goods but if we look at the amount of oil imported from Saudi Arabia by the US, for instance, there would soon be a serious discrepancy. Realistically, the US would run out of gold very quickly and then where would they be. Japan would be in an even worse position because they don't have a lot of gold to start with, less than a thousand tons. We'd have a scenario similar to 1941 and we all know where that took us.

In fact, if the hyper-inflation scenario for the US dollar that you are predicting ever came to pass, foreign governments would refuse to accept US dollars as payment for oil. Under those circumstances, I doubt that the US government would allow their gold reserves to be depleted before acting. I truly believe the American government would not allow the flow of oil to stop and they would secure it by whatever means was necessary.

Realistically, I can't envisage the powers-that-be ever allowing such a scenario to unfold. And that is why I see the US dollar slowly (or maybe not so slowly) devaluing against the Euro and the price of gasoline in the US rising to world levels. The Euro will become the currency on which international trade settlements are based and the standard of living in the US will decline.

I've opened a bit of a Pandora's box of issues here and I know each one could be expanded upon considerably. However, I prefer to be brief and not spend too much time on my soap box at any one time, though I'm always open to further discussion.

Regards, CG
Jake
(10/31/1999; 00:28:39 MDT - Msg ID: 17947)
61 Days
61 days till Y2k. Time will move faster now. I have been preparing for the "possibilities for over two years and feel good that I have included real insurance for my loved ones.

If it comes to pass as a non event I shall be out nothing with the exception of the ridicule from my friends and associates who are primarily concerned with what party they will attend for the millenium celebration. There seems to be no panic, no runs on banks, no heated media debates and those of us who have taken measures for survival are branded as militants or just plain whaccos. Were we wrong to prepare?, did we over-react? Someone needs to give me a pep talk tonight. :)
But I'm still gonna see it through the next 61 + days.
Best regards
Jake
blueboy
(10/31/1999; 01:01:31 MDT - Msg ID: 17948)
Y2K
Jake, even if you are wrong, you're RIGHT! As the old saying goes, I would rather have it and not need it than to need it and not have it!
SHIFTY
(10/31/1999; 01:01:50 MDT - Msg ID: 17949)
61 more days JAKE
Cheer up, your not alone. I find myself the proud owner of seven hens,250lbs of feed,a hand pump well I drove with an 18lb sledge,a pile of eggcartons,can goods,generator,and the one thing hard to put a price on,PEACE OF MIND.
Number Six
(10/31/1999; 01:11:05 MDT - Msg ID: 17950)
Spotted this at Gold-Eagle...
No link I'm afraid...

And yes LL has been accused of being a whacko, but now and then he gets it spot on... :)

"The global financial system is presently in the midst of the third "LTCM-type" crisis of systemic dimensions, since the LTCM hedge fund had to be rescued, at enormous cost, in September 1998, and the Tiger Fund had to be bailed out in June 1999 because of its Japanese
"yen carry trade" exposure. This time, the gold carry trade of US and other financial institutions, has become a systemic threat. Following the sharp post-Sept. 26 rise of the price of gold, financial institutions with vast "short positions" on gold, i.e., having speculated on an ever-lower price of gold, have faced very serious liquidity problems.

According to informed market insiders, key central banks, most notably the US Federal Reserve, have been involved in covertly manipulating the gold price downward during the past two weeks. In a few weeks, if the gold price were manipulated down to the level of $280-$300, it would permit the highly-leveraged gold carry trade positions of New York banks - Chase Bank,
J.P. Morgan, Morgan Stanley and others - to be closed down. These moves would be similar to what was done during June, to ease the Tiger Fund out of its Japan yen carry trade exposure. The Federal Reserve has reportedly intervened with derivatives or gold call options on the New York Comex exchange, in order reverse the gold price rise.

Gold market sources have pointed to one of the world's largest mines, Barrick Gold, as an example. Were the price of gold to have broken above $335 per ounce two weeks ago, Barrick Gold would face financial ruin on its gold forward contracts. A default by Barrick would severely impact two of its bankers, Goldman Sachs and Chase.

Because of the fury in the US Congress and public, over the September 1998 Federal Reserve decision to arrange a public bank rescue of LTCM, to avoid meltdown of the global financial system, Alan Greenspan has decided to pursue a far more concealed strategy of "crisis
management." Greenspan fears that if there is a disaster in financial institutions' gold carry trade, the hyper-fragile financial markets, especially the US stock markets, would plunge. This, in turn, would drive the price of gold up, into the range of $400 or beyond, and would likely trigger a stampede by foreign investors out of the US dollar. To prevent a dollar free-fall, Greenspan would be forced to impose a sharp rise in US interest rates, which would guarantee a collapse of
the US stock bubble.

The Fed's efforts are being quietly supported by Treasury Secretary Larry Summers, who fears any market crash now would finally destroy the Presidential ambitions of Al Gore and with it, Summers' plans to be confirmed as Gore's Treasury Secretary, or perhaps Fed chairman."

Lyndon LaRouche




YGM
(10/31/1999; 01:27:51 MDT - Msg ID: 17951)
SHIFTY, blueboy & Jake
Stay resolute guys. Hell we just found out a few days ago that the computerized radio beacon at the local airport has been out for wks and no one informed the public. It still isn't fixed after two months and it IS Y2K related. RCMP officers are even stockpiling and buying gen sets. The signs are becoming more apparent wk by wk. We have military also, and cancelled leaves for police and Emergency Measure people. It's definately getting more advanced quickly. Wait til the sheep stampede.---YGM.
Jake
(10/31/1999; 01:46:10 MDT - Msg ID: 17952)
ahhhh!
I feel better already, nice to know I'm not solo in this boat (lifeboat)
YGM: All Law enforcement leaves cancelled Dec-March this area but they better make sure those boys get paid and their families are protected or we'll see a real case of the Blue Flu.
YGM
(10/31/1999; 01:08:27 MDT - Msg ID: 17953)
Simple scenario for Y2k Financial Meltdown
Jim Lord released the Navy report that stated N. York would lose its water and sewer services. Now being as NY is the finacial hub of the world w/ billions of dollars flowing thru its financial centers to and from the rest of the world daily what do you suppose will happen when 7+ million people have little or no water and within hrs or days have to use the streets for toilets. Who's going to work? IMO--gridlock and marshal law will be the order of the day and nobody will be laughing at those who prepared, just the opposite they'll all be looking to you for help. Nite all--YGM
Go Gold and Go Physical
YGM
(10/31/1999; 01:09:18 MDT - Msg ID: 17954)
Simple scenario for Y2k Financial Meltdown
Jim Lord released the Navy report that stated N. York would lose its water and sewer services. Now being as NY is the finacial hub of the world w/ billions of dollars flowing thru its financial centers to and from the rest of the world daily what do you suppose will happen when 7+ million people have little or no water and within hrs or days have to use the streets for toilets. Who's going to work? IMO--gridlock and marshal law will be the order of the day and nobody will be laughing at those who prepared, just the opposite they'll all be looking to you for help. Nite all--YGM
Go Gold and Go Physical
YGM
(10/31/1999; 01:12:14 MDT - Msg ID: 17955)
Simple scenario for Y2k Financial Meltdown
Jim Lord released the Navy report that stated N. York would lose its water and sewer services. Now being as NY is the finacial hub of the world w/ billions of dollars flowing thru its financial centers to and from the rest of the world daily what do you suppose will happen when 7+ million people have little or no water and within hrs or days have to use the streets for toilets. Who's going to work? IMO--gridlock and marshal law will be the order of the day and nobody will be laughing at those who prepared, just the opposite they'll all be looking to you for help. Nite all--YGM
Go Gold and Go Physical
ORO
(10/31/1999; 01:12:43 MDT - Msg ID: 17956)
Number 6 - LaRouche
I think he has come to the same conclusion that I and others on this, and other forums have come to some time ago. Some were in on the "planning" stage of this fiasco, some in the setting of traps.

Two years ago, I came to the conclusion that the markets can not avoid collapse in the face of 20% swings in either the bond, stocks, or the trade weighted dollar. Moves of either of these by 20% or more in a period of one to three months would substantially eradicate all the capital of all of the banks in all of the world through the derivatives overhang. In typical banking fashion, the derivative poisoning was treated by higher doses of derivative poison administered in ever more sophisticated form.
In order to prevent a lock up of the financial system, the Fed has been applying its dollar snake oil to lubricate the system in every squeeky joint. They issue assurances to prevent each of the major participant from running for their lives.
The wholly unnatural behavior of the markets is due to Fed intervention as intermediary and "pusher", I mean lender of last resort. It can be seen in Yen in June, gold through the latter part of October, the mortgage backeds in September-October 98, the bond in the same period, stocks in all periods since October 97, etc..
ORO
(10/31/1999; 01:13:02 MDT - Msg ID: 17957)
Number 6 - LaRouche
I think he has come to the same conclusion that I and others on this, and other forums have come to some time ago. Some were in on the "planning" stage of this fiasco, some in the setting of traps.

Two years ago, I came to the conclusion that the markets can not avoid collapse in the face of 20% swings in either the bond, stocks, or the trade weighted dollar. Moves of either of these by 20% or more in a period of one to three months would substantially eradicate all the capital of all of the banks in all of the world through the derivatives overhang. In typical banking fashion, the derivative poisoning was treated by higher doses of derivative poison administered in ever more sophisticated form.
In order to prevent a lock up of the financial system, the Fed has been applying its dollar snake oil to lubricate the system in every squeeky joint. They issue assurances to prevent each of the major participant from running for their lives.
The wholly unnatural behavior of the markets is due to Fed intervention as intermediary and "pusher", I mean lender of last resort. It can be seen in Yen in June, gold through the latter part of October, the mortgage backeds in September-October 98, the bond in the same period, stocks in all periods since October 97, etc..
Number Six
(10/31/1999; 01:15:34 MDT - Msg ID: 17958)
Y2K Rollover
Guys - I'm unfortunately (!) working on a y2k rollover project for a major airline and will be at the sharp end as the clock ticks over - should be an eye opener as we are a worldwide system and we will see how the rest of the world is coping on our system way before (well, a few hours!) we feel the GMT effect here in the USA...

I'm making damn sure I get paid IN ADVANCE by the Agency so I can buy some more PM's... :)
ORO
(10/31/1999; 01:16:04 MDT - Msg ID: 17959)
Number 6 - LaRouche
I think he has come to the same conclusion that I and others on this, and other forums have come to some time ago. Some were in on the "planning" stage of this fiasco, some in the setting of traps.

Two years ago, I came to the conclusion that the markets can not avoid collapse in the face of 20% swings in either the bond, stocks, or the trade weighted dollar. Moves of either of these by 20% or more in a period of one to three months would substantially eradicate all the capital of all of the banks in all of the world through the derivatives overhang. In typical banking fashion, the derivative poisoning was treated by higher doses of derivative poison administered in ever more sophisticated form.
In order to prevent a lock up of the financial system, the Fed has been applying its dollar snake oil to lubricate the system in every squeeky joint. They issue assurances to prevent each of the major participant from running for their lives.
The wholly unnatural behavior of the markets is due to Fed intervention as intermediary and "pusher", I mean lender of last resort. It can be seen in Yen in June, gold through the latter part of October, the mortgage backeds in September-October 98, the bond in the same period, stocks in all periods since October 97, etc..
ORO
(10/31/1999; 01:22:05 MDT - Msg ID: 17960)
Number 6 - LaRouche
I think he has come to the same conclusion that I and others on this, and other forums have come to some time ago. Some were in on the "planning" stage of this fiasco, some in the setting of traps.

Two years ago, I came to the conclusion that the markets can not avoid collapse in the face of 20% swings in either the bond, stocks, or the trade weighted dollar. Moves of either of these by 20% or more in a period of one to three months would substantially eradicate all the capital of all of the banks in all of the world through the derivatives overhang. In typical banking fashion, the derivative poisoning was treated by higher doses of derivative poison administered in ever more sophisticated form.
In order to prevent a lock up of the financial system, the Fed has been applying its dollar snake oil to lubricate the system in every squeeky joint. They issue assurances to prevent each of the major participant from running for their lives.
The wholly unnatural behavior of the markets is due to Fed intervention as intermediary and "pusher", I mean lender of last resort. It can be seen in Yen in June, gold through the latter part of October, the mortgage backeds in September-October 98, the bond in the same period, stocks in all periods since October 97, etc..
ORO
(10/31/1999; 01:37:34 MDT - Msg ID: 17961)
SteveH- SOC
Mamon at play builds houses of cards connected by dominoes.
RossL
(10/31/1999; 07:22:04 MDT - Msg ID: 17962)
Old Uncle Jack
Marius, Number Six, I am seriously doubting that the COMEX will survive the last of December. Survive as we know it now, anyway. If enough people demand delivery and any little bit of squeeze develops, there would be interventions to keep the market "orderly"...

At least we'll have the company of Mr. Daniels to calm us in the trying times of the date rollover! My Grandpa (mom's side) came from a hillbilly family out of the West Virginia hills. Grandpa taught me many things. Foremost were an enjoyment of good sippin' whiskey and a mistrust of everything FDR stood for.
Scrappy
(10/31/1999; 08:18:10 MDT - Msg ID: 17963)
FOA
Sir, a simple question. I realize your posts seem to be limited to what is going on in the economic world. But if I may inquire, what do YOU think will happen at the Jan. 1, 2000 'rollover'?
Thank you for your thoughts.
YGM
(10/31/1999; 09:12:50 MDT - Msg ID: 17964)
SORRY for triple posts
Win 95 working thru rollover! Ha what a joke. W/ what this thing does (the box) it's hard to imagine how the rest can function. Message box reads cannot connect and hourglass dissapears so for all intents the post was never sent. Never sent three times! Shut down the box and awake to find --voila! 3 posts appear from cyberspace.---My apologies---YGM.
NORTH OF 49
(10/31/1999; 09:59:13 MDT - Msg ID: 17965)
YGM--am sitting here at my desk, absorbing your posts-----
and it occured to me, as my eyes wandered around my office, that I have a poster mounted above my desk that reminds me of how my mind observes you through the wonder of cyber-space.

I have been reading your posts as they pop up on various forums, like spring mushrooms, for almost a year now, and have the highest regard for your dedication, ambition and undieing (sp?) emotional persuit of the "Truth". I recall flying over your neck of the woods several times earlier this year on my way to Sakalin Island, and looking out the window thinking "man that looks like tough sledd'n to me"!!

Anyways, with credit to POP Productions, I will pass on the contents of said poster (which you may or maynot have already encountered).

THE CREED OF THE SOCIOPATHIC OBSESSIVE COMPULSIVE

1. If anything can go wrong, Fix it! (to hell with Murphy)
((my note--name is purely coincidental))

2. When given a choice--Take both!

3. Multiple projects lead to multiple successes.

4. Start at the top, then work your way up.

5. Do it by the book...but be the author!

6. When forced to compromise, ask for more.

7. If you can't beat them, join them, then beat them.

8. If it's worth doing, it's got to be done right now!

9. If you can't win, change the rules.

10.If you can't change the rules, then ignore them.

11 Perfection is not optional.

12 When faced without a challenge, make one.

13 "No" simply means begin at one level higher.

14. Don't walk when you can run.

15. Bureaucracy is a challenge to be conquered with a
righteous attitude, a tolerance for stupidity, and
((I really like this part)) a buldozer when necessary.

16. When in doubt: THINK!

17. Patience is a virtue, but persistence to the point of
success is a blessing.

18. The squeaky wheel gets replaced.

19. The faster you move, the slower time passes, the longer
you live!

Doesn't this fit this guy folks??

No49
YGM
(10/31/1999; 10:05:11 MDT - Msg ID: 17966)
Canadian Dollar Surpassing US $ --- Major Question
MK-FOA-ORO-Town Crier- or anyoneIn his Mar.3 interview (@ USA Gold Gilded Opinion) Don Wolanchuk, (one of the most highly reveered market timers) states he feels that during this new Bull Run in Gold the Canadian dollar will rally to a level higher than that of the US. My question is, even w/ a resource based economy & lots of Gold mines how can the Canadian dollar gain when we have only about 2mill oz of gold reserves and almost all of the rest of Can dollar reserve backing is in US T-Bills, Cash and other US debt instruments. In a scenario of ever declining US dollar value would not the Canadian one follow suit. What am I missing here?
Thanks-----------YGM.
YGM
(10/31/1999; 10:22:50 MDT - Msg ID: 17967)
If I may Impose a last Post to North 49
I have printed your poster and will enlarge to fit a wall frame. I loved it & you caused large smiles a more than a little laughter here this snowy Sun morn. Thank you for the thoughts.-- (where is that island you spoke of? & any further comments from your Banker neighbour over the fence?)
--------------Regards-YGM

PS- My old Pop had # 20 pegged.

--Do It Right or Do It Again & Again & Again------------------
NORTH OF 49
(10/31/1999; 11:25:19 MDT - Msg ID: 17968)
YGM
Glad you liked the poster--have tried to use it as a small guide myself on this rocky road of life.

The island I referred to may be more familiar to you if I spelled if right. Should be Sakhalin, a 30,000 sq. mi. island off the east coast of Siberian Russia. Just found out last week that this is where Yul Brenner was born (question on Jeopardy). I was there off and on for four months last Spring doing some consulting work for an American/Korean/Russian consortium. Really hostile environment--high earthquake zone (which was part of the reason I was there), really, really cold (which I'm sure you are well acquainted with) and big, big ice!! Despite what you see in the 007 movies, the people are simply great.

My neighbouring Banker Bud, not being a true goldbug, doesn't seem (IMHO) to really grasp the whole picture of this "Gold Opera." Once we get past the inventory of Scotia- Macatta, his eyes sort of glaze over when I bring up BIS/IMF face-offs. It would seem that bullion is still in the "commodity" part of his thinking. He'll learn

No49
The Stranger
(10/31/1999; 11:56:21 MDT - Msg ID: 17969)
Perfide Albion
http://www.tarpley.net/29crash.htmI hate to add to the atmosphere of doomsaying around here, but last night my father pointed me to a paper written in 1996 by one Webster G. Tarpley. Tarpley, who now has a book out titled "Surviving the Cataclysm" addresses the roll of the British and gold in precipitating the Great Depression:

"The events leading to the Great Depression are all related to British economic warfare against the rest of the world,
which mainly took the form of the attempt to restore a London- centered world monetary system incorporating the gold
standard. The efforts of the British oligarchy in this regard were carried out by a clique of international central bankers
dominated by Lord Montagu Norman of the Bank of England, assisted by his tools Benjamin Strong of the New York
Federal Reserve Bank and Hjalmar Schacht of the German Reichsbank. This British-controlled gold standard proved to
be a straightjacket for world economic development, somewhat along the lines of the deflationary Maastricht
"convergence criteria" of the late 1990's."

Warning: the piece is very long, but it is highly referenced. It starts with the formation of the Federal Reserve system in 1913 and ends with the inauguration of FDR. I believe it will particularly interest goldbugs who regard the behavior of governments with suspicion.

Having just recently visited Threadneedle Street myself (and having been allowed to heft one of the gold bars there), I found the section on the Bank of England's sham defense of the pound especially chilling. If, by any chance, this piece is already well known to members of the Forum, please forgive me. I didn't know.
SteveH
(10/31/1999; 12:00:30 MDT - Msg ID: 17970)
Euro
http://news.bbc.co.uk/hi/english/business/the_economy/newsid_500000/500231.stmrepost:

Business: The Economy

Business backs euro, says CBI

Adair Turner: CBI is happy with government's stance on the euro

Ten months after the launch of the euro, British businesses are, in principle, in favour of joining the single European currency, according to the director general of the Confederation of British Industry (CBI), Adair Turner.
Speaking ahead of the CBI's annual conference in Birmingham, Mr Adair told the BBC that the majority of businesses represented by his organisation believed it would be in their interests to join the fledgling currency.

The issue is expected to be hotly debated again at this year's conference. In a debate on Tuesday morning on the euro, entitled Growth Stimulant or Cold Shower?, Lord Marshal and Rodney Leach will put the case for and against joining the currency.

Mr Turner said the CBI was happy, on the whole, with the government's stance of being in favour if the move was in the best interests for Britain. Some CBI members would prefer a straight commitement to joining, he said.



CBI director general Adair Turner on BBC's Breakfast with Frost
However, he described the Chancellor, Gordon Brown's five economic tests for joining the euro as an "odd mix".

He said some of the tests were not vital, but the important test was economic convergence with other European Union countries where labour markets needed to be more flexible and public finances strengthened.

Mr Turner said CBI members would not be happy ruling out joining the currency for the next six or seven years as the Conservatives had done and he urged the party to keep its options open.


Prudent finances

Turning to the British economy, Adair Turner repeated the CBI's recent warning to the chancellor, Gordon Brown, not to go on a pre-election spendng spree in his next Budget.

Public finances at the end of the fiscal year in March are expected to be in a healthier state than even Mr Brown had predicted, thanks to improving economic conditions.

There are fears that the chancellor may be tempted to spend some of his "war chest", especially with an election on the horizon.

The CBI believes Mr Brown should save any surplus rather than spending it as this would stimulate the economy and result in the Bank of England having to increase interest rates.

Mr Turner said this would worsen the problem of the two speed economy where service industries are growing rapidly but manufacturing is still struggling to get out of recession.

BBC News Online will be providing comprehensive coverage of the CBI conference, with all proceedings broadcast live in audio. A number of the key speeches will also be broadcast live in video on the site. Click 'CBI conference live' in the related stories on the right of your screen for more details.

rsjacksr
(10/31/1999; 12:53:03 MDT - Msg ID: 17971)
Friends, Family, Sheeple and other topics.
http://www.usagold.com/I want to thank this forum for turning me into a raving insomniac. Mountain time indeed!

The wonderful thing about humanity is our ability to adapt.
The terrible thing about humanity is our inability to adapt fast enough.
Most of us, including yours truly, live in a system in which we have succeeded because we learned the rules that were taught. They, in fact, become our ASSETS. Unfortunately, change our environment and our assets become our liabilities. i.e. like someone suddenly changing the rules. We usually don't know how to or want to adapt. Scrappy, you were right on the mark. You are asking the sheeple to believe that their lives are a lie.
They know it's a lie. They know they have little or no power. Even politicians fall into this category. Everyone is trying to get their piece of the pie and if the system fails, so be it. Why else would the majority in a supposedly democratic society not vote. Could it be that they consider it a waste of time?
Even if it's true, that's a bitter pill to swallow. It really calls for self-examination and re-assessment. It usually takes several hard knocks before the light turns on and yes, then it may be too late. If you are ramming it down their throats, the only reaction you are likely to receive is either fight or flight (as in Steve H's friend ---- not Leroy ???? Whom I wouldn't be so quick to discount but that's another topic for debate). No, let's handle it now. I really have to learn to stop procrastinating (I'm the president of the club).
Math is the most precise science we have. Economics fall under it's auspices. If it can be quantified, it can be grafted. I can take the derivative, first level approximation, mean average and apply statistical analysis to the data. I can use any number of mathematical models on the information. I don't just need one. In this world of computers, I can do it in REAL time. I can acquire information at such a rate that you can't move your money or your goods with my knowing it and being able to respond. It only requires input. As I see it, the only thing we have going for us is "ABSOLUTE POWER BREEDS ABSOLUTE ARROGANCE AND ABSOLUTE ARROGANCE BREEDS ABSOLUTE STUPIDITY". But, that only opens the door for someone else to move in.

Re: FOA msg: 17268
 >>>Too date anyone that has invested in gold using the "traditional" vehicles has been "dead wrong"! If I had to guess, it would not surprise me to find that 95% of these players have lost their shirts on a "net basis over 10 years. <<< >>> Most everyone that analyzed gold from a "dollar devaluation" standpoint was sure that gold (and the producing industry they brought into) would soar from such an event. Few could accept that for the dollar to fall from world reserve status would also require the total destruction of the "dollar paper gold market ". <<< >>> During the next five years, physical gold is going to outlast and out perform not only the current world derivative gold market, but outlive a large portion of the stockholders equity in most gold mines. During the "death throes" of the gold marketplace, the dollar price could be all over the map! Simply put, most short term traders and long term paper gold (gold stocks included) investors will be eaten alive as we witness a transition unlike anything ever seen. How can one be ready for this? Some people are 80% gold bullion, 20% in the few largest un-hedged mines (only 3 or 4 exist) and hold plenty of cash that is expected to devalue greatly. Their mindset is ready for gold to be priced somewhere between 0 and infinity! In other words, gold in their eyes will outlive it all. >>>>
Sounds like you are singing my song. I didn't know about the hedging.

FOA, didn't you describe a time line of several years for gold and the Euro to come to dominance? If so, then shouldn't the course be (because this is all they know):
1) flight to bonds,
2) followed by flight to gold stocks,
3) followed by flight to gold. if there's any left to acquire or
4) flight to another currency or
5) WAR?
Forget (5). I think we've all grown up a lot since the last Great War. Besides, we've gotten to the point that we can end it all. Even as a kid, I never believed it would happen. You see, if there's ONE thing I do understand it's the name of the GAME is POWER and POWER is the GAME. Some times you win, and some times you lose, But nobody, and I mean NOBODY is stupid enough to end the GAME.
Question? What is going to stop Europe from playing the same monetary paper game that England and then the U.S. played when they come into power? It's been my experience that everyone complains about the system until they have the power. Then, Guess What? They suddenly join the club that I call the "Me Too Club". They adorn the robes of the Masters.

>>>> HopeingII "I stand by my contention.
The only thing in the past three years that has moved
the POG significantly up was the announcement on Sept.
26th. " <<<<<

I concur. The "Washington Agreement" appears to be one of consent. That makes it "Political". That means the present rise in gold is political and that can change if Europe, who now has leverage, changes it's position. But what kinds of deals can be made and on what levels? In other words, does the "deal" only encompass the Dollar. They are being very careful. They can't afford for us to tank as it will bring down their economies and nobody wants to tee off an eight hundred pound gorilla. To me it means that they were not quite ready for the coming events. Timing may have forced them into this position. THE DEAL IS NOT QUITE DONE. Also, it's been reported that 58% of monies invested in our stock market is foreign dollars. Time needed to extricate their assets? Help anybody!!!!!

AEL
(10/31/1999; 13:09:15 MDT - Msg ID: 17972)
"we will all burn in hell"
http://ourworld.compuserve.com/homepages/roleigh_martin/end_game_critique.htm"Collectively we are going to drive the ship right into the iceberg and not
say anything until the screaming starts and then claim we did all we could
to make everything compliant. We will burn in Hell."

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

http://ourworld.compuserve.com/homepages/roleigh_martin/end_game_critique.htm

October 28, 1999

IEEE Y2K Chair Personal Critique of Ed Yourdon's "End Game" Essay

by Dale Way
Chairman, Year 2000 Technical Information Focus Group
Technical Activities Board
The Institute of Electrical and Electronics Engineers (IEEE)
650.574.2317 voice, 650.571.7662 fax
d.way@ieee.org alt. email

......

2.3 Why Traditional Software Remediation Based on Compliance Will Often
Fail

TRADITIONAL SOFTWARE REMEDIATION BASED ON THE GOAL OF 'SYSTEM' COMPLIANCE
WILL NOT WORK in most cases, if the goal is protection from Y2K failures.
It means NOT that remediation can fail because it can be done badly, which
of course also happens, it means it is FATALLY FLAWED by its very nature no
matter how competently done. Traditional software remediation is invasive,
involving code modification of a working system. It is based on the
Independence Fallacy of Y2K. By the actions taken and not the words said,
it assumes the thing being remediated is an independent entity such that
changes in its logic need only be considered as to their effect on the
thing itself. This is the basis for much, if not most, in-house efforts,
and all outside "Y2K factory" code scanning and repair services: "You send
us code, we find dates and inject windowing code or modify code to account
for data expansion and send it back to you." In neither case is knowledge
of all other "systems" that share data, and therefore could be affected by
these modifications, considered in the modification process.

In most cases SUCH KNOWLEDGE IS NOT AVAILABLE as hardly any organizations
have traced data flows among and between their systems at the atomic level
required, especially those flows that cross platform, language and
organizational boundaries. (The atomic level required is all the paths that
every single data element follows through all programs, databases and
presentation services. It is not the physical communication paths and
interfaces snaking through and between systems, but the logical paths
independent of the physical media used that dynamically ride upon the
physical.) This is because organizations do not have the tools to do so.
And they do not have the tools because they have never really needed them
for doing the normal, incremental, piecemeal modifications applied all
along the way in the long, essentially additive evolution that has made our
infrastructure as hideously large and complex as it is and exposed us to
Y2K in the first place. (You know, you were there, programmers in the 60s
and 70s that may have had a choice in using two-digit years -- many didn't;
the data formats were already firmly established -- never thought their
software was still going to be used 30 or 40 years later. That it and the
data structures that tie it together are, is the real reason we STILL have
two-digit years abounding and therefore have a Y2K crisis now.) When this
Humpty Dumpty is put back together again there will be many problems.

"Oh!" one may say, "That will be taken care of in testing." Yeah, right. Do
we really have the time and infrastructure to test all of our systems, all
at the same time, to make sure we have not violated any hidden dependencies
between them by our essentially blind modification of many of our code
modules? Are we going to hang our hat on that? Some organizations may have
time and infrastructure for one or two test runs (like Wall Street's famous
$100 million Street-wide test that did not go all the way back through all
the firms' backroom systems), but everyone knows that is not going to be
nearly enough. A large bank can have 100,000 programs that run on 30
different platforms and use 50 different languages (type, vintage and
compiler manufacturer). Make several thousand code changes across that base
in something as ubiquitous as date processing in something like banking
operations. Assume you detected ALL dates (you would be lucky if you found
90%) and made modifications PERFECTLY (have the best people been the ones
doing this all along?; do you have the best tools?; for all environments?;
do you have the best project management and configuration and version
management capabilities AT THIS SCALE?). And that bank is on-line through
the Fed to all other banks. How many errors will there be after making
thousands of changes to a very large 'system of systems' that no one really
understands in detail?

Testing, integration testing, also called production testing or end-to-end
testing, is the only process that can reveal these hidden dependencies
carried in the data flow chains through any 'system of systems'.
(Apologist/mouthpieces for organizations, when they say anything about
testing, never tell the kind of testing they are talking about when
testifying to their "confidence" in being "on-track" to Y2K readiness; they
mean unit testing if anything, and they hope nobody notices the
meaninglessness of unit testing in the context of Y2K; often they
themselves do not -- again a malignant outgrowth of "compliance" thinking
and the Independence Fallacy.)

Integration/end-to-end testing in this circumstance is not the simple
"verification" of a job well done that society's entrenched
industrial/mechanical thinking would have them believe. Such testing in a
holistic enterprise like Y2K is functionally part of the ASSESSMENT phase;
it is part of the learning process that is supposed to tell an organization
what they are really up against and therefore can suggest the best approach
to take, or tell them approaches that are sure to fail. This knowledge does
not come cheap, or fast. And when it STARTS this late in a true
deadline-driven situation, where are they, really?

What is going to happen when a big organizations tries to integrate "compliant"
systems in a testing process? When something doesn't work right, they are not
going to know where the problem really is and where the best place to intervene
is (there could be several) to make yet another change. All the systems involved
in the affected data flow chain (which they cannot fully see) may be working
"correctly" from their point of view, yet the end output is not right. Such problems
live in the INTERRELATIONSHIPS between the systems, in the gaps, the very
place compliance thinking doesn't allow you to see. They will have to make their
best guess, take their best shot, intervene someplace, AND TEST AGAIN, test
all the systems that are involved TOGETHER again (though they may not know
ALL the systems involved; if they did you might not have this problem). How
many iterations of these loops will it take to find and squeeze out all the primary
errors, let alone all the secondary and tertiary errors caused in trying to fix earlier
errors? Do they have the time? Though you may eat one a bite at a time, you
cannot turn an elephant into a giraffe, or even a "better" elephant, that way.

If an organization goes off half-cocked, without complete, detailed
knowledge of how its 'system of systems' works altogether in all normal and
possible abnormal situations, as the vast majority of remediators have
done, yet make wholesale changes as if it did have that knowledge, they are
doomed to failure unless it had many more years than the three or four most
organizations have been at it. (Some agencies of the U.S. government were
not being fallacious when they first said they would be ready as late as
2014. They were just being honest. Of course, that "politically
unacceptable" response was quickly squelched.) It would be better for the
whole world if this could be admitted. Then non-technical contingency
planning would have the urgency at all levels of society it deserves. But
technical management and the Y2Klatura collectively do not have the brains
or the guts to do that DEFINITIVELY. We will hew to our baseless confidence
or pussyfoot around the obvious until the end. Collectively we are going to
drive the ship right into the iceberg and not say anything until the
screaming starts and then claim we did all we could to make everything
compliant. We will burn in Hell.

3. EPILOG

If this sounds harsh, it is only what history has in store for us, the
self-appointed Y2Klatura. For we have taken it upon ourselves to define the
problem and the solution. We have allowed or encouraged civilians to
believe we knew how to handle it. We have buried our own doubts or
mealy-mouthed them to the extent we allowed others to believe what was most
comfortable for them. Though we have often ranted, we have allowed
apologists and scare-mongers to each have their audience. We have given
little to leaders that they can use on their terms in their world. We
ourselves have been wrong about much. We have not examined ourselves nearly
as much as we are demanding others examine themselves. We, too, have
believed our own PR. It is time to make amends and do more to undo the
damage we have inflicted. Until we do that we cannot expect others to trust
us. Rollover/End is a dangerous anthropomorphism that mischaracterizes and
misdirects, Compliance the siren song that calls us to the rocks. Other
concepts more firmly grounded must be embraced. Other things more firmly
grounded must be done.


discussion thread:
http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001fqh




Richard, Oregon
(10/31/1999; 13:28:57 MDT - Msg ID: 17973)
Jake (10/31/99; 00:28:39MDT - Msg ID:17947) 61 Days
Jake - Don't be confused over your preparations. You've done the right thing and with the honest motives - ". . . . and feel good that I have included real insurance for my loved ones."

I too have prepared just a little more than I usually do for a typical winter. I always thought is was 'normal' to keep a freezer full and can goods on hand (my folks and grandparents always did) during months of uncertain weather. Look at the world weather pattern in the last year or so. What more proof does one need to 'be prepared.' I did get some extra thing this year . . . 8 cords of wood instead of 4, jugs of spring waterless than fifty cents/gallon and sealed, and more canned goods. Gasoline for the generator (just for the freezer), candles, lamp oil, TP, etc., etc. I with you pal - my children know where to come if they need to.

"Gold there is, and rubies in abundance, but lips that speak knowledge are a rare jewel." You're wise man, don't accept anything different from the others who would come begging at your door come the 'wrath of winter', despite y2k.
Richard, Oregon
(10/31/1999; 13:43:56 MDT - Msg ID: 17974)
One More Thing. . .
Jake - forgot to mention securing another handgun/rifle or so with ammo. With the way things are going in this country, a real American with have to hide his 'right to bear arms' with his 'right to own gold.' I assumed you have not forgotten to 'get physical.' My favorite from Aristotle - "Gold, created with the universe."
Goldspoon
(10/31/1999; 14:10:52 MDT - Msg ID: 17975)
Goldspoons bones..disease
If you are a follower of Goldspoons Bones predictions... you will remember that i said @3 weeks ago "disease will begin to play an increasing role in the woes of man" (paraphrasing)

Oct. 28, 1999 � A new strain of flu in Hong Kong has scientists warning of a possible worldwide epidemic.

The Hong Kong strain is believed to be a swine-type virus similar to the Spanish flu pandemic that killed 20 million people in 1918. Officials suspect that the new virus also jumped from pigs to human.

Health officials first diagnosed the strain last month through a 10-month-old girl admitted to a hospital.

The girl was successfully treated, reports the New Scientist, but an analysis of her virus showed all the molecular traits of a strain from pigs.

Killer strains usually come from pigs or poultry. A strain of flu from chickens killed six people two years ago in Hong Kong.

Most flus are variants of existing strains. But every few decades, a radically different flu forms, erupting into a pandemic capable of killing millions.

Pandemics are caused when a virus is extremely infectious and is transmitted rapidly. The last two pandemics happened in 1957 and 1968.
Goldspoon
(10/31/1999; 14:18:56 MDT - Msg ID: 17976)
FBI may be ready to lock melinium crazy people up....wonder Who they think is crazy?
http://www.msnbc.com/snap/329636.aspWASHINGTON, Oct. 31 � An FBI report prepared for the nation's law enforcement officials says the threat of violence by extremists to mark the new millennium is "very real," The Washington Post reported.


'The volatile mix of apocalyptic religious and (New World Order) conspiracy theories may produce violent acts aimed at precipitating the end of the world as prophesied in the Bible.'



THE BUREAU SAID in a written statement on Oct. 20 that it was preparing the report, entitled Project Megiddo, and would share it with police chiefs at their upcoming convention.
Goldspoon
(10/31/1999; 14:49:14 MDT - Msg ID: 17977)
Goldspoon's a few pages on gold for the masses
If you read my posts this weekend.... You know i'm mad as Heck and am not going to take it anymore... i'm going to do something... i am compiling a few short pages on gold/money that explains how Honest Money along with our economic freedom was stripped from us... i will use this to distribute to the masses...(kind of like Paul Revere) in hopes of awakening as many patriots as i can and rallying them to the cause of retaking our freedom.

OH! i need your help.... in writting these few pages for distribution...i figure the first thing to work on is an outline.....(a skeleton) and then fill in the topics listed by the outline. Here is a sample outline to generate suggestion to improve the outline..
What we will do is brainstorm across the forum and use a concenus outline.

1. A brief history of Gold as honest Money

2. Dishonest Money by decree

3. The right to coin money

4. Gold confiscation

5. Paper Gold and the closing of the Gold window

6. Gold for Oil

7. Fractional reserve banking

8. The explosion of fianical products or the inflation of the physical world on paper

9. Paridise lost and what to do to get it back

****"All suggestions on refining or re-defining this out line and submission of material on these topics is welcome.**
Remember i'm trying to cut to the chase on the info... each topic should be no more than 2 pages? Thanks!
aunuggets
(10/31/1999; 15:59:04 MDT - Msg ID: 17978)
Goldspoon...
Goldspoon......good idea and concept, but isn't what you are suggesting pretty much what Paul Hein has already done in his work "All Work and No Pay" at www.usagold.com/AllWorkandNoPay.html in the Guilded Opinion section ? That was without doubt one of the best synopsis I've ever read personally, and a real eye opener for alot of folks. It is rather long and involved, but well arranged and written. Your idea of "what to do about it" would be a good addition to the end of this work, or maybe even a condensed version for the masses as you suggest. Just a thought anyway......
Jake
(10/31/1999; 16:23:29 MDT - Msg ID: 17979)
Richard Oregon
Sir: You and I are are on the exact same frequency.I was testing the waters here. Great to meet you and best to you.

YGM: You were right again, this is a great place.
Jake
Richard, Oregon
(10/31/1999; 16:47:11 MDT - Msg ID: 17980)
Testing The Waters. . . . . .
Forget that, this is sink or swim. Glad to hear you're up to speed. It's YOUR responsibility to take care of YOU (& your's), not the governments. If they have their choice, they will take away ALL our individual freedoms and make us all SHEEPLE. I don't post much, just one of those Economics 101 students, a Squire!
Jake
(10/31/1999; 16:57:53 MDT - Msg ID: 17981)
Richard Oregon
http://www.gold-eagle.com/editorials_98/jacobson081398.htmlYou know Richard that the rest of the USA considers those of us In the Pacific N.W. very radical, but I tend to think we're just self sufficiant. :)

here's a link to an article I did about a year and a half ago. I hope it's ok to link to other gold sites if not I apologize and will refrain.
Jake
Gold Power
(10/31/1999; 17:02:15 MDT - Msg ID: 17982)
Waiting for the hedge funds
So far, I have been surprised that the hedge funds have not turned and gone long on gold to try to test the pain threshold of the shorts, especially the mining companies whose hedge positions are well documented.

Last Thursday, we heard reports of fund buying. I would think we will see more of this soon. Hedge funds have no mercy. They will destroy any weakness in their path to make a dollar, including entire countries. The destruction of the mining industry as we know it does not bother them.

Since it's been so widely reported that a price of $360 will put severe pressure on the mining industry, I will be very surprised if the hedge funds do not make a serious run at that level.

Gold Power
Black Blade
(10/31/1999; 17:39:24 MDT - Msg ID: 17983)
For laughs?
Check out Kitco! Gold down -$293.00 to $5.17. Yup, I'm gonna buy truckloads at these prices!
Gandalf the White
(10/31/1999; 17:44:40 MDT - Msg ID: 17984)
Yep -- Kitco gold Chart is a Holloweenie Trick !
<;-)
Golden Truth
(10/31/1999; 18:01:21 MDT - Msg ID: 17985)
AUSSIE,S MUST HATE GOLD TOO?
GOLD DOWN $3.70 WHATS NEW!ALSO P.O.G DOWN and Canadian Dollar up??
Man the whole the system is rigged, this Sucks!
G.T
she-gold
(10/31/1999; 18:07:37 MDT - Msg ID: 17986)
gold mining executives Fighting Back in public!
www.usagold.comMiners Seek Disclosure of BoE Gold Market Activities, FT Says


London, Nov. 1 ( Bloomberg ) -- Gold miners asked the Bank of England to disclose details of its recent gold market operations in light of complaints central banks have engaged in market manipulation, the Financial Times reported, quoting three small European gold mine companies that wrote to the newspaper. Peter Hambro, president of Mines d'Or de Salsigne SA, Chris von Christierson, chairman of Rio Narcea Gold Mines Ltd., and John Morrison, chief executive of Gold Mines of Sardinia, said they intend to write to the Bank of England and the U.K. Treasury. Australian gold miner Normandy Resources NL last week attributed the recent fall in the price of gold to bank manipulation designed to protect option exposures, and the three European miners wrote, ``It is time for the Bank of England publicly to state what it is and has been doing in gold and derivatives,'' the newspaper said.

Gold last week fell below US$300 an ounce in Asian trading as more supply became available and gold lease rates used for lending the metal dropped.
Golden Truth
(10/31/1999; 18:08:48 MDT - Msg ID: 17987)
TO GOLDPOWER
Unless the hedge funds have been ordered, oh i mean (asked)
to cool there jets! They know they can't make their fiat dollars if the whole system comes crashing down,right?
G.T
ET
(10/31/1999; 18:40:28 MDT - Msg ID: 17988)
AEL

Hey AEL - thanks for posting that piece from Yourdon's forum. I hope
everyone had the time to read and absorb its content. In conjunction
with the letter the IEEE sent to the Congress concerning y2k liability
legislation, the two sum up the story. It never was possible to 'fix'
y2k and consequently y2k will not be fixed. The computer-based
society as we know it today will cease to function in the same manner
and we will be forced to adapt to the new circumstances. I fail to
understand why we continue to kid ourselves as to the seriousness of
the situation and the effect it will have on everyone.

I just deleted about four paragraphs of comment because frankly, if
the reader hasn't figured out the situation by now, nothing I say is
likely to change that. I would like to point out one thing however.
When Another first came on the scene part of his message was an
attempt to get the reader to think outside his own limited experience
with the gold market. He did a great job of explaining how one's
perspective plays a huge role in one's ability to understand a complex
and fast-changing situation. Through the last couple of years I'm
sure most of us have learned a great deal about how things actually
work and how they might work down the road. FOA has done a fine job
recently of informing us what certain parties think will happen.

I believe it is important to remember that these now 'popular'
thoughts hold a certain bias also. I would hope Another would agree
that his view and that of his contemporaries is built on certain
assumptions about how things have been and thus they extrapolate to
some degree how things are likely to be in the future. I'm not
convinced the mitigating factor of y2k has been properly inserted into
this mindset, at least over the short term. For the Euro to triumph
as the new reserve currency it requires an economy which demands it.
The same interconnectivity problems likely to affect the value of
today's money will certainly affect the value of tomorrow's money.
Mises would be quick to point out that money itself also has its own
supply and demand features. Although many can see the advantage in a
new world currency, for it to have any meaning the economy which would
use it must be in place to do so. I'm not convinced the economy as we
know it today or even how we might perceive it with a different world
money is all that certain of a prospect. Demand for the underlying
asset which powers this economy, oil, may suffer the same consequence
as demand for the other main ingredient, information, if the latter
loses much of its significance.

ET
Kane
(10/31/1999; 18:46:30 MDT - Msg ID: 17989)
test
test
FOA
(10/31/1999; 18:56:22 MDT - Msg ID: 17990)
Comment
TownCrier,
That is some good point you are making!

TownCrier (10/29/99; 19:33:12MDT - Msg ID:17861)
-----the CFTC should treat financial futures [such as those for Treasuries] in a fundamentally different way than futures based on metals, agriculture or energy." ----
----that financial markets did not rely on financial futures for price discovery---------
----Clearly, the case is clear that the aforementioned real underlying assets, including metal (gold), DO rely on the futures markets for price discovery.----
----------------------------
TC,
Everyone should read your entire post to grasp it's full impact. I took part of it to create an image.

Slowly, everyone is coming around to understanding how our gold markets got so far off track. The official determination of what constitutes "buying and selling gold" never started this way. In the beginning gold was wealth and people traded it as money. Jump ahead to the US timeline and we see currency a gold loan that didn't pay interest as it was the US dollar. You loaned your gold to the treasury and they gave you a contract stating that your metal was held until asked for. Your contract stated that 1/35 ounce of gold was owed you, on demand. Because no one asked for their
loan to be repaid, the treasury just kept creating more loan contracts even though there was not enough gold to repay with.
After this "gold loan scam" went bust around 1971, they went back to using real gold again. The government allowed trading in physical in the US just as it was done in the rest of the world prior to this event. Then someone used the gold fabrication industry as evidence of a "need" to create a US futures market so suppliers could paper hedge risk. No need to make the point that this paper market was of little need as the gold industry had worked well for thousands of years without it. Indeed, another form of gold derivatives was just born. The gold market was destine to evolve
again as the distinction between trading real bullion and betting against someone on the direction of the metal's price movements became one and the same. People accepted that a gold derivative was just as good as gold as the pre-1971 dollar was. We came full circle.

How could we now expect modern traders and investors to mentally see that our modern "gold derivatives" were not the same as bullion when they viewed Comex futures and options as buying real metal in paper form? Today, investors see the "intent to supply gold" (a short) as bullion in someone's warehouse. Conversely, they also see "the intent to buy gold" (a long) as the total purchase price in cash waiting in the buyers bank. Both of these perceptions are false conclusions that a leveraged contract is enforceable by law even if the collective total performance is impossible. Just as the US dollar could always cover some gold conversion demands, it's credibility was destroyed when full conversion was asked for. This is the same fuel that drives the paper gold markets today, as long as people ask for more new contracts replace old contracts the game physical supply perception works. In like form, just as currency inflation cannot stop as deflation will ensue, the inflation of modern gold paper cannot stop as a run on the vaults will result.

After the Washington Agreement we can see that this entire arena is a house of cards built in the middle of a political currency firestorm that will strain the credibility of these contracts to perform. Eventually, as these market contracts deflate the loans will fail as the physical product it's legally required to deliver cannot replace the total number of paper demands. This house is going to burn along with everyone (long and short) that's in it.

Further to your report:
-----------------------
---That is important to grasp (and is why we repeated it) because there is currently a disparity between the availability-vs-demand of real gold when compared to the abundant trading of "paper gold." When real gold can't be moved adequately at the "paper gold" pricing levels, there will be a sharp adjustment in which all hell breaks loose due to the global scale of the gold derivative markets. Read on...-----
----Traders said that rumours are circulating suggesting that central banks, especially the Bank of England, had been lending more gold to the market in the hope that lower lease rates would keep the prices down and help producers to cover positions.-----------
----With the Bank of England in the midst of a series of auctions, all circumstances and developments reveal clearly that their goal was not to garner the highest price for their gold...to convert a "sterile asset" into a great number of dollars, euros, and yen with which to draw interest.
First, you already know that gold can earn interest. Second, the pre-announcement of the sales was a sure-bet to shake the confidence of gold-holders with the hope of stemming demand and dropping the price. And third, now you see reports of them lending in the hope to lower lease rates,
which in turn is hoped to keep prices down. Does this sound like the actions of an entity that is looking out for an interest to gain the best possible return on an asset that is being auctioned? Say it with me now...."No!"-----
--------when the wheels come off of this gold derivative market, the only position you will want to have is gold in hand. The dollar itself will slide right along with spurious gold contracts as it will be the denominator of those failed contracts. Oh, sure, more dollars are better than fewer dollars; but gold in hand will be better than any amount of paper that tries to play as its suitable substitute.---
----------------

TC,
Someone is trying to keep perceptions going that real gold is in good supply, even if it is loaned gold. Look at MK's report:
---------------

USAGOLD (10/29/99; 9:57:36MDT - Msg ID:17807)
MARKET REPORT(10/29/99):
------...Several weeks ago, gold bears cited the lifting of a Russian export tax on precious metals as good reason to sell the metal. That tax was extended for six months yesterday with no comment by the anti-gold group frequently quoted by the mainstream financial press.---------
------------------

Thanks Michael,
I posted right after that announcement that the Russians were the best gold traders in the world. Did anyone believe that they would Preanounce their lending gold so as to drive the lease rate down for their own loss? At that time the rates were way up as all the major players were still using
the public rates. They truly needed someone to scare some business into a "let's work this out privately position". The Russian statement did the trick as rates retreated, but it didn't cancel anyone's liabilities because no gold was loaned.

As TownCrier makes obvious, this huge paper market is in real stress and the signs are leaking out. Now look at the Cambior news as posted from SteveH #17867:

---------------------------
MONTREAL, Oct 29, 1999 ( BUSINESS WIRE ) -- Cambior Inc. ( "Cambior" ) announces that it has reduced its gold hedging position by 1.3 million ounces. This reduction, made with
a view to improving its aggregate hedging position, results from the purchase of one million ounces of gold ( the "Purchased Ounces" ) at an average price of approximately $300 per ounce and from the closing out by counterparties of other positions totalling 300,000 ounces. The one million ounce purchase was completed primarily through the bullion markets with the assistance of various parties to the recently executed standstill agreement ( the "Standstill
Agreement" ) among Cambior and its lenders and hedging counterparties ( collectively, the "Financial Parties" ) . The terms of the Standstill Agreement are summarized in a press release issued by Cambior on October 27, 1999. --------------------------

I have to ask the question: In today's context of what "gold is", does anyone know exactly what they did? Did they actually borrow that much physical gold to initially create this deal that went bad? If so was the money created as the "gold was sold for the loan" still waiting in a bank. If not, where did they get the cash to buy the new 1.3 +/- million ounces? Did the gold that was now purchased, come from a "new borrowed deal"? If so, who owes physical to who now? ---more from the SteveH post----
---------

The above mentioned purchase and close-outs are expected to generate a net crystallized liability for Cambior of approximately $33 million which will be reflected as a non-cash, pre-tax charge to earnings for a corresponding amount in Cambior's consolidated financial statements for
the third quarter.

Under the terms of the Standstill Agreement, the above-mentioned liability will be treated as a demand loan to Cambior by the Financial Parties. The determination of more specific repayment arrangements will form part of negotiations with the Financial Parties under the Standstill Agreement regarding the elaboration of a plan for the orderly fulfillment of Cambior's obligations to the
Financial Parties over time ( a "Definitive Plan" ) .
-----------------------

In the above, if a "net crystallized liability" is the same as the "liability will be treated as a demand loan to Cambior", then who covered the real gold cost and who is in debt now? Or was the first above statement
-------------
"from the purchase of one million ounces of gold ( the "Purchased Ounces" ) at an average price of approximately $300 per ounce"
----------------
just the buying of "paper gold ounces" to settle a physical problem with a new "bookkeeping problem"?

Truly, every investor should follow these deals gone bad and ask questions so as to understand what they are really doing. In the case of Cambior, I need someone to clarify it to me? If all the counterparties cannot clearly identify whether they are working to settle loans with "real physical
gold" purchased without liability, then investor assets may start walking. When someone says they covered a hedge, the company owners (stockholders) need to know if it was a paper hedge covered by trading more paper or was a new gold loan used by a broker to supply the cover.

Just as TC pointed out above, why does the gold price need to ne so low for the conclusions of contracts based on physical metal in good supply? Indeed, in a free market everyone must lose a little money on both sides, right? If it's not free, investors may just start walking from this whole paper arena and begin to buy only physical. Or is that the reason the major market makers are so quiet.

In the case of our modern gold markets, I ask the same question that Robert Redford asked in his movie "Three Days Of The Condor";
-------"Why is everyone so shy?".------------


FOA

Cavan Man
(10/31/1999; 19:39:07 MDT - Msg ID: 17991)
Hello FOA
In a post the other day a Mr. PH in LA offered much deserved compliments and asked if you might someday write a book. He also asked how much of what you know is derived from academia and how much from international real politik (sp). I think that is a pretty good question. what can you tell us? Thanks.
law
(10/31/1999; 20:08:28 MDT - Msg ID: 17992)
FOA
You need not reply to my previous question concerning the advisability of buying call options with the intent to exercise in order to keep pressure on the shorts.

Although some of the chess match is being played out in the paper market, the "out of thin air $s" used by counterparties "to heal their pawns" can be left on the board...avoiding the risk of paper by "getting physical"!

Thank you for your last post!

Striving for understanding!
blueboy
(10/31/1999; 20:19:17 MDT - Msg ID: 17993)
YGM
Thanks for the link to Dr. Coleman's book. I already knew the "what" but I needed help with the "who". Does Dr. Coleman put out a newsletter? If so how can I get it?

Thanks,
Blueboy
TownCrier
(10/31/1999; 20:20:57 MDT - Msg ID: 17994)
Hear ye! Hear ye! An update to USAGOLD's "The Gilded Opinion"
http://www.usagold.com/NewGoldMarket.html"The Dawn of a New Gold Market!" As compiled from an assortment of World Gold Council data, presentations, and commentary, this latest addition to The Gilded Opinion will walk you through the "Washington Agreement," introduce you to the IMF plan to re-book gold reserves to market values, and will show you a real-world example from Southeast Asia of gold in its role of monetary wealth, par excellence. Grab your torch and follow the map (link) provided above.
_______________*** a sample ***_________________
On Sunday 26th September a new era dawned for gold. For the first time in almost exactly 28 years, since convertibility of gold into US dollars for official holders was suspended on 15th August 1971, the governments with the largest gold holdings made a positive joint statement on gold. (Those three decades have been a period in which gold was persistently sidelined by the official sector attempting to demonetise gold.) It is a remarkable achievement. It is extremely rare for independently-minded central banks to agree to co-ordination of this magnitude on reserve management. France and Germany, who are known to have led the initiative, have the tradition and natural understanding of the intrinsic value of gold. They understand that gold is no one's liability, that it is universal and eternal. They hold a large proportion of their external reserves in gold because they believe that gold is the only thing that will ultimately secure a country's monetary independence and sovereignty.

As the Millennium dawns, gold is poised on the threshold of a new era, promising as ever to bring excitement into our lives. Arousing always human passions, its mystique will never fade. As a Renaissance courtier counselled his ducal master "Cherish the ancient, cherish the golden, you will not be an antiquarian but a man of gold."
Number Six
(10/31/1999; 20:32:08 MDT - Msg ID: 17995)
blueboy - Coleman
www.sightings.comHi,

even better, you can listen to Coleman at the above link, go the audio archives section and do a search on his name. You might also be interested in John Whitley.

Coleman has a newsletter and a website, you should be able to find the site via www.sightings...
KiwiChick
(10/31/1999; 21:10:19 MDT - Msg ID: 17996)
POG manipulation - possible?
All I know about the POG I've learnt here over the past few weeks so I may have missed something but what I want to know is ...

What stops the big boys making big paper gold sales and purchases at low prices amongst themselves? A kind of gentlemen's agreement thing to make it look as though a lot of off-loading of gold is going on at low low prices thus dragging the price down. What stops them squaring up later off-camera? Can this happen? Does this happen?
Jake
(10/31/1999; 21:21:31 MDT - Msg ID: 17997)
KiwiChick
Very astute observation!! If you picked that up in two weeks, you're going to be an instructor in PMs by years end.
It's almost the same method used by Criminals to launder drug monies. ie they buy property under an assumed name and then sell it back to themselves, using another alias, at a much higher price and then bank it or invest it under yet another alias.. sound confusing? IMHO there's not much difference between the drug barons and the gold manipulators. jumpin off the soap box now.
jake

Golden Truth
(10/31/1999; 21:42:50 MDT - Msg ID: 17998)
TO F.O.A
Thanks for the continual erudite updates. Personally i can't wait for the wheels to fall off, but common sense tells me we will not see the P.O.G over $300/oz even by the end of the year.

Why? I've come to this conclusion due to the telephone conference i listened to when "Bobby Godsell" from Anglogold mines in South Africa, the worlds largest was in England to protest the B.O.E's GOLD auction?

In that telephone conference he mentioned that the P.O.G would be $300/oz before the end of the year. Obviously he knew about the 15 C.B's getting together! To bad the GOLD mine owners didn't listen eh?

My point in all of this is that if the P.O.G was going to be higher i,am sure he would of said so!. To make his point all the more notable.
What i found out or discovered after being a faithful GOLD bullion holder for close to a year is we're right back to where we started from price wise.

I agree there has been some massive changes lately and i,am very excited and hopeful, but i,am so sick and tired of the manipulation i could just "barf". When will it end or at least when are they going to lose control that is evident to the little guy. Meaning, reflected in a nice increase in price of GOLD? Or is this GOLD market bigger than just one person? myself included,it's all very discouraging when everyone else seems to be making money even in penny stocks or $1-$2 dollar stocks and all we ever get is GOLD down $2-$5 dollars or whatever? When is this thing going to break wide open? Please tell us when or maybe a little hint,O.K?
Thanks for being here we,ed be lost with out you F.O.A
G.T :-)






Number Six
(10/31/1999; 21:58:15 MDT - Msg ID: 17999)
KiwiChick + new POG :)
Good point KiwiChick - never thought of that :)

Saw this gem over on Kitco

Enjoy!

Date: Sun Oct 31 1999 23:15
Gambler (FOR SALE - ONE HUNDRED AND TWENTY SEVEN 1-oz Gold Eagles!)

ID#434132:

Copyright � 1999 Gambler/Kitco Inc. All rights reserved

Yes, gold lovers, it's true. They're for sale! I want to do my small part in helping out the desperate shorts to cover. So spread the word to any gold shorts you may know of. Let all of those mega-short Australian producers know they're for sale, too!

As posted last summer, my goal was to accumulate atleast 100 one ounce gold eagles prior to BOE's second auction on Sept. 21st. My purchases began last spring and accelerated into July ending just prior to the auction for an average purchase price of $274.

Now, what standard of fair value shall I use to determine the sale price of my 127 1oz gold coins? Because gold is valued in US dollars, perhaps I should base its fair value on the current US trade deficit. Can we agree on an approximate annual 300 BILLION give or take a few bones? Let's see, there's atleast a US$ trillion or so out there in foreign hands from the cummulative trade deficit that will come back soon as the dollar continues to decline in value and interest rates continue to rise. ( Reminds me of late 60's when Europe had all those greenbacks! ) The U.S. claims to have about 260 million ounces or so in its coffers. Assuming this hasn't been loaned out already, we have ( 1oz=$300 ) 260*300=78,000 million or 78 billion in gold which is roughly ( 300 billion / 78 billion = .26 ) or 3 months worth of gold.

But since we have atleast a trillion out in foreign hands, that equates to 1 trillion/260 million ounces=3,846 per ounce gold. Should I sell my 127 coins for a total of 127 * 3,846 = $488,442 ? Nah, that's change for chumps.

Okay, forget about the trade debt, then how about if I base fair value for my gold on US Money Supply. M-1, M-2, M-3?

Well, M-1 lemme see chere: 1.2 trillion / 260 million = $4,615 per ounce. Nah, as much as I want to help those saps, it's still chump! M-2 seechere: 4.6 trill / 260 mill = $17,692 per ounce. hmmm 127x17,692 = $2,246,884. Well, I must admit that's a little closer to what I had in mind. But, well you know, I love my gold and all so let's consider US government debt at about 5.6 trillion - no better yet let's use M-3 coming in about 6.2 trillion.

6.2 trill/260 mill = $23,846 per ounce! That equates to a grand total of US$3,028,442.

Now, all things being fair and equal, this would be a fair price to sell IF there wasn't a huge annual gold deficit in addition to all the forward sales! Well some figures suggest anywhere from a 100 to a 150 tonnes per month. Okay, Mr. Gold Short, I'll give you the benefit of the doubt, we'll use 1,200 tonnes per year as our deficit. So I'm going to have to assess you an additional premium and mark up fair value from wholesale to retail, let's see that comes to:

3,028,442 x 3 = $9,085,326!

= $71,538 per ounce

TownCrier
(10/31/1999; 22:00:43 MDT - Msg ID: 18000)
Very nice post, Sir FOA (same goes for yesterday's early long post)
You did a fine job of putting that info into terms that should be very easily grasped by all. Anyone that might still see gold futures and options as attractive investment opportunities is either:
a) asleep at the wheel,
b) much too confident in their singular ability to outwit the deck that is stacked against them where all others will surely fail, or
c) a brash gambler that thrives on the longest of odds.

A quick final word for KiwiChick and Jake regarding POG manipulation among the "big boys." If you think about it, their primary role in the paper trading operations would be (until the absolute end of the game) as sellers only. The only buying demand to offset their sales would be the host of unwitting small speculators who mistake participation in the derivative markets as somehow equivalent to physical ownership, but one in which the leverage opportunity gives them the false sense that it is the superior investment vehicle.
Number Six
(10/31/1999; 22:01:45 MDT - Msg ID: 18001)
Golden Truth - when will it end?
"When will it end or at least when are they going to lose control that is evident to the little guy. Meaning, reflected in a nice increase in price of GOLD? Or is this GOLD market bigger than just one person? myself included,it's all very discouraging when everyone else seems to be making money even in penny stocks or $1-$2 dollar stocks and all we ever get is GOLD down $2-$5 dollars or whatever? When is this thing going to break wide open? Please tell us when or maybe a little hint,O.K?"

IMHO in precisely 8 weeks time. (If not before)...

Think about it :)
elevator guy
(10/31/1999; 22:30:14 MDT - Msg ID: 18002)
@FOA
I have been waiting for the price of gold to go through the roof,and while I am waiting, I had a thought. (First time for everything)

How about this scenario- The shorts continue to sell paper into the market, keeping the price low, and protecting the guilty.

The paper price of gold never, never, actually goes up much at all. It just meanders all over the chart, keeping the paper dream alive by teasing paper players with small turns up and down.

Meanwhile, the real physical price of gold increases, and then the Euro increases. (Most real big physical buying is "off line", and no one hears about the price details) The dollar is dumped for gold and Euros, and Americans never hear anything about it in the media. The dollar begins a massive devaluation, which for all practical purposes is not mentioned in the press. (We wouldn't want to upset the financial infrastructure, you know)

But at the gas pump, the effect is seen. When buying a gallon of milk, the effect is seen. Etc, etc. A change occurs in our economy, and our lifestyles, and no warning bell was sounded. No one told us when to run, and now we are left behind, in a world growing increasingly cold.

The shift in the political landscape happened while we were getting our world news through the media machine, and the earned value of our hands was stolen without a shot being fired.

Is it gonna happen like this? Will there be no one single day, or landmark event, to mark the change in the power structure of the world? Will the media machine think up some clever cause, to attribute the changes to? Will the coming changes have no telling thunder, and all US citizens merely adopt to their new lower standard of life, just like people adapt to the cold by "bucking up", and wearing an outer coat?

Is this the view down the road ahead, FOA?
Scrappy
(10/31/1999; 23:02:57 MDT - Msg ID: 18003)
elevator guy
just a thoughtI've been complaing for the last several years about prices. 'They' have kept saying "there is no inflation". I don't knokw about where you live, but my water is up every year, my electric is higher every year, dairy products are insane, gas is prohibivtive, cereal, bread, fresh veggies, condiments, all seem to have a steady increase. The only things that seem to be more affordable are non-essentials that are produced with slave labor in struggling countries.
megatron
(10/31/1999; 23:03:14 MDT - Msg ID: 18004)
Gold info
My personal bold prediction this week is that terribly falsified data will start being used as the weapon of last resort if the shit hits the fan as we approach 2000. They have no morality. Just because it's against the constitution to sell the gold in ft. knox is such a triviality to these types (Rubin, Greenspan, et al). Murder is illegal, that didn't stop anyone. Even if GATA gets one or two of em' into court they will LIE. Macro-economic events are going to have to completely over-whelm the system before these parasites will have their hooks cut off. The real fun is watching the lies and knowing the reality.
blueboy
(10/31/1999; 23:06:21 MDT - Msg ID: 18005)
Number 6
Thanks for the info I will check it out.

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