Inco (N:TSE,ME) and the Government of Newfoundland appear to be close to a deal that would spur development of the Voisey's Bay nickel deposit, reported The Financial Post. The company was scheduled to meet with Brian Tobin's government Tuesday to hammer out an agreement so work could start on the project as early as June. Mr.Tobin reportedly hinted on Monday that Inco was ready to budge on the issue
of processing ore in the province, which has been the sore spot in negotiations surrounding the deal for over a year. An Inco spokesperson declined to comment about the talks and would not discuss whether the company is prepared to move from its position that building a smelter in Newfoundland was not economically viable, but did say that Inco remains hopeful and optimistic that it can 'get an agreement by the end of the year.' However on another note, the provincial minister for energy and mines, Roger Grimes, warns that although there are signs of progress, 'the government and Inco do not have a deal'. He adds that the government has not yet received a formal proposal from Inco. There was little information released on costs and development of the proposed plant, but analysts estimate five years and almost $2.0 billion.

Some here in gold country think that this could be the real deal. It would appear that this could be similar to Franco-Nevada's deposit near Midas, NV (same region). I don't own any shares, but it looks interesting. They are a small player and I don't know their book shapes up, anyone have more info?

Great Basin Gold (GBG:VSE;GBGLF:NASDAQ) reported that ongoing continues to delineate what it is calling very extensive high-grade gold/silver vein systems at its Ivanhoe property in Nevada. The company says that 42 completed holes confirmed pervasive and extensive feeder vein systems to the overlying Hollister gold deposit, which currently has a resource estimated at 2.8 million contained ounces of gold and which is now interpreted as a near surface leakage
anomaly to an extensive, structurally controlled gold system below.
In the holes drilled to date, the company says that a total of 64 vein intersections were made. The grades of vein intercepts range from 0.21 ounces per tonne (oz/t) gold-equivalent to 5.77 oz/ton gold-equivalent, and include highlights of 10.6 ft grading 4.96 oz/t gold, 11.4 ft grading 2.94 oz/t gold, 4.3 ft grading 4.84 oz/t gold,
2.0 ft grading 1.86 oz/t gold, 3.8 ft grading 1.90 oz/t gold, 9.9 ft grading 1.07 oz/t gold, 2.9 ft grading 4.11 oz/t gold and 19.0 ft grading 2.51 oz/t gold. The latest results include highlights of 19.0 ft grading 2.66 oz/t gold-equivalent, 2.9 ft grading 4.22 oz/t gold-equivalent and 4.0 ft grading 0.94 oz/t gold-equivalent.
Great Basin reports that core drilling is outlining and extending multiple vein systems on the property that trend east-west and dip to the south, two of which, Clementine and Gwenivere, were reportedly confirmed over strike lengths of 1,400 ft and 1,000 ft, respectively. Gold/silver mineralisation was extended over 500 vertical ft by
drilling on several sections along the trends. The Clementine and Gwenivere vein systems remain wide open to depth and strike, and Great Basin says it anticipates significant extensions to both trends.

Representative [??]: "As the stock market reaches dizzyingheights, does that not represent, in a sense -- in a sense -- anincrease in the money supply, and is the FED concernedspecifically about that?"_ . _ . _ . _ ._ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _"That, that's an interesting question, because what we're dealingwith is distinctions between money and credit in certainrespects, or claimings. And the issue of asset value changes,which clearly are not the same thing as an increase in the moneysupply, are none the less interrelated and I think what we try todo, with hopefully some success, is to be able to understand theinter-relationships between money on the one hand, asset valuechanges on the other, and how both impact on the real economy. Iwish we knew more about a lot of these things. They continuouslychange and we continuously get proxies for what we think realmoney is, and find out that it's not a useful proxy." -FederalReserve Chairman Alan Greenspan, semi-annual Humphrey-Hawkinstestimony (Day 2) to House Banking Committee, 24 Feb 1998_ . _ . _ . _ ._ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ . _Regards, Journeyman

Oro,

Below are your last words of your last post. Assuming your source figures are accurate and allowing for computational inaccuracies, I see a significant finding in your numbers, but I am not sure exactly what it is. Let me explain. You have created an addendum to currently money supply theory. I presume this is your add-on (M5-9) and certainly worthy of deep consideration. In essence you have accounted for all liquid to semi-liquid financial assets and then tracked their growth over time. To aid in interpreting the significance of the various rates of growth in each asset class, I think we need to evaluate the level of risk to each M-class were the overall stock market to 1) remain steady (an unlikely event), 2) fall 10%, 3) fall 20%, 4) fall 30%, 5) fall 40% 6)finally, fall 50%. First we must define Stock Market. For argument sake we could assume the stock market is the broader indices and any representation of all stocks in the market or held in funds. Certainly the curve is skewed in favor of index stocks. Nonetheless, taking into account the various considerations of stagnant through a 50% correction to the "stock market," what would the affect be on each M-class as it fell through these various levels? I ask this because it seems that each M-class builds on a more fragile and less liquid asset base such that any redemptions from a higher M-class, of necessity, knocks value from the underlying class such that a cascading affect would work its way exponentially through to M-1, drying it up significantly. In other words, M-1 is now held hostage to a new financial era that can't afford a falling stock market, as the cascade or trickle through affect would devastate it. Any move to a cash position in any M-class above M-4 would devastate the system. The higher up the M-class you travel to liquidate the greater the cascade affect against M1-3. Finally, M-6 through M-9 are built on equities (for the most part). It is here first that the waterfall would begin. Any cash positions created from redemptions or sell-off here may go into bonds or checking but as redemptions ensue in equities, less cash would be redeemed and the corresponding build in bonds or checking would of necessity be reduced. If one were to plot the affect of M1-5 from a sell of in M6-9, I would guess one would see an expansion in M1-M5 but inherent in M1-M5 would be a loss of confidence in any form of paper asset. That could further starve M1-3. It is fascinating to think it through but your model shows an otherwise stable system out of equilibrium and any adjustments could be swift and unmerciful as it tries to find homeostasus(equilibrium?).

Oro -- Putting it all together, and ignoring small discounts we have:
M4 M3 + Short term bonds at face value held outside retirement accounts..
M5 M4 + Intermediate bonds and long bonds at market value held outside retirement accounts.
M6 M5 + All non retirement holdings of mutual funds (not including money markets)
M7 M6 + Individually held stocks outside of retirement plans.
M8 M7 + 50% of vested portion of 401K plans.
M9 M8 + 50% of total vested retirement accounts excepting 401ks, + 25% of 401 K plans.

So we can now look for a shortcut to obtain these figures for total liquidity. This liquidity figure essentially relates all financial assets; currency and currency equivalents, securities exchangeable on the open market for currency - tradable assets.

In Tables L100 and L9 in the Fed Flow of funds report (URL above), is a figure that is easily converted to reflect this: Total financial assets - Q2 standing at over 32 $t, less Pension assets, just under 10 $t, less equity in non-corporate business, just over 4 $t. This leaves 18 $t in the hands of individuals. From Table L101 we have cash and securities of corporations at 7.7 $t less 6.5 $t in illiquid or non-financial assets. Leaving 1.2 $t.
Total 19 $t. In 1993, this total was 11.4 $t, growing to 12.6 $t in 1995, and 15.2 $t in 1997, giving 10% growth in the first two year period to '95, 20% in the 95-97 period, 25% in the next.
Is that not vast excess? Would it not be vast excess if during this time nominal GDP rose less than 5% per year annually, and only 22% over the whole 5 year period in which liquid assets grew 51%? If incomes grew only 24% over this period? If in parallel, personal indebtedness grew 30% and the rate of growth in liabilities grew from 7.4% to 9.2%?

MK,

From yesterday,

"Though the shorts are being unwound in the paper markets without much
difficulty, unwinding the shorts in the physical market are another
matter entirely, and the activity surrounding yesterday's auction is a
good example."

Can I ask why the auction was so horribly 'undersubscribed'?
Since physical is still so short, conversely, demand should be high, why were there so few bids? I am completely perplexed and confused by the outcome.

MK, anyone?

Journeyman (11/30/99; 21:16:09MDT - Msg ID:19968)
The Great Flation Debate: Terminology II, The Application

Isn't this the (I shudder to use the word)Stagflation that some of the group was having definitional fits over awhile back?

SteveH - the point is that the growth in monetary substitutes necessary for the growth of output (however bloated that figure may be) has expanded significantly. This means that the marginal effect of more "money" - even that created by the markets themselves is going to near 0.

Journeyman - deflation follows inflation. Prices rise in the deflation stage much more than they do in the inflation phase. Why? because the central bank fights the destructive deflation by pumping up the monetary base - M1 to replace lost money substitutes destroyed in the deflation. The M1 currency is what used to be convertible to gold. It is that which is important in determining price levels in the currency.

To Oro & Others re "Who Dares Pull the Gold Trigger?"Good morning, all!

Master Oro, thank you so much for the very lucid explanation of your calculations and your through process regarding the dollar index. While you have clearly shown that it is not easy to arrive at an appropriate dollar index calculation, we can state with certainty that the dollar�fs reserve currency status has allowed the US to claim a disproportionate amount of the world�fs resources and products during the past decades.

The reserve status and relative strength of the US$ has also been a cornerstone of the US�f political, economic and military influence in the world. A weaker dollar would severely threaten the status of the US, and for that reason an action that would damage the dollar is in a sense an act of �geconomic warfare�h that will most likely be taken very seriously by the US.

It is clear that gold is a key competitor with the dollar, and that we must always consider the above when evaluating gold scenarios.

If you don�ft mind I would like to delve into this for a while.

From a post of yours at Kitco (Date: Wed Jul 21 1999 05:31
ORO (Is the "final" gold rally coming? Part I) ID#71231:)

�gFrom the 50s to the 60s oil use in general and Gulf oil in particular rose in significance. But the gulf does not believe in fiat and very much believes in the value of the oil and in the value of gold. Furthermore, true democracy is not at issue in these countries and the rulers can take a long term approach to obtaining value for their oil. Naturally, they would try to obtain as much gold as possible for their oil. When they think as much gold as is going to be obtainable is in their hands, they will force their view of gold's value on the world so that all know their riches.�h

Much of the debate here at USA Gold centers around the ME countries�f �gpulling the trigger�h that destroys our gold paper pyramid. This would clearly be an act of war on the US – would they really do it?

-Kuwait would not exist today if the US/Britain had not fought Iraq.
-The US offers major military support to SA.
In a sense, these countries are almost like �gStates�h of the US, and I have doubts about their ability to act independently of the US on the world stage.

How is it conceivable that they will take an action that will destroy the dollar and will surely ruin their relationship with the US?

The only possible scenario I can see is where there is a pan-ME/Islamic alliance that turns the ME away from US/British control. But this also seems to be far away�c�c..

Thoughts?

Japan is also sometimes mentioned�c�c.they have a huge pile of US$, and they will be acquiring many more in the upcoming fight to save the $/yen rate (http://www.bloomberg.com/bbn/topsum.html?s=c70f7a1d4dc220a2273e0b3df16a4a86). But Japan too has long lived under US protection, and I don�ft know if they would dare step away from that relationship. They were supposedly warned not to buy gold with $ in the 70�fs, and they seem to have been faithful to the warning.

The only one who would have both the will and the strength to seek independence appears to be Europe, and perhaps this is reflected in their recent announcement to freeze lending gold.

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

One other question/topic – ME gold purchases:

�gORO (11/01/99; 00:17:23MDT - Msg ID:18006)
Canuck Gold (10/30/99; 22:41:40MDT - Msg ID:17946)
Though not posted for my attention, I think this can be answered in quite a straightforward manner.
1. Oil is traded for gold now, and always has in one way or another. My estimate is that Arab oil is trading its output at a minimum of 1500 tons per year, and a probable 3000, top possible value is 4500 tons per year.�h

**My question:
If we have ME gold purchases of gold (monetary demand) of 3000 to 4000 tons, this would be equivalent roughly to global non-monetary demand, and more than global production. Where could they find 4000 tons per year in addition to the 4000 tons to fill non-monetary demand?

Do I misunderstand the figures or is there another source of gold?

TIA for sharing your thoughts,

THC

New York is unkind to Au this morning after an uneventful overnight trading session.

If these guys don't settle this fairly soon I'm going to have to change my handle.

I am a lurker and now a refuge from the Kitco Forum. I have read with ever increasing interest and respect the thoughts of the posters on this forum and have come to the conclusion that his is as good as it gets in discussion groups on the gold market. "Good as" is very good indeed!
I ask you in advance to please pardon me if this point has already been discussed, but it seems to me the question of the price of oil to gold (or visa versa) hinges on the cultural dynamic here. My understanding is that the ME countries do not value highly fiat currencies and at best use this exchange medium as a short term intermediary step in order to acquire gold- their measure of true money and wealth according to religious and cultural values. Given this premise, it seems to beg the question that since fiat currency is given little value in that particular cultural landscape, would it not serve those states better in their view to keep the POG, as expressed in fiat currency, as low as possible in order to maximise the exchange of oil for gold? Would this not enable those countries to purchase a wealth base very cheaply in exchange for oil. So, these people are not of the CABEL, but perhaps they exploit the situation with a chorus of smug snickers directed at those of the gullable west for allowing them to do this. To (some?)greater extent this would explain Kuwaite's behavior and that of Jordan in dumping physical supplies on the market. Would this not be in their eyes an investment for the future?

Comments?

MARKET REPORT(12/1/99): The strange goings-on surrounding Monday's
Bank of England gold auction carried over to New York yesterday where
162,650 ounces of gold were deposited at the COMEX warehouse. (Please
see yesterday's report below.) This is an unusually strong addition to
stocks that will show up as a little more than a blip, and the fact that
it occurred on First Notice day suggests that somebody is asking for
delivery -- a rather large delivery -- and someone else is
accommodating. In fact, that is the largest addition we have seen in
some time of tracking activity at the COMEX warehouses. Lenny Kaplan
tells us this morning that "demand has been good lately especially from
Asia." Standard Bank attributes yesterday's weakness at the close as "a
Fund related sell-off." Standard also reports open interest declining to
168,186 lots -- the lowest level since March.

That's it for today, fellow goldmeisters. See you here tomorrow.

Marvelous, Peter! I knew I was leaving myself open on that one. You make me feel like a newbie again.

http://www.usagold.com/halloffame.htmlBefore you, I, and anyone else attempts to move forward with your line of questioning, have you first had a chance to review the oil/gold related post by Aristotle in the Hall of Fame link provided above?

As for thoughts on keeping the price of gold low...your idea is a good one, but at some point, those who have have purposely acted to acquire their monetary savings in gold would want to ensure that it was fairly valued upon the time of spending it. Gold can't become so discredited through propaganda and manipulations that others would view it as akin to the Russian ruble. Fortunately, gold is quite resilient and can take take a savaging with no lasting effects. In testimony to that, put a real gold coin into the hand of any child (or hold up a gold chain to any "savage" taking his first steps into civilization from the jungle) and witness their reaction. In this regard, a recent post by Tanglewild is most instructive...
---------
Tanglewild (11/28/99; 8:22:58MDT - Msg ID:19797)
Aristotle, Perhaps the quote about civilization and being relearned comes from the 1968 book by Will and Ariel Durant, The Lessons of History. A quote:

"If education is the transmission of civilization, we are unquestionably progressing. Civilization is not inherited; it has to be learned and earned by each generation anew; if the transmission should be interrupted for one century, civilization would die, and we should be savages again. So our finest contemporary achievement is our unprecedented expenditure of wealth and toil in the provision of higher education for all. .�.�. We may not have excelled the selected geniuses of antiquity, but we have raised the level and average of knowledge beyond any age in history.

None but a child will complain that our teachers have not yet eradicated the errors and superstitions of ten thousand years. The great experiment has just begun, and it may yet be defeated by the high birth rate of unwilling or indoctrinated ignorance. .�.�. Consider education not as the painful accumulation of facts and dates and reigns, nor merely the necessary preparation of the individual to earn his keep in the world, but as the transmission of our mental, moral, technical, and aesthetic heritage as fully as possible to as many as possible, for the enlargement of man's understanding, control, embellishment, and enjoyment of life."

Oro, once again, you astound me with your scholarship, and the same goes for Journeyman and SteveH.

There is not much I can add to this flurry of brilliance, but I will at least respond to ORO's question, since it appears to have been addressed to me.

In a word, "no".

When you are toting up the wealth of the nation, equities certainly belong among your "M"s. Their influence, however, should not be considered proportionate to that of the traditional "M"s in terms of there effect on supply and demand on Main Street. For one thing, equity investments are usually intended for long term wealth creation and not for short term spending. For another, equity valuations are famously unstable (often for demographic reasons as much as for economic ones). As such, they can revert to the mean or beyond at any unforeseen time.

I might just as easily have pointed you to the officially-released inflation numbers of the last several years. Although I don't have much more faith in them than anyone else at this table, the truth of your claim should have shown up in them long before now.

http://biz.yahoo.com/rf/991130/bd4.htmlBank of Japan Governor Masaru Hayami issued a rare statement, saying: "The Bank of Japan supports the recent action by the Ministry of Finance in the foreign exchange market and strongly hopes that market stability is restored as soon as possible."

Think about those carefully chosen words. I'm willing to wager that you probably thought the market already was stable, or at least in relative terms. As you can see, apparently it is quietly coming apart at the seams.

I take your point and will plunge into the uncharted depths of past wisdoms of this forum.

Here in Canada where I make my home there is a joke that one hears from time to time about Americans. With our continuous obsession with our wanting to define ourselves with a sense of separateness from those of the south, it does pertain to a provincial "blinkers on" concept of cultural identity, values, and world view. Canadians too have their fair share of this blindness, but the joke is the only one I know that makes this point. I hope I do not offend, but the joke is: "How does one tell a Canadian from and American? Answer: the American is the one that needs a map to tell him where he is..." obviously this partly pertains to insular outlooks that are not just the sole trait of the US citizen. A cultural landscape erects borders, not just political, that may limit views in many ways. The perceived value of gold in the ME is just one of them.

Thank you for your kind words of welcome. I hope I can continue to learn from you all, and in time from time to time contribute meaningfully.

http://biz.yahoo.com/rf/991201/lq.htmlEconomists expect the Fed to be adding additional permanent reserves to the banking system through a coupon pass, also.

Yesterday a.m. fed funds were trading at 5-3/4 percent. This morning they were at 5-11/16 percent. Looks like the Federal Reserve Open Market Committee might as well hike their target rate to 5.75% when they meet in December...the market is already preferring that level.

Galearis (12/1/99; 10:03:55MDT - Msg ID:19991)
@ TownCrier
"I take your point..."

Over these many months, I don't believe I've ever before been accused of having a point.

Assisting others with a financially-oriented worldly education in an entertaining and enjoyable setting...that's what it's all about. That's my "map."

((:>).

I too have been pondering the Arab gold situation. Aside from the obvious embracing of gold as money by some factions of the Muslim world, there is no obvious activity. My own speculation is that the Arabs are content to sit back right now and let the elephants fight. I think that we will see global conflict sometime in the next five years. From what I have read about the Saudi rulers, they are a canny lot. So I would say that you are right, they have enough money right now that accumulation of gold is the agenda. As long as the West wants to give it away, they'll take it!

Good question. Perhaps, tho, the question is too general. It assumes that supply is limited and that demand is increasing. Someone yesterday stated that equities are a zero sum game, and I believe that is also true in general in the paper gold market. The paper gold market is not demanding physical, at least not today from looking at the spot gold price which is down. It helps me to realize that noone that I know has any interest in gold as money and therefore do not demand any. They don't collect coins, don't wear much gold jewelry, and prefer procelain crowns for their teeth. Therefore I perceive that people in general have no apparent demand and what limited amount there is is easily supplied. Demand has not increased the price of gold and for whatever manipulative reasons gold has decreased in price for a long time. Therefore we can conclude that there is not a present political or monetary policy based demand for physical which is driving up the price.

This leads to Farfel's Despair, which is simply that what we choose to think about gold's value (demand) is not a present fact (supply).

Facts are important to answering the question in any case, particularly when formulating investment plans, and we need to have them here to verify demand. For example, we might assume that a bullion bank which is short is required to deliver physical on maturity. But I have not seem a bullion bank gold lease ageement, and do not know that this is a FACT. If the bank can supply the demand of the lessee by delivering currency or rolling the lease over etc., then physical supply and demand is lessened in importance.

Oro - Please forgive the presumption of my re-emphasizing your comment to SteveH:

"ORO (12/1/99; 6:18:27MDT - Msg ID:19981)
SteveH Journeyman 'flations
SteveH - the point is that the growth in monetary substitutes necessary for the growth of output (however bloated that figure may be) has expanded significantly. This means that the marginal effect of more "money" - even that created by the markets themselves is going to near 0."

In a world where most people have never spoken on a telephone, most have never owned an automobile, and many exist under deplorable living conditions, it is a shame that what you contemplate here is, at times, true. It is possible for the money supply to outgrow production. Despite excess money growth this year (which, in recent weeks, has begun to reaccelerate, BTW), signs of a slackening are actually increasing. But I suspect higher bond yields having shut down the mortgage refinance business has a lot to do with this.

It will be interesting to see if a possible slowdown in GDP can dampen rising prices. It certainly didn't work in the 70s when companies used price hikes to conceal stagnating revenues.

Lafisrap - (Parsifal, if you will) - thanks for your thoughts. I hope you don't mind my having stolen from them earlier this A.M.

Canuck - Maybe all this talk of desperate shorts unable to find the real stuff is just goldbug puffery, eh. I think the situation still favors the longs, my friend, but you make a good point about the degree of (or lack of) agony out there.

It occurred to me to try for message #20,000, but I'll leave that honor to another. Numeric rollovers have been too much on my mind these past two years; I'm now in recovery, and hoping that "normal" life will prevail, in as many ways as possible.

My own rollover "5-0" is tomorrow; I'm taking it very slowly, step by step, thoughtful, grateful for so much...

And so much to read -- you knights and ladies continue to surpass yourselves both in exciting times and quiet.

Another rollover, you'll see if you occasionally come in through the USAGold front page, will be Hit # 900,000. That means there are many lurkers reading us. Among them must be many who have good insights to share with us; much about commonsense life and economics is welcome here amidst the stuff about shiny metals. Please don't be shy in helping us put our puzzle together.

Aristotle,I am still in the process of cerebral download when it comes to your fine essay and explanation of banking,many months ago.
One small question:
If an enterprising person legally hand carried $8000.00 in Gold and $2000.00 in cash to an established off-shore locality where banking requirements on opening a bank were very low,could they do this:

Open a bank of their own using the $2000.00 for start up fees,than write a check using the value of the Gold as a reserve asset,and buy more Gold,or any other financial instrument,but keeping on hand the original $8000.00 of Gold.Untill they reached maximum asset requirements set by the LOCAL governments.

The reason I'm asking is I just finished a book by: Jerome Schneider who explains the benifits of having an off-shore bank of your own,and locations where a bank could be established for under $2000.00.

My main question is:Would this banks checks be honored outside of it's established domain??
Or is banking completly controlled worldwide,by the few?
Showing my ignorance....beesting.

http://www.usagold.com/cpmforum1. It is amazing to me to see the gold cabal "machine" systematically finding ways to drive the price of gold down. They sell at the open on the Australian exchange, when the market is thin, etc. They obviously have teams of traders looking for opportunitites to drive the price down. They're good at what they do.

2. Is there anything on the horizon that we gold bugs can do that WILL drive the price up and break the back of the cabal? Soon? The cabal says it cannot stand a price above $340 or so. Any way "we" can drive it past that and MAKE them stop their game?

Damage from Y2K will probably not make much impact within the first week or so in Janury. That will deflate the gold bug balloon and give the cabal the window to drive the price WAY down. That bodes ill for us gold bugs.

Comments?

Thanks
Gurn Blanston

"Over these many months, I don't believe I've ever before been accused of having a point."

My Goodness! My first post on this famous forum and I have already established a first!

I also enjoyed your little parable about introducing someone to gold for the first time, as I can really relate to that at first hand.

As a kid I developed a fascination for mineralogy, and the king of minerals for me (and others) was gold. Hence as a young pre-university student I found myself in the cool, dank, dangerous underground relm of Campbell Red Lake Gold Mine near Red Lake Ontario. Here I saw a great deal of the yellow and also learned a great respect for those who toiled with me in what most people would consider as appallingly dangerous conditions (they were!). For those of us who have shared these toils, the place of the common labourer will never be seen as something lower - no matter what the income. (The mine had a "good" summer that year and only one miner was killed and only one was maimed.) Some years later I worked a placer claim by hand with two others (one of whom you know as rhody on that other site) on the Bridge River in British Columbia. It was not nearly as dangerous, but at an average breathless temperature of near 100 degrees F. the discomfort was equally appalling. We did not get rich, but the small vial of nuggets that we brought represented a new level of richness for me that was not just measured in troy ounces. I still have my share and would not for any urging trade it for ten times the product of someone elses labour.

In some ways we must all have been that person who sees gold in a significant way for the first time- there is likely some similar causal event with all gold bugs as a basis for their affection for the metal and it certainly can't just be a wealth thing.

Sorry for sharing this personal meander into life and times.

WilloTheWartHog:
"they are a canny lot. So I would say that you are right, they have enough money right now that accumulation of gold is the agenda. As long as the West wants to give it away, they'll take it!"

A gold bug is as gold bug does, yes?!

Thanks.

>>>> When you are toting up the wealth of the nation, equities certainly belong among your "M"s. <<<< -----Part true. Only the value attributable to replacement value of plant and equipment, royalty value of patents and copyrights, goodwill, and a P/E based on current long term interest rates, should be considered a physical equity. The bubble value composed of postulated future growth should not be in any "M" equation.

PS, Thanks for the gentlemanly acknowledgement.

There are a few things one can do. Of course, buy as much physical gold as you can. You alone cannot move the market, but every little bit helps. Then, show some small coins to friends and relatives. Remember that the price of gold is a vote, so the more people buy it, the more the price will go up. And there is something to be said for seeing and feeling the stuff as far as motivating people to buy it.

Educate yourself on the history of money (especially fiat money) and be able to explain and defend your position. Explain that non-ownership of gold by citizens (whatever country you're in) is a strategic weakness.

If every person owned a couple of ounces of gold, the situation we are currently in would be nowhere near as threatening as it currently is. The manipulators may be successful in the short term, but when the market moves, they will be chewed up and spat out by the inexorable power of real money.

Sir, I haven't posted for some time - anyway wellcome.
What got my attention was your reference to Bridge River (second part of my handle derives from Bra-(lorne)- an area I really know more than well and done some placer mining - do you recall a guy "Woodchopper Eddy"? - and even had my son go over for several summers to muck out old adits a/or work underground on the Peter vein extensions.
The Bridge River/ Bralorne area, after being the largest gold (Bralorne, Pioneer and King) producers in Western Canada from the 30's`to the early 70's - were abandonded due to low POG.
Today a fully permitted new co. (BPN), with all facilities in place (including plant, mill and all the rest of equipment stands ready to go into production again as soon as the POG stabilizes above $300/oz. This was achieved after
exploring across the main faaults (Cadwaller, Ferguson -) aand by picking up the extensions, while the maain areas are far from being depleted.
By making a point you've made an impact - Best CB2

"What got my attention was your reference to Bridge River (second part of my handle derives from Bra-(lorne)- an area I really know more than well and done some placer mining - do you recall a guy "Woodchopper Eddy"? - and even had my son go over for several summers to muck out old adits a/or work underground on the Peter vein extensions."

Hello and thanks for the welcome. My we are mining the nostalgia today! But to answer your question, we met few locals up on the Bridge River. The year was 1977. The spot we were working was that section where the gorge narrowed as it wound down to the Fraser. Only a matter of a few hundred metres upstream, the paying ground ended, and it was obvious that the gold had come out of the numerous quartz veins and lenses exposed in the walls. I seem to recall, however, an old adit perched on high in the canyon and this may be the one you remember. I also recall that during the turn of the century, when this area was a placer mining frenzy of activity and they had to import Chinese labourers for this work, the Chinese in turn developed a healthy side venture themselves of removing the large boulders of nephrite jade that was also present in this outwash. Near our little operation one could stand on one of these boulders that was simply too big for them to winch out of the canyon. An acquaintance of ours a half century later took a little "run" up the creek (I forget its name) that emptied(in a an almost virtical fashion) into the bridge right at our campsite, and discovered the source of the jade "in situ". It has been over twenty years since those hands-on mining days of mine and the names are gone. The fellow who owned our particular claim was a wonderful old timer (with the hat and the chewing tobacci - right our of the movies) called Ned. And except for a group of "hippies" that used the big salmon pool just down from our workings for skinny dipping, we did not see a soul. The good old days! Oh how I miss 'em....

"Manipulators"
"The manipulators may be successful in the short term, but when the market moves, they will be chewed up and spat out by the inexorable power of real money."

I disagree. The manipulators have real money and control the fiat market. They can't be both that smart and controlling and that na�ve at the same time.


Sorry about mis-post

Hello Canuck, i to have become dissapointed in the so called GOLD shortage. If you read Robert Chapman's "Gold'silver,Platinum and Diamonds" 25November1999 at G-E .com, Chapman says on page 6 that "There has been some inventory buildup,but it is hard to say how it will effect total yearly volume" Unquote.
To me if somebody was short Gold why would they at least not purchase what Gold they could get their hands on right up to the production amount and still not worry about driving the price higher? This makes no sense to me!
His data comes from the World Gold Concil. He also says Gold demand should be higher in the final quarter figures due to strong holiday, millenium coin purchases,and Middle East demand due to higher Oil prices.
This doesn't sound to me like the Middle East is swimming in cash!
I think it was ORO forgive me ORO, if I,am wrong but i remember reading that the alledged Oil for Gold contracts ended in this year back in Jan/99, because the Oil producers found out or whatever, that the Gold contracts they were promised for their Oil could not be honored?
I think thats why ANOTHER always said watch the price of Oil. The recent run-up in the price of oil sort of matches ANOTHERS thoughts, if not and the price has gone up only due to OPEC cut backs and a small increase in demand, then i say the Oil for Gold contracts are over done.It really makes me wonder when KUWAIT lends 79m.t. Yet at the same time wants Gold for Oil and maybe holds contracts for future GOLD in the Ground that they will maybe never see?

This leads me to believe the Oil producers were used as a Chess pawn to set the "EURO" trap. They knew that every one would "go for it" and short Gold and not be able to repay in physical. There for the only available subsitute would be repayment in EURO's. BINGO instant demand for EURO dollars. Oil and Gold were used to get the EURO going bigtime and now the Oil producers are trying to play both sides by pretending they knew nothing about all this, by lending them 79tonnes of GOLD, because they are COWARDS, and aren't quite sure who to support, i think the lending of 79m.t supports my COWARD analogy.
If not then this is the biggest internet scam in the "History of the World" Don't forget all this was supposedly reveiled to us as the threat of DEFLATION was swooping down upon the World. I say throw together a fews good rumors mixed with some half truths and who can prove it completely right, or false for that matter, but it sure sells alot of GOLD to anyone who buys the story!
I,am sure some of it, is very true ,but will it really have a huge affect on the P.O.G? This is where i get very suspicious especially when the B.O.E Gold sale is said to be only 2 times oversubscribed and "Robert Chapman" says there is a Gold surplus in the 3rd quarter.

In summary i think there is so much mixed data out there, it's almost impossible to get to the real truth. It appears that all this is happening at once and every one has a different aggenda. In short the GOLD market isn't the Worlds great Chess game. Its just a big can of WORMS. A.K.A "White Old Rich Men" With nothing else better to do than torment the rest of us!
Firstly with promises of riches, then hand us a stinking dead corpse stuffed full of more lies and how Superior they are to the rest of us.

In short we will never win not in this life at least and probably not for at least another 10 years, if we don't blow ourselfs skyhigh by then, and when GOLD hits $320-325 I,am cashing in my chips. I'll keep a couple pieces for souvenir's because GOLD is beautiful to look at and maybe i'll turn some of it into jewelery, but as it making a come back as real money, i say in a pigs eye.
They'll lanch a nuclear warhead before that ever happens so lets all enjoy our little bit of Gold, but don't expect to get rich off of it any time soon.
Even Robert Mundell said $600/oz in the next 10 years, ****
BY THE WAY after reading Mundells profile. I strongly believe him to be "ANOTHER" simple logic, first he is a Canadian,and started posting on KITCO first, 2nd he is the "Father of the EURO" 3rd he is about the right age of anothers profile.

Now for the the real Bombshell F.O.A is not a MAN, F.O.A is a Woman, think World Gold Concil, I think U.S.A Gold put it together shortly after the "Washington agreement" or maybe sooner?
For me it became obvious when F.O.A called us her "Bullion Boys" a man wouldn't say it that way, 2ndly when Miss Fukuda(sp)
said she had trouble converting her thoughts into english sometimes, plus the round about way of her Phonetics or "System of spelling" i know it has more to do with sounds, but couldn't think of a better way to explain it.

F.O.A is a more than wonderful person and i thank you for all you've taught me. Yet on the other hand i think it only fair to level the information field here in this case.
Since i believed alot of what you said to the point of ruining my life and telling everyone that GOLD was going to $30,000/oz. Them in turn, thinking i was crazy, quoting someone off the internet going by the name F.O.A?
I feel that i,f someone can come on the internet and promise GOLD is going to the Moon, they should be accountable for that, if at least not morally, Yes?
What say you "ANOTHER"? F.O.A?

I remember STRANGER was once asked, who he was, and stranger did reveal his identity. I also remember him upset about ANOTHERS prognostications and his timing on the P.O.G not being very accurate?
I to feel frustrated as in i've been fed a line of Fairtales!!! Boy do i feel like a sucker! If it was not for the 5 Dec GOLD $390 call options i would be down thousands of dollars!

That brings me to my last question F.O.A. You knew about the upcoming freeze on GOLD lending from the 15 C.B,S
Why not mention here at the forum, for the average person to pick up a couple Gold contracts. So what if a few traders picked up on it, it would of squeezed them forward sellers all the harder had they had to pay out more money.

I can see you wanted to protect the miners from that kind of exposure, but look at what you've protected them from, an honest price increase, because the other stubborn and wicked managers (Barrick) still refuse to cover and are working out "weasel deals" as we sleep!

Any ways enough said, i hope i didn't burst anyones bubble but this all had to be said sooner or later. There is to much at stake to be COY about this anymore, time to get down to business.
G.T
P.S As Another said in the footsteps of Giants "The cat is out of the Bag" YES???

Your mention of Red Lake blew me away. I was up in Balmerston the winter of '80/81, the winter we saw $852 POG.

Is Campbell the Placer Dome mine, I forget? The 2 mines where within a couple kilometres of each other. I worked at
Campbell, the non-unionized one. Just about died a dozen times, walked into a blast, just about fell down an ore pass, ran over a sac of AMEX with a train, got pinned to a wall with a jackleg, scaled a boulder that the next crew had to drill snd blast. My second day on the job was a little quieter. Just kidding about the second day but the mishaps are true. Can't believe I survived, a 20 year old punk looking for trouble and finding it easy.

Ask Gandalf about the 'little rock' I found.

Have you solved the mystery surrounding your past posting woes? Browser problems? Bad connections in Vienna? ...glad to see you still able to get through to the Castle.

Was posting to Galearis and almost missed your last message.

I too am frustrated. I took all my cash and bought physical.

I have been astonished with the money and derivative discussions in the past months and have for the most part stayed away from it. However, my locked up money has been used to play with mining stock. I was burned bad around the expiry of the Dec. Comex contract and burned again Monday.
I played the 'unhedged' rule (FN, GOLD etc.) and was flogged anyway. I am a rookie in the stock game so I have no one to blame but myself. Like a little whining kid I haved cashed out and will await the rollover. Meanwhile this dork at work bought a high flyer 'tech' stock a month ago that has since risen 35%.

I keep thinking back to that 58 page PDF federal document
that laid out the several year plan to extinguish gold.

I feel lousy and I know a few other people here do but I will not risk names.

What do we do? What's the plan?

I too am frustrated, BUT I did not buy gold to get "rich". I bought it for insurance against devastation and the transition to whatever will be in the future -- I think most of us agree it will not be the US$ or stocks.

I looked a few factors, and believe me I am a very simple person and cannot even come close to some of the understanding here ...
1) The US dollar fiat scam -- the Fed is and has printed $ left and right with no backing and I personally believe this will cause a major financial collapse or at least extremely wild inflation. As stated here many times, the US$ is really the primary medium of exchange in the world, if what you say is true about the EURO, then do you not think that these US$ will return home and create massive inflation.
2) I want to do everything in my power not to be a part of continuing their ability to manipulate us -- although my contribution in itself is quite small, I must take responsibility for what I know and act to make change.
3) The stock market mania -- ok maybe the bubble will continue to get bigger, but I know for certain that I sleep much better at night knowing that I have some gold tucked away which will not loose 50-80% of its value in a single day for one reason or another.

Also, I recall FOA stating that it may take up to 5 years for this all to come about.

Dear Sir, gold for oil, or oil/gold manipulation to force movement to the EURO, does it really matter?

In the turpulent times ahead (no time table attached, but it seems real soon), gold seems to me to be the best asset I can own.

Canuk my friend,
To buy gold in todays market in not to make a quick buck
and get out like it is some dot-com stock.
My personal hope for gold is to create real wealth and
security when the dot-coms and the dollar tank.
I don't really expect gold to take off until then.
It's fun to watch the POG daily, but I don't worry about
it. Just get it and hold it!
You'll be glad you did!

Ad Hoc Premises

There are a lot of ad hoc premises on the thread again. The FACT is the $US value of the POG matters. The Forum was hopping and full of joy when the POG rallied after the Washington Agreement; now come the comments that the BOE sale wasn't important, and one doesn't invest in gold to make a quick buck, and FOA will be proved right at some point in human history, etc., etc.

I don't mean to whine and complain, and gold may one day rally as never before. My beef is the spin (1) that the $US price of gold doesn't matter, (2) that gold is the only true money, and (3)that timing doesn't matter - all three are false. Re (1) even if the $US were a penny ante fiat currency, it is still outperforming gold over the past 20 years, so what does that say about gold (2) try buying lunch or gas with gold (3)if one had invested in a decent tech stock over the past couple of years, one could acquire gads of physical, and be far ahead of someone who got into physical alone two years ago.

Symbiotic Relationships

A few weeks ago I posted about the symbiotic relationship between true believer goldbugs and speculator goldbugs, but didn't complete my point. In short, the speculators need the true believers to generate the undercurrents for the price moves the speculators can exploit. The true believers also need the speculators: The speculators provide the magnitude of swing in the POG in fiat currency which validate that gold is true money to the true believers, such magnitudes also being necessary to the recruitment of new true believers (and speculators)to keep the cycle and the symbiotic relationship going. For example, how often one hears repeated references on gold sites to the $800 ounce gold of the late 70's/early 80's, to prove that gold is still money and still worth speculating on.

I submit the enemies of gold may win even if they succeed only in suppressing the swings which attract new true believers and speculators, said swings also providing the raw material for speculation which is the lifeblood of the penny-stock exploration sector, which provides resource to the miners, etc.

Well written brief, Councilor.

Those who are perhaps feeling some anguish as it appears gold has been stifled yet again should remember that what gold is really about is truth and the lack of it in our current system. You can stop believing in gold if you find that necessary but you can't stop refusing to be bamboozled by the various manipulators that have grabbed control of too much of our lives. Gold is nothing more than the solid basis of measurement that we all need to live our lives. The sad thing is that it seems for this moment at least as if the bullsh*t artists are winning. They can't ,they won't and even the Clinton era of corruption will end of its own dead weight in the not too distant future. Gold is after all only the yardstick to measure money in. One that can not as easily be fabricated by the charletans.For the moment they have got us all beaten down to the point where we are beginning to believe their bullshit. There ain't no way these stocks are worth anywhere near the prices they have kited them to. They have used the ability to create US currencey and credit to hyper-inflate and distort the world monetary system. Like all frauds this one too will collapse.It is golds function to provide a lifeboat to those who can see its role as a preserver of value and the output of one's work. FOA appeared to be a bizarre creation when I first read his stuff in the archives several months ago, and then I realized the wisdom of what he said ,transcended the hyperbole he sometimes appeared to use in making his points. He is after all a teacher using parables to convey very difficult topics. Topics which are tricky and difficult even for those among us who have fancy degrees and many years of experience in the financial business.Take my word after twenty-five years in the investment business specializing in the value of common stocks this bullshit can't go much further. The crash in 1929 peaked with stock market valuations at 89% of GDP,the peak in Japan was 157% of GDP. Today in the US markets we are at 160% of GDP. It took Japan ten years and they still haven't recovered. Today the US dollar is so weak it can't hold its value against the Yen which represents a bankrupt banking system and is actively being debased ,publically by its own issurer.Hang in there you are learning more than you think.

I think that the bankers actually believe that they can create a single currency system for the whole world based on fiat. While I bemoan the fact that most private citizens (at least in the US) own little gold and are vulnerable to a collapse of the present system, and I know that central banks still own most of the gold, this in itself does not prove to me that these bankers can foresee the future very well.

I think that world events will, by accident or Providence, foil these plans. I have seen first hand how even the people in the highest positions of wealth have been deluded by it.

The aim is to discredit gold, to demonetize it. Big bankers know that honest money and fiat money cannot exist for long side by side.

But there are cracks appearing. If the arabs own anywhere near what some authors have posted here, they are a force to be reckoned with by the bankers. There is a religious difference there that cannot be settled by negotiation. China also sees gold as a strategic resource. And the ECB's announcement cannot be ignored as a partial remonetization of gold, even though the ECB is part of the same fiat money cabal.

Gold is money. Money is a powerful, primal force, generated by the will of men. At this point in history, a group of people think that they have successfully tamed this force, having channelled it into canals and reservoirs that they control, and having taken away its substance. They do not think that it could ever jump the banks. They are in their own bubble, where the laws of nature seemingly do not apply. They are wrong.

This will end, but not in the way they expect. And the longer it keeps on going, the worse it will be when it does end: economically, socially, and politically.

This is my opinion and should clarify why I made my statement.

Well said. If we were to summarize the millions of words posted here about gold being the only real money, then we buy physical and do not care about supply and demand. We are secure in our viewpoint no matter what COMEX prices tell us. That is faith in our position. If we are gold speculators and traders, that is a different matter. And one thing is clear when it comes to speculating: a buyer or seller had better understand the issues themselves and not rely on an anonymous poster or his/her friend on the internet who cannot clearly articulate an obscure and arcane theory about gold pricing.

This story was told to me 25 years ago, I don't know if it's fact or fiction:

Seems a certain man, name unknown'spent his whole life prospecting for Gold in what is now the State of Nevada.
He always managed to find a little bit,but nothing worth while......He spent his whole life searching in vain for GGooold!.....Well the man fine-ly died....broke!
A relitive was summoned to clean up his belongings after his death. The dead man had built a mud hut to live in.
When the relitive arrived he gathered the dead mans belongings and noticed something strange about the walls of the mud hut.Well,he broke off a dried peice of mud from the wall and took it back to the city for mineral analysis........FULL OF SILVER!!!! I heard that this was how the richest Silver mine in old Nevada was discovered..The Comstock Mine! The irony is,the dead old man had been surrounded by tremendous wealth most of his last years....and didn't even know it. Something to think about.........beesting.

Oil
I don't know if the deals were renewed for one more year. I can say that there was much running around and waving of hands having to do with Ashanti and less revolving around Cambior. The action looked more like last minute transactions to save a bum deal than anything else. The fact that the bankers got a 15% chunk of Ashanti, is an indicator of there being a deal - pretty much a completed one. The Arabs holding the loans must have cut a lending deal to save Ashanti from going under and the gold flow from being stopped by the Ghana government by their nationalizing the property. Bin Tallal's involvement on such a public affair and open bidding on the news wires tells of its importance. That the bullion bankers did take a stake in the miner, as are many others around the globe means that they expect gold prices to rise.

I think the Arab Oil countries were intending on pulling the plug on the dollar in 1997 and had raised oil prices then and going into 1998 as part of the maneuvering. The rise in oil prices coupled with the slight tightening by the Fed and the BIS' pulling of the rug from under Asia that got the ball rolling on the Asian Flu (if I remember rightly it started with a tightening of bank equity requirements by the BIS in 1997 - and gauging by their data collections, they must have known the "flu" would be the consequence). The main deal was that the BIS and Oil are allies. The Fed tightening could have been done either with or without participation in the deals and played a minor role for the bulk of the crissis.
The main point is that there is a grab for real assets going on. The Asian crissis was part of it. The Oil for Gold scheme is part of it. In Asia, there seem to have been two issues that irked the West, that their growth had taken so much Western capital resources, and that the Asian government's "crony capitalism" (worse than ours in the West, if you can imagine that) kept even the biggest names outside of very lucrative markets and with no access to asset ownership there. I think the instability in Asian economies was intentional and was intended to serve both gripes noted above as well as stop Asian physical gold accumulation from competing with Arab Oil (which would have made oil way more expensive in Europe and the US). As an anecdote, I read an interview with a Rothschild banker specializing in restructuring in Korea speaking of trying to get the point across to the management of a plant they foreclosed on that they do not have a choice about firing people, that there is no one in the government to bail them out anymore (Business Week). The plant was obtained as part of a bankruptcy proceeding with the borrower. I believe the main intent was to obtain the assets, not to obtain interest payments.

Back to the Oil for Gold issue. The Oil royals have been buying gold in paper form for 20 years. They, particularly the Saudis, don't want the deal to go on further because they know that the situation is not tennable, that if it were to continue, they would be out on both the value of the deals short term, and would see gold producers go under and their assets not delivered, followed by their bankers going under. They would not get their gold, already paid for, and would be forced to bid openly on the market to both replace their orders and to get paid for the current output. That would actually have been the worse road to travel, and would have brought a more virulent confrontation with the US.
With gold flows in order, and the gold price heading upwards there was a better chance to resolve things without resorting to big actions. The prolonged US presence in the Gulf since the war there was intended to both reasure and threaten. The key is that the cost of securing oil by military means is very much higher than the cost of getting gold to pay for it. Furthermore, the action required by the US to secure the oil supplies to Europe and Japan would have to be payed for by them. I do not believe they would have payed the required price. The US would have been alone, they would have control of the oil, but the enmity of the whole world. Not only would the dollar have been but a soggy rag, but the whole system that keeps the US going would have been shut down. We would have food, some oil, most of the natural gas we need, but no parts for anything, some electronic items would have completely disappeared. The Reagan, Bush and Clinton regiggering of military contracting towards off the shelf items lowered costs by 50-80% for major military components, but had removed control supply of many key components overseas. What manufacturing was already controlled by Western Europe was ammended by the Pacific Rim making most semiconductor manufacturing in the US uneconomic. Same goes for low volume precision mechanical parts. The military might needed to control the oil would have prevented the US from having significant military might just a few years later. Selling this to the public here (yes it still matters) would have been next to impossible.
There is no way for one country to have significant military force on a long term basis if it is in isolation. That is the lesson of Russia. The complexity of supply structure needed to complete military hardware at an economically acceptible price within one country, or even a large bloc is well beyond prohibitive. Only the setting of the world on a printed dollar standard backed by gold for oil could make it work.

Back to the main line, there is no more gold available to supply an investment deficit of the 4000-6000 tonne per annum scale while still supplying the needed gold for jewelry etc.. The paper is no longer being bought, but I would need to check out the statistics when they become available (US statistics in a few days, BIS not till March or later) to confirm this for 99 Q3 as well. In this context, I should point out that the latest BIS data show a steep rise of Europe based shorting in Q2 with a decline in US based shorting in the same period. The indication would be that London is in way bigger trouble than NY. I would take the abrupt departure of BT (Deutsche Bank) from its substantial bullion business in Q2 as a very strong indicator of the "in the know" rats leaving the ship.

As ANOTHER pointed out, the US would play along and do what it had to do, because obtaining oil by force was not possible without more severe consequences than having to pay real money for it. Besides which, only a very minor portion of US oil comes from there.

At this point, I think the unexpected fallout from the oil for gold deal at first revaluation in the form of Ashantis of various sizes falling face first into the muck was not quite the intended effect. Therefore, a slight delay had to be installed, that gave warning to many bankers. The Euro is now being held hostage to this reorganization. The ECB may have been surprised to find casualties among friends in Europe (who were warned before) and called a halt before things got out of hand. Such birth pains are normal. No engineers are perfect. If you remember the period just before the Washington agreement, the ECB and the several member CBs were constantly being pestered by the financial community to announce sales and increase lending. No amount of press releases and statements could bring the deaf to hear anything but the good old song sung to them in childhood (gold-en bridge is falling down, falling down...). Even now, after the announcement, none wish to believe the statements and actions for what they are. Particularly this side of the pond.

As far as the last auction is concerned, there was most probably a planned response of the hedgers and their Bankers not to bid. The plan relied on their maintaining solidarity and not bidding. They knew that having AU bid was enough, since the gold made it back into the banker's hands anyway.

FOA being Harujo Fukuda, I hope it is true, and see some interesting points coinciding with that being the case. It would have been a great honor to find out it was her.

The next bid for gold should come at or slightly before the middle of Dec, in time for the next ECB quarterly report.

As we stand atop our towering outpost watching the sunset skies give way to stars, we can't help asking, "Are we free to make up our own minds, or are we being arm-twisted into doing something or else restrained from doing something else?" Freedom is a fine thing, especially when you realize you have it. Amid the various protests in Seattle over the World Trade Organization meetings this week, we have this report on *freedom* for contrast...

Ivory Coast decree bans mass demonstrations for 6 months
Abidjan--Dec 1--The Ivory Coast government has decreed a ban on all marches
and mass demonstrations in public places on working days for 6 months. President
Henri Konan Bedie announced this on television late Tuesday, the night before a
protest march planned for Wednesday by the opposition RDR party in the
commercial capital Abidjan.***[Reprinted at USAGOLD with permission. For details please go to: http://www.crbindex.com/reviews/index.htm No further reproduction without written permission]

Nobody ever guaranteed that being a free adult in a semi-civilized world be easy. Although many would like to think that education stops the day you leave school, the harsh reality is that if you subscribe to that line of thinking, you'll forever be getting the short end the various sticks that life has to offer. At all points along the way you must take the responsibilty to educate yourself on the various issues that impact your life, and make your decisions accordingly. What else do you have for options? You gould either make wild guesses at the best course to steer through life, or else have someone else decide for you...like we see in the report above from Cote d'Ivoire. Here at USAGOLD, our unabashed goal is to help facilitate your monetary education so that you may conduct your life in a more purposeful manner. Understanding what money is, and more importantly, understanding what money isn't (or should I say, what isn't money,) is vital to the ultimate success of your productive endeavors through any span of time. While money is the universal language of nearly all men, the national currencies require a translator. Gold speaks all languages more fluently than any local/national politician could ever hope to do.

While on the subject of freedom, a little bit of platinum found freedom today as the US Defense Logistics Agency sold a total of 5,377.38 troy ounces from its Web site sales. More platinum should also soon be hitting the streets from Russia. The Russian parliament's lower chamber, the Duma, approved the third and final reading of a legislative amendment to allow the resumption of platinum exports--of which Norilsk said they would refrain from "flooding" the market when the amendment is approved later this month by the Federation Council (paliament's upper chamber.)

In gold, some traders are still unsettled by the results of Monday's gold auction by the Bank of England. Bridge News reported today that "Traders said that prices fell on light commission house selling, more fallout from Monday's worse-than-expected UK auction result." If we give some thought to the matter, what more could reasonably be expected? In a repeat of the Monday GOLDEN VIEW, "...heavy currency intervention from Japan which strengthened the dollar while weakening the yen. All other factors being equal, this alone would drop the gold price. The sum of these effects brought the morning gold fixing in London to $293.10. When the auction deadline later arrived , it was revealed that in the closed bidding process, parties were willing to take the full 25 tonnes offered at prices at or above $293.50. Though some market participants had higher expectations and were depressed with the results, a fairer assessment is in order. The truth of the matter is that these 25 tonnes were not rejected, but were in fact TAKEN by professionals at a price $40 higher (up 15%) than a short two months ago at the September auction. That, my friends, is what we call a Reality Check. The reality is that these prices are solid. Unfortunately, many market participants were expecting fireworks, so in a fit of disappointment they threw reason out the window, and gold traded down throughout the day."

A fair degree of the common trader's consternation is that the auction was only oversubscribed by 2.1 times. Think about it this way...why should any party go to the trouble of bidding at an auction when a 'round-the-clock gold market exists to meet your golden needs? Given that the LBMA is headquatered in London, to make an analogy, why would we reasonably expect an excess of shoppers to participate in an auction of shoes in the parking lot of a shoe store? And further, in this brief time since the second auction in September, didn't we all witness the world easily absorb the additional supply provide under the arrangements of the Kuwaitis, and courtesy of Jordan? Yes, we did.

Here's another way to take a fair assessment of the auction. When they were first proposed less than a year ago, the gold price was in the same neighborhood it is now and the physical market was tight. Any casual review of gold lease rates should easily confirm that. The announcement and initial auction dropped the price to the $250's, and now that we've rebounded to the original levels (after first shooting far past it to $330's before settling back) it is a fair assumption that many small weak hands have been unnerved into parting with gold at these prices...whereas before the auction announcement they were at least holding if not buying also. We have simply returned to the conditions that existed when the auctions were precipitated, but the recent price history has undoubtedly shaken loose enough shoes to temporarily restock the store shelves at these prices. Anyone capable of absorbing all of the news of the past months has no trouble seeing the inevitable trend is strongly to the upside.

As it is, the post-auction effect is still hanging heavily over the market, and spot prices last quoted in NY were $289.20, down 90�. COMEX February gold futures settled down $1.10 at $291.90. The FWN gold review had this to offer:

"David Meger, senior metals analyst at Alaron Trading, noted that the
dollar's strength versus the euro and other currencies such as the
Australian dollar, but with the notable exception of the yen, is
"hampering foreign demand potential." He pointed out that there were some
Australian sales before the UK auction, based on the Australian dollar's
slip against the US dollar.
Traders noted, however, that today's gold market was relatively quiet.
"We're still in that lower part of the range after the auction," said one
trader. Meger said that support for Feb gold remains largely intact at
$288.50-291."

Open interest on the COMEX December futures fell yesterday by another 4550 to begin today's trading at 6,954 outstanding contracts.

From yesterday's GOLDEN VIEW: "COMEX delivery intentions on this first notice day totaled 3,057 contracts (305,700 ounces). The Bank Of Nova Scotia was tapped for the most postions to deliver-- 2,622 contracts (262,200 ounces)--while Deutsche Bank Futs was seen taking delivery of the largest postion with 1,406 contracts (140,600 ounces), and Goldman Sachs was a significant second, on the receiving side of 684 contracts."
+
On this second day of notices for delivery on the December futures, Duetsche Bank led the way with 319 and Goldman Sachs was second (on the receiving end of 181 contracts)...helping form the bulk of another 601 COMEX gold contracts (60,100 ounces) that received notice, bringing the two day December total to 3,658...that calls for 365,800 ounces, folks. Yet how much gold have we seen shuffle through COMEX depositories in consequence?

Yestaday's vault action saw only 162,650 ounces enter the COMEX system, with a net increase to the Registered stocks of only144,308 ounces. And today, only 57,484 ounces arrived to the Registered stocks from an outside source, while 22,296 were transferred to registered status from within...depleting the Eligible gold inventory to a scant 80,974 ounces...the lowest ever in my personal recollection of observation.

OIL

January crude settled up 41c at $25.00 after trading as low as $24.10 today after overcoming the bearish news that OPEC's supply cuts through March 31, 2000 might possibly be lifted. According to an FWN report, a Persian Gulf source said OPEC's output ceiling could be lifted early "if WTI crude stays above $25.00 per barrel and global oil inventories continue to decline." FWN continued, " The source did not explain the reason for the shift in position by the export cartel, but said members are in continuous consultation to review the market situation." It smells to The Tower like a behind-the-scenes deal is possibly being struck, or at least entertained. Traders were able to see past this news, or should I say buy into this news completely, as the price rise today brought crude up to exactly $25. This came on the back of Department of Energy data showing a decline in US crude stockpiles of 4.4 billion barrels last week, exceeding yesterday's API reported decline by nearly a million barrels.

And that's the view from here...after the close.

@ Kitco Dec 2nd





On December 2, 1999 at 10:00PM EST, kitco.com in conjunction with Platinum Guild International and Coin Connoisseur Magazine will be presenting a first-time live interactive 60 minute precious metals audio webcast. U.S. Congressman Ron Paul (R-Texas) will be joined by Adrian Day, (president of Global Strategic Management) and John Lutley (president of the Gold Institute) for a roundtable debate about gold and precious metals. Jacques Luben (executive director of Platinum Guild International) will moderate the forum. For details point your browser to liveinvestorsforum.com

�

Hello,to all of you dedicated people on this Forum.I have never posted here before,and I do not have time to say much now.Just keep a little SUNSHINE in your life,for it will be shining brightly on our GOLD tomorrow. Have a great day.

Make Sure You Register For Talk W/ Ron Paul etc.Welcome to our first live 60-minute Precious Metals Webcast at Liveinvestorsforum.com

Date: Thursday, December 2, 1999
Time : 10:00pm EST, 7:00pm PST

During the webcast you have the opportunity to pose questions LIVE to our experts via the Question Manager interface.





(click on a name to read more)

Our leading experts: Congressman Ron Paul,( R) of Texas, Adrian Day of President of Global Strategic Management, and John Lutley of the Gold and Silver Institute will give you crucial insights into the outlook for precious metals markets. Jacques Luben of Platinum Guild International will moderate the forum. Please join us by asking questions that will help you make important decisions for your portfolio.




Recent Bull Market in Precious Metals: Reality or Mirage?
Ask the Experts
In September of 1999, the IMF and the major European central banks clearly shifted their strategies toward gold. This move was a catalyst for a major short-covering rally that has had a positive impact on gold as well as platinum and silver prices. Many investors are, however, concerned that they have witnessed too many "false starts" in the volatile precious metals markets.

Role of Central Banks in the day-to-day fluctuations of the gold market.

Correlation of rising energy prices with inflation/precious metals.

Impact of Gold fluctuations on the Platinum and Silver Markets.

Potential for government manipulation of Gold prices

$ 300.00 Gold: Hurdle or Launch pad




�Should precious metals (gold in particular) continue to play a critical role in international monetary affairs? �If Central Bank holdings of gold are re-valued to current market prices, will this relieve official pressure to sell gold in future years? �With rising energy prices in 1999, will we see a follow-through for higher precious metal markets next year? �Since central bank gold loans are tighter, will we see higher lease rates? Implications for price outlook. �Will LDCs attempt to re-inforce the credibility of their currencies by increasing their private and central bank gold holdings? �Outlook for the U.S. dollar in 2000. Implications for precious metals. �Environmental issues that will impact on mining in the U.S. and elsewhere.

Gold market performance is truly pathetic, we have settled into a trading range again, and I am predicting that gold will range AT BEST between 288 and 291 until year-end, although there is a possibility that gold might reach 291.50 if y2k concerns heat up.

The chart for gold does not look particularly good, unless you turn it upside down, in which case it looks a bit better.

I wouldn't be surprised if gold collapses completely when the DOW breaks 13,000 in late December. The resultant euphoria should lead to mass intoxication and even if people wanted to buy gold, they would be too hung-over to lift a phone and place a trade. Amidst DOW 13,000 euphoria, gold should free-fall to somewhere in the area of 200- 201.

There will be some positive benefits to a gold collapse: for one thing, all the Canadian executives from Duuuh??ville, Ontario who are running the senior gold producers will find themselves out of work and the hiatus will allow them sufficient time to complete their junior college courses. Some will finally learn how to count past 10, others will finally learn that gold bullion is a metal and NOT a jellied soup.

Another benefit is that Canada can finally fold its gold mining industry and concentrate upon developing a substitute export industry utilizing Canadians' highly specialized talents. The most likely candidate: snow exportation -- an industrial activity requiring bending, scooping, and throwing. These skills can be readily acquired by most Canadians once Ontario's junior colleges are able to locate
adequate numbers of properly trained teachers. The major difficulty will be in locating Canadian teachers who can bend, scoop, throw, and chew gum at the same time. Although some former senior executives from Canada's major gold producers will wish to enter this exciting new export industry, in all likelihood, their chronic inability to put 2 + 2 together and arrive at 4 could be somewhat limiting. Most likely, the new snow export industry will need to hire some shrewd brains from Wall Street's bullion banks to captain the fledgling enterprise.

Although many people imagined gold might soar above 300 this year, these same people also believed the following phrases:

1) Yeah, the check is in the mail.
2) Yeah, I promise I won't come in you.
3) Yeah, let's do lunch someday.
4) Yeah, of course, I like you for your mind.
5) Yeah, we'll have your car ready by Five today.

Thanks

F*

A little change from last nights post!

November 30, 1999: 11:03 p.m. ET

WASHINGTON, DC, U.S.A. (NB) -- By Robert MacMillan, Newsbytes. A short, fictional film detailing a supposed US Army- instigated race riot in Times Square on New Year's Eve 1999 is back online despite the fact that the Federal Bureau of Investigation and the US Attorney's Office successfully persuaded the filmmaker's Web host to take it down.
Mike Z. released the seven-minute film on his Website earlier this month, with a short introduction saying that a cousin in the Army had sent it to him and was not sure if it were a hoax. The film is a fictional Army briefing with tips for launching a race riot during pre-Year 2000 festivities.
Several viewers, believing the film to be real, had contacted the FBI, which is hard at work on Project Megiddo, an effort to short-circuit anticipated religious and/or paramilitary fanatics who may use the so-called millennium date change as an apocalyptic backdrop for violent acts.
Mark Wieger, president of the BECamation Web company, told Newsbytes that FBI Agent Joe Metzinger and US Attorney Lisa Korologos told him that the tape could be used to "incite a riot and their jobs were to insure that this did not happen." Wieger said neither filmmaker Mike Z., nor the law enforcement community clarified whether legal action already had been taken when the FBI and the attorneys office asked him to remove the site.
Wieger now believes he was the victim of a lie, saying that the FBI told him that if BECamation would not take down the site, then BECamation's own ISP would pull the site.
"Not knowing what had transpired with our provider, without any information from Mr. Z., and with the FBI's pressure, we felt we had no choice but to pull the site until further clarification could be obtained," Wieger said in a statement. "Until we could talk to all parties involved (and) obtain the information to make an informed choice, we kept the site down."
Although Mike Z.'s film wound up being posted on several mirror sites, BECamation still lost more than a $1,000 in business, he says.
Wieger personally has been receiving threats on the phone and via e-mail from "very disturbed people," he says. Wieger said that an article in the Village Voice about the incident, as well as information reported on the Slashdot.org Website resulted in BECamation being overrun with "flame" e-mail and threatening telephone calls because of the company originally backed away from First Amendment principles in light of government pressure.
"We were getting flamed big-time," Wieger said. "E-mail bombs, threatening phone calls at home and at work and on my cell phone... One guy said 'You're afraid for your Lexus and your mortgage payments.' I said 'Excuse me, I drive a four-year-old Ford van.'"
"Now that the situation has been clarified by all parties we are happy to offer the site again on our servers. The site is up and running," he said.
Since the Web host and filmmaker said the law enforcement agents did not produce a warrant or any sort of court order, the American Civil Liberties Union (ACLU) and other groups have raised the question of whether the FBI and the Attorney's Office used subtle threats or intimidation to restrict the filmmaker's First Amendment rights, he said. The FBI and US Attorney's Office may find themselves on the business end of a free speech lawsuit, he says.
Mike Z. told Newsbytes that he is meeting with the ACLU to discuss the case. An ACLU representative said, however, that there are no concrete plans to pursue the issue with Mike Z. at this time.
US Attorneys Office Spokesman Marvin Smilon told Newsbytes that since there is nothing about the case (if there is one) on the "public record," law enforcement may not comment on Wieger's and Mike Z.'s allegations.
Smilon said that law enforcement would release further statements on the case if any civil or criminal charges are filed against Mike Z. or BECamation.
The FBI Website is http://www.fbi.gov .
The US Department of Justice Website is http://www.usdoj.gov .
The film is available at http://www.crowdedtheater.com .
Reported by Newsbytes.com, http://www.newsbytes.com .

LONDON--The International Energy Agency (IEA) has drawn up plans that could include emergency oil supply and rationing if the Y2K computer bug plays with global energy flows, a spokesman for the West's supply watchdog said today.

The plan, to go for approval before the Paris-based group's board of governors on Dec. 10, would kick in if computer failures occur at the new year and cut deeply into industrialized countries' normal oil supply.

"In the documents setting up the IEA the director is given right to apply crisis mechanisms when there is turmoil in the oil markets," said IEA spokesman Scott Sullivan.

Mechanisms available to the IEA for dealing with major supply crunches include allocating oil reserves and restraining demand, for example with brief oil rationing, he added.

Y2K would have to cause massive problems to trigger the plan. The IEA's normal definition of a crisis occurs when 7 percent or more of world's oil supply is threatened.

Industrialized OPEC countries consume about 45 million barrels per day (bpd) of oil, so about 3 million bpd would have to be cut to reach that watershed.

Sullivan declined to say how much oil the IEA plan would allow for release and added that the likelihood of supply chaos as a result of Y2K is low.

"We plan a response if there are major problems but we do not foresee that happening," he said. "The most likely outcome is a few small problems here and there."

I was going to drop this on you but I forgot. I was engaged in the annual ritualistic family feeding frenzy which requires that red-blooded Americans devour charred foul carcass. This news may be both good and bad....nickel increased over $800/ton.....Inco couldn't deliver, bummer!

Inco Ltd. Declares Force Majeure At Manitoba Division
Wednesday, November 24, 1999 09:03 AM

TORONTO (Dow Jones)--Inco Ltd. (N) said it will declare force majeure under certain sales contracts, due to the continuing lockout at its Manitoba Division.

In a press release, the company said the declaration affects certain electrolytic nickel products normally produced at that division. It said the total quantity of products that it expects to be unable to supply represents about 15% of its average monthly primary nickel sales for the first nine months of 1999. Inco said it can't predict when the Manitoba Division will be back in production.

Imagine if some major Au producer declared force majeure. Well then, hmmmm............

Golden Truth, that was quite the post. I am very impressed with your efforts at deduction. In my case, I have invested in precious metals for wealth protection. I appreciate that someone here such as yourself feels so deeply about what he writes. Thank you for your thoughts and for expressing them. I think everyone and I mean everyone appreciates your passion.

-Al

Golden Truth - You sure have a way of keeping the debate going around here. Anyway, congratulations on having vented what so many others have been thinking. I'll bet you feel better already.

I may be the one person at USAGOLD who has taken FOA to task more than any other. But it was never his irrational forecasts, per se, that caused me to speak up. Rather it was the sad spectacle of his being treated like a demigod by those who desperately wanted to believe and didn't know any better. And now, though it may sound harsh, I suggest that those who so willingly surrendered their judgement in this manner have only themselves to blame.

None of this really matters now, of course. What does matter is whether your gold is still worth hanging on to. I am about to tell you why I think it is.

I started here in January telling anyone who would listen that a major historical shift in dollar policy was underway. Two decades of disinflation had culminated in a serious threat of dollar deflation during the "Asian Contagion" of 1997-8. The Fed's prescription was to turn on the money spigot to a degree that hadn't been tried in many years. That spigot is still wide open today.

I further predicted that the ploy would work. America would not slip into recession, Southeast Asia (including Japan, BTW) would turn around, and 1999 would be a year of world economic recovery. The cost of this rescue plan, of course, would be re-emergent inflation. In other words, excess dollars would save the economy, but so would they begin pushing prices up as the months ticked by.

So there we were: Oil was at multi-decade lows. Gold was at multi-decade lows. Grains and metals were at multi-decade lows. All of this was because Wall Street was convinved that, if anything, the world economy was slowing down and 1999 was going to be a year of mild DEflation.

Imagine that. Here were all these assets priced for deflation, and yet we weren't headed for deflation. We were headed for INflation. I said so on January 19 in this forum and predicted that it would reach 5 or 6% (I am not quite so given to hyperbole as some who may attract a greater following). Clearly, here was a chance, I believed, to catch the rest of Wall Street napping and make some hay.

Today, inflation has arguably already reached 4 to 5% in the United States. Since the February lows, most commodity indices are up 15 to 20%. Oil is up 150%+. My Newmont Mining Stock is up 28% year-to-date. And now, despite the untimely action of the BOE, even bullion has risen some 14% from its lows. My Japanese portfolio is up 50% this year (on Feb.18, somebody announced here at the Forum that Japan was in a deflationary death spiral that would suck the world down with it). Compare all of that to how bond portfolios have done this year or even how most U.S. stocks have done.

See how smart I am? I hit just about everything right on the nose. Well, trust me, I can be plenty wrong, too. But, for what it is worth, G.T., I am not about to give up on gold, not at $289 and not at $325 either. As is so often chronicled by Town Crier, the Fed is still talking one game and practicing another. If anything, money growth is now accelerating. The world is AWASH in dollars.

The last time we saw anything like this scenario was in the 1970s. Back then, to gain the full benefit of the gold bull market one had to stay in his seat for TEN LONG YEARS. Along the way, gold often shook some terribly unfortunate investors out of the tree. In fact, one time, after climbing from $35 to about $200, it fell all the way back to almost $100. (Wow, would we ever have been mad at FOA back then).

So, finally, here is my point. This kind of market action is hard on everybody. You may be about to do very well in the months and years to come. Ironically, if you do, it may be for reasons you hadn't even counted on. But if you are going to survive emotionally, you may have to develop a better understanding of what you are doing. Perhaps you have already figured out how that includes knowing a man's performance record before you start believing exaggerated claims. That goes for Batra, Prechter, FOA, et al.

Thanks for all the encouragement. I hope I have helped.

The nostalgia continues. I worked at Campbell Red Lake Mines in the late 60's and as a young'un in my late teens, it was a real "grow up fast" or "get out" kind of place. The local town was Balmertown -with the segregated section of the mine barracks somewhat separated from the town itself - undoubtably the town slept more calmly in being a little isolated from the Saturday night life and death struggles during out of control parties. Essentially it was a two mine town (the other name escapes me at the moment), but the underground environment was a nightmare of accidents waiting to happen to the unwary - your description of some of the perils rings quite true.

If memory serves, even riding the ore trams was perilous and one continually had to watch out for the chute timbers located at regular intervals of some dozens of feet separation - which would overhang (just) the engine. Backing up ore trains for long distances was very dangerous unless one was completely focused in moving out of the way to one side as each passed. Forgetting this by being distracted or through tomfoolery with ones partner was often fatal if the individual was caught from behind and dragged under these structures and over the engine. Evisceration was the messy and fatal result. The mine was a screaming case for unionization. I worked here for $1.87 per hour.

Shute pulling was another lovely obligation. The muck would get hung up in the vertical shafts and one of us would have to climb up inside with a bar or to plant explosives. The number of times when my partner would climb right up inside there and that ominous creak, groan and rattle would sound from deep inside - out he would come with a yell -with several tons of ore crashing against the stops behind him. One had to do this in order to maximize the paultry bonus the company offered. I remember also the number of times we would high-grade the sample car (find all the v.g -visible gold material - we could) to put in the last car so that the company would move us to 1) a schute that would produce better bonus or 2) one that wouldn't get hung up so much (and hence produce better bonus.) Safety was secondary for us when so young and foolish!

Other underground experiences:

Three days track-cleaning on my first days underground stuck on #3 (the really cold and wet one) with a violent sociopath who spent the whole time, describing how good he was with a knife. The reminiscence he loved best was the gang rape of a sixty year old woman.

I worked there with a fellow whoes life ambition was to invent the world's first nuclear powered cigarette lighter!

One of the miners was run out of his town in Quebec when caught copulating with a cow. (The cow it was said appeared to have its ears down - which, as described by the teller of this story, who was familiar with farm animals, indicated some enjoyment was shared here.)

As known mineral collectors (rhody and I) we came under the covetous gaze of the local high-grade detachment of the O.P.P. (Ontario Provincial Police). They even placed the house we were living in under surveilance for a week or so - and finally raided it. (But forgot to get a search warrent!)

Other horrendous experiences abounded that long summer and it really deserves a different setting for the telling. I beg the pardon of those who consider this forum a place of more academic tales, but this is part of my particular Ontario heritage and the theme is still gold mining . It underlines, however, that there is "more than gold in them thar hills."

I had both the best and most terrifying summers of my life in that place. I heartily recommend it for it turned out to be a superb character builder for all us survivors.

Howdy Stranger! Yes you have helped, in making me realize that alot of what has been said here by ANOTHER and F.O.A is pure propaganda, to the highest, say $30,000/oz.
It really makes me mad that someone who you thought was on your side, can't tell you like it is, and go on to embellish, because they think we are stupid enough to believe it, so they keep running with the same hyperbole.

Thanks Stranger you always were the only one here that never lost his head. I know you've brought me back down to earth once before. This time i,am here to stay, and your advice was very well recieved.

I guess my only lament is that i don't have 10 years to wait this whole thing out. I wish i did but in 10 years my whole life could of changed 2 times over, if i,am lucky enough to even be here then or even this forum. I,am sure one day M.K will want to retire also.

Yet thanks for your kind words and shrewd yet practical thinking and advice.
I'll try and hang in for 6 more months after that we'll see where this puppy is really going.

Thanks a ton! Stranger.

WHAT INSULTS AND FOCUSING ON SECONDARY ISSUES TELL YOU ABOUT SOMEONE

1) Whoever consistently refuses to answer crucial questions or insists
on sprinkling insults is someone who can't think clearly, or someone
who is just abusive and taunting, or plain ignorant of what he sounds
like to others. (the key term here is "consistent." All of these things
make a post interesting from time to time as long as they are not
indulged in. Perhaps the difference between a connoisseur of fine wine
and a wino applies here as well.) In each of these cases it is a
mistake when responding to abusive arguments to imitate his method
because it makes you as muddled in your thinking as he is in his. Why
be abusive and ignorant on purpose? So rather than join him, focus on
what is most vital to your case and ask him focusing questions that
force clarity.

2) Insults and picking the weakest point to attack also tell you that
the person you are with is at a loss as to how to deal with your
argument. Of course this may be because your argument is insufferably
stupid and no matter where he picks it up it's weak. But assuming you
are on target, it is a sign that if you keep zeroing in through brief
questions and statements you can usually force him to really hate you
and run for his life. After all, that is what his style is for, to
intimidate you and get you chasing your tail. Stay focused.

3) If you have just got your butt kicked and you don't want to admit
it, then start insulting and looking for logical and formal errors.
Attack because the other guy wasn't perfectly polite to you anything
that takes the mind of the fact that you haven't a leg to stand on..
The more invective the better, here, because your goal is to lay down a
smoke screen and retreat but not let him know you've been blown away.
Which is to say, of course, that your goal is to go through life a
childish, abusive, self-centered idiot rather than learn how to think
andframe a sound line of reasoning.

Good evening and thanks for sharing your thoughts.

Galearis, I too recently moved my emphasis here from Kitco, as I am more interested in the discussion of long-term scenarios that takes place at this forum.

"Given this premise, it seems to beg the question that since fiat currency is given little value in that particular cultural landscape, would it not serve those states better in their view to keep the POG, as expressed in fiat currency, as low as possible in order to maximise the exchange of oil for gold?"

I understand this theory and have no problems with it. The problem I see is if they have truly been accumulating gold over the past decades, where could this gold have come from?

To Oro & Galearis:

I hope you can help me straighten this out. I see a major contradiction in the 2 major themes in the gold market.

Major Theme 1: Supply Demand Deficit
*Supply of 2500 tons per year does not satisfy demand of 4000 tons a year. The gap has been filled by CB sales and loans, which now amount to as much as 12,000 tons, or nearly half of CB holdings.

Major Theme 2: ME Gold Accumulation
*ME oil producers have been accumulating gold in exchange for oil, and have accumulated anywhere from 1000 to 3000 tons per year. That would amount to, say, anywhere from 20,000 tons to 60,000 tons over the past 2 decades.

Now, my problem is that if the supply/demand story is true, there is no spare physical gold for the ME to accumulate. If we assume that theme 1 is true, then they must have accepted paper gold.

If they accepted paper gold, then the West owes the ME 20,000 to 60,000 tons of physical gold (ME holds paper IOUs). This is certainly more than is left in the CB vaults.

So��..assuming that the ME has accumulated major gold paper holdings and that the gold to pay them does not exist, what is the outcome?

How can the ME demand payment?

If a local storeowner loans the local mafia leader $10K a year for 10 years, and then demands payment of $100K in the 10th year, what will happen? The mafia leader will rip up the IOU, and make various threats, yes?

Can someone pls point out the holes in my numbers and how the ME would have the strength to "demand payment of their gold"?

Thank you!!!

THC

Please be patient kind sir! Although many of us do empathize with the emotions that you have expressed. My instincts still scream at me that the late Sept. move was mere'ly the invitation to the party!! I hope many have RSVP'd. The next stage will begin at the appointed time and hor d'oeuvres will be served followed by a full eight course meal. My GUESS for timing is Monday,Dec 6.
Keep Well

International Repercussions??? Noooooo ...Really....Iranians Warned of Y2K Breakdowns

The Associated Press
Wednesday, Dec. 1, 1999; 10:25 a.m. EST

TEHRAN, Iran �� The government is warning Iranians they could face breakdowns in public services at the end of the year because of the Y2K bug.

"It is expected that with the arrival of the year 2000 some unexpected incidents may happen and some public services may be disrupted," Mohammad Sepehri-Rad, head of the Supreme Council for Information Technology, said Tuesday.

Speaking on television, Sepehri-Rad suggested there could be breakdowns in the oil, electricity, communications, transport and health sectors, saying his team had singled out these industries for attention.

Any disruptions in Iran's petroleum industry are likely to have international repercussions.

Most of Iran's computer-controlled systems were bought from the United States before the 1979 Islamic revolution. But it has been unable to get U.S. help to modify the computers for the millennium bug because of hostile relations with Washington dating from the takeover of the U.S. Embassy in Tehran by revolutionary militants in 1979.

The average plane in Iran's fleet of commercial airliners is about 20 years old. The aircraft are likely to be affected by the Y2K bug. It is not known what steps have been taken to repair the planes.

Sepehri-Rad said his team had accomplished its goal to a large extent and hoped that few problems would be faced.

"However, it should be remembered that no 100 percent guarantees can be given concerning the solution of this problem anywhere," he said.


� Copyright 1999 The Associated Press

The pulling of the golden trigger is something the Arab oil countries did not do before, because of the US being in recession despite much help from the world in the period immediately after Russia. In the post 96 period, they were met with European support for their direct gold trading concept and Europe added the gold backing to their currency. The problem was that this would force a delay. The delay was accomodated by Arab Oil and Japan.
The Japanese in summer 97 were making rather nasty noises. Today they stopped talking to the US about the key issues and are only doing things internally. They have stopped buying US notes in 97 (as has Europe) and started cashing them in. The internal discussion revolves around financial restructuring ("big bang"), throwing out cronyism in the legal and business world, and most significant, changing attitudes about militarization, the prohibition of which the US wrote into their postwar constitution. The story of a militarilly capable Japan is not one of danger to the world, but of expected decline of the US and the summoning of the required resources and will power for self defense. The US has been payed more than enough by the Japanese for their protection. What Japan must hope for, is that as its poppulation ages, they can rely on their dollar reserves to support retirement expenses. Japan is the first to face the baby boom retirement problem. Unfortunately, the dollar is valuable only as long as it is accumulated. The moment one needs to cash it in its value disappears.

The Euro plan was supposed to make the transition to gold exchange market paralleling the currency exchange market, with gold banking set free from central bank control, somewhat along the lines of Scotch free Banking of the 18th and 19th century (so far as I can understand it). Currencies were supposed to be valued according to gold backing, and the appropriate gold bubble would form, to the benefit of Oil Royals and all that have substantial gold holdings in hand or below ground. So far as I can tell, all evidence points to this still.
Oil issues were touched on in the previous post. Do not think of Kuwait being the beneficiary of US action in the Gulf against Iraq, and in its prior playing of Iran and Iraq against each other. Europe and Japan were the beneficiaries, as were South Asia and other EMs.
The US was thus let to perform the deeds it has been payed for. What the US did in Yugoslavia during this period had many purposes, one was to show its standing in favor of the Islamic side, one was to maintain an active presence in Europe, to be used as a threat to France in particular, but to Germany as well. The US can't play that bluff, and it was grossly interfered with by the French and ignored politically. The Russians snuck in, this was also intended to show the Russians what the US could get away with even in today's "open" information systems, TV and all.

As I have said before, the only protection a country may have today, is a nuclear arsenal. To this effect, all countries will be armed before long. The Americans, Russians and Chinese will proliferate nukes to the point that any country of substance would have them. They will do it whether it is legal or not. Americans who do this are still patriots, because they are preventing the US from self destructing and taking the world with it. We have two Sadams today, one is semi functional and sits in Washington.

In the realm of international economic agreements, the recent bilateral agreement with China was close to US capitulation on all the "nice" items and significant withdrawal on the important ones. Global discussions are now ocurring without any US participation at all. Clinton is being ignored. The US military umbrella is not only unnecessary for the world, it is unwanted. In 97 the US credit card was torn up, and no further official treasury bond buying of significance has come up since. Notice of this was given to Bush in 92 and Clinton's "balanced budget" is the first attempt to live up to this promise.

What the countries of the world expect to see is a free market among them, without any further manipulations in the markets. The ECB has stated it so often that it no longer makes an impression. The US is attempting to fight back, but its bullets will turn back at it.
The raids against the falling bond, the attempt to coax M1 into M3 so that less gold would be required to back it, the support of the stock market, the continuation of the option compensation plan when they have grown out of all proportion to the initial intent and now dominate the structure of the market altogether. These are tools to keep dollars flowing into the US. These are tools of desparation. Just to hold it together till the elections.

Oro, your message ID:20019 is definately a keeper. Thanks also for filling in the cracks, in the Oil for GOLD dealings. They are complicated, but you have easly mastered them and helped to shine a light on this contentious issue.

You are also a intellectual (Giant) how you find this stuff out is beyond me? Thanks so much i,am sure many here tonight have learned alot. I made a print out of your comments since to me they are quite lucid!
G.T P.S ORO i agree about what you said about it being a great honor to find out it was her. Thats why it "hurts me" so much to divulge it! :-( I will not speak of it again.

As I have worked it out, the purchase is done on paper. The accumulation is slow but steady. They obtain the gold for gold loans from themselves and buy it back. The rates of accumulation are not the same today as they were in the past. The 1995-1997 period was the main thrust where 8000 tons were committed and 4000 tons of their own gold were used to back that up (sums in total for the period). Trades were executed in the second and third quarter of every year. Prior to that, the accumulation was significnatly slower, probably on the order of 12000 tons gross since 1987, going into 1994, a large minority of that in paper form. I believe the current gold in hand would be about 10000 tons 6000 or so in Saudi hands. The Oil Royals paper gold position outstanding was probably in the 8000 ton range in the end of 98.
I would need to expend a significantly larger effort to put all that together into better estimates with something beyond back of the envelope calculations. Right now, obtaining information before 1995 is quite difficult.
The main point is that in 98, as Asians dumped their gold, the Arab Oil countries were getting delivery.
Because of many Westerners dumping their gold holdings after a disappointing 20 years, right at the beginning of a new gold bull - right after the first spike, it is in the interest of all gold accumulators to use the opportunity of collecting more gold at a discount to do so, even if one needs to delay a long plan from executing.

http://www.worldnetdaily.com/bluesky_exnews/19991201_xex_in_2000_its_.shtmlSorry, this is off topic....unless you're interested in protecting your gold (along with everything else you hold precious).

Following is a portion of the article:

In 2000, it's China Canal
Clinton admits Beijing to control
crucial waterway through Panama


By David Kupelian
� 1999 WorldNetDaily.com

President Clinton admitted yesterday that the
Communist Chinese will, in fact, run the
Panama Canal when the United States pulls all
of its troops out and relinquishes control of the
vital waterway Jan. 1, 2000.
Speaking to reporters in the Oval Office before
leaving on a trip to the west coast, Clinton
addressed the issue of the imminent U.S.
surrender of the American-built
multi-billion-dollar canal.
"I supported it at the time and I still support
it," Clinton said, referring to the controversial
1978 treaties signed by then-President Jimmy
Carter and Panamanian dictator Omar Torrijos,
requiring U.S. surrender of the Panama Canal
to the Central American nation at the century's
end.
"I think it's the right thing to do," the President said.

Clinton noted that the United States would be
represented in Panama for the year-end
change-over by former President Carter, whose
administration negotiated the treaties, and
Secretary of State Madeleine Albright. Carter
"deserves enormous credit" for winning Senate
passage of the treaties, which, Clinton added,
were "very controversial, immensely
unpopular. A lot of the members of the Senate
... had their seats put in peril over it," the
Associated Press reported.
As the year end approaches, increasing
congressional and military warnings about
America's imminent loss of control of the canal
have been dismissed and scoffed at
consistently by the Clinton administration.
During yesterday's announcement, Clinton,
once again, at first brushed off concerns --
voiced most recently by former Joint Chiefs of
Staff Chairman Adm. Thomas Moorer -- that
China is preparing to take over the canal once
the United States leaves. Moorer has asserted
publicly that China plans to seize control of the
canal through a Hong Kong company,
Hutchison Whampoa Ltd. -- a firm widely
believed to have close links to the Chinese
military -- which has won rights to operate
ports on both ends of the canal.
But then, in disarmingly unambiguous words,
the president openly admitted that China will,
indeed, control the Panama Canal after Dec. 31.
"I think the Chinese will in fact be bending over
backwards to make sure that they run it in a
competent and able and fair manner," Clinton
said.
"They'll want to demonstrate to a distant part
of the world that they can be a responsible
partner," the president said. "And I would be
very surprised if any adverse consequences
flowed from the Chinese running the canal."
But the former chairman of the joint chiefs of
staff is very concerned about "adverse
consequences." "I am appalled," Moorer told
WorldNetDaily in an exclusive interview, "that
the president would make such a statement,
and that his advisers would mislead him to
this degree. If what he says takes place, and the
Chinese are allowed to remain and increase
their presence, the results will be catastrophic
for the U.S."

"If we have to go back in to restore the canal to
its previous position," he said, "there will be
many casualties, and they won't be confined to
the canal area itself. Our inability to move our
forces back and forth (through the canal) will
result in casualties of our forces in other parts
of the world." If the U.S. is prevented from
navigating through the Panama Canal, it must
travel an extra 9,000 miles around South
America.

Moorer added an ominous warning regarding
China's strategic use of the canal.
"No one seems to grasp the threat to the U.S.
that can be posed by Chinese container ships.
When the Russians brought missiles into Cuba,
American citizens went into a panic," said
Moorer. "But now, following the lead of the
president, Americans are practically ignoring"
China's ability to do the same.
A Chinese dissident who spoke to
WorldNetDaily on condition of anonymity,
echoed Moorer's concern.
"The chinese Communists don't have a
sufficient number of long-range ICBMs, and
those they do have don't have sufficient
accuracy," he said, "even though they are
drastically improving them, thanks to U.S.
technology. But the shortage of ICBMs can be
compensated by, one, submarines, and two, an
enclave close to the U.S."

If anyone can find out if this story is fraudelent, I sure would like to hear it. The thought of the Chinese controlling the Canal scares the s*** out of me!

www.kitco.comrepost --

Date: Wed Dec 01 1999 18:30
AzusaGold (Scientists Announce The Discovery Of A New Element) ID#255250:
Copyright � 1999 AzusaGold/Kitco Inc. All rights reserved


Investigators at a major research institution recently discovered the heaviest element known to science and have tentatively named it Administratium.

Administratium has no protons or electrons; thus it has an atomic number of 0. It has, however, 1 neutron, 125 deputy neutrons, 75 assistant neutrons and 111 deputy assistant neutrons, giving it an atomic mass of 312. These 312 particles are held together by a force that involves the continuous exchange of meson-0like particles called morons. It is also surrounded by vast quantities of lepton-like particles called peons. Since it has no electrons, Administratio is inert. However, it can be detected chemically, as it impedes every reaction with which it comes into contact.

According to the discoverers, a minute amount of Administratium causes one reaction to take more than four days to complete, when it would normally have occurred in less than a second. Adminstratium has a normal half-life of three years. It does not decay, but instead undergoes a reorganization in which the proportion of the deputy neutrons, assistant neutrons exchange places. In fact, an Administratium's simple mass will actually INCREASE with time since with each reorganization some of the morons inevitably become neutrons, and from new isotopes. This characteristic of moron promotion leads some scientists to speculate that Administratium is spontaneously formed whenever morons reach a certain quantity in concentration. This hypothetical quantity is referred to as the "critical morass." Any scientist will recognize it when it occurs.

http://www.pathfinder.com/time/magazine/articles/intl/0,3266,28724,00.htmlTime magazine, July 19
"Said Haruko Fukuda, chief executive of the World Gold Council: "This is the economics of the madhouse." "

www.kitco.comrepost --

Date: Wed Dec 01 1999 14:30
rhody (LEASE RATES: Where have I seen this before? One month gold) ID#410367:
Copyright � 1999 rhody/Kitco Inc. All rights reserved
lease rates jumped .21% today, from 1.77% and gold tanked $1.40
The other lease terms moved up by marginal amounts, so gold is being
shorted again using supplies from where???? Minions of monetary
agencies continue to add to that lease overhang, and cheapen the
spot price, which adds to demand which adds to the supply deficit,
which adds to the demand which requires even more leased gold which
adds to the lease overhang and all of that is supported by a shakey
DOW and USD.
For those of you who don't believe in a lease ( short ) overhang,
even Gold Fields Mineral Services admits it may be 4500 tonnes.
Since annual gold consumption is 3500 tonnes and production is 2400
tonnes, there is no way even the 4500 tonnes can be covered. GFMS
is likely an instrument of US monetary interests, so they offer
a best case scenario for gold supplies. Even their estimates lead
to a dead market in gold. So why does the leasing go on? Every
lease from now on will likely end in a default, or perpetual roll overs
at ever increasing lease rates, culminating in defaults, lawsuits and
cash settlements. Anyone involved in leasing is selling down his gold,
and running a near 100% probability of losing the gold. Go figure.

ORO's posts from yesterday were simply brilliant. In fact, GT's and Stranger's posts were brilliant as well. An incredibly stunning performance. Bravo!

(I think FOA is ORO...nah...)

Leroy,
The following posts are the most significant yet unsubstantiated yet highly intriguing posts I have run across on the net in recent days. ORO from the www.usagold.com forum is in true form. He sounds much like FOA did. Yet, I see evidence of identity pointing going on, whereby folks are trying to say FOA is a female and a well-known gold-bug. In addition, the Stranger's post highlights a sentiment of this prolonged gold-agony caused by gold really being at the center stage of world finance and intrigue but nobody and I mean NOBODY wants to make it known...yet.
Back to ORO. If what he says is true (I am the messenger and do NOT necessarily agree or disagree with any of what I have passed along here) then this post about oil and gold clearly brings to light what FOA and Another have been saying as true. What scares me about ORO's words here are that they seem to explain much of the circumstantial evidence that comes to the light of press regarding the gold market and the Euro and the conflicts in South East Europe. Again, these are the most significant posts I have seen on the oil for gold story yet.
The conclusion I draw from these posts follow below:
-- The timeline of the below events are out of any one parties hands as each delay in the rise of the price of gold is because so many players have turns at play.
-- Gold and it price on world Gold markets are in a state of flux and are out of balance -- a significant disconnect between paper price and physical price that is only be held in check by periodic physical gold deliveries from some Middle East oil countries (Jordon and Kuwait) and the Bank of England gold auction.
-- Most large holders of physical gold have stopped letting loose of their gold and will no longer play the gold-lease game.
-- At this moment in time, gold is being fed in small quantity via the above sources in order to buy time for large bullion banks and players to get their books in order for the next move up in gold. Ashanti and Cambior were the catalyst for this.
-- The Middle East oil countries are heavily into oil for gold contracts that to maintain price stability requires repayment in gold that doesn't exist in sufficient quantity to repay loans.
-- Recent oil hikes are a result of the above playing out.
-- Longer term, oil will go much higher.
-- Gold will go much higher and faster than some may be prepared for. Question still remains as to when, however. There will be some real fallout from this in terms of some larger players. Bankruptcies and suits.
-- The Euro is being held in check for the moment while this plays out.
-- The Euro has a good chance of becoming a world reserve currency in a world that can likely only support one world reserve currency.
-- The dollar is in true disfavor with the above world players. So all the acts that play out above will continue to move towards the Euro and gold. The Euro may become the proxy for gold, which will buy time for physical gold to be delivered to the ME.
-- Much of the European military and Middle East recent police actions would appear to be a result of payment for, reactions to, positioning for, the Euro becoming stronger and the dollar growing weaker and the large gold short position that scares the gold contract holders into believing they may not get their gold. In other words, its all about money, oil, and gold and waiting for the music to stop as the players move around the few remaining chairs to see who is left without a chair at the table.
SteveH

Here's one last futile attempt at pitching a case for one particular definition before giving it up as a lost cause and proposing a solution. Although I've seen some subtle variations, it seems that the two most popular camps in the debate are aligned with either money supply, or else prices. The terms are built upon Latin "flare" (to blow), and not surprisingly, our own most common use for the term inflate is probably associated with balloons (or maybe tires.) When we blow into a balloon to inflate it, it swells in all directions, doesn't it? It generally gets bigger. To belabor the point, inflating an empty baloon or innertube makes the thing increase is size, volume, etc. A deflation is a reversal of the process.

Is it most appropriate to think of changes in prices as a swelling? Do prices increase in volume? Prices move more like our description of an elevator, don't they? When they change they either move up or they move down, they don't swell or collapse in size. Money supply on the other hand, if viewed as actual currency in circulation (or on deposit) rather than as a representative integer behind a statement such as M1, M2, or M3 =?, is more aptly described as a change in size, such as an increase in volume similar to air molecule in a ballon. To belabor the point again, currency in circulation doesn't change up or down like an elevator, it swells or it collapses. It inflates or it deflates. The confusion has probably crept in over time as the monetary authorities realized that telling the public that the money supply has been inflated would be certainly viewed as an unsavory turn of events. Such tomfoolery would surely result in some form of reprisal against the obvious cause--the institutions. Just like the changing phrases in the George Orwell's "Animal Farm," vocabulary had to be manipulated and managed such that money supply was kept out of the limelight. Or like my earlier point about advertising or propaganda slogans, repetition does not make something true, but rather creates merely the perception of truth. As such, the term inflation was deliberately forced to fit the symptom--not the cause--of rising prices. The public wouldn't hang the institutions for something that could conveniently be blamed on a smattering of causes--trade tariffs, labor unions, product shortages, monopolistic control of the market, excessive consumer demand, etc.

The problem, apparently, is that instead of relying on common experiences and common sense, many people have likely come to rely on the specific teachings encountered through their various formal educations. There's no shame in that, but the wisest choice is to know enough to pick your battles, and to realize this one will never be won by either side. What's more, it really doesn't matter. It's more important to realize that effective communication should be the bottom line.

Therein lies the solution. Simply avoid using the 'flation terms altogether. Who needs 'em? How much more difficult is it to clearly convey your thoughts by saying the money supply is expanding or contracting, increasing or decreasing? And prices--how much more difficult is it to say prices are increasing or decreasing, moving higher or lower? Here's my point. If you don't know my personal preference in terms, this statement is worthless to you--"The ECB is not so much concerned about euro exchange rates as they are about maintaining an inflation rate at two percent." The energy required to be crystal clear is the same as the energy spent being equivocal, so just do it. Be clear, that is.

Here is a prime lesson in effective communication, courtesy of Alan Greenspan as posted earlier by Journeyman-- "Whenever you have a currency fall as sharply as the rupiah has fallen, which is approximately 80%, and you import any significant amount of materials or foodstuffs, which they do, then clearly the domestic price of many of the things which they import obviously skyrockets ...and as consequence there are increasing concerns of food shortages and food prices which are too high for those average Indonesian citizens to afford." -Alan Greenspan, Semi-annual Humphrey-Hawkins Testimony to US House, July 22, 1998

And here's a final example of of effective communication from the same source--
Representative: "As the stock market reaches dizzying heights, does that not represent, in a sense -- in a sense -- an increase in the money supply, and is the FED concerned specifically about that?"
Greenspan: "That, that's an interesting question, because what we're dealing with is distinctions between money and credit in certain respects, or claimings. And the issue of asset value changes, which clearly are not the same thing as an increase in the money supply, are none the less interrelated and I think what we try to do, with hopefully some success, is to be able to understand the inter-relationships between money on the one hand, asset value changes on the other, and how both impact on the real economy. I wish we knew more about a lot of these things. They continuously change and we continuously get proxies for what we think real money is, and find out that it's not a useful proxy." -Federal Reserve Chairman Alan Greenspan, semi-annual Humphrey-Hawkins testimony (Day 2) to House Banking Committee, 24 Feb 1998

On a side note, it goes without saying what the underlying meaning is to the phrase "...we continuously get proxies for what we think real money is, and find out that it's not a useful proxy." Let me summarize with my closing statement--

Gold. Get you some. (And the flavor of the month is...Swiss Helvetias and Confederatios! Yes!! I got me some!) ---Aristotle

After reading on this forum for months, I have heard the phrase oil for gold, and that the arab countries sell oil for gold. I now believe this is bunk. Billions of dollars have been spent on oil. If they were really purchasing gold with this money, it does not reflect in reality. I defy anyone to show me proof of this myth.

I believe many things that you all have posted, but this mysterious veil thing is ridiculous. If you really have inside information on something, why not just state it? Why not reveal who you are? I saw the Wizard of Oz.

You asked, "Can I ask why the auction was so horribly 'undersubscribed'?
Since physical is still so short, conversely, demand should be high, why were there so few bids? I am completely perplexed and confused by the outcome."

"Undersubscribed" would imply that there weren't enough bids to claim all the metal offered. The auction was in fact oversubscribed by just over a factor of two. But I see what you're saying. More to your point, I think Townie's Golden View last night may have hit the nail on the head. Essentially, the auction scheme came about in response to tightening physical supply that likely threatened certain London Bullion Market Association operations. And although the price has now returned to the range at which the auctions were announced, the recent whipsawing down to $250 then up to $330 followed by a "collapse" back to $290 has shaken enough metal out of weak hands to temporarily alleviate the pressure. The fact that anyone at all is participating in the auction when an efficient spot market is supposedly right there in their back yard still speaks to an apparent difficulty in getting clear Gold of any size for ownership.

But for a small fry like me, the auctions are little more than a curiosity. I'm on the monthly program, and am content to help keep the fire burning here with the added benefits of no sales tax and delivery right to my door. The BOE's auctioned Gold comes inconveniently only every-other month, the London Good Delivery bars are way outta my league, and I'd have to arrange for the collection and transportation, not to mention the collection fee and Value Added Tax payable as this Gold would be transferred out of the LBMA system. When it comes to acquiring Gold, smallness has distinct advantages of flexability. But truth be told, I'd like nothing more than to rock our favorite Gold broker's world with a one tonne purchase!

Gold. Get you some. ---Aristotle

PS. WilloTheWarthog, I enjoyed your #20003 post. But where you said, "If every person owned a couple of ounces of gold..." the sad truth is that EVERY person could only have three small sovereigns should such an even distribution be theoretically attempted. Try this simple evaluation: put three Gold sovereigns (or four French or Swiss 20franc Gold coins) in your left hand, and consider yourself a man of average monetary wealth. In your right hand, heft the remainder of your Gold savings. Without the sinister implications, how many equivalent lives of men have you got at your command? That's a lot of potential manpower, my friend! Maybe we could convince ORO to do a calculation of the sum of ALL national currencies (M3 aggregate would be fine) expressed as a dollar equivalent and evenly divided among the world's 6 billion residents. I'm willing to go out on a limb and guess that the equivalent cash value per person would be staggeringly high. And beyond that, when you evaluate your preferred form of monetary savings, consider the future stability of its global supply and subsequent value.

Socrates said an unexamined life is not worth living. More significantly, my namesake went one step further, saying an unplanned life is not even worth examining. How can you take that first important step to plan your life if you can't count on the enduring stabilty of your money's purchasing power? Without spending a dime you could find yourself to be wealthy one day and a pauper the next.

IMO, WHAT'S NEW?
They sold or gave technology secrets to the Chinese over the past 7 years and now we have a military foe that is, possibly, superior to us in its military technology.
Now we give them the Canal, which Americans died building, and then they will control the gateway from the Atlantic to the Pacific with superior military weapons to protect it.
Sounds like something Clinton's crew would do. No wonder Hillary is fed up with the socialist pig.

Now for something different. You just never know where or how the next exploration idea will materialize. This has to present an amusing prospectus to potential investors.

Pharaoh Gold Mines (a subsidiary of Australian-based Centamin Exploration Company) have a copy of a treasure map. Not just any treasure map, but a copy of an ancient cutaway drawing of mine tunnels used during the reign of King Seti I in 1350-1205 BC. The original, on papyrus, is in an Italian museum. The map shows an area near the Red Sea coast about 500 miles SE of Cairo now known as the Sukkari Concession. The area is littered with ancient mining tools, mortars and crushers. Exploration drilling has been progressing for the last three years. The Australian executive director, Mike Kriewaldt, estimates extraction costs of about $120/oz using open-pit mining. Under the terms of a 1994 concession agreement with the Egyptian government, Pharaoh Gold will be able to produce and sell gold free of taxes for 15 years after production commences. In exchange the Egyptian government gets up to half the profit. The Australian Financial Review calls the Egyptian concession a "potential world-class gold project". Outside assessments suggest that one section of Sukkari Hill could hold over 2 million ounces of gold. Centamin shares trade in the 10-cent range.

That's not right. At least, it's not true if you use the exchange itself to define the closed system under the standard definition of zero sum. Within this system, each dollar of profit by one party does not have a one-to-one correlation with each dollar of another party's loss. No way, no how. For a simple demonstration, picture one stock that you bought for $10 and sold for $11. The next guy sells it for $12, the guy after that for $13, and so on. Nothing but profits for everyone all the way to the stars.

The futures markets, on the other hand, are zero sum markets. The difference is in the nature of the "investment." Stocks are free assets that come with no obligations. Depending on your choice between buying, holding, and selling, you and everyone else might conceivably never experience a net loss, or conversely a net gain. Futures are distinctly different beasts. They are CONTRACTS between two parties who enter into opposite sides at a specific price. As the contract price changes, one party gains exactly what the other party loses. A zero sum market.

Gold futures are a zero sum enterprise. Gold coins and bars, however, are free assets like stocks. And just like the simple stock example given, under a steadily rising market there need never be a loss suffered by anyone who had Gold pass through his possession. The opposite holds for the string of sellers in a falling market. The IMF, the ECB, the BIS, etc., all know this well enough. As a Gold "owner," the IMF can count on rising Gold prices as a relatively harmless source of funds with which to bail out Heavily Indebted Poor Countries. There is no "zero sum counterparty" to cry foul. If the U.S. followed this lead, assuming our Gold reserves are unencumbered of obligations, they could function as a painless source of future value with which the goverment could provide Social(ist) Security to our coming wave of retiring baby boomers.

I recall a coach in my track days who was fond of the phrase, "No pain, no gain." True enough when you're logging the endless laps around the track, and true enough on the futures markets. But Gold in hand has the potential to be all gain, no pain--a politically attractive opportunity that won't forever go un-utilized.

Gold. Gain you some. ---Aristotle

I'll have to get back to your question after a break. Which post did you find of passing value?

One quick question, to make my job easier: where you stated "If an enterprising person legally hand carried $8000.00 in Gold and $2000.00 in cash to an established off-shore locality..." I'd like to know what is the weight of the Gold (container?) in which you are carrying the 8,000 bucks? Heh, heh, heh. Who was it that recently posted a (British?) rhyme about a couple of characters going out to sea with plenty of this and plenty of that and plenty of money wrapped in a five pound note?

Good morning all, and thank you Oro for your generous sharing of ideas!!!!

1. End of US Hegemony?
I agree with you completely that many nations are tired of US political, monetary and military hegemony. But �gdisliking Caesar�h and �gtaking effective action to disable Caesar�h are quite different. He who challenges Caesar and fails will face certain death, and death is not an attractive prospect to the politicians who manage the major non-US global players (Japan & Europe).

I don�ft think we can be sure that decisive action is imminent on this front.

2. ME Gold Accumulation
The gold market lacks transparency, and I think that it is not an effective use of our time to strive for precision in calculations. Cocktail napkin figures are fine. For the purposes of our discussion, as per your suggestion, let us assume the ME oil nations have accumulated:

10,000 tons of physical gold
8000 tons of paper gold

This puts them roughly on par with Europe, right?

3. The �gTrigger�h
Perhaps we should look at possible triggers to destroy the paper gold/US$ pyramid.

A. Major dollar holders (Europe, Japan, China or ME) make a bid for physical
B. Major gold creditors (ME or EU CB) call in loans
C. Bull run in gold shuts down shorts
D. Oil producers announce will buy and sell oil for gold, not paper money

What is the likelihood of these events? Please let me know what you think. I see:

A. Europe and Japan have not shown any interest in accumulating gold so far, it is hard to imagine that they have this concept. I find it hard to imagine this happening.
B. The EU BB probably hold at least half of the gold loan positions, calling the loans would push many of these to the edge. Would Europe destroy its own banking system? I find that hard to imagine as well. On the other hand, this seems like a natural move for the ME to demand payment. The problem is can they actually receive payment.
C. The common man is programmed to think in paper money, and will probably not buy physical until the move is already well underway. For this reason, C is not a likely �gtrigger�h.
D. If they can defend themselves from the US, Russia and other hostile nations, why not?

Based on my limited understanding, D actually seems like the most reasonable. Why would the ME choose the Euro? The ME cannot receive delivery of its current paper gold positions, switching from US$ to Euro will not make any more physical gold available to them, unless the Euro to gold parity is fixed and the European CB is willing to exchange gold for Euros at a fixed rate (kiss yer gold goodbye!).

Assuming the ME producers can defend themselves, would it not be most rational for them to:
*Convert all paper gold to physical
*Buy as much physical as is possible now with US$
*Announce policy change to begin using gold as currency for foreign trade (quote oil in gold)

I don�ft understand the attraction of the Euro, as the Euro is a fiat currency like the dollar. If the Euro gold reserve are just reserves and are not available on demand at a fixed rate, what is the difference from the US$?

However, I don�ft see how SA or Kuwait could free themselves of the US/Britain�c�c.SA is now �goccupied�h by the US military�c�c�c.just like Japan.

Looking forward to discussion of the problems with the above reasoning.

Many thanks,

THC

http://www.usagold.com
Wage and price controls is not a subject I have heard discussed here or anywhere else in regards to Y2k.

I am of the opinion that in the event of severe disruptions in the enconomy, the government may result to wage and price controls.It happened in the Nixon era and it could happen again.

In the event that it does, what effect would that have on the stock and commodity markets? It seems to me that the price of Gold would want to skyrocket, but would price controls effect this?

Perhaps this is a dumb question, but if anyone has insight into this area, pleae share it.

The current dip looks like a great buying op.

It looks like a capitulation. Time to start buying again.

Enjoy this while it lasts.

3. The �gTrigger�h
Perhaps we should look at possible triggers to destroy the paper gold/US$ pyramid.

"A. Major dollar holders (Europe, Japan, China or ME) make a bid for physical
B. Major gold creditors (ME or EU CB) call in loans
C. Bull run in gold shuts down shorts
D. Oil producers announce will buy and sell oil for gold, not paper money"

It was late last night when I finished typing to this forum and did not respond with my 2 cents of fiat to your oil/gold question. It seems to me the problem with responding to all these questions about things gold/fiscal/oil/fiat is the extraordinarily complicated nature of the interelationships that most consider the house of cards to end all house of cards. All your points above would likely accomplish the task, but do we really want the above to happen. All at once? Some? And in what order of battle?

Thank goodness we have a superior minds such as Sir Oro and FOA to dissect this beast for us all. The rest of us need simple answers in order for some sort of epiphany to occur. Here is my take FWIW - in "simple" words. FWIW The whole domino/house-of-cards fiscal problem may be summed up with one word: DEFAULT.

Many CBs hold way too much paper, be it gold or US treasury bills. They cannot send this back from whence it came and exchange it for real money because of the lack of supply of the real money (gold). To do so would ultimately cause those other things that would be equally destructive to their fiscal system and local economies. The US dollar decline would royally upset their own economies. There is not enough gold to cover the paper (and indeed there never was). To call in the loans, in what ever form, would lead to DEFAULTS.

Simply put, the mess they are in is somewhat(?) or wholly (?) unretrievable because to address their oversupply of the worthless, to exchange it for real money (wealth), or a percentage thereof (the Euro) would lead to a domino affect of DEFAULTS. A vicious circle. None of these people want to be left out in the cold on this particular musical chair game.

But this gamemanship between the fiscal managers of the respective world economies, as so aptly pointed out, is not to find a solution; it is a delaying tactic where the only goal is to minimize the damage of the ultimate collapse. Letting the POG 'go' according to free market fundamentals would only serve to trigger the fiscal calamity and......well at this point pick your favourite disaster movie.

Bottom line: the cure is worst than the disease. NOBODY WINS IF THE US DOLLAR COLLAPSES PRECIPITOUSLY! The goal here as I see it is to allow that paper ship to scuttle gracefully and without a ripple. Hopefully, for we who buy gold, this process will go on with class dignity and poise, with no temper tantrums and no violence.

Canuck: The Red Lake saga continued late last night. Please give it a read - I am sure noone has ever discussed a cow as sexual object on this forum before. And every word is the truth!

MARKET REPORT(12/2/99): Gold took a hit this morning shedding $5.40
from the price in what the London press is attributing to the lingering
effects of the Bank of England auction. Lease rates continued to rise
back toward the 2% level and another significant First Notice day
related delivery of 57,482 ounces was made to the Comex warehouse.
Standard Bank reports strong physical demand in Asia. Someone is playing
Santa Claus in Chicago again this year. Six gold coins were dropped into
Salvation Army kettles already this Christmas season proving that gold
advocates also have golden hearts.

On to another, less appealing, subject:

In what is obviously blatant anti-gold propaganda that I cannot let go
unchallenged, Reuters reports this morning in a piece by Alden Bentley
that "Almost none of gold's advance from near 20-year lows in September
and October was attributed to safe-haven hoarding of coins and bars
before January 1, analysts said." This is a lie and I would like to know
who these analysts are that Reuters is quoting and whether or not they
have the credentials and exposure to make such a comment. Quite to the
contrary, ask just about any gold firm in the United States and they
will tell you that the past year's rush to gold has been the heaviest
since the 1970s gold rush -- and that a good deal of the impetus has
come from Y2K concerns. The coinage demand figures bear this out.

Quoted in the article were a number of so-called gold analysts who are
nothing more than hired guns paid by the big brokerage firms to (for the
most part) debunk the metal. Not one gold analyst from any major gold
firm was quoted on Y2K volumes over the past year or even in recent
months. They weren't interviewed because this article was written and
the slant determined before one of Mr. Bentley's fingers hit the
keyboard.

My guess is that the real story is that another demand bubble is forming
for the yellow metal related to Y2K and Reuters is trying to kill it
with another totally unfounded anti-gold propaganda piece. We have seen
a strong pick-up in Y2K buying over the past week, and that, my fellow
goldmeisters, is a report from the front lines, not the back room of
Merrill Lynch or Smith Barney -- or some other hand selected anti-gold
spinmeister. Why don't we just get it over with and roll out James
Carville to get the job done once and for all?

Now, in the interest of reporting all the news, though much of the gold
buying in recent months has been Y2K oriented, I must say that not all
of it has been. Investors are also concerned about the overvalued stock
market, rising oil prices, inflation and whole host of other potential
problems. They also mention quite often that gold is low and the time
just seems right to make a purchase.

If the patterns of the past hold true in the present, you can expect a
string of attacks on gold starting now in the national press and
spreading to your local newspapers before the next two weeks are out.
Obviously, there is more fear on Wall Street than we realized about the
public exiting equities, and when you look at the most recent figures on
mutual fund reductions and growth in money market accounts, you get some
inkling as to the reasons why. Gold is an obvious beneficiary of flight
capital, thus the attack.

You know what's funny about all this?.... These orchestrated attacks on
gold never work. Even though reports are form written and perfected (you
could read a similar rendering a decade ago, two decades ago, etc.),
they haven't been able to change the public perception of gold. In fact,
they tend to have the opposite effect. Intelligent investors naturally
wonder why the press is so vehement in its hatred of gold and why the
spin group on Wall Street finds it necessary to orchestrate these
regular attacks. Could it be that they fear gold? Believe, it is a
lifeless metal, not the neighborhood attack dog -- so why the fear?
Those who believe in gold won't be swayed by propaganda of this nature,
and those who hate gold will revel in the delight of knowing that the
mainstream press is on their side. So it goes.......onward into the 21st
century where Robert Mundell tells us again today (this time through a
Canadian newspaper) that gold will play a significant role in the
international economic system.

That's it for today, fellow goldmeisters. More later if anything
interesting develops.

Please call 800-869-5115 (Ask for Mary Conway) if you have an
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Wage and price controls were implemented during the Nixon regime. Their effects were thoroughly documented, even by the US Government. I believe that with the new inflationary age that has already started, and the further increases in the size of US Government, they are an inevitable move within the next few years. Whether they are proposed because of war or because of economic problems, the net result will be the same.

During the wage/price control era of the '70's, WPC's contributed to increased government size and severe warpages and shortages in the market. For example, the price of fabricated copper products was held down while the world price of copper was going up. The net result was that many fabricated copper products (such as wire) were not sold in the US as finished product, but was rather exported and sold as copper scrap in the international market. This was legal because there was no control exercised over the export of scrap, so the producers, wishing to minimize their losses, sold to the highest bidder. Thus the US government was effectively responsible for the shortage of copper wire in the US.

All this was thoroughly documented after the fact by the wizards in the US government. I don't know if the two-volume, several thousand page book set is still available from the US Government printing office.

No matter how hard the government tries, it will not be able to change the result of its current inflationary policy. While it surely should bear the blame for the results, it will act in ways to shift the burden to the taxpayers and corporations--as usual, with their consent.

THC (12/2/99; 7:52:04MDT - Msg ID:20053)

1. US hegemony is chalangeable, as discussed before, the US can't put together the necessary resources to conduct its military operations alone. Currently, the US can continue on this road of malignant intervention on behalf of perceived human rights violations that no one else cares to join into (excepting the UK). The problem is that in typical slay the princess - bed the dragon fashion, the US is dumping national sovereignty in the pursuit of human rights in a way it would find intolerable were it applied to itself. Fo everyone outside the powerful US and the UK and Australia who are bounded by seas, All other countries have borders where significant ethnic poppulations of one side reside across its borders. In this messy situation, no one but the US would take the sovereignty of nations lightly. It stands in the eyes of the governments of the world as much higher in priority than any other matter of international law, politics, and military dynamics.
If the US is seen to methodically disrespect the sovereignty of nations, then there is nothing to be lost in pulling the rug from underneath it. The military for seignionrage deals were terminated, in part, because of this too. There is no advantage to anyone whatsoever in supporting the current system as it is.

2. Oil Royals accumulation - good. 'nough is E-nough.

3. Pulling the trigger.
The trigger was not pulled yet, in Q2 99, but as gold shorts were dumping, EMU member countries were having their banks dispose of their net short positions, and working out more reliable counterparties. The BT/Deutsche disposal of their position onto Morgan's books was a great example of this. That UBS and others were still stuck with bad positions is a problem that has probably contributed to the delay. The LBMA is mainly the province of UK institutions with the US majors participating. I would put the UK position as 1/2, the US (post BT dumping) at 1/3, going down, and continental EU as low and nearing 0 as much as is possible.

The Washington agreement and developments leading to it indicate that the UK position has shifted, and the UK is joining the gold side though with much trepidation. Much of their elite depends on London remaining the main financial hub of Europe. If they lose the position to Frankfurt and Paris, they are lost. Their joining in with the gold side should stand as a sign of a shift. It may even be possible to save the LBMA and keep some or most of the gold trading from leaving the UK. This, however, requires that much be cleaned up and changes the size of the gold contingent and the possible dynamics. ANOTHER's disappearance may have to do with the move by Europe to accomodate the UK, and therefore, the LBMA. The rush should now be on to unwind the system so as to save the members instead of bombing them to oblivion. If gold options have to be eradicated by letting gold slide till expiration and hedging of those remaining, so be it.

The Washington agreement was the difinite turning point and can be viewed as Europe pulling the trigger on one of the guns. Many other guns are there. These include bidding gold up below the market, cutting the gold loans short, Oil publicly bidding for gold. All has to be done to maximum effect. Friendly forces must be protected, taken out from the line of fire, where they insisted on standing despite many warnings. Now that British forces are at least acquiescing, if not joining in with the EU, one of the weapons loses much of its effect and direct action must be taken. Could the Brits be putting on an act as a delay tactic and have no intention of joining in? Perhaps in Maggie's day. Today's Brits will be stunned into inaction by the realization of predicament. "Trembling upper lip" is closer to a description of character in their current leadership.

As things turned out, the buckshot in the gun hit some on the friendly side, particularly the interests of Oil based gold accumulators stuck with possible losses of hard earned gold contracts. There is now a rescue operation for some of those wounded by friendly fire.

The gun used, now needs to be reloaded and the advantage of surprise is lost, though much confusion on the US/IMF side prevents some actors from coming to terms with reality. Many interpret the collection of the wounded from the battlefield as a sign of weakness on the part of the gold faction. Perhaps strength is shown by those who leave their wounded to die? I don't think that is the case.

Now we can talk of triggers from your post:
A. Major dollar holders (Europe, Japan, China or ME) (1) make a bid for physical (2) buy real assets
B. Major gold creditors (ME or EU CB) call in loans
C. Bull run in gold shuts down shorts [due to natural occurence of stock tumble in US]
D. Oil producers announce will buy and sell oil for gold, not paper money

The disruptions to the global economy brought on by any of these options being excercized, is a given. None are attractive to the EU and Japanese sides, However, the oil countries are a different matter. They may recognize the damage to the markets a precipitous decline in the $ would bring about, however, they could not care less and have zero sympathy. The Islamic and Arab worlds are very much united in their view of the US, a negative view. They would like to see the $ plunge overnight. They would dance in the streets. Their partners, however, will not want this, so D is saved for last.
Europe does not care for Japan much and is ready to write off the dollars on its books. It would not be the first time. If there is an opportunity to actually get something from the US by sending out $ to buy real US assets and goods, they will make the most of it. Since Q4 98 this is precisely what is being done. However, this can last only as long as the liquidity squeeze on US bank and credit systems does not need Fed assistance in the form of debt monetization. We already know that monetization is occurring right now and on a grand scale. The interest rates needed to support the dollar under these circumstances, grow substantially. There is a tendency to forget that cashing in dollars for "real stuff" tends to cause price rises/"inflation", and the amount of "real stuff" received in the next batch of purchases is smaller. Because of the conversion of $ debt into Euro debt, there is a paydown of Eurodollar loans and a drop in the global dollar liquidity pool (Euros convert to $, $ was in bank account, $ returned to lender, lender writes down asset and $ that payed it, $ is gone along with future demand for $ left). This brings the TED spread higher, and pulls $ deposits from US banks to replace lost $ liquidity in the global banking system. The liquidity hole sucks reserves from the Fed. Though the reserves are "temporary" and much of the demand is being met with liquidity options, instead of liquidity, there is no doubt in my mind that eventually, the currency will be added into the monetary base despite all attempts to avoid it. The result will be an inflation of M1 and will cause price rises.
Glearis, perhaps this covers some of your thinking regarding the move to default - that it would be default on value rather than default on the obligations. The Brits are being allowed to organize so as to reduce losses, but once the time allocated for this expires, remaining positions will be squeezed, whether default will result or not. I am all full of hope that somehow the $ would not crash. Unfortunately, I can't find any good reason for the world to do so, since the benefits are so limited. They may try to get as much as they can for as long as they can, but this process in itself will raise prices and will diminish their $ holding's value anyway. I still hope to see things happen your way, as I have written many times before, but allowing things to continue as they are, seems to just let Wall Street climb ever higher up in the sky just as the fuel tank indicators are blinking "low". The higher they fly, the greater the damage when they fall.
Back to the business at hand. Europe awaits C with baited breath. If it does not come along on its own, they will do more of A2 than has already been done. They are already doing B to a minor extent and will probably do more of it once the smoke clears from the first shot.

In short, the EU marvels at Wall Street's masterful performance on the financial stage, as they sucker Americans and even foreigners who know better into the stock market. They marvel at how the "psycopaths" of Merril, Goldman, and others built this bubble pumping machine that automatically commits money to the worst investments in human history, that have the stock price built into earnings to such an extent that earnings no longer relate to business as it is, but to the PR hype of the business as it could one day be.
Just yesterday I spoke to a fiduciary investor and his financial advisor. I told them of Bill Parish' work, just to find that the first still insists that Microsoft is a good investment, and that the second was shocked, but still thought that as long as there is significant momentum to the stock price, the stock would make a great investment even though the company is being operated into the ground.

The Microsoft situation goes straight back to Mises and company noting that monopolies are only sustainable by government action, namely the IRS kickback of employee tax payments to the company, and the SEC and FASB allowing them not to deduct the options costs from their income statements while allowing them to book the tax credit. The monopoly of Microsoft is provided by this subsidy, since it allows the company to sell its products below cost while expanding its reach into new cash flow generators that may some day make it profitable as a running business, rather than a brokerage operation.

I saw in the NY Times this week a BIG article on gold and the BOE last auction... I couldn't believe that what was written was unbiased journalism...there were soooo many wrong quotes and interpretations of what happened in the auction and how that this was negative for gold! When they covered the topic of who bought the gold, they said that because the minimg companie were buying the gold that that meant that they would be selling it into the market forcing the price lower....What a bunch of hog wash that is... BUT, when there is an up day in gold or when gold traded over $300 again this last week, there was not a word... I take offense to the press writing articles which effect public opinion when they have no idea what IS GOING ON IN THE GOLD MARKET! AND, they never balance their negative comments with opinions from the positive side...like from the Anglogold who bought the gold...you know, you would think that they would want to know why a gold mining company would buy 200,000+ ounces of gold when all they would have to do is go dig it up... I guess we never said that journalists were intelligent people....

http://biz.yahoo.com/rf/991202/pj.html$6.015 billion was added by the Fed through 70-day fixed system repurchase agreements for tri-party settlement, and an additional $5.0 billion through overnight repos on this first day of the new two-week reserve mantenance period for banks.
Dana Saporta, economist at Stone & McCarthy Research Associates, said "In the new two-week maintenance period we put the average daily add need for the period at $13 billion."

To anyone new to the forum, these repurchace agreements are loans from the Fed to the various banks of the nation to replace depleted cash reserves as deposits reduce their accounts through outright spending and cash withdrawals. Definately a Y2K inspired phenomenon.

http://www.egroups.com/group/gata/299.html?From the Financial Times. Excellent.

Sir Aristotle, I find passing value in all the posts,and I'll have to get back to you on the banking question.
The degree of value can only be measured in academic terms.
Such as; I've got my Bachelors degree in Golden economics,but I'm going for my Masters,and the forum contributors are the Instructors.Recent examples:
ORO #20055-"A great buying opportunity today"!
Towncriers GOLDEN VIEW #20020 "superb".
Special note from post; Deutsche Bank Futs and Goldman Sachs were BIG WORLDWIDE PLAYERS who took delivery at COMEX for the last 2 days.
Aristotle's quote;"How can you take the first important step to plan your life if you can't count on the enduring stabilty of your money's purchasing power.Without spending a dime you could find yourself wealthy one day and a pauper the next."End of quotes.
Very significant statement--How can I take past present and future earnings and retain past,present,and future purchasing power???
Put cash under the bed?-Thats never worked in the long term.
Put cash in savings bank?-With very low interest rates money loses purchasing power over time due to --flation.
Invest in Corporate securities?-Works sometimes can be disastrous other times.
Invest in Government bonds etc.-Rate of return may stay even with --flation.(talking about U.S.bonds)Penalties for early redemption.Can be a legal and family mess upon death.Can be discussed much more.
Invest in Real Estate?-Very expensive for the small investor,lose a lot of cash thru financing,open to unlimited taxation.Can be discussed much more.
Invest in a small business?-U.S. Government statistics show 90% of small business's fail withen the first 5 years.Can be discussed much more.
Invest part of a portfolio in Gold?--Lets do a comparison to the U.S. Social Security System which started in 1938,I believe.The explanation of S.S.(to non-U.S.)would take another whole post,and then some.

If a person retiring in the year 2000 had been able to purchase one ounce of Gold a month for his/her entire working life (42-45 years) they would have approx. 500 ounces of Gold,in todays topsey turvey world, worth about $150,000.00.
The first 20 working years assume the Gold could have been purchased for $35.00 per ounce,this would equal ownership of 240 ounces at total cost of $8,400.00. I'm going to use an average purchase price estimate of $300.00 Gold per month for the remaining 260 ounces of Gold=$78,000.00.Total out of pocket expense for 500 ounces $86,400.00. So if you want to figure in dollars profit- a paltry $63,000.00.Not much in todays mushrooming paper dollar amounts.

Now lets say another very conservative investor using the monthly installment method of saving,over the same period had saved $86,400.00 paper money in a very poor yeilding bank account, and now thru bank interest accumulation the the total amount was $150,000.00.

Now lets take a part of the above statement by Sir Aristotle,and apply it to today."If you can't count on the enduring stability of your money's purchasing power!!!"

Now say this is you, some reading this may may want to hypothetically take the above mentioned $150,000.00 cash, reinvest in high yeilding securities'spend it,or live off the interest.
This would be the pleasent decision to make leading up to retirement.
Now the question is; Knowing the current world situation,and the potential for tremendous appreciation in physical Gold,which person would you rather be right now?
The holder of $150.000.00 cash or the holder of 500 ounces of Gold? The most accepted way to get to this point,according to most economists, is gradual accumulation as Sir Aristotle has suggested many times. Decision making equals--- free thought--- If you don't want Governments to do your thinking for you.....right or wrong, practice with hypothetical decisions right now!!....Thank You for reading.....beesting.

http://biz.yahoo.com/rf/991202/kw.htmlAccording to this Reuters report, the markets expect demand for dollars to surge through December. Brazil's Central Bank director of monetary policy, Luiz Fernando Figueiredo, said of the intended dollar auction "It is one more measure to prevent the millennium bug, another liquidity measure."

http://www.kitcomm.com/cgi-bin/comments/gold/display_short.cgi#startDate: Thu Dec 02 1999 06:47
Dabchick (Rhody.....Lease Rates) ID#258195:
Copyright � 1999 Dabchick/Kitco Inc. All rights reserved
I have been mulling over your posting on Monday ( 15:51 on 29th Nov ) about the sudden jump in 1-Month Lease Rates, and would appreciate your further comment on the following figures for the last 10 days which I have compiled from the data supplied daily in the FT.

Rates for 1-Month gold loans/leases
Rate... | $Libor | For'd | Lease |
22 Nov | 5.59 | 4.83 | 0.76 |
23 Nov | 5.59 | 4.85 | 0.74 |
24 Nov | 5.59 | 4.84 | 0.75 |
25 Nov | 5.59 | 4.80 | 0.79 |
26 Nov | 5.59 | 4.80 | 0.79 |

29 Nov | 6.47 | 4.36 | 2.11 | Note the jump in $Libor
30 Nov | 6.47 | 4.44 | 2.03 |
01 Dec | 6.47 | 4.50 | 1.97 |


Rates for 12-Month gold loans/leases
Rate... | $Libor | For'd | Lease |
22 Nov | 6.16 | 4.38 | 1.78 |
23 Nov | 6.16 | 4.48 | 1.68 |
24 Nov | 6.19 | 4.48 | 1.71 |
25 Nov | 6.22 | 4.45 | 1.77 |
26 Nov | 6.22 | 4.35 | 1.87 |

29 Nov | 6.25 | 4.37 | 1.88 |
30 Nov | 6.28 | 4.41 | 1.87 |
01 Dec | 6.28 | 4.39 | 1.89 |

As shown, all the 12-Month Rates ( ie $Libor, Forward and Lease ) have remained about the same throughout. The 1-Month rates show a different picture, about which you posted on Monday. In that post, you said that the rise in Lease rates on Monday was as a result of an immense lease-driven short attack on gold.

But it is clear that while 1-Month Forward Rates fell this Monday from 4.80 to 4.36 the major part of the 1.34% rise in 1-Month Lease Rates in London from 0.77% to 2.11% seems to have been a result of the 0.88% rise in $LIBOR from 5.59% to 6.47%. ( Incidentally, there have been identical rises in the 1-month money interest rates for the Yen and the Euro since Friday ) .

I have taken the liberty of copying the first part of your post of Monday this week ( 29th Nov at 15:51 ) when you wrote:
" LEASE RATES: There was an immense lease driven short
attack on gold today. For the past several weeks lease rates
have been quiet to slightly declining until today.
All last week one month gold leases were in the range of .8%
and stable to declining. Then today, they jumped 1.32% to
2.12%! ONE YEAR leases are 1.95%. So we went from a "normal"
looking spread of .8% to 1.7% across the board to instant
backwardation in one day! The drop today was an orchestrated
attack by fiscal interests to attack precious metals at a
critical time ( BOE auction and collapse of 30 year bond and
a weakening DOW ) The attack was across the board on all
PRECIOUS METALS, even platinum where one month leases are now
66.5% up .86%......................."

The rise in 1-Month $LIBOR also accounts for the rise in 1-Month lease rates for all the other precious metals. Don't you agree?

I would appreciate it if you could explain how the rise in 1-Month $LIBOR signifies a short attack on gold.

Regards....bbl.......Dabchick

http://biz.yahoo.com/rf/991202/y3.htmlThe ECB held interest rates and its M3 reference rate steady, yet currency traders remained unimpressed by ECB President Wim Duisenberg's comments that the euro had a strong potential to rise, and had expectations of slowing U.S. growth and an acceleration of European growth.

Currency traders said the dollar's own downside was protected by action from the Central Bank of Japan to curb the rising yen. What a giant bowl of soup! You're either floating on a saltine, or you're not.

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=282088a8918f6dcb67278c93028386d0As you know, the yield moves in opposite direction to the price paid for the bond. The price itself is a supply/demand sensitive thing. Seems that the demand just isn't there. When you consider that bonds are the form in which many major international institutions hold their dollars, you get the impression that their confidence is too weak to hold dollars, even when yielding in excess of 6%. The reluctance could be a sign of a risk deterrent, or as a non-competitive return, or both. The more the bond falls, the greater the risk of developing a vicious downward spiral. Might our currency go the way of banana republic paper?

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=e94d3cd22052e9c7592fb851acf83d5a30-year fixed-rate mortgages this year in October averaged 7.89 percent a week, a giant 17 percent increase over the 6.74 percent weekly average one year ago. Smell any inflation?...that is, whatever inflation may mean to you.
;-)

Inflation is when you blow a balloon up. Deflation is when you let the air out. Then, there's the scenario where someone takes a pin, and....

seems to be up more than expected lately. Is it housing starts, manufacturing, consumer spending and what not- impacting the equity and credit bubble simultaneously by broadly commenting on this truly unparalleled goldilocks economy, which has come to roost so benevolently on te US.

So is the money supply (thanks TC - staggering! -and BTW yes my browser prob's seem to be under control)but nobody in the main stream press takes notice of this unprecedented boost of monetary aggregates, without which goldilocks and new paradigm and era apostles would suffer the same fate as the major and minor industrialized nations have recently undergone in their plight to concur with the greenback's hegemony by right (eignorage -ORO?) of printing the world reserve currency. (ORO - your latest posts have been phenomenal - thank you).

At a press conference ECB's Whim Deusenberg stated laconically today:"Whatever I may want to say will not have a lasting impact on the exchange value of the euro - so I won't say anything!". He stated, though that the ECB expects
accelerated economic growth in euroland for the next two years, which will highlight the appreciation potential of its currency quite dramatically. - Though I missed a statement - appreciation vis a vis what? ... and that seems to be the problem.

In this time and age of "instant" -sounds like "Ersatz" - information the historical only ever accepted parameter of value in human conduct - GOLD - is abjectedly, while purposefully obscured by powers of the casino-, crony- and
phony capitalists.

As the protestors in Seattle feel uncomfortable with the aims of WTO - ostensibly feeling their will be one global company - one government - one e-currency - and one system regulating every aspect of individual liberty -
after the ongoing mergermania - a return to small is beautiful may be tomorrows craze again.
I can feel the beauty of a small circular Philharmonic in my hand. Best CB2

I am deeply greatful for your wonderful response, and I look forward to the ponder of your words. As so many others on this forum have stated and continue to state daily, we are blessed with one who is at once so wise in these fiscal ways and so generous in sharing this wisdom.

There is so much in this post to think about that I feel quite lost as to where to begin. So I will retire, digest what is obvious, and research what is (to me) not. This is the material that has drawn me to this wonderful forum and it makes each day an excitement of learning. Each day I learn how much I have yet to learn, a humbling experience but one with an open ended goal. Thank you!

I interested in your message(ID:20039)
well, as I know that the waterway through Panama will holding by HWL (a big company in HK) in Y2k, NOT the Chinese Gov..
And also the Chairperson of HWL said that is only use for commercial way.

What do you think?
<:-)

F. C

Today, another 2,371 December futures contracts were tapped with intentions for delivery, bringing the three day total to 6,029 contracts on this third day of notice. Folks, that translates to 602,900 ounces on the move...some of it likely passing through several hands as they each pass the buck on delivery.

64,236 ounces of new gold was added to COMEX Registered stocks today, bringing the Registered total to 1,178,117 ounces while Eligible gold stands at 80,974 ounces.

Of today's delivery intentions, Goldman Sachs was on the receiving end of 1,051 contracts. Deutsche Bank was second with 781 contracts. Delivery intentions so far for December are nearly half of the current total on the COMEX books.

As of the conclusion of yeaterday's trade, there were still 6,085 December contracts yet to be settled one way or the other (a net decline of 869 from the previous trading day.)

http://www.ecb.int/key/st991202.htmThis is the transcript of the ECB press conference today. I detect little concern either over the exchange rate versus the dollar or the prospect of inflation for Europe.

Date: Thu Dec 02 1999 16:40
glenn (Excuse me.) ID#423288:
I hate to bother everyone with my petty posts but I wanted to bring to your attention the fact that the money supply JUST came out for this week and it appears that the Fed monitized all of the known debt on the planet earth this past week!

http://www.bog.frb.fed.us/releases/H6/Current/

over the past two weeks

m1..up..10.7 billion
m2..up..35.1 billion
m3..up..62.7 billion


thank you for your time.

The actual Financial Times article includes a great cartoon which shows a guy named Goldman Sachs with five heads.

I remember the $325 call option trade that was mentioned in the article, because it was big. I think the Oct 4 trade date mentioned in the article is wrong and that the trade occurred later in Oct and near the expiation date. It covered something like $4B of gold at $325 and the premium was millions of dollars. Altho GS pretends that the trade was on behalf of a client, it most likely was one of the GS heads selling to another GS head in some kind of stupid desparation effort to contain the potential damage.

"Chinese Wall" is the SEC's terminology for a process whereby it abrogates its responsibility to protect investors; it is pathetic to read the SEC's tortured rationalizations to justify this process, and nobody in their right mind believes in these things. The "control room" of compliance officers and corporate lawyers mentioned in the article are the middle men who more likely make sure that the information passing over, under and around the so-called wall is used in ways which benefit the company while at the same time appearing to have come from some other source.

http://biz.yahoo.com/rf/991202/9e.htmlThe incredulous voice of frustration..."Whatever I say, whatever I do the euro continues its movement so perhaps I am best advised not to say anything." --ECB President Wim Duisenberg

Currency speculators smelled blood in the water when the ECB refrained from forex intervention as the euro zeroed in on parity with the dollar. Apparently they don't realize that this single currency is being managed under a new paradigm, and what is currently done for Japan's currency (for example) is a legacy of a failed era and is not to be readily embraced by the ECB. If a euro carry trade has developed, when it turns, the aforementioned blood in the water will be that of the speculators. Japan, on the other hand, has been most accommodative for the unwinding of the yen carry trade.

On the arrival of parity (Reuters data showed the euro as low as $0.9997) Tim Fox, currency strategist at Standard Chartered Bank said, "This reflects the malaise that currently persists across the European economy. But it cannot necessarily be called a vote of no-confidence in the concept of a single currency."

Do you hear that, Mr. D? The whole world hasn't yet tossed this baby out with the bathwater. Hold the course...because we know that a truly free market in gold depends on an unmanipulated free market in euros, too.

http://www.msu.edu/~kreinin/"Gold for Oil," New York Times letter, March 18, 1974,
included in Casebook of Economic Problems and Policies, R. Fels ed.
Mordechai E. Kreinin
University Distinguished Professor
Department of Economics
Michigan State University

http://biz.yahoo.com/rf/991201/bd5.htmlArgentina's upcoming economy minister, Jose Luis Machinea met with U.S. Secretary of the Treasury Lawrence Summers in regard to the possible dollarization of Argentina, a policy his party has opposed.
Mr. Machinea told reporters, "We talked about the subject of dollarization. It is a subject they (the United States) are prepared to discuss with us, but it is a sovereign (Argentine) decision, in which the United States wants to play no part."

SecTreas Summers said, "I think its better to let the Argentine authorities speak for their views. The subject of dollarization did come up in our discussions and I repeated ... that dollarization was an enormously consequential decision for any country, that currency decisions for any country were very much political decisions and decisions that a country had to take for itself."

The same rationale holds true for people, too. As alluded to in yesterday's GOLDEN VIEW, as a free preson you needn't blindly be "dollarized." You are free to make your own sovereign decision, and shouldn't take your obligation lightly. The SecTreas himself admits that the decision is "enormously consequential" that the deliberating party "had to take for itself."

Just as countries choose their personal currency and then use various other currencies as needed in trade, so can a person choose a globally sovereign currency such as gold, and use whatever national currency as required to facilitate your daily economic needs for trade. As the national boundaries become ever more blurred by international banking, it make ever more sense to be among the first to anticipate the future and get in on the ground floor with cheaply obtained gold...the REAL single currency. The banks hold onto a quarter of the world supply for a reason. They don't have a quarter of the world's wheat or corn, in marked contrast. Think about it.

Perahps you remember the day the Yen turned. After a very mild intervention by the Japanese MOF, on that fateful day in Aug 98, the Yen was allowed to fall up to that point. Had no action been taken, the Yen would probably have fallen more steeply, and instead of stopping at 70 cents per 100, may have continued to the mid 60s before interest rates in Japan would have slowed down the carry trade dominating exchange rates at the time. Just a slight reversal of the trend, was enough to send the Yen skywards to 90 cents in one month. The odd gravity of leverage increases the force going counter relative to the originating force. Sort of like a yo yo on a rubber band.

The Euro is sitting in a simillar position to last year's summer spike down in the Yen. The spike earlier in the week in Yen and Euro Libor are indicating more resistance to new lending, we are on the edge of the liquidity boundary. In the Yen, we are approaching the hard edge of the unwinding of the carry trade, in the dollar, the transition to Euro debt is limiting liquidity available just as physical cash is withdrawn. In the Euro, new Euro creation is reaching the point where interest payments on the first loans are stretching the availability of cash Euros to cover interest payments.
That's the best guess right now as to Dabchick's observation of the Libor rates in all currencies.

What say you?

Some comments on your post of the multiple Ms

SteveH (12/1/99; 3:34:47MDT - Msg ID:19978)
The Stranger (12/1/99; 12:14:39MDT - Msg ID:19997)
Thanks again for the kind words and the informed and thoughtful commentary.

--->....I see a significant finding in your numbers, but I am not sure exactly what it is. Let me explain. You have created an addendum to currently money supply theory. I presume this is your add-on (M5-9) and certainly worthy of deep consideration. In essence you have accounted for all liquid to semi-liquid financial assets and then tracked their growth over time. To aid in interpreting the significance of the various rates of growth in each asset class, I think we need to evaluate the level of risk to each M-class were the overall stock market to fall...
Before considering the Stock Market, think of what happened in 1998 after the stock market fell. The Fed pumped up liquidity, the mortgage companies were our in force putting liquidity to use in mortgage refinancings. All at once, upon the initiation of recovery in stocks, bonds fell along with the rise in stocks. On average, long term paper lost 12.5% or more (after interest accrued is put back in). This plays into the simple fact that over the past two years the only categories showing growth are those related to equities. The 25% growth in the cap weighted markets, has coincided with a steep rise in yields and a steeper rise in financial debt. The main point is that financial corporations are holding an enormous chunk of the stock market on margin. According to Tice, this is the result of delta hedging financials entered into when they used the 60% implied volatility in 1998's dip to sell highly valued options with hefty time premiums and once the market went up they were constantly pushed into buying ever more stock to hedge the calls, while the puts were becoming worthless. The manipulation of the market position of the arbitrageurs by the PPT participants is the major structural driver of trading in the markets (as opposed to apparent fundumentals played out by the options compensation scheme. A sudden drop in the market would cause these hedgers to get stuck with devalued stocks bought on margin that could not be sold quickly enough to unwind the hedge. That is very dangerous. It nearly destroyed the financial companies in summer 98 - particularly in the day after expiration in August 98 and again in Sep 98. The liquidity of the major poppular stocks simply dried up and their unwinding of old hedges simply exploded the markets.

--->... taking into account the various considerations of stagnant through a 50% correction to the "stock market," what would the affect be on each M-class as it fell through these various levels? I ask this because it seems that each M-class builds on a more fragile and less liquid asset base such that any redemptions from a higher M-class, of necessity, knocks value from the underlying class such that a cascading affect would work its way exponentially through to M-1, drying it up significantly. In other words, M-1 is now held hostage to a new financial era that can't afford a falling stock market, as the cascade or trickle through effect would devastate it. Any move to a cash position in any M-class above M-4 would devastate the system. The higher up the M-class you travel to liquidate the greater the cascade affect against M1-3. Finally, M-6 through M-9 are built on equities (for the most part). It is here first that the waterfall would begin. Any cash positions created from redemptions or sell-off here may go into bonds or checking but as redemptions ensue in equities, less cash would be redeemed and the corresponding build in bonds or checking would of necessity be reduced. If one were to plot the affect of M1-5 from a sell of in M6-9, I would guess one would see an expansion in M1-M5 but inherent in M1-M5 would be a loss of confidence in any form of paper asset. That could further starve M1-3. It is fascinating to think it through but your model shows an otherwise stable system out of equilibrium and any adjustments could be swift and unmerciful as it tries to find homeostassis (equilibrium?).

1. Cascading. There seems to be an error in your dealing with this issue. The selling of a cash account security moves M1 or M2 (money market - MZM) cash from the buyer's account to the seller's. A sale of a margined security settles the margin loan, which eliminates the buyer's cash that went to cover margin, both the margin loan and the cash it created are lost. The distinction is important.
2. If one takes financial market debt into account (by far the most rapidly advancing form), the financial markets are now structured with the elements of M5-M9 held against margin. If these securities are sold to cash buyers at a loss. Which is what happens in a credit crunch, then the cascade effect you speak of can really get going, as it did in summer 98. The process is this:
A. Sell security held on margin, (1) cash buyer - the cash comes out of M1-M3. Cash settles Margin loan. Loan gone, cash gone, M1-M3 fall. (2) margin buyer - cash created as margin loan made, cash disappears into old margin loan - no change in M1-M3.
B. Sell security held free of margin - in cash account, (1) cash buyer - cash comes out of M1-M3. Cash returns to M1-M3 and they remain unchanged. (2) margin buyer - cash created as margin loan made, cash created and margin loan is outstanding, M1-M3 rise.

In the event of a credit crunch, A1 is more likely, because of possible difficulty in obtaining credit for margin loans pressuring margined players to exit and preventing new margin from forming. As this proceeds, M1-M3 falls, thus exacerbting the problem by preventing more margin from being created. As this proceeds, losses are made, and some margin accounts fall into default. The default removes the loan, but not the cash. Currency drops in value as credit availability still decreases and the Ms fall.

If Tice's analysis is on spot as to the reason for the rise in financial debt, then the next contraction in the stock market can really cause a disaster if the Fed continues tightening terms of credit and is reluctunt to increase monetization. Note that higher interest rates will cause more closures of margin positions and a rise in cash holdings. This would continue to press M1-M3 just as the Fed churns out more cash.

The situation would be hysterically terrible were an interest rate shock knock the 7 trillion in financial corporation debt supposedly held as margin for some 7 trillion in securities. I has within it a theoretical potential to eliminate all the cash dollars ever printed. Watch this.

After all these days,,, did Another "time" the gold market correctly? No, not for traders he didn't! But, then again, his whole message and proposition was never for a traders mindset or time frame. Indeed, his direction was for simple savers, like you and me. As a conservative group, our
holdings represent the most long lasting, stable assets that presently exist. Such assets collected over a lifetime should not be lost to a world gone mad! Truly, Another's thoughts represent the values held in the old world. For many these are in competition for our hearts against the current facade of economic reality.

We now understand how short-lived the current misconception of money must be. Other fast paced modern investors have accepted that "money was never wealth" and paper currencies need not be real things to represent their savings. Lost on these "educated of the Western world" is the knowledge that "wealth in the form of real things" was the first thing humans traded. It was only later that someone labelled these things as money. As a people we once knew the special value of gold and held it beside our other tradable property. We held this gold more dearly because it made the best form of "tradable" wealth. In this context, it's demand will remain, as always, infinite. It mattered not if one had one ounce or one million ounces, as gold money was/is but a representation of the real tradable wealth you saved over a lifetime of work. How far must modern gold now climb as it is reintroduced to the world as a new "tradable money wealth"? As far as the unlimited
efforts of humanity!

Truly, as gold is once more used as "wealth money", this action will again impart an unlimited value for gold in use. The more we built and created, the greater the gold value must always be in the future. Neither time or new ideas have changed human nature as it seeks to run from the modern uses and valuations of "IOU" wealth. A wealth that was never as great as the dollar said it was. As a system it could never represent a lasting "wealth of nations" as held in the account of "common man". Gold will come pouring in to fill this void.

This coming new level of value for gold is the "proposition" Another presents. A concept that is now being embraced as "something new" for a failing economic system now based upon an over leveraged world reserve currency! Truly, the old ways will not fail those that see through our
modern money fog. Another once put it somewhat this way; Nothing has changed our need for real things as tradable items. And this earth is still round my friends. As I hold my gold for the money it is, traders will work all these markets as they must. With the speed of light they now circle the earth, only to find their future as but one step behind me!

Yes, Another once said that. Differently of course, but an incredible bit of insight it remains. I also accept that most "physical gold" savers will find themselves "many steps" ahead of the "Western trading community" as this plays out. This "long term gold accumulation" proposition was given some time ago, to induce conservative people to begin saving gold "now". At any dollar price, be it $600 or $10! Such direction was given in the face of unprecedented choices from where someone could make fortunes using our modern vehicles. Yet, through it all, the revaluation must
come as gold will return as money to represent all of this wealth many times over. For truly, all modern wealth will be directly or indirectly denominated in gold as our dollar reserve fails. To this end, the physical gold holder will stand "one step in wealth" ahead of every worldly paper trader. Weather they trade paper gold stocks or dow stocks, real estate deeds or CDs, in the end their paper winnings will compete with the spoils of all others of "Western thought". These "non physical owners" will seek to buy what gold they can at a price many will refuse to understand. If one made a million by paper investing, he will buy no more than a million in gold. Still, for every new buyer that wishes to escape the old paper world there will be the lowly physical buyer from the past who will already possess two million in gold.

You see, there is a world of difference between saving real money as a "wealth of ages" and trying to trade this world's "paper derivatives". The lasting wealth of physical gold does not have to be "converted" into real things prior to a currencies destruction. It already represents the new
holding everyone will want. The coming "Western" economic dislocation will devastate all forms of assets that are held in "contract ownership". Be they stocks (most gold stocks included), bonds, businesses or savings accounts, etc.; the loss of a major currency will consume most of the equity
these paper items represent. It has happened with every currency ever created and will happen again with our dollars.

So, the next time you read that someone lost their "bet on gold", remember, they lost because they made the wrong bet. Only a "bet" of "buying physical" over time represents the FOA/A true position.

Another recently said:

"The time? These years be right for ones who save gold. One good ear knows meaning of wind in trees. The leaves come down as seasons change. Fools see falling price of gold as "death of tree", they chase it's price as leaves on the ground. Know you all, it is the season that has died.
Time will prove all things. Ones of simple thought, such as I will save the wood, not the leaf as they buy the gold, not the price! Thank You Another


I will be posting and replying this weekend. Thanks FOA

Thank you for 20048 and 20051 seems to make sense to me.
Net capitization of the indices (ie Nasdaq)is going up, not flat.

You posts carry a philosophical tone, I like that. Any thoughts on the definition of investing versus speculating.
I saw a phrase the other day, it went something like this,
" investing is a sure thing, guaranteed income, if the income (increase) is not guaranteed it is speculating"

There have been many posts declaring the merits of investing
in gold versus speculating in gold and I fail to see the difference. Surely the difference is not a time thing, that is, investing in gold is a long term venture whereby speculating is short term. How would one define the time frame? Surely the difference is not of financial gain; in either scenario profit is a common denominator. How do you feel about this bizarre question?

I was going to Babbylon but I thought I would pre-seek ideas
on this issue. Also YGM's recent message scared me off.

http:liveinvestorsforum.com/events.aspLaunch site for audio....@ 7 pm pacific and 10 pm eastern

http://www.usagold.com
June $400 Gold calls now selling for $170. That looks like a good buying opportunity to me considering they were as high as $1500 2 months ago and theres lots of time left on them.

Although physical gold is a good investment, there is much more leverage potential in Gold Calls and when they are so
down so much they look good to me.A risky investment ,yes, but with lots of potential upside.

A Phophetic Phrase or an Investors Credo...This Line shall Endure..As I hold my gold for the money it is, traders will work all these markets as they must. With the speed of light they now circle the earth, only to find their future as but one step behind me!..............(end quote from FOA Post)

*****Much appreciated words along with your "return to have a say".......................YGM.

Good evening, Oro!

Thank you very much!

Let me first emphasize that:
*I truly appreciate your generosity with your time and ideas.
*I am very bullish on the metals, and I have long futures, options, physical and mining share positions.
*My purpose in this discussion is simply to achieve a realistic assessment of possible scenarios for the global gold market & monetary system.

1. US Military Hegemony
Once again, I am in complete agreement that the world is tiring of Caesar, but how does one get rid of Caesar? The Devil is in the details, and it is not easy to get to There from Here.

Caesar has troops in perhaps over 100 countries and territories. The key locations may be Europe, the ME, and Japan. How does one get rid of Caesar? Will he leave if one asks? Let�fs look at Japan. Japanese right-wing politician Ishihara Shintaro is now mayor of Tokyo, and a key campaign pledge was to get back the US airstrip in Tokyo for civilian use. He met with the US ambassador, and the ambassador refused to discuss it except with the central Japanese gov�ft. The Japanese gov�ft will not bring up the issue, so no progress. Okinawa has the same fate. I suspect it will be the same in most countries. Caesar will not pull out his troops unless he has a strong stimulus.

Most pertinent is perhaps, �ghow can the ME get rid of Caesar�h, and �ghow will they defend themselves after Caesar has gone?�h

2. Damage by the Trigger
A. Who holds the CB loan debt?
We have a total load position of roughly 10000 tons (or whatever), and this has been borrowed short by the BBs and loaned long to the miners, hedgies, etc.

Now, if we add up all of the BB positions, we must have a net 100% coverage of the above figure. By your numbers,
*UK holds 50%
*US holds 30% or so
*The only other possible bag holder would seem to be Europe, at perhaps 20%?

Now, it would seem that if the trigger is pulled:
*The BB will be unable to return the gold.
*The BB will be squeezed to the edge & then pushed over.
*The CB and ME gold loaners will not be able to get their gold back.
*Some of the key banks will go belly up.

This would appear to be an extremely mixed blessing. One immediate result is that the gold loans are destroyed by the bankruptcy of the borrower, thereby reducing European CB gold holdings by perhaps 50%.

Does Europe want this?

3. How does Europe benefit from this scenario?
It has been discussed here that the BIS and Europe have a deal, and that oil will be quoted in Euros.

If the European CB only holds gold as a �greserve�h and does not offer convertibility at a fixed rate, is not the Euro just another fiat currency like the dollar?

Why would the ME quote their oil in Euros instead of just gold?

Please help me here, I think I am missing something.

The link between the Euro and the ME seems to be missing, and this would appear to be the key to aligning the interests of Europe and the ME.

4. Triggers
You have improved the �gtriggers�h substantially by adding �greal assets�h to �gA�h and �gstock crash�h to �gC�h.

C seems to be the most imminent scenario, although one cannot be 100% sure that it will indeed lead to a gold bull market (although we will know when we get there!).

Thank you in advance!!!!

Good evening, Oro!

Thank you very much!

Let me first emphasize that:
*I truly appreciate your generosity with your time and ideas.
*I am very bullish on the metals, and I have long futures, options, physical and mining share positions.
*My purpose in this discussion is simply to achieve a realistic assessment of possible scenarios for the global gold market & monetary system.

1. US Military Hegemony
Once again, I am in complete agreement that the world is tiring of Caesar, but how does one get rid of Caesar? The Devil is in the details, and it is not easy to get to There from Here.

Caesar has troops in perhaps over 100 countries and territories. The key locations may be Europe, the ME, and Japan. How does one get rid of Caesar? Will he leave if one asks? Let�fs look at Japan. Japanese right-wing politician Ishihara Shintaro is now mayor of Tokyo, and a key campaign pledge was to get back the US airstrip in Tokyo for civilian use. He met with the US ambassador, and the ambassador refused to discuss it except with the central Japanese gov�ft. The Japanese gov�ft will not bring up the issue, so no progress. Okinawa has the same fate. I suspect it will be the same in most countries. Caesar will not pull out his troops unless he has a strong stimulus.

Most pertinent is perhaps, �ghow can the ME get rid of Caesar�h, and �ghow will they defend themselves after Caesar has gone?�h

2. Damage by the Trigger
A. Who holds the CB loan debt?
We have a total load position of roughly 10000 tons (or whatever), and this has been borrowed short by the BBs and loaned long to the miners, hedgies, etc.

Now, if we add up all of the BB positions, we must have a net 100% coverage of the above figure. By your numbers,
*UK holds 50%
*US holds 30% or so
*The only other possible bag holder would seem to be Europe, at perhaps 20%?

Now, it would seem that if the trigger is pulled:
*The BB will be unable to return the gold.
*The BB will be squeezed to the edge & then pushed over.
*The CB and ME gold loaners will not be able to get their gold back.
*Some of the key banks will go belly up.

This would appear to be an extremely mixed blessing. One immediate result is that the gold loans are destroyed by the bankruptcy of the borrower, thereby reducing European CB gold holdings by perhaps 50%.

Does Europe want this?

3. How does Europe benefit from this scenario?
It has been discussed here that the BIS and Europe have a deal, and that oil will be quoted in Euros.

If the European CB only holds gold as a �greserve�h and does not offer convertibility at a fixed rate, is not the Euro just another fiat currency like the dollar?

Why would the ME quote their oil in Euros instead of just gold?

Please help me here, I think I am missing something.

The link between the Euro and the ME seems to be missing, and this would appear to be the key to aligning the interests of Europe and the ME.

4. Triggers
You have improved the �gtriggers�h substantially by adding �greal assets�h to �gA�h and �gstock crash�h to �gC�h.

C seems to be the most imminent scenario, although one cannot be 100% sure that it will indeed lead to a gold bull market (although we will know when we get there!).

Thank you in advance!!!!

Stratfor today reports that Iran will build a $3 million dollar meat plant in rebel held (FARC) territory in Colombia, which I understand is also in the drug baron, drug producing region. (I did some work on Colombia in a previous life, but not much). Apparently, Iran already has sufficient meat-packing capacity to meet all its needs, while Colombia's ranching area is far from the plant, and the plant is in the jungle. One should read the Stratfor report for the full background, but apparently Hezbollah and FARC have major ties, and this is to provide Iran terrorist influence with FARC. Also, perhaps to provide a window on the drug trade.

In a previous life, I did come across some reports indicating that Iran (or Iranians) was becoming a big player in the drug trade, particularly heroin (poppies grow within Iran ,and in neighbouring Pakistan and Afghanistan) but also some other drugs. This was a recent development, and is partly rooted, apparently, in a belief among some Islamic thinkers that there is nothing wrong in contributing to the addiction of infidels, non-Muslims, etc. This would be especially true of the Great Satan, the US, perceived as the pre-eminent anti-Islamic force. Hence, one weakens the great enemy, while raising drug money for terrorist activities. If a showdown over culture, oil, whatever develops between the US and allies v. the oil-producing, Islamic Middle-East, the Colombian jungle is the place to be. The jungle diminishes the US advantage in military assets and technology. An Iranian presence in Colombia ties down US assets. It places terrorists in striking range of the Venezuelan oil fields, to cut off the main alternate supply of non-ME oil. Money for future adventures is raised from the drug trade. And maybe even some Christians rendered soft by liberation theology can be converted to Islam. Keep an eye out for this development. Note also the presence of a significant number of Chinese triad foot soldiers in both Latin America and North America, the triads allegedly sometimes serving the ends of the Chinese government. Note also the rise of Islam in North America, often fueled by recent immigration. There are now more adherents of Islam than Jews in North America, a little-cited statistic, said adherents of Islam often receiving financial support from the Middle-East.

Except for Pearl Harbour, no country has "taken it" right to the US since the War of 1812. How will the US react if, during a hypothetical move in the Mid-East (assume against a fairly united Arab and Islamic world and not just a renegade like Saddam), the power lines, refineries, aircraft, etc. start "crashing". The last few US opponents have just essentially sat there, with no real capacity to hit the US. In political and military battles against Iran and Saddam, the US has faced opponents who could not muster a strong coalition against it, due to national, cultural and religious reasons (see an old post I did juxtaposing Iran and Saudi), but if the FOA/Another/Oro thesis is true (a big if, but some corroboration seems to be there), will the US benefit from such dvisions? Will the US homeland be immune from terrorist counter-attacks and disruptions?

Did anyone listen and pick up on a few tidbits which I found interesting in the context of our common interest -- gold and money?

Alan Keyes mentioned that the taxation under the current code was unconstitutional and that to return to our constitution we should remove it and return to the constitution form of raising money for government operation.
Score one for Mr. KEYES!
I hope he would also be in favor of returning to the constitutional form of money -- GOLD and silver issued by the government NOT the Fed.

Interesting candidate, definitely well-studied and not your typical politician mold.

I meant to say "GOLD and silver issued by the government, NOT worthless fiat paper issued by the Fed."

Traders and analysts are still attributing gold's present weakness to a lasting sense of disappointment over the UK auction held Monday, which was over-subscribed by 2.1 times instead of the 8-times level from the September auction. Gold's $4.50 fall today occured while London was still in session in overlap with NY. Reuters' London market review quoted some dealers offering an explaination. "It was fund long liquidation which has taken us down. It came down through support at $286.00 and I think a few stops were hit. It is just some stale fund long liquidation." Another dealer said, "There has been selling and I think those people who bought it (before the auction) are getting stopped out," while an analyst added that this consolidation period in the wake of the third UK auction is "being characterised by professional disenchantment and consumer bargain-hunting."

More Bargain Hunting in All the Wrong Places?

It seems that value shopping has become a lost art. Propelled by its fourth largest point gain in history (99.07) on the seventh heaviest volume, the Nasdaq Composite reached a new record by 5 points, last set the day after U.S. Thanksgiving. The Street.com suggested that it was "momentum players and daytraders piling into Nasdaq stocks" that were largely responsible for tech stock gains today. Are these values stable and justified on sound principles? Jay Suskind, head of institutional equity trading at Ryan Beck, said "It's momentum, momentum, momentum. People don't want to miss the boat." OK, so can another man on the scene offer more peace of mind about the stock markets? We don't gain much confidence from the words of Louis Todd, head of equities trading at J.C. Bradford. "The Nasdaq is just unbelievable. People are scratching their heads, 'How far can these things go?'" And finally, from Reuters we get a quote from James Melcher, president of Balestra Capital, "No one seems to be worried about anything. Inflation is moderate, production growth is excellent. The country is growing at a pretty good rate. The problem is, markets are supposed to look ahead. Happy days are here. It is late in the party, though. (Investors) have lost all hindsight. I just hope the party keeps going."
We're sure that will do it, James...Hope.

Today's surge in home sales reported on earlier helped inspire deeper losses for the long bond...losing 9/32 in price to lift the yield to 6.316%. Treasury market participants are also apprehensive about tomorrow's November employment report. A consensus of economists forecasts an increase in November payrolls of 210,000 (down from October's 310,000 gain) and a steady jobless rate of 4.1%. Earnings are expected to maintain a trend at 0.3% gains. Traders are not optimistic. "Any relief rallies should be sold, still," a note trader told Bridge News. "I'm still
negative, I still think we're going to higher rates."

BACK to GOLD

Spot prices ended the day in NY at $284.70, down $4.50, while the COMEX February futures lost $4.80 to settle at $287.10. FWN attributed today's price decline to the dollar's strength against the other major currencies (yen excluded). As the dollar climbed versus these other currencies, gold becomes more expensive when priced in these other currencies, weighing on new purchases and encouraging sales in those affected nations. Heavy sales were noted by trades coming out of Australia in particular.

For today's COMEX totals for gold inventory, and delivery intentions, please scroll down to the information posted earlier at:
TownCrier (12/2/99; 14:51:07MDT - Msg ID:20073)
COMEX news flash

The significant but brief recap is that an additional 237,100 ounces were added to the previous two days of accumulated delivery intentions, bringing the total that will be changing hands to 602,900 ounces. Toward that end, 64,236 ounces of new gold was added to COMEX Registered stocks.

OIL

January crude continued its solid recovery from the early-week selloff, settling up 82� at $25.82. France has thus far failed in its efforts to push forward a 6-month rollover of of the Iraq oil-for-food deal, but the UN is adopting instead a one-week extension effective Sunday. Iraq's UN ambassador Said Hasan said "We will reject a week immediately." Iraq would also continue its halt on oil exports for at least another week, extending from the halt on November 25 during Baghdad's rejection of an earlier 2-week extension proposal. One broker was quoted by FWN "If we know Iraq is going to keep rejecting an extension, that's 2 million bpd that is going to be desperately missed by the market."

On another front, Venezuela Energy and Mines Minister Ali Rodriguez indicated that OPEC is 85-86% compliant with its agreements on output cuts. He said he wasn't worried about cheating, and boasted that Venezuela had the highest compliance level at 98.7%. Confirming OPEC's commitments to curb supply is an early report from Bloomberg that compliance in November has improved to 90%, up from their figure of 84% in October.

Higher oil is upon us.
The Y2K proving ground is one month away.
The Fed is daily replacing lost reserves from the banking system.
The stock market is as precarious as it ever has been.
US Bonds aren't getting any more popular with yields above 6%.
The dollar is seemingly at the mercy of continued Japanese intervention to weaken their own currency and prop the dollar.
The euro share of new-issue international bonds for the first half of 1999 was near equivalent to the levels enjoyed by the mighty dollar.
And speaking of that mighty dollar, when translated into history through the German Mark, the dollar is now at its highest level against this European benchmark currency in over TEN YEARS...since September 1989.
With 291 million people living in the 11-nation euro-zone, compared with 269 million people in the United States, euroland GDP in 1997 of 5.55 trillion euros compared with 6.85 trillion euros for the U.S., a second-quarter euroland annualized growth of 1.5 percent compared with 1.9 percent in the U.S., and a key refinancing rate at 3.00 percent in euroland compared to the Fed's key rate at 5.50 percent, you can be sure that our peer group across the Atlantic will continue to work for a level playing field as currencies are concerned.
How does the future shape up?
They have over 12,000 tonnes of gold while we have over 8,000 tonnes. They will be adding a host of countries to their currency union, while the U.S. has mildly entertained the dollarization notion with Argentina.

And that's the view from here...after the close.

I'm kind of new to the market, so could you explain the meaning of this "news flash"...Thanks.....Goldilocks guy

>>>>>>>>COMEX news flash
Today, another 2,371 December futures contracts were tapped with intentions for delivery, bringing the three day total to 6,029 contracts on this third day of notice. Folks, that translates to 602,900 ounces on the move...some of it likely passing through several hands as they each pass the buck on delivery.

64,236 ounces of new gold was added to COMEX Registered stocks today, bringing the Registered total to 1,178,117 ounces while Eligible gold stands at 80,974 ounces.

Of today's delivery intentions, Goldman Sachs was on the receiving end of 1,051 contracts. Deutsche Bank was second with 781 contracts. Delivery intentions so far for December are nearly half of the current total on the COMEX books.

As of the conclusion of yeaterday's trade, there were still 6,085 December contracts yet to be settled one way or the other (a net decline of 869 from the previous trading day.)

Is that realy you, or your soon to win a Pulitzer clone. The "True Comics" slogan of the 40's comes to mind "Truth is stranger and a thousand times more thrilling then fiction. Move over Tom clancy and John Grisham ,The high points of your plots are being combined by the USA Gold Forum's resident Attorney/Global conflict Author.

Will make time on weekend - as much as possible.

Printed out your post, will read later.

Thank you for your thoughts.

Peter,

Thx for your kind comments, but I lack the discipline to read a novel, let alone write one. Anyway, I don't have the background in the cloak and dagger stuff to make anything believeable anyway.

My main regret is that I can't keep up with the recent posts on the Forum. What I do read reveals there is some very heavyweight stuff being put on this Forum's pages, which I wish I could read in sufficent detail and leisure, so that I could assimilate it. No to single anyone out, but I regret not being able to read a tenth of what Oro puts out, in that it seems to come from a unique perspective. There are other great heavyweights - The Stranger, Aristotle, SteveH, FOA, MK, you, Towncrier, too many to even mention - suffice it to say some awesome and innovative stuff has been produced recently, but unless one has hours in the day, it's not possible to keep up.

I fear my recent posts may have overstated some points, and stated some others in an excessively black and white manner, but there's only some much precision and detail that a time-management challenged, overworked, slow typist like me can achieve. When my current appointment expires, maybe I'll take your suggestion and try to write for a living.

Regards,
canamami.

I would like to have been the guy with the cash in the bank who didn't have to pay a 3% haircut (6% RT) every time he needed to draw down some cash and which was in your example obviously an equally safe investment over 40 years as having purchased gold with the same return.

However, what would you suggest to me today if I had done both and presently have $150K gold and $150K cash? This is a little tougher for me to figure out. Let me assume that the $150K gold is my worst case crash scenario protection and ignor all the confiscation and related threats to my gold-induced sense of security. Do I add to the gold holding or try to diversify my retirement portfolio including an investment in income producing assets? I am not asking for investment advice, just trying to get a handle on how to proceed wisely. My choice is T-bills and notes in an account at the Fed.

Contrary to what you may think, these exchanges, especially the challanges to my thinking, are exactly why I post.

No feedback is better than a challange to an idea.

Printed out, will read and reply soon.

Thank you.

From one of those other forums ... can anyone verify this one?

BOE update
(uponroof) Dec 02, 21:52

Oh, by the way,
That auction last week which was ONLY 2x over subscribed
There was a minimum bid cut off...
which means some bidders whose bids were below the cut off WERE NOT RECORDED AS SUBSCRIBING.

The previous auction had no such clause, hence the 8x over subscription.
I am not sure how many bidders were involved, it's probably a closly guarded secret.
The headlines were important to BOE (only 2x) and the clause worked well.
Obviously BOE is learning "on the run" quite well.
Brace yourself for January's rules.

www.kitco.comrepost. Sage advice.

Date: Thu Dec 02 1999 20:52
kapex (Repost!) ID#275194:
Copyright � 1999 kapex/Kitco Inc. All rights reserved
Date: Sat Jan 30 1999 21:04
kapex ( Thoughts! ) ID#218248:
Copyright � 1999 kapex/Kitco Inc. All rights reserved
I just wanted to take a few minutes to share some of my thoughts with the group here at kitco. As we have
watched these markets together for the last 6 months or more, I have rang in with my thoughts and comments from
time to time.

One thing that is truly amazing to see is the level of capitulation that always happens at turning points. Bar none,
without fail, always happens. It is human nature, and it is plain to see. That is, if your not caught up in it yourself.

Fear and greed are the two emotions that are prevalent at these extremes, yet few recognize this phenomena as it
is taking place. The final step to capitulation is not one that comes quickly. Many recognize what is happening,
while it is happening but don't recognize that they themselves get emotional and throw in the towel precisely at the
point at which the complete opposite behavior is warranted. Capitulation or throwing in the towel has to take place
before the trend can reverse, otherwise it will continue.

So, you ask yourself, " how do I know when this is about to happen?" Good question! The answer is not so easy.
For one, you have to be willing to be wrong for a while. For another, if you want to take advantage of an
opportunity to profit from a change in the trend, it will go against you for a while. The KEY here is to look at that
for what it truly is, an opportunity to buy ( or sell ) at the lows or highs.
What's really amazing to me is the capitulation that
occurs at these junctures. Just at the time you should be recognizing the opportunity for what it is, the opposite
emotion exerts itself and you ask yourself, "what if I'm wrong, or too early," even though all the signs point to your
being correct. You then fail to act and the market does indeed reverse trend, Without you, I might add.
This is also a form of capitulation. The inability to act on that which you know is the correct course of action
because of fear of being wrong. It is also one of the things that I watch for in myself as a sort of a final piece of the
puzzle in place so to speak. I step back, review my reasoning and try to remind myself that it's ME that's kind of
capitulating, ( by the fear of being on the wrong side ) and then try again to buy or sell.

With all that said I would like to comment on the markets that we are so very interested in here at kitco. But
before I do, I would like to read you a few things from the book "Contrary Investing" by Richard E. Band.

Nine symptoms of a dying boom

� A breathtaking, parabolic rise in prices, accompanied by predictions that the advance will go on indefinitely

� A widespread rejection of old standards of value. According to the apologists for the boom, the dawning of a
"new era " makes today's prices reasonable, even cheap, no matter how outrageous they would have seemed only
yesterday.

� A proliferation of dubious investment schemes promising huge returns in an inordinately short time.

� Popular fascination with leveraged investments, such as futures, options, or margin accounts, which enable the
speculator to control a large block of assets with a small down payment.

� Heavy selling by corporate "insiders" and other conservative investors with a long- term orientation.

� Extremely high trading volume that enriches brokers and snarls paperwork has back offices try to keep track of
the many transactions.

"Although with today's computers paperwork is not the problem that it was just ten or fifteen years ago".

� Absurd or even violent behavior by people who are desperately trying to get their hands on the booming asset, (
Remember the "grown-ups" who punched and scratched each other to buy a cabbage patch doll ) .

He prefaced these nine with the words. "When more than two or three of these symptoms appear at once, it is
time to sell: The undertaker is at the door.
Personally I can't think of one that does NOT apply right now with respect to the stock market. Can you? Are the
"Internut" stocks the Cabbage Patch Dolls of today?

Is this not the same for the Precious metals and commodities right now only the opposite? 20 year bear market in
gold with dire predictions of 250, 200 and even 150 $ per ounce prices. Why, do these predictions come out
now, at the lows, after it has already been beaten down to the lows of many years? Because capitulation is what
has to happen to mark the reversal of the trend.

I also read someone's comments very recently and was taken as to how he pointed out that Gold's price is only a
reflection of the level of commodities ( CRB ) in general at this time. He is right! But he IMHO, failed to make the
next logical conclusion. ( From a contrarian standpoint ) That being, that he is only voicing what everyone else is
already aware of, and that this is a sort of resignation of why things are, rather than why it would be a good time to
buy. Just an observation. This has been factored into the prices of PM's and commodities already. A contrarian
will sit up and take notice when a well-respected individual reflects what is a valid point indeed, but then doesn't
take it to the next, logical conclusion.

Deflation may very well be just around the corner. But I would be a lot more fearful of an asset that is at unheard
of highs ( knowing the impact that deflation would have on that ) than one which is already at it's lows and is
begging you to buy it while it's low.

kapex

Several weeks ago you posted that gold at $30,000 would not change hands but rather be held like a share of stock representing value. Today you post that gold will be the new "money wealth." Does this mean that no one will spend money? Does this mean that like the wealth of the old world Another, we will buy food with gold? How long do you think it will be until a gold based system of wealth exchange occurs and what will the billions of people who have no gold use to facilitate barter? Also, what is the current status of negotiations among world powers along these lines and who are the players? Many people think that the NWO is in charge of this type of thing, and others think the NWO is incapable of implementing it even if they are in charge.

Also, would you please reference me to published and accessable information verifying and explaining the existence, terms and implementation of the gold for oil deal. I would like to read something in that regard which has been published at any time since 1973. I am aware that ME oil producers had desired this arrangement as the Gold Pool collapsed but they were unsuccessful at that time, and I am unable to find a single subsequent reference to that concept including sources who described the demise of those efforts. You may recall that OPEC at that time simply accepted higher royalty payments.

Thanks

Re: BOE Auction

Amazing info.; we need to confirm/deny that post ASAP.

Can you believe the crooked S.O.B.'s (if true). Can you begin to imagine if a BOE insider/informer was to leak & confirm that statement.

All; see previous post by Twice Discipled.

The Stranger,

I don't know if we should call you Mr. Reality Check or Mr. Antidote - either way, your guts and intelligence have often served to single-handedly expand the range of beliefs and discussion on the Forum, and I'm sure have saved some from what could have be disastrous financial actions or decisions. Your presence on a certain penny-stock gold thread could have saved one neophyte investor a lot of money.

From the clash of competing positions, truth is distilled.

I note Oro has put a verifiable hypothesis on the table, which is something I like to see: The next bid for gold comes in mid-December; I stand to be corrected if I'm wrong.

P.S.: By the way, would you, your clients and former Wall Street associates be interested in launching a takeover bid for a couple of poorly managed exploration companies who own what is still a fairly promising property in the Carlin Trend in Nevada. :-) They could probably be had for $0.15 a share :-) and :-( simultaneously. Need a perverse sense of humour to deal with the losses.

I deeply respect your independent character. I wish to make one point to you, if I may. In your post to FOA, you mentioned that people here had been victimized. I must say to you, that victimization is nourished by naivete on the victims part. I do strongly believe that being a believer in anyone other than yourself is a mistake. Just as we elect the politicians that we deserve, we elect others to follow and we deserve what we get. If anyone here accepts FOA, you or me as gurus we are silly to do so. It is incumbent on each of us to evaluate what is brought forth here. And along the way the truth will be sorted out. It may be that in the end one way of thinking or another is proven right or wrong, but we all cannot believe we are independent free thinkers if we blame others for our own decisions.

Thank you for standing up and being so independent minded. Your challenges help make this a place for sorting out truth.

My advice, as someone who's been trading futures options for the last year and a half, is that it's NOT a good trade. There are technical & fundamental reasons why I belive this is so.

Jun 2000 400 calls are a LONG way out of the money, with not a comfortable amount of time to expiration--despite your perception that there's all kinds of time until June. Think about how long gold either declined in price, or traded within a narrow range of resistance & support. Also, think about how we are all being worn down by the seemingly endless ability of the "Hannibals" to hold the price down. Many of us thought they'd be done in when the October runup occurred. It's obvious they were not. I own Jun 290 calls, and I'm beginning to wonder if I shouldn't have liquidated in October. Also, it took COMEX two weeks to clear the trade which liquidated my Feb 2000 290's in that runup--during which time I felt like I was twisting on a meat hook.

That $170 premium may look attractive, but it's a trap unless something miraculous happens. Go ahead, but only if you know you'll be ok financially & emotionally if you lose it all. Odds are strongly against you!

In a play to protect the internet's "free from tax" advantage till it "matures", Clinti is getting on everyone's nerves, challanging their sovereignty and their internal laws, and finally - he is challanging their funding.

Imagine Europe without the VAT levied on everything domestic or imported simply because it was ordered via internet.

No way.

The "huzpah" of the guy is amaizing.

Labor laws and environ-mental laws that would put the burdens of a rich nation on those just emerging into the industrial revolution shows such a detachment from reality that brings one to ask why armageddon has not hapenned yet with him at the glowing red button. Would Al Gore press it if it were to save the whales (at least when they evolve again?).

I have often sat and dreamed of $30,000 gold.

An onze of gold buys 300 loaves of bread today (to keep the math easy) so if the awesome rise of gold is dependant on the failure of the dollar how much bread can be bought with
$30,000 gold?

If (again for easy math) the dollar shrinks to a dime, or inversely stated, a loaf of bread is $10, then $30,000 gold will buy 3,000 loaves, an increase of 10 fold.

FOA's 30,000 number is the number in the future, based on a severely devalued dollar. He is not stating gold will rise from $300 to $30,000 (100 fold).

Gold rising from $300 to $30,000 with no change in the dollar results in 30,000 loaves of bread, this is mathematically absurb.

To further ramble on endlessly, and take numbers to a point hopefully outside of reason if the dollar depreciated to a lousy cent, $30,000 gold buys 300 loaves ($30,000@1%/$1),
exactly what $300 gold buys today ($300/$1).

I hope I haven't bored the economically astute with this post, I just wanted to ramble with the notion that $30,000
today isn't $30,000 tomorrow.

FOA's 30,000 number can be any number, you pick.

LOL!

Pls put in a good word and ask Mr. Clinton to grant global income tax exemption to all who "work over the Internet!!!!!"

Yeehaa.....

THC

Dear Stranger,

Please forgive the personal nature of this reply to your "Welcome Back!" message (Msg ID:20095) to FOA this evening. I fear that I am, in the interest of fairness and yet almost against my will, too often forced into the role of official defender of FOA/Another, something that they hardly need. Nevertheless, your comments should not go unanswered as they betray a dangerous lack of understanding of FOA's message, and at the same time, demonstrate a definite lack of courtesy that is hard not to take offence at.

Your own remarks would benefit from a bit more clarification. Just what do you think you mean by "the exact bottom in the POG last summer"? Bottoms are a moving target, only seen clearly after the fact. Was last summer really the bottom? Can you issue a guarantee of that to accompany your supercilious tone? What happens if the POG continues to track downward now and passes the $250 mark to the downside? Issue an apology? Do you really think anyone but yourself would care if you did?

Your fixation on the $30,000 number lacks perspective, too. True, FOA has made a bit of a fettish out of it at times, with his "On the road to $30K" literary device (which is as likely meant to entertain us as to be taken literally). In any case, that number was introduced years ago by Another to shock us into thinking in a different way. Much later FOA further explained that Another had come to that figure as the conclusion of a working study group that felt that under certain conditions some stability could result from such a number, etc., etc... Unfortunately, FOA has not disclosed all the details of that study, and certainly, we would all like to know more about it. However, calling it a "phony idea" is offensive to those of us who have followed Another's THOUGHTS considerably longer than you, yourself, have.

I find your charactarization of FOA as "trying to pass (him)self off as some kind of financial swami" to be particularly idiotic. Only an extremely shallow thinker could conceivably invent offense in such a thing as that. Because who cares how FOA "tries to pass himself off"? Not I! Are you suggesting that your own contributions are made with some such ulterior motive as that? I can assure you that my own are not. I think... I read what others write... And I search untiringly for truth in every post I read. I don't care who is a "financial swami" and who is not. As a matter of fact, I find the utterances of the widely recognized swami, Alan Greenspan, to resemble the inchoherant ramblings of a madman (or invetterant lier). FOA and Another appear to purposely make an effort to let the content of their remarks speak for itself. Of course this is virtually impossible. As human beings, we unconciously supply what they make a point of leaving out. This is impossible to avoid on our part. But that hardly qualifies them as "trying to pass themselves off as swamis". You, yourself would do well to examine your own motives in even suggesting such a thought.

Even if FOA and Another have been buying gold since it sold at $400/oz, I doubt very much that it much affects the pot they may or may not piss in. After all, they still have the gold. They pay no interest on it. They risk it not by investing in stocks that may become worthless at any moment by a multitude of circumstances, not the least of which would be outright bankruptcy of the underlying company. Because, yes, that still does happen in this best of all possible financial environments. "Not to the financial giants listed on the DOW", you reply. Yet such things do happen. And you can be sure that such a company would be deleted from the DOW so fast you would hardly miss it. It can happen. And it does happen. Why do you think Microsoft replaced Sears Roebuck lately? Was it not simply to reinforce the idea that the DOW goes up? Of course the DOW does go up; because if any of its stocks don't, it is replaced periodically with one that does. Rest assured that Microsoft will be replaced as soon is it stops going up with something else, too. (I'm sure that you are aware that some critics suggest that the profitability of many of these corporations is based on irregular accounting practises more than on financial success.) What do you think would happen if that idea were suddenly embraced by a majority of investors? Wouldn't you prefer gold at that moment, no matter what the price?

I personally would very much like to have all the money I have ever lost over the years to this single circumstance reimbursed to me in gold, be it at $300/oz or $400/oz. After all, it would still be gold. Far preferable to a worthless stock certificate, any day. If this qualifies as a "phony idea about wealth" so be it. I still prefer such a "phony idea" to any other phony idea of embracing a stock certificate at a PE ratio never before contemplated in human history!

And certainly, any "honest people in here who have been victimized by baloney" deserve whatever happens to them for not reading Another's/FOA's words properly (as you, too, appear not to have done). Another and FOA have always advised buying real gold, not gold contracts, nor any other abstraction of wealth. Those of us who have done so have our gold. We will still have it whether or not the price goes up or down. And it will still be gold. Not gold contracts. Not an abstraction of any kind. FOA has often said that he is "sitting back to watch the show". His only failing has been in not sharing his view with us, lately. I hope your remarks do not lead him to absent himself unnecessarily.

In the end, we'll be happier with our gold than we would be without it. Maybe we would have been happier with a few "good" stocks or gold contracts. But who would have known which were the "good" ones? If I challenged you (or anyone) to foretell the future of any investment, how would I know (in time) if the response is correct or not?

No one can know the unknowable. Not you. Not me. Not FOA.

Do us all (including yourself) a favor and lighten up!

Many of your contributions have been well worth remembering. (Your view on inflation has been consistent and well worth taking note of.) Unfortunately, this latest message was not.

http://www.egroups.com/group/gata/301.html?New at GATA:

GATA Chairman Bill Murphy's latest
"Midas" essay says the shorts are still
in trouble and asks for help with GATA's
new advertising campaign seeking
answers from the Fed and the Treasury:

http://www.egroups.com/group/gata/301.html?


Gold market watcher Reginald H. Howe
suggests that the Bank of England's gold
sales program was meant to rescue the
Fed from its sales of naked gold calls:

http://www.egroups.com/group/gata/302.html?

http://www.usagold.com/productspage.html"Town Crier.....What does this mean????? I'm kind of new to the market, so could you explain the meaning of this "news flash"...Thanks"....Goldilocks guy

The "news flash" was simply an attempt to deliver early a tidbit of news that is normally conveyed later in the evening GOLDEN VIEW. The data is an attempt to show the small window of the gold derivatives markets as they come closest to overlapping with the real (metal) gold market.

Each COMEX futures contract generally represents a leveraged, theoretical control over the fate of 100 ounces of gold. In truth, it is only a zero sum betting arena in which the margin price you pay is your ante to participate by holding one side of a contract, and the price movement dictates how much cash you must pay or receive from the counterparty to the contract (anonymously paired through the Commodities Exchange.)

Any given day there is a real "threat" that demand for gold on the real (spot) market could exceed supply, raising the price to a new equilibrium price. But over on the COMEX trading floor, the supply and demand fundamentals are based on the game tokens...the contracts themselves as people trade into and out of these contracts as the price changes, settling with the counterparty at every turn.

The Open Interest position is an indication of how many outstanding contracts are currently in play between counterparties for the various futures months. The counterparties include one who is betting on prices moving higher (called a long position) and the other is betting on the contract price moving lower (called a short position.)

These futures contracts trade over time, from well in advance right up to their termination day in the month of the future's "expiration." For gold this last trading day is the third to last day of the contract month. Open interest can change over time as new contracts are written or old contracts are settled between the longs and shorts. For example, on the December contract, the open interest throughout Autumn was near 100,000 contracts, but as December (and First Notice day--see below) approached, the number of outstanding contracts had fallen to only 11,504. Of note, when the futures contract's termination month arrives, contract holders have the option of giving notice of their choice to settle their postion with gold instead of cash. A short position can be the one choosing to supply gold, or the long position could be the one who demands it. To this end, COMEX offers a depository for the gold at which it can be both stored for customers and verified that it meets the quality specification of purity and weight necessary to substitute for cash settlement. (Specifications are 100 ounces �5% of .995 fineness either delivered as one single bar or three kilogram bars.)

My reports try to track the number of futures contracts that are exchanged for physical postions. In some cases, the short who has to deliver gold may already have it stored in the COMEX depository, in which case the registration changes ownership...an untrackable operation to our outside view. In other cases, the short must procure the necessary gold from an outside source. This source could be a refinery, a personal stock, or the spot market...in which case it would help put pricing pressure on real gold.

If a long futures holder has designs to take delivery of 100 ounces, he would have to pay COMEX the full agreed upon contract price. Remember, originally he had only put up a small margin. If the price rose, the short counterparty would have to absorb the difference in price. The actual gold comes from whichever market participant that held a short position from the earliest time. COMEX would supply them with only the original contract price that they shorted.

Here's a thought. Instead of hastling with COMEX for these clunky bars, why not simply settle for the cash (as most of them do) and if it is gold you want, get it from your favorite source? Through USAGOLD/Centennial Precious Metals, you can get a wide variety of gold coins at superb prices. With all things being equal, our hope is that if or when you choose to build a personal position in gold, you will choose to order through us rather than some other source. Not only will you find it an easy process, you may very well find our prices to be the best around. And if in the rare chance you live accross the street from a gold dealer, perhaps you might still be pursuaded to choose us, rationalizing the extra effort as a cheap tuition for the education and service we strive to provide daily at no charge. It is your purchases through USAGOLD / Centennial Precious Metals (look in your yellow pages...we post an ad in many cities) that fund this site.

I hope this doesn't seem like a shameless pitch, but all things being equal, we would love for all of our valued visitors to choose us for their business. Your support helps us to keep the fire burning. Visit the link above to see a small sample of the gold coins we have available, and be sure to sign up for a free information packet on personal gold ownership...and to receive our free monthly newsletter.

I wandered off the path a bit, but I hope this answered your question.

http://www.usagold.com
In response to Marius post I would suggest the following.

Gold moved up approx. $80 in about 1 week in October and it could easily do it again. That doesnt make $400 look far out of the money.

Secondly, one factor Marius doesnt acknowlege: Y2k. In the event of civil disorder (at least possible) Gold should be a major beneficiary. BTW, I read in todays Oregonian that the Food Stamp program is still not Y2k compliant (the source was the government itself). Anybody want to venture
a guess as to what will happen if the people in the inner
city dont get their food stamps?

Thirdly, there is an out of control stock market waiting for a crash.

Fourthly. I did a little averaging for the price of Gold. I threw out the year gold went over $800 and this year. The average price of gold over the last 18 years has been $340.
That in itself is good reason to have calls.

Personally, Ive got Gold Calls Im holding onto. If they dont move by the second week of January, Ill just roll them over into some further out calls.

And yes, you shouldnt put any money in calls that your not prepared to lose. Nothing ventured nothing gained.

I am also in favor of Alan Keyes as the next president.
He is a great speaker, is the only Republican candidate talking about getting rid of the income tax.

I missed tonight's debate. Couldn't find what channel it was on. Wasn't listed in the TV guide.

How did Mr. Keyes do agains George Dubya?

BOICE COLUMN Plain English: Y2K will spark permanent change in global economy. Source: The Tucson Citizen

Many people may be taking the "Don't Worry, Be Happy" approach to the Y2K computer bug - but not Tres English. He doesn't believe the approaching 2000 will be an apocalyptic end of the world as we know it. However, English, founder of the Y2K Business Coalition, predicts the glitch will spark subtle changes in how national and world economies work. His predictions came out this month in a final report of the Y2K Business Coalition, which was disbanded in September. The Y2K bug may strike when computers become confused by a date that ends in 00. Computers could shut down or create reams of incorrect or garbled data.

nglish bases some of his Y2K predictions on the oil embargo in 1973. The embargo created a 10 to 15 percent reduction, for just a few weeks, in one vital resource of the modern world. That shortage - and regulators' reaction to it - caused a major recession and high inflation for four or five years. Y2K, he concluded, will probably create at least that level of problems in all fields of modern technology worldwide.
He sees the upcoming century as a confusing mix: "I think we will experience - retail customers and businesses - some items either unavailable or in an overabundance," he said. "We'll see rising prices on some items and falling prices on others. There could be high inflation or deflation." It is and it isn't as confusing as it sounds. People and companies have been stockpiling some supplies. When the expected shortages don't materialize, companies will begin dumping inventory -at reduced prices. Production will slow, prices continue down and hence deflation in certain sectors.

Some commodities will experience unexpected shortages, generating an increase in prices and, worse, inflationary expectations. Regulators, seeing rising prices, could clamp down too hard, sending the economy into a recession. Y2K will bring "an unprecedented range of disruptions," he said. "This is a different phenomena than we've ever seen before." Small businesses, which he considers among the least prepared for the computer bug, will be among those most affected. Many "small businesses are choosing to do nothing though they know the problem is coming," he said. Because thousands of small businesses have not attacked the Y2K bug, he expects the small-business failure rate to as much as double during the first six months of 2000.

Many of these businesses will fail, he said, even after they fix their hardware and software because large companies will refuse to do business with companies with Y2K problems. "Major corporations will say, 'We don't need you. You messed up. Come back when you can prove you don't have the problem,' "English said. Major companies that have dealt with the potential bug will become more dominant in the local economy. "Look for an acceleration of the established trend toward national chains and job shops and away from locally owned or controlled companies at all levels, "he said. His predictions, he admits, could be as wrong as any of the others that have been offered during the past year. However, he could be right. And that's worth thinking about.

Was it not Visigoths who found Roman roads so convenient for transporting troops into Rome?
Was not the Atomic Bomb gracing the Soviet arsenal soon after it was developed and used for the first time?
Contrary to what some may think of the US military might, there is a limit as to how effective it can be, and there is a question as to how significant a victory would be. How would a victory against Japan translate into any benefit for the US? Or a victory over France? A victory over Saudi and IRAN?
What possible good could that do to the US? The poppulations there would not provide anything the US could not obtain with the simple work of its people? The return on violence is just not there.
Since WWII, when the Bretton Woods agreement essentially built both the terms of reparations for surrender of the Axis and the structure of payments by the rest of the world for the US effort in the immediate past and that for the role only it and Britain could take - for everyone else was flattened.
The idea was not to allow actual redemption of gold for the dollars held, but that was the essence of a gold standard, and not having it would have meant foregoing the deal. My best guess is that the Europeans were done with the deal in 1959. At that time, the redemption of gold started and continued to grow as the US, already leveraged into oblivion, was steadilly monetizing the deficit - trying to prevent recessions by using Keynesian principles. Greshams law took hold, and over the next decade, US gold holdings were sucked out of the country despite a very frightening cold war - every post war building in Europe has a bomb shelter. But that did not stop the attack on the dollar. DeGaulle nearly broke up the whole economic system around this issue. France had no qualms about going it alone despite the US taking over its fight in Vietnam.

Under threat of the hard line Brezhnev, the dollar tumbled to a fraction of its value (a small fraction) against major currencies and against any and all goods as the gold - oil exchangeability standard set up in 1969 as a replacement for the gold redeemability standard failed miserably.

There is no particular military item that would limit the capability of the world to rid itself of the $. The US may intimidate and threaten, but it is obvious that it has nothing to gain from unpaid violence in a modern economy - until the reality of the "new age" settles in. (to be covered in a different set of posts). The US role as paid protector was a mercenary role - once the US got addicted to the payments. The Brits too have fallen into this hole.

The final shut down of the Soviet threat left only the US as current major threat to the world. China is being prepared to be the next one, but that will take a while. With due patience and some coaxing, it may never become a threat.

So, to your question, there is no need to answer it, the US will not take any great military measures to protect its currency and economic standing. It can only convince the world that it is necessary for something. If the perceived benefit is more limited than the cost, the exodus of dollars from reserve accounts will continue.

As the Washington agreement makes obvious, the piggis are singing "we're not affraid of the big bad wolf". And they are doing it at the opening to his lair. The military downsizing will actually happen after the decline of the dollar breaks the nation's ability to field this order of magnitude of force.

Bullion shorts
Again, the EMU CBs did not lend out more than 2000 tonnes. The BOE and a gazzillion others have done so. Probably filling another 1000-2000 tons. The US has probbably assisted in control by the sale of call options from the Fed (no proof at hand - only rumor). The old Fed gold market simmulation and report, the comments from Angel and other former Fed officials indicate that that is the case. Howe's article on Gata and Golden Sextant includes a wee bit of extra research beyond mine that indicates that the Fed has indeed been an active player in this arena.
I still hope that settlement did not include gold settlement, but there is no end to the possible idiocies a self deluding CB staff can indulge in.

Finally, I repeat that the bulk of the gold in the gold banking system, which is structured as a minimum 2 to 1 short by its definition, came from the gold accumulators themselves (see the Kuwaiti and Jordanian gold that was offered to save Ashanti and others) Most of the rest came from your everyday large gold investor who believed in the bluster of the banks about their creditworthiness.

The Fed report of some infamy quoted 20000 tonnes were in primarilly private western hands. A large chunk of that was used alongside the Oil Royal's own gold to keep things going, to fund new contracts.

The CBs manipulated the price the same way they do with any other item, they subsidized the interest rates, letting the market do the rest.

The Vancouver Stock Exchange and the Alberta Stock Exchange have been combined into one junior market called the Canadian Venture Exchange. All companies that were previously listed on either the VSE or ASE are
now listed on the new exchange, CDNX.

AND Worth Every Minute..........GATA on the MOVE

Dear Friend of GATA and Gold:

Here's a special "Midas" commentary by GATA
Chairman Bill Murphy at www.LeMetropoleCafe.com,
wherein he says that the gold shorts are still
very much in trouble and appeals for support
for GATA's forthcoming advertising campaign to
ask the crucial questions about manipulation
of the gold market.

Please post this as seems useful.

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

* * *

"MIDAS" COMMENTARY
BY BILL MURPHY
www.LeMetropoleCafe.com

December 2, 1999

Spot Gold $284.50, down $4.80
Spot Silver $5.08, down 8 cents

Throw out the technicals when a market is rigged. This
is not sour grapes talk. I had thought the market was
sold out. For whatever reason, it was not. I was wrong.

Despair is everywhere again. One would think by the
price action of gold and silver that we are in for some
tough times ahead. That is what many of you told me
today. Well, that is JUST NOT THE CASE.

Ironically, the feedback I am receiving from all my
very good sources is that the shorts are in dire shape,
that the surprise $80 rocket move up in the gold in
early October devastated bullion dealers and gold
producers alike far more than is realized.

The word is that several other Cambiors and Ashantis
are being kept under wraps. The word is that United
Bank of Switzerland is laying off 65 of its personnel
in the foreign exchange and gold operations. We have
alluded that to you for some time now. Other bullion
dealer operations are also being pared down. That can
mean only that the derivative selling game of the past
years is winding down to a significant extent.

I will have much more to say on this soon. Today was a
very busy day. The Gold Anti-Trust Action Committee
received more favorable commentary from highly regarded
gold industry people than any other day this past year.

For it is becoming apparent to even those most
skeptical of us that certain powers are manipulating
the gold market. Because of that recognition, forces
are being mobilized to fight back.

In addition, I received a call today from a highly
respected hedge fund manager who told me that he
chucked his entire Barrick Gold stock position as a
result of the company's refusal to change its hedge
strategies. I can tell you that his ( or her ) position
was greater than 3 million shares and this person
pleaded with the company to change its ways, but to no
avail. He wanted Cafe followers to know that he agreed
with the great novelist, Arthur Hailey, who also sold
his long-held Barrick Gold position recently.

The bottom line is that it makes no sense to own that
stock. If Barrick does not even believe in its own
market, why own it? Sell it and come back another day
when Barrick thinks the gold price is going UP. In the
meantime, invest in some other industry or some other
gold company.

This is a significant development and I have been
passing this word on to other money managers: Owning
Barrick Gold is a trip to mediocrity. Many other senior
gold companies that are superb investments, especially
now. So why not buy the ones that will benefit most
when the price rallies, which it surely will?

Any why will it? THE HEAT IS ON THE "HANNIBAL
CANNIBALS," and they are beginning to really feel it.
That is what I was told today. For one year GATA has
labeled Goldman Sachs "Hannibal Lecter." At times we
called them the leader of the goon squad that killed
every rally attempt that gold made. You know why by
now.

For one year many looked askance of that description of
such an esteemed financial operation as the lordly
Goldman Sachs. Who were we to suggest that Goldman
Sachs was acting like a cannibal toward its own
clients?

Well, take a gander at this Financial Times article.

* * *

Thursday, December 2, 1999

The Financial Times

ALL THINGS TO ALL MEN

The various roles played by Goldman Sachs came under
strain when a rising gold price hit Ashanti, write
Lionel Barber and Gillian O'Connor.


On Friday, October 1, a worried Mark Keatley, finance
director of Ashanti, the Ghanaian gold mining company,
flew from Accra for a crisis meeting in London. Mr
Keatley knew his company was in trouble, but he was
about to discover that things were a great deal worse
than he had feared.

Mr Keatley was carrying a three-inch stack of papers.
The papers summarised several thousand derivatives
contracts which Ashanti had entered with 17 banks,
including Goldman Sachs, the company's main financial
adviser.

Six days before, the European central banks had
announced they were limiting sales and loans of gold.
The price of gold, which had been falling steadily
since spring, suddenly surged, rising from $269 an
ounce to $307 over the week.

On the face of it, a rising gold price should have
benefited one of the world's biggest gold producers.
But the papers Mr Keatley was carrying told a different
story. For Ashanti, aided by Goldman, had for months
been placing a huge bet on gold prices continuing to
fall.

Ashanti was not the only one in trouble. Goldman Sachs'
multiple roles as corporate adviser to Ashanti, seller
of over-the-counter financial derivatives, and trader
in the bullion market were about to converge in a way
that was to test not only the bank's expertise but its
reputation.

The full extent of the crisis began to emerge that
Friday evening at Goldman Sachs' headquarters in Fleet
Street. With Mr Keatley's agreement, Goldman secretly
ran Ashanti's trading positions -- over 2,500 in all --
on a computer model.

The results were shocking. Ashanti's "hedge book" of
derivatives contracts was deeply in the red. If the 17
banks that were its "hedge counterparties" demanded the
cash deposits they were entitled to, Ashanti would go
into default. Ashanti would also squeeze the bullion
market in closing all its contracts because it would
need to purchase gold.

Over the next few days, under the watchful eye of the
Bank of England, an extraordinary sequence of events
unfolded as the banks, led by Goldman Sachs, sought to
rescue Ashanti and prevent a crisis in the bullion
market. The effort was successful, but it left
lingering questions among rival banks in the City about
Goldman's role.

Ashanti was built up on the century-old Obuasi mine in
Ghana. In 1994, it became the first black African firm
to list on the London Stock Exchange. Thanks to the
charm and political connections of its boss, Sam Jonah,
the company expanded rapidly through acquisitions in
other African countries.

Goldman became the main corporate adviser to Ashanti in
1996. Like other investment banks, Goldman allowed the
two sides of its operations - the private advisory arm
and the public trading operation - to deal with the
same client.

It imposed safeguards to prevent confidential
information passing across the "Chinese wall" from
private to public. This arrangement was subject to
constant monitoring by a "control room" of compliance
officers and corporate lawyers.

In the case of Ashanti, Goldman's special place in the
bullion market made these arrangements highly
complicated. Goldman sold a wide range of financial
derivatives to gold companies. It was the leading
member of a so-called "big four" of investment banks
with which Ashanti traded. The others were Credit
Suisse Financial Products, Soci�t� G�n�rale of France
and UBS of Switzerland.

For Ashanti, derivatives were much more than an
insurance against a falling gold price - they were a
source of profit and cash. This was important for
Ashanti which had a heavily indebted balance sheet,
partly because it had been forced to borrow to finance
acquisitions rather than issue equity.

The main reason for this was that neither of Ashanti's
two principal shareholders -- the Ghanaian government
and Lonmin, the rump company originating from Tiny
Rowland's empire -- wanted to have their stakes in the
company diluted.

Sam Jonah boasted that Ashanti had "earned" more than
$700 million by using derivatives to make forward sales
of its future gold output. As long as the gold price
was falling, Ashanti was able to make a profit from the
gap between the current and future price. By the middle
of 1999, the company had "pre-sold" some 50 percent of
its reserves.

But when Europe's central banks intervened on September
26, Ashanti's hedge book suddenly turned from an asset
into a crushing liability. And as its derivatives
positions spiralled into loss, its counterparties
started to demand cash deposits -- known as margin
calls. At the end of June, Ashanti's hedge book had a
positive value of $290 million. In early October it was
$570 million in loss, and there were margin calls
pending of $270 million.

The dramatic deterioration in Ashanti's financial
position was being closely watched by Goldman's
derivatives salesmen. But they did not know that their
colleagues in Goldman's advisory team were also taking
an active interest in Ashanti's affairs.

For over a year, advisers led by Richard Campbell-
Breeden had been working on a possible merger between
Ashanti and its shareholder Lonmin. But Mr Campbell-
Breeden had not yet fully grasped the implications of
Ashanti's financial hedging activities.

"We thought that if the gold price went up it was good
for Ashanti because it enhanced its long-term value,"
says Mr Campbell-Breeden, "We did not appreciate that
it could produce a short-term liquidity crisis."

The truth dawned when he was told of Ashanti's looming
cash crunch by Ron Beller, co-head of fixed income,
currency and commodity sales for Goldman in Europe. Mr
Beller told Mr Campbell-Breeden that J. Aron, Goldman's
commodity trading subsidiary, would soon have the right
to make margin calls.

Mr Campbell-Breeden immediately called Mr Keatley in
Accra. Mr Keatley assured him there was "no margin
problem." But three days later he called Mr Campbell-
Breeden at 1am and modified his position. There was
indeed a margin problem, but he insisted it was
containable.

Later that day -- Thursday, September 30 -- Ashanti
issued a statement to the London Stock Exchange, saying
it had reorganised its hedge book. It said the
"management was satisfied that the hedge portfolio is
robust in the current gold market."

As the market absorbed news of Ashanti's problems, Mr
Beller tried to stabilise the company. He assured
Ashanti and Mr Campbell-Breeden that J Aron would
temporarily waive its right to margin calls. Mr Beller
then took on an additional role. At Ashanti's request,
he approached SocGen to inform the French bank of
Goldman's decision to waive margin calls. At the same
time, he informed SocGen about the merger talks with
Lonmin.

As Mr Keatley prepared to fly to London, Goldman was
becoming entangled.

First, it was trying to prevent a client from going
bankrupt, with the risk of turmoil in the gold market.
Ashanti's heavy derivatives exposure made the position
more serious because other gold companies could come
under pressure.

Second, Goldman had to avoid the suspicion that it
would exploit its access to Ashanti's books in its
trading. Goldman admits this required "extraordinary
measures". Mr Beller and a few Goldman traders were
operating full-time during the crisis on the advisory
side of the Chinese wall.

Third, Goldman had to reconcile its position as
corporate adviser with being Ashanti's principal
counterparty. The former role involved Mr Beller not
only advising Ashanti and Lonmin on derivatives, but
acting as an intermediary with 16 banks. By its own
admission, Goldman found these multiples roles
extremely hard to manage. It created special
confidentiality agreements for several people from
Goldman's trading side before they were seconded to
Ashanti. It also kept the Bank of England informed.

Over the weekend of October 2 and 3, Goldman led
frantic efforts to sort out Ashanti's hedge book and
persuade the hedge counterparties not to make immediate
margin calls. There was a brief break from negotiations
on Sunday as some of those involved watched a football
match, in which Chelsea beat Manchester United 5-0.

Linklaters, the law firm, helped in negotiations with
the "big four", some of which were wary about agreeing
to a moratorium on margin calls without similar
commitments from others. On Monday evening, most
counterparties met in Fleet Street. Others took part by
telephone. Later one executive from Westdeutsche
Landesbank was tracked down on his honeymoon in
Australia. He was told his bank had an exposure of $3
million -- 10 times the amount he had believed.

After agreeing to a series of temporary standstills --
and after the appointment of CIBC in place of Goldman
as principal corporate adviser to Ashanti -- the 17
banks extended the moratorium to a three-year margin
holiday. But they extracted a price: the right to
acquire 15 per cent of Ashanti's equity through cheap
warrants issued by an offshore subsidiary of the
company.

Ashanti was saved, although the Lonmin bid ultimately
failed because the Ghanaian government was determined
not to lose control. But one month later, questions
remain over the role of Goldman. Many involved pay
tribute to its skill in resolving the crisis. But some
rivals remain concerned about Goldman's privileged
access to information.

One complaint that went as far as the Bank of England,
concerned a large trade executed by Goldman in the
middle of the crisis. Some rivals believe it traded
gold heavily at $325 an ounce in an effort to extricate
both itself and clients from derivative liabilities.

Goldman agrees that it traded heavily at $325 on
Monday, October 4. But the bank insists it was trading
options on behalf of clients, rather than spot trading
for itself. Any information used for trading was gained
from its own exposure to Ashanti, as well as market
knowledge.

The bank says it offered to resign as corporate adviser
to Ashanti several times, but Ashanti resisted. As a
compromise, Goldman says it encouraged Ashanti to
appoint CIBC as its lead financial adviser in charge of
discussions with the other banks, as soon as possible.

With hindsight, some Goldman executives admit that some
of the derivatives it sold Ashanti may not have been
ideal for a heavily-indebted company. But it argues
that the deals were "client-driven transactions" - the
responsibility of Ashanti's management.

Wherever responsibility lies, the result is beyond
dispute. Ashanti is heavily in debt, and dependent on
the goodwill of its banks. In the words of one person
involved, the company is "a prisoner on the run."

* * *

Nice huh? Weeks ago I told you that a friend of the
Cafe spoke to Sam Jonah. Jonah told him that Goldman
Sacks was squeezing them by the balls. Go back and
check the record. Even the FT article is more polite
toward Goldman Sachs than they really would like to be.
The libel laws in Britain are tough so the authors have
to be careful. Who wants to fight the Goldman Sachs
money?

GATA is a different story. If they come after us they
will have to open up their gold books. Forget about it!

That is yesterday's story. Tomorrow's is: What are we
all going to do about it, especially since the
mainstream world is getting the drift now about what
the gold market has been all about for some time?

I can assure you that this FT article has REALLY raised
the heat on Goldman Sachs. I received a call today from
France assuring me that is the case. Our supporters in
Europe also told me it is time to be very aggressive,
so we are going to go all-out against the gold market
manipulators.

Much of our plan has been inspired by the famed
newsletter writer Harry Schultz, who continues to urge
his readers to support GATA. Because of his followers'
support, money has been coming in so that we may soon
be able to launch an effective counterattack on the
Cannibals and their sugar daddies in officialdom. We
are not too far from launching that campaign, but we
need a bit more money in the till to make it effective.
GATA would like your support and that of all the gold
companies NOW.

The following letter was sent to many of the major gold
producers today and now is being sent to you:

* * *

Dear Friend:

Last spring I met in Washington with U.S. Rep. James
Saxton, vice chairman of the Joint Economic Committee
of Congress. He told me that the best way to gain
congressional support for the Gold Anti-Trust Action
Committee was to tell congressmen that we are on a
mission to find out the truth about the gold market.

GATA now believes it is time to accelerate that quest.
The gold market is rife with rumors that the U.S
government is intervening in various ways to hold down
the price of gold. The rumors grew the other day after
the government of Kuwait's extraordinary announcement
that it was sending its 79 tonnes of gold to the Bank
of England for leasing purposes.

This should not be a surprise to any of us in the gold
industry. After all, on July 24, 1998, Federal Reserve
Chairman Alan Greenspan told a House committee:
"Central banks stand ready to lease gold in increasing
quantities should the price rise."

Gold mining companies and their employees and
shareholders, less-developed countries that produce
gold, and investors in gold bullion and coins have all
been hurt by the unnaturally low gold price. Everyone
connected to the gold industry wants to know if the
gold price is being held down by some sort of concerted
action and, if so, the reason and parties behind it.

GATA would like the Federal Reserve Board and U.S.
Treasury Department to answer 11 questions. We believe
that the following plan is best suited to ferret out
some truth:

1. Place the attached letter to Fed Chairman Greenspan
and Treasury Secretary Lawrence Summers as an
advertisement in The Wall Street Journal, Barrons, and
The Washington Post so that we may be heard in
government and financial circles.

2. Following publication of the ad, begin an Internet
campaign to gain congressional attention for our
agenda. GATA will request that all gold-oriented
Internet sites get behind this campaign.

3. Once the campaign begins, GATA will ask its
congressional contacts to help us get a response from
the Fed and the Treasury Department.

Posing our questions in public is essential. A
spotlight must be focused on our issues to raise hopes
that we might actually succeed. We must let the U.S.
government know that if it is acting surreptitiously to
hold down the price of gold, congressional inquiry will
make the scheme difficult to maintain.

The Treasury Department is responsible for the U.S.
gold at Fort Knox, and GATA is going to call for an
audit of the gold there. It would be the first gold
audit since the Eisenhower Administration. Gold
reserves are an important government financial asset
and the American people have a right to know that it is
all accounted for. They and we also have a right to
know if any government gold has been lent out. This
specific request for information should be helpful in
gaining public support, as it is easy to understand.

GATA is not re-inventing the wheel here. We are just
following in the footsteps of Peter Hambro, president
of Mines d'Orde Salsigne SA; Chris Von Christierson,
chairman of Rio Narcea Gold Mines Ltd.; and John
Morris, CEO of Gold Mines of Sardinia. They recently
asked similar questions of the Bank of England.

To achieve our goals, the Gold Anti-Trust Action
Committee needs your support. We have received
substantial contributions from two senior gold
companies. Without them we would not have been able to
retain our excellent lawyers and gain publicity around
the world in the last 11 months. We hope that you also
might help us, particularly by contributing to our ad
campaign. We need additional support to pull this off,
as the ads will be expensive -- but well worth it.

If you do want to help our ad campaign financially,
your contribution will be used only for that.
Communications and contributions to GATA are kept in
strictest confidence. You will not be identified with
us without your permission.

GATA has received financial support from many gold
company shareholders. Because of it we have made great
progress. But we have to keep plowing ahead on behalf
of gold. We can do so with your help.

Thanks for your consideration.

Best regards,

BILL MURPHY, Chairman
Gold Anti-Trust Action Committee Inc.

* * *

The following advertisement is under final construction
and was presented to many gold companies in the
following manner:

ADVERTISEMENT, layout under construction

To: Alan Greenspan, Chairman, United States Federal
Reserve System, and Lawrence Summers, Secretary of the
Treasury.

From: Bill Murphy, Chairman, Gold Anti-Trust Action
Committee; Chris Powell, Secretary, Gold Anti-Trust
Action Committee; B. Ethan Stroud, Attorney, formerly
Department of Justice, Treasury Department, Washington
D.C.; John R. Feather, Attorney, formerly Legal Staff,
Federal Reserve Bank.

Dear Chairman Greenspan and Secretary Summers:

On July 24th before a House Banking Committee and on
July 30th before a Senate Agricultural Committee, Alan
Greenspan

Please stand and bow while I give you a standing ovation.

One more..............el

Good Evening - Looks like all of those stops around $286 have been breached (as predicted) & POG appears to be in freefall down to the next support level ($280?) to settle in the 270's maybe?. Not a time for gloom but rather another excellent opportunity ahead to buy cheaply.
Where the Commercials are net short the market will not be powered to move upward.

CNBC reports Edmund Saffra (?spelling) 29% owner of Republic Bank of New York (one of the Comex repositories) was murdered in Monoco by two armed knife men. His appartment was torched.

Scandal or coincidence to his bank's releationship to gold?

Take a look at an Italian 20 Lire coin from the late 19th century. It is now worth somewhere near 100000 Lire. This is the history of fiat money. Now, free your mind from artificial boundaries and ponder at a US $20 gold coin from the early 20th century.

http://dailynews.yahoo.com/h/nm/19991203/bs/hsbc_safra_1.htmlknew too much???

Wasn't armstrong supposed to be turning states evidence for immunity...

He'll be next...

"The deal was put on hold in September when U.S. fund manager Martin Armstrong, a major client of Republic's futures brokerage, was charged with bilking Japanese investors out of $950 million in a securities fraud scheme."

Reuters

www.goldensextant.comIn here, Howe says Fed's gold activities forced an increase in cash reserves that found its way into the markets. In other words, the Fed is responsible for maintaining the markets' levels while protecting a lower gold price. That was my take on it.

11:55p EST Thursday, December 2, 1999

Dear Friend of GATA and Gold:

Our old friend Reginald H. Howe, the Harvard-trained
lawyer and former mining company executive, sounds more
like GATA than GATA itself in another brilliant essay
he has posted at his web site, www.goldensextant.com. I
think that Reg may get closer to anyone else to what is
really happening behind government doors on both sides
of the Atlantic.

Please post this as seems useful.

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

* * *

Fed Options: The Plot Thickens

By Reginald H. Howe
www.goldensextant.com
December 1, 1999

My commentary of September 20 suggested the possibility
that the Bank of England's gold sales were triggered by
a plea from Washington aimed at rescuing the Fed from
potential big losses on the writing of gold call options.
Nothing that has happened since is inconsistent with this
suggestion, and what new evidence there is supports it.

But to go back, an initial question -- on which I accepted
the opinion of others -- was whether the Fed has statutory
authority to write (sell) call options on gold. In my opinion,
it clearly does. What is now codified as 12 U.S.C. Section
354 provides in relevant part:

"Every Federal reserve bank shall have power to deal in
gold coin and bullion at home or abroad, to make loans
thereon, exchange federal reserve notes for gold, gold
coin, or gold certificates, and to contract for loans
of gold coin or bullion, giving therefor, when
necessary, acceptable security...."

This provision, included in the original Federal
Reserve Act (Dec. 23, 1913, c. 6, s. 14(a), 38 Stat.
264), has remained unchanged and in force ever since.
While it does not specifically mention writing call
options, the broad grant of authority "to deal" in gold
and to make or receive gold loans can readily be
construed to include writing or purchasing options.

This authority, it should be noted, addresses only what
the Fed can do for its own account. It has nothing
whatever to do with buying, selling, or otherwise
dealing with the official gold reserves of the United
States, which are under the control of the secretary of
the treasury acting with the approval of the president
(31 U.S.C. ss. 5116-5118). Whether the Fed's authority
to deal in gold for its own account may in some
respects be limited by other statutes is a question
that I will leave to others, but under Section 6a(d) of
the Commodity Futures Trading Act, any transactions for
its account are expressly exempt from trading or
position limits.

Testifying in July 1998 before the House Banking
Committee looking into the regulation of over-the-
counter derivatives, Fed Chairman Alan Greenspan
distinguished financial derivatives from agricultural
derivatives, saying that it would be impossible to
corner a market in financial futures where the
underlying asset (e.g., a paper currency) is of
unlimited supply. The same point, he continued, also
applied to certain commodity derivatives where the
supply was also very large, such as oil.

Greenspan further volunteered: "Nor can private
counterparties restrict supplies of gold, another
commodity whose derivatives are often traded over-the-
counter, where central banks stand ready to lease gold
in increasing quantities should the price rise."

In other words, the Fed Chairman opposed any action by
Congress aimed at greater regulation of over-the-
counter derivatives, specifically including gold
derivatives. One reason -- left unstated -- for this
opposition may well have been concern that any new
legislation might interfere with the Fed's own
activities in the derivatives markets, particularly in
the gold area.

Why might the Fed have engaged in writing call options
on gold?

The Fed's immediate purpose and effect would be to
facilitate gold leasing by enabling the bullion banks
to hedge more easily short positions resulting from the
sale of leased gold. Indeed, as the so-called gold
carry trade grew, demand for this sort of hedging by
bullion banks likely strengthened, since here, unlike
in mining finance, their customers were not themselves
producers of gold. More generally, by thus exercising
control over the amount of leasing and resulting short
sales, the Fed could have achieved considerable
influence over the gold price.

Indeed, perhaps it was just this kind of activity that
led a former Fed governor to claim on CNN's "Moneyline"
in October 1998: "The Fed has precise control over the
price of gold and therefore over commodities such as
crude oil. No inflation, therefore no need to raise
rates."

A recent analysis by Ted Butler faults the Commodities
Futures Trading Commission for not taking action
against certain bullion bankers over the option
strategies foisted on certain mining companies. The
basic strategy to which Butler refers is the sale by
mining companies of long-dated call options to finance
the purchase of relatively short-dated put options --
that is, the strategy that crippled Ashanti and
Cambior. In all that has been written or disclosed
about this strategy in recent weeks, two facts stand
out.

First, the risks were not fully or widely understood.

Second, the strategy experienced a surge in use right
after announcement of the Bank of England's gold sales
program.

No doubt, as many have suggested, this sudden spurt of
options hedging reflected the gloom that descended over
the gold market in the wake of the Band of England's
announcement. But to the extent that the bullion banks
actively pushed the strategy onto their mining
customers, it may also have represented an effort by
them to replace Fed call options that were in process
of drying up.

Efforts at market manipulation almost always come to a
bad end because ultimately market fundamentals will
assert themselves. Central bankers tend to have a
better appreciation of this than politicians, which is
almost certainly why the Bank of England's gold sales
program was ordered by the British government over the
objection of bank officials. If the BOE's gold sales
were originally intended to rescue the Fed from a
losing options position as gold threatened to move over
$300/oz. last May, it has probably largely achieved
that narrow goal by now. But the cost has been
enormous, not only in British gold but also in
undermining continued central bank control of the gold
price.

Neither the BOE nor its political masters foresaw that
their attack on gold would trigger the Washington
Agreement, announced Sept. 26, 1999, which overnight
caused an almost complete reversal in negative
attitudes toward gold created by several years of
highly publicized central bank sales and huge increases
in their gold leasing activities.

The resulting spikes in the gold price and in already
high lease rates effectively killed the gold carry
trade and forced far more prudent use of hedging by
mining companies. While the troubles of certain mining
companies caught wrong-footed have been widely noted,
the damage to the bullion banks themselves, not to
mention certain hedge funds, has yet to be fully
disclosed.

The Bank of England's reputation for prudent oversight
of the international gold market, long based in London,
is badly tarnished. Kuwait's release of its entire
official gold reserves for loan through the BOE has
only underscored the parlous condition into which that
market has fallen.

The BOE itself now appears locked into a gold sales
program that amounts to a fire sale of British gold, so
much so that two of the world's largest mining
companies have successfully used the last two auctions
to cover some of their own forward sales. Whether
wholly unsubstantiated or floated as a trial balloon,
the mere rumor -- quickly denied -- that the BOE might
cancel future planned gold sales caused an almost
immediate $10/oz. spike in the gold price a couple of
weeks ago. Charges fly that the BOE's sales are part of
a government plot to join the European Monetary Union.
If so, it's a pretty dumb plot.

By not joining the first round of the EMU, Britain
regained possession of 173 metric tons of gold
previously deposited with the EMI (predecessor to the
EMU) and increased its total gold reserves to 715 tons,
which its gold sales program when completed will reduce
to around 300 tons. Should Britain join the EMU, it
will probably have to allocate about 140 tons to the
European Central Bank, leaving national gold reserves
of around 160 tons. Britain would thus be the only
major EMU member without substantial gold reserves, and
thus the only one not to benefit from any future upward
revaluation of gold.

Beyond these direct consequences, some believe that the
Fed responded to the October gold banking crisis and
presumed problems of the bullion banks by adding
liquidity to the banking system, thus providing much of
the fuel for the November stock market rally. In this
connection, it is worth noting that the bullion banks
with apparently the greatest exposure to Ashanti's
problems are among those most often associated with
suspected Fed activities in the gold market.

So too the question of whether and to what extent short
gold positions may have played a role in last year's
Long-Term Capital Management affair remains shrouded in
mystery.

What does appear, however, is that the Fed is very
reluctant to allow the U.S. stock market to progress
from a correction into a true bear market, adding
credence to the growing belief that the stock market,
however overvalued, is too big and too important to be
allowed to fail.

There is a certain irony in the fact that since Alan
Greenspan assured Congress in July 1998 that over-the-
counter financial and gold derivatives required no
further regulation, these very same derivatives have
twice presented the Fed with an opportunity to allow a
stock market correction to turn into a bear market for
which it could escape much of the blame. In each case
the Fed may properly have been concerned that the
decline might cascade into a disorderly rout. But by
intervening to head off these stock market declines,
the Fed may also have undercut the credibility of its
own interest rate weapon. Searching for a way to freeze
the bubble or at least to let the air out slowly, and
unwilling to let market forces have their way, the Fed
has steered the whole American economy into uncharted
waters.

The Fed was founded to stabilize the gold value of the
dollar on the theory that central banking could achieve
this goal better than free banking. Having utterly
botched that mission, it has accepted a new one:
guardian of the American economy's paper wealth.

The Fed has never had nor will it ever have "precise
control" over the gold price. The question now is
whether its control over the stock market will prove
equally illusory. No doubt, should its traditional
monetary tools or suspected derivatives activities
appear inadequate to the task, the Fed will unveil some
new weapon. But if the Bank of England ever announces a
plan to achieve greater diversification of its dollar
assets by investing proceeds from its gold sales in
U.S. blue chip stocks, beware. For if the first rule of
investing is "don't fight the Fed," the second is "bet
against the Bank of England."

-END-


------------------------------------------------------------------------
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Au coming up slightly after dismal overnight trading, breifly going below $280.00. Markets look to open strongly.

s&p futures up +18.90 on benign unemployment report. Au continues downward......bummer!

And now Safra's death. Perhaps we should get ready for the Apothoesis of Rubin to his rightful position as head of the US Federal Reserve. Robert Maxwell knew too much and maybe so did Safra.
http://www.spotlight.org/Nov__16/Rubin/rubin.html

http://www.spotlight.org/Nov__16/Rubin/rubin.htmlAnd now Safra's death. Perhaps we should get ready for the Apothoesis of Rubin to his rightful position as head of the US Federal Reserve. Robert Maxwell knew too much and maybe so did Safra.
http://www.spotlight.org/Nov__16/Rubin/rubin.html

The market action in the gold equities is quite encouraging.

http://financeservices.about.com/business/financeservices/gi/dynamic/offsite.htm?site=http://commdocs.house.gov/committees/bank/hba43661.000/hba43661%5F0.htmThis morning's reading -- I had meant to research more fully the longterm outcome of the S&L crisis, but this is about all the time I could spare for now.

Problem: Financial crisis?

Solution: Throw it on the National Debt.

"
From its inception in 1989 through its closure at the end of 1995, the RTC took over and resolved 747 failed thrifts having over $400 billion in assets at book value. The RTC ultimately disposed of all but $8 billion of those assets, which were transferred to FDIC management at the sunset of the RTC, along with the RTC's remaining liabilities. According to the latest GAO financial statement audit of the FDIC, the RTC incurred total costs of $86.4 billion. Overall S&L clean-up costs significantly exceed that amount, however, because of losses incurred by FSLIC between 1986, when it officially became insolvent, and 1989, when the RTC assumed responsibility for resolving failed thrifts. Based on GAO and FDIC estimates, overall S&L clean-up costs since 1986 totaled $156.4 billion, of which taxpayers financed $128.4 billion, or 82 percent of the total cost."

Some are selling into the futures rally.

Futures have been above fair value for the whole hour but for 4 minutes. As trend-is-my-friend money is leveraging into the futures the arbitrageurs bridging between the rally in futures and the individual stocks are being stuck with them - the tech stocks are being sold to the Arbs. Indications are that shorts in the stock market are getting cleaned out.

Volatility is indicating that tradeable stock in tech companies remaining outside retail index products is limited.
We are in a hyper version of July 98. It is more concentrated this time, with fewer participants than ever, hence the stronger performance of the tech laden indexes.
The VIX is back at the 20 level. Watch for it dropping further. If we manage 19 we are in business for a serious decline towards mid-late Dec.
Triggering the decline should be a push by Wall Street firms to take the current outstanding call options on stocks back out of the money.
Cycles from the FFT breakdown indicate a major quarterly top is forming.

I believe that if you account for the 10 for 1 reverse split of the early 1990s the Ruble has done about a 100 to 1 decline in about twelve years. This would be the magnitude of a decline in the dollar needed for $30,000 gold. More than I expect but John Templeton was called a wide eyed optimist in 1980 for calling for a 3000 yes that is 3000 Dow. So maybe $30,000 dollar gold is possible after all.

MARKET REPORT(12/3/99): Gold continued to track down in today's
early trading.The metal had slid to below the $280 mark in London before
staging a rally that brought it back to $282.75 at the afternoon fix.
The rally extended to the open of the New York session.

Another 64,236 ounces of gold came into the Comex warehouses yesterday
and it appears that most of the gold is going into the accounts of
Goldman Sachs and Deutsch Bank (the "stoppers" per Comex parlance). The
largest deliveries were made by Cargill, the Bank of Nova Scotia and to
a lesser extent, Morgan Stanley (the "issuers" per Comex parlance).
(Thanks TC) Does this indicate a squeeze? We wouldn't go that far but it
does establish that there are now parties on the other (long) side of
these Comex futures' contracts who want delivery. Hence, the metal is
pouring into the Comex warehouse.

Meanwhile, the price continues to move downward in most mysterious
fashion. London traders are blaming the fall on the usual culprit --
"fund-selling." If these funds keep selling on paper, and people like
Deutsch Bank keep taking delivery someone is going to end up with a
boatload of cheap gold and someone is eventually going to run out of
sources -- shades of the late 1960s when DeGaulle led a European charge
on U.S. gold reserves. Being owners of the physical metal as our primary
portfolio hedge, CPM/USAGOLD clientele can afford to take an academic
interest in the proceedings, continue accumulating on these dips and
calmly wait to see how this interesting scenario will play out.

Speaking of watching and waiting:

I would direct readers to a very important post at USAGOLD FORUM
(Message #20118, posted by YGM, look under the heading, ALL THINGS TO
ALL MEN). The article published yesterday in the London Financial Times
delves into the back room activities of Goldman Sachs, the Bank of
England, and British regulators during the Ashanti crisis in October.

Well, that's it for today, my fellow goldmeisters. The snow's falling,
it's beautiful actually -- and I'm fighting one of those winter colds.
Looks like gold might be on the mend. We will see what the day brings.
Have a nice weekend.

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.

For ongoing discussion on economic and political issues near and dear to
gold, please visit our USAGOLD FORUM. I think you will enjoy and benefit
from the on-going discussion.

When it was announced this week that HSBC take over of Republic National Bank(a large U.S. bullion bank) was approved, I spent one day on the internet trying to find out who HSBC is and who the major stockholders are....Search results almost -0-.
This is what I did find out;
HSBC-Stands for the 160 year old Hong Kong Shainghi Banking Corp.(3rd largest banking corp. in the world)offices in 79 countries.Headquarters in London England.
And thats it!!!
Don't know who the officers are,owners are,who has controlling interest etc.
Does anybody out there know???
I have suspicions, could this be a banking arm of N.M.Rothschilds & Sons????
And a murder mystery also to solve.....beesting

http://news.bbc.co.uk/hi/english/world/europe/newsid_548000/548288.stmThis is from the BBC whose World Service EuropeToday and WorldBusinessReport programmes just reported that the Russian mafia may be involved.

http://www.usagold.comPOG now about $280..........
GATA Chairman Bill Murphy .......'despair is everywhere again. One would think by the price action of gold and silver that we are in for some tough times ahead. ... Well, that is JUST NOT THE CASE... the shorts are in dire shape. (just luv the use of caps here!)

Confidence! Confidence! Confidence! ......mumble....mumble....mumble.... the shorts are in dire shape......the shorts are in dire shape
C'mon chin up!
the shorts are in dire shape.....mumble....mumble....mumble
the shorts are in dire shape......mumble....mumble....mumble
the shorts are in dire shape......the shorts are in dire shape......the shorts are in dire shape......the shorts are in dire shape......

Whose 'shorts'?

Maybe your recent posts are intended to rattle a few cages and generate some controversies or something but I think your hostile attitude is way out of line. In fact, I find it hard to imagine that you truly believe what you're posting. The consistent opinion (of most of the thinking posters at this forum) is that when the US dollar takes the inevitable hit, whatever investments you are holding that are not tangible assets (like gold, diamond, art etc) are going to take such a beating that their value will be squat relative to today. When you're burning US dollars and Microsoft stock certificates to keep warm, what good will be the power of compound interest then. Why do you think the bond market is going to pot. Do you really think 30 year bonds will return true value when they mature?

If you really believe your statement:

"Yet, over the past 100 years, gold has risen in price against the dollar at an annually compounded rate of about 2.5%, probably less than any other investment you can think of.

The point is, gold is inherently a short term investment for which timing is ABSOLUTELY ALL THAT MATTERS. Furthermore, I submit that people who hold gold year in and year out in quantities which are disproportionate to their other investments are squandering any opportunity of ever achieving wealth in their lifetime."

then you're truly in the wrong place. You're looking for a quick fix. You have the day-trader mentality. Instant gratification.

Doesn't your above statement scream at you? Something as important as gold should have appreciated at a significantly greater rate. The supply/demand numbers dictate that the price has to take off sooner or later, especially now that a limit has been placed on future CB loans. Look what's happened to the price of oil in the last 6 moths. The powers that be can only manipulate the market so far, but when it goes, it will unwind like a clock spring or more likely an earthquake. The trouble is, no-one can accurately predict when that will happen. Those of us who are patient know it's only a matter of time and we're prepared to wait.

One of the cardinal rules of investing is that you cannot time the market but you're using this forum in an attempt to do just that. You're frustrated that the predictions posted here have not come to pass during your short attention span. Like a spoiled child, you're lashing out at those around you because you can't have what you want when you want it.

Everyone is entitled to their opinion. Just because you interpreted FOA's writings to mean that what he anticipates will happen should have happened by now is your problem, not his. He has never predicted when gold will move, only that it will move eventually. Those of us who agree have established our position and will patiently wait it out. You can disagree if you like, but there is no call to be insulting about it.

Please take out your frustrations somewhere else.

Some are seriously lacking in the "Manners" Dept.From the Hans Sennholz site---
Quote of the Week

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

The Week of November 28, 1999:




A Good Education:
"A good education is the apprenticeship for life; in its widest sense it includes everything that exerts a beneficial influence on a young person and prepares him or her for virtuous and fruitful living. There are five criteria of a good education: correctness and precision in the use of language; gentle manners which give form and color to our lives; sound standards of morality and a character based on those standards; the power and habit of reflection; and the ability to work. In short, a good education develops the ability to speak and write effectively and imparts a sense of right, duty, and honor. "
(A Good Education, p.1)

The confusion between the two of you might lie in the fact that The Stranger is forgeting that the 21/2% return(?) he is ascribing to gold over the last hundred years has almost all come because of the gradual depreciation of the paper fiat currency over that time. In fact he would find that almost all of that cummulative 100 year 2 1/2% decline has happened since the tie to gold was severed in 1971. And more importantly if he thinks that the rate of 2 1/2% per year over a hundred years was slow he is saddly mistaken,and has not learned his own lesson of compund interest very well.The fact that almost all the decline of the fiat currencies value his "return" to gold has happened in the last 28 years in spite of the fact that the current price is the lowest of most of that perieod, reenforces exactly what you and most of us have been saying that the game is ending for fiat currencies rapidly and the high returns to those who hold non depreciating gold lie ahead.In 1981 the return on the stock market for the preceeding fifteen years had been less than 2% per annum over the period,this said nothing about the next eighteen years return did it? Stranger perhaps you want to revisit the investment merits of your arguement.

Interrupt Self Imposed Exile"Never concede with spontaneous alacrity or calculated observation that things are as they appear to be.

Never assess and conclude with comprehensive finality of judgment the consonance and consistency of current events with events past despite lifetimes of experience and academic progress".

The Rule of Cavan Man (BY CM)

Return to self-imposed exile.

Part of your post:
What would you suggest today if I have $150K Gold and $150K cash.Do I add to the Gold holdings or try to diversify my retirement portfolio? My choice is T-bills and notes.

My answer:
First,thank you for asking these questions of me,but I'm not qualified IMHO to help you. Each persons situation and goals are unique.A lot depends on present age,life style,family size,present retirement plans,health plans, etc.
I can share some of the pitfalls I've encountered;
1. Usually lost money when I followed advice from anyone else.
2. Don't loan money to friends or relatives.
3. As my deceased father would say,"there are no sure things in life."
4. I am a devout Goldheart(for 30 years)so my opinion would be biased by that.Prior to 1983 I made money on Gold stocks.
The stocks purchased after 1983 are still way down from original purchase price,but by 1994 we had recouped most of our original investment thru dividends.
5. In 1996 started acquiring physical Gold as part of a deversified portfolio.Currently 1/3 of our portfolio is physical Gold. 5% is cash on hand(in case Y2K is a big problem)

I think your choice of U.S. Government debt is a wise move,however strange things can happen in a life-time...try to prepare for any scenario.....check out retire-ment in foriegn lands...I am. With proper planning you should be able to live comfortably anywhere in the world(thats politically stable) presently.Remember(if your in North America)our ancestors migrated successfully from all over the world. Anyway to sum up, those decisions right or wrong are yours and only yours to make, it's your life your planning here.

P.S. If you've already got $150K in physical Gold, you could become a Goldsmith upon retirement and turn $150K into $1 million.

Best of luck......beesting

Possibly to near double....(and measured in Euros!)



Russia Mulls Raising Oil Export Tax To 12.5 Euro/T

MOSCOW, Dec 3, 1999 -- (Reuters) Russia is considering raising the crude oil export tariff to 12.5 euros per metric ton from 7.5 euros now, but a final decision will be taken by Prime Minister Vladimir Putin, a senior trade ministry official told Reuters on Thursday.

Andrei Kushnirenko, head of the ministry's tariff policy department, said that the commission for protective measures in foreign trade had examined oil tariffs on Wednesday but could not reach a unanimous decision.

"Our commission examined this issue but could not reach a common position," Kushnirenko said. "So it was decided to leave the right to decide on the issue to the head of the government."

Russia raised its crude oil export tariff to 7.5 euros per metric ton in September from five euros previously to take advantage of rising crude oil prices on international markets.

Since September oil prices have continued to firm.

The government took a decision in October to increase budget revenues by increasing commodity export tariffs. This was followed by speculation that the increase would be extended to hydrocarbons, which make up the bulk of Russian export earnings.

Kushnirenko declined to forecast when the new crude oil export tariff could become effective if a decision was taken to raise it.

"It can only be set after a government resolution has been published," Kushnirenko said, ruling out the possibility of the new tariff being imposed retroactively.

Customs tariffs normally become effective after a government resolution is signed by the prime minister and published in the official gazette, but in urgent cases this procedure can be overruled by a presidential decree.

Don't be too quick to assume a 'lid' has been placed on CB gold sales. I can see how it was a short term 'sucker punch' for some people, but as I've said before, NOTHING substantial is going to happen until macro-economic events COMPLETELY over-whelm the situation. The maggots that presently run this world are extremely hostile towards gold and personal freedom and will not let something like illegal activity stop them. We're going to have the last laugh, just not yet.

Feeling the effects of Manipulation.......Gold miners hit by price fluctuations
Date: 11/28/1999
Page: 7
Author: JU CHUANJIANG and ZHAO GANGBusiness Weekly staff


YANTAI: Shandong Province, which produces 25 per cent of China's gold, is being heavily affected by price fluctuations on the world gold market.

China has been able to produce more than 150 tons of gold within recent years, making it the fifth-largest gold producer in the world even though the gold industry is still tightly controlled by the central government.

The State purchases gold at prices set by the People's Bank of China and sells to gold processing enterprises also at fixed prices.

To support the gold industry, the State increased the gold purchase price from 48 yuan (US$5.78) to 96.48 yuan (US$11.62) per gram in 1993.

However, the bank has reduced prices seven times since 1997 in response to fluctuations on the international market, a 25 per cent price decrease.

The price cuts reduced income to Shandong's producers by about 1 billion yuan (US$120 million) per year. About 90 per cent of its gold enterprises fell into great difficulties.

China's gold purchasing prices reflect price fluctuations on the international market.

When the British central bank sold 25 tons of gold on July 7, 1999, and announced that it would sell another 400 tons, the International Monetary Fund and some European countries also sold gold in large quantities on the international market. This resulted in the lowest gold prices since 1970.

However, sales of big quantities of gold ended in early September. The price climbed by 27.8 per cent between September 3 and October 6.

In China, gold prices increased from 69.6 yuan (US$8.42) per gram to 85.2 yuan (US$10.27) in October.

Price changes on the world market have brought uncertainty and risk to the gold industry in Shandong.

To reduce risks, the province's gold industry has taken several steps to increase its income.

According to a local official, the gold industry reduced 20 per cent of its management costs and 10 per cent of its production costs during the first six months of this year.

The industry is placing emphasis on the development of non-gold sectors in the province. More than 300 enterprises engaged in the manufacturing of machinery, electronics products and building materials, as well as hotel services have been set by the province's gold industries.

A foreign-funded metal processing company set up by the Penglai Gold Group has exported its products overseas.

------------------------------------------------------------------------
Copyright by China Daily. All rights reserved.

Good to see you buddie......beesting.

http://www.audiocentral.com/rshows/mir/default.htmlNo comments as I'm just now listening......YGM.

My real audio doesn't work, could you give a synopsis and analysis of what was discussed by Ron Paul and the others concerning Gold on the other site last night...Thanks in Advance......beesting.

Thanks. I think you have wise parameters for using your money. I too am persuaded in the wisdom of holding gold over time, especially today when the NAZdog continues to make new highs and gold is being manipulated down in price. And not because I think gold is a good investment but rather because it is a good place to store the reward of many hours of my blood, sweat and tears. I refuse to participate in discussions about the demise of the dollar from an investment standpoint because if the dollar does totally tank so will all investments. This is not true of the stock market, which if it tanks will not destroy all other investments, and not just in the US. It has been clear for the past three years that the stock market will thrive as long as the dollar does. The forces supporting the dollar are very powerful and my investment strategy is based on their continued efforts. People who hope the dollar tanks have, in my opinion, no notion of what that will entail to their own future and everyone else's.

It is possible to open an account with the Fed at any of their branches. The Fed buys treasuries at the next auction as a market order or you can put in a limit order if you wish. I have done that because I want some type of income stream which is isolated from what I perceive is the inevitable future of the stock market. It isn't a great yeild but I think it is a safe investment.

Offshore bank accounts for US citizens are a trap for the wary and unwary alike, beginning with the question on your 1041 asking if you are a signator on a foreign bank account, and the explanation required of a yes answer. Not impossible to do legally, but care required. And the socialist governments have mounted a big campaign that is going on right now against Euro area tax havens which will affect them all in the near future. Nothing will happen immediatley because the Rothchilds and Rockefellers have to move their trusts somewhere else first, but it is inevitable that things will change soon.

I am mostly a lurker here and Kitco, and I must say that I
agree entirely with The Strangers views on FOA, I mean
this person did say those things, Gold is going to $30,000.00 and not just once, on
numerous occasions, and further the $30,000.00 figure
was mentioned directly in connection with the so called
"short squeeze" last month, "we are well on the road to $30,000.00", This is not my interpretation of what FOA said look up the words yourself. But beyond that I must also say
that for a while I was rather upset with Kitco for making
"fun" at FOA and Another, such as they did again this week, BUT I now understand why they make "fun" of
FOA and Another. A poster must be held accountable
for his opinions, if he is to be given any credibility.
And at the moment, unless goes to $30,000.00 very soon,
I would say that FOA and Another have lost credibility
with me and I am certain many other lurkers.
Thank-You The Stranger for saying what many of us
are thinking, and I'm sure what many more are thinking but afraid to say.
I beleive that USA Gold Forum will become much more credible if opinions stated by any poster are scrutinised
and debated, instead of just following and accepting every word of a particular poster, including FOA.
I hope FOA continues to post here, but we must hear
some explanation as to why Gold is not $30,000.00
or at least why it is not well on the road to $30,000.00.
Many posters unfortunately,make investment decisions based on the so called "gurus" of these discussion forums.
As I said, I beleive this will make for a much more credible discussion group. This is my opinion of course, and I hope others give theirs.

Does anyone know why I can't open YGM's link by clicking on it? I can't open it by clicking on it and can't open it in another window with my right click on the mouse. Thanks

ANYONE CONCERNED W/ OIL FUTURES OR Y2K Shortages..DEFINATELY does not want to miss this talk...(sorry for caps, but this is very, very important listening).....example...
INRON (sp) the worlds largest Natural Gas producer and Electrical Co in the world admits it's not going to make it..also very worried about feeder companies etc...projecting a minimum 30% shortfall, which will trigger a "Depression, not a Recession" ...still listening here...YGM

beesting.....Hi, Sorry I couldn't get that Kitco Audio either, but will search for a transcript...they did say that they believed Gold Confication was in the cards if Gold rose to extreme highs.....IMO...the changes to public perception on Gold & Y2K are about to change dramatically over next 45 days.....YGM.

I feel that your recent post where you welcomed FOA back and then proceeded to undermine him with name calling is both offense and highly inappropriate. This kind of post brings disgrace to this group which is known for its integrity. This forum was born and has grown on recognizing the value of another viewpoint; respectful disagreement has been it's hallmark. I hope that you will respect others in your future communications with them.

I don't know how to hold someone accountable for their opinion, but certainly FOA is free to express his/hers here. That is, after all, the purpose of these forums (in part anyway). I too have been skeptical about Another's and FOA's opinions, but it does appear that some of it is coming to pass (on a small scale anyway). There is a Kitco post this afternoon describing how bullion is no longer available at Mexican banks but is still available from private dealers for a higher premium. And recently I began reviewing Another's old Kitco posts that have been graciously posted on the web (unfortunately I lost the URL although I saved the files).

I've tried to address some questions to FOA regarding some of Anothers statements, but got no response. In particular, Another stated at one point that when the gold market went up, goldbugs would not be happy with it, and I remain concerned with confiscation. I do not think confiscation is an issue in an orderly market rise, but if gold goes to $30000 as FOA states, forget about trying to sell it. You better hide it. It WILL be regulated (taxed or confiscated). In fact, IMHO, if gold sees $1000+, it's in the "red zone" (US govt. crosshairs), IMO. Another and FOA, being foreigners (I live in the States), don't recognize that the government operates much differently here than in other countries and routinely interferes in the markets. Real estate is a prime example. All residential real estate in the US is tax-subsidized by way of deductions.

If the local government can outlaw gas masks at the drop of a hat, as demonstrated in Seattle this week, how safe is your gold? I'd hope FOA addresses this issue when he pops in this weekend. In regards to looking to these forums for financial advise, they are probably no better or no worse than anywhere else one may turn for advise. Unfortunately, the greatest of all human weaknesses, that of suggestibility, is amply demonstrated time and time again on the internet.

I hoped that you would keep the discussion on this side of being civil, because at time I feel you have something to offer. Apparently you cannot keep it to the issues. Your code is deleted and the offending posts have been removed. We do not conduct personal attacks around here. I have no problem with respectful, intelligent disagreement. You crossed the line.

Good luck in all you do. MK

You guys should shouldn't be so quick to just on our Stranger. You have to follow him over a few posts, over a couple days. Recently he commented on his good fortune and luck. Stranger is up (handsomely) in all his asset classes.
Sticking and holding one asset is against all diversification 'rules'.

I took the day off and played 'day trader'. Barrick opened very low and rose until noon. I rode the wave up. I have a second play on the go which is playing out well. Meanwhile
gold is floundering about like a beached whale. I hope to wrap up the day ahead $500.

I have enjoyed the day, sipping a couple beers, teasing the dog with pizza, relaxing and scooping easy cash. What the hell, I'll buy sheep manure if it's going up.

This little tidbit re-inforces Stranger's quote:

"The point is, gold is inherently a short term investment for which timing is ABSOLUTELY ALL THAT MATTERS. Furthermore, I submit that people who hold gold year in and year out in quantities which are disproportionate to their other investments are squandering any opportunity of ever achieving wealth in their lifetime."

Stranger:
No offence whatsoever taken for calling me an amateur in financial matters. Your insinuations that you mean no offence is likewise taken with a grain of salt.

No, I have no aspirations towards professionalism in financial matters. In fact, the opposite would be the case. Meaning no disrespect to yourself, either, in fact I find it fair to say that professionalism in the financial field is mostly a matter of legalized theft...the lowest form of sculduggery.

Surely you would offer no argument that the professionals who dreamed up and presently administer the Federal Reserve System take every advantage of us. A system based on incomprehensible complexity designed to cheat every one of us of the fruits of our labors is nothing in which to take professional pride. Calling a system-wide depreciating currency "wealth" stretches our English language even as it stretches the thinking person's credibility. One has only to examine and understand the bucketshop mentality and modus operendi of the average broker's office to find a perfect example of moral corruption in financial professionalism. And how about those morons on FNN every day, touting this stock or that, this index or that all the while giving lip service to an independent media?

No, in my book, professionalism in financial matters is nothing to hold up as a paragon of virtue, nor even something to admire.

And yeah sure! We all know about compound interest. As consumers, we have been on the losing end of it all our lives. And not just whenever we fire up our credit cards, either. Compound interest is built into the price of virtually everything we buy, and into everything even remotely touched by our "modern", so-called capitalist system. But your often-heard bromide about compound interest making us wealthy is still impossible to swallow. Percentages are not magic. The magic is the deception that powers them.

You mention timing: Yes, as others have commented on, timing IS crucial. Many of us believe that the system is on the verge of change. Timing it is one of our greatest frustrations. But throwing the stability of the past in our faces sheds no light on the basic timing question. Because that is how change happens... by changing. Just because an asset has only appreciated by x.x% during the last xxx years doesn't mean it will continue to do so at the same rate for the same period of time into the future, etc. Obviously!

Most of these questions have been amply discussed at length here at this forum. And in a much more civil tone of voice. I regret that I seem to get drawn into this kind of exchange against my will more often than others seem to. I ask the indulgence and forgiveness of all.

I'll return to my self-imposed exile now.

Newgold, the manner in which you express your opinion is eminently more acceptable than that of The Stranger. It's one thing to have a dissenting opinion. It's quite another to insult people you don't agree with. As a matter of fact, I don't for one minute believe gold will be worth US$30,000 any time soon (unless, of course, the US dollar suffers from hyper-inflation). In fact, I'd be surprised if FOA really believes it will go that high either. I recall that he (she) said it could go that high but it appears to have been meant as the upper end of the range rather than a target. I wouldn't want gold to go that high anyway. The fallout from US$30,000 gold would be far worse than any of us would care to contemplate. However, I figure that gold in the US$600 - US$1000 range will be with us in the not too distant future, maybe by the end of next year. I can wait another year, even more if necessary. I'm convinced gold is going to move significantly (and I don't mean just $80) and I'll be ready when it does.

megatron, I referred to CB loans not CB sales. I'm more concerned with loans than sales at this point in time. Loans have to be repaid eventually (unless there's a default) and they have to have been at least as big as the sales each year for the last few years to make up for the lack of supply. Loans have been mainly covert transactions until recently and no-one seems to know what the outstanding short position really is. My guess is that the CBs had reach their comfort limit on gold loans and the Washington Agreement was their way of avoiding admitting to that fact. The barrel is being scraped for new suplies, to which the Kuwait and Jordan announcements bear testament. They're running out of options and their collars are starting to feel tight. Tick, tick, tick.........

CB

"Surely you would offer no argument that the professionals who dreamed up and presently administer the Federal Reserve System take every advantage of us. A system based on incomprehensible complexity designed to cheat every one of us of the fruits of our labors is nothing in which to take professional pride."

To you I say AMEN & AMEN!!!!!
No need for excile PH.....timing is NOW
Keep Well

Gold is a very short term tradeable and a very long term investment hedge. Today, at rediculous prices, it is also a good long term investment.

FOA and ANOTHER, though they may not have benefited you to date, have come with a view quite different from that of most modern day investors. Their view is shared, in part, by the likes of Dale Davidson and Reese Moggs, Yardeni, Faber, Ackerman, Dines, Casey, and many others who have great long term records, but have missed the boat on the latter part of this dollar and equity rally, predominantly because they did not expect the Japanese to dump money into the US's continuous losing proposition.

To make one thing clear, the GDP numbers and the growth in employment are both products of the monetary regime and fiscal favoritism policy. The government made two critical decisions to make the profit margin on employees greater. The first was the lowering of taxes on corporations, and the shifting of costs of government functions and social insurance from the corporation and high income individuals onto the employees. The second was the policy mix that brought us such wondrous things as the options compensation disease and R&D and Marketing expensation. Much of the rest has to do with the monetary system and the "new era" of financial rules dictated by record real interest rates in the US.

ANOTHER and FOA have warned us that the rule of rate of return will be replaced by the rule of return of principal. The level of dishonesty in the financial system in the US can only be matched by Soviet Era propaganda. The rate of return of nothing has been very high by historical standards. However, the standards from which people make the extrapolation have changed. Whereas in the past there was a rate of return of something, today it is nothing that is returned. Any attempt to cash in the nothing will quickly reveal its value. Upon that process starting, there will be a "revaluation" of gold. Up to that point, gold will be controlled in price by the combination of the need to satisfy powerful accumulators and the level of success the financial firms have at marketing their papers as equivalents to the real thing. So far, only a smidgen of doubt has come into the markets. During this whiplash swing in sentiment, bear bull bear, much gold was shaken out of individuals and released from the hordes of accumulators for the purpose of collecting significantly more gold in the near future.

To complain that a major shift in the structure of the monetary system that has large and complex powerful forces pitted against each other could be predicted to within days weeks or a year or two is quite absurd. Organization of the EMU and the gold plan revealed by ANOTHER and FOA are long processes that bear much resemblance to the herding of cats.

Rather than complain about the process repeatedly being halted and delayed as one cat or another finds a frightened golden mouse to pounce on or a patch of catnip, you could note that the existence of the process has been confirmed by multiple events. We all owe much gratitude for the two for their revelation of some of the thinking and motivations behind these events long before any occurred.

Back in late 97, when ANOTHER posted most of his commentary, there was barely a suspicion outside of Veneroso's work (and he was not quite aware of the enormous scope or importance of the market) as to how overextended the gold market had become. The surprise release of LBMA volumes in late 97 was an eye opener to many. I remember my own surprise at the magnitude of OTC derivatives contracts reported by the OCC, I was even more surprised to find that the highest estimates I had made were very close to the reported numbers from the BIS - higher in fact. Without ANOTHER and FOA's pointing of direction, I would never have been aware of how close we are to the end of the gerra Americana. For years I had known that the US is slated for decline and that what it is doing around the globe wins it no friends. For way longer, I knew that the US was being subsidized by the world through its role as issuer of the global reserve and trade settlement currency, and that had to end because the US was consuming global resources at ever greater proportions, that the rewards of the spread of the industrial revolution from the West to the developing world was not benefiting the participants as much as it was benefiting the US. Without A/FOA I would not have been able to prepare for the upcoming demise, be it today or tomorrow, 1998 or 1999.

Timing of the events is probably impossible to the outsider, it is probably hard for the insider as he is stuck in many pointless meetings and strategy discussions that leave things in the air most of the time, and he often despairs of resolution coming.

Fortunately, some such as Cyclist and Kaplan do a reasonably good job of timing from technicals. The timescale of A/FOA is not that which traders could use, but large players can't move that fast and must convert holdings methodically over great lengths of time. A/FOA stand with these people.

I should put things in sharper perspective. Up to the BOE sale I was very skeptical of A/FOA. The research I did from that point on has all confirmed their case, none of their main points were challanged by the reality of data and the reports out of Europe. The US media is about as reliable as Pravda because so much of the advertisement revenue is coming from the financial firms and their young client corporations.

http://biz.yahoo.com/rf/991203/kb.htmlThis is a helpful snapshot of Canada's foreign reserves and the country's efforts to "work" their "portfolio" through various investments and cross-currency swaps of domestic obligations. It seems that they mark everything to market on a regular basis, so they always have a good sense of where they stand. For example, as the yield on U.S. bonds changes, the market value of the bond is adjusted accordingly.

This report compares end-of-November books to those of October. Interestingly enough, even though the market price of gold fell during that time, their book-loss on gold value was only $14 million, while their book-loss on paper asset values was $230 million. And keep this in mind...these values are all given in US Dollars as the benchmark. If the price of food, energy, clothing, and real estate increases, they could actually be suffering a real-world loss in reserve value, even though the book values might show an increase in dollar valuation.

On another note, their gold sales have ceased for many weeks now. Accross the pond, with the European Central Bank marking their vast gold assets to market values on a quarterly basis, the ECB is likely eager for gold increase at the end of this year. As we mentioned long ago, their Washington Agreement came in the final week of the previous quarter...just in time to produce a healthy new book value for their gold. Stay tuned.

http://biz.yahoo.com/rf/991203/pf.htmlFine tuning the reserve levels after yesterday's 70-day repurchase agreements, ahead of the weekend the Fed has added another $2.9 billion via 4-day RPs. Monday or Tuesday will probably be a biggie.

It would seem to me that there are some here who have demonstrated the mentality that Stranger spoke of in the post that described FOA as some sort of Pied Piper. Unfortunately, Stranger took it upon himself to be some sort of critic. As one who has greatly appreciated FOA and Anothers opinions at this site from a long ways back, I consider the information as just that, information. Regardless of the POG. If the mindset here is to utilize this as inside information, then I believe it has been taken out of context. Stranger recognized this "following" as he named it, as potentially damaging to these individuals. Unfortunately, there is a responsibility of each individual to learn to discern what works for him or herself. How often in our enthusiasm we get caught up in the maelstrom of euphoria. These responses are based largely upon emotionalism and it will cloud the view of logic. The depth and breadth of knowledge that is expressed here is a fantastic wealth of information. I for one am grateful for the lessons that I have learned here and it would be a great loss if the posting ceased because of criticism.

I will go out on a limb here and suggest that as a group of people with lots of differing opinions to express that we do not attempt to achieve credibility at the expense of those who have already acquired the respect of others. The attack of Stranger on FOA, demonstrates this weakness by criticizing him personally.

As for those who are now asking for proof of the $30,000 figure, I suggest that you sit back and observe the times rather than jumping in and out of the scene. If your purpose on this earth is to just acquire wealth and riches, then you will be better served to "follow" the Stranger. I'm sure he would like nothing better than to win over FOA's so called, converts. I'm afraid that you have grown to appreciate something that I try to avoid. It reminds me of the little rich kid in Willy Wonka and the Chocolate Factory when she would say "I WANT IT NOW!" Of course the crowd will now press against the jailhouse doors and shout "Off With His Head" since we haven't reached $30,000. Oh FOA I'm afraid you overestimated our intelligence when you applied logic to something that stirs every emotion possible, especially greed!

Well stated Crossroads. Reminds me of a quotation by Faulkner: "Man is not the victim of fate or destiny, but simply of greed, and the greed of his friends if he is not careful."

If I remember correctly, both FOA and Another were always prompt and very courteous to reply and explain [be held accountable for] what they said.
If I remember correctly, FOA said on several ocassions said that the $30,000 figure was the HIGHEST extrapolated number that he had seen.
It would seem to me that it might just be a little presumptuous and premature to be condemning their forecasts just yet.
As for what the folks at KITCO think, I really don't care. What I do care about are the thoughts and opinions of the posters at USAGOLD.COM.
Sorry for ragging, but I do not think FOA deserves that kind of treatment from any of us. He may be proven right, he may be proven wrong; but by G--, he was always courteous, and he was always thoughtful.
regards

Oro, I spent the first 40 or so years of my life "cowboying." The picture of herding cats may have me laughing too much to go to bed, tonight. Brilliance aside, that one description should put you in everybody's Hall of Fame.
Regards and thanks

It dawned on me while reading an article on Brazilian Govt putting out dollars to make everyone feel secure, that there is a large force leaning on dollars as security during this y2k thing. No matter what happens with the computers, there is going to be a big change in things after the first of 2000. If things go smoothly, some money is going to leave US markets, if things don't go so smoothly, it may stay for a while. The higher it rises, the harder the fall. My opinion is that the strongest force that ever influences gold is fear and insecurity. The public has no fear of y2k at this time, that is obvious. Myself, I think the great fear coming will be inflation like in the 80s. The law of exponentials is at work.

http://www.imf.org/external/np/speeches/1999/112799.HTMRemarks by Michel Camdessus, Managing Director of the International Monetary Fund to the International Graduate School of Management Palacio de Congresos, Madrid, Spain
November 27, 1999 :
[excerpts]
I will try to identify the crises that explain the tremendous instability of the last ten years and, with the clearer understanding that we now have of these crises, the strategies that could make the next ten years more stable and more prosperous.
Several major factors, with intertwining effects, can explain the recent instability. I�will mention just four of them:
-- a new breed of national economic crises;
-- a crisis in the world financial system;
-- poverty, as the ultimate systemic threat;
-- a crisis in world governance.
These four factors are directly relevant to the activities of the IMF, and indeed each of them calls for large-scale changes, including in the way in which the IMF operates.

I. The new breed of economic crises
The IMF long considered itself fully conversant with economic crises. Crises were its job. Indeed, it had been created in the first place to respond to such crises and to ensure that they did not, as had occurred in 1929, turn into global catastrophes and lead to war. For the first forty years of its existence -- until the mid-1980s -- crises were mainly external payments crises, often resulting from macroeconomic policy weaknesses and exacerbated by unsustainable debt.

The Mexican crisis, and much more evidently the Asian crisis, were unlike any seen before. Crises of this new type explode on the open capital markets, arise from complex dysfunctions, and are much less exclusively macroeconomic in nature. They quickly take on systemic proportions, and can be checked only through the immediate mobilization of massive financing.

Take the three major Asian crises, for example: Thailand, Indonesia, and Korea. Dealing with them meant dealing with a three-dimensional problem: a dimension, obviously, of macroeconomic imbalances, along with massive outflows of short-term capital; an acute crisis in the financial sector, reflecting institutional and banking practice weaknesses; and a much more fundamental crisis in the economic management model to which the previous successes had complacently been attributed, but which was quite simply in conflict with the new demands of a globalized economy. I'm thinking here of unhealthy -- I would even say incestuous -- relations among corporations, banks, and government. This third dimension, which the students in Djakarta shouted down in 1998 with cries of corruption, collusion, and nepotism, implied that fundamental reforms were immediately required.

If there is any characteristic distinguishing this series of crises from others, it is the prominence of the private sector -- financial institutions and corporations -- on both sides of the equation as creditors and debtors.

I lack the time today to go into greater detail, but it is clear that the multifaceted factors behind today's national economic crises have been evident -- mutatis mutandis -- in a good many other cases, particularly in Russia, of course, on a grand scale. As we well know from our annual analyses of each of our 182 member countries, these symptoms exist in differing degrees almost everywhere and they were no stranger to the Japanese protracted crises of the 1990s.
Whether a country is large or small, any crisis can become systemic through contagion on the globalized markets.

The aim of an international financial organization in making such suggestions is not so much to seek balanced books at all costs, but rather to encourage countries to discover and realize what the consequences are of the circular relationship between integrity of monetary and financial management, high-quality growth, and poverty reduction. Without the last, the first two have little chance of enduring, and without the first two, any efforts to reduce poverty will be protracted. I call your attention to this circular relation: it was not seen that way some time ago. The recognition of this fact by the world policymakers is a major silent breakthrough. [That's a key point!]

II. Identifying and correcting the weaknesses of the global financial system
It goes without saying that while crises are different from what they used to be, we have to look beyond their national components alone in order to explain everything. Countries have not only been actors in crises; they have also been victims. Systemic cracks have also come to light. To repair them, it is necessary to analyze the weaknesses of the global financial system and not only of national economies.
Considerable thought has been given worldwide to the ambitious project of designing a new financial architecture. The defects of the current architecture are well known.

III. Poverty, the ultimate systemic threat
The slow progress on poverty around the world and the fact that in many places poverty reduction seems to be losing ground are clearly the most serious crisis factors at the end of this century. Here more than anywhere else, we must reflect on our collective capacity to place the human being at the center of our policies -- to humanize globalization.
I hardly need dwell on the global dimension of the problem, and on the risks that it will grow worse.
I am far too familiar with the constraints and inertia we face as we wage this battle to suggest that there is an easy solution of some kind,
Do you remember the Copenhagen Declaration, in which we promised to reduce by half the number of people on this planet living in abject poverty by 2015? Do you remember Rio, Jomtien, Cairo and Beijing, where we promised to achieve at least six other objectives in the next fifteen years...

I will come right out and say it: we must undertake to ensure that the pledges made in our name are fulfilled. I have asked the heads of state of the G7-G8 to make the first decade of the new century the decade of fulfillment of existing pledges. The key is clearly our solidarity. With 1.3 billion people living in extreme poverty, what is needed is something that is also fundamental in human relations: abiding by one's word. If we allow cynicism to prevail in this area, we may as well give up the dream of progressing to a more fraternal global society. It is a matter of great urgency, my dear friends. I see the time soon coming when we will say that, considering the amount of time we have lost since these pledges were made, the targets are no longer attainable. We have not reached this point yet, but the situation is urgent. We need a jolt of responsibility and solidarity.

[One initiative...]...is the adoption of a new joint strategy by the IMF and the World Bank, aimed at making poverty reduction the centerpiece of their joint strategies in the 75 poorest countries.

...Even with all these initiatives, we know only too well that in the world today many people feel that they lack control over their own destiny, and fear that there is no legitimate authority to deal with problems that are increasingly taking on worldwide dimensions: the environment, drugs, corruption, crime, money laundering, etc. Which brings me to our fourth crisis: it is the question of the pilot in the plane! What we might call the crisis of world governance.

IV. The world governance crisis
Humanizing globalization also means creating conditions -- institutional or other conditions -- that will enable us to better protect ourselves as a group against collective risks on a global scale, and together obtain a clearer view of our collective destiny.
To be sure, what is currently being accomplished with the available resources by the Bretton Woods institutions and all forms of bilateral and multilateral cooperation is certainly not negligible, and it is probably for that reason that the Asian crisis and its aftermath did not turn into the major systemic crisis that loomed just a year ago. But we all still feel that we could, and must, do a lot better.

All we can do is persevere with this effort, because it is the right one. It calls for only a modest first step in an urgent and essential task. To understand this, we need merely compare our world to the world in 1945. Each country has now achieved sovereignty, each wants to shoulder its full responsibility in the face of global problems, and we know full well that the effective participation of each country in managing the "Global City" is key to its proper functioning. What is more, while globalization has until now operated at the whim of more or less autonomous financial and technological forces, it is high time that we took on these responsibilities and took the initiative, so that progress toward world unity can be made consistently and in the service of humankind. ...Clearly, we need to be imaginative enough to visualize the institutions that would best serve the global common good or, at least, to make the necessary changes in the institutions created in San Francisco and Bretton Woods.

The task is certainly monumental. We are the first generation in history to be called upon to organize and manage the world, not from a position of power such as Alexander's or Caesar's or the Allies' at the end of World War II, but through a recognition of the universal responsibilities of all peoples, of the equal right to sustainable development, and of a universal duty of solidarity.

The 21st century must be one of gradual strengthening of the global institutions, but also one of decentralization and strengthening of all the echelons of responsibility. Affirming this does not take anything away from the need to better structure the world architecture, to create regional organizations where they are still lacking, and to strengthen the political dimension of the regional economic organizations already in place, such as the European Union. The more we see the need to consolidate or vest new responsibilities in world bodies, the more it is necessary to ensure that they are accepted by public opinion, and the more it is necessary, as well, to let them know that their contribution can only be subsidiary and ensure that everyone understands that nothing can be accomplished at the global level unless it is taken up at the grassroots level and supported by initiatives up the entire institutional chain. Citizenship at all levels must be one of the key values of the 21st century.

I have used the words "key values," and that is indeed what is needed: to identify the values that men and women today can use to make sense of our history and participate in it. Our history has not yet been written -- it is still in our hands. Notwithstanding its risks, globalization is an opportunity to move toward a world economy that is more worthy of the human race. This is a new chance given to humanity. It is also an opportunity to take action on the three values that many of you will certainly have detected behind my comments and with which many around the world identify: responsibility, solidarity, and this new kind of global citizenship. It is these three values that must guide us as the new millennium unfolds before us.

I think you are right. One of the large banks that I am familiar with here in Texas is expecting some very large deposits from abroad specifically spanning the y2k period. Initially, they do not anticipate it remaining here very long, unless the countries are hit hard by y2k. This information is about 30-45 days old: if it has changed, I have not heard about it.
regards

http://www.imf.org/external/np/sec/nb/1999/NB9979.HTMEarlier in the fall, the IMF established a temporary facility to help member countries that might experience balance-of-payment difficulties arising out of Y2K. As stated in the release, "This News Brief elaborates on the terms and conditions under which the facility can used." I've given below only the portion that would be of some interest to the widest audience. For those interested in the technical details of the loan facility, click the link.

News Brief No. 99/79
December 3, 1999

1. Access to the facility is available for balance of payments needs arising from Y2K-related problems arising in either the current or capital account of a country's balance of payments. There is no restriction on the type of problem that might qualify for Y2K financing under the facility, other than that it should be identifiable asY2K related and should generate a balance of payments need. Examples of possible problems that might affect a country's current account in its balance of payments could include, (i) interruption to shipping, (ii) interruption to government services, (iii) shutdown of oil pipelines, or (iv) export-related factory shutdowns. Problems may also arise in the capital account of a country' balance of payments. Such problems could result, for example, from failure of financial sector computerized transaction registration systems, or from a general withdrawal or withholding of capital related to fear of possible Y2K problems. Capital account problems related to latter concerns could occur in anticipation of the New Year, or subsequently on the basis of actual events.

[Quite a string of potential problems, wouldn't you say? Either the IMF has an overactive imagination, or they are taking the same kind of conservative assumptions and precautions that everyone would be wise to take.]

One last word on FOA/Another, I think most posters at
Gold Forums are "Gold bugs" and know only too well that
someday soon Gold is going to is going to be valued much
higher in fiat. But the specific"call' that the Gold Squeeze
in October which did move Gold to $US345 ,was going to take Gold there, was, let's be judicial, premature.

Now the question that remains is What is going to take Gold there? so enough with the $30,000.00 gold call.

I think that the story of the head of the Republic bank
Mr. Suffra who was deliberately BURNED in his home
in Monte Carlo most of you here I'm sure know about
the Republic Bank of New York, and also the BIG proptests at the WTO meetings may revive anti_US sentiment worlwide and their acceptance of the BIG BULLY"S dollar.

http://www.sightings.com/politics5/y2kchem.htm(excerpt only)

"In the past, we have had very little information about small chemical handlers and manufacturers, and the assumption was made that they were not prepared for Y2K," said Senator Robert Bennett, the Utah Republican who chairs the committee. "To a large degree, that assumption has been confirmed by this in-depth, independent report."
�
The report was prepared by the Texas Engineering Experiment Station's (TEES) Mary Kay O'Connor Process Safety Center headquartered at Texas A University in College Station. Its results include the following:
�
* 86.5 percent of firms surveyed were not yet prepared for Y2K * 85.6 percent had not coordinated emergency plans with local/community officials * A majority had not linked contingency planning to community emergency services such as police, fire and rescue, or hospitals * 79 percent said they had never before been surveyed about Y2K preparedness * A majority of respondents do not belong to industry organizations or trade associations, which have been the primary gatherers of Y2K preparedness information in the private sector * 4.1 percent said Y2K presents a potential for a "catastrophic event"
�
An estimated 85 million Americans live within five miles of one of the 66,000 sites that handle hazardous chemicals.
.........................................................

�
YGM...Comment....As a constant poster here I wish to make clear that at no time is it my wish nor intent to foster scare-mongering w/ my repetitive posts concerning Y2k.
I fully realize that the date change IS going to have a bearing on Gold & Silver values if the end result is as ugly as many expect. What I am doing is searching with all my free time to find any and all Y2k related info and some of what I find I feel is worthy of further dissemination. There's more at stake here than just our collective wealth, it's also about collective well being and as such I'm very grateful for my posting priviledges here and the ability to pass on info once read.....With that said I'm sorry to see Stranger lose his posting priviledges because of indescretions. I too have been there and done that, thru anger and hopefully I am wiser for the experience........I'll always feel indebted to have been allowed even reading priviledges here, let alone having a voice..................YGM..

A universal duty of solidarity? What could this duty be? For years the Mexican government has popularized the term solidarity, altho it has never been clear what the term meant. Now the head (ex-head?) of the IMF has started up the same chant. Has sort of a nice socialistic ring to it tho, doesn't it. Sort of like, gee, we all are thinking the same thing now, thanks to our caretakers. This seems to be where we are headed in the twenty-first century.

Hey NewGold - how ya doin'? I seem to have gotten here a bit late and
have missed the now-deleted post of the Stranger. Frankly, if it was
anything similar to the one yesterday I doubt I missed much. Despite
some attempts by myself and others to get our resident 'professional'
to re-examine his views concerning money, the Stranger seemed more
interested in counting coup. In my opinion, it was his loss.

You wrote;

"I am mostly a lurker here and Kitco, and I must say that I agree
entirely with The Strangers views on FOA, I mean this person did say
those things, Gold is going to $30,000.00 and not just once, on
numerous occasions, and further the $30,000.00 figure was mentioned
directly in connection with the so called "short squeeze" last month,
"we are well on the road to $30,000.00", This is not my interpretation
of what FOA said look up the words yourself."

I don't recall FOA saying that gold was going to be trading at $30,000
an ounce anytime soon. As a matter of fact, Another and FOA have
consistently tried to explain that the value of gold would not change
at all. What would change would be the currencies you use to price the
gold. This point is fundamental to understanding their argument.

"But beyond that I must also say that for a while I was rather upset
with Kitco for making "fun" at FOA and Another, such as they did again
this week, BUT I now understand why they make "fun" of FOA and
Another. A poster must be held accountable for his opinions, if he is
to be given any credibility."

If you find the opinions of any poster to lack credibility please feel
free to ignore them. Some at Kitco have never understood money as far
as I can tell hence it isn't surprising they might find Another and
FOA difficult to understand.

"And at the moment, unless goes to $30,000.00 very soon, I would say
that FOA and Another have lost credibility with me and I am certain
many other lurkers."

I suggest you reread what the two of them have actually said.

"Thank-You The Stranger for saying what many of us are thinking, and
I'm sure what many more are thinking but afraid to say. I beleive
that USA Gold Forum will become much more credible if opinions stated
by any poster are scrutinised and debated, instead of just following
and accepting every word of a particular poster, including FOA."

It would be helpful if some would stick to criticizing the arguments
instead of attacking the individual. Some at Kitco also have great
difficulty with the concept of civil discourse.

"I hope FOA continues to post here, but we must hear some explanation
as to why Gold is not $30,000.00 or at least why it is not well on the
road to $30,000.00. Many posters unfortunately,make investment
decisions based on the so called "gurus" of these discussion forums."

If this is indeed true then they must take responsibility for their own
actions rather than blaming someone else. My father called it
'growing up'.

"As I said, I beleive this will make for a much more credible
discussion group. This is my opinion of course, and I hope others give
theirs."

Well, you've got mine.

Frankly, NewGold, I haven't found a better source of information than
this forum. I've been hanging around this internet for years and this
forum by far has more thoughtful and knowledgeable individuals on the
subject of money than any other. Rarely do I find the opportunity to
add to the discussion as I'm usually two or three chapters behind most
here.

ET

... though lethal to your health - as Edmond Safra had to experience, no wonder, as he seems to have had enough of the insid(-eous)e monetary perpetrators, the alledged keepers of the bubble.
A deal with HSBC, valued at 10 plus billions was soured by Marty Armstrong of Princeton Economics International (what a great name for allegedly ripping Japanese investors to the tune of a billion Bucks), though eventually ratified this Tuesday at the same price for shareholders - not so for the founder, who BTW agreed to 19% lower compensation for his own 29% interest.

What bugs me? - The colluder federal advocates: Accumulation
of physical gold may be disastrous to your {W-)health.

I'm worried, friends
- who is going to be the next victim - and by whom???
CB2

HTTP://WWW.USAGOLD.COM
A short gold course on gold investing:

Buy low, sell high.

The average price of gold over the last 18 years is $340,
excluding the highest and lowest year.

Gold at $280 is a bargain.

Buy!!!

We're all big boys and girls here attemping to dicipher an extremely deep and nefarious 3,000 year old business. I would think that we're intelligent enough to know that even though there could be $30,000 gold prognostications we don't sell our houses and run to the coin store. 5% of everything is useful, including gold opinions, so let's take the rational approach to FOA's analysis by running it through OWN mind/filter and make a decision based on our OWN situation. Some of his insights are brilliant, some I don't agree with. Fine. Let the Stranger come back as long as he agrees to play nice.

If I may, a tug on my sleeve here in The Tower alerted me to a fine opportunity to make a subtle point in regard to some of the conversation you gentlemen are having at the Round Table.

As free individual, you are certainly within reason to pursue whatever activity you feel suits you (within the genernally accepted "laws of the land," of course,) so don't feel for one split-second that this is an admonishment. However, your post (12/3/99; 13:05:09MDT - Msg ID:20157) presents a fine opportunity for a larger study that was too good to pass up. Again, you have no reason to be on the defensive, so please see this commentary for the non-personal post that it is. Hopefully the result will be yet another small bit of evidence in support of physical gold accumulation as a vital foundation ahead of any subsequent contract, bond, or stock based investments.

You we're kind enough to share with us the events of your day:
"I took the day off and played 'day trader'. Barrick opened very low and rose until noon. I rode the wave up. I have a second play on the go which is playing out well... I hope to wrap up the day ahead $500.
I have enjoyed the day, sipping a couple beers, teasing the dog with pizza, relaxing and scooping easy cash. What the hell, I'll buy sheep manure if it's going up."

On the sheep manure example, I'm sure you'll agree that it is impossible to *know* the future direction of price movement, so at best, you are saying that in a look back at a review of the recent price history, if the asset has been previously lower and climbing in price, you are willing to buy it today at prices higher than anyone else that came before you in the hope that investor psychology will reward you with a continuation of "The Greater Fool Theory" rather than a premature termination upon your own purchase. That's fine, but ultimately risky. Wouldn't it be better to rely on fundamentals for your decisions? When the punchbowl is finally removed from this drunken investment orgy, you would at least find yourself away from the carnage. At best, you would come out far ahead.

Why do we favor gold over fiat currencies, or outright leveraged speculation on any stock or commodity (gold futures included)? That can be answered in small part from the insight gained from your day off from your usual activities.

This day of play was a one-time thing for you, however there are growing numbers of jubulient delinquents out there that are dropping out of productive endeavors to do nothing but trust to their luck and consume the efforts of others. Just the other day I saw one of those prime-time game shows in which a pretty and young contestent told the host of the show that her occupation was "Day Trader." Here we see a (bright?) girl with her whole life ahead of her, and if her luck holds out for another 60 years, she will have added nothing to this world but empty beer cans and pizza boxes.

Let's imagine for a moment at seemingly best-case scenario...that the stock market will forever go up with no significant declines. (Remember: this is just a best-case assumption to make a point.) As more and more people cash out of productive society to daytrade their savings into ever larger and larger amounts of currency, it wouldn't be long before everyone saw the brilliance of this scheme and joined in. Nobody would be left to brew the beer, and nobody to make and deliver the pizza. They'd be day trading too. And they'd have to trade on price "momentum" (kinda funny for something with no physical mass) because the fundamentals would be meaningless. There would be no people dumb enough to keep working for these various corporations when riches are so much more easily attained through day trading. Homestakes miners would all be at home day trading. Yahoo's computer staff would all be in their living rooms shouting "YaHOO!" Former Ford Motor Corp employees would all be at home, counting their new riches from their Homestake and Yahoo investments, wondering what model of new car they should be buying next, or whether they should buy some physical gold. Let's hope they don't try to do a websearch for more info, because the Yahoo search engine ceased working long ago...as did new gold from Homestake and new car production from Ford. There is no pizza to eat, and no beer to drink. And you can't bake your own pizza because the stores have no flour...the wheat farmers are all day traders now. The only thing the world has is currency. Lots and lots of currency.

Here's the point were trying to make. At any place in any age, there will always be a small few who press their luck and survive. There are others who somehow manage to find a way to ride the coattails of the system. Anyone is free to explore these avenues for themselves. But the bottom line is that when the world is viewed as a closed system, there must be meaningful production that is at least equivalent to the consumption. Anything else is unsustainable and unstable. The sunburned stoop-backed field workers of the less "advanced" nations will one day tire of laboring to produce goods while the consumers spend their time day trading their way to riches (and the fruits of others' labor) in air-conditioned comfort. At some point the workers will stand up, wipe the sweat from their brow, and after a brief survey of the land around them and their neighbors, they'll say with a rich accent "Go on an' keep your clean paper money. If you get too hungry, you can wash it down with water."

And you know what? More and more ordinary people in developed and industrial nations are adopting such an attitude toward their own governments and corporations. These giants aren't much different than daytraders, getting ever fatter off the sweat of honest people who in turn are given paper to show for their labors. Even some of the sharper guys at the top have looked around and realized that the party is now on very shakey ground. (On a slightly related note, read the IMF's directors recent comments posted earlier.) Critical mass is reached the hard way when closed-system consumption of basic requirements exceeds the available production. It is reached the easy way through an earlier shift in psychology. The result in either case is a shift in favor of real things instead of credits from a gambling casino.

At the least, when the shift arrives the host of day traders will have to develop a productive skill and earn their keep in the world. At the worst, everything they've manged to accumulate in the mantime will have been wiped out completely...no more casino credits, and maybe no more house if they've played a leveraged game. Betting on gold and having gold are two distinctly different paths that won't likely reach the same desired destination. Be careful out there my friend. The signs of irrational exuberance and bubbles are no longer subtle and worthy of debate...for the same reason that no sane person would debate that two plus two equals four. It is self evident.

It could be that the proper context was lost in my selected excerpts. The gist of it was that due to the interreliance of the global financial structure, no single nation should manage its currency affairs with such reckless policies that it becomes a threat to the system as a whole. A "United we stand, divided we fall" sorta thing. At what point will the easy solution jump up and grab them to the point where they admit publically that gold is the solution, and that gold and fractional reserve banking practices don't mix? I'm encouraged by the grassroots comment. The little people of the world speak of gold, and not in whispers!

fabulous forum at highest standards of civility, integrity and intellect - I would beg not to be too harsh on a slip of tongue in mostly enlightening verbal battles versus A/FOA.
Personally, I try to travel a route between these extremes and I feel there are so many more agendas in life where wealth - however accounted - takes a backseat towards real achievement, not measured in virtual, though instant monetary rewards -.though readily exchangeable to reality?
3 a.m. -long day - Best CB2

unrevised - not only as usual - but by late night!

http://biz.yahoo.com/apf/991203/safra_the__4.html"The Safra family started as bankers and gold traders, financing camel caravans moving goods between Aleppo, Constantinople and Alexandria. The name Safra means 'yellow' in Arabic."

In this article that covers the recent killing of Edmond Safra, the founder of the Republic Bank of New York, our old friend Martin Armstrong gets a mention.

Hi All - It's interesting that we seem to go through these waves of emotion on the forum much like we experience waves of emotion (positive or negative) in life. This forum is alive because it is people that give it life. We're like a family. We have our opinions and differences, our ups and downs and all the other stuff of families. However, for the most part, we care about the other members of the forum family and treat them with respect. This is a good thing, I believe. It allows people to be open without being open to attack. I believe this is called communication, or something like that.

I can't think of a single reason to pick on FOA or any other member of this nobel table. To the contrary, I find the opinions and information presented by rather brilliant people like FOA, ORO, TC, MK, Aristotle and many others to be gifts of the highest order. Do I agree with everything that's written here? Certainly not. Not by a long shot. But that's the magic of the forum. It's opens our minds to new ideas and different twists that we may not have considered before. It's a learning experience and a rare and valuable one at that.

It's said that it's darkest just before the dawn. It is in this darkest hour that the creatures of the night ply their illusion with most realism. But the illusion cannot prevent the dawn. Nothing can prevent what is and will always be. It feels to me that we're seeing the first glimmers of the dawn and a brilliant sunrise it will be. But we must remember that the sun rises on its own time as a part of a natural cycle. The dawn of real money is no different. Those who feel the need to predict the timing of rising suns and golden metals may feast on the sour gruel of unrealized expectation most than once. Possibly a remembrance that truth has and always will triumph over illusion. We just don't get to pick the time. Best, DD

My experience

http://www.kitco.com/_a/news/3513.htmSource: The Independant London.
Dec. 3, 1999 (some excerpts)

Nobody knows who was the first human being to value Gold,but likely someone in Central Europe before 4000 BC.

Bacteria is being used in Gold extraction.

This is the BEST pro Gold article I've seen in a long, long time,I wish it would hit all the main stream newspapers worldwide....enjoy.......beesting

The latest parabolic upswing in the NASDQ and S+p so closely matches the gold spike that my conclusion is that Greenspan must have thought "this is the BIG one" and started going at 'it' with BOTH HANDS! What is the man trying to prove? The under the table 'juice' they must be pumping in will be astounding when finally revealed in Congressional statements in the year 2050!!

. . . a phrase refering to one of the most spectacular periods of inflation in German history meaning "flight into real values". With the dow up 247 points today I speculate that Americans are investing in common stocks like never before prefering to have debt payable in fiat money rather than holding claims on it. So far most people have choosen to hold parts of real companies rather than fiat money, also, unfortunately than gold. So far they have been right. But, there will come a moment when financially potent individuals - not to imply that any of you wise readers are impotent - and institutions once again begin to buy gold like the French did in the 60's. When that happens, we will all be vindicated.

In the mean time, continue to plan for freedom. Teach your children that the foes of the gold standard are wrong. Show them the tools of wise financial management including hard work and savings - naturally in gold money. The "easy money" machine is like a drug user, requiring ever increasing doses to placate the need. One day it will OD.

Like Aristotle says, get a little more gold.

"Under the table 'juice'" I like that phrase. What they used to be able to do with a casual flick of the wrist like tossing a $100.00 bill over your shoulder to solve the market/drug users need for at least a week, they are now frantically digging in to the money barrell with both hands, shoveling faster and faster, trying to keep pace with the insatable demands of the market. Every slight downturn in could spell disaster with a bottom of "who knows where".

The "under the table juice" led to a picher full and then a 40 gallon drum, next a tanker truck and soon a continous 40inch pipline spewing money into the market, but alas, all the juice in the world won't be enough to keep this wagon on the road.

I haven't been seated at this tableround for very long but I have been here long enough to see that A/FOA never gave a date as to when gold will go to $30,000. I believe they are presenting a scenerio that it could go that high and the reasons for it.

This is the road to $30,000. We are on it. It's a long road with peaks and valleys(and bandits..). I will not be discouraged but remain steadfast in my beliefs that one day a dire scenerio concerning the currencies of the world may come to pass.

I for one think that what they say MAKES SENSE and much more sense than what we are witnessing in todays markets. Whether it's tomorrow or 10 years from now makes no difference to me as I will be ready...I will have GOLD!

Let the price go down as it allows me to buy even more, confident that one day A/FOA and many others here are going to be right in their forecasts.

I can't imagine sleeping as well knowing that my insurance policy(GOLD) is not within reach or worse yet I just sold it when that scenerio unfolds.

I am not putting all my apples in one basket but along with the delicious, rome and grannysmiths are GOLDEN apples. Why? Because it makes sense to me.

I end this note with thanks to all that gather here. I appreciate the knowledge of not only A/FOA but the many fine people that grace this table. Thank you all.
I welcome any comments.
Get physical,
Tanglewild

TC, good post on #20179, I be back on that.

Turbo, mail-call!

I noticed that Puetz capitulated to the equities bull market on KITCO tonight. Although some doubt his sincerity on account of his extremely sarcastic "tone of voice," I have NO doubt myself that he truly did capitulate.

Whenever anybody capitulates, the person experiences much internal dissonance. Sarcasm is often a phase one goes through on the way to capitulation. In effect, Puetz is saying that although he really does not believe in the soundness of this market, he is tired of losing money and missing out on great profitable opportunities. So he will begin the process of placing greater wealth into general equities and dumping precious metals. No doubt his decision has been made with a great deal of anguish.

It is simply a case of facing the reality presented by the various markets: the DOW will surpass 13,000 this month, it is as certain as the sun rising in the East, and not because it should, but because the mania is in full force and the Clinton government and its subservient media agents regularly intervene to ensure the mania will sustain itself in perpetuity. At a certain point, a person must ask whether it makes sense to become a financial martyr for an ideology (even an ideology of "basic common sense") or simply move on and benefit from the investor mania that shows zero evidence of ending anytime soon. Puetz is choosing the latter course although he may never really come to believe in the basic "sanity" of his actions.

As for gold stocks...it is impossible to have any faith in them given that they are piloted by the greatest collection of self-serving morons who ever left the backwoods villages of Northern Ontario. They have ZERO interest in serving their shareholders while maintaining MAXIMUM interest in serving themselves and their bullion bank masters. The gold producers exist solely to hedge, sell forward, short gold, and drive their various companies into bankruptcy, all the while bullsh__ting their shareholders into believing that blue skies lie around the corner. There is not a single gold producer I would not sell short today, every one of them stinks to high heaven. Most of them will be in bankruptcy court before the end of 2000. The only exception will probably be Barrick Gold....but then Barrick was NEVER truly a gold producer, it was always a de facto gold hedge fund.

As for the price of gold...it can only fall at this point, until Y2k-phobia is well over (maybe in March?). Next year, the Clinton establishment might consider allowing the metal to experience a $10 -$15 upspike but I would expect that will be the most dramatic rise it will see for the entire year as it works its way BELOW $200.

Although I have argued this point with various die-hard goldbugs, I will repeat that so long as the Clinton Establishment runs the show, then gold will never be allowed to rise for any more than a day or two. I honestly believe that if the Clinton Establishment ever saw gold racing upward dramatically again and could not figure out how to instantly stop the rise via friendly central bank proxies, etc., then they would simply shut down the gold market until the ante status quo returned. Some would argue that the Clinton government would have a hard time controlling the price of gold on foreign exchanges in London, Hong Kong, Sydney, etc. However, I simply do NOT believe that fact. Britain and Australia have proved time and time again that they are no more than mere slave colonies of the United States today...they exist simply to do America's bidding, no more. Meanwhile the Chinese are so busy ingratiating themselves to America in order to gain entry into the WTO that they would never rock the boat of US Dollar hegemony.

Puetz's capitulation to the equities bull market seems hard to believe but for all its cynicism, it is so obviously a genuine surrender.

So Bravo Puetz! Go ahead and take one last swipe at your chronic detractors, and now go make some money like everybody else is doing. It never feels fun to be a "market whore" and surrender one's inner beliefs...but it is certainly much more profitable and a person's got to eat.

Sad but true...the Gold Bull is dead.

Thanks

F*

I think your right about the Gold Bull being dead.

For now that is.

Just got my Mutual Funds magazine in the mail today.
Front cover has a giant US Gold Eagle on it and the bold headlines:
GREAT INVESTMENT IDEAS FOR 2000. WHERE TO MAKE MONEY IN THE YEAR AHEAD.

Almost no mention in the magazine about gold. Nothing about Gold funds or anything. Until the last page.

Article reads:

Gold's Glow Goes

Was the recent gold rally a flash in the pan?
Bill Martin of American Century Global Gold says yes; the end was hastened by gold producer, who pessimistically sold short.

But there's more to this story, says Caesar Bryan of Gabelli Gold.
"You have an amazing technical situation where people have shorted and shorted and can't pay it back," he says.
"Some 10,000 tons of gold has been lent by central banks.
It must be returned. But how do they move gold from around someone's neck back to the central bank vault?"
They buy it, Brian says, and prices rise again----but who knows when?


*****
The word seems to be getting out.

I've been lurking the forum much too long. I've read brilliant insights and theories of many on the this forum. Whether those insights and theories come to surface or not only time will tell.
However I seem to sense that sometimes to much value is given to FOAs opinion. He is given an almost religious overture. This is by no means any fault of his own but rather that of those on this forum who worship his every word. They do so because he gives them hope.
However reality should be put in perspective. Even though I too find his insights and theories stimulating and entertaining, one should remember that to date he has been wrong in many of his writings and one should question that fact.
Though many may discredit and abuse S.J Kaplan, he in my mind has a better track record. His writings may be unemotive and cold, as science and statistics often are, and nowhere near as inspiring as that of FOA, but reality is reality.

The Labor Department's employment report today failed, as usual, to signal an imminent end-of-the-world through alien invasions or asteroid strike, and the tickertape parade on Wall Street commenced immediately upon hearing the non-news. But seriously, what the Labor Department reported was that nonfarm payrolls rose only slightly more than expected, the unemployment rate was steady, and average hourly earning rose...but less than was expected. Investors naturally threw caution to the wind and rushed headlong into the stock markets. Those who thought it prudent to step aside did so by dabbling in bonds (lifting the long bond by 24/32 in price at 6.257%).

Investors, it would seem, live these days from moment to moment with no personal or institutional memory of what has transpired in the past, losing all perspective and appreciation for the big picture. Lightning may strike, they say...but not here. That's right. We all know that nobody ever falls off the gravy train, and that baby can keep on rollin' to the horizon.

The DOW climbed and impressive 247.12 points (+2.24%), but new 52-week lows still outnumbered the new highs by 185 to 98. The Nasdaq Composite reached a new record with a 2% gain, but oddly enough, advancing issues finished at a dead tie with declining issues. The high fliyers, however, did beat those in the dumps by 269 to 85.

GOLD

LiveInvestor's Forum hosted an interview with U.S. Rep Ron Paul (and others) yesterday to discuss various issues surrounding the gold market. To paraphase some of Congressman Paul's comments, he said early on that 'gold is a natural money.' He said he has had conversations with Alan Greenspan and many other bankers in regard to gold. The bankers without exception 'cling to their gold reserves because it is the only real money they hold.' It was noted by the panel that none other than the brilliant mind of Aristotle had once spelled out the necessary characteristics of money with the conclusion that gold fits them all...reiterating that gold is a natural money.

Rep. Paul said that in time the Washington Agreement would be seen as 'a seminal event that will lead to higher [gold] prices.' He said he could assure us that the government's solution to problems has been to print money, and they they have printed 'alot of it.' He said that we [as a gold market] are behind in the discounting of the past dollar-creation...that there has been decades of such creation out there and the discounting [falling dollar/rising gold] 'could happen at any time.' On the trade imbalance with other countries, he indicated that these countries would be well-advised to 'swap their excess dollars for the stability of gold.'

In the gold markets today, Bridge News was told by Leonard Kaplan, chief bullion dealer at LFG Bullion Services, that gold is still in a follow-through from its recent fall, noting that "with equity markets screaming higher, capital is flowing into equities and out of metals." Bridge added that the strong dollar was adding to the price fall.

The bottom line is: "Hey, don't blame the gold. Give thanks (if you're an American) to have a strong dollar to use to your advantage." --quote from a visitor to The Tower

FWN offered these comments from David Meger on this strong dollar issue:

"It's technical liquidation and there's not much else to say," noted
David Meger, senior metals analyst at Alaron Trading, pointing out that
there was "no physical demand in the spot market last night."
He said that the "currency situation" continues to be a problem for
precious metals, with the dollar's strength "taking away demand
potential."
The dollar's jump this week against other currencies, with the
exception of the yen, has made gold expensive, particularly in euro and
Australian dollar terms.

The dollar has recently reached parity with the euro, closing today at $1.0020 per euro. A year ago, early optimism for the soon-to-be-born single currency drove the price up from the ECU level in the ballpark of $1.05 to official introdution at the exchange equivalent of $1.18. ECB President Wim Duisenberg had these thoughts as reported second hand by Bridge News.

"ECB President Duisenberg told the Wall Street Journal that the euro's
weakness was a disappointment, but not a cause for worry and that it was
unlikely to spark intervention. He said that the ECB would "never" intervene
using its own money to change the value of the yen, unless the US agreed to
partake in the effort."

That's about as unequivocal a statement as anyone could hope for. And while we're quoting sources, here's another brief but unrelated story that might be of passing interest for our Y2K watchers...

CSCE, NYCE reopen after computer glitch forces trading halt
By Gloria Gonzalez, Bridge News
New York--Dec 3--Futures trading on the Coffee, Sugar, Cocoa Exchange
and the New York Cotton Exchange has reopened after technical difficulties
forced trade to be suspended for more than one hour.
A spokesman for the New York Board of Trade said a problem with the
price reporting system forced trade to be suspended. "I just know that
there was a problem with the pricing systems," said Terry Gordon, a NYBOT
spokesman. "I don't know exactly what went wrong."
Floor traders said the computer screens went blank at about 1020 ET.
"Computers were down for some reason," one trader said. "The prices
weren't going up."
***
(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.
---
So with the dollar and equities markets in overdrive, gold prices suffered accordingly, and spot was last qoted in NY at $279.30, down $5.40. Gold derivatives traders at COMEX watched as February futures were sold down $5 to settle at $282.10. One-month gold lease rates belied the story behind the soft price by climbing 0.15 percent to 1.9288%.

Open interest on the COMEX December gold futures fell by 3103 to 2,982 positions in yesterday's derivative trading. Delivery intentions this morning totaled 229 contracts (22,900 ounces), bringing the December total to 6,258 contracts to be settled with delivery before the month comes to a close...that 625,800 ounces. Likely in response to that requirement, COMEX vault action saw 32,118 ounces arrive to be counted among the ranks of Registered gold inventory.

OIL

January crude futures had a sideways session ahead of a scheduled vote by the UN Security Council on whether to extend the Iraq 1-week oil-for-food deal. A technicality really...Iraq's UN ambassador Hasan said Iraq would reject a brief extension. After the trading day ended, the UN did in fact vote to extend the deal for one week. Crude settled up 1� at $25.81.

BACK to GOLD

We'll repeat the bottom line, now that we're here at the bottom: "Hey, don't blame the gold [for the fall in price]. Give thanks (if you're an American) to have a strong dollar to use to your advantage." We'll throw in the added thought that it is up to you to portect what you've worked for...such as through the 'stability of gold' in the words of Conressman Paul. The dollar itself has a weak master and too many would-be assassins. Again,even the big bankers admit that gold is the only real money they hold.

And that's the view from here...after the close.

If we see the stockmarket crash, were does the money go?

A very much needed reminder for everyone. Continues the thread of the "Values" contest in the HOF.

In the euphoria of the Washington announcement rally, most of us got carried away by the excitement of the same kind of "Something for nothing" wealth transfer, that all these stock traders are achieving. Those posters who are upset that their speculative investing in Gold has been a losing proposition should take a hard look at the fact that EVERY profit on 'buy low - sell high' has a winner and a loser in the quantitative whole.

Holding Gold as a storage of Value is an ancient and noble pursuit. Profiting by wealth transfer vias may be necessary in a society that mostly underpays true productive endeavor, but that activity falls short of Ayn Rand's prime directive "An honest man is one who knows he cannot consume more than he produces."

Profiting by non-productive wealth transfer in this society is necessary to survive, but let's not lose sight of the possibility of a better world.

It already went!

unfortunately we do not have e "Thread Archive" and the Forum probably equals 5000 printed pages by now. I think I and some others had some disscusion on this recently though, I'll take a look in my own files

Very insightful, Mr Farfel. Very realistic and pragmatic.

You know, the gold market is just so absolutely stepped on by the vested interests of the banking/industrial establishment, that I really wonder why we have any hope of transparency at all. Their manipulation is brazen, calculated, and shameless. I pray for GATA like I would pray for a little scrawny David going out against the unbeatable Goliath, without armor on, with nothing but his little sling.

Its quite disheartening to see how powerful they are. I think it was FOA, or was it Another, that talked about "weak hands", that will capitulate, and give up their gold.
When we see just how enormous the issue of depressing the POG is, it is overwhelming, and we find no solace or quarter with idealism, or truth. We tend to give in to what we see as a greater power, and bow low to the evil king of fiat.

Gold may be truth on earth, a litmus test of b.s., a connection with holy things above, ok, it may be all that. But if the DOW does not crash, and gold remains successfully beaten down, gold is no more useful than fiat currency. Maybe less useful, because you will not buy a suit with it, or bread. It can only sit in the safe, and re-assure you of its importance with its true yellow hue.

I would like to see a world where truth and justice reign supreme. I would like to see our paper currency tied to gold, so that the rewards of our labor are not stolen by those who print paper.

But for the time being, it does not look like this world I dream of will come about any time soon.

BS reigns supreme. Everyone is buying tulips like there is no tomorrow. The dollar is on life support, but no one knows it, like a long dead leader propped up in front of the camera. And the tape of his voice plays the same party line over and over. "There is no inflation. Everything is dandy. Your government cares about you"

OK, maybe you can sense I'm a little despondent. I guess I'm coming to grips with a rush of greed and pride that came over me when my options increased 2000%. I've been waiting for gold to take off again, only to see it hammered by the powers that be, like an innocent getting slaughtered by an oppressor. And thats exactly what it is about. The oppressor maintains control of his rip-off fiat currency system by bashing gold down. What an unholy thing it is indeed. It slike they have to quash the truth of gold, for it reveals their dastardly acts, like the light of day reveals the work of the theif.

Dear Megatron,

You said, "Let the Stranger come back as long as he agrees to play nice."

Regarding your comments about Strangers behavior? I thought you might like to know, this is not his 1st offensive attack on a fellow poster. MK thanks for the discernment, for I grew weary of the constant antagonism from the professional.

FOA, I just want you to know that I look forward to your posts.

Town Crier, Regarding post #20179�Good Job!

ET, post # 20175�.my thinking exactly!

Farfel, jump right on the ol bandwagon�.#20190�that's just what they want us to do!

Floor traders said the computer screens went blank at about 1020 ET.
"Computers were down for some reason," one trader said. "The prices
weren't going up." <<<<

Put that one along side of "Let them eat cake"


***

I was not sure. Thank you.

A crashing Dow and a beaten down POG, can not occupy the sake economy at the same time

Same, not sake

Best one is the post composite on 9/5/99 msg #12858

Best sentence ever posted at at this forum:
"Freedom is a fine thing, especially when you realize you have it."

It was one of Town Crier's, from a day or two ago.

About Stranger being gone, I don't like it, and I am unable to form my own opinion as to the justice of him having his posting privilege removed, because the purportedly offending post has also been removed. I want Stranger back.

And I still am hoping for gold at $275 per ounce, because that is the price at which I have decided to make my next big physical purchase; however, I am feeling as if the additional cost may be small enough to justify buying now. Perhaps I will wait a few more days. I may be sorry.

I sure do need gold to go to $30,000, but later, after I get some more.

Lafisrap

There's been a lot of talk about the possible identity of FOA and ANOTHER and their motives. I have no notion of their identity, and in a conversation with MK he said frankly he didn't either. If you've ever called to do business with Mike or visited him at his office, you'd take him at his word. To save some of you some time with the he/she business, I distinctly remember FOA making a passing reference to a wife, and that he is from the USA (whether now or originally, I don't recall.) I'm as intrigued as the next guy, but these discussions should focus on sluething out the various intrigues of gold rather than the identities or moral character of other posters. MK has already demonstrated the level of tolerance for personal attacks. An artful individual can surely find a way to challenge any given idea without casting disparagement or shame upon the source. Cosider this forum as good training ground for participation in a civil world.

Here's some food for thought. Imagine taking a trip seven years ago from your home in Istanbul to do a little recreating on the shores of the Black Sea. While there, you encounter a fatherly old figure of a man fishing with nary a care in the world. He motions you over and engages you in conversation. He asks if you've ever given much thought to gold. You search your brain, but only manage to say with any certainty that you were aware that gold was currenty 3,000 Turkish Lire per ounce. As he stands there fishing, he calmly relates a tale of history and of the future. He mentions some government policy and some international institutions that you'd never even heard of, let alone thought of. He tells you that in your eyes, gold was destined to look like the best of all possible "investments" although it was itself nothing more than the honest wages of your own past labor. He quotes some monetary value in terms of Lire to help you relate, but the value was so high you instantly dismiss him as a pleasant but raving fool.

As you continue your vacation, his words hound you...or should I say it is your own ignorance that hounds you. You can't believe that in the past you had never given much thought to something as your own money, and had never heard of or had little knowledge of the various prominant institutions he mentioned. You realize you had been living on auto pilot, and really weren't positioned to control your own destiny as well as your own responsible instinct told you that you should. So, you do some research, and you get some gold...prompted by that old fisherman, but based on your own conclusions. In fact, you do remember one thing he said quite clearly. Even though his steadfast claim was that gold was destined for incomprehensible values, he warned you to buy gold only in accord with your ability to understand the tale he told. And sure enough, the more you reserched on your own, the more you became comfortable with the shifting daily price of gold, and the more gold you desired to hold over your previous paper wealth. The more you came to know, the happier you were that gold was only 3,000 lire per ounce...though yu still harbored some rational reservations about gold ever rising to those ridiculous figures quoted by that old man by the sea.

Flash forward---gold in Turkey today is 146,325,000 lire per ounce. You have never gone hungry or worried about the future...unlike your neighbors. Well, you tried to tell them only a short seven years ago when gold first moved from 3,000 to 3,500, but they laughed in your face when it fell back to 3,300. You've since moved discreetly to a new neighborhood. These numbers are true; only the names have been changed to protect the innocent.

>>>>Best sentence ever posted at at this forum: "Freedom is a fine thing, especially when you realize you have it." It was one of Town Crier's, from a day or two ago.<<<<<

A giant thank you! Just the kind of warmth needed to defeat the chilling night air...as though you threw another log on the fire out here in this old stone tower. Cheers! To you and to all!

http://www.spotlight.org/nov_16/Wall/wall.htmlThank you for the past post#. I will check it out.
I just found this article about Wall Street Coruption Scandal. See link

Will check again.

http://www.spotlight.org/Wall Street story

Oro, thank you again for the very insightful response.

"All roads lead away from Rome � but only after everyone has arrived at Rome!" (ggg)

Once again, I agree strongly with your long term view of the weakening trend of US influence. As has been documented so well by Richard Maybury, the US military is being forced to perform increasingly numerous overseas missions, with a shrinking military resource base. As a result, the some say that the US military is stretched to the limit, and could only fight up to wars in 2 theaters��.a war occurring in a 3rd theatre would be beyond the current strength for conventional warfare.

I also agree that the US has no interest in actually having a "hot war" with Japan, Europe, or the pro-West ME regimes. However, I think it will most likely take many years if not decades for the "Roman legions" to go back to Rome. They will certainly not give up their wonderful bases in Japan and elsewhere because the local politicians "politely ask them to go home."

It does appear that the US international influence, the dollar, and Wall Street are at their zenith, and that some time in the near future then must begin a long downward slide.


Now, before we digress to far, I would like to confirm your outlook on our proposed gold bull market/dollar bear market. Do you see the decline in the dollar/ascension of gold to be caused/triggered primarily by natural market forces (supply/demand gap no longer filled by CB sales/loans), or do you think it will be driven by some sort of long-range plan by Europe and/or the ME?

If you do see Europe favoring stronger gold, how will they avoid becoming a repeat of the US? In other words, a fiat currency (Euro) with large "gold reserves" which provide "psychological backing" but are not actually available to the marketplace.

And, if the ME is tired of being paid for "hard goods" with "paper money", why would they select another fiat currency such as the Euro instead of asking for payment directly in gold or silver?

Looking forward to hearing from you!!!!!!

Have a great weekend,

THC

In the case of a war,I think Wall Street would offer a new
IPO WAR.COM . With this market the money would come by the train load.

Just an observer here. I thought it was time I spoke up to what I sense is a monumental crap roll by the american public and others on this stock market frenzy.

I have a sense that there are those on this board along with the population at large that have little doubt in their minds that the 2000 rollover will mean very little in disturbance to the world around them. It may be so, that the computer glitches can be solved in due time and everyone will survive problems that will occur, dispite some inconveniences. This is as rosy a picture as you can find. ( and I mean all of the experts, both pro and con)What fails to be said is that the financial markets will be the most affected, not the least, in even the most rosiest of all predictions. If you think about it, the inconviences of all the other scenarios, water, power, heat, food, etc., there are ways around it and preparedness to soften the blow. But the same can not be said about financial matters. ( Unless you have a diversification in precious metals)There are no government agencies or official guidelines to prepare for anything that could happen to the financial markets.

I don't care if the odds are 90% that nothing will happen over the next few months or so on the 2000 rollover. That still leaves 10% possibility that the stock market can very well take a major hit. It's almost like covering black and red on the roulette wheel and being equally diversified to prevent any way to lose. The only problem is that the 0 or 00 has a way of cleaning house now and then. In my view, the stockmarket is overblown with crap shooters believing that they have the system figured out and there is no way to lose. Blindly they see the 2000 rollover as no threat at all. In fact a 0% threat, at that. Those that are playing the stockmarket game may be right and their porfolios may survive and even prosper more after Jan.1st, but they are letting it all ride in the greatest crapshoot mankind has ever witnessed.

It must seem, to many of you, that the price of gold should have risen by now. I assure you that you are quite correct. If this were any normal situation,it would have risen by now. The current low price is a result of a great many misconceptions and perhaps a few manipulations. In reality the current gold price is just a mistake. It really is no different than the cash register ringing up the wrong sale price on a valuable piece of jewelry. LATER IT WILL NOT MATTER WHY THE PRICE WAS LOW. IT WILL ONLY MATTER WHO HAD THE WISDOM TO PERCEIVE THE OPPORTUNITY AND THE COURAGE TO ACT ON THAT CONVICTION. But to the very, very, select few who do recognize this opportunity, your wisdom and patience will be rewarded. American popular culture is filled with myths. So we believe that the stock market can grow at 28%, while the economy grows at 2.5%. (What is the stock market if not a proxy for the economy?) The hypnotized will respond that the difference is in productivity. We'll see.
The decision to buy gold should not be based on predicitons of $30,000 an ounce gold. Don't you see, if gold reaches $30k, bread may be $100 a loaf. No, you don't aquire gold to become rich! If you can afford to aquire gold right now, you are already are rich! When the rest of our so called "wealth" is distroyed in a credit contraction or currency collapse, we will still have the GOLD! Only then will many of you see how truly rich we once were.

Bullseye with that last post! And think also about this: The Wizard of FED has only been tweaking in .25% interest rate hikes because they don't want to be accused being the reason the market crashed. If Y2K doesn't cause a market crash and make all those bad old programmers into a tidy corral of scape goats, Big Al will surely have turn up the heat and pop this balloon some time in the first quarter of 00.

Michael

I think you were way too harsh on Stranger. I believe he is a poster that has contributed significantly to this forum. He brings a point of view and perspective that increases the composite knowledge base available here. I tend to view this forum somewhat like a large family, siblings will tend to have differences of opinion and even use harsh words at times. In my family when that happens we don't banish the members.

Stranger happens to be one member of this round table that is rather frank and say's what is on his mind. I suspect some of that may be from his time in the New York Banking World, some of that demeanor was probably necessary for survival.

The other thing I have noticed is this forum seems to be somewhat self correcting. If someone makes a comment that comes across as offensive, there seems to be a number of voices that are more than willing to call it to the offending member's attention which tends to have a correcting influence. I have also noticed that at times some of the correcting voices are guilty of the same thing they find offensive in the comments of others. None of us are perfect but most of are likely a little better or a little more knowledgeable for having visited here.

One Last point, I have like many others at this forum found that that writings of Another and FOA to add an interesting perspective. I believe Another started posting two years ago and his writings came across to me as if he thought the events were imminent. I have read "In the Footsteps of Giants" and most of their postings and it is clear to me that they both thought the events they were predicting would have transpired by now or at least be well along the path. I suspect they would both readily admit their timing has been off.

Stranger was pointing out the fact that their timing has not been very accurate. There are a number at this forum that suggest timing does not matter if one buys physical gold because gold will eventually go up. I don't buy that notion, I am aware of people who have been holding physical for the past twenty years. Most alternative investment mediums would have been better.

I have not taken the time to go back and read the writings of Another and FOA. However some of the ideas and statements that I seem to recall were as follows.

The Euro would gain on the dollar.
Physical Gold would rise in price while paper gold would lose value
285 was the bottom and gold would not fall below that point
The paper gold market might drive physical gold to extremely low dollar values
Physical gold will go to $30,000 an ounce.

In the end whether one views gold as an investment or insurance the real question is did it accomplish it's purpose. If an investment, we could have done better in most other mediums, if insurance, we could buy the insurance for less today. Since 1997 when Another began posting buying physical gold and holding has not served us well. However I am not ready to discount all of the writings of Another or FOA and would like to continue to hear their viewpoints. I would also like to continue to hear from Stranger and allow him to ask pointed questions.

When they find out how to burn water, And the gasoline car is gone.
When an airplane flies without any fuel, And the satellite heats our home.
One of these days when the air clears up, And the sun comes shinin' thru.
We'll all be drinkin' that free bubble-up, And eatin' that Rainbow Stew.
Eatin' Rainbow Stew in a silver spoon underneath that sky of blue.
We'll all be drinkin' that free bubble-up, And eatin' that Rainbow Stew.
-- from a Merle Haggard tune.

I would like to second J.A's request, we can't always be living in a $30,000/oz fantasy world, can we?
Thanks J.A i feel very much the same, good points by the way.
I say we let Stranger back on the forum, it's not totally fair, the guy is trying to get to the truth in this whole mess. Can you blame him for that???
Howdy Stranger, i,am still in your inflation camp, now more than ever!
G.T

http://www.nypost.com/business/18993.htm[snip-snippin' away]

THE FED IS PARANOID ABOUT Y2K

By JOHN CRUDELE


THE Federal Reserve is being driven to distraction by Y2K.
Even as the Central Bank has been publicly tightening monetary conditions through three interest rate hikes this year, it has been quietly pumping money galore just in case the Millennium madness being predicted actually does happen.

Michael Belkin, a Fed expert who writes the Belkin Report, says Alan Greenspan has allowed $70 billion in cash to flood the U.S. monetary system in recent weeks and has created something called a "repo option." These options could leave the monetary system awash in another $426 billion in additional emergency cash in the next few weeks.

"This all adds up to the biggest Fed credit expansion ever. This monetary boost is wildly stimulative for the U.S. equity market in the short term," Belkin says, "but will leave equities painfully vulnerable to a crash once the Y2K-related credit expansion is withdrawn in the new year."

http://www.audiocentral.com/rshows/mir/
Last chance to stock up on food, water, gas... gold...

Good Evening;
Question = What is the true value of the POG?
Answer = Whatever the majority of the market participants in that market believe the value to be is what it will be over in that time horizon. If you change the market participants perceptions of the worth or value of Gold at a particular time parameter then you will change it's value. When the 'Commercials' are net short you will not see "lift off".

Some days I get cantankerous too. Often a viewpoint that seems toget supressed for whatever reason gets support and attention itwould lack otherwise. Supression implies such a position may beembarrassingly true and perhaps can't be refuted in a fair andopen joust. Often this awards an inintended and undeservedvictory. I'm not saying anything specific about the merits of theparticular issue that got The Stranger in hot water, just ageneral observation on the effects of supression in general. Idon't believe in swamis or "Authorities" of any sort myself. Forme, a position sinks or swims on it's own merits only. I may payattention to information from a previously fruitful source,however, but realizing we're all human and fallible, and as YogiBerra quipped, "Prediction is very difficult, especially of thefuture," I expect no one to be correct more than about 60% of thetime, and that includes myself. Now, when you start talking abouttiming the markets, nearly everyone who has any smarts orexperience will tell you it simply can't be done to the month,let alone the day. None the less, Another & FOA sort of leftthemselves open to criticism from those looking for that oneinfallible guru. Let that be a lesson to any of us who makepredictions -- if I've made any, use them at your own risk. Ihope I made this post ambiguous enough that you can't tell whichside I'm on -- except, though realizing I have no standing in theissue, IMO it would be a good idea to reinstate The Stranger.Regards, Journeyman

I also would like to see Stranger return. Sure he was somewhat harsh in his approach to FOA (and others), but he did get my brain cells a "buzzin" at times. I don't necessarily agree with some of his thoughts and analyses, but they sure did provoke some interesting discussion. On the same note, I didn't always agree with FOA either, though sometimes I found myself considering several of his scenaros regarding gold and it's place in our lives. Those who have been reading this forum for some time certainly remember the "jousting matches" between Stranger and Farfel. Sometimes they got a little out of hand, but surely provoked a lot of thought and discussion. I would not think that should result in banishment, a stern warning perhaps. I for one would like to see Stranger reinstated and given back his seat at the Round Table.

Farful, in message 2091 you make MANY predictions. I'll betgood money (gold) that at least 40% of them will prove tobe incorrect. Regards, Journeyman

Ah, that's Farfel's message 20190 from yesterday. Regards, J.

http://futures.tradingcharts.com/chart/GD/C9 Date: Tue Nov 30 1999 03:24

Josef (Stone-Gold - the perspectives of gold market have never been better) ID#238188:

Copyright � 1999 Josef/Kitco Inc. All rights reserved


Details of 15-ECB Decision to Dramatically Reduce Gold Supply


It began with a statement released jointly by European
central banks from Washington, D.C. on Sunday, 26
September 1999 under support of the following
signatories---


The European Central Bank and the central banks of
Austria, Belgium, Finland, France, Germany, Ireland,
Italy, Luxembourg, the Netherlands, Portugal, Spain,
Greece, Sweden, Switzerland,and England.


Mr. Wim Duisenberg, President of the European Central
Bank, announced the joint Statement on Gold:


"In the interest of clarifying their intentions
with respect to their gold holdings, the above
institutions make the following statement:


1. Gold will remain an important element of global
monetary reserves.


2. The above institutions will not enter the market
as sellers, with the exception of already decided sales.


3. 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.


4. The signatories to this agreement have agreed
not to expand their gold leasings and their use of gold
futures and options over this period.


5. This agreement will be reviewed after five years."


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


The initial market reaction was electrifying. Gold rose
26% in just a few days. The unexpected reaction caused draconian problems for some gold mining companies, like Ashanti and Cambior who are heavily short gold through hedging practices which sold many future years' production. Furthermore, it is without one iota of doubt the market's reaction pushed many bullion banks to the very brink of bankruptcy due to their heretofore reckless gold "leasing' operations.


The global house of financial cards was about to
crumble. Consequently, the Gold Cabal was forced to put
a cap on the speed of gold's price increase. This is
quite evident from the following chart:


http://futures.tradingcharts.com/chart/GD/C9


It is plainly evident the Gold Cabal has forced the POG
down from it intra-day high of $339 to the $290 area. HOWEVER, the pressure release does not alter the long-term monumental impact of the September 26th decision.


The sensational decision will curtain supply for the
next five years, while burgeoning demand continues to
accelerate. Moreover, there will no longer be threats of
this or that Central Bank dumping bullion on the market.
This psychological war tactic is now passe. Many
heretofore speculators will be drawn to the yellow
market, since the price is still within shouting distance of 20-year lows.


During the last fortnight the POG was intentionally pushed down about 12%, allowing merciful time for
forward selling companies like Ashanti to gain a
reprieve from its "hedging" obligations, and permitting
dangerously overextended bullion banks to cover their
SHORT POSITIONS.


Once sufficient pressure has been relieved, the POG will
commence to relentlessly rise again as a result of the
decision. Also, we may all rest assured the US Fed will
NOT intervene while gold seeks its true market
value...significantly higher than it reached in early
October ( $339 ) .


Here are the rationale supporting the statement the US
Fed will no longer meddle in the gold market. The
15-ECBs would never have made this sea-change reversal
without the full approval and knowledge of the US Fed.
Indicative that the Fed was part of the communication
loop was the fact the announcement was make in
WASHINGTON, DC, and not in England nor Frankfurt
( Headquarters of the ECB ) . And although Greenspan did
not sign the decision, he damn well was there nodding
his approval.


The upshot of the September 26th Gold Accord and
subsequent pressure on the POG is the following. Within
a short period ( time sufficient for all bullion banks
and gold producer SHORTS to cover ) , gold will resume its
bull market posture. This inevitably will draw in the
big Specs, causing wild price surges from time to time -
followed by periods of correction as prices soared too
far and fast.


The gold bull market will last at least the 5-year
duration of the Gold Accord. Frankly, I foresee the 1980
record high of $850/oz being taken out within the next
couple of years. And as the POG continues to gain
momentum, it will attract the investment attention of
the on-line hords of e-Traders, who care naught for PER,
dividend yields nor market to book valuation methods.
All the e-Traders are concerned with is how fast a
security is rising.


I have read somehere that during the latter '70s - when
gold soared 24 times ( $35 to $850 ) - only 50 investors
in every 1000 had positions in gold. Comapare that to
today's 1 in every 1000 who has a position in gold. Due
to the dramatically reduced gold supply for the next
five years vis-a-vis dynamic demand growth, the POG will
rise so spectacularly that it will eventually attract at
least 100 investors in every 1000...if not more.


The 21st Century investor is seeking capital
appreciation, not quarterly dividends. By virture of the
15-ECB decision, the shiny metal has taken on the
investment allure of "GOLD.com." And we all know what
that means!

I guess you are lurking here Mr Stranger even if you're not posting because there is good 'food for thought at this site'.
Sometimes when the hearts on fire sparks will come out of the mouth, but lets keep our communications civil to keep friendships intact and not get anybody's backs up.
I have learnt much on this forum from posters that challenge my own viewpoint & sometimes strengthen it if I don't agree with them. Mr FOA's knowledge of the fundamentals of Gold is to be revered, far be it for me to mock him or any prediction for the future he may make.

http://news.cnet.com/news/0-1009-200-1476422.html?tag=st.ne.1009.thed.1009-200-1476422Gold not glittering as Y2K investment haven
By Reuters
Special to CNET News.com
December 2, 1999, 7:30 a.m. PT

NEW YORK--Blink and you might have missed the brief Y2K gold rush, which fizzled out weeks before any mayhem might arise from programming glitches in the world's computers, analysts said.
Almost none of gold's advance from near 20-year lows in September and October is attributed to safe-haven hoarding of coins and bars before Jan. 1, analysts said. And there has been no speculation that gold would benefit if out-of-date computers wreaked midnight havoc by misreading the last two digits in the year 2000 as 1900, they added.

"Some of the buying was Y2K-related but I don't think it was a significant amount to substantially impact prices," said David Rinehimer, director of commodities research at Salomon Smith Barney. "If anything, it faded as we got close to the end of the year." The ambivalent attitude toward gold in private and central bank portfolios is a millennial reminder that the metal has lost its age-old status as an investment that protects personal wealth and insures national currencies in uncertain times.

Far from serving as shelter against an analog apocalypse, investors who feared disposal plans by the Bank of England, the International Monetary Fund and the Swiss National Bank shunned gold for much of 1999; the metal was no longer seen as an important part of monetary reserves. Sentiment strengthened in September after Britain's second bimonthly auction of reserve bullion met surprisingly robust demand, kicking off the rally that hit a two-year high at $338 an ounce two weeks later, after European central banks pledged to curtail their market activities for five years.

But on Monday the third sale of gold under Britain's program to reduce its stockpile by 415 tons to 300 tons was a disappointment. Investors did not jump at the opportunity to buy metal before year-end at a big discount from the highs. "One thing [the auction] shows is gold is clearly not attracting any sort of Y2K interest," said William O'Neill, director of futures research at Merrill Lynch.

Metals research firm CPM Group said in its 1999 Gold Survey that Y2K buying occurred in the first four months of the year, before tapering off in the second and third quarters. According to CPM, sales of the U.S. Eagle gold coin are on track to set record sales volumes in 1999, though no more than one-fifth of these were attributable to investor Y2K buying. Golden Eagle sales reached 1.71 million ounces in the first three quarters, compared to 1.84 million in the whole of 1998.

FideliTrade, a Delaware bullion investment firm, said Eagles were priced at a big premium over Canadian and Australian gold coins because even some sophisticated investors thought U.S. dollar-denominated coins would be handier in any disruption of the economy or financial system on Jan. 1. "If conditions get so bad that cash isn't available for a long term, people think they are going to go to the drug store or grocery store and buy their goods using bullion coins," FideliTrade managing director Michael Clark said. "The one-ounce coin has a $50 face value and goes for over $300. So you are going to buy a $300 item today with the expectation that, first of all, it's going to be negotiable, and secondly, that you are going to negotiate it for $50," he said. "How logical is that?"

Some investors and dealers took positions in futures and options to hedge potential Y2K risk, but are unwinding those structures, fairly confident that systems at U.S. financial firms, utilities and government agencies are ready for the date change in four weeks. "What we saw early in the year was more a move to risk aversion than anything else," said Dinsa Mehta, head of global commodities and foreign exchange options for Chase Manhattan Bank. "As we come up to a very calm year-end, people are finding that they are Over-inventoried in many risk dimensions that would have kept them reversed from Y2K risk," he said.

There is such a frenzy going on to not be left behind in the great rally, is it possible that traders are leasing gold just to get cash for stocks?

Nato Oecd Imf World Bank Wto just a few terms we are all familiar with. Reality shows that the conspiricy theorists are not far off. There are very rich and powerful people building the structures which will govern on a world scale. They are now experimenting with the military structure. The UN was first tried, but it seems there are too many people there who want international laws that are fair to all. Nato was the next try, succeeding in their efforts in Yugoslavia while circumscribing all international law, making a mockery of the UN and signing agreements with the same intentions as those signed with the native Americans in the old west. There are some very unscrupulous folks making the play for the biggest prize of all. World dominion. In order to have complete control, they absolutely must control the money. Gold is an impediment to them. Their biggest fear is that there is something they will not control. We are all at the crossroads. Will there be a new feudal system with invisible rulers? One great lesson has been learned, they must remain invisible to the people they rule, lest they lose their heads like the French rulers did. There are so many secret meetings going on these days, meetings which we will never know about until after their aims are implemented. The media will not help us, they too are owned. I am taking the advice I learned here on this forum "Be a nation unto yourself" I will defend my sovereignty. I am trying to live by the golden rule in all forms of it's meaning. Spiritual and material. I stand as a timy nation in the face of the beast.

In a recent message you spoke of USAGOLD/Centennial Metals in an unusual context. Repeatedly you used the phrase "we".

Without any ulterior motive, may I ask the question, do you
have a business realationship with MK?

As I recall, FOA did say that gold could go down, it could be $20 oz. for a time, but that the price manipulations would be a passing phenomenon. He went on to say that regardless of the price, the VALUE was unchanged. If the value in exchange in the ME or elsewhere is actually $400/oz. but we place a price tag on gold at $20/ oz. what is it's true value? I agree with others who say that other investments have proven more productive in recent years. The problem is, it is difficult to time when dramatic economic changes will take place, and one does not want to be trapped on the outside looking in. I have friends who continually want to "wait and see" whether it be matters concerning troubles related to Y2K, easing back on money invested in the stock market etc. People tend to want PROOF before making a shift in their normal activities. I can foresee many instances when by the time these individuals wait to see the proof they seek, it will be too late. They will be trampled by the herd of others who, like them, have waited to see proof, and were poised to make their move when it happened. People have lost the ability to think for themselves, to make choices that aren't based on what everyone else is doing. We seem to need the constant reassurance of the pack. As far as FOA's predictions of $30,000/oz. I have always viewed the price as unlikely, but the concept sound. And if the price should rise that high, it would be because out whole world is crumbling about us. Indeed, he even pointed out that "when it happens, you won't like it." Even if the $30,000/oz. scenario doesn't play out, gold is making a quiet, behind the scenes comeback, and I believe it will resume it's role as a store of wealth. Will you own it now? Or will you "wait and see?"

What we are up against is a battle of ideas.

One idea says as Lassale (the founder of the German socialist movement) said, "'The state is God.' As such, the state has the power to 'create' unlimited quantities of money and thus to make everybody happy. Intrepid and clear-headed." (from Ludwig von Mises 1965 The Freeman magazine article entitled the "Gold Proplem") So many people today look to the state to provide for their every whim and need from the cradle to the grave. So, I guess the real problem is one of idolatry. As any sane individual knows the state can never replace God.

The battle rages on between those who believe in a free market economy and those who believe in a planned economy. Gold plays a very critical role in this battle of ideas. Again I quote from von Mises, "Governments believe that is is the gold standard's fault alone that their inflationary schemes not only fail to produce the expected benefits, but unavoidably bring about conditions that are considered as much worse than the alleged or real evils they were designed to eliminate. Except for the gold standard, governments are told by pseudo-economists that they could make everybody perfectly prosperous." Yet it is the exsistence of Gold and actually all real assest that people choose to use rather than money that reveals the futility of the socialist ways. So I say do what you said you are going to Hipplebeck, plan for freedom in your own life and don't believe the lie that someone else - civil government - can plan better than you what is best for you, with your money.

Ceasar is not God and he never was!

http://www.fortunecity.de/kraftwerk/rem/23/dj1.htmlRelative Comparison of Dow Jones Industrial Average Index Performance in 1929, 1987 and 1999


mail comments to: vadovic@aol.com


In decimal scale the DJ seems to go parabolic the last 5 years.
It is possible to obtain much better picture if the index is shown in logarithmic scale. The index values will not be parabolic anymore, they will be linear with some deviations to upside or downside. By doing the linear regression in logarithmic scale, it is possible to obtain the average values of DJ index depending on the time. Also is possible to obtain the mean deviation from the average (the two parallel lines, or "band" where the index can be expected to move. I did analyze values of DJ on monthly closing for 3 time periods
-long-term� - from 1915 till end of november 1999
-medium term � from 1978 till end of november 1999
-short term � from 1994 till december 3 1999



If the values of the DJ average leave the "band" there is a tendency to correct.
I did draw a parallel line from the top in 1929 to present time. We are well above the long term band. (Overbought� 2.87 above mean value that is 3794).� DJ value today equivalent to the peak in 1929 would be approximately DJ = 12914
�
�


�

I did similar thing with the peak in 1987. The present value of that peak would be DJ = 11840
We are well above the medium term band. (Overbought 1.26 above the mean value that is 8631).
�


�
�

However DJ is "oversold" (aproximately 3% below the mean, that is 11616)� within the short term band starting in 1994,� so the incredible rally have still some room to go. (maybe to 13392?)
Other important number is 9729 that would be extrapolation of 1998 lows. a close below that number might bring correction of the 1987 type� and bring DJ into the 7500 range
or the correction of the 1929 type and bring DJ into the 3000 range
�

These values are purely statistical and do not include any fundamentals whatsoever. They might give a hint if the index is "overbought" or "oversold".� I recommend to compare them with the rearview vision after the crash. The analysis was performed december 4, 1999. Will look at it again in about two weeks, or when something interesting will happen.

mail comments to: vadovic@aol.com
�
�


Some Milestones


May 26, 1896 Index is launched by Charles Dow at 40.94 points. The Dow Jones Industrial Average then had only 12 stocks, not 30.October 28-29, 1929 Stock market crashes at 12.82% and 11.73% back to back (38.33 and 30.57 points), and ushers in the Great Depression.February 8, 1971 NASDAQ Stock Market is born.November 14, 1972 Dow's first close above 1000, called Wall Street's equivalent of breaking the sound barrier.August 12, 1982Birth of the long-term bull market as viewed by some analysts.October 19, 1987 Black Monday crash of record at 22.61% or 508 points.October 11, 1990 Commonly recognized start of current bull market.November 21, 1995 DJIA has first-ever close above 5000 nine months after hitting 4000.May 1996 Centennial of Dow Jones Industrial Average is celebrated.December 5, 1996 Greenspan warns of "irrational exuberance" in markets.October 27-28, 1997 Biggest-ever point loss at 554.26 (but only 7.18%) followed by then-biggest point gain; 337.17 (4.71%)September 8, 1998 Biggest-ever point gain at 380.53, or 4.98%, after seven weeks of declines on global economic turmoil.March 29, 1999 Dow Jones Industrial Average jumps 184.54, or 1.88% to 10006.78 primarily behind tech-stock rally.
�
******Graphs are shown at the posted site ......YGM,�
�

Though not a fan of St. Paul's I always liked this one from the Epistle to the Ephesians - "Put on the whole armor of God, that ye may be able to stand against the wiles of the devil. For we battle not against flesh and blood, but against principalities, against powers, against the rulers of the darkness of this world, against spiritual wickedness in high places. Wherefore take upon you the whole armor of God, that ye may be able to withstand in the evil day, and having done all, to stand."

The secular among us can just substitute Good for God and so forth - that's what I do - it's the content that counts.


Another way to express this depth of being from Friedrich Schiller in William Tell - The Rutli Oath -

No there is a limit to the tyrant's power,
when the opressed can find no justice, when
the burden grows unbearable - he reaches
with hopeful courage up unto the heavens
and seizes hither his eternal rights,
which hang above, inalienable
and indestructible as stars themselves.
The primal state of nature reappears,
where man stands opposite his fellow man.
As a last resort, when not another means
is of avail, the sword is given him.
The highest of all goods we may defend
from violence, Thus stand we before our country,
thus stand we before our wives, our children ...
Now let us take the oath of this new league.
We will become a single land of brothers,
nor shall we part in danger and distress.
We shall be free, just as our fathers were,
and sooner die than live in slavery.
We shall rely upon the highest God
and we shall never fear the might of men.


beesting - msg id 20136
I could do some digging through my personal archives (might take a couple of hours to dig up the articles) to help you with the HSBC question. Back in the late 70's and early 80's I did a bit of organizing for LaRouche and recall an amusing New Solidarity headline that read "NIX BRIT DOPE BANK TAKEOVER" (amusing because Labor Party members used the literature to both raise money and awareness, mostly at 30 second traffic lights at major intersections, and some headlines were better than others in that respect.) Anyway, at the time we were trying to stop the HongShang bank from taking over Marine-Midland on the grounds that it was deeply involved in the dope trade laundry business. I recall that the HongShang bank was also zeroed in on in the book "Dope, Inc." Who knows but that the Executive Intelligence Review web site - another LaRouche publication - might be lashing out again on the same topic 20 years later. They are like pitbulls.

Hello everyone! This will be one of many posts I hope to offer this day. I'll be in and out, so my response will vary.

I suspect most of you have been in a casino at one or more times in your life. Perhaps a Bains in Monaco or one of the many in Las Vegas. It was years ago in one of these gambling establishments that an old gentleman once gave me an education about people. He invited me to sit down at his
private spot and observe life "on the edge". Here is what I learned. In some ways it can be seen as a parallel to investing in our modern gold market. I adapted it a little for today's thoughts and actions.

You can discover the most about someone's character when they are losing their money. To a lesser extent we can understand their feelings as they are winning. I watched and listened as one player was winning. He gave advice and addressed how his timing was absolutely to the point.

The short term winner:

" " "All right! I just made 50% on that investment and it took only five minutes. I've been doing this all night, so all you "want to be's" gather around and watch how it's done. Before long, I'll clean them out and be rich. If you watchers are smart, you'll catch my "developing record" as it points out that I know what I'm doing. Done this before, some years ago and I'll do it again. All you other players at this table, give up on those losing hands and follow my lead. As you can see this crowd is behind me, so I must know what I'm doing! " " "

My friend pointed out: This guy had indeed beat the house before and made a bundle. Even though the crown around him was growing large, none of them had watched his play last week, or last year, or five to ten years ago. He was cleaned out several times and will never get all his money
back. Just like our modern markets, the tables are rigged against him. He wins just enough to keep his hopes up. We cannot tell his record by watching the crowd. Watch the pit bosses (monsieur in some classy casinos) and the cameras instead, as they are "not" focused on him. The house isn't
worried about this type of player, doesn't care what he says and neither should we.

I watched an listened to a player who was losing. I also saw that the house cameras weren't on him either. He addresses his problems in a covert fashion by looking for flaws in others, even the quiet player next to him.

The "I would be right if everyone else wasn't so wrong" loser:

" " " When this thing turns the money will come rolling in. It's just that right now the cards are wrong, the house is wrong, the waitress is disturbing me. Mostly, it's the way this guy next to me is playing the game, that is throwing me off! No wonder I can't win with someone sitting next to me playing so conservatively. He even expects to make a chunk of money, if he ever bets. And has the
audacity to tell anyone that will listen! Hey, don't you know others are watching you! Your actions are affecting them as much as it is me? None of us can win if you keep playing that way. Look at this, not only are the cards coming up wrong, my gold stocks are going down again. Who do you think you are, sitting at this table with "professional" gamblers? Then there is that guy who keeps saying "I don't care, I'm betting more"! Is everybody watching this? No wonder this isn't working, these kinds of people are dragging us down." " "

My friend pointed out: He must be getting killed! Can't change his strategy because he only wants to play his "paper cards". Typical gambler; he wants to prove to everyone that they can win using the "house deck"! People like this keep the modern system going. If you think he is bad now, wait till the others start winning as his hand keeps folding. I've seen this before and it's best to move to a different table before his end comes.

Then there was the simple quiet one at the end of the table. He had not made anything, but his phones were tapped, mail monitored and weird people followed him at night. Six monsieurs stood watch on him as he played and the cameras were well focused on his game. Even though he talked
funny, a few people understood what this guy was about. His actions could bring down the house, even all of Monte Carlo! Clearly, something was very wrong with this picture. I walked to the table and talked. I was seen then as the only publicly known observer that knew of him.

" " " FOA: Sir, I see that your people keep bring in "golden chips" and stacking them on the table. For years, you just sit here and watched this pile grow. Still, you have yet to place a bet.

Another: My friend, I only bet when my play will win.

FOA: Sir, how can you win if you don't play the "paper cards" like everyone else?

Another: I do not intend to play the "rigged paper game of fools". I will bet but once.

FOA: Sir, Excuse me, but you have to play if you are going to win, no?

Another: I will bet only once and that will be enough.

FOA: But sir, how will you know when to bet?

Another: When the stakes are so large the house cannot afford to accept my wager. You see, I will play "my game" in "their house". In that day, in that time they will be the ones that fold. It be for the benefit of this new marketplace.

FOA: But how can you win if this house fails.

Another: Presently, this gaming house plays with their chips and their cards. Not real are these. This action has imparted the false value on the world money many use. The closing of this marketplace will impart a new value on my holdings and the holdings of all that know what is real.
The game I play is the game "ALL" win! It is "the good bet", yes?" " "

FOA: I get your drift, my friend. Let's stay in touch as I want to follow how the politics of this plays out.

Another: We watch this new gold market together, Yes?

FOA: Yes!" " "

My friend in the booth pointed out when I returned: Did you notice how he didn't get excited or mad as the value of his chips went up and down. That's because he is not betting yet. Everyone that hasn't taken the time to talk to him thinks he's nuts for building that chip pile. They think he is losing his shirt while waiting to bet. Still they are being taken to the cleaners as the "house politics" keeps
changing the card game right under their nose's. Don't think for one minute that this guy works alone. There is a huge amount riding on how this plays out. The rise and fall of nations are being bet on that very table. What a game of human interaction this is. All the other players at the table don't know that this old, little man controls whether they even have a card house to play in.Hope you enjoyed my view from this seat, FOA? "Yes I did. Hope to return in five or ten years, say 1999 or 2000, and visit again.


later FOA

He Should Have Followed His Own Philosophy.....(quote)
"To be conservative in banking is to be in banking 1,000 years. The day you are not conservative, you cannot survive." ...E.Safra.

* .........Where does that leave Greenspan ....the paper printing Bank Baron???? Possibly he'll be remembered as the Man from Thin Air in the Land of Nothing....

MK,

I have been a great fan and frequent follower of this Forum for a bit over a year now. In terms of being a "fan" and a "follower", the writings of Ayn Rand have been part of my intellectual life since I was about 16 or 17. I believe deeply in private property rights. You pay for, own and maintain the Forum, and thus I recognize that what is posted, and who posts, rightly rests in your sole and absolute discretion.

In addition, I would recognize that The Stranger sometimes expresses himself in a "vigourous" and perhaps "know it all" manner, a fact he himself acknowledged on this Forum on several occasions. I myself have been on the receiving end a couple of times (e.g., I "needed bucking up"), so I'm not speaking of a matter alien to my experience. On the other hand, I have not noted that The Stranger adopts a gratuitously insulting tone, nor that he has ever acted in bad faith. When he has gotten "vigourous" in his comments, it was clearly because he genuinely believes individuals are acting in a manner clearly harmful to their own best financial interests, or perceives someone is counselling others to act in such a harmful manner, and he wants to set things right. I note that there have been posters who indicated they had converted all their assets into physical gold, or gold options, etc., based on what they had read or perceived they had read on this Forum. Clearly, there is an undercurrent on this Forum that fiat currencies (including the US dollar) and equity securities are worthless, and that gold is the only worthwhile asset class; such an approach (certainly if followed to extremes)would lead individuals to make investment decisions which are objectively unprofitable, over most time frames. Moreover, The Stranger has also been gracious to those with whom he disagrees, and provided learned posts from a mainstream investment perspective.

In addition, I believe The Stranger has been one of the more regular and effective contributors, whose posts are clear, intelligent and reflect his experience in the investment industry. (Fair disclosue: I am a fan of his posts, and have referred readers from other sites to this Forum, sometimes expressly to read The Stranger's posts). That being said, I sometimes disagree with what The Stranger posts, as I sometimes disagree with what FOA posts, or others post, etc.

I note that others have sometimes adopted "vigourous" tones in discussion on this Forum, so I don't know if what The Stranger said is materially beyond the pale. I recall Another once indirectly referred to me as a "stupid person" because I posited (in one of my first posts)that gold may find a role as a medium of exchange between private parties, as a means of avoiding currency fluctuations. I may have made a stupid comment, I don't know, but such a comment by Another could have been viewed as uncivil discourse. Maybe I have an overly thick skin, acquired for various reasons, but I tend not to allow occasional intemperate comments over the internet get to me. In terms of giving general offence, I've seen (and perhaps have written) a number of posts that could be perceived as unsympathetic to various groups in our society.

I further get the impression that The Stranger may have been cut less slack as a result of content of his views, as opposed to the manner in which he expressed himself.

In any event, MK, I believe the "excommunication" of The Stranger constituted a disproportionate response, in the light of all the circumstances. That being said, this is your Forum, to govern as you choose.

I have been following the posts in this Forum for sometime and I for one have come to appreciate Stranger. The reason for my appreciation is that unlike some in this forum Stranger is not Blind to the realities of Economics as many in here seem to be. Stranger is not a GOLD BUG he is an investor and the reason for investing is to make Money!

My question to those in this Forum is, how many of you are able to support your standard of living with your Gold?

One last word on Stranger and I'll get back to lurking
I agree with most posters here who have asked that
The Stranger should NOT have been banned, I for one
really enjoyed reading his posts, they were informative
and to the point. I believe the reason given by our host
for banning him was that he called FOA names, well
if that is the case, I recall sometime last year when FOA called a poster a name, I forgot who it was exactly, and
our host himself stated that he was shocked by FOA's attack, but FOA was NOT banned, I beleive the other poster was banned or quit I am not certain.
The point is we are all testy when Gold is NOT doing well, but I agree with those who suggest that banishment was an over-reaction and The Stanger should be allowed back soon, this Gold Forum will be much richer with him posting.

It did seem quite abrupt and heavy-handed to terminate him like that. It is obvious that Stranger was in no way a "troll" -- someone committed to disruption and/or incapable of civil discourse and/or having little or nothing of value to offer. Quite the contrary.

Further, deleting Stranger's allegedly intolerably-offensive post denied others (myself, for one, not having access to the forum more often than every other day for the last little while) the opportunity to take it in and draw our own conclusions. I would like to think of this forum as the expression of *free markets* on several levels, including free markets for ideas. But as the conventional "free markets" crowd tends to forget, there is nothing "free" about a market when the very land under which it rests is controlled in such a way as to make certain outcomes inevitable... just as there is nothing "free" about a press that makes certain viewpoints unreadable. I know, it can be said that this "press" belongs to usagold, and hence (blah blah). But this would leave aside the fact that the internet infrastructure was built over a period of decades by public moneys (mostly DoD); to come along now and stake claims of cut-and-dried ownership -- and hence a justification for autocratic control -- seems pretty fatuous to me. The infrastructure that allows the usagold forum to exist was built and paid for by all of us; hence to that extent (which is certainly NOT total, but IS significant) the usagold board belongs to us.

At any rate, much better if this matter had been thrown onto the (in this case round) table, polling the participants as to their feelings on the matter. Perhaps the consensus would have been to expel Stranger, but I very much doubt it. He may be abrasive at times, but as I said he is clearly no troll. He is a member of this community.

MK,

The consensus is clear - the Knights want The Stranger restored to his rightful seat at the Table. His absence is palpable, in that it narrows the scope and diminishes the content of the debate.

You own the Table (here I disagree with AEL), but the quality of the meal is diminished by The Stranger's forced absence, said forced absence causing the Knights to question the food preparation and running the risk that they will seek a Table with more varied, evenly balanced meals and after-dinner repartee.

The Stranger situation.
I believe before posting that he knew he would be treading on thin ice by putting before the roundtable such an acid laced message. Stepping over the line is exactly what was done just as MK said earlier.

It is no ones fault that Stranger put so much weight on the comments of A/FOA to accomplish within such a short time span the rather lofty goals he had hoped for other than his own and he's paying the price.
Although I certainly enjoyed reading various posts from the Stranger I personally can do without vicious attacks aimed at others at this fine forum and if allowed to do so I believe Stranger would do it again. History has it's values.

Just callin it as I see it.

Regards,
Tw

I have recently begun to reread portions of a required reading in university, "The Imperial Republic: The United States and the World 1945-1973", by Raymond Aron, translated by Frank Jellinek (University Press of America, 1974). Part II, Chapter II, "The Two Marshall Plans: The Round Trip of the Dollars", and the Introduction are especially relevant starting points for an understanding of the events leading to August 1971, and the underlying theories behind FOA/Another/Oro. It would appear these ideas and this debate have been kicking around for quite some time. I skimmed these portions of the book as a 20 or 21-year-old student, being more concerned with the political and the military than the economic. A fascinating read, actuated by what I have read on the Forum.

Aron was a centrist who was hated by Sartre and his Mao-loving leftist existentialist clique. If I recall, Aron died in a certain degree of despair a few weeks before the liberation of Grenada, believing the United States had lost the will to meet the Soviet challenge.

The continuing expansion of stock or equity prices may also be being fueled by this.
Example:
I go to my claim,work for a week and produce one ounce or about $300 worth of Gold. History shows that one ounce of Gold representing my week of labor should be exchangable for goods or services indefinitly,no matter how many times it changes hands the Gold doesn't wear out.
I take my $300 after selling the Gold and invest it in a booming stock market.

My brother builds a nice kitchen table in a weeks time and sells it for $300.He also invests the $300 in a booming stock market.The table which he no longer owns represents his labor.
Now lets say 10 years passes,my Gold is still out-there somewhere,but my brothers table got so old after hard use the owners destroyed it.
By this time both of our stock investments could be sold for say $1000.We got lucky.

Now the point here is billions and billions of paper dollars representing past labor and products that no longer exist are being exchanged in the securities markets daily.
Yes, the FED pumps money into the banks who in turn pump it into the local economy who in turn pump it into the securities markets in a seemingly never ending bubble cycle.

Now,how does the FED come up with all this money?
Well some is created out of thin air by selling back to whoever wants to buy, Government debt obligations created by The Treasury Department.Some is interest received on the Government debt. The way I understand it all banks can create about $8.00 for every $1.00 they take in'so there is a lot more being created at a local level also.
Recycling estimate of money in U.S. only,-- 75% or more of all the money received by the public(weekly monthly,whatever)goes right back to the FED by way of interest payments from private parties to local banks and taxes to all Governments on almost everything except physical Gold.(local Governments may get a chunk of the remaining 25%)All these numbers are estimates,I don't think anyone could calculate the actual amounts accurately)
Also we now have many many foriegn companies listed on exchanges and doing business in the U.S,that were not there in the past giving incentive for those employed by those same companies to invest away from their home-land.
Does this post make sense??(These are only shared thoughts to the USAGOLD family)
How does all this affect the price of Gold? Well, if the banks can legally create on an 8 to 1 ratio, the bullion banks may be creating 8 paper Gold contracts 7 backed by nothing but promises and one backed by real Gold.Selling these contracts on the futures markets and making a double killing. How? Well if they paid a miner $350 for one futures contract,create 7 more contracts(which may be paid in cash or Gold, or rolled over) out of thin air to=8. $350 divided by 8 = $43.75 per contract cost to bank, then short sell the contracts,knowing by flooding the market with paper contracts a little at a time, so not many will suspect whats going on(short selling profit is based on downward moves in prices) it will force the price of Gold down thereby reaping more profit from the suckers buying these contracts thinking the price of Gold has to go up because of real supply and demand.
Whats the bottom line?
This whole scenario could change quickly and unexpectedly(or it might not) so we (my household) are still accumulating physical Gold at what we feel are bargain prices along with some paper.(got some Gold yesterday and feel good about it!!)
Too much strong coffee this morning.....beesting

The numbers I gave are only examples. Real futures contracts are in 100 ounce increments...Thank you...beesting

Sir, your logic pertaining to the infrastructural prerequisite reminds me of Mikhail Bakunin's brilliant arguments to abolish the 'right of inheritance'. I doubt they would find much acceptance here, even if they are internally consistent and merit consideration.

The dedication in the copy of "From Out of the Dustbin" of Bakunin's Basic Writings 1869-1871 by Robert M. Cutler is poignant. "To the memory of P.E.C. and for all whose freedom does not depend on others' lack thereof."

Respectfully,
dragonfly

Your Post: Good Evening;
Question = What is the true value of the POG?
Answer = Whatever the majority of the market participants in that market believe the value to be is what it will be over in that time horizon. If you change the market participants perceptions of the worth or value of Gold at a particular time parameter then you will change it's value. When the 'Commercials' are net short you will not see "lift off".
My reply- I believe you are correct as you say "the market participants perceptions" of the worth or value of gold. But I would turn the statement around and make it the perception of the worth or value of dollars. I say this because I believe the following to be true:
1) That too many dollars have been and will continue to be printed.
2) That too much "virtual" Gold, that does not exist, has been sold.
3) That when the previous two truths become widely understood, then much of the gold in existance will not be obtainable by exchange for dollars.
4) That these truths will become widely understood only after the present system crashes, not before.
5) That Gold will then be converted to dollars only breifly and the dollars then quickly "used" before they fall further in value.
The future price of Gold in dollars is irrelevant to me. $300 or $30,000 I care not. When the true scarcity of gold is "discovered" it will end the illusion that there is some sort of gold surplus out there that will forever keep the price down.
It is my opinion, that a very great mistake in buying gold today is to believe that it will go to "todays equivalent" of $30,000. I believe that what ANOTHER and FOA have been saying all along is that in the aftermath of paper market corrections, that $30K won't buy much gold. If it won't buy much gold, then neither will it buy much lumber, oil, medicine, or food. Regards, my friend! And further comments if you will?

In my humble opinion a newly created bullion bank doing business in the U.S. and the rest of the world, should be thoroughly researched as to past policies,ownership,CEO & Board of directors etc. Bullion banking seems to go beyond the limit of security measures when it comes to secrecy.
And now we(everyone remotely connected with Gold) have the very mysterious death of Edmund Safra the part owner of a bullion bank being taken over by HSBC. I read about a rumer months ago that the Russian Mafia had infiltrated into the highest levels of the Gold markets in London.(only repeating what I read) Here in the U.S. there was talk and investigations into money laundering thru our CB Bank of New York from Russia.
Now if there is some FUNNY business going on in the Gold markets as some suspect isn't it in all of our best interests to check it out, since the mainstream newspaper business seems to be oblivious of everything happening in the Gold industry. YES CHECK OUT HSBC!!! As much as you can.....Thank you.....beesting

ask of you.... a few philosophical questions? What gift is it, that allows us to see our mistakes clearly in retrospect, while we remaincompletely blind to them as we walk the path to distruction? Blind to the point of becoming angry, if someone dares question our present direction? Could it be that there are certain unalienable truths? Certain rules that guarantee consequences if broken? Is wisdom truly born from pain? If you are indeed wrong in your prognostications. I will not begrudge you for your error. I see that your frame of reference is not that of these present halycon days.

I strongly agree with Canamami's excellent post (MSG 20237). The Stranger added a lot to help balance out the discussions on this forum. Lets give him another chance. Bring him back, MK.

Thank you TC for your posting (msg id 20169) of Michael Camdessus' remarks.

I think the history of IMF 'conditionalities' and the utter failure in every country where they have been applied speaks volumes when referencing MC's remarks. Those who are convinced that the results are actually a 'success' of sorts comprise a much larger group nowadays than the cranky 'right-wing' anti-UN, anti-global anything Bircher types of the 60's and 70's. This larger group, which consists of a good deal of the so-called Left, believes that it has been in the interest of 'world elites' to wreak havoc in other nations, through IMF 'structural adjustments' among other techniques, and reap certain benefits. The convergence of conspiracy buffs of left and right persuasions is a story that is lately being told and is an interesting topic in and of itself. But to get back to MC's remarks - What does he mean by "Considerable thought has been given worldwide to the ambitious project of designing a new financial architecture."??? How about the need to "...humanize globalization."??? Is that a backhanded admission of guilt?
Or is Newspeak for the next phase of imposing one's will upon another. Was it Isaac Hayes who sang "Smiling Faces", the ones that "..show no traces of the evil that lurks within."?? That is the IMF in my book - whether from the left or the right perspective - as George Wallace said - "Ain't a dimes worth of difference". There was a fellow named Bertram Gross who wrote a book in the 80's titled "Friendly Fascism" which covered a new form of 'inflation turned inwards', to borrow Jacques Rueff's phrase, one that would look very different from the red, black and brown varieties of this century. Could it be that the instigators of this thought pattern have frightened other nations to the extent that they realize that sooner or later it is 'do or die' and that if they don't collectively dissociate from the existing system of 'perverse incentives' that even the stronger among them will someday suffer the same fate as those who have already been cannabalized by those who wield the sword of debt service? Is the Euro a step in this direction? Is it being instituted with knowledge of whatever MC means by "ambitious project".
My take on the IMF saying that it sees poverty as "the ultimate systemic threat" is somewhat dark. To read between the lines - the call for "solidarity" is required because it is already a foregone conclusion that "...the targets are no longer attainable." Therefore "humanizing globalization ... will enable us to better protect ourselves as a group against collective risks on a global scale." Boy, ain't that a mouthful! Who is "us", who is in the "group"? How about this one - "Each country has now achieved sovereignty...". Who is his audience? What world do they live in?

Respectfully,
dragonfly

As one who threw himself early into the fray generated by Stranger's poorly-conceived remarks to FOA, I hereby claim a right to comment on our host's action in removing Stranger's posts and posting code.

Indeed, as MK noted, this was not Stranger's first transgression. He was judged guilty of the same transgression and later pardoned on an earlier occasion. For this alone, he might deserve his present fate, even if only as example to others tempted to the same sins.

Unfortunately, using punishment for the making of examples is itself an exercise in negativity. There is considerable discussion suggesting that punishment serves little in modifying sociopathic behavior, which itself is not rationally motivated. In Stranger's case, it is clear enough that he was trying to give voice to an undercurrent of frustration generated by POG's refusal to conform to FOA's explanations and predictions. Rather than search for the true underlying reasons for this, Stranger took the infinitely easier path of heaping scorn on the predictor/explainer, thinking he thereby called into question the basic content of FOA's explanations. Hoppily, there was no dearth of commentary (expecially ORO's) that quickly brought the discussion back to ideas, and away from personalities.

This was good.

And is the reason that MK's discipline was unnecessary. Like a free market left to its own natural laws, this forum finds a true path without intervention by the authorities.

Michael: Please take note of those calling for the readmittance of The Stranger. His contributions have often been worthwhile, and given enough rope, he will demonstrate, even to himself, that his frustrations will never be assuaged by casting personal remarks at others.

Who among us has never erred? Indeed, (as pointed out already) FOA himself once lost his temper towards another poster, for which he appologized and was forgiven by all. Unfortunately, the offended poster never returned, a loss which we all still suffer. This is why so many of us leapt so quickly into the fray... ie, to try to head off the loss of FOA and ANOTHER as a consequence of The Stranger's ill-conceived remarks. Certainly, I would not want to ban Stranger from our midst unless the personal aspect of his posts began to overwhelm our ability to discuss ideas, a line that he has not even begun to approach.

At the same time, arbitrarily removing offensive posts from the archives is dangerous. Far better to leave them there as examples for those tempted to future excesses. And surely, it is a slippery path, and poorly marked for him upon whose head falls the task of judging the transgressors. Better to leave it to the members of the forum themselves.

Those who would grant proprietary rights to our host to act as judge, jury and executioner, should also remember that without the many fine contributors who give this forum its excellence, there would be no forum at all. This in itself should give these contributors a voice in the right and power to police the forum. Not doing so could lead directly to a less healthy forum for all, an outcome to be avoided at all cost. Only when such a policy threatens to fail would there be any need to seek a more authority-oriented solution.

I am thrilled to see that FOA promises to post today and look forward to the view from his vantage point as he "sits back and enjoys the show". His presence alone is ample proof that Stranger has had no ill effect on the forum.

Stranger should be readmitted, his posts should be restored, and let's get on with the game!

Hello all,
I have to admit, I'm not a regular poster of the site, but I do read the forums daily(or nightly). I have come to appreciate the different philosophies put forth on the how's,why's, when's, and where's of our economy as it relates to gold. I also appreciate the breaking news stories added each hour relating to Y2K, gold, Geekspan, and the general state of the planet as seen through the eyes of each and every poster.
I'll be direct, we are all adults, I feel MK's actions were a little too harsh. I believe with Strangers past postings on the site we can assume he hasn't developed a pattern of disrupting this forum, but just the opposite, he's added an opinion carried across with vigilance, thruthfulness, and at times strong emotion. Just as every regular poster on this forum has. I appreciate Stranger, I like a person that calls it like he sees it. A person may or may not agree with his views. I have on a few occasions, but I've also laughed and moved on.
I think Stranger should be given a warning and reinstated.
My explanation for this is simple, "we're all human". We all cross that line sometime. Give the guy a break.

I miss Stranger, heck I've missed FOA, but I sure as heck miss SPOT more...

Get gold, get physical, and get Stranger back on this forum,

CoinGuy

First of all, I am not an FOA true believer but I find his insights stimulating, logical and often brilliant. I take no-ones predictions as anything more than a possibility. I have also disagreed with FOA and have felt the response sometimes evasive. Having said that, I would like to say that I am totally with Michael on this issue!

It isn't a matter of who 'owns' the Forum. It's a matter of agreeing to a set of rules and then following them. Michael has bent over backwards to keep Stranger's posting privileges when Stranger has blatantly broken the rule of courtesy. I once E-mailed Stranger saying "You do push the envelope, you know." Stranger appears to have A Jekyll/Hyde thing going. Suddenly the dignified Wall Street Investment councilor lashes out at people, derides content or indulges in bathroom humor. I noticed that until lately these occasions were on Sunday afternoons, and thought maybe it was a weekend persona taking over. But lately, it seems to be more frequent.

Having said all that, I would like to suggest that Stranger be re-admitted on probation. Our group is having practically a religious schism over this. Strangers firm position of a specific viewpoint regarding our subject matter is a good foil to think against.

And David! If you find yourself falling into one of those belligerent moods, E-mail the post to me and I'll edit it. I would be willing to be, on those occasions, your designated poster.

Sincerely Peter

I've been listening to a pretty good radio program on the "yellow metal". It's rather basic, but the Commentator(Joe Battaglia) sometimes spews out a few good gems of info. He also comments on the stock market, and the economy. It's over at www.wellsfargonevadogold.com. There is also an archive of past shows. Worth a listen.

CoinGuy

Bonedaddy (12/04/99; 13:07:01MDT - Msg ID:20249)
FOA, If I may....ask of you.... a few philosophical questions?
What gift is it, that allows us to see our mistakes clearly in retrospect, while we remaincompletely blind to them as we walk the path to distruction? Blind to the point of becoming angry, if someone dares question our present direction? Could it be that there are certain unalienable truths? Certain rules that guarantee consequences if broken? Is wisdom truly born from pain? If you are indeed wrong in your prognostications. I will not begrudge you for your error. I see that your frame of reference is not that of these present halycon days.


Hello Bonedaddy,

Halycon? Indeed, these times will seem as such.

-- Alky-one, the daughter of Aeolus (god of the wind) was sick over learning that her husband had been killed in a shipwreck. She threw herself into the ocean and was changed into a kingfisher! The Greeks figured that she built a nest on the sea, every year around the solstice. So, for a time
every year the seas were still"--

No, bonedaddy, the tranquil, halycon times we now experience will not last. Modern gold bugs search for financial refuge during these smooth times and find themselves in a tempest not of their making. They chase only the price of gold and find the ships they choose to sail upon being sunk on calm seas. In their anxiety about the future, they listen to the siren song of leverage. They board the very vessels that offer the least in stability. As Another points out, Westerners buy the price, not the
gold.

They see the trail we discuss and follow only half the map. Then, when the "price" of gold fails, they visit their bitter venom upon us. Not because we were wrong, but because they want to follow their old charts.

But, how does one talk to a group, yet address only a concept of simple spirit? Buy the gold and forget the price. The present marketplace for gold does not establish it's value, only it's dollar exchange rate.

We are "on the road". The process has begun. Many once solid BB's are in trouble from this first strike. The Europeans have withdrawn and left the marketplace to drown in a flurry of "paper gold IOUs"! Eventually, the larger scope of this political game will assert itself. That being the dragging down of the dollar from it's "reserve currency" perch. But, before that must come the end of our present price making system for gold. This destruction may show itself in many faces. Here is where the "old gold bugs" cannot quite grasp it.

One of the "unalienable truths" that you speak of is that one cannot own what he does not possess. The entire dollar/debt economy is built on the exact opposite of this concept. That being, "if you hold it in contract form, you possess it's "physical equivalent". This can be extrapolated to include US stocks, treasury debt and even dollars themselves. The American Experience says that one only need to hold the "right to buy something" for such to be counted as real wealth.

This wholesale acceptance of "fraudulent wealth" has lead an entire generation of "Western workers" into saving nothing and thinking it's something! Once any tiny part of this concept is broken, it will call into question the validity of the entire "paper asset" world. Break the gold market pricing system and you will break the dollar. Break the dollar and the complete dollar based business system is market to the market. A marking that brings currency pricing in line with "on the minute supply" of real things. Not the price of things I can get in six months. The resulting dollar inflation will wreck the ability of most businesses to function at a profit. The gold business included!

This is why our present dollar based gold market does not and will not accommodate gold investors outside the physical market. The Washington Agreement has unleashed a paper flurry of gold IOUs, all running from account to account. Running just ahead of the accountants before these
contracts are market to the market. The next "equity killing" gold run will soon destroy another batch of BB traders before the paper price plunges again. A vicious cycle that will continue with wider and wider swings. $100, $500 then $1,000 swings until the LBMA stops all fixings. All the while these moves will drain the equity premium from every mine stock until only the fully unheadged retain any value at all.

If you think our poster's comments were rough on me, wait until others start getting hit "Hard"! These people hate what we have to say because it destroys their investing world and therefore there professional record. As my friend said in my last post, ""Can't change his strategy because he
only wants to play his "paper cards". Typical gambler; he wants to prove to everyone that they can win using the "house deck"!"" I add that it's a deck rigged against most "gold industry" investors. Another said this long ago and he "WAS NOT WRONG". This entire industry and marketplace is
going to fail!

Bonedaddy, I offer a truth that most don't want to see publicly written. Not because of their concern for other's accounts, rather because it opens too many eyes! When all your money is on the wrong horse, you don't want to hear someone talking about how it's going to die. We shall see.

Thanks FOA

http://www.larouchepub.com/lar_oberwesel_2631.htmlFirst to establish the "gold worthiness" of this post, the following excerpt from the link above which is from the August 6 edition of the Executive Intelligence Review:

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

We are now in a process which is typified by the act of the Governor of the Bank of England, Eddie George, in looting his own bank of up to $1 billion and probably more, in concert with an international syndicate which includes the backers of Vice President and fading Presidential candidate Al Gore.

This act of the Bank of England, stealing from itself, for the benefit of a group of cronies of the director of the Bank of England and of the Queen of England, is typical of these types. It must be said that what happened to Russia during the past six years, was found so good by the Western banking system, that they have imported the Russian model, of stealing from their own country's assets, into the West.

For example, there is nothing remarkable or unique in what Eddie George is doing. In every part of the world, we have a form of criminality called privatization. "Privatization" is a multi-syllabic word for stealing.

For example, in Germany, the Stadtwerke, the municipal utilities, are the present object of stealing, under the label of "privatization"--something that every Russian can understand.

If you're going to privatize a firm, you're going to steal from it. That's what "privatization" means. It used to be called, in the Eighteenth Century and the Seventeenth Century, "privateering." That's when people get a legal license to go out and loot. Sometimes they were called "pirates," and if they had a piece of paper from a government, they were called "privateers." So, you don't call the Russian liberals "pirates," you call them "privateers," because they've been given a special license to steal from their own country, their own banks, and everything else in sight. Privateers even steal from each other.

And when times get tough, the frequency and the intensity of stealing from one another increases. It could be said that, with probably a rare exception, that at this point, every leading bank and every leading other financial house in the world, is engaged primarily in stealing--stealing from its own assets.

Now, in the case of Eddie George's stealing of gold, what happens is that the gold is stolen by selling it below its value to a private syndicate of cronies. A small group of people are allowed to buy this gold below price. They are going to hoard that gold, until after the great financial crash wipes out all financial institutions around the world. And that's in process now. When the crash is over, they intend to come back with their gold.

In the meantime, they're driving down the price of gold, in order to bankrupt the gold mines in South Africa, Russia, and so forth. So, they will buy up the gold mines which have gone bankrupt, and they will control the world's gold and gold production after the crash is over--not far into the future.

Every bank is doing the same thing--virtually every bank. Maybe there's an exception, here and there. But I've checked with some bankers, and they don't know of any exceptions. Every bank and financial house is stealing from itself. That is, the relevant directors are stealing assets, and, by various kinds of loan mechanisms and others--with which I'm familiar from the old days, investigating frauds and bankruptcies and so forth, and probate proceedings, in the United States and Canada.

What they do, is they move the money through a lending procedure, or a trade procedure, at reduced prices to a second party, who passes it on to a third party, who passes it on to the fourth party. And the fourth party is the collaborator of the person in the bank who is doing the stealing. When the crash comes, each of the intervening parties, including the bank itself, will go bankrupt. And the bank official hopes to retire on the basis of what has been stolen by the fourth party. It's an old method of stealing. It was practiced in the 1950s, the 1960s, in the United States and Canada. I investigated many such cases.

What is being done now is no different, except that it's done on a grand, global scale.

Whenever you hear the world "privatization," you scream "Thief! Catch thief! Stop, thief!" Every time you hear of privatization of a Stadtwerke in Germany, you say, "Stop, thief!" when you hear somebody proposing it: "Stop, you accomplice of a thief!" The politicians who are owned by financial interests, are bought. And they put through the laws of privatization which enable people to steal. There is the greatest amount of theft in history now going on around the world. Government politicians, governments as such, are stealing. They are stealing for the people who pay them, who support the political parties, who have bought and paid for the politicians, who are now stealing for pay under the guise of being elected, and other officials.

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

The darker side of the equation is one that involves serious consequences which impact us all at a profound level and for which we can barely hope to prepare, even with a stash of physical gold. Another excerpt follows: -------------------------------------------------------

Looting and lying
Why is this going on? Why doesn't somebody stop it?

Well, this thing can go on only under one condition. The stealing at such levels, on such a scale, with such profundity: It only happens when the system is about to go under, when every one of the people behind authorizing it, covering up the stealing operation, knows that the entire world financial system is about to blow. Those who tell you that the system will not crash because they have it under crisis management, are lying. They are lying--why? To buy a few more weeks and months at most, in order to complete the process of stealing. In order to steal, they have to keep you quiet, confused, and believing that the system will not crash. That's how they steal.

So, when a banker says the system will not crash, he is lying. Every leading banker in the world knows the system is crashing, because they're stealing. And they wouldn't dare steal the way they were stealing if they didn't know the system is about to crash--and if they didn't know that virtually every other banking and related financial institution in the world is doing exactly the same thing. So, they don't blow the whistle on each other. That's what's happening.

In the end, they will rob every savings account. They will loot everything, and leave the poor public, especially those who were foolish enough to invest in mutual funds, absolutely destitute. That's the situation we're now in.

For example, the system began to disintegrate in the spring and summer of 1998. We had entered this phase before this, during the summer into October of 1997. The process leading into this had been established in 1994-1995, with the Mexico crisis and the mishandling of the Mexico crisis by the United States in the so-called bailout. So, these are the steps. We've entered, step by step, going back all the way to the middle of the 1960s, in fact, but in terms of financial systems, 1971, and then the Carter administration in the United States.

The famous names who are responsible politically for setting this into motion, include the first and second Harold Wilson governments in Britain; and you see the result of the Harold Wilson era in a television report yesterday, on the British Sky TV News, on the Great Western Railway System, which is a privatized section of the former British Rail system, a victim of Thatcher. This privatized rail system had a crash. And the crash occurred because of privatization. People were killed because of privatization. Because the only way to make profit out of a bankrupt system, is to gut it. So, the safety signals, which should have been operating--about six of them, according to the British report--didn't function. So the train crashed. And people were killed.

This is typical of the effects of privatization. We saw the same thing with the crash in Hanover of the ICE [German high-speed rail system], where a cheaper wheel was used. Safety precautions were not taken. The same thing was done in the German rail system, that was done at Mercedes Benz, with the A-Class--of scrapping the engineering departments which are necessary to develop and prove workable systems, and letting a computer idiot, a nerd--a mere nerd, not a human being, but a nerd, on a computer--decide how the thing should be designed. A nerd who understands nothing about the principles of physical science, but who thinks that, if you know how to operate a computer, and a little mathematics, you can solve all the problems. This is a form of psychosis. This is not anything else.

So you see all over the world, the private and public systems are being looted, consciously, willfully, with willful criminal negligence. They call it negligence, but it was willful. What do you call that? That's called an intentional crime. If you strip away safety systems--for example, you might say, by U.S. standards, that the victims of the Western Railway crash this week, were the victims of HMO-style management--that is, the privatized takeover of medical insurance programs. The cutting of medical care, as Andrea Fischer pushes that here in Germany, is calculated mass murder! If you adjust the conditions of life, such as to wittingly increase the death rate and suffering rate, you are a mass-murderer. If you do this for financial reasons, then it's a crime whose motivation for murder, is stealing. But this is typical--what is happening with the HMO and the medical system inside the United States, what is typical of Congressmen of the United States, who are bought and paid for by Wall Street, who put through the bills which will not allow the victim of an HMO murder to sue for damages in case of injury or loss of life, for criminal negligence.

This is the characteristic of the present world system.

Now, what about crashes? When people hear about crashes, they think about the 1929 crash, or perhaps the 1923 blow-out of the Reichsmark and the great hyperinflation. Well, you want to know about Germany, Weimar, the Reichsmark blow-out in 1923? It's happening right here, in the United States--on a world scale, in Germany, everywhere, the same thing is happening.

What has happened, is--and that's what the present phase of the situation is, which is why all bankers generally are stealing, why privateers are stealing, why bought-and-paid-for government officials are voting for stealing, which is called "liberalization." Don't make crime a crime any more--liberalize it. You don't call people immoral, you call them "liberal." You don't call them murderers, you call them "liberal." In the old days, they would have called a Nazi death-camp manager a "liberal," because he was liberally handling the problem.

This is the way of the world we're in. What's happening?
--------------------------------------------------------

So what is LaRouche's solution??? As follows:
-----------------------------------------------------

First of all, a group of governments--and I have chosen the United States, joined by cowardly Germany, with Russia, China, India, and a few other countries--simply decides, as an executive decision, the following:

The world financial situation is hopeless, a hopeless catastrophe, nothing can save the world financial system in its present form. Therefore, let's stop trying to save the world financial system, or monetary system, in their present forms.

What do we do?

Number one, we declare and avow, that we are each perfectly sovereign nation-states, and have the absolute power, embodied in us by virtue of being perfectly sovereign nation-states. Globalization just died. We killed it.

Number two. With this power as sovereign nation-states, we agree--whether anybody else does or not--as sovereign nation-states, we are making a sovereign decision, which we are making in common, and we represent a majority of the human race, so that's probably important. You put together China, Russia, India, Iran, Malaysia, a few other countries, my friends in South America, in Central America, the United States, and Germany, what have you got? You have the majority of the human race. You have the future of the human race, assembled.

Because the German economy is the only economy in Europe. Any other economy in western Europe lives just on dole, taken out of the German pocket. Without stealing from Germany, France couldn't exist. Who else is going to pay for the big hole called Cr�dit Lyonnais? It's a bottomless pit. That's where the devil lives and sups tea with Mitterrand. It's the bottom of the hole, called Hell. The hole called Cr�dit Lyonnais. And actually, Mitterrand has special privileges there, because he created the hole.

So, the first thing we do as sovereign nations, is we declare that all gambling debts, including derivatives and junk bonds, are now retroactively declared to be null and void. No one among us will ever honor again, any gambling debts, such as financial derivatives and junk bonds. Now, that does the positive thing of taking at least $300 trillion of current financial debt out of the world system. If you don't do that, there is no possibility of reorganizing society, and saving civilization. That's the price. You cancel $300 trillion, approximately, of gambling debts, such as financial derivatives, and say that they are null and void as if they had never existed--which sovereign governments can do, if they're perfectly sovereign and if they represent nations which represent the majority of the human race, that's a pretty good decision, about as good as you can get on this planet. That's the beginning.

What about the rest of the junk? Put it into bankruptcy reorganization. Freeze it. Freeze the accounts. Terminate interest payments on these accounts. End it. Government takes over. The government puts each part of its society into generalized bankruptcy reorganization under state supervision. You want to survive, you're going to do that. If you don't do it, you're not going to survive. You have no choice. The comet has reached the Sun. You have no choice.

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

To clarify my position, having had extensive experience with LaRouche and the International Caucus of Labor Committees, I must say there are many areas of disagreement between us, but Lyndon must be given credit for sounding the alarm and rigorously documenting every step of our decline for over 30 years. Anyone who has even a cursory knowledge of his voluminous output will attest to at least that much.

Respectfully,
dragonfly

I hope we get some conversation going on your provacative post. I find it interesting how people come to accept alot of this by it being done a little at a time. What you laid out there in the prposed solution, could be a real life, real time version of Atlas Shrugged, -- keep talking friend.

You stated something vary pertinent to the question of why Gold has not risen in price.
*****
People tend to want PROOF before making a shift in their normal activities. I
can foresee many instances when by the time these individuals wait to see the proof they seek, it
will be too late. They will be trampled by the herd of others who, like them, have waited to see
proof, and were poised to make their move when it happened. People have lost the ability to
think for themselves, to make choices that aren't based on what everyone else is doing. We seem
to need the constant reassurance of the pack.*****

http://www.egroups.com/group/gata/302.html?The above link points to a _very_ interesting commentary at the Gata messages site by Reginald H. Howe. He explores the possibility of the US Fed writing gold calls and the implications of that hypothetical act.

In part of his commentary he speculates that the Fed started to wind down its position earlier this year and this was what got the bullion banks to promote writing calls to their hapless customers such as Ashanti.

We may never know the truth here but this has the ring of truth to it. Certainly, the announcement of Kuwait allocating their entire gold reserves to the trusty hands of the BOE while the US Defense Secretary was still vistiting smacks of an extreme desperation (particularly the plublicity given to what is traditionally a very discrete subject). Likewise the Jordanian sales. It looks like the US is shaking down anyone they can for the physical.

Enjoy.

Good evening, FOA!! I have a question for you, please. The other night on the Kitco LiveAudio Forum, Representative Ron Paul said he believed gold would be confiscated if its value were to rise sharply. I know you've said confiscation isn't likely, but -- well, considering the tyrannical nature of some of our government leaders -- do you think it might happen? We keep hearing rumors of martial law, and executive orders confiscating almost everything of value. Thank you!

The worlds three Currency Blocks, seem to stand at Parity, 100Yen-1USD-1Euro. It seems so strange to me that this is occurring right now during such incredible times. So close to the aftermath of Event I, the "Washington Agreement". And during the time the equity markets have moved into "absolutely" uncharted waters. And with the Fed pumping in liquidity at alarming rates. Could this be the prelude and starting gate for "Event II"???. What could that "Event" be?? My one thought�freeze the Currencies at this trading range?? How convenient. Revalue Gold here??. How convenient. Would they do this?? Would this work?? Just a small thought for the brilliant minds that visit this fabulous forum.

Leigh (12/04/99; 15:34:26MDT - Msg ID:20261)
Question for FOA

Hello Leigh,
You know,,,,,,,, I have thought for some time that the whole issue of gold confiscation keeps being dragged out to serve special interest. It always comes across with background overtones of: "Americans don't need physical gold, so why bother with the worry". Usually the paper pushing brokerage industry and miming industry enjoy using this angle so as to sell their product.

Like this: " " "it's the foreigners that need the real gold anyway, so let's use their problems as they drive the market higher. That will benefit our paper gold holdings and we gain without thinking about government law changes" " "

See where I'm coming from? Truly, the last time the US called in gold, it was because they needed it to square "official bookkeeping" and create new banking reserves. This happened because we were on a "fixed gold price standard". Had we not been on this, they could have just raised the gold price to $100 without calling any in from the public. It would have achieved the same reserve effect. Honestly, foreign governments did not credit the dollar as worth more because the US robbed gold from someone to pay it's debts?

Then we have the precedent of 1971? Now why on earth would we now take gold from our citizens when we just denied delivering it against the dollar? Because, you say the new price today will be so much higher. Well, they could have marked their gold to $1,000 in 1971 and still not delivered it against dollars. It would have created the same reserve increase the IMF is doing today.

You see, the whole song and dance is about dollar supremacy. If in the near future the dollar reserve function is degraded, the US will have no reason to grab gold from anyone. Hell, they could mark what they already have, market to market. Say $8,000??? Those that run the US political
machine will be under the same gun as you and me. Just like a failing Russia, the leaders will be getting their hands on all the gold they can buy and shooting down all laws against
private ownership. Let's face it, they won't be able to ship it overseas (foreign exchange controls) so you can bet they will want a good free dealer market for physical: "right here in the go old USA for the benefit of the voting citizens ".

Leigh, the big Western money is going to run for physical as this unfolds and they will be paying up for it with inflated dollars. At prices none of us will understand.

My take on it,,,,,,,,,,,thanks FOA

I believe the IMF solution of marking their gold to market may actually set the example for governments to follow. Especially if what we believe is beginning with the gold market actually takes place...a rising gold price would increase the value of a country's gold holdings if marked to market instead of the ridiculous fixed value concept. Something to keep an eye on.

Lamprey

TownCrier (12/3/99; 22:45:13MDT - Msg ID:20205)
Town Crier: Your following note is right on:
"""these discussions should focus on sleuthing out the various intrigues of gold rather than the identities or moral character of other posters."""


To ALL:
I want to thank every person that has come out in support for "civil conversation". Thoughts can never be discussed in an atmosphere of disparagement and personal attacks. Human nature has always set us on the road to warfare without rules of conduct. My only open attack came in self defence after a departed poster accused me of "fraud" several times. Presently the Stranger displayed all the signs of using degrading remarks when intellect was in short supply. It's the old "I'll shout him down until he shut's up". This has surfaced several times. It will return again when least expected. Maybe it will be sent in someone else's direction and hurt their efforts equally?

We all post here at the expense of time and energy and no one wants to have "volunteer" work destroyed. Rules build a civil world and allow the thousands of lurkers at this site a good experience. I say, let him post through someone else or from under another computer site. Mine and Another's thoughts are free, simple and clean for each to interpret as they will. I have no need to remain and debate a rude person who makes commits at my expense. Especially on this stage.

Thanks FOA

http://king.igs.net/~wacoppin/truth.htm#jmayParticular Interest.....

**Jonathan May's Story...
**Why You are Poor-Money and the Fed...

Note-- as in many websites some content is hard to believe and some is hard to dismiss...Just as in listening to Financial Gurus, or Y2K experts.............."You be Your Own Judge, Jury and Executioner".............YGM.

Golden Sextant PageDecember 3, 1999. A Time for Courage: Buy Gold

As a general rule, this site does not offer direct investment advice. So do not be misled by the headline; it is directed at the ECB and the Bank of Japan. There will never be a perfect time for either the EMU or Japan to assert complete monetary independence from the dollar. Recently, with the Euro surprisingly weak against the dollar and the yen surprisingly strong, the ECB quite properly eschews intervention in the dollar/Euro market and the Bank of Japan continues an ineffective policy of sporadic dollar purchases followed by domestic yen sterilization.

Today, in an article entitled "Time to Tame Exchange Rates," The Wall Street Journal, Dec. 3, 1999, p. A14, David Malpass, chief international economist for Bear Stearns, argues that Europe (and by implication Japan) should evaluate its currency in absolute terms, not in reference to the dollar. He writes:



Europe may want to create a benchmark other than the dollar for evaluating the euro. Otherwise, it will trap itself into viewing the world through American asset valuations. This would cause mistakes in monetary policy and would reduce the attractiveness of investment in the eurozone. My preference would be for the European Central Bank to evaluate the euro using the price of gold or another indicator of the euro's absolute value.



Mr. Malpass does not address the mechanics of implementing his advice. He does suggest that given the strength of the yen against the dollar, gold and commodity prices, Japan "should shift from its failed government spending policy to monetary stimulus, expanding central bank assets until deflation stops." The ECB, he suggests, should "announce in advance that when the price of the benchmark rises (meaning the value of the euro is falling), the quantity of euros will fall, and vice versa." He also makes some telling criticisms of American exchange rate policy. Overall, it is an excellent article, which I strongly recommend taking the time to read and study carefully.

But let's suppose, as appears to be the case, that the ECB is relatively content with monetary conditions within the EMU, and considers as well that gold is relatively cheap in Euros and even cheaper in dollars. The problem, as Mr. Malpass suggests, is not so much a weak Euro as a strong dollar. Under these conditions it makes no sense at all either to sell gold to mop up Euros or to buy gold with Euros. The problem is not a shortage of gold relative to Euros or vice versa. The problem is a shortage of dollars relative to both. The answer is to sell dollars, of which the ECB has an abundance, for gold, of which it can never have too much and with which it can someday, if conditions warrant, purchase excess Euros.

The point is that Mr. Malpass did not go quite far enough. If the ECB uses gold as the benchmark for the Euro, it logically must also use gold as the benchmark for its foreign exchange holdings. Indeed, it should hold very modest amounts of foreign exchange except in so far as it may deem certain foreign currencies a good value against gold.

Of course, if the ECB declares gold as its principal benchmark of value -- not only for the Euro but also for all other currencies that EMU current account surpluses may bring it -- it will also be declaring complete monetary independence from the dollar. But if it doesn't, the Euro will continue to play second fiddle to the dollar. Worse, the ECB at some point could find itself forced to buy Euros with dollars despite reasonably tight monetary conditions within the EMU.

If the Bank of Japan were willing to effect currency maneuvers through the gold market, it would have several options. It could sell dollars for gold, tending to weaken the dollar by adding to supply. Better yet, it could buy gold with yen, which it might feel less need to sterilize immediately, particularly if it also made gold the benchmark for the yen. Finally, should Japanese actions in this regard assist Europe to adopt gold as its benchmark, this too could help weaken the yen. For to the extent that the ECB has excess yen reserves, it would likely use them ahead of dollars to buy gold since it is even cheaper in yen than dollars.

The real question, then, in both Euroland and Japan is whether either is now prepared to assert true monetary independence from the United States by declaring for gold, or whether, despite all the brave talk, both will continue to measure their money at the end of the day against the dollar.

Thanks, FOA, for answering my question. You said, "[the U.S.] could mark what they already have, market to market...." I'm taking that to mean we STILL HAVE some gold -- the Fort Knox gold isn't gone after all? That has been a recurring topic around here. (You don't have to answer that if you don't feel you should! We worry about your safety!)

Town Crier, I LOVED your story about the Turkish gold!

Canuck (12/4/99; 5:55:47MDT - Msg ID:20230)
"Sir Town Crier,
In a recent message you spoke of USAGOLD/Centennial Metals in an unusual context. Repeatedly you used the phrase "we".
Without any ulterior motive, may I ask the question, do you
have a business realationship with MK?"

Good heavens, dear sir! Has that not been abundantly clear in past posts? Acting as Master of Ceremonies (for the various contests MK announces in order to stimulate thought and discussion and to put some of his own precious metal into the hands of those that earn the reward) should have removed any notion of doubt. In addition to that, the announcements of updates to the USAGOLD website and the maintenance of the Hall of Fame should have further made the case clear. The daily GOLDEN VIEW is itself spinkled with obvious references to the connection. I'm certain that most people have been aware of this connection. If not, then my apologies for vagueness where I thought the case to be self evident.

With regard to location, The Tower does in fact stand apart from the Castle (USAGOLD / Centennial Precious.) From this vantagepoint on the wild frontier, we are able to give news and fresh perspectives in addition to those delivered by MK himself. From reading our various posts, you can see that we are frequently in close agreement, though not always. No collection of seperate minds will ever be found to be in complete agreement on all points, even on a matter as focused as gold. Here at The Tower we do have a special understanding of the importance of gold, as does Michael Kosares...that's why we occupy our days in this field instead of any other. (Shouldn't everyone pursue what they know and love? Would you want to receive brain surgery from someone who was a gormet chef at heart?)

So, for the purpose of adding additional service to his valued CPM customers (in addition to his monthly newsletter, this website, daily market reports, the forum, Gilded Opinion, etc.) MK has procured the services of The Tower. He has a rare commitment to this customers, both past and present, and that's why I recommended in a post a few days ago to Goldy Locks Guy (I believe) that all other things being equal, I would encourage you to at least consider MK for your next gold purchase. And if calling MK is more effort than walking across the street to a neighborhood bullion dealer, perhaps you could consider that small extra effort as "tuition" or a simple thanks for these services he provides. You'll likely find that his prices are better than elsewhere, anyway. Everyone wins. As MK states in his newsletter, "It is your purchase from Centennial Precious Metals that nourishes these pages." We thank you all for your help to keep the fire burning in the hearth, and the intelligent, civil discussion going at the Table.

My question to those in this Forum is, how many of you are able to support your standard of living with your Gold?
.......................................................
I'd say not many when even the Placer Gold Miners are hurting and selling excess equipment to keep going....BUT we all as ever hopeful Goldbugs "KNOW" how quickly that could and will change. I myself care not a wit for monies lost nor those who lose it thru paper shuffles of imaginary Gold. Physical will be the court of last resort and that day's not far away....IMO...YGM.

Go GATA & Go Physical.

lamprey_65 (12/04/99; 17:11:13MDT - Msg ID:20264)
Gold Marked to Market

Hello Lamprey and welcome,

The latest discussion I have received?

This IMF action was political money warfare at it's finest. The US faction fought for all they were worth to reverse this. It's a major blow! Even though the US dollar group still control the marketplace price for gold, they cannot stop the official revaluation of national holdings. Now that the IMF deal was forced through, these national holdings are free to be raised without "marketplace price settlement"! That is the key from which the ECB/BIS can spring gold higher in increments. It's also the reason the "Washington Agreement" seemingly came out of nowhere so as
to free European gold away from the English marketplace.

If you have followed this discussion here, you know how sensitive the books of the LBMA are to a rising gold price. Now the IMF deal has opened the door to a world with two prices of gold. In time, as reserve requirements demand higher than market prices, the ECB will begin to do their
quarterly gold revaluation using official gold prices instead of the fictional "dollar paper price".

Between now and then, paper lease rates, comex open interest and paper gold prices will be all over the map. The paper price could run to $500 next week and sink back. Or run and keep running. This is the undercurrent that has the BBs in hot water. There are some serious issues of "who's side are we going to go with" being discussed right now. If gold is forced up, it will bring the oil producers to settle in Euros so as to benefit their contracts. These contracts are dead without the Euro group. I believe this is the enticement that a Euro at par is offering. A clean transition before the fact. We shall see.

Who would have ever thought a small ME country's 79 tonnes were so important to the survival of the LBMA? Yes, they got a good return of military commitments for their lending gold, but that 79 tonne was nothing compared to the contract loss if the markets failed before they fully integrated with Europe.
Indeed, we shall see!
FOA

The jury has suggested Mr Stranger . . . 30 days confined to another forum somewhere else, the place where the 'big yellow bird' resides engaging in poetry & childish banter set around a precious metals theme. At the end of 30 days thou shalt be re-admitted to "the" forum under a new born again name & nature!

I do not enjoy, relish, look forward to or gain personally from deleting codes let alone one as important as The Stranger's. I'd rather have him posting than not for the good of the site, but, at the same time, no one is above the rules. If you cannot debate an issue without making it personal, then don't even sign up to post here. That is not what this place is all about. If it were, USAGOLD would degenerate into a juvenile showcase/chat room in no time. I'm not going to let that happen. The Stranger has crossed the line before and toed it on several other occasions. He kept pushing the envelope -- as others have said -- until he pushed too far.

The rules are few and without complication. One of them is that personal attacks are forbidden. There is no wiggle room there. This has nothing to do with the Stranger's philosophy. It has nothing to do with stifling dissent. It has everything to do with an ad hominem attack on another poster. I would not suspend anyone's posting privileges on the basis of their analysis. I simply enforce the rules in the interest of all who post here for the long term good of all involved. If I don't act to stop one, it gives license to all. I think everyone who's been here for awhile understands where I'm coming from by now -- attack the idea or the argument not the person.

The Stranger made two posts which I considered to be a direct attack of a personal nature on a fellow table member. He also made what I consider to have been some ill-founded, and unbased accusations -- and that was probably the more eggregious offense. In addition, I thought the attack particularly vicious. And it could have gotten worse. As I said, I will not allow a situation to degenerate to that level. After a great deal of consideration, I decided to put an end to it and remove the offending posts.

I think it is important to provide a posting culture where individuals -- both novice and initiated -- can participate without the fear of being torn to pieces by someone who disagrees with them, or doesn't like their forecast, or whatever. If you are a lurker who wants the internet version of the Jerry Springer Show, you are not going to get it here. Too often, I have seen that happen elsewhere, and when I initiated USAGOLD Forum, I vowed it would not happen here. That's why I did what I did. We have become one of the most highly respected destinations on the internet because we have kept the discussion at a level where intelligent, information seeking individuals can visit and find something of enduring value -- that alone has been a notable achievement.

Let the discussion continue.......

http://www.pathfinder.com/fortune/1999/11/22/buf.htmlThanks for the info, FOA...very interesting, indeed!

I've been lurking for a few months, decided to join the fray (oh, personally - I don't miss The Stranger all that much).

So many things happening now that will influence gold's future. The current U.S. market bubble's demise will also come into play...of course, no one knows when, but it will happen. Don't know where I picked this up, maybe here:

http://www.pathfinder.com/fortune/1999/11/22/buf.html

When Mr. Buffet talks, I listen.

In the final analysis, physical gold looks like a necessity for the individual concerned with preserving wealth. The Asians could teach us Westerners a thing or two on that subject.

Lamprey

Hi FOA,

Very good to se you posting.

Questions:
Do you have any ideas as to what is going on in the LBMA? I understand that the LBMA "trades" approximately 2.5 trillion dollars of gold each year. Please describe, if you will, what a "trade" is in this case. I can see no reasonanble answer on my own other than that dollars are exchanged for paper claims on gold, and paper claims on gold are exchanged for dollars?

So, if that is the case, who is doing all this trading? And why? I may be missing a lot of important information, much of it may even be obvious, but I see no other explanation than that the LBMA is a dollar/gold laundering machine.

I have read that there is a world drug trade that is extremely large and traces back to the British East Indies Company, and this world-wide drug trade still flourishes, using much gold that must be laundered into dollars.

Please comment if you have good info.

Also, what is "market to market"? I am guessing you mean "marked to market". That means to price something at the price the market will pay, correct?

Thanks,

Lafisrap

http://www.alltexas.net/news/cars/Hey there miner man--remember about a month ago I posted a site with a raft of what would appear to be a raft of UN vehicles claimed to be stored in Texas. Also in that post I indicated (regretfully) that I had seen another one with several aerial pictures of an enormous amount of similar vehicles but had deleted it--guess what--found it!!
Make of what you may.

No49

Should read: Make of "it" what you may.

Sorry
No49

LaRouche

LaRouche is quite the enigma. An unavowed statist, one who eschews government controls on just about everything. But then he attacks like a pit-bull on the corruptness of politicians that is an inevitable result of statism itself. Quite a circular argument. I wish he would learn some Austrian economics.

I recall his quest for president and his half-hour TV shows in 1986. He made claims about governments and drugs that myself and my friends us thought quite eccentric. I discovered ten years later that he was right about the cocaine. (Terry Reed, Compromised, ISBN 1883955025) Go to amazon.com and plug in that ISBN into the book search. You don't have to buy the book, just read the comments of the other buyers.


Farfel
Take a chill pill, dude

Clinton has no great interest the gold market. He's a politician. His interest in gold is limited to its use as a tool in his power game. Complex market dynamics are not controllable by mere presidents or elected politicians.


Stranger

--quote--
"The point is, gold is inherently a short term investment for which timing is ABSOLUTELY ALL THAT MATTERS. Furthermore, I submit that people who hold gold year in and year out in quantities which are disproportionate to their other investments are squandering any opportunity of ever achieving wealth in their lifetime."
--unquote--

Lots have been said about the Stranger and I respect MK's position on the matter. I am in total disagreement with the Stranger and the above quoted statement. And also his Y2K position. Timing is important, but not ALL that matters except maybe for the over-leveraged players that FOA just remarked about. Stranger's statement applies for day-traders and bubble-mania mavens.

lamprey_65 (12/04/99; 18:35:54MDT - Msg ID:20274)

Lamprey,
That W. Buffet is something else, isn't he! No one has ever played modern paper market investing as well. I think (I THINK!) he even converted he silver holdings into lending contracts. Perhaps that was his intent from the beginning. Because his holding strategy is so public, buying hard silver cheap and then lending it for "who knows what" return looked good for his profile. With the market in a squeeze after his "news break" he could have got 20% to lend it??? Again, that's just like his kind of deal.

All in all,,,,,one day, Berkshire will buy some gold to hedge their massive portfolio against international investment barriers (if they haven't brought it already). Not even they can ignore this as a risk from a market meltdown. You can bet that when that time comes, this gold will not be lent.

Every day that goes by, the Dow Stock market looks more and more like the old Japan bubble. Only they didn't have a world reserve currency to worry about. When the US bubble blows, every asset holder outside the Euro zone will be running for cover. It's not going to be nice.

On the subject of physical metal; not all Asians run from gold stocks. Some of the major investment families over there own claims as private companies. Only they market the gold to themselves as they see the bullion itself as the value, not the possible earnings of the company. Big
difference from our concept, no?

Thanks for talking FOA

http://www.gold-eagle.com/gold_digest_99/vronsky120699.htmlAdd another angle? We can only hope!

Lamprey

Ufta....!what a stir if I might add.....all I can sayis that man that owns the football gets to make the rules....

The only reason I lurk/post here is to share what I have learned with others....in turn , as I travel the learning curve of life and reap what other sow (after sifting the wheat from the chaff) I hope to gain a edge on what is driving the precious metal price.....as to the posts refering to this site being the place where the intellectuals(knights?) hang out and the Kitco Bar and Grill is just for "party animals" , I thought that was tacky comment....I haved learned a lot from both sites ...!
I guess the thing that rubs my feathers the wrong way is the "phantom posters"......one can change their handle and ask "setup" questions to their first handle......this is very childist and deceptful.....what these posters a failing to realize is they can change their handles all they want.....but eventually your "writing style" is recognized as to who the REAL poster is......if the "hogs and kisses" poster thought that was just a little joke then where is your honor......if this type of "wasting bandwidth" is continued here all credibility of this forum will be lost forever....!

As to the knight bit.....please leave me out..! they were the "hired guns" of their day.....not much honor in that...eh? got vanity...?

So let us continue our discussion...and continue to share and care for each other.....

Your friend...Chicken man...

Lafisrap (12/04/99; 18:51:51MDT - Msg ID:20275)
Questions:
Do you have any ideas as to what is going on in the LBMA? ----------------------
So, if that is the case, who is doing all this trading? And why? I may be missing a lot of important information, much of it may even be obvious, but I see no other explanation than that the LBMA is a dollar/gold laundering machine. ------------------------------

Hello Lafisrap,
"a dollar/gold laundering machine",,,,,Ha Ha! Good lord, I think you have it! No, seriously they do move a lot of gold. Only most people have the wrong concept of what moving gold is all about. On the retail side they mostly set up a lot of the "big" trades of gold from the mines to the
fabrication industry. They also move any physical needed to cover the industry deficit. And a lot of investment physical is shipped all over the world. Still, all of this is but a drop in the oil barrel compared to what they trade.

Practically all the fully paid for investment physical is traded without movement. Just the ownership is transferred. For what it's worth, even this small amount dwarfs the new bullion coin sales world-wide. To me this demonstrates why fresh (new) coin market sales cannot move the physical price. It does make an excellent indicator of private physical purchase intentions. Usually if coin sales are up, most likely large physical bullion is in demand also. But, coin fabrication is small compared to bullion.

Earlier this year, old bullion supply dried up and it looked like the last of the private "old stocks of gold" had finally run out. Then the price shock from the Washington Agreement flushed out some more. I've written on this before (and ORO told it better than I), but the more the old holders sell out in return for holding "unallocated gold accounts" the worse the shortage will be when the
marketplace fails. Slowly, over many years, the people that now hold the real bullion that was sold to create a lot of paper gold, have literally locked up the ownership. The old liquid gold market we used to know in years past functioned because of all the private physical holders that traded it.
Now, it's all paper being shuffled around.

This gets back to your LBMA item. The old, deep private bullion pool has been replaced with a paper commitment pool. In the past, if someone defaulted, we just grabbed their bullion. Today, if they default, they just default! Again, if that big African mine does tell them to take a hike, the
whole modern gold market could just collapse. This is why I smile when I hear someone question why the big funds and traders don't just take delivery against OTC paper. The question is just exactly what are they going to take delivery of?
All the gold movement is just for show. Same for comex. Sock a little gold in there and complete a few deliveries so it all looks right. It's all the same game we played with the dollar before 1971. Only when everyone asked for delivery did we find out that the world was awash in paper gold,,,,,I mean dollars! It's going to happen again, real soon.

-------------I have read that there is a world drug trade that is extremely large and traces back to the British East Indies Company, and this world-wide drug trade still flourishes, using much gold that must be laundered into dollars. ------

------Also, what is "market to market"? I am guessing you mean "marked to market". That means to price something at the price the market will pay, correct? ------------

Lafisrap,
As for drug money in gold? Shoot, I bet more illegal trade of everything is done in US dollars than gold. From what the Government tells us about the new copy machines now-a-days, they don't need to break into banks any more! They just print the stuff?? What a mess!
Sorry, Market to Market is a slang. You are correct.

Thanks
FOA

As buying all that silver pushed the price up over $7.00 and then it worked it's way back down to $5.00, could not the leasing it back have caused the reversal? Furthermore, this results in making silver available for another acquisition run.

Seems like a fairly simple strategy, Buy until there is a shortage, lease profitably and drive the price back down, accumulate more, then make another large purchase setting off a silver rally and then tighten the leasing screws, maybe the metal is all due to be returned by then.

Any flaw in this script?

Something tells me I'm fortunate to be......North of 60.....Could there be a "raft" :-)) of UN Decals hiding in one of those sheds? Also the pics look like the storage compound is out in farm country w/ twin dirt airstrips...
Thanks for the site.......Lets hope for a peaceful and happy New Year, free from chaos and strife........YGM.

Peter Asher (12/04/99; 21:44:15MDT - Msg ID:20283)
FOA, Buffet
Any flaw in this script?

Hello Peter,
That could be right. There are several angles floating around. Your thought would make the best play for silver longs. Don't forget, I own a little silver,,,none of you would talk to me if I didn't (smile).
Anyway, tightening screws is not the Buffet profile. My take is that he brought long before $7.00. The price run started because committed traders knew his announcement was a threat to their hedged plays. You know, deltas all out of whack. The price worked it's way back down after he leased high (10%, 15%, 20%???) as commercials pulled their emergency long trades.
In reality, the silver he locked down was already in use, so to speak. It was held as a function of inventory. So, all he did was lock a claim on the inventory metal, then contract it's ownership back for a fixed time. All the while receiving ransom money. It fit's perfectly because that's the same play he uses to grab preferred stock of companies. If the collateral goes up in value, that's good. But, his
aim is a higher return than "market" and be first in line in ownership.
He would do the same thing using Iron if the rates were right.

Thanks Peter, I have to go. FOA

FOA,

Welcome back to the Forum.

I have some questions (though in no particular structure), which perhaps may elicit some interesting responses.

1. In Don Coxe's weekly conference call, reference was made to some agreement or proposal whereby "two zeros" will be dropped off the Japanese currency. This forms part of the "parity" notion - that one US dollar will equal one Euro will equal one yen.

Given the large amount of "non-convertible" dollars held by those states previously and/or currently under US protection, said amount of dollars representing the "liquidated debt" owed to the US for such protection. Could "parity", in your opinion, constitute a window period whereby holders of "liquidated debt for protection" US dollars will be able to convert those assets into yen or Euros? In a sense, as part of ushering the "new economic order", Euroland and Japan will assume some of the US' outstanding debt incurred as part of defeating communism. Could this partly explain why the pound and the lesser Commonwealth currencies have been left on their own for now, perhaps as a reward for the role in defeating communism in the early part of the Cold War, as well as the greater (dis)proportionate debt incurred in defeating Hitler? Once the window period is over, the greater currency competition then begins. How would this "parity", "window period" scenario benefit gold? (Please note that I have used the "rational actor" model of international relations in this question, which in reality I don't accept.)

2. Traditionally, the US has opposed revaluing gold reserves, perhaps to preserve the dollar's pre-eminence as the world's leading currency (arguably, there are other extant, lesser reserve currencies). In the seventies, a two-tier official/market price of gold existed (in fact it still exists), in that gold was valued at $35 per ounce officially, while in 71 the market price was $70, while in 73 it was $105. My understanding is that gold loses its monetary function when the market price exceeds the official price, in that no central bank will let its gold go at the official settlement price when the market price is higher. Thus, I suspect you are positing that the ECB will value its gold reserves at higher than the market price. If private citizens have no access to the official market of CB settlement, how would private citizens benefit from the higher official price, and therefore why should private citizens hold gold?

3. The crisis in August 1971 could perhaps be viewed as an attempt to knock the US off its pedestal, just as that which Another posits is a planned attempt to knock the US off its pedestal today. It didn't work in 1971, and in fact the US and its dollar emerged even stronger than before, the dollar remaining the reserve currency and the US freed from the few shackles imposed on it by Bretton Woods, free even of the need to pay lip service to the gold exchange standard. Not only did the US get away with breaking the gold exchange contract, it emerged even stronger than before precisely because it broke the contract. The US continued to permit its corporations to continue foreign direct investment, even when running a trade deficit, contrary to the then IMF statutes. The US then presided over further changes to the IMF statutes, further weakening gold.

The same parameters which led to a US victory over Europe and Japan after August 1971 still exist. The rest of the world still does not want to face a US export capacity supported by a weak dollar (though branches of US manufacturing may have declined since 1971). Further, the US is still quite an autarky, so that it can get by on its own, to a great extent. The question: Why would the US be routed economically in the new currency order you state Another and his associates wish to implement, when the result in 1971 was US victory?

4. The basis of your theory concerning gold's future value turns on the rest of the world, especially the oil-producing Middle-East, continuing to value gold. Yet, we have seen Kuwait and Jordan both release significant amounts of gold into the market? Both are Arab and Islamic countries, said willingness to release gold apparently being inconsistent with the cultural premise of your hypothesis. Do you have any further comment on Jordan's and Kuwait's "parting" with their gold?

Again, welcome back to the Forum. I look forward to any reply you may have.

Regards,
canamami.

In my first question, I noted that there were a large number of "non-convertible" dollars. In fact, it is arguable that since the end of the gold exchange standard, all US dollars are convertible. I simply assumed for the purpose of the question that there are "non-convertible" dollars. I don't know enough about the field to form an independent opinion concerning the existence of non-convertible or excess US dollars.

You answered my questions and much more! In your logic I find a stark beauty.
I don't relish the idea of the dollar being dragged from it's "reserve currency perch". At the same time, it does seem inevetable. Each morning I arise hoping to find that gold has NOT catapulted in price over night. I was born a man of humble means and I enjoy owning gold. (Enjoyment is different than pleasure is it not?) My hands don't feel the sweaty palms of greed. I simply see nowhere other than gold to store the fruits of my labor. When the POG finally does begin to rise, these halcyon days will indeed end. A common man will no longer be able to aquire gold in the amounts that I have grown accustomed to over the last few years. I only know that when I look at the French Angel I carry with me, I see a day of hard work, earned with integrity, by honest effort and skill, stored up for a future time when my
back will not be so strong or fortunes so kind. You have stated that "we are on the road." Time IS running out, I understand. But even though I'm a "gold bug" I do not wish to see the price rise, just yet.

Hi Oro!

Pls take a look at this article:

http://www.stratfor.com/MEAF/specialreports/special24.htm

It is interesting to watch history to unfold......the ME nations want to follow a "united we stand" strategy, while Caesar wants to "divide and conquer."

If Caesar fails in his peaceful strategy to divide them, will he leave when asked to do so?

A US that no longer controls the ME oil may quickly lose global influence.......

Cheers,

THC

In previous episodes, remember, it was discovered that there wasgreat confusion amongst the people caused by ambiguousterminology. Further, clearing that fog, it could be suggestedthat Keynsians, conditioned to see increasing of money suppliesas invariably stimulative, were effectively blind to businesscontractions resulting from the depreciation of monetary tokenssometimes caused by these very "stimulations." That is,Keynsians didn't normally consider that "stimulative" monetarytoken supply increases cause monetary unit depreciation and"Monetary unit depreciation (so-called "inflation") can causedeflation (economic contraction.)". _ . _ . _ . _ . _ . _ . _ . _ . _ . _ ._ . _ . _ . _ . _ . _ .In today's final chapter (a very short one, I might add) I'llattempt to put all this together in a nice satisfying synopsis. (Please remember, though, I'm a journeyman, not a master.) . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ ._ . _ . _ . _ . _ . _ .The SECOND way for "deflation" (unemployment and businessesshrinkage) to occur is a "tight" money supply. Tight money isnormally attributed to failure to create and/or distribute enoughcurrency tokens. Before it was abbrogated in 1993, such a "tightmoney" situation could be said to be produced by adherence to thegold standard. Especially since 1933, so-called "tight money"can produce the same effects that hyper-depreciation of moneytokens (A.K.A. hyper-inflation) causes. Particularly, highinterest rates (money shortages cause money rental fees to behigh) discourage businesses from borrowing to expand. Further,not "enough" money in the hands of "consumers" prevents them frombuying, so businesses shrink, laying off employees so there arefewer people with enough money to buy, which leads to businessescontracting even more, etc. The problem since 1933 is thatbecause of the increasing degree of malinvestment that builds upas a result of stimulation, the potential effects of suchcontractions become much more severe.. _ . _ . _ . _ . _ . _ . _ . _ . _ . _ ._ . _ . _ . _ . _ . _ .SYNOPSIS: Two different monetary conditions can lead to"deflation" (economic contraction). FIRST: A "shortage" of moneytheoretically caused by the gold standard, etc. SECOND: Too muchmoney caused by over-production of money, etc.. Because thereal-economy effects mimic each other so closely, the two causesmay sometimes be confused. Historically, the "deflations"(business contractions) studied by the economists (Keynes, etc.)who's insights formed the basis of what was until recently taughtin most economics courses, studied the pre-1933 businesscontractions. Not suprisingly, they concluded that these werecaused by a SHORTAGE of money rather than an excess. In fact,with the gold standard in place, there was no possibility of "toomuch money" causing economic contraction, and in their defense,it wasn't reasonable to expect the Keynsians to understand"inflationary depressions" which were to them at that time, atbest theoretical.. _ . _ . _ . _ . _ . _ . _ . _ . _ . _ ._ . _ . _ . _ . _ . _ .ADDENDUM: The pre-1933 economic events studied by the Keynsians,etc. were, despite perceptions to the contrary, relatively verymild. For example in the panic of 1873, 2.8% of banks failed; in1884, .9% of banks failed; in 1890 panic, .4% failed; in 1893,1.9%; in 1896, 1.6%; in 1907, .3%; and in 1914, just after theFederal Reserve Act was passed. .4% of banks failed. Contrastthat with the approximately 50% of US banks that were unsound 19years later in 1933 under the kindly ministrations of the FederalReserve. {Gspan on "automatic" gold standard}. _ . _ . _ . _ . _ . _ . _ . _ . _ . _ ._ . _ . _ . _ . _ . _ .FINAL QUESTION: Which is, in the current (1999) context, the mostlikely type of economic contraction? Will our monetary tokensdepreciate, or will they appreciate?. _ . _ . _ . _ . _ . _ . _ . _ . _ . _ ._ . _ . _ . _ . _ . _ .Regards, Journeyman

it occurs to me;
Isn't it just possible that the Washington agreement was done for the purpose of raising the price of gold so the IMF deal would be worth more?

My opinion is that there is far more oil money being spent on weapons than there is on gold. After all, what good is having a bunch of gold if you cannot defend yourself from someone taking it away from you

"My opinion is that there is far more oil money being spent on weapons than there is on gold. After all, what good is having a bunch of gold if you cannot defend yourself from someone taking it away from you"

Along your line of thinking, wouldn't there be nobody willing to sell them weapons because, after all, everybody else would be a potential aggressor?

When you are too small to defend yourself against a whole playground of bullies, why waste significant effort entertaining a farce of self defense? It would be much more prudent to master the diplomatic arts and let each bully recognize that it is in his best interest to protect you from the other bullies. As the only fuel station in town, it wouldn't be too difficult to find something of common interest to all the bullies with which to build a diplomatic base and be too important to let fall into "enemy" hands. Just like Switzerland playing banker to the world, the Middle East plays the important role of fuel tank for the world.

www.kitco.comRhody believes that the NY Fed is stealing foreign account gold under they holdings:

Date: Sat Dec 04 1999 07:45
rhody (@ Dabchick: As an addendum to my earlier comments, and) ID#410367:
Copyright � 1999 rhody/Kitco Inc. All rights reserved
assuming any of it makes sense, from where is the liquidity coming
to tank the gold market? Some of it is coming from client states
like Jordan and Kuwait but given the supply/demand deficit, these
sources have to be stop gap. Canada has only about 50 tonnes left,
so whence comes the liquidity, and by whom is the speculative attack
led? My guess ( and it's only a guess ) is the New York Federal Reserve
Bank. This is where much foreign national reserve gold resides for
"safe" keeping. Since the early part of this decade, foreign CBs
have been withdrawing this gold and moving it offshore. The drawdown
amounts to about one third of the total. Assuming US Treasury gold
has not been touched ( It would require an act of Congress to sell or
lease this gold legally ) then the NY Fed and Middle Eastern ( oil ) gold
seem to be the only remaining gold stockpiles remaining. I can't
imagine the middle eastern oil interests helping out the Federal
Reserve to keep the USD afloat, so I suspect the Fed has been dipping
into foreign CB reserves held in the NY Fed to sell down POG. I
further think that foreign central banks are aware of this and that
is why there have been net withdrawls and a movement of gold offshore.
A parallel to this is the movement of Warren Buffett's silver purchase
off shore. It looks to me, that no significant bullion holders much
trust the Federal Reserve Board, or the U.S. Government. Gold is
political, and when the US dollar loses world reserve status, this
is going to turn ugly in the truest sense of the world. FWIW, IMHO.

www.kitco.comRhody now talks about the significance of one month lease rates and its indication as to bank stability.

Date: Sat Dec 04 1999 06:25
rhody (@ Dabchick, your 6:47 on Dec 2. The 2.11% increase in) ID#410367:
Copyright � 1999 rhody/Kitco Inc. All rights reserved
one month lease rates on Nov 29 lead to the present precipitous
fall in pog. About one third of the increase came from the
forward rate ( lending rate drop by CBs ) and two thirds came
from the rise in LIBOR. I cannot comment on why interbank
lending rates would rise, although usually this reflects a
credit risk driven tightening for interbank transfers. My
interpretation here is that the world financial system just
got a little more unstable. The forward rates ( lending rates
to bullion banks ) dropped. This must mean that the CBs
intentionally added liquidity to the gold market. The bullion
banks chose not to pass on any of the spread to borrowers, so one
month rates rose. The above is what the numbers that you posted
mean to me.

The world gold market is opague, so I admit I am guessing here.
For example, I have no idea what forces really drive inter bank
lending rates ( LIBOR ) as I do not have access to the back rooms
of international banks.
My comments following the Nov 29 lease rate spike we more about
the inevitable result of such one month lease rate spikes rather
than their cause. A spike in one month lease rates ALWAYS tanks
gold on that day or the next. Could it be that a speculative
attack on gold occurs because LIBOR rises, despite the increased
cost of borrowed gold, as the powers that be sense instability
in financial markets and react to sell gold down lest a rotation
occurs into pms as a safe haven?
Bullion banks, on the other hand, were severely injured following
the ECB Washington Agreement driven gold spike. Could it be
that the drop in lending rates was an attempt by the CBs to
restore profit margins to bullion banks, who subsequently
passed none of the margins on to speculative borrowers, who
never the less were forced to borrow at the higher rates because
of lease roll overs? I heard yesterday that one bullion bank
in Europe has been cutting back trade and laying off staff.

I admit that all of this is perverse, and that I understand rather
little of it. Rising LIBORs should act to raise the price of
gold as lease driven selling should be made more expensive and
gold liquidity made less. If there is increased interbank
credit risk, then forward rates should rise, not fall, and
that should drop lease rates not raise them. I do not
know which end of this LIBOR/forward rate relationship is being
manipulated, but my guess would be the forward rate. Yet
forward rates accounted for only 1/3 of the lease rate spike.
Perhaps we are approaching this question of gold prices and
lease rate factors from the wrong side. If what I have said
above is accurate, then rising lease rates should be positive
for pog. Yet if one month rates rise, and the other terms
do not, the pattern is the price of gold declines. So it may
be that there are entities that react to lease rate fundamentals
in such a way that they never are allowed to reflect in the
price of gold. When fundamentals do not cause a change in
reality, look to politics for the answer. Gold is political.

A rise in LIBOR should have caused a rise in lease rates, and
that should have turned off speculative shorting. It didn't,
shorting increased. That's illogical. Therefore, the shorting
was political, and not lease driven, except indirectly.

Please accept my apologies for this late answer to your post, as
I missed it, and only an email from my brother drew may attemtion
back to Thursday morning posts.

Hey dragonfly - how ya doin?

You wrote in part;

"But to get back to MC's remarks - What does he mean by "Considerable
thought has been given worldwide to the ambitious project of designing
a new financial architecture."??? How about the need to "...humanize
globalization."??? Is that a backhanded admission of guilt?"

His parting shot before he leaves? Socialism doesn't change, just the
players out there advocating it. Here are a couple of paragraphs from
the Winter issue of Mises Memo (www.mises.org);

"Today the intellectual classes say a humane alternative is the
soft-socialism of British collectivism, New Deal economic planning,
the regulatory and welfare state. But here again, the intellectual
roots are the same. All these systems assume that the state should be
society's organizing force, that private property must serve a social
benefit or be confiscated, that lower orders of society must conform
to centralized plans or risk being destroyed.

"Every sort of evil has followed from this assumption. For example,
the idea of central banking is premised on the notion that a small
group of powerful government officials can set interest rates, control
business cycles (versus create them), and manage the entire banking
system. The result has been incessant waves of financial crisis and
currency depreciation. The regulatory state is supposed to protect us
from every sort of danger but only ends up erecting barriers to
economic progress. Vast resources have been expended in creating a
social-security state that saps social energy and produces nothing
like the security that comes with private property and private
savings."

You wrote further;

"Or is Newspeak for the next phase of imposing one's will upon
another. Was it Isaac Hayes who sang "Smiling Faces", the ones that
"..show no traces of the evil that lurks within."?? That is the IMF in
my book - whether from the left or the right perspective - as George
Wallace said - "Ain't a dimes worth of difference"."

I've got a copy of "Smiling Phases" on an old Blood, Sweat & Tears
recording which featured the lines;

Smiling faces, going places
And if they bust you,
You just keep on smiling through and through.
And you'll be amazed at the gaze on their faces as they sentence you.

I don't know if this is what you were referring to but it is
analogous.

You wrote further;

"My take on the IMF saying that it sees poverty as "the ultimate
systemic threat" is somewhat dark. To read between the lines - the
call for "solidarity" is required because it is already a foregone
conclusion that "...the targets are no longer attainable." Therefore
"humanizing globalization ... will enable us to better protect
ourselves as a group against collective risks on a global scale." Boy,
ain't that a mouthful! Who is "us", who is in the "group"? How about
this one - "Each country has now achieved sovereignty...". Who is his
audience? What world do they live in?"

Yes - first they plunge the world into poverty with their policies,
then rather than admit their policies failed, attempt to re-institute
the same failed policies again under a new moniker. Well, their time
seems to be up. Statism is dying. RIP.

Thanks for your insights dragonfly. Appreciated at this end.

ET

My wife has reminded me of the tune to which you referred. We have a
copy around here somewhere but probably on an LP. I was told the
other day I can buy one of these writeable CD players and copy by old
LP's onto CD's and eliminate the noise. Might have to think about
doing that.

"...they just pretend to be your friend.
Smiling faces, smiling faces tell lies."

ET

What does this have to do with protecting gold? It has to do with affording to protect gold. The legal profession would appear to have a lock on protecting gold, or do they?

PRO SE is the act of defending one self.

HALT -- Quicken Family Lawyer Amicus Curiae Brief


No. 99-10388
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

UNAUTHORIZED PRACTICE OF LAW COMMITTEE,
Plaintiff-Appellee,

v.

PARSONS TECHNOLOGY, INC., d/b/a
QUICKEN FAMILY LAWYER,
Defendant-Appellant.

On Appeal from the United States District Court
for the Northern District of Texas

BRIEF OF AMICUS CURIAE
HALT, INC. -- An Organization of Americans for Legal Reform

TABLE OF CONTENTS

Introduction.
I. The Public Interest in Helping People Understand and Use the
Legal System Outweighs the Unsubstantiated Claims That
Self-Help Law Books and Software Are Dangerous

II. The Court Below Misconstrued the Texas Unauthorized
Practice Statute to Ban Self-Help Law Books and Software

III. Enjoining the Sale and Distribution of Quicken Family Lawyer
Violates the First Amendment Rights of Texans to Buy, Read
and Use Self-Help Law Books and Software

Conclusion


TABLE OF AUTHORITIES

Faretta v. California, 422 U.S. 806 (1975)
Florida Bar v. Brumbaugh, 355 So. 2d 1186 (Fl.1978)
In re Thompson, 574 S.W.2d 365 (Mo. 1978)
In the Matter of Marilyn Arons, et al., Supreme Court of Delaware No. UPL-4 (1996)
Kansas v. Schneider, 573 P.2d 1078 (Kan. 1978)
Kleindienst v. Mandel, 408 U.S. 753 (1976)
Moore v. City of Kilgore, 877 F.2d 364 (1989)
New York County Lawyers Ass'n v. Dacey, 282 N.Y.S.2d 985, reversed, 234 N.E.2d 459 (N.Y. 1967)
New York v. Winder, 42 A.D.2d 1039 (N.Y. 1973)
Oregon State Bar v. Gilchrist, 538 P.2d 913 (Ore. 1975)
People v. Landlords Prof'l. Serv., 215 Cal. Rptr. 548 (1989)
Perry Education Ass'n v. Perry Local Education Ass'n, 460 U.S. 33 (1983)
Police Dept of Chicago v. Mosley, 408 U.S. 92 (1972)
Red Lion Broadcasting Co. v. FCC, 395 U.S. 367 (1969)
Simon & Schuster, Inc. v. New York State Crime Victims Board, 502 U.S. 105 (1991)
Smith v. Oregon Bar, 942 P.2d 793 (9th Cir. 1997)
State Bar v. Cramer, 249 N.W.2d 1 (Mich. 1976)
State ex. rel. Indiana State Bar Ass'n. v. Indiana Real Estate Ass'n., 191 N.E.2d 711 (Ind. 1963)
Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976)
Statutes
Texas Gov't Code Ann. � 81.101(a)
Texas Gov't Code Ann. � 81.101(a)
Texas Gov't Code Ann. � 81.101(c)

Other

Commission on Multidisciplinary Practice, Report to the House of Delegates,
American Bar Association, Chicago, Illinois (1999)

Commission on Nonlawyer Practice, Nonlawyer Activity in Law Related
Situations: A Report with Recommendations, American Bar Association, Chicago, Illinois (1995)

Consortium on Legal Services and the Public, Agenda for Access:
The American People and Civil Justice -- Final Report on the
Implications of the Comprehensive Legal Needs Study,
American Bar Association, Chicago, Illinois (1996)

D. Rhode, Policing the Professional Monopoly: A Constitutional and
Empirical Analysis of Unauthorized Practice Prohibitions,
34 Stan. L. Rev. 1 (1981)

J. Turner, T. Rudy & E. Tannouse, Do-it-Yourself Law: HALT's Guide
to Self-Help Books, Kits & Software (HALT, 1999)



Introduction
The key issue presented in this case is whether new technologies will be harnessed to provide accurate information about the legal system to the millions of Americans who are presently denied access to courts. There is an overriding public interest in helping people understand and use the legal system, which can be achieved by preserving the availability of self-help law books and software such as Quicken Family Lawyer. The judicial branch has a responsibility to adapt to technological changes and innovations. In a sweeping opinion that mischaracterizes self-help legal software as constituting a "cyberlawyer," the District Court for the Northern District of Texas has failed to fulfill this responsibility.

Amicus curiae HALT -- An Organization of Americans for Legal Reform further submits that the court below misconstrued the Texas unauthorized practice statute when it enjoined the sale and distribution of Quicken Family Lawyer, a misreading which the state legislature addressed through emergency legislation signed into law earlier this month. The judicial branch has the authority to regulate the conduct of lawyers and those who hold themselves out to be lawyers, not publishers, software programmers or private citizens who wish to purchase their products. Self-help law books and software make it clear that they are not acting as



attorneys, and consumers who buy and use these products know that they are getting an aid for their use, not a lawyer. The District Court's misguided judicial activism misconstrued the Texas unauthorized practice statute to enjoin the sale and distribution of self-help law books and software.

Finally, as a national, non-profit public interest organization HALT has long provided self-help legal materials to its members, and advocated reforms that empower consumers to handle their own simple and routine legal needs. The First Amendment protects not only Americans' right to publish and speak, but also our right to read and listen. The rights of over 2,800 HALT members in Texas to buy, read and use self-help law books and software, such as Quicken Family Lawyer, are being violated by the decision below.


I. The Public Interest in Helping People Understand and Use
the Legal System Outweighs the Unsubstantiated Claims That
Self-Help Law Books and Software Are Dangerous.
According to the American Bar Association, each year thirty-eight million low and moderate income households nationwide need legal help, but are denied access to the American civil justice system.(1) Today, cost and complexity remain the largest barriers that prevent access to the civil justice system. Tens of millions of low and moderate income Americans cannot afford to hire a lawyer when they have a legal problem, and millions of others are intimidated by even the prospect of trying to deal with the system on their own.

One way to reduce costs is to increase consumer choice and encourage the development of innovative methods of delivering legal services.(2) Empowering citizens with self-help books and software that allow them to handle routine matters pro se is a critical innovation that can help expand access.(3) Recently, more sophisticated software packages, which include legal forms on compact disks and a state-of-the-art user interface, have greatly improved the resources available to help consumers deal with their legal needs pro se.(4)

Unfortunately, unauthorized practice statutes have been used by Texas and other states to attack these and other innovations that expand citizen access to the civil justice system.(5) These abuses of unauthorized practice rules to constrain consumer choice of alternatives to hiring a lawyer represent vestiges of an era when the organized bar acted, sometimes unlawfully, to protect lawyers' economic interests rather than to further the public interest in having an affordable and accessible legal system.

Ironically, this kind of abuse of unauthorized practice statutes has been rejected by responsible lawyers and jurists since the late 1960s. In 1967, the New York Bar charged that the publication and sale of Norman Dacey's book, How to Avoid Probate, constituted unauthorized practice. The New York Court of Appeals disagreed, ruling that writing and publishing self-help legal materials and forms is not the practice of law. New York County Lawyers Ass'n v. Dacey, 282 N.Y.S.2d 985, reversed, 234 N.E.2d 459 (N.Y. 1967).

The impact of this kind of abuse of unauthorized practice rules upon those who lack access to the legal system is starkly illustrated in an unauthorized practice proceeding now pending in Delaware. In 1996, the Delaware Disciplinary Counsel filed a lawsuit against Marilyn Arons for providing services, free-of-charge, to parents of disabled children in "due process" educational placement hearings in that state. Incredibly, the complaint against Arons did not come from the parents or children she serves, but from lawyers from the school districts that have lost numerous cases to her. In the Matter of Marilyn Arons, et al., Supreme Court of Delaware No. UPL-4 (1996).

Another example of a recent misuse of unauthorized practice rules to reduce access to the civil justice system involved independent paralegal Robin Smith, who helped some ten thousand people prepare their own uncontested divorce papers for nine years without one consumer complaint, but whose service was shut down by the Oregon State Bar. Smith v. Oregon Bar, 942 P.2d 793 (9th Cir. 1997), cert. denied, 118 S. Ct. 1055 (1998).

The hallmark of this recent wave of abusive unauthorized practice cases is that they are victimless -- there is no consumer who has sought the intervention of Bar authorities. Rather these cases have been spawned by attorneys in adversarial positions, unsupervised Bar Committees or individual lawyers who think they are losing business to less expensive alternatives. In fact, Stanford University legal historian and past president of the American Association of Law Schools, Deborah Rhode, found that only two percent of complaints against non-lawyer practice involved any claim of injury. Policing the Professional Monopoly: A Constitutional and Empirical Analysis of Unauthorized Practice Prohibitions, 34 Stan. L. Rev. 1 (1981).

Finally, in this case, Appellee concedes that no user of Quicken Family Lawyer has sought its intervention or claimed that they were misled by the product, despite the fact that an estimated 100,000 copies have been sold in Texas since 1990 (Brief for Appellant, pp. 5, 7-8 n.4). It is patently absurd to claim, as does the Texas Unauthorized Practice Committee, that its abusive actions somehow further the public interest by protecting consumers. Invoking unauthorized practice statutes to attack perceived economic competition, or to silence an adversary who cannot afford a lawyer, demonstrates that this public service rationale is being grossly perverted.

Americans have an undisputed right to handle their own legal problems pro se. Faretta v. California, 422 U.S. 806, 832 (1975) (fundamental constitutional right of all persons to represent themselves in court proceedings); see also, Florida Bar v. Brumbaugh, 355 So.2d 1186, 1192 (Fl. 1978). To meaningfully exercise that right, citizens need access to books and software products that help them understand and deal with the civil justice system. Particularly in light of the current crisis, where literally millions of Americans have no viable alternative to handling their legal matters themselves, amicus curiae HALT submits that there is an overriding public interest in protecting the availability of self-help law books and software.

The decision of the Court below ignores this critical public interest and denies Texans access to innovative computer software, because it offers them too much help. This perverse result cannot be allowed to stand.


II. The Court Below Misconstrued the Texas Unauthorized Practice
Statute to Ban Self-Help Law Books and Software.
The judicial branch has the authority to regulate the conduct of lawyers and those who hold themselves out to be lawyers, not publishers, software programmers or private citizens who wish to purchase their products. The Texas unauthorized practice statute explicitly recognizes that its provisions must be construed consistent with this authority of the judicial branch (see Texas Gov't Code Ann. � 81.101(b)).

The District Court erred in concluding that self-help law books and software, which are nowhere enumerated in Section 81.101(a), could nonetheless be included in its definition of the "practice of law." Just as the judicial branch's authority is rooted in its power to regulate the conduct of lawyers and those who hold themselves out to be lawyers, the Texas unauthorized practice statute limits its reach to services or advice "requiring the use of legal skill or knowledge," i.e., those that lawyers are specially trained to provide. This qualifying language is critical -- it reflects a commitment to ensure that members of the public are actually getting services from a lawyer when they believe they are getting services from a lawyer.

Self-help law books and software provide information that the reader or user decides how to use; they do not purport to give the advice or services that require the use of legal skills of an attorney. HALT's most recent Citizens Legal Manual, Do-it-Yourself Law: HALT's Guide to Self-Help Books, Kits & Software, reviews the major products in this field. Virtually every product contains explicit guidance about its limitations and the difference between pro se self-help and hiring a lawyer.

For example, products from Nolo Press typically include the following plain language explanation (See, Do-it-Yourself Law, review of 101 Law Forms for Personal Use, p.19):

We've done our best to give you useful and accurate information in this book. But laws and procedures change frequently and are subject to differing interpretations. If you want legal advice backed by a guarantee, see a lawyer. If you use this book, it's your responsibility to make sure that the facts and general advice contained in it are applicable to your situation.
Similarly, products from Block Financial typically include the following explanation (See, Do-it-Yourself Law, review of Kiplinger's Home Legal Advisor 98, p. 23):

The user acknowledges that Block Financial Corporation, The Kiplinger Washington Editors, Inc. and Teneron Corporation do not practice law or provide legal advice, are not engaged in rendering legal, accounting or other professional services and are not rendering such professional services with regard to Kiplinger's Home Legal Advisor. The user acknowledges that laws vary from state to state and change over time. The final documents should be reviewed by a lawyer before use. Where a document is to be negotiated with another party, the user should consult an attorney prior to the start of negotiations. Use of Kiplinger's Home Legal Advisor constitutes agreement to the foregoing.
Finally, products from Appellant Parsons Technology typically include even more extensive explanations (See, Do-it-Yourself Law, review of Quicken Family Lawyer 99 Deluxe, p. 26):

This program provides forms and information about the law. We cannot and do not provide information about your exact situation. For example, we can provide a form for a lease, along with information on state laws and issues frequently addressed in leases. But we cannot decide that our program's lease is appropriate for you. Because we cannot decide which forms are best for your individual situation, you must use your own judgment and, to the extent you believe appropriate, the assistance of a lawyer.
Family Lawyer is designed to provide information and forms you may find helpful. It is provided to you with the understanding that Parsons Technology is not engaged in providing legal advice or other professional services. It is not intended to replace legal advice and if legal advice or other expert assistance is required, the services of a competent and qualified lawyer or other professional should be sought.

Self-help law books and software make it clear that they are not acting as attorneys, and consumers who buy and use these products know that they are getting an aid for their use, not a lawyer. Consumers are not being deceived.

Despite the explicit explanations that Quicken Family Lawyer "is not intended to replace legal advice and if legal advice or other expert assistance is required, the services of a competent and qualified lawyer or other professional should be sought," the Court below enjoined its sale and distribution in Texas. In doing so, Judge Sanders acted like a legislature and added a new prohibition to the Texas unauthorized practice statute, which goes far afield from regulating lawyers and those who hold themselves out to be lawyers.

The Texas State Legislature promptly acted to correct this misguided judicial activism by passing House Bill 1507.(6)

On June 19, 1999, Governor Bush signed this legislation, which amended the Texas unauthorized practice statute by adding the following subsection (c) to Texas Gov't Code Ann. � 81.101:

In this chapter, the "practice of law" does not include the design, creation, publication, distribution, display, or sale, including publication, distribution, display, or sale by means of an Internet web site, of written materials, books, forms, computer software, or similar products if the products clearly and conspicuously state that the products are not a substitute for the advice of an attorney. This subsection does not authorize the use of the products or similar media in violation of Chapter 83 and does not affect the applicability or enforce ability of that chapter.
While this corrective legislation should curtail future abuses of the Texas unauthorized practice statute, this Court should similarly correct the District Court's mistaken interpretation of that statute and remand with instructions to vacate the injunction against the sale and distribution of Quicken Family Lawyer.


III. Enjoining the Sale and Distribution of Quicken Family Lawyer
Violates the First Amendment Rights of Texans to Buy, Read and Use
Self-Help Law Books and Software.
The First Amendment protects not only Americans' right to publish and speak, but also our right to read and listen. Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748, 756-57 (1976); Kleindienst v. Mandel, 408 U.S. 753, 758 (1976); Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 386 (1969). As this Court recognized in Moore v. City of Kilgore, 877 F.2d 364, 370 (1989), "A listener's interest enjoys protection just as the speaker's interest finds refuge behind the shield of the First Amendment."

The District Court action enjoining the sale and distribution of Quicken Family Lawyer unconstitutionally abridges the First Amendment right of Americans to read and use materials that help them deal with the legal system.

The District Court's decision is predicated on the content of Quicken Family Lawyer; if this product addressed health questions, income tax preparation, accounting, home improvements, car repairs or any of the myriad of other topics covered by popular self-help books and software, the court would never have attempted to apply the Texas unauthorized practice statute. But in this one area -- legal self-help -- the District Court decided that the content of a publication should be suppressed and issued an injunction that restricts Texans' ability to purchase and use that product.

Such a content-based regulation of protected speech is subject to strict judicial scrutiny. Police Dept. of Chicago v. Mosley, 408 U.S. 92, 95, 99 (1972); Simon & Schuster, Inc. v. New York State Crime Victims Board, 502 U.S. 105, 116-17 (1991). The District Court's action cannot survive such scrutiny, because it is not narrowly tailored to advance a compelling governmental interest. See Perry Education Ass'n v. Perry Local Education Ass'n, 460 U.S. 33, 45 (1983). As detailed in Section II of this brief, the interest in protecting the public from being misled is already being met by the careful and thorough explanations included in self-help law books and software. Moreover, as detailed in Section I of this brief, there is another governmental interest at stake here -- facilitating access to the civil justice system for all Americans. Clearly informing consumers that they are not receiving the services of a lawyer when they use self-help law materials is a far less restrictive alternative to a wholesale ban on these products. The State of Texas and the District Court cannot require more without violating the First Amendment.

Self-help law materials inherently express a point of view -- that consumers should be empowered to handle their own simple and routine legal needs. Since its founding twenty-one years ago, amicus curiae HALT has worked to advance this straightforward proposition and overcome the resistance to reforms that facilitate access to the civil justice system.

During the past two decades, court after court has been persuaded that this point of view is correct and recognized that self-help law materials are not the same as personal services provided by a lawyer. See Oregon State Bar v. Gilchrist 538 P.2d 913, 916 (Ore. 1975); State Bar v. Cramer, 249 N.W.2d 1, 9 (Mich. 1976); Kansas v. Schneider, 573 P.2d 1078, 1079 (Kan. 1978); In re Thompson, 574 S.W.2d 365, 369 (Mo. 1978); State ex. rel. Indiana State Bar Ass'n. v. Indiana Real Estate Ass'n., 191 N.E.2d 711, 717 (Ind. 1963); New York v. Winder, 42 A.D.2d 1039, 1040 (N.Y. 1973); People v. Landlords Prof'l. Serv., 215 Cal. Rptr. 548, 552 (1989); Florida Bar v. Brumbaugh, 355 So.2d 1186, 1194 (Fla. 1978).

The District Court not only painted over this important distinction, it also failed to grasp the fact that Quicken Family Lawyer and other software products represent the fruit of the self-help law movement's advocating that consumers should be empowered to handle their own simple and routine legal needs. The decision below is thus the antithesis of a content-neutral regulation; it is a suppression of a specific point of view, the most pernicious form of governmental interference with First Amendment rights.

On behalf of consumers in Texas and nationwide, amicus curiae HALT urges this Court to vindicate Americans' First Amendment right to buy, read and use self-help law books and software.



Conclusion
For the foregoing reasons, Amicus Curiae HALT, Inc. -- An Organization of Americans for Legal Reform respectfully requests that this Court reverse the decision of the United States District Court for the Northern District of Texas, vacate that Court's Order enjoining the sale and distribution of Quicken Family Lawyer, and re

From Rhody's post, one could argue that Canada sold its gold because it knew it could not keep it anyway when things got ugly, so why not sell it now and at least get something in return.

Contrariwise, countries (e.g., Canada) may have sold gold because they have no faith in it keeping its status as a financial asset, so sell it while it still has some value. (Canada has been selling since the 1970's). Following Occam's law or some variant thereof, this second simpler explanation is most probable.

Briefly (the workload piles up even this early in the month!), the reason why some of us care for the Comex price is not merely speculation, but with reference to gold there are a number of reasonably coherent theories in play, and one looks to independent evidence from public sources like the Comex price to ascertain what's going on, to determine which theory is true and accurate.

The straightforward anti-gold thesis (gold is dying), is simpler and more direct than the somewhat conspiratorial theory advanced by FOA/Another/Oro, which hinges to a degree of diplomatic gambits and hidden actions. That being said, there are events which have occurred for which the FOA theory appears to provide some explanation. Other observers outside the gold world have also pointed to the political actions surrounding gold lately (e.g., Don Coxe), so it is "fairly arguable" (to use a technical legal phrase) but far from proven that the FOA theory is true. Ordinary principles of reasoning would probably tend to favour (IMHO) the "gold is dead" theory.

The third theory would be the older mainstream investment industry theory, which holds that the POG will increase at times of inflation (examples of internet exponents being The Stranger and Offshore at the MIQ site). This theory turns on and requires (IMHO) a critical mass of investors who will doubt national currencies, and regard gold as the alternative, durable money (this goes to my past posts about the symbiosis between true believer and speculator goldbugs). My critique of this theory is the past profits made in gold speculation were based on there being a critical mass of true believer goldbugs. Without this critical mass (and also in the face of huge official reserves subject to being sold off), there is no reason why the historical precedent of gold rising in times of inflation should continue to hold true. In a sense, one reason why so many gold bugs pay attention to the FOA theory is that it provides a basis (in Middle-East and Asian demand for gold, and Euro politics) to believe that gold has a future, to restore the old mainstream theory concerning gold rising in times of inflation.

Without some deus ex machina like ME or Asian demand to save the day, it would appear the better view is that "gold is dead". This goes to my previous posts that the POG (and gold) requires some demand side action to save it, not merely a crimp in supply.

1. Sir, many months ago(before the previous drop in POG below $280) ANOTHER said," the BIS would be buying Gold with both hands if the price dropped below $280". As of today 12/5/99 we are slightly under that benchmark price. Now'since The Washington Agreement has changed the rules concerning Gold,do you or ANOTHER see BIS intervention as a possibility again?

2. Since the BIS is "THE CB of the worlds CB's" could they do this action on their own?

3. Question #3, When a country "defaults" such as Russia, does that mean; A-The country is refusing to pay their debts ? or; B-The countries currency is no longer acceptable in the world market place?

FOA, a sincere Thank You for sharing of your knowledge, views,and time, from this Goldheart, and his family......beesting

Nightrider (12/4/99; 10:03:41MDT - Msg ID:20238)--"...The reason for my appreciation is that unlike some in this forum Stranger is not Blind to the realities of Economics as many in here seem to be. Stranger is not a GOLD BUG he is an investor and the reason for investing is to make Money!
My question to those in this Forum is, how many of you are able to support your standard of living with your Gold?"

An interesting perspective--People invest to make Money!--which brings me to my first question to you: What is Money?

My second question might be easier: What is it that they are investing to make this item you call "Money?"

My third question requires a presumption on my part, if I may be so bold, that your answer to the second question was "Money": How was this money for the original investment obtained?

Arguably, the answer you provide to this third question answers your original question about how those of us at this Forum are able to support our standard of living.

To revisit your concept that investors as opposed to Goldbugs (I'm among those that prefer Goldheart to Goldbug as long as we're name-calling) invest for the reason of making money, allow me to present an alternative view. Judging from the tone of your post, I'm guessing that your so-called investor is doing nothing more that swapping one form of gaming piece (fiat dollars) for another (stock certificates or bonds or whatnot.) Knowing that babies are not born with a fistful of dollars, I'm willing to go out on a limb and assume that these original gaming pieces were originally earned through some form of productive personal effort. At some point they probably quit the interim game (stock or bonds) and swap those gaming pieces for the appropriate amount of the original kind of gaming piece. If the interim game went well, they get more dollars, and if it went poorly, they end up with fewer dollars than they started with. If they put these pieces into a bank to earn compound interest, then a different interim game commences in which over time they are guaranteed (unless the bank fails) to get more dollar pieces back than they originally put in. But in all cases (whether the interim game was stocks, bonds, or compound interest) we shouldn't lose sight of the ebbing life (waning purchasing power) of fiat currencies such as is the game piece called a dollar. Take a look at these excellent words from PH in LA--

"Calling a system-wide depreciating currency "wealth" stretches our English language even as it stretches the thinking person's credibility. ... We all know about compound interest. As consumers, we have been on the losing end of it all our lives. And not just whenever we fire up our credit cards, either. Compound interest is built into the price of virtually everything we buy, and into everything even remotely touched by our "modern", so-called capitalist system. But your often-heard bromide about compound interest making us wealthy is still impossible to swallow. Percentages are not magic. The magic is the deception that powers them."

A brilliant presentation! Of the various avenues for investment that you likely have in mind in your reference to investing, of the ones that aren't outright gambling, my guess it that primary goal is to beat the returns of compound interest, and hopefully to exceed the levels of purchasing power that is lost over time whether the dollars are invested or not. There is overwhelming disincentives to sitting on idle dollars. Where investments look unattractive, the wise person will use these game pieces to immediately buy the real goods that they need--hard assets of one type or another.

That is precisely how we support our standard of living. We earn our keep. And when our garages are full of paid-for cars, and our cupboards and cabinets are filled with food, and our closets hold the clothes we need, storage becomes a problem. And as investments remain unattractive or else simply don't suit our lifestyle (who wants the sleepless nights worrying whether other "investors" will find the stock attractive in the morning) or we don't care to spend the precious minutes of our short but wonderful lives with our faces buried in a Wall Street Journal or captivated by the talking heads of CNBC, it is then that we do the most natural act of a free and sophisticated mind. We convert our extra game pieces into real money--Gold. You see, life is too important to let it all pass by as a game. This Gold forms our savings.

And the best part is, we save so much time by not fretting over the markets, or reading financial reports, or watching CNBC; and we sleep so well at night that we can be more productive in order to earn more game pieces to support our standard of living and to save the excess through a conversion to REAL money. What's more, we have enough free time to gather here with like-minded individuals. Why? Becauses it's frustrating when your various friends and neighbors "just don't get it." THE Aristotle said that living well was the single proper pursuit of all men. Saving with Gold is as much a guidepost for living well as anything else I have encountered. It puts your focus on your own life, on the concept of value, and provides real, meaningful security for the future. As an added bonus, I can think of nothing better than recognizing an opportunity for a course-correction in your life with Gold in the neighborhood of 20-year lows--an even more attractive bargain when you account for an inflation ravaged dollar over 20 years. What did cars, bicycles, shoes, and pizza cost in 1979 compared to today?

Time to start living well.

Gold. Save yourself. Save you some. ---Aristotle

USAGOLD (12/04/99; 18:27:54MDT - Msg ID:20273):

"...no one is above the rules. If you cannot debate an issue without making
it personal, then don't even sign up to post here. That is not what this
place is all about."

....... I'll buy that. And certainly I agree with the "let's maintain a
civil discussion here" point of view. Now, may we please SEE the allegedly
offensive post(s), so that we may judge for ourselves?

"If it were, USAGOLD would degenerate into a juvenile showcase/chat room in
no time."

....... Oh, surely you do not believe that. The high level of discussion
here perpetuates itself, attracts contributions of a like kind, discourages
contributions of an unlike kind, and generally disciplines itself. Indeed,
I find the usagold board to be a fine microcosmic example of (noble)
anarchy in action -- a cooperative, self-regulating community.

"I'm not going to let that happen."

....... Good! Perhaps we can *help* you not let that happen. Could we
please see the allegedly offensive post(s)?

"The rules are few and without complication. One of them is that personal
attacks are forbidden. There is no wiggle room there."

....... Well, clearly there *is* wiggle room here, as there should be, and
the precise extent of it is most appropriately determined by open airing
and exchange amongst the community members, beginning with public scrutiny
of the allegedly offensive post(s). Could we see them, please?

"I simply enforce the rules in the interest of all who post here for the
long term good of all involved."

....... Could it be that the participants here are the best judges of their
own interests?

"If I don't act to stop one, it gives license to all."

....... No, it doesn't. A number of sharp words have been exchanged over
the months without anyone thenceforth assuming "license" to behave like an
anal sphincter. The key is the prevailing ethos of civility, the sincere
thirst of all here to achieve a more profound understanding of the issues
in question, and generally the convivial, self-policing, self-organizing,
self-correcting nature of this forum. I have every confidence in the
ability of this forum to discipline and ostracize, as necessary, miscreants
who truly ARE inexcusably "over the line". (Does anyone here lack this
confidence?) Again, noble anarchy in action.

"The Stranger made two posts which I considered to be a direct attack of a
personal nature on a fellow table member. He also made what I consider to
have been some ill-founded, and unbased accusations -- and that was
probably the more eggregious offense."

........ Sounds awful. May we please see the allegedly offensive post(s)?

"I think it is important to provide a posting culture where individuals --
both novice and initiated -- can participate without the fear of being torn
to pieces by someone who disagrees with them, or doesn't like their
forecast, or whatever."

........ I think it is important that individuals not be shielded from the
rough-and-tumble of the ideas marketplace (as other marketplaces). That may
include occasionally being the recipient of some sharp words. However,
there are of course limits, reached when "a few sharp words" degenerate
into persistent malice, calculated disruption, etc. These limits can be
established and applied, consensually, in the course of events, by a
community of intelligent people of good will -- such as we have here.

........ Last: I emphasized in my first post that Stranger was not a
"troll", and I gave a definition thereof. I pointed this out for a reason.
I am not necessarily opposed to a strong, censorious hand deleting posts
and even revoking posting priveleges, in the face of clearcut,
agent-provocateur-style (calculated and systematic) disruption; i.e. if the
interest of the community is *unquestionably* being challenged and
undermined. I have seen this happening on the TB2000 (Y2K) chat board: a
veritable invasion of trolls, who relentlessly disrupt with the apparent
intention of destroying meaningful discourse. In this instance unilateral
and summary censorship is (most unfortunately) appropos, to maintain some
semblance of the initial (and still roughly prevailing) spirit of the
forum. But nothing that is happening at usagold even remotely resembles
that. We have here *one* individual who seems to have made some
questionable posts in the past (with varying views as to just how
questionable or inappropriate), and who seems to have made some very
questionable posts in the last few days -- the "mystery"/deleted posts
which may or may not be intolerably offensive in the eyes of the whole
community (as it stands at this moment there is no way of knowing,
since some of us have not seen the posts). The consensus of those who
*have* seen the "mystery" posts seems to be that Stranger should be
re-instated. So it seems to me that we are at an interesting juncture, with
the interests and views (and I would say rights) of the whole of the
community, on the one hand, and those of the proprietor of the board, on
the other, not well-reconciled.

Excellent point. What if gold is dead? I had brought this up with FOA early on. ORO has delved into this as well. If the past serves me well, I recall we concluded that it can't be so. Why?

Knowns:

Central Banks of Europe said they will only divest 2000 tons over five years. That leaves them 9,000 tons.

Asians, Indians, Middle Easterners, and Europeans still believe in gold and use it in some forms as money.

Only the US and England stand ready to lease gold in quantity to control the price of gold.

The above supports the theory that the dollar is in danger of loosing its reserve status.

Gold doesn't act as though it is dying. What looks like it is on the last leg is the paper gold markets in the US and London. This is support by Bill Murphy and Frank Venerasso who maintain through their research a 8,000 ton and growing naked short position on gold contracts. Even conservative estimates of gold gurus support a 3,000 ton short position.

***

No, gold is the most alive financial asset. It is being held in abeyance currently by the controllers of the paper gold market in order to keep it from springing to life as a jack in the box. The lid is easy to hold down but don't let the lid get too open for fear it will jump and jump high. That is my take on it, anyway. The facts support FOA, imo.

Further to your post from Rhody, Bill Murphy of Le Metropole is saying something similar. He as heard from 4 sources that the Fed is playing gold games. Not an even playing field here. I wonder if FOA has heard anything about this. It sounds as if these may acts of desperation and the system is starting to fall apart as predicted, I believe, by FOA. Is the $US in its last days?
------------------------------------------------
Le Metropole members,

Midas du Metropole has served commentary
at The James Joyce Table entitled,
"THE FED - THE FED - THE FED."

"All week I heard just one thing - the Federal
Reserve of the United States of America is
knocking the crap out of the gold market.
Early in the week those utterances came to
me in whispers from A source - a bullion
dealer. By the end of the week, 4 highly
credible sources told me the same thing.
This is truly unjust and an outrage and GATA
is going to do something about it. It is time
to take the battle to them. Hit them hard and
where it can do some good and actually turn
the tide on this misuse of power. GATA's
action plan will be laid out to you very
shortly. You will be integrated into the plan
and it won't take you more than 10 minutes of
your time if you would like to help."

Sir, thank you for your fine post,I feel you posted to create some discussion.
Well, here is a small amount from me;
Gold in some instances is NOT looked upon as only a financial asset.I'll give a few examples:
Did any of the royal families sell Gold when it peaked over $800 per ounce?
Did the Catholic Church sell when the price peaked over $800 per ounce?
Did married couples rush out to sell their wedding rings when Gold peaked at over $800 per ounce?
IMHO the ownership of Gold has and still does have a very special place in the world,especially in third world countries.
Another point again In My Humble Opinion,it's been only the last 50 to 60 years that people perceive their home as an investment to sell if the price is right,many still do not see their home as an investment but as a warm,comfortable,place to live.
Some in our family have known poverty and realize sole ownership of Gold makes that person FEEL special,no matter what the estimated dollar price of Gold is.Our investments,our home,and our Gold are all in seperate categories even tho we can figure a monthly dollar value for them.
I hope you and no-one else is offended by my viewpoints,but thats the way I see it for this Goldheart.....Thank You for all your fine posts......beesting.

http://cnn.com/ASIANOW/asiaweek/business/and

http://www.gold-eagle.com/gold_digest_99/hein120699.html

Where you suggest that Canada has been selling Gold because it knew Gold was dead, I'd suggest that the more simple reason is that they must be fiscally more responsible that the United States (which has the luxury of issuing the key currency.) Perhaps in an effort to balance the national books they have sold Gold rather than diluting their currency into complete oblivion through issue of domestic bonds. Pure speculation on my part--but quite a simple solution nonetheless.

Your conclusion should be dismissed post-haste. It could prove quite detrimental to your wealth. You said, "Without some deus ex machina like ME or Asian demand to save the day, it would appear the better view is that "gold is dead". This goes to my previous posts that the POG (and gold) requires some demand side action to save it, not merely a crimp in supply."

It never fails to impress me how after all the past discussion on this matter these conclusion continue to pop up from time to time. I might expect it from a fresh new face, but sheeeesh, canamami, you've been here forever. Gold is in use as money even now on such a scale that there is no need to "save the day" as you indicate, but rather a need for people to save themselves. Please give your full attention to the following background info and news release from the London Bullion Market Association. If the first sentence in the background, coupled with the daily average turnover, doesn't turn your impression around to a new reality, then nothing else I could offer would ever succeed on that account.

Gold. Get you some. ---Aristotle

LBMA BACKGROUND
London is the global clearing centre for gold and silver in much the same way that all US dollar transactions ultimately clear in New York or Japanese yen in Tokyo.
�
Figures for amounts cleared are collected monthly by the LBMA from the eight clearing members.
Three measures are taken separately for each metal:
1) Volume--the amount of metal transferred on average each day measured in millions of troy ounces
2) Value--the value measured in USD, using the monthly average London pm fixing price for gold
3) Number of Transfers--the average number recorded each day.

The figures include:
* Loco London book transfers from one party in a Clearing Member's books to another party in the same Member's books or in the books of another Clearing Member.
* Physical transfers and shipments by Clearing Members.
* Transfers over Clearing Members' accounts at the Bank of England.

RELEASE DATE: Friday 12 November 1999
-------------------------------------
Clearing Turnover Statistics: October 1999
All gold and silver clearing figures showed an increase during the volatile month of October, but the rate of increase varied greatly from one statistic to another.
With a daily average of 37.2 million ounces, gold ounces transferred were only nominally higher - still, it was the highest level since February 1998. The average price, $310.731, was the first time the average has been above $300 since November 1997. It brought average daily value to $11.5 billion, an increase of 17% over the previous month. A solid gain was also registered in the number of transfers, which rose by 11% to 1,205.

Gold is worth more dead than alive! To a perspective buyer, that is

Actually gold is never dead. Perhaps dormant, hibernating, sleeping, or down, but dead? No such thing. Beesting has just now described much of this reality. Something that is dead has no more value. Was anyone contemplating throwing their gold in the trash, I thought not. There, you see? Not dead after all is it?

Now if one is seeking to buy Gold, It is cheaper when people think it is dead. The cheaper it is to buy, the more it is worth when you have it. Ergo, "Worth more dead than alive!"

>>>> Your conclusion should be dismissed post-haste.<<<<

Was the double meaning intentional?

This situation is not pleasant, nor one-sided, and reasonable people can take different positions. To use the language of Canadian administrative law (which may be nonsensical to sane people), I would say that I disagree with with MK's action, but that it's not "patently unreasonable on its face."

I reiterate my postion: MK alone "owns" the site, and he controls it as he deems appropriate. We posters, Knights , etc. will have to decide for ourselves our response to the situation. Our freedom has not been taken from us - we have many other places to go to post about gold, and I'm sure other sites will be happy to have The Stranger present, posting and contributing.

I chose to continue posting this weekend as I had ideas gestating, and this is traditionally where I post, and generally I like it here, to a great extent because the tone is generally civil and serious. I'll have more time to reflect on my future approach once the weekend is over.

canamami (12/04/99; 22:46:25MDT - Msg ID:20286)
1. In Don Coxe's weekly conference call, reference was made to some agreement or proposalwhereby "two zeros" will be dropped off the Japanese currency. This forms part of the "parity" notion - that one US dollar will equal one Euro will equal one yen.

Hello canamami,
Ok, fair enough, I'll take this a little at a time.
In this context we back out the flows of equity investment motives and look only at currency derivatives as official treasury debt held in lieu of cash. US debt is held in foreign countries by two classes. Some of it is private (mutual funds, citizens and companies doing dollar based business) and government (official Central Bank). Usually, the private holdings are done because someone has an idea (right or wrong) about the direction of their local currency values and interest rates (yen, Marks, Euros). Just like you and I, they may want to diversify their assets. "In times past", for every foreign buyer of US cash, their was a local (US) citizen that for the same reasons, wanted to diversify outside of the US. So they kind of balanced this flow and this action did not impact balance of trade accounts. Again, we are talking about cash flows for the sake of owning savings, not any form of equity flows.

In the private sector, it was always the business trade that built up excess dollars as they sold more "goods" to the US for dollars than the US businesses sold to them. Using Japan, the net effect of all their private companies selling into the US created a huge negative balance of trade account. For many years now, if these countries walked into the foreign exchange markets and sold these excess dollars for Yen, it would have drove the yen way up. If done early and before a large position builds up, this is the "natural way" a true fair currency exchange market should work. If the US continues to buy more from Japan than it sells, the currency markets react until the goods being traded are evenly priced.

This action would protect the workers of both countries from being exploited, even though their productive efforts are equal. Contrary to the "business community propaganda" a worker in Japan does not tighten a bolt better or faster than one in the US. Take all the technology innovations and
pour it into a big pot along with natural human nature and add some cultural differences. Boil it down and we find that through the world over everyone works the same for the same incentives. Of course the business community always leaves out a "true" incentive / compensation package when comparing national productive effectiveness. Trust me, I've been everywhere and seen it all. You would not work as "effectively" and as productively in, say India, if you received the same pay they do. No, by far and wide, the real national industry productivity measurements are all
skewered from "engineered" exchange rates between nations.

So, back to our currency rates. No person or nation ever extended it's wealth by selling two TVs in exchange for one TV. The US knows that the road to national wealth is not in a strong currency by itself, rather it's through operating in a manipulated currency market! If your workers can tighten one bolt in exchange for foreigners tightening two or three bolts, your wealth, standard of living and voting citizens are better off.

Under the old dollar / gold standard, no foreign government wanted to see it's people tightening 3 or 4 bolts in trade for every one the US worker did. Perhaps a ratio of one turn for two could work for a while until their economies grew. But no one wanted to get locked into doing this forever, as this modern dollar standard has forced then to do.

It worked better back then as they traded two turns of the nut for one US turn and they retained a little gold wealth in the form of US dollars. Are you still with me? This is important to grasp.

------- A foreign nation traded real wealth for real wealth, even though gold was part of the wealth equation. No, I'm sure it wasn't equal, but it was close. In return, the US gave up some sovereign power over it's gold hoard by allowing gold claims,,,,dollars,,,,to be held overseas. In return they still increased their living standard by getting more value than they sold, even though some of it was
in gold trade.---------

All of this started the "new era" of a negative US balance of trade deficit. No ORO, it didn't show up on the official money flows because the US did send the dollars out. BUT!!!,,, they didn't record the trade on the negative side as the """gold loan"""" it really was! Yes, we shipped some bullion out, but more often than not, nations were content to leave the gold in the US where it was to back the dollars held overseas. The proof that this occurred comes in the fact that by 1971, the dollars outnumbered the US gold five to one.

So, as we can see, nations starting holding dollars and US treasury debt because it represented a wealth for wealth exchange. Nations, Japan included, were content to have their Central banks enter the currency exchange markets and buy up the excess dollars their businesses created when
they sold more to the US than they brought. In that time they did not think they were exploiting their workers into making two turns on the bolt for one US turn, because they were trading most of the additional "twists" for the wealth of gold.

By 1971 the "dirty float" of currency exchange markets was normal practice until the US closed the gold backing for the dollar. Suddenly, all the dollars that were purchased overseas to adjunct the exchange rates were now worthless! The only recourse for governments to regain real wealth
for all the additional "nut turns" was to use the dollars to buy local American goods. One problem though, all the dollars were collected while the gold standard impacted exchange rates! Now, with only a pure dirty float for an exchange market, any reverse selling of the dollar into the US would drop that currencies value. So, the good purchased from the US would only represent a tiny return of the wealth value these dollars were originally traded for.

It is here that the story begins to change and the world heads for a new alignment. Everyone in the world was impacted by this move. From oil producers to auto makers in Japan. Everyone lost, big. If gold had become so worthless, as most US politicians proclaimed, why didn't they just
revalue what they had left to, say $2,000 and call in what dollars were out there? They didn't because in that scenario they would have drained the dollar as a reserve unit and killed the notion of dollar supremacy. Gold would have regained it's exact value as money to the world prior to
currency / exchange / standards. Perhaps $3,000 or $4,000 and ounce (back then) and the US would have run some real inflation.

The world Central Bankers (and oil producers) took a real hit when this all happened and it won't be allowed again. They have supported the fiat dollar standard and even helped "pump it up". All in an effort to keep business rolling until a new currency could be created. One based on
several economic national arenas, no dollar reserves and a world market price for gold. As opposed to the present IOU paper dollar gold system. Even though the Euro is born, this package is not complete, but it's getting there!

Truly, You have to have been around the turn a few times to understand that no one (and I mean NO one) is wanting a larger piece of the old dollar pie. The notion of currency parity for the purpose of trading up debt reserves is something being floated by the Washington think crew!

Are these nations trying to pay up for past US military action? Oh boy, not a chance. Why don't we pay Italy for all the good the Roman legions did for everyone!! No one is worried that the US will back away from protecting it's interest after it's bankrupt. Whether it's oil or national security, they will act as best as able. See ORO's post about this, it's real good. Besides, look at Russia. No
money, no nothing but still out there firing away!

Also: The present paper gold market depends on new hikers entering the gold trail towards it's end. They buy paper gold as some kind of stock market / investment hedge without knowing the big picture. In the past their actions would have worked their purpose. But, not in this transition. A
currency exchange storm is going to sink a lot of these paper boats and kill the very assets many wanted to protect. Buy the gold not the price!

Thanks FOA

.....beesting

Although I rarely post, I read much of this forum almost daily...and appreciate the well-thought-out comments. This is especially true during the decade of decadence and deception, where TRUTH is difficult to sort out among all the mis-information promoted by the Press and available on the internet. I, like many, am anxious to see Gold Spike #2; but it is very difficult to predict when it will happen.

Most of us can't help but truly wonder if and when gold will ever return to realistic levels...as was evidenced by the numerous comments (pro and con) regarding Another and FOA and thier comments these last couple of years. Frankly, I perceive the tendency to criticism as simply being symptoms of our frustration at seeing the long-awaited gold bull kicked down before it could get off and running.

Many of us (myself included) feel as though the (@#$%^&) was kicked out of us when "The Big Breakout" was changed into the Big Disappointment by the manipulators. Gold Spike #1 was crushed by the "big boys," thus it's no wonder that some posters are prone to criticize more than they might in normal times. I'm sure most of you read information regarding the activities of GATA...and perhaps many (if not most) also read gold-eagle.com. If you are like me, you're probably looking for SOMETHING to help you believe that you did not throw your money away by buying gold or investing in gold stocks.

When everything is all said and done, however, no matter how dark it now looks, I believe that it is a certainty that gold will eventually rise again, like a golden Phoenix out of the ashes of despair.

BOTTOM LINE: The longer it takes for Gold Spike #2, in my opinion, the greater that spike will be...perhaps making Gold Spike #1 look small by comparison.

Let me also add that I appreciate all who contribute to this forum, as this is one place where it is easier to sort out the gems from the rocks. This forum is CERTAINLY a cut above another forum (that I won't name); but I agree with MK's desire to discourage personal attacks. He once removed one of my postings when a competitor of his was attacked by someone and I defended that competitor in a way that looked like an ad. I believe that he was acting appropriately under the circumstances. Let's appreciate this forum.

Happy Holidays,
Skip

But your comment of the forum self-policing as a means to keep things as they should be has a degree of merit. Therefore I would like to offer this small tweet on my tin whistle--

These endless pleas on behalf of The Stranger are quite off-topic from Gold as and investment or financial asset, and risk falling into the same category as a past obsession with colloidal silver. Know what I mean? As I see it, any resolution would have to be rest upon The Stranger sorting this out with MK behind the scenes. If as a guest I ran afoul in a host's house and thereby lost my standing invitation to future gatherings, it would distinctly be my sole responsibly to explore the avenues of reconciliation with the host. This gathering isn't a democracy where the mob rules, but more like a man's parlor in which we as guests must respect his values and standards, no matter how high and civil they may be. I'm sure MK sees this forum as a reflection on his good name and business. If it were to evolve into a bad reflection, I sure know what decision I would make. Lights out. Ample freedom exists in the streets, but it must be limited by the proper attention to decorum while in another man's house. I've already belabored this point well beyond my original intention. I simply wanted to make the self-policing case as stated above to leave the pleas to the appropriate parties.

beesting--I owe you some thoughts on offshore banking, but must run an errand. I've got you on my "to do" list.

Gold. Get you some. ---Aristotle

Hello ET - all is well here - just broke in a new chainsaw and have been splitting red oak with sledgehammer and wedges. Hard work is satisfying! I am pleased that you found my post interesting and I appreciate the quotes from the Mises Memo. It is time I did some research and learning in that area. I plan to visit the link today.

Here is one from Antony Sutton's "Wall Street and the Rise of Hitler"

"Of all recent history the story of Operation Keelhaul is perhaps the most disgusting. Operation Keelhaul was the forced repatriation of millions of Russians at the orders of President (then General) Eisenhower, in direct violation of the Geneva Convention of 1929 and the long-standing American tradition of political refuge. Operation Keelhaul, which contravenes all our ideas of elementary decency and individual freedom, was undertaken at the direct orders of General Eisenhower and, we may now presume, was a part of a long-range program of nurturing collectivism, whether it be Soviet communism, Hitlers naziism, or FDR's new deal. Yet until recent publication of documentary evidence by Julius Epstein, anyone who dared suggest Eisenhower would betray millions of innocent individuals for political purposes was viciously and mercilessly attacked. What this revisionist history really teaches us is that our willingness as individual citizens to surrender political power to an elite has cost the world approximately two hundred million persons killed from 1820-1975. Add to that untold misery the concentration camps, the political prisoners, the suppression and oppression of those who try to bring the truth to light. When will it stop? It will not stop until we act upon one simple axiom: that the power system continues only so long as individuals want it to continue, and it will continue only so long as individuals try to get something for mothing. The day when a majority of individuals declares or acts as if it wants nothing from government, declares it will look after its own welfare and interests, then on that day the power elites are doomed. The attraction to "go along" with power elites is the attraction of something for nothing. That is the bait. The Establishment always offers something for nothing; but the something is taken from someone else, as taxes or plunder, and awarded elsewhere in exchange for political support. Periodic crises and wars are used to whip up support for other plunder-reward cycles which in effect tighten the noose around our individual liberties. And of course we have hordes of academic sponges, amoral businessmen, and just plain hangers-on, to act as non-productive recipients for the plunder. Stop the circle of plunder and immoral reward and elitist structures collapse."

I have been interested in the ability of some of our ancestors to get to the root of things in eloquent language. Over the years I have typed up a number of passages that hit home. Here is one from Joel Barlow in his "Advice to the Privileged Orders in the Several States of Europe" written from 1792-1795 and subtitled 'Resulting from the necessity and propriety of a general revolution in the principles of government.'

"A nation is surely in a wretched condition, when the principal object of its government is the increase of its revenue. Such a state of things is in reality a perpetual warfare between the few individuals who govern, and the great body of the people who labour. Or, to call things by their proper names, and use the only language that the nature of the case will justify, the real occupation of the governors is either to plunder or to steal, as will best answer their purpose; while the business of the people is to secret their property by fraud, or to give it peaceably up, in proportion as the other party demands it; and then, as a consequence of being driven to this necessity, they slacken their industry, and become miserable through idleness, in order to avoid the mortification of labouring for those they hate."

ORO mentioned something to this effect recently regarding the 'Generation Xers' and their potential lack of willingness to uphold their end of a bargain (vis a vis the 'Boomers') that they had no say in. Should be interesting.

Take care,
dragonfly

Felix the Cat (12/2/99; 14:47:48MDT - Msg ID:20072)
"Simply Me
I interested in your message(ID:20039)
well, as I know that the waterway through Panama will holding by HWL
(a big company in HK) in Y2k, NOT the Chinese Gov..And also the
Chairperson of HWL said that is only use for commercial way.

What do you think?
<:-)

F. C"

Sorry I took so long to answer. I was busy....and, it seems, so was this forum. Didn't think it right to interrupt with something off topic. The Panama Canal situation still scares me. Hong Kong is under China's dominion now. China is communist. Communist governments see everything
ang everyone as THEIR's!

(Aside: Strange twist on the mega-rich captalist's idea, "Own nothing, control everything.", eh?)

This communist country also seems to be in an expansionist phase. Tibet
has been wriggling under China's thumb for a long time. Hong Kong
surrendered recently. Now China "licks its chops" over Taiwan.

China has also been trying to gain a toehold in or near the U.S. for a
long time. A few years ago, Chinese companies were trying to lease
closed Military Base's in California. Don't know if any of those attempts
succeeded.

Businessmen around the world smile and shake each other's hands while
secretly plotting their "friend's" demise. Governments are even worse!
And a governmental plot wrapped in the cloak of business is the most
deadly "friend" of all!

In summary: I think a Chinese wolf has put on the sheep's costume of
Hong Kong Business in order to sneak in to the U.S. farmer's barn!

If I am wrong, I would be glad to hear it.
Maybe I'm just too paranoid. But then, paranoia about my own
government is what got me interested in gold...so it has a bright side, yes?

simple me

(Turbohawg, is this what we're talking about?)The following excerpt from your post IMO should stand alone as a most perfect singular paragraph describing the pitfalls and chllanges of democratic systems.

>>>> It will not stop until we act upon one simple axiom: that the power
system continues only so long as individuals want it to continue, and it will continue only so
long as individuals try to get something for mothing. The day when a majority of individuals
declares or acts as if it wants nothing from government, declares it will look after its own
welfare and interests, then on that day the power elites are doomed. The attraction to "go along"
with power elites is the attraction of something for nothing. That is the bait. The Establishment
always offers something for nothing; but the something is taken from someone else, as taxes or
plunder, and awarded elsewhere in exchange for political support. <<<<

(Y2K subject)>>>> just broke in a new chainsaw and have been splitting red oak with sledgehammer and wedges.<<<<

Just in case your new at this, Cut a 2'round X 1 1/2' section for a chopping block under log to be split and use a maul. If there are no knots in the log it should split in one swing

Thank you for your excellent reply.

The expression "gold is dead" is shorthand for the notion that gold is losing its role as a financial asset. The issue is whether its relative importance is declining, to the point when it will lose this role absolutely. Perhaps a better expression would be "gold is dying" rather than "gold is dead".

Remember, my conclusion was predicated on there being no ME or Asian demand to absorb the official reserves that can be leased and/or dumped on the market, or produced in the future. Bring in adequate amounts of such demand (especially official demand), and the world will laugh at the official holdings in "unsteady" hands. I just need to see evidence that such sufficient demand exists.

I don't view the Comex price as a total con-game representing paper only. The BOE auction concerned physical, not paper. It sold out at about $293.50, and was only 2.2 times oversubscribed. This was materially close to the Comex price. Thus, based on Comex, the FMV for gold is $280.00 right now, roughly. I do not believe that would be the FMV if sufficient Asian or ME demand were in play. Further, why would Arab CB's dump gold if they view it as the ultimate value?

Now, there is the somewhat alternate theory that the Fed is acting to artifically suppress the POG (Bill Murphy), for ulterior reasons, but that this will eventually be broken. Judging from my investment decisions, this appears to be the theory I am following, wisely or unwisely.

Now, do I get censored as well - AEL - who's next? The Stranger has a long track record of being responsible and in my opinion absolutely one of the smartest and most honest poster's this forum ever had. He deserves a public airing by this forum - may we please see the post? Censorship has always been the most dangerous action to man's freedom and should only be exercised under the most severe circumstances. AEL, I applaud you for your courage - and that is what your post is courageous. What scares me is that I have to think of it as courageous? Think about it. Koan.

FOA,

Thank you for your detailed reply. Would the manipulation not have been prior to August 1971, when the US printed dollars alegedly backed by gold, but which weren't backed by gold. Once the bluff was called in August 1971, what manipulation occurred after that date? The rest of the world could have just "eaten" their loss, just as creditors always do when a debtor goes bankrupt, and accepted no more US dollars as settlement. That didn't happen. The question being: Why not?, and why should it be different now?

I believe that the individuals who run countries also feel the demands of past debts due, and deep cultural ties. I believe that one reason that Britain backed Canada in the "fish war" with Spain went back to 1939-45, perhaps even 1914-18. Just MHO, accept it or reject it.

Censorship ??? Really Koan, if I don't want some one using four letter words in front of my Grandchildren, in my own home, is that censorship??? I am in total agreement with Aristotle's #230314 on this. We are guests on this forum, not tenets paying rent, or share owners in seats at the Round Table. And, even if we were, we would be beholding to any CC&R's that we agreed to when we bought in.

I regret that we are having our first quarrel, especially as it a disagreement regarding the Castle Architecture rather than in the topics of discussion, but then Gold leads to philosophy and politics, and therefore censorship. Actually the "Stranger" Debate is really about property rights IMO.

"A Man's Home is his Castle" it is said. More later.

Http://www.usagold.comThis is a different kind of post about gold, a different perspective.

If you look at the clad quarter in your pocket you will see
it has serrated edges.Why? Because at one time the coins were made of precious metals of gold and silver, and to prevent "clipping" they were minted with serrated edges. This was to prevent the precious metal being shaved off by
unscrupulous people (Bill Murphy would say it was the ancestors of those now running Goldman Sachs).

In 1968 Lydon Johnson (an infamous American Traitor) eliminated the silver out of our money. Yet the Treasury department continued to mint facsimile coins of a clad silver-like material with serrated edges. Why? To get the sheeple to psychologically accept the "phoney money" as real money. And it worked since Sheeple liked to be lied to, and besides they had never really been told that they had a legal right to honest gold and silver money.

The system works ok as long as people are asleep and accept
the phoney money as real. During the Carter years many people lost confidence in the money (another way of saying they woke up to the fact that it wasnt real money). As a result the price of gold soared to $800 worth of the play money.

Not to long ago (before the October run up), I talked to a very highly paid investment councilor who tried t

Canammami, as a result of reading your words, below, I had some thoughts that may be worth sharing.

***
Thank you for your detailed reply. Would the manipulation not have been prior to August 1971, when the US printed dollars alegedly backed by gold, but which weren't backed by gold. Once the bluff was called in August 1971, what manipulation occurred after that date? The rest of the world could have just "eaten" their loss, just as creditors always do when a debtor goes bankrupt, and accepted no more US dollars as settlement. That didn't happen. The question being: Why not?, and why should it be different now?
***

Could it be that many common people were deliberately exploited by their political and business leaders (two turns of the wrench in exchange for one) while the dollar was gold backed, and when those doing the exploiting unexpectedly found themselves holding paper dollars backed by nothing, because the US dollar was still worth something as a result of it still be used for oil, the paper dollars were still seen as valuable by those who were willing to sell the labor of their people so cheaply. I expect that the losing-end workers actually get much less than the value of the labor exchange represented in the currency exchange. The political and business leaders get the difference.

So, perhaps the "oil backing" gave value to the US dollar, the ones doing the exploiting were more inclined to accept paper dollars with some exchange value as oposed to declaring foul and accepting nothing, and as a result the US has them "hooked on dollars" based on the greed of the exploiters.

Could it be that the US just stumbled into this situation?

Lafisrap

Http://www.usagold.comThis is a different kind of post about gold, a different perspective.

If you look at the clad quarter in your pocket you will see
it has serrated edges.Why? Because at one time the coins were made of precious metals of gold and silver, and to prevent "clipping" they were minted with serrated edges. This was to prevent the precious metal being shaved off by
unscrupulous people (Bill Murphy would say it was the ancestors of those now running Goldman Sachs).

In 1968 Lyndon Johnson (an infamous American Traitor) eliminated the silver out of our money. Yet the Treasury department continued to mint facsimile coins of a clad silver-like material with serrated edges. Why? To get the sheeple to psychologically accept the "phoney money" as real money. They didnt want anybody saying "you cant fool me, this is just a big penny"And it worked'since Sheeple liked to be lied to, and besides they had never really been told that they had a legal right to honest gold and silver money.

The system works ok as long as people are asleep and accept
the phoney money as real. During the Carter years many people lost confidence in the money (another way of saying they woke up to the fact that it wasnt real money). As a result the price of gold soared to $800 worth of the play money.

Not to long ago (before the October run up), I talked to a very highly paid investment councilor who tried to convince me that Gold was no longer money.He believed it because someone had hypnotized him, and he was running around hypnotizing others into the same belief. Astonishing, a highly paid investment councilor who didnt even realize that Gold is real money!!

In essence, what the European Central Banks did was say to the world, "Wake up!!Gold is real money!!!.Of course, they knew it all along as that is the reason why they keep it in their vaults.

Well, that caused people to start waking up and Gold
took off,perhaps too much too soon.

But Y2k is just around the corner. In times of economic and civil strife and lack of confidence in the government, people wake up to the fact that fiat money isnt real and rush to real money: Gold. It has always happened in the past and my sense is that it will happen in the future, the near future. People will wake up, realize that paper notes are not real money and flee to gold.


By the way, I am of the opinion that people could be made to accept Monoply money as real money. There is really no difference between it and US fiat notes except that it is printed by Parker Bros. or whoever it is that manufactures monoply.

The world is about to wake up again to the fact that Gold is real money.Those who have it have protected themselves and their family.

Working smartPeter, thanks for the response and the splitting tip, it makes sense, I'll try it that way on the next batch.

Lately I have appreciated the posts that speak more to the physical world of work, turning bolts, production and so forth, since sooner or later it does boil down to effort expended today being returned in some future time and place. It is easier to understand than many of the various mechanisms that make it possible. Maybe that is why I turned to gold coins in the first place, because it just made sense and required so much less participation in a corrupted system of near infinite betrayal. It is interesting to note that quite a few of my friends who have 'gone along' with the 401K game, and have substantial paper profits over the last 10 years, are somewhat disturbed now that financial rumblings have awakened their sensibilities and they notice the 'sacrifice' required to get liquid. I joked with them over the years that the faith required to participate in such a system was ever an amazement to me, especially given the fact that they wouldn't trust their dollars with the neighbor next door much less someone they didn't know a few blocks away, yet they would hand it over under the most interesting of 'conditionalities' to folks who were doing all manner of odd things with those dollars. Some of us wondered what was in it for the company we worked for since they made such a big deal of it every year and those of us who did not participate (few in number) were subtly pressured to attend the annual spiel given by some cute 30 something PR flak from Fidelity. Having a principled oppositional stance regarding the something-for-nothing pre-tax 'investment' game I was ironically surprised to discover a couple of years ago that I had 17 dollars in a 401K account that was set up for me as a result of the legal distribution of non-vested match dollars from the accounts of employees who left the company!! The government doesn't seem to want anyone to be left out of their 'largesse'. Anyway, I have said for a long while that I didn't think retirement was in the cards for me anyway and that if I could live with small periods of creative leisure (mopping up that do-list and breathing in some fresh air) interspersed with working in smarter ways that that would suffice. Building community of sorts is much more satisfying than focussing on mere individual survival, which relies on community ties to begin with anyway. 'Work til ya drop and leave alot of gold to someone you love.'

Here is one from Dan Van Gorder's "Ill Fares the Land"

"We display great naivete in our widely accepted and expanding philosophy of the advantages of idleness, politely called leisure time. The prevalent dogma that work is an antiquated and insufferable evil, justifying governmental action and organized labor's joint efforts to bring about its eventual eradication, is a worm-eaten fruit of the present generation. Certainly it could not have been tolerated by the men and women who hewed this nation from a wilderness and lifted it from a few struggling coastal settlements to a place of world leadership - a job accomplished in a little more than two centuries. This foolish philosophy has risen with or fruited from the social and economic dislocations following the World War I and World War II era that has given us music without harmony, art without resemblance, family life without discipline, education without knowledge, religion without God - a period of revolt against restraint, of organized crime, of unprecedented hedonism, and the paradoxical sacrifice of priceless liberties on the altar of so-called democracy. It should be recalled, however, that "made" work is government-controlled work and dovetails into the collectivistic plan of driving everybody onto relief and thereby forcing the capatilistic system to commit suicide."

In the interest of fairness, if anyone wants to see The Stranger's last offensive post before MK cut him off, send me an eMail at dransfpa@rev.gov.on.ca and I'll send you a copy. I agree with MK's decision to cut him off, and I also think he should be re-admitted but only on the understanding that he refrain from using offensive language, an arrangement that MK and the Stranger should negotiate in private. The Stranger knew what he was doing and purposely stepped over the line. Responsible adults should know better.

CG

I have been watching the currency in circulation figures for over a year. There has been no unusual behavior until November. As of the latest reporting week the currency total is up to $580.4 billion, up $23.4 billion from the previous month. That's up 4.2%. The similar period last year saw currency go up $8.7 billion to $506.9 billion, a 1.7% increase. This past month the totals have been increasing every week. The last one was up over $7 billion.

This number can be found in Friday's Wall Street Journal in the back part of section C. It is part of the weekly money supply column. It would be great if a GOLDEN KNIGHT or LADY who lives on the East Coast could report this total to us on this wonderful FORUM first thing Friday morning after he or she reads the Journal.

It seems that people have a hard time anticipating something too far into the future, so I think that the currency in circulation will go up weekly and then after Christmas everyone will get serious about Y2K. By the following Wednesday the banks will be cleaned out of cash and the store shelves will be empty of canned goods.

Got cash? Got GOLD? Don't wait too long.

Dear FOA: Please, what did you mean last night when you said, "[The leaders] won't be able to ship [gold] overseas (foreign exchange controls) so you can bet they will want a good free dealer market for physical 'right here in the good old USA for the benefit of the voting citizens'." Does that mean gold won't be allowed to cross national borders? What about gold owners who travel or move overseas? Thank you!

For those who just won't let it die ...
I wasn't going to get into this discussion, but since the topic continues to be hashed. I read all of Stranger's post before it was deleted. As I read it the first thing that came to mind mind was "this guy is being so blantantly disrespectful and rude he is trying to get kicked off of the forum." In other words, I think the Stranger knew he was going too far with the name calling and accusations. I have gained some insight from his posts, but that doesn't excuse what I see as his blatant attempt to taunt both MK and FOA.
I agee with Aristotle.

Please continue the GOLD discussions.

http://www.idrel.com.lb/idrel/shufimafi/archives/docs/ft990511.htmFormer owner or Republic National Bank, recently murdered in Manaco Excerpts:
So it was all the more surprising last year when Republic became one of the biggest casualties of the RUSSIAN debt default, and took a loss of 191 million and a further 97 million to cover debt restruction that included shutting its prime brokerage unit which dealt with HEDGE FUNDS.(LTCM???)
More on Republic National Bank at:
http://www.rnb.com/
......beesting.

As of this afternoon, one dollar is worth 10 oz. Of top round on sale, 4 oz. Of roast beef, 4/10 of a gallon of regular, but it won't get you into the movie theater. The fact is that the Dollar is POTENTIALLY worthless. This can not be said about Gold.

Gold has been discounted for lack of Inflation, discounted by the sale of paper contracts, discounted for failing to go up due to that, discounted for every half truth and distorted logic that anyone can come up with. Maybe there are a few more gold stashes that can be bullied or connived into entering the supply lines, but the amount IS finite.

This is a pendulum swing that is reaching the end of a cycle. The further it goes on one momentum, the further and faster it will go in the other direction. Cananami is right about needing a significant rise in demand to turn things around. That will come, the potential gold demand is mostly untapped at this moment. If one tenth of one percent of the money chasing equities went after Gold, it would probably blow right through the historic high.

The Washington agreement changed nothing quantitatively at that moment, it was a change in policy which will, and already has, caused quantitative shifts in supply and demand. That is why I called it a "News driven rally" The effects of the agreement have only begun to affect the balance.

Going back to my first paragraph: It would enhance clarity and understanding to call the Dollar "Potentially worthless", for to say it is worthless in the present moment is false, and therefore diminishes the effect of the message.

<a potential aggressor? >>
What???? The US not willing to sell weapons? We don't arm the world in some perverted play to balance and play everyone against each other? Are you joking?


<farce of self defense? It would be much more prudent to master the diplomatic arts and let each bully recognize that it is in his
best interest to protect you from the other bullies. As the only fuel station in town, it wouldn't be too difficult to find something
of common interest to all the bullies with which to build a diplomatic base and be too important to let fall into "enemy" hands.
Just like Switzerland playing banker to the world, the Middle East plays the important role of fuel tank for the world.>>
Surely, you're putting me on.

Peter,

That was an excellent distinction and clarification. Obviously, neither the dollar nor gold is dead or worthless. The discussion turns on future contingencies, and which result is more likely.

Le Metropole members,

Midas du Metropole has served commentary
at The James Joyce Table entitled,
"THE FED - THE FED - THE FED."

"All week I heard just one thing - the Federal
Reserve of the United States of America is
knocking the crap out of the gold market.
Early in the week those utterances came to
me in whispers from A source - a bullion
dealer. By the end of the week, 4 highly
credible sources told me the same thing.
This is truly unjust and an outrage and GATA
is going to do something about it. It is time
to take the battle to them. Hit them hard and
where it can do some good and actually turn
the tide on this misuse of power. GATA's
action plan will be laid out to you very
shortly. You will be integrated into the plan
and it won't take you more than 10 minutes of
your time if you would like to help."

All the best,

Bill Murphy
Le Patron
www.LeMetropoleCafe.com

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

As much as I wish the best for Murphy and Powell regarding their great gold crusade, a point has been reached where they either sh_t or get off the pot!

Either they formally file litigation tomorrow or they don't.

But every time they announce some special action plan and that plan does not entail formal litigation, then it seems they undermine their cause.

In its original incarnation, GATA was supposed to hire hot shot attorneys and sue various bullion banks for malfeasance. Anything less that that is simply "verbal masturbation."

If the issue is simply that GATA cannot raise sufficient monies for hiring attorneys (and it seems to me that if the case had real compelling merits, they could find attorneys on a contingency fee basis anyway), then acknowledge the fact, fold the tent, and return monies raised to date to the various GATA contributors.

Yet, at this late point in time, every time GATA announces these special actions in lieu of formal litigation, then it simply validates its detractors' assertions with respect to its complete irrelevance.

Thanks

F*

Yes, I too thought that the Saudis were big customers for those F-whatevers; you know, those cute little airplanes with the afterburners and weapon's racks

Mr Twice Discipled(20330) - Agreed & seconded.

All - Where do you we see the bottom in the short term for the POG? My own thoughts point toward about another $5.00-$7.00 down before this retracement is complete. Others are pointing toward a return(a short term one) towards the levels we saw in September before we resume an upward manifestation again.
The spot market opened strong in Australasia, but with weakness Oil & Platinum & with current traders committments as they are this week may be more of the same.

Canamami ---Thank you, Sir

Hipplebeck #20336 was to you.

Farfel,

I've been following GATA's actions, and I think they are appropriate. This is not merely a legal battle, it involves serious political and PR matters also. Some of Bill Murphy's posts also made reference to Freedom of Information requests, as well as efforts made to assess the governing statute. A long time ago, I posted re advisable approaches to be used by GATA. At heart this is public law litigation cum a political battle. I don't believe a private class action lawsuit is the way to go, but I could be wrong and US lawyers would have to assess the situation. In short, GATA's approach seems okay to me.

Many here do not remember it was exactly these same type of verbal attacks on ANOTHER a former frequent poster, which caused him to stop posting on Kitco and eventually here.
Sir,ANOTHER posting his "THOUGHTS ONLY" was "THE" most respectful poster I have seen on the internet,and did not deserve verbal abuse by disgruntled Americans,who may not know how,because of their own upbringing,to show proper respect for others on an International level.ANOTHER/FOA IMHO along with USAGOLD have been the founding fathers of this forum!!.....on with the Gold dicussion.......beesting.

Beesting,

That was a very good point. Gold possesses a sentimental value beyond the monetary. I guess that's why De Beers and the diamond industry engaged in massive advertising to invest diamonds with a similar character.

Hey dragonfly - I'm with Peter on using the maul. I only use the
wedges on really big pieces. I keep checking every morning for that
new hydraulic splitter that Santa will no doubt bring but so far I
haven't seen it. I think my wife thinks I might start getting soft.

Yeah - you'll enjoy the website. Since you mentioned the Eisenhower
era you might be particularly interested in Mises book "Omnipotent
Government - The Rise of the Total State and Total War". He penned
this classic during WWII as he described where this mindset that
produced these wars originated. It is an interesting history of
Europe which you will read nowhere else. Germany's history from 1860
on has been rewritten so many times it is difficult today to
understand how such a great people could have taken the road they
took. Mises clearly explains what happened but further explains how
it could happen again. The common notion that Hitler rose to power
because of the demanding WWI war reparations is total bunk as far as
Mises was concerned. It's an interesting read.

If you haven't read "Human Action", move it to the top of your to-do
list. It is truly the economic bible of our time. The original
edition is currently being reproduced in it's entirety. It is the
50th anniversary of its publication.

Well, no more log splitting for me as I have 4 cords cut, split and
seasoned. We had our first snow today so I've fired up the wood
stoves, broken out the chili and I'm making some cornbread. Off to
Michigan tomorrow, brrr!

ET

My first reply would have been - and so's every other Fiat Currency - though it's a question of concept!, which I've not been able to circumvent at a dinner party last night with good friends, including an 80 y's plus veteran of several European currency devastating devaluations in that time frame.
His claim was that holding $$$ saved him from bankruptcy a couple of times and proof still is that every (former)eastern block country including good old Russia is accepting only $-currency (note currency)as "real money" as I found true at visiting St. Petersburg (called Leningrad inbetween). Not only the international Hotels, but even the tour guides and taxis preferred the stuff (-Ok, vs Rubles you'd say).
A concept AG is still relying upon, or better has to expand to in order to prevent collapse, even disregarding the fact that this same concept held true for other (fiat? - not ever for so long)currencies, only baacked on seignorage, hegemony and trust - in go(l)d we trust), before the broke $-arization became the global reserve asset scheme (TC-Ass{et}s are tempting).

Right - everyone prefers a currency, appreciating vis a vis the homely -paper (of paupers, which may be the destiny of the US $ as it was the destiny of the Pound Sterling before), as long as the political system, or the economy gained enough credit to support the concept of paper credit.

I've at least learned, that the lifelong European experience
in trusting the 'relative' value of the US $ goes a long way to question the other 'experience' of creating a 'virtual' new contract "value" , after experiencing a hard (won) core
currency block (DM, ATS, NFL ... SFR), now softened by LIT, PTA's FFR's ... - A message some regard as a licence to abandon hard won stability - in politics and economy! - so the concept of a federation of adverse nations, without the concept of a mutual agreeable defense plan -outside of US preeminent NATO- is maybe dee(oo)med to fail.

In any case - let's watch this game`unfold together- rigged or not - that is only a question of conception of wether you're on the fiat side or on to reality -

So, to wrap it up P.A. - For most of Europeans -East or West- the US $ is still the most stable currency (except DM/SFR)- Can you believe the concept after losing about 95% of buying power since the mid 50's.
Even history seems to become "virtual" in this day and age of "new" paradigms.
Thank you for letting me raamle and venting - Best from Krampus & Nikolo - CB2

A Dollar Saved is a Dollar Spent!
Dragonfly's comments regarding the Government love affair with 401-K, brings me back to my favorite topic of "Wealth Transfer."

It appears that in our brave new economic paradigm of negative savings, that working capital needs can be satisfied by cooperate bonds and IPO's sufficiently to not need a lot of loans backed by fractionalized savings.

One must admire the brilliance of the plan/scheme. Many affluent consumers really do want to save some of their earnings. So there has come to be a way in which those peoples earnings can become savings to them but actually spending as regards the economy, Each dollar that enters the Stock Market is at once a dollar's (Perceived) savings to the stock purchaser, and a dollar's worth of spending money to the stock seller.

This is how the Goldilocks economy is created. Many earned dollars are doing double duty. They satisfy savings needs on one hand, while creating spending flows on the other. Simultaneously the "Can't lose" investment climate creates a marketplace for selling equity risk/reward to money that would otherwise have sought debt instruments. Even a bond is only an equity until it matures.

Mathematically the equation has a lie in it. When the excesses of false quantities exceed their working limits this will contract. Deflate or burst? That is the big question.

Sometimes it helps to back up and look at things simplistically to keep a perspective handle on it.

A currency is as good as the economic machine that it draws upon. What's so confusing now is that people in other economies are using US dollars as an ersatz currency in their own lands. Trading other people's paper promises, as a paper promise.

It seems that the attempt to QUANTIFY all this, is what drives us up the wall. But do we even have to.

It seems to me at this moment of unpredictability, the best course of action is to purchase any needs and wants where best afforded and store any reserve value in gold. Potential profits foregone are nothing compared to loss of wealth created.

Hipplebeck (12/5/99; 6:24:30MDT - Msg ID:20292)
oil and gold
My opinion is that there is far more oil money being spent on weapons than there is on gold. After all, what good is having a bunch of gold if you cannot defend yourself from someone taking it away from you.

Hello Hipplebeck,
Armies take more than just gold. Every physical thing is in contention. Perhaps they can't afford anything else, either? What about all the paper dollars or bank dollar accounts? With the threat of ending your life most will withdraw that too and offer it up! So, let's not keep any money.
Do you see where this line of reasoning is going?
Truly, people buy gold as an asset that stands right along with all their other things. Buying weapons never stopped anyone from buying assets.

FOA

canamami (12/5/99; 11:54:47MDT - Msg ID:20321)
Reply to FOA - post# 20311
FOA,
-------------
Thank you for your detailed reply. Would the manipulation not have been prior to August 1971, when the US printed dollars alegedly backed by gold, but which weren't backed by gold. Once the bluff was called in August 1971, what manipulation occurred after that date? The rest of the world
could have just "eaten" their loss, just as creditors always do when a debtor goes bankrupt, and accepted no more US dollars as settlement. That didn't happen. The question being: Why not?, and why should it be different now?----------------

Canamami,
The world did begin to walk from the dollar! It plunged and remained on a downtrend for several years! The US knew their option was to raise gold prices prior to 71 (just as I offered in the last post). But oil was the major problem link! Every oil person in the US knew we were running out of local reserves at the old "gold backed" dollar price. All the Middle East had to do was wait us out as they were happy to out produce and supply us in exchange for "real dollar
backed gold". You see, oil was and is the real driver of all economic production.

We could have raised the dollar price of gold to settle our accounts but that would not have raised the local oil price enough to make deep reserves available. Yes the dollar would have depreciated somewhat and foreign oil would have went up, but not enough. The need for more local reserves and the higher dollar prices that could make them available is what drove the 71 gold closure. They had us and we had them.

Without another functioning reserve currency system in place, our modern world would have shut down to a level of pure physical commodity trade. Perhaps worse than the 1929 era. With every other country about to stop trade for dollars, it was the Oil group that literally saved the
current system by backing our now fiat dollar with oil. This "black gold backing" took the form of accepting settlement of all world oil trade in dollars. And boy, did the world ever send them dollars! No body was going to walk from dollar trade as long as they had to buy their oil with it. It was that simple.

Don't think for a minute that people weren't running for gold then, either. Had the US, BIS and IMF not sold some gold into the demand the dollar exchange rate for bullion would have hit $3,000 or $4,000, easy! And that was back then, not now. Even then the gold rise was a controlled burn
to show people that they couldn't escape from all these dollars into gold. It would gun the price through the roof long before the exchange was complete. Why not just write the dollar holdings off, you ask? Hell most of the average trading partners didn't hold much gold! That was what holding the dollar was for. They would have completely wrecked their entire local economic / money system if they did walk.

As long as gold could remain in some form of ratio to oil )for conversion purposes), the dollar settlement was assured. At least until another reserve system could come along. It took the US 50 years to establish a reserve currency, so if it took the "Old World" ten years that was not long to hold gold at static dollar prices. Well, it took longer but so what? In the scope of things the transition to free market gold and Euros was the only choice. Hence the 20 year time lag that gold has gone nowhere. Yet, gold was being acquired through out this time. And it will be repriced in proportion to that time span.

A bunch of years ago, when the Euro looked to be late (very late), the drive to free up private gold holdings started. Yes, gold was being recycled by oil, just as the dollars were recycled. But, there was a physical limit to how much could be moved. For the last several years, it's been imperative to keep the price of gold down or it would kill the system. The US / IMF faction did all they could to help. But, understand this,,,,,,they never expected the Euro to work and fully well expected oil to run back into the dollar when it failed to be born! My god, when the Euro was
formed in the first few weeks, we almost had people talking about shredding documents and leaving town,,,,the game is over!

Do you remember the old Hunt brothers saying about an ounce of silver was worth a barrel of oil? Well I have news for you, it was rumoured long before that that a gram of gold was worth a barrel of oil. Forget the price of gold! Forget the price of oil! If a barrel of oil flows one way gold (or contract equivalent) must move the opposite until some ratio is reached. (oro understood this and posted it). They never flow in the same direction. When gold flow is disrupted, as in the mid and late 70s, oil prices rise! When gold is liquid, oil prices fall. From the beginning of this year, after the Euro was born, gold flow has slowed and oil is up. Another was telling me over and over that gold was being cut off then. Yet, we read gold expert after gold expert, telling us that the CBs were selling it all.

Next, the Washington Agreement was announced and these same people are on the wire telling everyone the CBs are lying,,,,, "They are still going to sell it all"! I can't wait till the ECB starts buying official gold from others using dollars! With this job off the BIS back sense the Euro was born, it's been in the ECBs court to support gold under $280. They didn't this summer (we took a lot of heat because they let it fall to $250), because they were putting together the Agreement for press, I guess. When the next official move starts, I suspect the gold experts will be saying,,,,,,,"they are only buying it to sell it" Ha Ha!! Oh well.

Truly, the Washington Agreement is "the" confirmation that the currency war is in progress. The LBMA has been left "hung out to dry" as they scramble to gather any and all gold political favours can muster. We can expect a flurry of paper gold, sold into every taker until something else breaks and then the rush up. After that, another truck load of paper. All the while the market credibility slowly wanes. Forcing physical gold trade and oil settlement into Europe. Without a functioning "dollar / paper gold marketplace, gold will gravitate to the oil price until "gram parity" is reached. I expect that long before we reach parity, physical gold trading will outprice the paper market. Confirmation of the "visible" gold bull market, that everyone needs so badly, will appear when London closes for good.

For all "Bullion Boys",,,,,,, Bullion Men,,,,,, for us old guys, (and ladies) (my wife included);;; we are on the road!
For all paper traders, good luck timing the motives, needs and thoughts of Political power brokers. (smile)
I have said enough for a while,,,,,,thanks for all your time and thought energy,,,,,,,,FOA

.@Canamami, SteveH, Aristotle, all. _ . _ . _ . _ . _ . _ . _ . _ . _ . _ ._ . _ . _ . _ . _ . _.The "bankers that be" did pretty much kill the use of gold,particularly in many "modern industrialized media-ized" countrieslike the USA, and even to a large extent, in their own macroeconomic international finance trade game, replacing gold withall manner of paper and electronic derivatives and derivatives ofderivatives, etc. . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ ._ . _ . _ . _ . _ . _.And the results are beginning to catch up with all of us. Infact, the results in the last few years have caused even thebanker/government cliques themselves many a mid-day change inundergarments. It's these unscheduled undershorts changes thatshould tell you that (a tip 'o the hat to Samuel Clemens) rumorsof gold's demise have been greatly exaggerated, quotes to followa bit later. . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ ._ . _ . _ . _ . _ . _.The bank/government establishment tried to kill gold for thesimple reason that when gold and paper money bearing the sameface value circulate at the same time, any creative printing ofextra paper unbacked by gold causes the paper bills to rapidlylose value relative to the gold. When a shopkeeper says he'llaccept either a $20.00 gold piece or, say $25.00 in paper moneyfor the same purchase, even a complete sheeple figures out heshould quickly unload the paper bills. Thus when gold and papermoney circulate at the same time, gold acts as a highly visiblebarometer, keeping the money manufacturers relatively honest. . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ ._ . _ . _ . _ . _ . _.This is bad for the money manufacturers because of theseigniorage (profit) they make from printing those extra unbackedpaper bills, which today amounts to about $.95 per $1.00 bill orabout 1900% profit (proportionately more on $5, $10, etc..) Thisseigniorage goes to the deceptively named "Federal Reserve,"actually a worldwide agglomeration of private banking interests.To keep their little family business going, the moneymanufacturers must get gold out of the picture, keep it'sbarometric function hidden as much as possible. (See MID: 16513,in USA GOLD archives, October 15, 1999 for a more completepresentation of this.) This has worked fairly well for awhile in the "modernindustrialized mediaized" world. It didn't work in China,Thailand, Hong Kong, and particularly it didn't work withIndians, who alone buy 30% of the world's gold production everyyear. You may have noticed that this list of people who don'tthink gold is dead include well over half the world's population.. _ . _ . _ . _ . _ . _ . _ . _ . _ . _ ._ . _ . _ . _ . _ . _.But when the barometer's away, the financial cats will play. Inevery case in history where gold was abbrogated, massivedepreciation of the substitute paper currency followed, much likemassive killing of citizens follows gun confiscation. The worldeconomy has only been separated from gold for a maximum of about67 years, measuring from 1933, or 29 years, measuring from the"closing of the gold window" in 1971. I know what you'rethinking: "Gold's been dead for at least 29 years, much too longfor resurrection." . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ ._ . _ . _ . _ . _ . _.In the classic inflation in 1790s France, it took ten years andmuch misery before the mistake was corrected. And that was onlyone country and it had gold and silver circulating right alongwith its paper money to help speed the correction. The reasonmankind hasn't corrected the situation just yet is that it's nowworld wide, and the gold barometer has been fairly effectivelysupressed so the results of paper/megabyte excess money creationcaused depreciation aren't quite as obvious. BUT the classicresults are occuring, are screwing nearly everyone, and scaringeveryone else, including the power's that be:. _ . _ . _ . _ . _ . _ . _ . _ . _ . _ ._ . _ . _ . _ . _ . _. - "This is the biggest financial challenge facing the world in the last half-century." -Bill Clinton to CFR [Council on Foreign Relations, THE NWO folks], MSNBC, 14 Sep 1998, ~12:04:47 PM EDT. _ . _ . _ . _ . _ . _ . _ . _ . _ . _ ._ . _ . _ . _ . _ . _ .It's certainly the worst international monetary crisis since thefounding of the system, the Bretton Woods [paper money] system in1944. And if we look around the world at Asia, and obviously atRussia, at most of the emerging markets now -- South Africa,parts of Latin America and Mexico -- you really see signs ofdanger. And I know that the authorities in Washington are mostconcerned about this spread, and properly so -- because it seemsto be happening." -Roger Altman, former Deputy Secretary ofTreasury, CNBC, 14 Aug 1998, ~7:37:21 AM EDT. _ . _ . _ . _ . _ . _ . _ . _ . _ . _ ._ . _ . _ . _ . _ . _. *// Mr. [Albert] Friedberg [famed Austrian economist, currency specialist and head of Canada's Friedberg Mercantile Group] points to the monetary policy of the Federal Reserve as the fundamental cause of the currency debacle. He notes that since the early 1990s, the Fed has backed a credit expansion policy that it has exported abroad. He also predicts that "the crisis will widen. It will travel from Asia to Russia, Greece, Brazil. Eventually it will come back to the United States." -TORONTO GLOBE AND MAIL (January 10, 1998) [NEXIALIST N+E+W+S reprise]. _ . _ . _ . _ . _ . _ . _ . _ . _ . _ ._ . _ . _ . _ . _ . _. ~"It is just not credible to believe the United States can continue to remain an oasis of prosperity in a world undergoing increasing levels of economic stress." -Alan Greenspan. _ . _ . _ . _ . _ . _ . _ . _ . _ . _ ._ . _ . _ . _ . _ . _ .-The World Bank reports that [as a result of the Asian currencycrisis] the number of poor in Asia (Malaysia, Thailand,Indonesia, and the Philippines) may double to 90 million over thenext three years, and there is a desperate need to reduce theprices of basic supplies [food, etc.]. -NWI, 30 Sep 1998,~5:51:13 PM EDT.. _ . _ . _ . _ . _ . _ . _ . _ . _ . _ ._ . _ . _ . _ . _ . _ .-The [Indonesian] people are angry about an inflation rate that'shit 40% a month. Some basics are rising even faster: Gasoline hassoared 70% the past two weeks; rice has doubled in the sameperiod. "Who can afford to live, let alone eat, here anymore?"said Mozes, a 43-year [old?] accountant. -"Economic despair turnspeaceful protests violent" by James Cox, USA TODAY,FRI./SAT./SUN., MAY 15-17, 1998, COVER STORY, pg. 1. - There's now a shortage of imported drugs in Indonesia becauseforeign drug companies won't extend credit to Indonesianhospitals and doctors. As a result of this and other side-effectsof the Asian economic crisis, the cost of many medical procedureshas risen by 500%. Many Indonesians can't afford this, and someare paying with their lives. -NWI, 20 Feb 1998, ~1:55:50 PM EST. . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ ._ . _ . _ . _ . _ . _.-Russian inflation is 67% this month, which makes it almost impossible for average Russians to survive. 100,000 Russians inMoscow will lose their jobs in the next two months, and that'sjust in the financial sector alone. -NBC Evening News, 3 Oct1998, ~6:36:11 PM EDT . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ ._ . _ . _ . _ . _ . _ .-Government price hikes sparked a week of riots and demonstrationsthroughout Yemen that left more than 50 people dead in June,reports Faysal Makram in the Saudi-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 Governmentfinancial reforms. -CNNI, 3 Oct 1998, ~1:51:01 PM EDT. . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ ._ . _ . _ . _ . _ . _.etc.. _ . _ . _ . _ . _ . _ . _ . _ . _ . _ ._ . _ . _ . _ . _ . _.It's fairly clear that things are no longer satisfactory, evenfor the money manufacturers -- that's the basis for comments, thelatest from retiring IMF head Camdessus, that the world needs a"new financial archetecture." At the same time, such authoritiesas Camdessus also admit this will be "difficult." I interpretthat as "just about impossible." The most difficult way is to aworld currency, the other is to some return to gold as abarometer, which is much simpler, makes sense and is the pathpredicted by Nobelist Robert Mundel.. _ . _ . _ . _ . _ . _ . _ . _ . _ . _ ._ . _ . _ . _ . _ . _.It's possible, that the "new paradigm" may stick -- there are,rarely, genuine revolutions afterall. But, as Damon Runyon wrote,"The race doesn't always go to the swift nor the battle to thestrong -- but that's the way to bet." If you're betting on fiatvs. gold, you're betting against a thousand years of history. . _ . _ . _ . _ . _ . _ . _ . _ . _ . _ ._ . _ . _ . _ . _ . _

FOA,

Thank you for the very detailed response, which has provided me with what I believe is a much clearer understanding of your hypothesis. I would like to ask further questions, but you have indicated you are leaving, and my own demands preclude further discussion. Thank you once more.

From The Stranger,

"The point is, gold is inherently a short term investment for which timing is ABSOLUTELY ALL THAT MATTERS. Furthermore, I submit that people who hold gold year in and year out in quantities which are disproportionate to their other investments are squandering any opportunity of ever achieving wealth in their lifetime."

I have 2 comments;
a) Mr. Stranger is/was a direct speaking person that walked
a fine line and it has ultimately cost him his posting
priviledges but
b) Anyone that disagrees with his statement above doesn't
want full bang for his buck.

In speaking of investment maximizing strategy Stranger's comment is so absolutely accurate I cannot find any fault with it. The only possible grey area is gold being a short
term investment. The term short-term/long term/speculate is a merely a 'definition' game in itself. What time frame constitutes short term versus long term? Furthermore, IMHO, buying gold is an investment, when gold reaches is maximum
buying power, are you going to hold it ? We often rant and rave that the stock markets have peaked and they cannot carry this curve any longer, it has reached its maximum. Gold will do the same, therefore the timing of purchasing and the timing of selling is ABSOLUTELY ALL THAT MATTERS.
I hope no one here is buying gold to watch it go down and when it peaks, whether that be in the short term or in the long term I will sell because I don't see the point of watching it go down.

I will miss The Stranger, his posts were always razor sharp,
straight to the point.

Lafisrap,

Thanx for your reply. Thinking about gold and its role is the ultimate mental challenge.

Tout le monde, it's been a turbulent and interesting weekend. Peut-etre adieu, peut-etre au revoir - on va voir et decider.

Just read the above and I offer a suggestion. If I may, I suggest that our honorable forum may be in need of a "censorship" board. I suggest we vote on electing a group of nine members who may then 'remove' offending posts. Perhaps then Sir MK, would then have final say. I fear Michael cannot re-instate The Stranger because of the position he has taken (for which he has the right). Opinion,
IHMO, seems to favour Stranger's reinstatement and I believe
this may have placed our host between a rock and a hard place.

Censorship and Rules
Censorship is when the Government says no-one can produce anything with certain words or ideas in it. Rules are when an establishment says that it will not allow the production of whatever, on it's premises. The former is suppression of a basic human right. The latter is an exercise in the right of freedom belonging to the owner of the establishment.

There is a profound difference between these two things. Please, everyone, try and focus here.

I've not been able to catch up with all the prolific posting here, so, hope I'm not too far off.
I truly hope some have not said they were led into buying gold by any posters here.
We've had the freedom of choice to buy or not.
I have chosen to buy.
I now enjoy what I have( waiting for the Helvitas and Confederatos to arrive).
Please return to the cordiality of the round table.
Thanks for the novelette to read on the road(3 days of posting printed). Blue Sky to all

http://www.spreadscope.com/Graphs/TB1299IEU1299ITBEU.html
Thanks to "nobody" over at Yourdon's for bringing this to my attention. My silver trading buddy calls this the "TSHTF" indicator. For those unfamiliar, the TED spread is a popular futures trading spread which plots the price of T-Bills to the price of Eurodollars. Normally the difference between these instruments is slight and doesn't vary much but in times of crisis traders will bid up the T-Bills in a flight to quality and dump the Eurodollars. Hence when you see the chart move this fast to the upside (the spread is increasing), you know that big money is moving. It should be interesting to keep our eye on this chart the next few weeks as we approach the year end rollover. Of course this could also be one of those signs we've been watching for concerning the dollar and it's reserve status. Looks like things are heating up!

ET

http://www.usa.gold
Iwalked around the Wal-mart store in the part of Oregon where I live today and noticed some subtle shortages. The auto supply section sells 5 gallon plastic containers for gasoline and they were all out, even though they had just got a shipment. Also I noticed the small economy size propane fuel cylinders for camping stoves.lanterns, and small heaters were just about sold out, even though there are usually at least a hundred on the shelf.

There is a nearby storehouse that is selling emergency supplies and the owner is telling me that they cant keep stuff on the shelves. I bought her last kerosene heater/cooker today.

The following is from an anonymous LAPD officer.

"An information memorandum was circulated to all ranks late last year which seems to be a prelude to others on the subject. It advised that Y2k is a problem of unknown scope and dimension, could cause major disruption,and is not easily correctible. "

In the last 12 months LAPD strength has been built up to 9700. Typical strength is about 8000.

I think the concept of a "clean" or no name calling forum
that USA Gold has articulated is worthy so that the
forum would be "open" to ideas and posters would not be
"chased off" from expressing those ideas, however I
think equally important is the concept that a theory or prediction needs to be "scientifially" proven or debated. That is to say that a prediction or theory must be challenged and debated from all sides in order to be proven "sound" or credible. I believe that is how a forum gains "credibility"
by debating vigourously each theory, and not by censorship
all that accomplishes, is to make the entire forum much less
"credible" and much less visited.
I don't believe Strangers post rose anywhere near the
level of namecalling that FOA himself admitted to and apologised for, and he seems like an older tough guy
who's been around and has heard much worse, the proof
is he has not been discouranged from posting, on the contrary, I think Stranger's post made him come back.
Tha isn't to say that he was right on the $30,000.00 Gold call last month, but that is the point, the free exchange of ideas, uncensored, is what gives any forum "credibility".

I think that FOA is Another, and others, and I also think that he is really "Lyndon LaRouche", his writing style etc
are very similar. I used to watch LaRouche on TV,on
his own paid broadcasts, many years ago and enjoyed his courage and ideas, I was not always in agreement, but he
was sure intriguing and revealing. Yes I do enjoy reading
him, but let's face facts, he hasn't been right on the call
for Gold of $30,000.00, that's all Stranger was saying
and many I would say most here agree with him.
Good night.

That's quite a picture! A range of 62 to 110 over six months, then from 100 to 180 in two days. Some players are shifting gears!!

My friends,
After reading and digesting the posts of the last
few days I feel I must comment.
All of the problems people face in trying to build
security and wealth boil down to one simple fact...
The Fedral Reserve System OWNS the United States of
America.
Few among the public masses understand this. All of
the gold investors reading this forum must have
realized this long ago.
There is no discussion that needs to take place.
This is a simple fact.
Yet we let it go on. And waste our time watching the
POG,the DOW,the NASDAQ et all.
Do we watch praying they will stumble and we will
gain? (Y2K)
Do we wait for the bubble to burst and hope we will
gain? (debt)
Tell me why do we sit and wait for "them" to fail
if we are a free people?
There is no value in the fiat dollar, we all know it.
Yet we sit'saddly,quietly,being good boys and girls,
buying our gold.Praying "they" won't just take it away!
All the figures, charts,commentary,genius view points
etc. are worth nothing. As long as the Fed is accepted
as the controling body of our (and the worlds) economy.
When will we get down to reality and realize all our
work'sweat, and saving can be taken away at a moments
notice when "they" feel they might be loosing the game?
It is long past time for the educated public to stand
up and take control of our country once again.
What say you, knights and ladies of the golden table?

"but let's face facts, he hasn't been right on the call
for Gold of $30,000.00, that's all Stranger was saying
and many I would say most here agree with him."

Can we PUHLEEZE put this baby to rest. We have gone around the houses with this one many times and some people STILL DON'T GET IT :o)...

The $30,000 figure mentioned was as a result of a "think tank" study group, we don't know the full details of their tasked parameters, and it is obvious that this $30,000 figure is at some indeterminable point ***in the future***, and will occur ONLY after certain factors have materialised i.e. and I'm guessing, the failure of LBMA/COMEX paper trading, oil priced in Euros, possible hyper-inflation in the USA... to name just three.

It will only occur "after the cats have been herded!!!"...

At NO TIME did FOA intimate that $30,000 was imminent as some folks keep (disingenuously if they had READ his/her posts properly) insinuating... sheesh!

It is really getting VERY OLD to keep attacking FOA and ANOTHER like this, FOA in particular has explained this concept several times...

I'd like to see The Stranger back too, maybe he'd had one or two beers I don't know, we all make mistakes... Michael, maybe you could reconsider a probationary period?

Later,

Andy

Thanks ET,

It seems you may have something with your post. Of all the different angles on the future outcome of gold, I find the 2000 rollover question particularly interesting. With all the information I have looked at about problems with the Y2K issue, it is very hard to decipher if there is going to be something to it. But my opinion is that there is enough there to cause at least some concern for the financial aspects to it. I believe it would be incredible for the "big money" to just scoff at the possibilities with so much at stake. This angle looks like a bullseye to me and I appreciate the input.

Doing some simple calculations here is what I come up with. Last week before the BOE auction, the POG was just under $300 per ounce. Now, just before that Kuwait added 79 tonnes and Jordan I believe 45 tonnes, to go with the 25 tonnes auctioned by BOE. Normal mine production worldwide according to the World Gold Council is about 2400 tonnes per year or about 200 tonnes per month.Total amount of Gold going into the market in the last 3-4 weeks about 349 tonnes. Normal consumption of Gold, again according to The World Gold Council, 3600-4000 tonnes per year or about 300-340 tonnes per month.
That means currently(if the markets are truly supply and demand driven) Gold inventories on all the markets should start to dry up towards the end of this December. The BOE and LBMA some-how coaxed Jordan and Kuwait to part with thier Gold last month,unless LBMA can find another source soon the squeeze should start the end of Dec.

"Warning to all Gold holders and Goldhearts" if you see a dapper man with derby hat holding it in his hand who has a strong English type accent and a badge that says BOE on it,watch your Gold close-ly...He may try his best to talk you out of it.......beesting.

There has not been too much discussion on this forum about the Safra hit... like the following poster I believe it is linked to the Armstrong affair ( and a few years back the Robert maxwell murder too - he also "knew too much"...), really, this is just the tip of the iceberg IMHO.

This from GE...

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" ARMSTRONG TO TURN STATE'S EVIDENCE to save butt
(KeyserSoze) Dec 05, 10:55

More than a month ago I posted this:

If Martin Armstrong does not suffer an "untimely accident" before he goes to trial and 'spills the beans,' he most certainly will divulge he was an integral part of the international scheme to CONTROL THE PRICE OF GOLD, relentlessly forcing the price lower and lower.

The identity of those who will be implicated by the 'patsy' Armstrong will totally amaze most observers, who heretofore thought there could not be a conspiracy to PRICE FIXING the PRICE OF GOLD.

In light of how rapidly the arraignment of 'patsy' Armstrong is proceeding, I feel he will turn state's evidence in a plea bargain to commute his sentence to a two-year minimum in a correctional institution away from mainstay criminals. Literally, this is to save his butt (pun intended).

Count on it! Armstrong will sing!

When he does, gold will go ballistic to at least $500.

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

THEN, the very unexpected happens. On Friday December 3rd, it flashed across world headlines: "Billionaire Banker Safra Killed in Monaco Fire -- founder of prestigious Republic National Bank of New York."

Police suspect foul play - albeit murder rate in Monaco is said to be about 1 every 10 years."

Your post makes sense. To ask the Fed to help with the increase in the price of gold is like telling them their only source of putting out a fire is with gasoline. They will resist at all costs and if they give up, they lose everything. They will use any and all the power they got to suppress the POG. The odds are that the "big money" and the FED will come out on top. But odds have a way of sneaking up on everyone and eventually even the heavy favorites lose. Diversification in even the hated financial, fiat ways is the only way to ensure a winning hand. But I would have some PM just in case the fiat pyrimad collapes or has a major meltdown. I agree with the theories that gold is on the way up and will be a force to be reckoned with. It may take some time and patience or it could be very close at hand. No crystal ball here, just reading some great posts.

My info shows that Mr. Safra was not assinated or killed by violence, but died from smoke from a fire as he would not come out of the room in which he and one of his nurses were hidding from "vandels". He had a cellphone and was told that the police officials were in control of the building and that there was a fire in the top (penthouse) floor, but he would not come out and both he and the nurse died from the smoke. His wife was in another portion of the home and was not harmed. --- Has this been blown out of true proportion?
<;-)

http://members.xoom.com/_XMCM/Nebucadnezer/importvolume2.gifI have but a few minutes to post.

I was trying to catch up with whatever time was available. I will return later at night to read.

FOA - All of this started the "new era" of a negative US balance of trade deficit. No ORO, it didn't show up on the official money flows because the US did send the dollars out. BUT!!!,,, they didn't record the trade on the negative side as the """gold loan"""" it really was!

I understand this. I understand that the gold obligations were not listed on the debit side of the US books. Specifically avoided was any entry of gold loans or anything containing references to it.
Indeed the job of maintaining dollar - gold relationships has been a G7 and Oil country effort, and the bulk of it occurred in London with the participation of US creditors aiming to get something, for the nothing (i.e. dollars) the US so happily issued them in payment. From the days of the London Gold Pool, to the spot markets of the 69-74 period, to the hybrid paper markets from then to 1980, and the mostly paper markets of the early 80s, and now the wholly paper markets ruling since.
To make one point about CB behavior, the modern CB is accustomed to controlling the economy through the dictation of short term interest rates. A number of CBs work in concert to attempt getting the right balance. If a currency is to be weak, the interest rates are lowered, using the higher interest rate at the country, who's currency was to strengthen, to produce capital flows from the weakening to the strengthening one. Gold has been maneuvered in this way as well. Low interest rates have caused a carry trade in gold without the CB doing significant lending. The CB offers guarantees of liquidity - a promise to put its gold at risk, not directly putting the gold in harm's way. The issuance of calls, particularly currency settled ones in which the CB is not limited as to quantity, serves as a proxy for lending. But in this "foolproof" plan there is a snag, the abundunce of currency settled gold calls issued can endanger the currency by creating a currency pump - a Buffet style convertible bond with no floor for conversion - that can pump unlimited currency into the market in a death spiral. The Fed is repeatedly rumored, now by more specific people, to have manipulated gold in "emegency situations" using either currency or gold settled gold calls.
FOA, do you know if the Fed is indeed issuing these calls, if so, do you have any idea of how much? Order of magnitude?

However, there are still these questions from my studies:
How large is the Eurodollar market? (I have a current accounts based estimate of 21-24 $trillions in loans outstanding)
Does gold play any part in supporting the Eurodollar markets?
I have seen the proportions of goods traded for dollars rise tremendously, as the productivity of the emerging market nations has risen but the number of dollars received for their production has not risen in proportion. The $ debt machine has been run by Europe and Japan to shift the cost of maintaining the US onto Emerging Market economies. Whereas the purchasing power of the dollar in the Emerging Markets rose tremendously, the major foreign currencies - those of Europe and Japan, have enjoyed a 90% higher increase in their purchasing power vs. the Emerging Markets - relative to that of the dollar. This allows both Europe and Japan to increase their import volumes even more than the US, without even showing the slightest disadvantage in the balance of payments. I believe that this is the reason that Europe and Japan maintained the value of the dollar as long as they have. Now that the Emerging markets have buckled under this debt and are in the process of repayment, and the carry trades are breaking apart, there is no way to obtain any advantage out of it.
FOA, was this an intended occurrence, or was the crissis just one expected by the BIS? I seem to have found some indications that it was intentional.
However, The mechanism, like the Gold mechanism is a carry trade, an interest rate driven engine that forces itself to stall, i.e. Long $/short Yen trades have gotten so out of hand, that the slightest rise in Japanese interest rates would crash the system. A simillar situation is close to being reached in the $/Euro trades.
FOA, was this the intent of the interest rate maneuvers of the last few years on the part of both Japan and the EU?

Finally, a rush of questions to you; how inclusive is the BIS group? Overtures were made to China, Malaysia (included for a fact), and many other Asian nations. Is India included or being pursued? South American countries are being wooed by both the US and the Euro faction. Do you see the mangy US offer of major participation in seigniorage being preferred to the Euro side's "fair money" offer? Are the BIS group members succeeding in recruiting South American participants?

A few more charts:
http://members.xoom.com/_XMCM/Nebucadnezer/Exportchainquantity.gif

http://members.xoom.com/_XMCM/Nebucadnezer/Importchainquantity.gif

http://members.xoom.com/_XMCM/Nebucadnezer/g3802701800417345.gif

http://members.xoom.com/_XMCM/Nebucadnezer/Quantity trade Deficit1.gif

http://www.gold-eagle.com/editorials/wanniski111897.html

It sure has, but which story is the spin? What's you scource ???

You guys, you guys! You worry about Stranger and Greedspan and PPT and falling POGs. Me, I'm in war zone already. My wife threatens to move out in January, after she sees if Y2k (it's "my" problem, since I'm the one who told her about it) is really so bad. Sort of a Can't Win situation, eh? So what do I do first -- not jump in the car and race around town angrily at 99mph, no -- I come HERE and read the voices of quiet reason, of collegial discourse, of decency and civility and mutual exploration and unraveling mysteries and enjoying the company of like minds. Yes-s-s-!

A mutual friend (depressed, divorcing after 17 bad years) did himself in two days ago -- and she's taking it harder than I -- I go up into gratitude for the life we have, she goes other way, into guilt and blame, etc. Oh well. Temporary, I hope.

(Sorry for venting personal stuff here -- I know it should be judiciously avoided -- but....)

Let's all be grateful, and I have been all along, for the fine minds MK has drawn together, to share difficult times, and easy, should they ever come. Thank you and bless you all for being my oasis tonight.

Gandalf - I have heard similar accounts, however there are a few oddities... i.e. he was normally VERY well protected but this time his bodyguard was absent, the guy stabbed was not his bodyguard. His wife pleaded with him to come out on the cellphone, but he was terrified (understandably) of what was on the other side of the door...

This from GE too...

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This Armstrong/Safra thing reminds me of my army service
(JohnnieReb) Dec 05, 18:43

Strangely, the episode involving gold intrigue, Armstrong's shenanigans and Safra's very highly suspect death remind me of my military service.

Life in battalion is in many ways like the financial world. Whenever, a soldier was discharged from the army after finishing his tour of duty, battalion usually found reason to blame the now gone hapless soldier with all the unsolved mysteries: from petty theft to malicious property damage. Those who remained were the innocent "untouchables."

For this reason I believe the Gold Cabal will soon cease its price fixing crimes, but in the meantime will "leak" information that Edmund Safra was THE master-mind behind the International Gold Manipulation Operation of recent years. To give the startling news credibility, Martin Armstrong will be given a commuted sentence in exchange for his "confession" that he was the Enforcer for the sinister Safra.

Consequently, the slate is wiped clean. No one hurt -- but hapless and defunct Safra takes the rap. All past sins forgiven.

The upshot�...? GOLD SOARS.

From what I've read about Safra's murder, seems to me that no one really knows if this was merely a botched robbery or an assination. However, let's consider the facts:

1. Supposedly, Monaco has a VERY low crime rate
2. Safra's bodyguard was suspiciously absent from the scene
...he was supposed to be on duty
3. Safra had heavy dealings in Russia and had undoubtedly
made enemies among the Russian Mafia over the past year when
he pulled out of that country.
4. His institution (Republic) has been heavily involved with the gold carry trade
5. Republic is being sued by Japanese investors as part of the Armstrong fraud.

After considering all of this, I would hazard a guess that it was assassination. I would hazard another guess that it was most probably the Russian Mafia...they are extremely dangerous to cross.

Having said this, I think Armstrong will be taking a guess or two himself, wondering how secure his own situation is at this moment.

Lamprey