USAGOLD Discussion - January 2000

All times are U.S. Mountain Time

Jeff
(01/01/2000; 00:04:36 MDT - Msg ID: 21954)
Happy New Year
Just making sure everything is working :-)
-Jeff
Peter Asher
(01/01/2000; 00:22:39 MDT - Msg ID: 21955)
Days of Gold Gone By

Should Gold's true value be forgot.
And never brought to mind
Then pour a cup, of memories,
To days of gold lang syne.

Chorus
For gold lang syne my friends,
For gold lang syne,
Come drink a toast to our good host
And days of gold lang syne

Columbus sailed across the sea,
When Silver reigned supreme,
And golden coin, did men then join,
For wealth beyond their dreams.

Chorus
To gold lang syne my friends,
To gold lang syne,
We raise our silver goblets high
To days of gold lang syne

Through intervening centuries
Were hatched the Fiat plans,
To relegate the one true wealth
To ore beneath the sands.

Chorus
For gold lang syne my friends,
For gold lang syne,
So hoist a toast to golden friends
And days of gold lang syne

Then ventured we, upon this page,
And loudly did proclaim.
That Fiat money soon would cease,
To be the Master's game

Chorus
To gold lang syne my friends,
To gold lang syne,
And now we toast, our Forum host
And days of gold lang syne

Put golden coins upon the shelf,
And silver bars so fine.
Protect your wealth, and drink the health,
OF - DAYS - OF - GOLD, LANG, SYNE!

Thanks to The Scot for searching out the original lyrics

Copyright PeterAsher 28 Dec.99
el St.One
(01/01/2000; 01:03:42 MDT - Msg ID: 21956)
2000
To All

Happy New Year

Happy New Decade

Happy New Century

Happy New Mellennium

Happy Happy Happy Happy Happy Happy to be here for a go at another year.

Wishing all a healthy and prosperous year............el
Peter Asher
(01/01/2000; 02:36:26 MDT - Msg ID: 21957)
Saturday is a business day in Islam
http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=002Aj2So this is the first workday test

>>>>> Reporting straight from the Utah Joint Information Center - I am here with Senator Bennett who has announced
that the Pakistan Stock Market has crashed. His source is an independant daily Pakistani newspaper, "The
Islamabad." No further word is available at this time.

-- Jennifer Bunker (Salt Lake City, Utah) (Jen@bunkergroup.com), January 01, 2000
Peter Asher
(01/01/2000; 02:42:03 MDT - Msg ID: 21958)
Bumps in the road
http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=002ArS-- meg davis (meg9999@aol.com), January 01, 2000

Did anyone else happen to see this? On Fox News tonight, right after the rollover CST, the anchor man and
woman (stationed at Time Square) were yucking it up about the Y2K success. It was a never ending litany; all is
Y2K AOK; the world is 100% compliant. They were incorporating little corporate interest stories in their
coverage...taking us to Sprint to see the people waiting for bug reports. They even brought the camera in tight for
the view of an engineers drummming fingers (bored, with no glitch calls coming in). It's amazing how it's all
blatantly directed to influence the viewer to form a pre-determined opinion. They cut to another reporter standing
by a cash machine. "Banks are OK; no major glitches" was this little sub-story. He promptly puts in his ATM
card, punches in his ID, hits "yes" to answer the "will you pay a dollar for this transaction" question and waits for
the money....nothing. "Oops! It wants my ID again" he says, and then he starts the process over. Still no money.
He quickly starts at the beginning for the third time, punching and answering without the fanfare. The machine starts
to make that...whirring "I'm going to send you money now noise". And, the anchors at Time Square cut in to say,
"we can hear the money coming out now". But....no money. At this point, they were clearly embarrassed and I
was laughing my rear end off. It was too funny. Without wasting a single moment "puff" he was gone; and we were
left with the Time Square anchor team making a flustered comment like..."he'll probably call and get mad at his
bank tommorrow morning." Boy do I wish we had more "live" TV; it's so much more fun than the taped stuff!

Peter Asher
(01/01/2000; 02:45:38 MDT - Msg ID: 21959)
Getting bumpier
Airport communications, SW Iowa - repost from TB2000

greenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread


http://www.freerepublic.com/forum/a386d8277152f.htm News/Current Events Breaking News News Keywords:
Y2K, IOWA Source: KCCI-TV Des Moines, IA Published: 12-31-99 Posted on 12/31/1999 20:28:39 PST by
CampaignWatch KCCI-TV in Des Moines reports that two dozen airports in SW Iowa lost all communication
ability at 0 GMT, this evening.

Officials from Iowa's Department of Transportation and the FFA are swiftly investigating the source of the
Y2K-related glitch.

Some of the airports effected include Council Bluffs, Red Oak, Shenandoah, and Creston.

-- beckie (sunshine_horses@yahoo.com), January 01, 2000
Simply Me
(01/01/2000; 03:39:35 MDT - Msg ID: 21960)
The Best of 2000 to One and All!
My computer is up and running fine. Ye-ea-ah!
Thanks for the reports on Y2k around the world! Glad to see so many still on line! Loved the story about the reporter at the ATM machine!

Still filling up bottles of water. You never know when all that spit and bailing wire is going to fall apart. Perpetual paranoid that I am (trust the system and you'll get screwed someday...maybe not today...maybe not tomorrow...but), I may begin to relax a little when my 70 year old mother gets her Social Security automatically deposited Social Security payment this month, I can fill my gas tank with no trouble January 14th, and the shelves of the local grocery store are still well stocked January 30th.

By the way, the smaller grocery stores were looking a little bare January 31st. And water, toilet paper, batteries, and gas cans were in short supply at the local SuperWalmart. Looks like Nashvillians prefer to weather their storms (natural or otherwise) at home rather than Red Cross shelters. That's why I love this place.

So far so good!
Golden Parachutes: Got mine and I'm keepin' it. Get yours.
simply me

SteveH
(01/01/2000; 05:35:23 MDT - Msg ID: 21961)
Nickle62
Thanks,

I am not sure what 'opions' I discussed you are referring too. My only post of the day was to Peter and Golden Truth.

But from your question, it would seem that ORO is on top of the options for pay and retention scheme.

My take on all the wealth being created currently is the following:

Test the wealth effect by asking, what would happen if but 10% of these folks cashed out and bought gold? Let me see how well I do an OROian? 10% of market cap of Nasdaq and NYSE and ASE and Canadian Markets and Euro markets is (this is a guess) $10 trillion (more?). Take $10T and multiply times .10, which equals $1T. Take $1T and buy gold. At current market price of gold (rounded to nearest $100) of $300, divide $300 into $1T. That number equals 3.3333 billion ounces of gold that (theoretically) $1T could buy. 3.3333 billion ounces equals approx. 104,000 tons (using 32,000 ounces per ton) of gold. Since that is approx. 26,000 tons short of the entire worlds supply of gold, I would say that were these folks interested in buying up that much gold the price would rise slightly. If you take the price of gold as it was in the early 70's and for the sake of argument say that it was 1/2 of its current value at or around $150 and you apply knowledge that total market capitalization at the time was $500 billion and there was only 110K tons of gold around at the time (annual growth of gold supply is about 2 to 2.5 percent) then one assumes that just 10% of those folks bought gold or $50 billion worth, that would mean they could have bought 10K tons of gold. In other words, just using simple assumptions it would appear that in 1973 10% of world stock market cap could by 10k tons of gold and today it could buy 10.4 times more. Either my assumptions are way off, gold is dead, or things will get mighty interesting with gold sometime in the future, to the tune of at least a 10 X increase in value or at least $3000 per ounce. If we move our comparison to the 60's with today, that factor could be more than 30 times or $9000 per ounce.

BTW, my computer date is 1/1/00 and I didn't have to touch it.

Let's see of the banks open on Monday and if the IRS looses our records (here is hoping on the latter).
Leigh
(01/01/2000; 06:10:34 MDT - Msg ID: 21962)
We're Wise to Be Prepared
http://www.the-moneychanger.com/html/not_here.htmlTo anyone who's feeling like a gullible fool this morning: Please read this article. I've posted it before, but it is a great lesson about why it's wise to buy gold and to prepare for any eventuality. It has never been far from my mind since I read it a year ago, and I think the lesson it teaches will be borne out in the coming year.
Number Six
(01/01/2000; 06:20:28 MDT - Msg ID: 21963)
@Canuck and y2k
Yep - thanks for the words, pretty uneventful here in sunny Denver, working on a y2k project we cut over the United Airlines system with no drama at all.

As for y2k...

Please remember that it is an ongoing process - it may well be a death of a thousand cuts.

So far we are all encouraged, but it dismays me when people who perhaps really should know better dismiss it as a hoax.

Wordwide over 1 trillion dollars have been spent. If this is a hoax then I have been vastly overpaid for the last year!

This is no hoax. The markets open Monday/Tuesday. Let's see how the international payments system does. How clearing and settlement work.

Let's monitor chemical plants, refineries, shipping, pipelines, ports, oil platforms. Let's see how they are doing with oil in Nigeria, Iran, Iraq, Mexico, Venezuela, Saudi Arabia.

Let's see how trucking, rail, JIT deliveries do.

Dick Mills [electricity] has gone on record as saying that he expects power problems to peak two weeks into 2000. Last night I monitored UPI, AP and Reuters for the duration and saw nothing about any power problems in the USA. Yet on the timebomb 2000 board we have had reports of sporadic outages in at least ten different states. Also getting reports in about nuke glitches in Japan, BP having problems with oil in Egypt, ATM problems in England etc.

Many pipelines in the USA have been shut down.

Russia and the UK are on Reuters claiming to be TOTALLY bug-free.

Come on, pull the other one, it has bells on :o)

The fat lady is only just gargling IMHO. The news is great so far, but please don't go dumping your preps just yet. For all we know USS Titanic may have hit the berg and stripped a long gash of metal from it's hull, only no-one noticed because they were too busy looking at the fireworks up above.

TO RECAP

Midnight can be viewed as stage one of the effects of y2k.

Unfortunately some information may not be available from relatively closed societies such as china for weeks. Russia exists across 12 of the 24 time zones. It was good news that reactors in the first 2 time zones appear unaffected so far. Of critical impotance will be the embedded chips in their gas delivery systems. They are major suppliers to Germany etc. of fuel.

The second phase will begin next week when businesses and gov't agencies that are shut down now start up.

The third phase will play out as any effects on supply lines that will be reflected in company earnings in the 1st quarter.

The news so far is very encouraging, but it's not over by any stretch of the imagination.

I'm giving it at least another 3-6 months to see what develops.



Number Six
(01/01/2000; 06:23:49 MDT - Msg ID: 21964)
Great post from tb2k...
Until we see Medicare, Medicaid, Food Stamps, I.R.S., to name a few, operating with precision and dependability, we are very vulnerable to an economic nightmare. Government accounts for a huge segment of employment in this country. Add to this the incredible amounts of money that is issued into circulation in the form of benefits and such, and the truly amazing unanswered questions as to where the U.S. is at this point remain unanswered.
I have viewed my preps as not only "meal insurance" against interruptions in the supply chain, but as an economic hedge against rising prices in the months ahead. I cannot believe I am alone in thinking this way. Interest rates are going to march upward; housing may well take a hit. Mortgage brokers will be doodling on pads of paper as they realize there is less and less business(to name but one example of an industry vulnerable to rising interest rates).

Most of the really important problems, e.g. Def. Dept., pipelines that were shut down (and may be pesky to restart), will be kept from public view as a matter of national security.

And what about the many computer viruses that may be running around, looking for infrastructure to disrupt? Seems there are MANY more things yet unknown to hoist a victory flag over this country and y2k. (The only victory so far is preventing massive public panic;well, there is the additional victory of propaganda over a national audience--YECH!)

2 very alarming things to me are: 1)The overall complacency of our nation(not going totally unnoticed by folks like China and Sadam) and, 2) HOW EASY IT IS TO STILL MAKE PRUDENCE TO APPEAR LIKE FOOLISHNESS! An extra comment on this 2nd point is the incredible amount of folks reporting they feel foolish and embarrassed. If you really want to feel/experience both of these emotions, then chuck your preps. and begin running around trying to get folks who prepared for NOTHING, to accept you back into their "fold of foolishness". Then, when fallout begins to become apparent, you will realize the true meaning of foolish, embarrassed, and UNPREPARED!

Just as the coverage of y2k was so incredibly shallow and simplistic in the press for the past few YEARS, so too is the thinking that we are over the worst of y2k. Just cuz my T.V. works, doesn't mean it is "all-clear!". And one night of CNN pics. of lights on all over the world hardly gets me feeling even remotely confident that things will not be "so bad". (This line of reasoning wouldn't work on a 6 year old child.)

The most unfortunate side-effect of y2k roll-over so far (IMHO) is the "innoculation effect" that is occurring among some who prepped. How willing will they prepare or stay prepared for the unforeseen yet not on this nation's radar screen?

In closing, I will add that this nation is in and will remain in a window of vulnerability for some time. Just as a cancer patient never knew the day, time and hour that a tumor began to form within themselves, so too this nation appears to be generally clueless as to our vulnerabilities to attack and outright breakdowns in necessary infrastructure that are now present. When rollover occurred, every unremediated line of code became a cancer cell in this country's economy. Whether the Nation's "immune system" of bug busters can heal all of these conditions, before they grow into a sizeable tumor remains a HUGE question, at least to me.

I therefore will remain ready to "roll with the punches". Old habits are hard to break: Why let CNN and the "crowd of fools" do your thinking for you?

-- (He Who) Rolls with Punches (JoeZi@aol.com), January 01, 2000.

Cavan Man
(01/01/2000; 07:04:40 MDT - Msg ID: 21965)
HELLO ET
I know the place is Westport well; caught the brown bottle flu there a couple of times at least. Next time you're in the neighborhood give me a shout http://www.tetranet.net/cavansales.

Happy New Year
Cavan Man
(01/01/2000; 07:21:51 MDT - Msg ID: 21966)
Dear Golden Truth
The very best reason to buy gold now is becasue of the inflation which is hot and getting hotter although we're told NOT! In 30 days if there are no Y2K related disruptions to the economy, watch for the FED to begin telling us about inflation and raising rates. That is their next big problem unless the unexpected happens.

In some private email I asked The Stranger if, in his opinion, was buying gold today like buying IBM when it hit $40, remember that? His reply unequivocally; YES! He pointed out there is much more leverage in stocks but given the lack of solid fundamentals supporting the major indices combined with the vulnerable hedge book position of so many miners, I can't bring myself to take a chance on mining company equities.

As to our friend FOA; to me, what he repeatedly says here and the core of his thesis makes too much common sense. If you go a step further and accept the fact that our other friend ORO (and others not mentioned, sorry)has taken the time (I don't have) and applied the intellect (also, don't have) to poke holes in the FOA/Another THOUGHTS and has concluded in agreement (I believe you do ORO) with FOA/Another, then, I think more patience is required on your part.

Besides, everytime you get negative that is a bullish signal for me! (haha). Take care this year friend.
Canuck
(01/01/2000; 07:47:50 MDT - Msg ID: 21967)
Number Six
Good morning, 9:30 eastern.

I have scanned the forums, yes, you are correct. There are dozens of little 'cuts' emerging; the bleeding MAY start.

I watched that 'goobtube' all day yesterday, was dumbfounded by the superficial take, the fact that every major city had fireworks bothered me. I said to the girlfriend, "Why does every city have explosives and dynamite ... seems ironic?" My 12 year son blurted, "Dad, they all look (the fireworks) like Desert Storm."

Still haven't heard or seen a single 'bit' from M-E or Venezuala.(sp?) Keep us posted Sir Number Six; you ARE the
(oil) man.

Safe New Years to all.

Thanks for the advice Leigh.

My fishing advice to my son when he gets one on the line; don't give him any slack buddy, let your guard down for one second and he's gone.
FOA
(01/01/2000; 08:24:33 MDT - Msg ID: 21968)
Comment
Good day everyone!
Looks like the world will have a chance to move on with life without any of these Y2K problems. Good! There will be enough monetary action to follow and understand without the
added impact of computer control problems.
Jeff (of USAGOLD) good job keeping the system up. And while I'm at it, good job to all the other thousands of dedicated computer professionals who made the turn over work.
Michael, TownCrier, ORO and everyone, our golden century begins today. Preordained to be in our financial future by the planers of tomorrow. I'll do some thinking ,writing and make replies later.
Thanks ALL FOA
elevator guy
(01/01/2000; 08:31:25 MDT - Msg ID: 21969)
//Calling Michael Kosares, come in, Michael, over//
Happy New Year to you, our gracious host. "Live long and prosper".

Thank you for your forum, and all the blessing it has been to me.

The most signifigant development in my life, from this site, has been that my eyes have been opened, from many posters, as to just how hollow and bankrupt our fiat money system is. This knoledge will prepare me as we head into a year that will likely see a major, albeit possibly gradual, correction in the stock indices. The real kiker for me was when one poster, (I cant remember his name) said that the stock markets have been growing by huge percentages, but the growth of our economy has only been a couple of a percent. This is a very good argument, to support the existence of gravity!

On the tube, we watched celebbrations from around the world, including the Pepsi Center, in Denver. Were you there to catch Neil Diamond sing? Didnt see you in the audience!!!

Best Regards, and best wishes for the new year.
elevator guy
(01/01/2000; 08:41:05 MDT - Msg ID: 21970)
Pakistani Stock Exchange, Y2K?
IT was reported here earlier this morning, that the Karachi Exchange had crashed. I assume this means an electronic glitch, and not the value of the indices themselves.

After doing a Yahoo seach, loaded the FASCOM page, and all the info is from December 30!!

Does anyone know if this is typical updating for that site?
Two days behind? Something would seem amiss here.

Anyone?
elevator guy
(01/01/2000; 08:49:22 MDT - Msg ID: 21971)
@ Peter Asher, msg id # 21959
I attempted to call the Council Bluffs Airport, in Iowa, and although it rang, no one picked up. Of course, they could just be super busy, but-

This would lend credence to the greenspun report of communication loss.

Council Bluffs Airport- 712-328-4682

Dont everybody call at once!
elevator guy
(01/01/2000; 08:55:34 MDT - Msg ID: 21972)
Last post before I take a walk, really, I promise!
One thing that does not seem to have made it past the rollover is Jim Lord's website!!!!!!

Anyone else notice this? Maybe the server is busy with Polly chat!
Journeyman
(01/01/2000; 09:23:35 MDT - Msg ID: 21973)
One of those thousand (tiny) cuts . . .
Hmm! My old 486 (running Windows 98) & checked out as "compliant" thinks it's Jan. 4, 1980. It knew what the date was when I hit the sack last night.

Regards, J.
Number Six
(01/01/2000; 09:59:35 MDT - Msg ID: 21974)
elevator guy @pak stock exchange @canuck
This is not quite true, no crash - an urban legend!

Should be fun and games watching the worlds banks talk to each other next week...

we have the problem of corrupt data sloshing around - this will need to be contained and isolated quick should it rear it's ugly head...

clearing and settlement will also need to be working at 100% - no errors allowed...

we'll see...

Canuck

Good advice for your Son! My best to you and yours!

Oil looks to be heading south as of now - however it's very early days, again, we'll see...
The Scot
(01/01/2000; 10:07:22 MDT - Msg ID: 21975)
Thanksgiving
Today I am thankul that the world seems to have met it's current problem and may have overcome it.

I am also very thankful to have learned so much from the great minds that share their knowledge here at this esteemed site and to our host who makes this all possible.

I am very proud of those who prepared for the unknown and did all they could to insure the safety and well being of their family in spite of the harassement of friends and neighbors. You did the right thing.

I am especially proud of the single mothers and military wives who in some cases had to do this on their own.

This event has shown to us the power we have to communicate together via this medium to help and encourage oneanother.

I still believe the year 2000 will present problems for many around the world. Let us continue to share knowledge and try to uphold the courage and character worthy of "Knights of the Table of Truth".

Happy New Year to all, God Bless. The Scot
beesting
(01/01/2000; 10:11:50 MDT - Msg ID: 21976)
Officially in the U.S. it's January 1, 19,100.
http://abc.net.au:80/news/newslink/nat/newsnat-1jan2000-92.htmFor a good laugh, check it out.....beesting.
USAGOLD
(01/01/2000; 10:35:52 MDT - Msg ID: 21977)
To mhChuck and all....The "One Thousand Ton Gap"
I remember Farfel lamenting the fact that the gold producers did not have the moxy to pull together as a cartel to keep gold off the market and thus buoy the price. Then when the cartellization (different source; same effect) occurred via the Washington Agreement, I was surprised that no one, not even Farfel, recognized it for what it was -- a signed agreement to keep gold off the market every bit as important as the OPEC Agreement -- in fact, a cartel. The price move from $255 to $330 which apparently many of our speculators missed was fueled by rampant fear among gold's detractors and unmitigated enthusiasm among gold's advocates responding to the appearance of that cartel.

When the gas came out of our mini-balloon, gold still garnered a roughly 15% return over the three month period from September to present -- that's 60% on an annualized basis. The commentators at CNBC cannot stop bubbling and gurgling over the 20% return on the DJIA through 1999, but noticeably failed to give gold credit for a substantially better performance. This despite the fact that major gold firms also spend millions advertising on their network.

Who caught that gold spike? Many. Including a large number of mega-Centennial clients who followed our simple formulation of buying on the dips -- no matter how catastrophic the opposing mainstream press and Wall Street's gold haters makes them appear. If you didn't catch the spike, or as a speculator you took losses in gold over the course of 1999, it was because your strategy (as a speculator) is flawed, not because of any inherent problem with gold itself. By the way, of the "many" who caught the spike, not one has called to sell!

The way to capitalize on gold, from my point of view, has always been to purchase the physical in a steady program and hold it as a long term hedge against various economic/political events that might injure the overall portfolio. (I have always thought that options, futures, loan agreements and the like played into the hands of the oppposition and anyone who has discussed the subject with me knows how I feel about it.)

For the life of me, I cannot understand these tirades against gold that it somehow kept one speculator or another from making a profit on internet stocks (for example). I have never suggested or have even come close to suggesting that 100% of one's portfolio should be in gold. In fact, I think the 10% to 30% formulation I've recommended based on your assessment (not mine) of the world economic/political situation is prudent beyond challenge. What an individual does with the other 70% is their business, not gold's (or mine for that matter). If you neglected to ride the internet crazy horse, that's your problem not gold's. I never been able to understand these strange connections, then again I've never been a gold speculator.

Instead, I remain steadfast in my opinion of gold as the ultimate arbiter in the currency wars foisted upon us by our various national governments. In keeping with that, I continue to recommend long term gold accumulation as a form of sound and reliable money which serves as the ultimate savings vehicle and, unlike the dollar, has none of the attendant liablilities and reciprocal obligations. I believe that anyone who owns it under this rubric need not wait for price performance to gain some satisfaction, that satisfaction comes now in form of peace of mind and the sure knowledge you have done everything you can to protect your family (and yourself) from potential systemic failure. (I will return to this subject further down.)

Now...onto something of a forecast for Gold2000..........

Back to the Washington Agreement:

In 2000, I think the fundamentals have changed in gold's favor. There is an inherent gap between gold supply and demand of over 1000 tons. That gap in years past has been filled by Forward Selling/Gold Carry Trade programs and Official Sector dishoarding. Both depend upon central bank co-operation for their sustenance. That rug has been pulled out from under the bullion banks in a very public show of disfavor by the central banks via the Washington Agreement. Keep in mind that when the Euro central banks came together on this agreement, they knew that it would jeopardize those gold loan positions at some of their own member banks, so they had to have done it with some larger end in mind.

The drop in gold from $330 back to the $275 level had to do with the bullion banks scrambling and doing everything in their power to keep gold down while they unravelled the mess at Ashanti, Cambior and others that did not become public. Many mining companies are still in a cold sweat over this and can only hope that the bullion banks are successful in buying enough time to unravel the mess. They may not have the time. That is the message of gold's return to the $290 level. I see it as the secong leg in a long term breakout (perhaps the Elliott Wave Three) that won't materialize overnight but occur over an extended period of time (assuming there is no stock market crash.)

I think the fundamentals are going to play a much more important role in gold's pricing next year than they have in the past decade with the central banks out of the supply picture. That one thousand ton gap will become an issue. Any of the anti-gold crowd that wants to stop a price rise runs the risk of pushing the price to a level that would generate huge physical purchases that probably cannot be fulfilled. At the mining companies, I would advise playing along with your bullion bank counterparties but buy the physical whenever you can (as Goldfields has done) because you might not be able to rely on your favorite bullion bank when the chips are down. (Just ask the people over at Ashanti) As a matter of fact, they tend to dig into your asset structure when things go bad and then offer you "more time" as a salve to arrest the bleeding. Of course, the next step, should the price continue higher, will be more bleeding, but let's not talk about that.

At the end of the year, we were in the market for a substantial number of gold coins at the behest of a client and not one supplier could make immediate delivery. (The transaction was not completed for reasons I can't go into here.) And when you consider the amount of gold that is supposedly transacted daily, our needs would have to be considered small. We have heard repeated stories of the lack of large amounts of bullion available for purchase among the big players and this despite the appearance of significant bullion from Kuwait, Holland, Jordan, Britain and others. When these various hoards come on the market, forget the source, they disappear into the black hole of physical short covering. These hoards have not sent the price reeling downwards. They've only acted as a temporary suppressant psychologically, then disappeared.

In essence, I see this up move at the end of the year, not as Y2K related upon reflection, but the fundamentals coming into play. Many are asking the same question I am: How is this 1000 ton gap going to be filled and at what price? We know about 300 will come from Euro banks according to the agreement. Where will the other 700 come from with the official sector and the carry trade essentially shut down, or at least substantially subdued? I believe it will have to come out of the ground and I think that will occur at prices that ratchet every higher as the year progresses, though we could have something of a down draft at the beginning of the year.

Once in Goldconda:

mhChuck makes the point that Mr. Greenspan and Wall Street have essentially pulled off the New Paradigm and there is nothing to stop the current Era of Good Feelings from extending to infinity. He goes on to list to list a series of governmental policies that flaunt the power government seems to exert over the economy these days without even the hint of a consequence. But, mh, history is replete with examples of even the mightiest empires turning to salt in what seems to be the blink of an eye. One day things are fine; the next not so fine. How does this happen? It would not be trite to say that in each instance destruction of the currency was involved, however, I would say it goes much deeper than that.

The ancient Greeks dealt with this phenomena often in their tragic literature -- the counterpoint of power and failure. Human arrogance was always rewarded with a reminder from the gods as to who was really in control. Even the mightiest king or emperor, kingdom or empire could fall as easily, quickly and completely as the lowliest citizen -- a victim of "The Fates". It is not you or me who will bring down the New Paradigm, or even the acts of the greatest economic and political thinkers of our era. It will fall by its own arrogance.... on Hubris, as the Greeks called it -- the vain act of contemptuously assuming the mantle of the gods.

And I say this not because I "want" it to happen. I say it because I believe it "will" happen -- no matter how much I do to prevent it, to speak out against it, or to warn against its eventuality. All I can do is prepare for it by adding to my gold holdings and then going about living my own life in the best manner possible. In this way, I act on my beliefs and I am happier for it. (And I still have plenty left to invest in internet stocks if I want to.)

"Golconda, now a ruin, was a city in southeastern India where, according to legend, eveyone who passed through got rich. A similar legend attached to Wall Street between the wars." From "Once in Golconda" by John Brooks 1969

I might add that a similar legend attached to Wall Street after the end of the Cold War....

More some other time.....MK
Nightrider
(01/01/2000; 10:44:18 MDT - Msg ID: 21978)
Remebering Stanger
As many of you readers will remember, when, the topic of Y2K was the rage in this room The level headed Stranger was a Voice of reason and Confort to many of us Its, a shame, that his voice of reason can no longer be heard.
Peter Asher
(01/01/2000; 11:38:30 MDT - Msg ID: 21979)
A message on the Libertarian newsletter:
Subject: Increase in firewall alerts

I'm personally experiencing an increase in probes and port scans
on our firewalls in the last 90 minutes.

Lots of telnet and other port probes from arab and canadian ip's.



RAP
(01/01/2000; 11:58:33 MDT - Msg ID: 21980)
One more cut
I went to my local W.D. today and the MAC - ATM had a sign on it-- "OUT OF ORDER", seems it worked yesterday!
Happy new year to all.
Netking
(01/01/2000; 12:09:29 MDT - Msg ID: 21981)
Financial Lessons of History
http://www.gold-eagle.com/gold_digest_00/baron010100.htmlInteresting read above friends...

As we head into the new year, going boldly where no man has gone before it's a good time to reflect.
Gold will have it's place in the sun this year. The Dow should be a "Down" by about 30% by March 31st and gold should be heading north by then. White metals & oil will head south for a while shortly(sorry Sir number 6!).


Cavan Man
(01/01/2000; 12:16:09 MDT - Msg ID: 21982)
USAGOLD
I think your point about hubris is well taken. I see it evidenced most everywhere I look.
Goldy Locks Guy
(01/01/2000; 12:24:20 MDT - Msg ID: 21983)
Leigh...or someone, Can you explain this?



>>>>>. Housewives spend their day waiting in lines at gas stations to fill up at $16.50 a gallon -- for regular. Latecomers at grocery stores feel lucky to buy bread for $15 a loaf & hamburger for $24 a pound. Grocery store shelves are nearly empty. Banks nation-wide begin to call in loans. The five largest US insurance companies announce they will not honour requests to cash in policies "until further notice.">>>>>

Leigh, I have always wondered exactly what is meant by the Banks calling in loans....what does this mean? I've got a couple of credit card debts that i've been putting off paying because they are low interest rate and because I didn't want to spend my cash.

Besides that point, I called my local bank and asked the manager if there was a situation when the issuing bank of the CC would have the right to force payment in full of the account. He said no unless the account was in default or something.

Anyway, do any of you guys know if this is accurate? I suppose I should trust the Bank Manager, but I don't.

Thanks......goldilocks guy
koan
(01/01/2000; 12:27:48 MDT - Msg ID: 21984)
Stranger
Happy new year everyone - here's to you Stranger. You were the best this forum ever had.
Leigh
(01/01/2000; 12:40:39 MDT - Msg ID: 21985)
Goldy Locks Guy
Happy New Year, GLG! I don't really know the answer to your question. Perhaps a banking-savvy knight will be able to help you.

Thank you, Scot, and Happy New Year to you, too.
DIRECTOR
(01/01/2000; 12:52:39 MDT - Msg ID: 21986)
To All
Do any of you fine people know if The Wall Street Underground has a website? And if they do, what the Link is for it. Thanks in advance for any help on this.
Canuck
(01/01/2000; 13:20:16 MDT - Msg ID: 21987)
Is Y2K over?
A mining story that might have parallels with Y2K.

In the fall of '80 and the winter of '81 I worked in the bowels of the earth in a mining town in Northern Ontario. My partner was a robust little native, no more than 150 lbs. who ate nails for breakfast and raw
meat at night.

Our job was to 'drive raises'. A raise is a little tunnel, about 6' x 6' rising at a predetermined angle following a gold vein. A vein is a highly rich gold ore deposit that can run through granite like a knife through a pound of butter.

Each day my partner and I would climb up the 'raise' to the end of our little tunnel to meet the 'face' of the previous days 'blast'. Our job each day was to drill out a pattern of holes 6' x 6' x 8' to blast out a new cube of rich gold ore. We would follow the vein until some geologist genius figured the most concentrated
area had been reached and then a 'stope' team would come in. A 'stope' is a cavern, sometimes many miles under the earth, where high grade ore has been removed. No need to drill and blast granite, its the gold we were looking for.

The drilling pattern for the cube in the raise is precise. I'm sure a dynamite expert or some genius in physics thought up the pattern. The 24 holes drilled started in the dead centre, in a dense cluster and as the holes moved away from the middle they moved further apart. At the outside perimeter the holes might be 2 feet apart whereas the centre holes were inches apart. The one whole in the middle was bored out to be about 3 inches in diameter; all others were about 1 inch. Each hole, except the giant centre was filled with dynamite and a blasting cap. The half a dozen or so holes surrounding Mr.Big had fuses timed for a 7 minute burn. The holes surrounding those were timed a second or two longer. As we move away from the middle each fuse is a second or two longer than the previous. The engineering behind the whole thing is as follows. The very centre holes blow first; it implodes onto the large bored hole creating a large hole maybe 6 inches in diameter. The next explosion implodes on a larger hole therefore the hole can be drilled further away. By the time a 4 foot hole has been blown out, elasped time maybe 10 seconds, the outside holes are blowing away 2 foot by 2 foot by 8 foot chunks of granite and gold weighing many, many tonnes. The noise is deafening, beyond explaining and extremely dangerous. The individual explosions can be heard miles away because the air and space is contained. My favorite thing to do was to light the main 'starter' fuse and wait, play chicken. I would wait a minute, a minute and a half and then run as if the devil himself was chasing me. A real intelligent thing to do, but hell, when you are 19 years old flirting with the devil was fun. I would race down the 'raise', jump on the little train/locomotive thing and drive like a madman. When I was a half -mile or so away I would light up a cigarette and wait. On the first mind-altering boom I would inhale a huge drag and puff a cloud of smoke in the air and shine my head-held light into it. The force of the explosion was so powerful the positive pressure would move the cloud of smoke exactly one foot away. The ensuing vacuum would then pull the cloud back to its original
position. Twenty-three times the cloud would bounce back and forth; it was eerie.

The point of this extremely long winded tale.

I go back to the analogy painted by Number Six earlier; the birth of the cancer cell and the spread of it.
The 'rollover' was the birth of the cell and we wait for the spread of the disease.

The fuse has been lit, the first explosion will take time, a small fracture will ensue and then another and then another. Once the process has been started it will multiply, the cross-defaults, the calamities, the
dominoes and the explosions. I cannot believe Y2K is done. Someone said 10% of computers have been exposed to the rollover; banks, business and government is still an unknown. What will Monday and new week bring?

I am pleased beyond belief than the 'clock rollover' played little havoc with hydro and telephony, I am estatic that water is still available. I am relieved that millions, as Mr. McIntosh suggested, did not die with the rollover. I thank my God, and your God , and every other God we are okay today.

I am not thoroughly convinced its over, I stand on guard, I hope you as well.
Jon
(01/01/2000; 13:41:54 MDT - Msg ID: 21988)
Happy New Year Stranger
I miss your comments. Hope all is well with you and yours. Had a big laugh the other day when someone showed me Weiss' latest Y2k newsletter. He recommends shorting EWJ and I immediately thought of you. I've just about doubled my money on EWS. I believe your EWJ will out perform my EWS and I may switch. Any thoughts on this pls e-mail me
Johmin@msnbc.com
Gandalf the White
(01/01/2000; 14:05:41 MDT - Msg ID: 21989)
Canuck's Story #21987
The Hobbits LOVED your story from twenty years ago, BUT have one question --- Do you mean to say that your partner stayed at the "hot" end of the raise to watch the fireworks while you took the ride down the adit a mile + away ? WOWSERS, he was a tough miner!! -- Another question, any misfires ? -- BTW, Wish I had a scanner to be able to post the pictures of how square my raises were from the good ol'e days. -- Especially the one with the streak of yellow stuff down the side. --- Good ol'e Quartz Hill !!
<;-)
Peter Asher
(01/01/2000; 14:27:54 MDT - Msg ID: 21990)
Goldy Locks Guy (1/1/00; 12:24:20MDT - Msg ID:21983)
Many mortgages have clauses that stipulate payment if the Value of the property drops below the balance owed.

Also, many unsecured loans along wtith some mortages, have a clause that requires payoff if the borrowers credit worthiness deteriorates. Most people don't read the fine print or consider the consequences of the clauses, believing the liability won't occur. --- As in the case of Ashanti Mines!
THX-1138
(01/01/2000; 14:28:11 MDT - Msg ID: 21991)
Y2K bit spy satelites
http://www.drudgereport.com/matt.htmXXXXX DRUDGE REPORT XXXXX SAT 01/01/00 14:00:09 ET XXXXX

PENTAGON: SPY SATELLITE SYSTEM IN Y2K FAILURE, DATA LOST FOR HOURS; WHITE HOUSE TOLD DURING CELEBRATION

The Pentagon experienced one "significant" Y2K failure on New Year's Eve, Deputy Defense Secretary John Hamre said on Saturday.

"We did have one significant problem, one that I had wished we hadn't had, but we did... One of our intelligence systems, a satellite- based intelligence
system, experienced some Y2K failures last night shortly after the rollover of Greenwich Mean Time."

Hamre revealed that for a period of 2 hours, officials at the Pentagon Officials lost their ability to monitor all data from the spy satellite system.

"We were not able to process the information that the satellites were sending to us," Hamre told reporters.

And on the morning after the night before, the system was still "operating at less than our full peacetime level of activity," Hamre said.

MORE...

"The satellites were always under positive control," Hamre explained. "At no time were we ever without positive control over the space assets.

"Our problem actually was here on the ground, in the processing station. We were able to adopt backup procedures, which had indeed been planned and
rehearsed, and they are in place right now as we're working through the final details."

Word that the Y2K bug had left the Pentagon temporarily blinded, reached the White House at the height of New Year's Eve celebrations, the DRUDGE REPORT
has learned.

Shortly after 9 pm ET on Friday, the White House was informed of the satellite data jam, according to one well-placed source.

However, White House officials publicly maintained throughout out the night that there had been no "serious" Y2K events or disruptions.

MORE...

"I won't be able to speak much to the details of it because of the sensitive nature," Deputy Secretary John Hamre said of the intelligence breakdown.

"I am not sure that we will ever be able to give you a full report of what happened."

Hamre added: "It was only for a matter of a few hours when we were not able to process information. We are now. And we'll be back to normal operations very
soon."

END.
FOA
(01/01/2000; 14:40:22 MDT - Msg ID: 21992)
Comment
Cavan Man (12/30/99; 6:43:30MDT - Msg ID:21838)
Hello FOA and, Many Thanks
Please consider this:
I am 42. Will I live to see it and perhaps enjoy the knowledge that I made the right decision???????????

Cavan Man,
42? Oh boy, I didn't know you were so old! Well, at that age one should be careful with your body. Get plenty of rest, eat well and take your vitamins. If lucky, one could live another 40 or 50 years! (big smile)
Seriously, it was so long ago that I passed that age I lost the records. And for the record, I know I'll see this gold change. So, all in all, you don't have to live long enough to see the next gold bull, "you just have to outlive me"!! Ha Ha (huge great big smile!)

Happy new year CMan.
FOA
(01/01/2000; 14:42:33 MDT - Msg ID: 21993)
Comment
Golden Truth (12/31/99; 15:09:49MDT - Msg ID:21912)
Paranoid Thinking Runs Amuck Here!
Now a year later i still have an enormous amount of respect for your knowledge about Gold. Yet, I still respectfully say, the World markets are just to big and to unpredictable for one person to know with any certainty.------------------

Hello Golden Truth,
Reading all of your post tells me the (non physical) gold markets have been rough on you. I can understand your feelings if you can grasp what groups we are talking to.

All of Another's Thoughts and my comments are directed toward "physical gold owners and by extension "physical gold advocates". These people have read all of these ongoing posts (some have been involved privately long before the current "gold forums stage") and know the thinking is
strategic as it applies to a moving, evolving political target! Each group of posts are but a snapshot in time as it applies to this changing chess game. Yet, the end results remains the same, the destruction of our present pricing system for gold, a huge increase in the dollar price of physical gold, the eventual use of gold a Euro reserve settlement currency along with the new free market that must evolve with it.

"Physical Gold Advocates", such as I (and readers) have brought gold from the high $360s into the low $280s because of this ongoing timeline of events. A timeline that is now quickly being depleted as the Euro builds it's position in the world. I submit, we are not hurting in any comparable
way as our gold holdings are in a good large proportion to our total assets. And certainly our asset values have not been impacted as the gold derivatives players have (gold stocks included). When behind the stage power plays are in progress, the possible short term outcome is presented. Yet, it is presented with the knowledge that readers will think bullion, not derivatives. As such, if the chess game moves into another stage, no hard loses are taken by anyone.

ALL:
The historical record of physical gold alone is enough to justify a real gold holding. I add that the record for mining shares and the other leveraged derivatives are lacking in their long term comparison. These items are as new and peculiar to the modern investment scene as is the current dollar "off the gold standard"! Players often tout these paper investments to be as good as gold, yet they are truly only as good as the dollar marketplace for gold! Still, I own some gold shares (gold), but only in a small proportion.

We conclude that the coming bull market in gold will be unlike anything before it. Today, the leverage is in physical gold, not paper gold. This latter day track record of derivatives, gold stock options, gold options, gold stocks, etc. all clearly demonstrate this changing function. The horrendous ongoing, long term loses, built up by these paper bull traders is evident. With each downturn, they search for greater and greater leverage, in a attempt to return to "even". All the while, the bullion buyer slowly amasses a large "highly leveraged" position, just by channelling his would be trading loses into paid up physical and rare gold coins.

One day, the dollar paper gold markets will be driven into "Force Majeure", during a transition from the current dollar reserve system. With each political announcement, the stress on the London market will grow. We know this position and understand it well. Yet, no one can guess when the
last bullion delivery will spell the end for paper credibility. I only offer the month by month level of stress and how it may impact bullion.
As for this Y2K item. I fully acknowledged it potential for impact on the dollar. Yet, in my posts, I offered my feelings that it would not be severe. Clearly, we have larger items to address that this.

More later. FOA

Mr Gresham
(01/01/2000; 15:59:47 MDT - Msg ID: 21994)
Hoot of the Century (Which One?)
http://stand77.com/wwwboard/board.htmlThe Y2k Debunkers' website, devoted to hounding and harassing and jamming the TB2000 website, can't display their posting dates correctly. They show 1/01/100.

Happy New Year, all. Now we can get on down to basics! Let's see if anyone will join in.
USAGOLD
(01/01/2000; 16:24:52 MDT - Msg ID: 21995)
Once in Golconda...
"The days (of August, 1929) are cool and dry; Goldconda's climate lacks the usual seasonal sniff of Hell. Not only do the regulars stay in town; necomers have arrived in great numbers. These are men and women who are sacrificing their own vacations, or else have simply chucked their jobs, to spend their days sitting, or more likely standing, in the brokerage customers' rooms watching the quotation board report the glorious news, and to share in the beneifts. They arrive early to read the brokerage houses 'morning letters' informing them confidently which stocks will rise how much that particular day, which will be 'taken in hand' by a pool at what hour, which companies have favorable news to come out shortly. By Stock Exchange opening time, all along Wall and Nassau, Broad and Broadway and Pine, the customers' rooms are jammed -- there is standing room only and perhaps not even that, there is a premium on positions from which the quote board can be seen. Still, they all are sure it is worthwhile being there, right on the scene; they feel themselves part of something tremendous, and perhaps, too, they feel their physical presence on Wall Street makes them insiders, gives them some slight advantage over those who are maintaining vigil elsewhere -- the barber or chauffeur or cab driver whose ear is cocked for a tip his important client might let fall, even the important man himself who has given up his vacation not in substance but only in spirit, and, sacrificing a seat in the sun, is glued all day to one in an office in Bar Harbor or Newport or Southampton or in a Catskill Mountain hotel. Brokerage house branches have suddenly made their appearance at every important resort, and the wires between them and their home offices hum all summer long."

To be continued.....

Once in Golconda
by John Brooks, 1969
Mr Gresham
(01/01/2000; 16:28:07 MDT - Msg ID: 21996)
TB2000 Forum
http://hv.greenspun.com/bboard/q-and-a.tcl?topic=TimeBomb%202000%20%28Y2000%29P.S. Don't miss it today -- it is really rich! Probably for another two weeks or so, also, if you want to wrap up your y2k story with the full roster of bugs that are being outed.

Also SangersReview.com (no "www") has a good ongoing filter of harder news, and checks out the rumors pretty well.
Al Fulchino
(01/01/2000; 17:48:22 MDT - Msg ID: 21997)
No reason to doubt ourselves


Many have awakened to wonder why they planned for y2k. I am not one of them. People who purchase gold and / or purchase food and supplies were indeed the smart ones. They are not all doom and gloomers, instead they are optimists. They are usually people of perception. They are usually people with decent morals. They are the neighbors I want around me. There were indeed consequences if the y2k bug was not worked on. Those who think this through do understand this. In fact, those who laughed at y2k and the people who prepared should be kissing all the rear ends of those who sounded any alarm at all. They should be thanking the corporate executives who decided to spend millions on this issue. Those same executives, who said fixing it WAS important, kept the stock value of their respective companies and the profitability of the companies in the black. I say thank you to all of those who cared. Instead it is our turn to laugh at the naysayers if we so choose.

I now have a very respectable financial security blanket, based on my gold and silver purchases, around my family and me. I have food and many other items that will serve useful purposes when I so choose. I also have an interesting perspective as a retailer of a much sought after resource as some of you here know.
This past week I got to observe the wise make final preparations, as well as the "newly concerned" ( formerly known as naysayers make those just in case purchases. In their faces, I saw doubt inside with a smile on the outside. They didn't need the extra stop at my stations. They chuckled about how silly y2k was and how nothing was going to happen, BUT they came anyway. They would normally be doing something else. They came and bought. They went home and told their wives to buy a bit extra. Deep inside they too wondered. My sales were up 50% for the last two weeks, day in and day out they came. They came and filled tanks that hadn't seen a full tank in years, ones that had holes in them and leaked all over my lot. They came with shopping carts filled with gas cans. I got to see all the people who would be dangerous to me if a crisis were to have developed.

So I thank those who warned. I thank those who prepared. I thank those who worked on a fix. And I caution that we take note that this is only half time. There are still weeks in front of us that may indicate some problems have not shown themselves yet.

PS. By the way, we just gave away a canal. Celebration anyone?
Golden Truth
(01/01/2000; 18:17:00 MDT - Msg ID: 21998)
TO F.O.A
Hi F.O.A, thanks for being so very candid, and taking the time to respond to me! One thing i would like to say right off the bat, is that "i am" only a physical GOLD holder. I bought physical @ $290/oz almost a year ago after reading "your" posts and Anothers posts on GOLD for Oil. I then bought more in the $280-270 range and due to all the ongoing negativity we saw in the GOLD market in the summer of 1999! I stood by helplessly and watched the price nosedive to the $253 range.
I could of cried every single day! I do remember you saying that one would need "intestinal fortitude" or strength, because at that time, it was "thought" the P.O.G was going down to $200/oz, remember that? You know, in hind sight you were right, it probally would have, if it wasn't for the suprise announcement. A.K.A the "Washington Agreement"

I,am sorry if i've been hard on you, but its because i believe in you so much! I've also convinced others to believe in you! and they also only have purchased physical GOLD. Let me share this with you, firstly my Uncle@ 25oz's, next two guys i work with 10oz's each, and one is looking to buy alot more! He also thanked me for getting him into GOLD WOW eh! Now lastly myself, wait for it, a whole 38oz's.
For a total of 83oz's of pure 24k GOLD. So you see F.O.A your words carry alot of weight and in GOLD yet. Whether you know it or not, alot of people due really look up to you in this New GOLD market.

Also in reviewing "Anothers" posts i've begun to wonder or notice that his focus was mostly on "OIL for GOLD" in the beginning. Where as now we tend to focus on the "EURO and GOLD". Which for me is alot more complicated, but i never give up trying to understand it all!

To make a long story short, what is going on in the OIL for GOLD realm these days? Is it as Another said it was some 2 years ago in the book "IN THE FOOTSTEPS OF GIANTS" or is it back to business as usual?
Sorry for being hard on you, but owning GOLD and having someone telling you that it is priced way below its true value and at any minute or day it all could come undone.
Is the equivalent of a very beautiful Woman that is classy, refined, educated, well traveled and smart saying "You can have me, but you must always do just one more thing" before the big day! Very frustrating indeed, but usally worth it?
I feel this is the point at which alot of male GOLD owners are at, i,am sure you can feel my frustration also F.O.A
(Big Smile) :-)
God bless you and i trust the Holidays and Santa was good to you!

G.T




USAGOLD
(01/01/2000; 18:25:37 MDT - Msg ID: 21999)
Once in Golconda
"Many of those now crowding Wall Street have burned their bridges. They have thrown over their jobs on reaching some predetermined goal, a paper net worth of $50,000 or $100,000 or $200,000; they have bought expensive houses and mink coats for themselves or their wives, and look forward to lives of leisure and affluence spent at this easy and entertaining game. Moreover, in their short time on Wall Street they have come to feel a sense of belonging there; the scars on Morgan's (from an anarchist bombing) are 'their' scars and the grave of Hamilton in Trinity Churchyard is 'theirs.' They have a new life and, if they wish, they can even partake of the very symbol of belonging. The most change-resistant institutions, the urban club, has gone democratic on Wall Street; luncheon clubs, most of them no more than six months old, are everywhere, ranging from fancy cafes to one-arm counters in bare rooms, and membership is just a matter of knowing somebody -- anybody -- and paying a fee.
At lunch hour the streets of the district are jammed from building line to building line. Even at the height of the morning and afternoon business hours the streets are full of pedestrians, talking, gossiping, shouting to make themselves heard over the din of the new office building construction going on everywhere. But at noon the crowds on the streets grow so thick that no car can pass, and the constructions sounds are stilled for the workmen's lunch break. A visitor from England, charmed by the silence broken only by talk and footfalls, is reminded of Venice. He finds the atmosphere 'savagely exciting,' and as an outsider watching the performance of a rite he does not understand, he feels loneliness and a certain alarm. He is not reassured when his American friend and guide breaks into a cool explanation of Wall Street and the American business to say, abruptly and cryptically, 'All the same, I don't really believe it.'"
Peter Asher
(01/01/2000; 19:08:18 MDT - Msg ID: 22000)
Al Fulchino (01/01/00; 17:48:22MDT - Msg ID:21997)
As much as we would have liked to have you for a (Almost) neighbor, I'm glad you did't invest in closing up shop and moving the whole kit and kabbodle out here. That would have been a bit much considering how it all fell out.

Robin was just saying that alot of things she's been putting off doing for 20 years, got done because of the high necessity level. She also pointed out that if food prices shoot up we'll all have made a good investment.

Not an Ill wind, was it?



USAGOLD
(01/01/2000; 19:57:16 MDT - Msg ID: 22001)
Once in Golconda...
"All through the days and long into the evenings, the talk, talk, talk goes on. There are tales of fortunes just made and of fortunes about to be made -- above all talk of fortunes. There is not talk of panic; the spring crisis is in the past now, brokers' loans are soaring faster than ever but that is considered healthy now, there is no money squeeze and call money has settled back to a reasonable 6 or 7 percent. The market averages stand 34 percent above the March low and 76 percent above early 1928. When on the ninth of the month (August,1929), the New York Federal Reserve raises its rate to 6 per cent nobody pays much attention; the Fed is a figure of fun now. There is constant talk about the new investment trusts, Blue Ridge and Alleghany, Shenandoah and United Corporation and hundreds more, that are the latest thing in stocks, a billion a half dollars worth of new ones put on the market since January; paper companies with staffs of only half a dozen people, existing merely to hold and trade in the stocks of other companies, most of them elaborately designed to 'move fast' by the application of 'leverage' to their structure, they are considered flimsy and over-speculative by some, but why should they be? Weren't Alleghany and United sponsored by that pillar of conservativism, J.P. Morgan & Company, and hasn't Alleghany gone up from its February offering price of 20 to 56, United from its January offering price of 25 to 73? There is talk about John J. Raskob's article in that month's 'Ladies Home Journal' entitled 'Everybody Ought To Be Rich,' in which he explains how savings of $15 a month wisely invested in stocks will do the trick in twenty years, and talk about whose shares it lists, has just declared a 'stock dividend' to its members -- one fourth of a seat to each holder of one. There are jokes about well-fed, broad-beamed Exchange members needing a seat and a quarter each, these days.

Money is king -- but there is something else. It is a high, wild time of riotous spirits and belief in magic rather than cold calculation, a time of Dionysius rather than Apollo. People speak of 'luck' and 'the breaks' more than of earnings and dividends. They have given up their month at the lakes and beaches not in the puritanical spirit of 'business first' or 'come labor on,' but in the hedonistic spirit of living more fully and not missing life's chances. It is almost as if they believed the market existed for taking chances not on money but on happiness."
USAGOLD
(01/01/2000; 20:07:21 MDT - Msg ID: 22002)
Series of posts....
The "Once in Golconda" posts below are extracted from the book of the same name published in 1969 by Harper & Row and written by John Brooks. For some reason my end notes did not end up on the board.

My purpose is to bring to light the extraordinary parallels between the cultural and market phenomena of 1929 and the present. Manias, it seems, have similar characteristics no matter the era. It's like deja vu all over again.

To be continued.....
Number Six
(01/01/2000; 20:14:41 MDT - Msg ID: 22003)
This post was pretty much addressed to me as one of the prime gold advocates on TB2K
Those thinking y2k 'is over' have no idea what they are talking about. Here's one reason why.
Several months ago (mid-November) I attended a financial conference as a presentor for our start-up company and happened to meet Robert J.(Bob) Leuver. Bob is not a well known figure but was the number 2 man at the Treasury dept under Reagan (he was head of the Bureau of Printing and Engraving). Anyway, it was clear that he is well connected to this day. His testimony to Congress is not uncommon and he *often* consults with central bankers, especially in South and Central America.

His area of greatest expertise is obviously banking. He did not expect bank runs before the end of the year. He felt that the American banking system was in very good shape overall.

Here is his one word assessment of the banking sector in South and Central America: toast. According to *his assessment* - all the banks of South and Central America are toast and are going down hard. He stated this as fact, without hedging. No inuendo. Just a simple statement. "All of those banks there who say they have even begun to get ready, and that's not many, are 'not reporting accurately' (not his words for what they are doing - I softened them). Their financial system is going to collapse."

I emphasize that this is his assessment because, like any human being, he could be wrong.

It is interesting that he believes the big money center banks will be *better* off. (Contrary to Gary North). Why? Because Citicorp, for example, has it's own office in the foreign city. They can sever all ties with the national banks and still do business. That alone would collapse the economy there, he affirmed, but since it's collapsing already, the nations will be grateful that Citibank in, for example, Buenos Aires, keeps its doors open. (I suspect that the angry people will look for a 'foreign devil' scapegoat to blame and so burn down the Citibank office, but that's just *my* speculation.) He thinks xxxxxx Bank (a large regional US bank), for example, will be in horrible shape because they have a lot of money loaned in those countries but no way to collect it except through the national bank. Each transaction they do in those countries is totally dependent on a functioning national bank. Ooops!

He does not think we will be able to reliably get *anything* from South or Central America next year and, for some reason, mentioned car parts a couple times. (But that won't affect us, right pollies?)

And here's one for you Andy: The biggest buyers of the British Gold in the previous to last sale were the Chinese. They bought almost all of it. The Europeans did not like that and that was one of the reasons they decided to curtail the sales of CB gold. Robert J. Leuver, formerly the #2 man at the Treasury, recommends the purchase of gold. Hmmmm, it seems Andy is in good company.

Now, what does the potential collapse of these banks mean? The reader can draw his or her own conclusions. My assessment is that, if true, this will be substantially bigger than the "Baht crisis" which, as you may recall, initiated the Asian crisis and nearly caused a worldwide financial meltdown. (Which of you can honestly say you even knew what a "Baht" was before that crisis?)

Pollies are gloating, "no bank has collapsed yet". Stupid pollies. Someone should buy them a clue.

And perhaps those 'embarrassed' at having prepped should buy a clue as well. (Lots of hunger during the Great Depression - your preps may yet serve you exceedingly well.)

Further, take a look at the SEC filings for any major bank. Exposure in Latin America is *huge* (much bigger than Russia or CIS). What will the impact be? The reader may draw whatever conclusions seem reasonable.

Here's another tidbit. A friend of mine recently started a new hedge fund. It's a small fund - only about $100 million. He is clearing through xxxxxxx brokerage. When he 'signed up' he was asked, "How much leverage do you want? Two times?" He paused. "Four times?" Pause. "Ten times?" (His pause was due to shock.) He took 'some' leverage. My point is, the whole system is leveraged far beyond what most people would guess even in their *wildest* speculation. This, my friends, is why y2k did, and *still does* scare the caca out of the Fed. They are trying to drown their sorrows in liquidity (but may soon need to turn to booze.) The liquidity injection has of course made the situation worse - much worse. The Fed has brought us to the edge of a very high cliff. Now, in the new millenium, we are ready to step forward.

The market has been on a wild rampage. It may continue for a few more days, but I speculate that the life of this bull is measured in days, not months. Once it goes there will be no stopping it. The unwinding will be unlike anything ever before witnessed on this planet. I expect the system to effectively seize up, not from y2k glitches, but simply because there is such an indescribable dislocation in place that a controlled return to 'normalcy' is impossible. Greenspan has not allowed the market to purge itself of excesses in what would be a painful but relatively controlled manner. The infusion of capital beginning in the Fall of '98 was politically, not economically motivated. This infusion has not only continued unabated but has accelerated sharply through the end of this past year. (The Fed is very afraid, but not of power outages!) My point: don't put that cash stash of yours into a terminally ill bull. I think his rage is the result of a large brain tumor.

Now, if banks in Latin America do fail, don't expect it to happen in one day and don't expect it to hit Reuters by Monday afternoon (or for weeks/months/ever). I'm certain, however, that by noon on Monday the pollies will be claiming that the banking system is 'fine'. Stupid pollies.

As for my own expectations, Gary North would classify me as an optimist because I have in my portfolio the most digital of all assets: puts (S&P 500, LSZ series). The purchase of these was 'optimistic' because it posits the survival of enough infrastructure that being correct has meaning. I need power, the exchanges to function, a reasonably intact banking system and the ability to buy something with any $'s I may receive. So far so good.

P.S. I had a can of hash for lunch. Yummy!

-- Me (me@me.me), January 01, 2000
Goldsun
(01/01/2000; 20:21:08 MDT - Msg ID: 22004)
Euro Roars Into New Year
http://www.ducati.com/MH900e/astride outrageous new Ducati motorbike.
Ducati is selling this wild limited production model in a wild new way. You place your order on the web, even though the bike is delivered to the nearest dealer. And the price will be the same everywhere in the world -- 15,000 euros!
Rock and EuRoll!
Goldsun
RAP
(01/01/2000; 20:29:49 MDT - Msg ID: 22005)
Goldsun
True inflation:
I bought my first Ducatti in 1966 for $1250, a slight increase in price?
Black Blade
(01/01/2000; 20:31:29 MDT - Msg ID: 22006)
Good to see everyone alive and kickin'
Just blew into town and thought that I would poke my head in here. Well now we made it through the roll-over. Hopefully no major problems on monday when everyone fires up for the new year and no major problems from embedded systems develop. I see that Holtzman has signed up! Now I have my work cut out for me. I have over a weeks worth of reading to catch up on. All in all, things don't look too bad. Happy new years all!
SteveH
(01/01/2000; 20:33:07 MDT - Msg ID: 22007)
Protecting gold
Upon reading this you may conclude that this has nothing to do with gold. Au contraire. It has everything to do with it. Where the word gun exists, substitute the word gold. For example, register guns, register gold, loss of rights to guns, loss of rights to gold (gold seizure). You see my point?

After a few days of reading I have come to the following observations about our Second Amendment Rights. If you boil down the issue to its most basic premise or what is called a priori (that which is the essence of the issue), the following comes to mind:

-- Second Amendment is an individual right for the people to keep and bear arms, including CCW (carrying concealed weapons) in all locations.

-- This right applies to voting age persons.

-- Gun registration is ineffective and unconstitutional.

-- Severe penalties for child access are not necessary and unconstitutional, including misdemeanor and felony penalties.

-- Purpose of right to bear arms is because of British and early-American common and natural rights and their experience with governments who have attempted to remove these rights before attempting the removal of further rights.

-- Founding fathers saw fit to make sure this didn't happen by including the already existing natural and individual right to keep and bear arms in the Bill of Rights.

-- Children should be educated and trained as to the proper use of firearms in order to protect this most valuable of all rights, as it ensures that future generations of Americans will not usurp for convenience or expediency this right.

-- The lack of a Supreme Court ruling on the individual right nature of the Second Amendment and judges and weapons boards who bow to the public health aspect of loss of life and limb versus strictly protecting the Second Amendment is causing serious harm to the right.

-- The greatest enemy to the Second Amendment and to the American people is the attitude that the Second Amendment should have no cost in lives. The Public Health aspect of the Second Amendment and its perceived wanton loss of life from having a free and open right to keep and bear arms is becoming prevalent such that some naysayers would rather have zero loss of life than the individual and uninfringed right to keep and bear arms. That is NOT to say that the liberty interest of the Second Amendment should cost any lives, rather the American people must establish the liberty right above that of the cost in lives, while working on ways to reduce loss of life and limb, while NOT infringing at all on the Second Amendment individual right to bear arms. This is critical: there is a segment of our society that believes the Second has no place as long as there is loss of life. This is a most dangerous position, as its ultimate effect would be to guarantee the ultimate loss of many greater lives. The founding fathers knew that Arms had a cost to society but also knew that the liberty right of bearing of arms far outweighed that cost. This is a complete paradigm shift from current thinking as it places proper perspective on where the individual right to bear arms should be. To put this in perspective, automobiles cause great loss of life and limb and yet the Press no longer reports but exceptional losses, people accept the cost in lives, while government and drivers do try to be safer and reduce loss of life and limb. Do we remove the right to drive from people? Only when they are irresponsible or drunken. AND, the right to Drive is not a Constitutionally guaranteed right as the Second Amendment right to bear arms is. Again, the emphasis of loss of life and limb from guns needs to be placed second place to the right to bear arms. Otherwise, erosion of that most important right will continue. Put simply, today's anti-gun person has forgotten the reason they have the right to be anti-gun and to say so is because of the very existence of the Second Amendment. They are in a very dangerous downward spiral that will not stop with the Second Amendment. This and all rights in the Bill of Rights need be jealously protected.

-- America is a formidable country because of the armed nature of each of its members. The totality of armament in the hands of all citizens makes this country great and protects it from those who wish to destroy the country from within or without. That is the exact meaning of the Militia part in the Second Amendment. In other words, you can not have an armed populace that stands ready to defend its rights, without the uninfringed right to bear arms. AND, that right has, does, and will cost innocent lives. Yes, non-infinging ways to reduce loss of life is essential, but should never be allowed to stand in the way of the Second Amendment. Unfortunatly, some of our leaders, judges, and law-enforcement persons have forgotten or refuse to recognize this, and that is how we find ourselves with more and more infringement, more and more bad press, more and more misunderstanding of what it is that makes America great. It is time for all American's to decide if their liberty is important and come to terms with the above.

-- The Second Amendment should not be allowed to be whittled away at by regulations, rulings, and restrictions. In so doing, the chances of other rights being whittled away at are equally imminent. No, the only proper way to change the Amendment is by a new Amendment. Otherwise it should be hands off.

-- The Courts find that the legislature, who is elected by the people, make laws that are constitutional, making the burden of proving a law or regulation is not constitutional that much harder. In order to rectify this situation, more people need to file formal complaints against those would choose not defend the Second Amendment. In addition, more people need to elect officials who support their views of the Second Amendment.

-- Any official using the color of law to restrict or oppress the Second Amendment through regulation, restrictions, or rulings are guilty in some way of a violation of at least one Civil Rights violation. To view this differently, would a citizen stand to have their right to freedom of religion reduced by having to register their religous preference? What is so different about the Second Amendment? Is it that gun registration reduces the cost of lives? I firmly don't believe it does. Does gun registration infringe on the Second Amendment? You bet it does.

-- Anti-gun proponents are using the risk to children to appeal and disfavor the Second Amendment. The Press has picked up on this is a big way. The Press has become one-sided on this and refuses to show the positive liberty aspect of the Second Amendment. This is tantamount to brainwashing, as the Press is known to have great influence on people. To choose only one side of an issue, to choose only to report shootings, especially those of or by children is to miss a whole other positive aspect of the liberty aspect of the Second Amendment. In fact, the Press receives an F for being patriotic, as they have forgotten or fail to mention the whole purpose of the Second Amendment. Death of children is tragic; so is trying to take away civil liberties. The Press needs to find a way to be constructive and patriotic. They must protect the Second Amendment by first understanding its true purpose, educating people to that purpose then find constructive ways to reduce loss to life and limb but in a fashion that in no way destroys the very right that allows them the freedom to speak their minds. It is naive to think that the liberty of the keeping and bearing arms in favor of a strong nation should come secondary to the social cost of same. Again, not that the social cost can and should be reduced but let the Press and the people not become so naive or complacent to realize this.

-- People who have not experienced crime do not understand that law enforcement is there more to deter crime but can not stop it nor can they save everyone. Often, persons must protect themselves until help arrives. If that help is slow in coming, then people are on their own. It is a natural right of people to protect themselves equally, force against force. Since our society chooses to be armed, then armed the citizens should be, if they so choose. To believe removing guns from the peoples hands will only result in removing guns from good peoples hands.

-- Anyone who has been arrested soley for possessing a gun for self-protection oddly could be considered political criminals in that they are the victim of a laws that have breached the Second Amendment. In proportion as the these crimes increase, the Second Amendment becomes further eroded. By right, no restriction of the right to keep and bear arms should have ever been permitted. That this is so is a testimony to erosion already having taken place. That is not to say that the Second Amendment can not have restriction or rules, but these need to be made in according with the individual right that it is, just as criminals are guaranteed their right to trial, their to counsel. It isn't popular but is is still a right.

-- Concealed carry and open carry are both manifestations of the right to bear arms. Concealed carry is currently the more accepted, as open carry of weapons often arouses undo suspicion and delay by biased arrests. Yet, concealed carry is the most contraversial as persons with hidden guns are often considered acting like criminals, when they are in fact merely excercising a natural right that existed even prior to its listing in the individual Bill of Rights to the US Constitution.

-- Concealed weapons boards do not have a Constitutional right to deny law-abiding citizens concealed weapons permits. Law-abiding citizens have the right to bear concealed weapons, but may choose not to. Their choice, not the boards.
FOA
(01/01/2000; 20:34:38 MDT - Msg ID: 22008)
Comment
mhchuck (12/31/99; 19:13:55MDT - Msg ID:21928)
Just Another Squashed Bug.----------------
----and----------
mhchuck (12/31/99; 19:22:25MDT - Msg ID:21931)
Do We Have Free markets?
Yuk, Yuk, what an industry, if the price of the item they are producing rises...they all go bankrupt. Please come and get me, I'm ready for the nuthouse.---------------------

Hello and welcome mhchuck,

Well, if you have come this far down the gold trail, we might as well finish the hike.
The end of this is closer than many think. My dad always said don't worry about the big bully in town. There is always someone bigger and tougher than him wait for the chance to ?????
The same is true in the money power game. I never said that the Euro was not going to be a tough "dude". He is and he will work the dollar over with the help of gold. We are only pointing out (to the average person) that the timeline of the dollar is ending and the transition will be sudden and harsh on dollar asset holders. Truly, gold will not be an "innocent" bystander in this fight. It's historic power to break empires will certainly come into full use.
Again, bullion will be the survivor with the most leverage in this battle. Yes, the gold mines will still have valuable reserves and be in full operation as this all unfolds. It's only the equity holdings of these "businesses" (not all, just most of them) that will be ransacked as the gold marketplace is up-ended.

FOA
FOA
(01/01/2000; 20:36:19 MDT - Msg ID: 22009)
Comment
Golden Truth (01/01/00; 18:17:00MDT - Msg ID:21998)
TO F.O.A---------------

Golden Truth,

No, G.T. I am the one who thanks you for telling us what you think and how you feel. And doing so without using a sword to try and cut my head off (as some have done)! Truly, all the success, wealth and social standings are lost if we as people cannot clearly air our thoughts without physical
and verbal violence.
No one can walk this gold trail without a modern, updated map. And no one can read this map without a good understanding of the road signs that daily events create. Further, human understanding is developed by allowing ourselves to weigh "reason", by viewing these new events
as others see them. Not just accepting them in the light of past performance.
Things change, life evolves and so too do the reasons and motives for gold. In this respect, oil influence has played a major roll in the evolution of our gold markets. Not to mention the birth and success of the Euro. There will be much more on this later.

Thanks FOA
Number Six
(01/01/2000; 20:36:32 MDT - Msg ID: 22010)
New Duck!!!
Whoa! I like it, I like it...

As a confirmed Ducatisti this has piqued my interest again, the Europeans really are at the cutting age of bike design now, especially the orgasmic new Aprilias and pretty much anything coming out of Italy.

Reminds me of the old Halewood replicas, and the early BMW R90's...

Way to go Ducati, way to go!

Wonder if they'll take e-gold? :o)
canamami
(01/01/2000; 20:39:05 MDT - Msg ID: 22011)
Y2K, the Stranger, Happy New Year
Y2K was substantially a bust, at least up to now. My government's Y2K Co-ordinator asked us not to check out our phones at midnight. Why? So many people checked their phones for dial-tone in New Zealand, the system crashed not from Y2K, but from those who worried about Y2K. (i.e., the worriers overloaded the system by checking for dial-tones). Also, several cousins have "lost" their New Year's holidays because the government put them "on call" in case there were emergencies. My cousins are now convinced Y2K was a scam thought up by computer people looking for $800 a day consulting fees (said contracts continuing for several more months).

For fans of the Stranger (of whom I am one), it appears his views on Y2K have been vindicated. (The Stranger still posts concerning gold elsewhere on the internet, for those who may wish to follow his views on the topic).

Happy New Year to all!
JCTex
(01/01/2000; 20:59:08 MDT - Msg ID: 22012)
FOA: end is closer than many think
I may frame that and use it as a mantra. I, personally, do not see how the Comex price can do anything but go down. To begin with, WHO wants to buy on a market that cannot deliver on anything except more manipulation. You and Another have that one figured out.
You mentioned your dad's statment about a bigger bully: I am mostly a lurker, but nearly entered MK's last contest in order to enter "The Washington Agreement" in ALL 5 categories. Any truth to the rumor that the Saudis gave the CBs an ultimatum concerning gold sales?
canamami
(01/01/2000; 21:08:25 MDT - Msg ID: 22013)
Question re Remedies for US Breach of Contract
This is open to the entire Forum, though it may be of particular interest to FOA.

Is it possible to distinguish between pre-August 1971 Bretton Woods/gold-backed dollars and post-1971 dollars? It would seem that only those dollars which existed prior to August 1971 represent a breach of contract by the US. Further, even on a purely moral basis, given that the rest of the world accepted US dollars after the 1971 breach of contract, would such acceptance constitute a waiver of the breach, thereby nullifying even a moral claim to US gold? Moreover, it appears that by the early 1960's the world knew that the dollars outstanding exceeded the gold backing, yet the world continued to use the dollars? Again, the world accepted the US dollars knowing there was realistically no gold backing, thereby nullifying the moral claim.

Does not the continued prominence of the US dollar reflect value to US currency which stems from more than mere "gold backing" or "acceptance for oil settlement"?

(Kindly note I am not diminishing the possible importance of the Euro as a competitor to the dollar, or that at some point the huge overhang of foreign-held US dollars and the trade deficit will have an impact. I submit the Y2K non-event may lead to an outflow of dollars from the US market as the world recognizes no further need to hold dollars in the US as a Y2K technological safe haven, and this may trigger the long-overdue equity correction/crash - perhaps a NASDAQ crash and a major S&P/Dow correction.)
FOA
(01/01/2000; 21:19:45 MDT - Msg ID: 22014)
Comment
USAGOLD (01/01/00; 20:07:21MDT - Msg ID:22002)
Series of posts....

Hello USAGOLD,
I have really enjoyed your recount of the Golconda writings. How true to modern life it is.

Philosophically thinking about our present situation; the current run up in the stock market is a perfect end to a long play. This mad rush to buy anything at any price is indicative if a financial order run amuck. I am struck at how the same process is repeated again and again by our Fed,
each time with greater intensity. Starting with the 1982 Mexican default and the Dow at 700+/-, the federal reserve pushes money into the system. Right into this present day, each and every possible threat to the dollar system is addressed with a more intense cash flood. Now the flood
becomes outright and open with little consideration of the eventual repercussions.
Yet, the entire population accepts this illusion as real wealth for the long term. Truly, a mass of deluded opinions ripe for reality.

Further,

I could not agree more with your #21977! In present time, the Washington Agreement has turned the "Thousand ton Gap" into a ticking time bomb. Even before the agreement, stocks of gold were being drawn down. I have often stated that this gap was being filled by private gold holders
exchanging old line physical for derivatives. Because this process was backed by the CBs, there partial withdrawal from the business has set off a mad scramble in the BB camp. Far from the past official leasing announcements and sales, guarantees were hidden from view. This loss is the real
story behind the market facade. The recent small official announcements to lend by other countries indicates that we are at the end of private stock supplies. I expect that the "gap" will now work it's magic in short order.
How this will end in a pricing format is completely uncertain to many. The world has never had to wait out a transition from paper into physical. Usually, it's been the other way around (the dollar in 71). We watch for physical to move as paper becomes frozen. We shall see.

Thanks FOA

koan
(01/01/2000; 22:20:34 MDT - Msg ID: 22015)
Where does Stranger post?
Hi Canamami, can you tell me where the Stranger posts? Thanks.
Number Six
(01/01/2000; 22:28:23 MDT - Msg ID: 22016)
koan - GE
But I've just been banned for posting on the Gold / Oil (hello FOA :o) ) "relationship"....

Apparently Vronsky believes there is no relationship...

!!!!!!!
canamami
(01/01/2000; 22:36:25 MDT - Msg ID: 22017)
The gold "subculture" - Reply to Number Six, koan
It seems that there is some similarity between gold affinciandos and old-fashioned, first-part-of-the-century leftists - the Stalinists expel the Trotskyites, who in turn start to expel each other and splinter into sub-groups over disputes of some sort - i.e., the International Socialists v. the Trotskyite League, etc. All the while, the internet/tech investors get rich. O, to redo my investments of the last 18 months!!!
Al Fulchino
(01/01/2000; 22:37:55 MDT - Msg ID: 22018)
Thank you Peter.
Peter Asher (01/01/00; 19:08:18MDT - Msg ID:22000)

Today my wife and daughter and I were driving to the gym. It was an unusally warm upper 40's sunny day here in NH. My wife turned to me and said," This must be what it is like in Oregon this time of year." After I had visited Oregon this summer, I waited patiently for the wisdom on what to do. I really liked Oregon as did my daughter. I view the decision to stay here as being good for now. And as you say it was not an ill wind at all. I am grateful for what the year has brought. And as Robin says, it made me do a lot that I have put off.

You and Robin would be good neighbors.
Goldsun
(01/01/2000; 22:38:09 MDT - Msg ID: 22019)
Y2K Relief Selloff
Canamami
I agree with your suggested withdrawal of foreign money from US equities due to perception of Y2K as a nonevent. Which could have the benefit of producing a market crash before the effects of Y2K are felt.
Interesting to see if fed starts sponging up its Y2K liquidity spill. Delay might indicate they don't believe it's over either.
Goldsun
FOA
(01/01/2000; 22:49:45 MDT - Msg ID: 22020)
Reply
canamami (01/01/00; 21:08:25MDT - Msg ID:22013)
Question re Remedies for US Breach of Contract
This is open to the entire Forum, though it may be of particular interest to FOA.

Hello Canamami,
Your thoughts:
--------Is it possible to distinguish between pre-August 1971 Bretton Woods/gold-backed dollars and post-1971 dollars? It would seem that only those dollars which existed prior to August 1971 represent a breach of contract by the US. ---------

I have to put your items in context. Why would it be important to separate the pre and post gold backed dollars? That was not the thrust of the logic presented. The point was that foreign entities would take the US to task in trying to reclaim their gold at $42 per dollar. Simple international contract law does not allow the same contract to be honoured today and not yesterday?? Our present dollars have not changed in legal interpretation from their beginning. Only the Treasury committed an outright default by not supplying gold back then. Truly, the government should have reissued a new currency at the time of default.
Today, any return to backing the dollar with gold would open up a can of worms for the US. Especially in light of the success of the German and Swiss WW2 payments. Again, the whole reason for pointing this out is to highlight the political repercussions from backing the dollar with gold. Many suggest such an avenue and we point out that a new currency would have to be printed to avoid this. It's just another reason why an argument for backing the dollar with gold is impossible and dollar assets are at risk. The US gold stocks valued at any price will not save the dollar.


------Further, even on a purely moral basis, given that the rest of the world accepted US dollars after the 1971 breach of contract, would such acceptance constitute a waiver of the breach, thereby nullifying even a moral claim to US gold? ------------

Would the US risk such a move using this light argument as a loophole? I doubt it and so do a lot of others.

--------Moreover, it appears that by the early 1960's the world knew that the dollars outstanding exceeded the gold backing, yet the world continued to use the dollars? Again, the world accepted the US dollars knowing there was realistically no gold backing, thereby nullifying the moral
claim.---------

So, in the same light, if the world stopped paying off dollar debts they could not pay, does this action nullify the moral claim that everyone should pay dollar debts? Further, if you buy a junk bond that is trading without payments, does your purchase relinquish the issuers obligation to pay you any interest? This logic does not work in your presentation or mine as offered.

-------Does not the continued prominence of the US dollar reflect value to US currency which stems from more than mere "gold backing" or "acceptance for oil settlement"?---------

I ask you, does not the high level of the US stock market reflect it's prominence rather than mere earnings or rational P/E ratios? Truly, the mind in a crowd thinks the common thought, no? Again, Western views are skewered by group acceptance of the contract that "bookkeeping entries" are representing real wealth. It's a fragile view that can be fractured from the competition of a less leveraged alternative. The Euro!


------(Kindly note I am not diminishing the possible importance of the Euro as a competitor to the dollar, or that at some point the huge overhang of foreign held US dollars and the trade deficit will have an impact. ---------

It is impossible for the production of any country to support it's currency if it's currency always flows "out" in a trade deficit. In this country, the negative effects of a reversal of this long term trend will bring on a dollar currency crisis that runs the price of gold well before local price inflation. This is the primary reason why recent investment profits will never transition into gold before it overtakes the illusion of these realized gains. This is the focus of our "reasoning" and push for the purchase of
gold "before the fact". Gold will run well before price inflation is evident (in a large degree). And before resource stocks create an up-trend based on this performance. All in conjunction with a severe downturn in local equity markets that will overwhelm all forms of paper investments (gold stocks included).
Yes, we may see minor runs in these areas prior to the crisis, but these moves will not be connected with the major bull market in gold that is coming.

Thanks FOA
Number Six
(01/01/2000; 22:49:50 MDT - Msg ID: 22021)
@Canamami - splinter groups....:o)
LOL, yeah good one. Well i feel I'm in good company with farfel, the stranger, chester and a whole bunch of others.

But somebody please reassure me, there IS a relationship between oil and gold, ***isn't there???***

LOL!
FOA
(01/01/2000; 22:50:45 MDT - Msg ID: 22022)
Reply
JCTex (01/01/00; 20:59:08MDT - Msg ID:22012)
FOA: end is closer than many think
Any truth to the rumor that the Saudis gave the CBs an ultimatum concerning gold sales?

Hello JCTex,
You must not have read the Hall Of Fame posts by Aristotle and others?

FOA
FOA
(01/01/2000; 23:16:07 MDT - Msg ID: 22023)
Comment
canamami (01/01/00; 22:36:25MDT - Msg ID:22017)
The gold "subculture" - Reply to Number Six, koan

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

In the future we will read of the paper gold "subculture" that invested mostly in gold derivatives instead of gold. Even with the leverage of mining shares clearly working against them, this group will be questioned as to why they stayed the course. I suspect that they will eventually be buying gold at ever increasing prices, kicking and screaming all the while. Eventually enjoying the benefit of the only way to beat this dollar manipulated marketplace. Physical gold.
I never thought that I would see the day when investors brought into a business that tried to sell it's product (gold) down?? And defended their action with more suggestions to buy! Then when someone suggested to change their investment mix to buy mostly the product (gold) and less the business (mining),,,,,a move I add that would drive the product (gold) price up,,,,,,,,,,,,,that logic is
attacked with pitchfork and fire?????????? Indeed, this logic does belong in a "subculture".

Be back later FOA

Note: ORO, I'm still working on a reply to you.

SHIFTY
(01/01/2000; 23:35:08 MDT - Msg ID: 22024)
gold closed mon. 1/3/00
I just noticed on kitco,that gold is closed on monday.
Is this new or did I just not notice it the other day?
SHIFTY
(01/02/2000; 00:10:00 MDT - Msg ID: 22025)
gold closed 1/3/00
I did not know that gold was closed on mon.
Is this new or did I just not notice it the other day.??
SHIFTY
(01/02/2000; 00:34:38 MDT - Msg ID: 22026)
monday gold
I just did not notice that gold was closed on monday.
Too much y2k prep.

I would do it all again. It let me see just how tuff it can to be 100% self-sufficient.
Number Six
(01/02/2000; 00:59:26 MDT - Msg ID: 22027)
@Shifty
Yes, all markets are open in the USA on Tuesday, though I believe Monday elsewhere, especially the far east/Oz...

I wonder if money will flow out of US equities as Canamami predicts, remember also that a lot of folks did not cash out last week because of the tax hit - this week they may decide to bail.

If there are any y2k-related bank glitches, the bailing could turn into a stampede for the exits... maybe :o)
Number Six
(01/02/2000; 01:11:34 MDT - Msg ID: 22028)
Interesting post on tb2k...
Even though 10% of the world is experiencing minor glitches randomly in the basic infrastructure now, it should be noted carefully by all IT professionals and computer experts that the other 90% of the system hasn't yet been fired up in real-time testing. As people will go back to work on Monday fire up those systems and then we will soon see what kind of interconnectivity problems surface as the whole system is then put into full operation. If we start seeing snowball effects happening over the next few weeks we wil soon know how far the system can cope without collasping on itself.


The small glitches that we think are 'minor problems' now can easily at any time start escalating through the infrastructure, so its a waiting game to see how many of these glitches will surface. If there is enough of those little tiny glitches or outages happening all at once this can clog up or collaspe the infrastructure and grind it to a halt, but only time will tell if the glitches start increasing in their accelerations or remain at a stable level that the system and the programmers are able to cope with, for this is the big hidden danger of the y2k issue now.

I am sure there will be an increase in the amount of glitching when the other 90% of the code is put into operation when people go back to business as usual and with those systems that couldn't get their embeds upgraded because not enough time, in the meantime last minute fixing is probably being done during the holidays to try to turn back the glitch bomb before people go to work. We must also take into account that this is where the "non-compliant or incompleted systems" around the world start to play the part in provoking a interconnecting glitch snowball effect for nearly half the world's computer systems did not make it to the deadline of 31st Dec 1999 and so technicians hope to try to fix things in 2000 after the glitching starts for the danger is far from over, if the glitches snowball, it may outdo the number of technicians and programmers to fix it, it's just the beginning, wait and see.

Now it all depends if there is enough glitching to outdo the number of programmers patching the systems up, this will be quie interesting. The bomb has gone off, but it hasn't quite detonated fully yet, its a Year 2000 Timebomb, not a Day 2000 Timebomb. So many think that because everything in the basic infrastructure is still operational so far with only minor glitches that this y2k bomb is only a fizzler.

We will know if the infrastructure stands once it starts going into full real-time testing, we can't know if the system is going to pass the test until the whole thing is tested. Before we celebrate thining the y2k bug has been beaten, not everything was put in full operation on New Year's celebrations, because we see the power and phones still working or basic utils, this don't mean that the whole system has jumped the hurdle over y2k.

TO SUM UP
=========

The immediate effects of y2k are not really immediate but over time, its a timebomb, not a daybomb. Not until the whole system is put into full real-time operation will be begin to know of the ramifications of y2k over the next few weeks. y2k is not a day event, its a year event, possibly even longer. Pollies can gloat all they like about the rollover event, for it dosen't matter to the billions of glitches and unfixed systems around the world, they don't take day events. If there are problems with embeds, they might take a while to show up. The non comp ones though would probably crash as soon as they are fired up. But the y2k in the software code plus the billions of glitches will prob slowly detonate over time.

Journeyman
(01/02/2000; 02:19:24 MDT - Msg ID: 22029)
Argentine banks declare holiday???
Unverified rumor, repeat, RUMOR!!!!

A cobol programmer friend of mine, now in upper management of a company that services Fortune 500 Co.s (and others), was on Y2K watch over the weekend. He reports things as largely uneventful.

HOWEVER, he reported that the Argentine banks had declared a bank holiday, as there were massive bank runs. I have done a cursory search of the web, using the Drudge site only, but can't verify this story so far.

Anyone else heard about runs on Argentine banks????

Regards,
Journeyman
Mr Gresham
(01/02/2000; 02:30:24 MDT - Msg ID: 22030)
FOA -- 30k?
FOA

This was first scribbled while reading Holtzman's latest. Still raw; I can't seem to get all the paragraphs to lead to one another, (it's still new imagery for me), written at different times, and it's late, I'm tired. I'll get it out now or it may languish for weeks�

He wrote: "There seems to be some misunderstanding about what would happen were the world were to universally abandon euros, dollars, yen and pounds and adopt a literal gold standard. Contrary to the hopes of many, the purchasing power of an ounce of gold in such a circumstance would not change much at all. It's not that the relatively fixed number of above-ground ounces would be rationed out to replace all the paper money and bank deposits. Not at all. Instead, things would simply be repriced in terms of units of gold mass. "

For all my appreciation of Holtzman's wit and wisdom � and I could have written a LONG appreciation � he seems vulnerable here while deflating a common truism among Goldhearts.

The disappearance of one entire class of "money" would leave the field open to, yes, repricing in gold units, but that class of gold units would then be able to buy all things presently being traded in fiats, probably at a very low gold price giving a substantial premium to gold holders. (How would velocity affect exchange value?) But that won't happen, at least for now.

The question is: Exactly what IS the money supply?

The money supply is made up of the things including gold, bank balances, and pieces of colored paper, that various groups of people are willing to labor for and sell their belongings for. Currencies of various types are great pools of trust among particular (national) groups with some overlap between groups accepting the same currency. Most persons living in the world develop a connection primarily to one currency, and accept others only with the intention of converting them to their primary "squeeze".

Things that have value as money exist as great pools (I'm picturing different-colored puddles meeting on a sidewalk) bumping each other, mixing, pushing, contending for the "non-money" goods of the world. They are pools of confidence, and their value rises en masse as the estimation of their overall purchasing power rises, and diminishes as the money-printing agency creates more of that currency and is discovered doing so.

If the world grants dollars-as-a-whole the right to buy, say 50% of the world's good and services, a single dollar depreciated by money supply inflation will buy less of that share, but the aggregate of dollars should (what is it � cetis paribus? All other things remaining equal) still buy the same 50% share. The other moneys of the world as a whole have been allocated among them in the contending marketplace of public confidence the other 50%.

A fiat currency is backed not by its government, which has NOTHING to give but other paper, but by its citizens� willingness to work and sell for it. Residents of other nations may form an estimation of the worth of the currency pool of a nation, and want to hold some of it, usually for their own reasons of hedging the untrustworthiness of their own currency. A dual loyalty is a survival skill in many places. (You get a little taste of that as a tourist if you ever encountered moneychangers near borders of nations with exchange-controlled currencies: Poland-USSR, Cote d�Ivoire-Ghana-Togo).

When USAmericans find they must develop that dual loyalty, then the dollar will shake. The value of the dollar pool externally has come less from the goods and services USAmericans are willing to provide to others, but from the collection of different branches of that pool outside the US for local purposes. The chief attribute earning trust within and without the US has been the perception that creation of dollars has not been grossly abused, until now. When and how the recent splurge in dollar creation is noticed is the denouement we shall watch.

How much money is contending for non-money? If you removed � or devalued � one class of money, then others should grow in their powers to bid for non-money goods. Right now, the EC is attempting to create a class of money that combines the prior value of all DMs, francs, etc., and represents the pool of currency that existed in Europe. That fiat currency purchased goods before and it shall in the future. It represents a pool of shared value for which people will deliver their services.

The Europeans therefore possess TWO pools of value: their fiat currency and their gold reserves. It is not necessary and would do them no good to back their currency with gold. It would do them no good to nullify the value of one entire class of present value (fiat) that people now respect and will work for. It would not add very much to the value of the gold reserve, and would only cut the amount of goods and services that Europeans could bid for. At the same time, bringing the gold out into open spending would inflate prices unnecessarily. They see it as wealth storage, FOA says. It also turns out to be a wise use of Gresham's Law, encouraging the use of a wisely-managed ("I only have to run faster than you," said the Euro to the Dollar) fiat currency in trade, and keeping the gold slightly off-stage (or well-displayed in the bank window as in the old wildcat banking days in US) for effect in earning world respect. Kind of trying to blend the best of 19th & 20th centuries.

Gold, at this point, sits on the edge of the bench as a possible substitute, but it doesn't yet have much of a share of goods and services that expect to sell themselves for gold. Instead, gold gets bought and sold for dollars. Dollars brought gold to the party, but will gold leave with someone else?

It is the _overall_ loss of credibility of a class of money that would open the way for gold (or the other fiats) to encroach upon its share. That loss would never likely be total, but it might be surprisingly large.

The question of gold rising to $30,000 led me to explore the question: "How much 'money� is contending for 'non-money�?

The hydraulics behind FOA's assertion come in two stages, as (was it Canamami?) once asked: Is it 300 to 3000 based on price inflation of "things-in-general" going up by 10 times? And then another 10 times from other factors.

I think FOA is saying the first 10 times, even preceding the inflation of "things-in-general", will be a special case (one-time) as externally-held dollars with "nowhere to go" in fear of being cut off from buying ANYTHING, will quickly bid for gold just to get _something_ that dollars can still buy and get them out of nervous pockets. It is really hard to believe in such a run, without seeing the dollar figures now in advance of it, and thinking about other exits for those dollars. But gold would certainly be the foremost candidate.

Most of us would settle for protection against inflation of things in general, in a time of crisis. And that is something we assume gold would give us, whether the inflation increment turns out to be 2x or 10x. FOA says the dollar supply is out there for the 10x inflation of things in general (?), but is the same pool of dollars being "counted twice", once to go into things in general and the other into gold as a default crisis insurance?

I would like to pick this up at another time, because now I seem to recall figures like those this article seeks have passed under our gaze before, and perhaps a better figure-filer than I will be kind enough to bring them back up. Plus, this is still new material to me, having MY questions clear for the first time, and I would probably waste both of our time to go farther into it tonight. I'm grateful to be in a group (class?) where we can explore together without having to appear to be "know-it-alls."

WAC (Wide Awake Club)
(01/02/2000; 03:01:09 MDT - Msg ID: 22031)
Which direction for the � - Euro or $
http://www.telegraph.co.uk/et?ac=002254602319209&rtmo=pb1lBhpe&atmo=99999999&pg=/et/99/12/31/wnaf31.htmlHappy New Year All. I'm not sure if this article as already been posted. It's the first public suggestion I've found (in a reputable newspaper)of the suggestion of the UK joining the US $.
Mr Gresham
(01/02/2000; 03:03:45 MDT - Msg ID: 22032)
Argentina
No sign of Argentina troubles on Yahoo or Buenos Aires news, Journeyman.

WAC -- Welcome back!

g'nite
Canuck
(01/02/2000; 06:37:06 MDT - Msg ID: 22033)
Question
The information this week-end has been most interesting.

I have a question regarding Y2K.

If Y2K is over, we sense there will be an exodus from USD and an ensuing market correction/crash.

If Y2K is not over, there will be fear/panic and there will
be a market correction/crash.

Is this to say that regardless of the Y2K outcome there will be a correction/crash?
Canuck
(01/02/2000; 06:40:53 MDT - Msg ID: 22034)
Question #2
CNN, in a 3 second update yesterday, declared," Kuwait rolled over fine."

I still haven't heard/see a 'bit' on middle east or Venezuala(sp)?

Anyone?
overton
(01/02/2000; 06:49:28 MDT - Msg ID: 22035)
Canuck ********* black gold report report
http://www.kitcomm.com/comments/gold/2000q1/2000_01/1000102.041417.sharefine.htmsee sharefins 04:14 this morning kitco
Canuck
(01/02/2000; 06:51:40 MDT - Msg ID: 22036)
Oil Report ?
Giant Gulf oil producers exterminate Y2K bug

]DUBAI, Jan 1 (Reuters) - After months of preparation for possible Y2K] ]mayhem in a strategic region that sits on nearly half of the world's oil reserves,] giant Gulf producers appear to have squashed the dreaded millennium
computer bug.

Shipping and oil officials said on Saturday that it was business as usual in the Gulf, where wells were pumping crude for supply to the West and Asia after fears that the millennium bug could wreak havoc.

OPEC kingpin Saudi Arabia -- the world's biggest oil producer and exporter -- moved quickly after the turn of the century to reassure its customers that oil was flowing.

State oil giant Saudi Aramco reported that production, export terminals, refineries and pipelines in the kingdom were running smoothly. Shipping sources said they had so far heard no reports of any disruptions in oil exports.

``Everything is working normal now and it was during the rollover,'' said an official with one of the region's biggest shipping agents. ``It has all been under control since yesterday early morning until now. There has been no stoppage.''

Concern had been growing in huge markets such as the United States that the Y2K bug could undermine crucial supplies from the strategic Gulf. U.S. Energy Secretary Bill Richardson underscored worries when he said he would be speaking to the oil ministers of Venezuela, Mexico, Saudi Arabia, Canada and the head of the International Energy Agency to discuss Y2K conditions.

Saudi Arabia had said it was ready to replace any oil supplies that my be disrupted because of Y2K computer problems.

PRODUCERS REPORT NO PROBLEMS

But key Middle East producers faced no serious problems in their huge oil and gas fields, export terminals and refineries.

Big OPEC players such as Iran, Kuwait, the United Arab Emirates (UAE), Libya and Algeria escaped any Y2K disruptions to exports to huge markets in the West and Asia, shipping sources and officials said.

Egypt said supplies from the Red Sea to the Mediterranean along its Suez Canal and SUMED pipeline suffered no disruption. In Ankara, Turkey said it had put back the date on the monitoring system on ,the Iraqi pipeline that delivers oil to the Meditanerrean to 1995 to circumvent
the bug.

Many questions had been raised in the countdown to the turn of the century amid the global Y2K hysteria. Would Iran's energy industry, for instance, escape the possible wrath of Y2K because the country's computer systems are older?

``The loading of tankers at Iran's ports is continuing on schedule and without interruption,'' the official Iranian news agency IRNA quoted Mohammad Saadatvand, Oil Ministry representative at the state Y2K headquarters, as saying.
Saadatvand said operations were also normal at refineries and other oil installations.

Gulf states which belong to the Organisation of the Petroleum Exporting Countries were especially sensitive to any damage to oil exports that could undermine the delicate balance of supply and demand in the world market.

After all, 1999 was the year when OPEC returned to the world oil stage spotlight with a production cut deal that has doubled prices and given the cartel renewed prestige after years of quota violations.

Even smaller, non-OPEC producers in the Gulf said they managed to exterminate the Y2K bug and safeguard oil exports that are their economic lifeblood.

``Everything is fine in production and the oil fields. There are no problems,'' Nabil al-Qawsi, an official at the oil ministry in Yemen, told Reuters.
Canuck
(01/02/2000; 07:00:56 MDT - Msg ID: 22037)
Embedded chips date sensitive; maybe not??
Copied from elsewhere
---------------------------
After the rollover I put my brain in gear, rather than relying on the "experts" as I have done to now about what goes in the embeds. I'm not a hardware guy, but I went back and thought about my only hardware project from 20 years ago in university (back when memory was expensive).
Any thing that is in hardware that deals in time is going to use counters to determine when time has elapsed. They are not going to use dates because you have to use more memory to store it and then convert it to a number to do the calculations and then more memory to convert the number back to a date. So they'll count seconds or days. The point of storing a date calculation is know when a certain amount of time has passed. If you use counters (even thousands of seconds for many days) it is the simplest, cheapest, and bug free way to do that - regardless of date. Now some of the more fancy hardware that is newer may have some date functions for things like maintenance (since memory is not a problem now) that has been arbitrarily decided to be done at month ends rather than on a fixed interval, but my guess are those are very few and between.

End of story.

IT and database are a different matter altogether and we will see those effects start at the end of the first day, first week (a few) and end of the first month (many) because those systmes will now be calculating things based on days transpired which will now calculate to negative days (so we should get interesting usage billing and interest billings). Similarly penalties won't be applied because the number of days in the calculation will be negative so the penalty period would not have expired yet.

Overall I think these will be minor problems too as I don't think too many functions will be affected (they'll be things like extra negative intererst, no penalties, billing for execessive negative usage, etc.)

Yourdon, I'm surprised you fell for this in such a grand way, you're supposed to be one the "experts" who investigated all this. Why Mr. CEO said all his teams were being sent home was because his clients along with all the other companies with embeds found out the above and realized that the "consultants" were swindling them by just investigating and investigating and investigating but actually doing very little else. I'm willing to bet that 99.999% of all embeds are like what I describe above. That's why the world could tollerate a 0.001% hiccup in the number of embeds out there and not blink at all.
Hipplebeck
(01/02/2000; 07:50:46 MDT - Msg ID: 22038)
freedom
In Times square, streets were locked down, dogs were sniffing, people being searched, military style police everywhere. No alcohol, no packages, etc.
In Red square people were firing pop bottle rockets out of their empty champaigne bottles.
Bonedaddy
(01/02/2000; 08:10:10 MDT - Msg ID: 22039)
Steve H, on protecting GOLD
Steve, thank you for yesterdays post. As a society, I think we have difficulty seeing how interconnencted our rights an responsibilities truly are. Over the course of time, rights not asserted or claimed are certainly lost. Personal arms have not changed much since since the turn of
the last century. But, many of the American people have since sold their birthright for porridge.
As citizens, we have been allured by dreams of safe, cushy retirements on 401k dollars and medicare. If our "benefactors" had truly cared for us, they would have provided a tax free means for us to take delivery of physical GOLD. (A gold backed 401-k? Who holds the gold?)
Bottom line, there are as many criminals in government "service" as there are in society. The same holds true for organized religion. (Was it Descartes who said, "Steal a little and they throw you in jail, steal a lot and they make you king"?) For this reason collective rights will always be subject to corruption. The only true rights flow to the individual. The blood of Christ was shed for the one person who would believe. But any person may choose to be that "one". Therefore, let us stand together, as individuals, and assert our rights. And take possession of physical gold while we can still do so openly.
The one caveat: the individual must act responsibly at all times. The price for any mistakes must rest soley with that one individual. Costs cannot be shared with the crowd.
Bonedaddy
(01/02/2000; 08:20:17 MDT - Msg ID: 22040)
Hipplebeck
Beautiful logic, man! No wonder they call it Times "Square".
USAGOLD
(01/02/2000; 09:04:15 MDT - Msg ID: 22041)
The Stranger
I have asked The Stranger to retake his seat at this noble table and he has accepted. I have done this not only because of the public requests posted here, but also because of the strength of his contributions in the past which I feel warrant handling this situation differently from similar situations in the past. The other reason for reinstating The Stranger's code is the stature of some of the posters requesting his return through private correspondence -- posters who I know have a high regard for the rules of this Forum and maintaining its integrity. I want to thank those who publicly spoke in The Stranger's behalf in this hall for the concern displayed and the class with which the requests were made. The advice, be assured, has been taken in the spirit it was given. I also want to thank those who spoke in behalf of the integrity of this Forum and its rules both publicly and in private correspondence. Please be assured that the rules stand as published now and in the future. I personally have enjoyed The Stranger's presence here and welcome him back whole-heartedly. It will be good to once again hear his voice in this hall.

Stranger, please take your seat, Sir, and thank you for graciously accepting my invitation to return. I look forward to your contributions, and I know I speak for many when I say that we have missed your participation.

Let the discussion continue.....MK
The Stranger
(01/02/2000; 09:07:50 MDT - Msg ID: 22042)
Test
Test
Mr Gresham
(01/02/2000; 09:18:17 MDT - Msg ID: 22043)
Stranger
Good for you both, and for us all. I look forward to making a valuable new acquaintance.
rsjacksr
(01/02/2000; 09:23:29 MDT - Msg ID: 22044)
y2k and Brainless management
This not the time to become complacentHappy New Year to everyone.

From my previous post, you should know that I'm not a doomer.
I don't believe we'll lose water, sewage or any of the essentials in a well serviced areas.
But here's what I do know��.. If companies have handled the y2k problem in the same manner as related to me by friends �� we are in for a rough ride. And you won't know that until the problems can work their way through the system. At minimum, the next couple of weeks. So don't be in a hurry to breath a sigh of relief. The game hasn't even yet started.

------- canamami (01/01/00; 20:39:05MDT - Msg ID:22011)

Also, several cousins have "lost" their New Year's holidays because the government put them "on call" in case there were emergencies. My cousins are now convinced Y2K was a scam thought up by computer people looking for $800 a day consulting fees (said contracts continuing for several more months). -------

I'm glad their systems stayed up. But the night is young and the proof is in the pudding. It take time for problems to work their way thru the system. Associates of mind have been put on "call" for the MONTHS OF DECEMBER AND JANUARY.

-------- Journeyman (01/02/00; 02:19:24MDT - Msg ID:22029)

A COBOL programmer friend of mine, now in upper management of a company that services Fortune 500 Cos (and others), was on Y2K watch over the weekend. He reports things as largely uneventful. --------

Lucky him.
My friends were put on call Friday and some have disappeared into the black hole of system crashes ever since. Some have been gone for more than twenty four hours. The problem, as related to me, is largely companies that did little or nothing. This includes hiring temps to write code and then not test it. Brainless management. LOL (lots of luck). Take care.
Canuck
(01/02/2000; 10:00:37 MDT - Msg ID: 22045)
I relieve my post for awhile; talk to you soon.
Y2K : The Non-Event

I send this to anyone feeling duped.

Look's like Y2K will come and go with very few problems. This is a good thing, a very good thing. I'm glad we will avoid the catastrophic scenarios painted by the extreme 'doomers'.

I took painstaking measures to protect my family amd myself from any harm. It was my job. It was obvious to me to take a position of safety than to take a position of risk. I have too many canned goods and way too
much macaroni in the house but I don't care. It will be used. In the next few weeks I will 'unwind' this position and carry on.

The U.S.A. also has its 'line of credit' extended too far so I foresee an 'unwinding' in the financial arena as well. We may well see volatility in the markets but this will not affect me much because in line with my 'position of safety' I liquidated all equities Dec. 31. I don't think I can stomach the stock markets any more.
It has turned into a guessing game.

Today I sit a free man with few worries; I have my wife, my children, my home and my insurance. That insurance, my friends, is a yellow metal extremely undervalued today but ready to battle any bug.

When the next 'rollover' occurs, I will play it EXACTLY the same way.

P.S. : Cheap firewood and generator for sale!!
Phos
(01/02/2000; 10:21:18 MDT - Msg ID: 22046)
Canuck (1/2/00; 6:37:06MDT - Msg ID:22033)
First, I would like to thank MK for The Stranger's return. The more good discussion here, the more I learn. That is a bit selfish I suppose, but I like to learn and I have learned much (and forgotten a lot of it!) from this site. I have been dragging myself to the computer over the holidays despite having the flu (Sydney?) so as not to miss anything.

Canuck raises an interesting point. Will there be a market correction? What I have been reading elsewhere suggests money has been sitting on the sidelines waiting for Y2K to pass and, now, that money should come rushing into the market driving it to new heights but possibly not for long. I would like to hear the opinions of some of the sages here on what may transpire.

I would think the FED will have a large impact on where the markets go from here. Are they going to start reducing the huge money supply bubble they created in the latter months of 1999? Are they going to raise interest rates in February to rein in potential inflation? I think the ball is very firmly in Mr. Greenspan's court and what he does with it will affect us all this year. Seeing that it is an election year, the politicians are going to want some input to the process, I would assume. They would not want the economy tanking due to a major market correction brought on by higher interest rates. And, of course, Y2K has not shown much yet but it may still. Let's see what happens over the next month or so.

May I wish a very happy New Year to our host and fellow round table members. The best for 2000 (especially gold).
USAGOLD
(01/02/2000; 11:13:43 MDT - Msg ID: 22047)
Once in Golconda, Continued.....Flannel Throated Fanatics
"On the seventeenth the Ile de France and the Berengaria depart on transatlantic trips, the former eastward and the latter westward, each fully equipped for speculations with floating brokerage offices; when the Berengaria arrives in New York six days later, passengers tell of how every day the office on the promenade deck has been so mobbed that quotations had to be passed by word of mouth to passengers who couldn't get near enough. The same week, there is much favorable comment on a new book, "Wall Street and Washington", by the renowned Princeton economic authority Joseph S. Lawrence, in which he scores off the Federal Reserve for its insolent meddling with Wall Street ("an innocent community" mercilessly persecuted by "flannel-throated fanatics" in Congress) and suggests that anyone who favors stronger regulation of the stock market is undoubtedly an all-around bluenose and probably an advocate of Prohibition to boot. This is the kind of talk the tape-watchers dote on, and when it comes from a cloistered professor, so much the better. As the month draws to a close and the Stock Exchange decides to forgo its usual Saturday session and declare a full three-day holiday over the Labor Day weekend, there is further cause for jubilation. There are rumors, cited even in the Times, of many large pools being formed to buoy the market during the autumn, and it is said that a single brokerage firm has received invitations to join no fewer than five of them; meanwhile four important railroad stocks, Santa Fe, Union Pacific, Chesapeake & Ohio, and Norfolk & Western, are all near the magic price of 300 in what appears to be a race. Nobody doubts that they will all reach it; the only question is which will reach it first.

So, assuming one can get a hold of a reservation -- the railroads and the Trimotor airliner to Boston are overlooked -- one can take that three-day weekend with fears for the future. And yet -- can one really believe it."

From Once in Golconda by John Brooks, 1969

To be continued....
FOA
(01/02/2000; 11:36:40 MDT - Msg ID: 22048)
Reply
Mr Gresham (01/02/00; 02:30:24MDT - Msg ID:22030)
FOA -- 30k?

++++++++++++++++++
Good stuff Gresham! Re-read your post for a refresh then come here. This is something we can air out. I'll just rummage around some and see if any of this hits home. Will place some of your post comments inline where usable.

Two additional observations came into play years ago when this whole timeline was being worked out. One of them:

---A major flaw in the fiat system was in selling people the idea that money need not be wealth.--

This is something Martin Armstrong pushed a great deal in his pronouncements. I made an open post to him on this forum because his position was in direct conflict to human nature. Lo and behold his personal clandestine actions later proved out my point. Truly, most modern thinkers don't trust
contract fiat money and understand "things" much better. Only they try to hide their perceived weakness. Indeed, he quietly owned a bunch of gold!

Onward:

In real life, everything is our wealth and simultaneously our money. Houses, cars, furniture, pots
pans, you name it, it's all tradable in a duel format as money. In fact real things were what people traded in the beginning. Modern economist love to regress this function and use the term "barter" in a way that "dirties" it in the eyes of modern educated man. The use of things as money has always been the natural way people trade and the most understandable method to compare value by applying an "efforts to acquire" worth to unlike items.
Advancements in our infrastructure brought on the need to use contract wealth (receipts for delivery) as a means to trade efficiently. (You know, the old receipts for gold in the vault story bankers started.) Over time we lost the grasp that by using money to buy and sell real wealth we
were still just trading real wealth as in the beginnings. Only now we are using money to denominate the trade. Again, modern economists contradict the facts by trying to convince us we are really trading dollars, not the wealth they represent. As if I buy a house from you, I get the house and you get the dollars as the end trade. In reality you have only taken what the dollars can buy, "real wealth", not the subjective paper value. I could have just as easily given you ten cars for the house and we both would know exactly where we stood.

So, in a larger sense the entire world economy is in effect trading "things wealth" for "things wealth". The nation state's moneys have nothing to do with how rich we are. Today, the grand illusion of paper money has evolved into -------we equate our life savings with how much we can
buy, not how much we have------. The concept holds little reason for most people to worry as long as the world works. But, if the world changes, our savings are suddenly not what our wealth really is!

Further:

The second flaw arrives in the form of: --------"currency inflation slowly transforms fait money into a futures contract"-------
In a broad sense, IF the money supply is created in "lock step" with the ability of the economy to produce, everyone could take their money and buy a "newly made" item the first day,,,,,,, And the persons that received those paper dollars could turn around and buy another "newly made" item the next day and so on. In time, more and more items would come into ownership and there possible supply on the resale marketplace would increase. But, as the money supply was only fixed to the new production ability these increases in real goods, the increase supply of "owned" goods in the
marketplace would drive up the value of paper money.

This would not be a problem except that our money makers decided to name this affect "deflation" as the paper value of goods in existence fell as the money value rose in direct converse fashion. This process would not effect anyone if it was a known effect that everyone planned for. But bankers and governments never plan for it nor do they want it.

So, along the way path to money inflation, someone decided that the money supply should increase in somewhat matched step, not only with the production of new goods, but rather with the total supply of owned goods. This was accepted as good economic practice and it's application
ordained an ever increasing world money supply to match the perceived world wealth in existence. Our constant building money supply is always viewed as a good thing. Indeed it is even a major component of all relative tools that measure our economy. An illusion that says "if our money is
increasing, our economic system is growing". Again, at the very least, this guaranteed that the value of money would not "increase" on it own (hence the need for a "return" on cash in the form of interest) and the money denominated value of "goods" would not deflate. But, perceptions changed
and the process evolved further.

In time, the perceived purchasing power (and worth) of dollars was extended to include what goods could be produced and therefore brought in the future. Not just today's production plus the existing supply of owned things, but also future delivery from a perceived infinite economic
production base. This is where they justified the long term, massive debt build-up that has leveraged our economy far into the future. And done so on a scale unknown to mankind.

In effect, the world has accepted a money supply that created a money supply in gross excess of the worlds present things. Truly, this present reserve system does not price our real wealth of today, rather it prices our "perceived" wealth today as if it is produced or purchased today. Yet,
this "real trade" for "real wealth" cannot happen until far in the future. This is the fundamental reason why dollar inflation on a massive scale has not produced a matched price for wealth owned today. People hold the ideal that any amount of US debt is as good as "real wealth in the bank", also known as "money in the bank". All the while lacking the grasp of any tools to measure just how far out of reality "existing debt money" is in relation to what it can buy, in mass.

-------------Your words:----They see it as wealth storage, FOA says. It also turns out to be a wise use of Gresham's Law, encouraging the use of a wisely-managed ("I only have to run faster than you," said the Euro to the Dollar) fiat currency in trade, and keeping the gold slightly off-stage
(or well-displayed in the bank window as in the old wildcat banking days in US) for effect in earning world respect. Kind of trying to blend the best of 19th & 20th centuries. ---

Our present financial structure and debt leverage was built on a platform that said " " "the dollar would always be credible as a "contract money" far into the future. Lost in this credibility is the risk that any move from world dollar use would force this contract into a bookkeeping change that revalued the dollar in present tense. In other words, a huge price inflation that matched the dollar to
current goods and production. Such a change has happened to other currencies and peoples all through history as money power moves from nation to nation. Only never before was it done when gold had not "marked to the market" the currency value loss on a regular, ongoing basis before the fact. Today, this transition of real wealth buying power from a single reserve system to another will force the dollar price of gold to soar to levels, we cannot understand. From this stance we can understandy why many have viewed gold as a riskless holding that will be revalued. If it was part of
your mix, the transition would always make up for any return lost from not holding other assets. Indeed, it is the very untimate in a super leveraged investment. No other currency today could expect a 1,000% to 10,000% rise in value against the dollar, none.

Now, if one can look closely we understand the need for gold in the background of a new reserve currency. Only gold has the ability to carry the load of this perceived wealth transfer without a catastrophic loss of world economic process. And do so in a format as common as any stock of treasury bill asset. Gold at $10,000+ will be as common as Yahoo at $400+. Just like a US treasury bill at $10,000 face, one ounce will be just another "money in the bank"!

-------Your words again: -----Most of us would settle for protection against inflation of things in general, in a time of crisis. And that is something we assume gold would give us, whether the inflation increment turns out to be 2x or 10x. FOA says the dollar supply is out there for the 10x
inflation of things in general (?), but is the same pool of dollars being "counted twice", once to go into things in general and the other into gold as a default crisis insurance?--------------

My friend, count it at least once+ for the present and ten times+ for the future. This will match the lost future buying power of dollars held in savings today. Then you will know where the real dollar value of gold in transition lies.

Thanks FOA
Jon
(01/02/2000; 11:39:25 MDT - Msg ID: 22049)
Welcome back, Stranger
Happy new year to you and yours. I've been tracking your EWJ, which is doing alot better than my EWS [which has doubled in value for me]. Do you think I should switch? Again, glad to see you're back.
FOA
(01/02/2000; 11:39:33 MDT - Msg ID: 22050)
Welcome!
Welcome back Stranger. There are two sides on every trail.

FOA
Cavan Man
(01/02/2000; 12:40:44 MDT - Msg ID: 22051)
WELCOME STRANGER
Whew! Glad you are back. I maintain your views and FOA are of different origins yet complimentary! A great treasure is found (here) again. God bless and thank you.
Aristotle
(01/02/2000; 13:07:43 MDT - Msg ID: 22052)
A New Year's Resolution -- Allow yourself to own more Gold
Happy New Year to everyone, as we leave the 1900's to the historians!

Most Americans are justifiably proud of their country due to its history and prominent role in the world scene. However, this tends to lend itself to an Americentric perception that the world revolves around America, that America's problems are necessarily the world's problems, while the world's problems are deemed to be nothing of consequence--reported on the evening news inconveniently between sports and weather. Being an American is an end unto itself. But if we do pause to give a thought to the greater world, it is only that they should strive to accomodate our preferred easy existence. At the very least, they should conduct their foreign affaris so as to be no burden to our consciences--limiting their visible levels of suffering at the hands of want...want for adequate nourishment, for quality shelter, for safety from violence at the hands of others.

Living in a land where these common necessities are found in abundance, it is too convenient to suspend the disbelief that the entire world shares and rejoices in our own good fortune. Thus deluded by our own fantasy, we are like the person sitting at the kitchen table as they play Monopoly with their family. Although this game and its rules are distinctly limited in both time and space, playing this game dictates our decisions, actions, and emotions--the real world is forgotten while we remain at the table. The dishes in the sink need to be washed. The car needs to be filled with fuel. The snow on the driveway needs to be shovelled away. The bills need to be paid and envelopes mailed. All of these real-world concerns are dismissed as we 'Pass "Go" and Collect $200,' as we 'Take a Ride on the Reading Railroad,' as we build houses on Baltic Avenue, or clutch our hair as we land on a Boardwalk replete with commercial development.

It does not matter however long we may play at Monopoly, nor does it matter how well we fare in the game; the real world still exists, and in the real world the car still needs to receive fuel, the snow must be cleared away, and bills must be paid.

Now imagine, if you can, the clever player who is not so absorbed by this game that he may yet still see the truth of the wider world, and in doing so properly recognize the limited value of his Monopoly money beyond the scope of this game. Imagine this player to be playing the game well enough that he is in a position of wealth--having acquired one-sided money, 2x3" squares of property, little green plastic houses, and little red plastic hotels.

Now imagine that there were an extra space on the gameboard (called USAGOLD next to 'Free Parking'?) where players with awareness of the real world could exchange some of their game-wealth for wealth that endures in function beyond the scope of the game. It wouldn't surprise you to see this special space on the gameboard being being rigorously used by the wisest of the participants (the parents) while the kids remain content to see their piles of one-sided money grow and grow, and their lines of green plastic houses get ever longer. We would see the wise parent maintain only enough Monopoly money and Monopoly 'investments' to remain viable in the game so that they might continue to utilize that special space to accumulate enduring wealth for use in the real world.

The fact of the matter is, regardless of how competitive the game of Monopoly becomes, the necessities of real life will remain, and they won't be satisfied by Monopoly money...even though you might (at this time) manage to bribe your son or daughter to shovel the snow for a crisp, one-sided, orange $500 Monopoly note.

So it is with playing the good game called American Life. Regardless of how blinded we become in the American competition to keep up with the Smiths and Joneses, the problems and necessities of the real world remain and will be resolved whether we choose to take notice or not. Just as our son or daughter will one day acquire the wisdom to refuse the one-sided $500 enticement to shovel the snow, so too will the lines become more distinct between what is fine within the American game, but increasingly unacceptible for international settlement.

Make a New Year's resolution to have a greater world view. Be intelligent, light on your feet (adaptive), and aware of the distinction and growing separation between popular perception and universal reality. Prepare (through wise choice of assets) to live as well in the greater world as you have lived within this thriving but distinctly American game. Eventually the kitchen table must be cleared away for the next meal, Monopoly money doesn't play very well at the Main St. Bank, and it doesn't play very well at the Bank for International Settlements, either.

Gold. Get you some. Dress yourself for a good seat at any table in the world. ---Aristotle
The Stranger
(01/02/2000; 13:13:05 MDT - Msg ID: 22053)
Test
Test
TheStranger
(01/02/2000; 13:30:24 MDT - Msg ID: 22054)
TEST TEST TEST
Technical Problems. Thanks.
TheStranger
(01/02/2000; 13:55:35 MDT - Msg ID: 22055)
Hello
Hello
TheStranger
(01/02/2000; 13:59:56 MDT - Msg ID: 22056)
I Thank The Members of the Forum and Apologize to FOA
I wish to apologize to FOA for the very derogatory remark I made about him last month. I recognize that such behavior violates the important rules by which we comport ourselves here at the Forum. To all, I am sorry I have not
always exercised the best judgement in expressing my views. I will try to do better in the future.

I am aware of everything that was posted about me during my absence. Out of humility, I will not present here a list of all those who deserve my gratitude. However, I want to say to everyone who argued publicly for my return that I know who you are, and I will not soon forget the kindnesses
you have expressed. "No man is a failure who has friends."
TheStranger
(01/02/2000; 14:08:27 MDT - Msg ID: 22057)
Inflation Update
1. In addition to Fed Ex, three more shippers
announced either "fuel surcharges" or just
plain rate increases last week. They are TWA, AMR and UPS.

2. New claims for unemployment benefits in the
U.S. dropped last week to a level below 300,000,
which indicates businesses are scrambling to find
workers."The only way for employers to get skilled
workers for job openings is by stealing them from other
companies," said Wells Fargo's chief economist, Sung Won
Sohn. "So we are seeing more and more employees willing
to jump ship to get wage hikes."

3. Major U.S. steel producers now are in the
process of raising their prices 8-20% on cold roll steel.

4. The top performing stock in the Dow Jones
Industrial average for 1999 was not Home Depot, Microsoft,
Intel, Hewlett Packard or IBM. It was Alcoa,
reflecting increasing prices for industrial metals which
continued throughout the year.

*****

I have posted many times in the past year about why the argument for gold does not rest on such transitory boogeyman events as Y2k. What it does rest upon is the historically significant reinflation of all currencies which has been taking place since the Asian Contagion. This process is now
well-entrenched and is irreversible in any short term sense.

Anybody who bought gold because of Y2k would be
well-advised to stay the course in my opinion. You
may have bought for the wrong reason, but that doesn't
mean you own the wrong thing. What is happening in oil,
aluminum, copper, etc. is coming to gold soon enough. You
can depend on it.
TheStranger
(01/02/2000; 14:12:38 MDT - Msg ID: 22058)
Jim Grant on ABC's "This Week"
In an Interview on ABC's "This Week", Jim Grant said this morning, "Never before have corporate values been quite near where they are now. This is an extraordinary moment in American financial history and a dangerous one."
USAGOLD
(01/02/2000; 14:16:18 MDT - Msg ID: 22059)
Once in Golconda.....More Parallels: Soaring Averages a Rousing Spectacle/Decay Underneath
"When the crash finally came, it came with a kind of surrealistic slowness -- so gradually that, on the one hand, it was possible to live through a good part of it without realizing that it was happening, and, on the other hand, it was possible to believe that one had experienced and survived it when in fact it had no more than just begun.
The market did not all crash at once. Large segments of it had been depressed for a year or more. The 1929 boom was, in fact, quite a narrow and selective one. It was a boom of the handful of stocks that figured in the daily calculation of the Dow-Jones and New York Times indexes, and that was why those well-publicized indexes were at record highs. It was also a boom of the most actively traded stocks bearing the names of the most celebrated companies, the stocks mentioned daily by the newspapers and millions of times daily by the board-room habitues -- and that was why it was constantly talked about. But it was emphatically not a boom of dozens of secondary stocks in which perhaps as many investors were interested.

As a matter of fact, a good part of the stock market had been more less depressed all through 1929.

The soaring of the averages made a rousing spectacle. Yet the highest September, 1929, price of Celanese was 66; its high in 1927 had been 118. The September high of Cluett, Peabody was 46; its high in 1928 had been 110. The September high of Consolidated Cigar was 62; its high in 1928 had been 100. The September high of Freeport sulphur was 43; its 1928 high, 105. The September high of New York Shipbuilding was 27; its 1925 high, 88. The September high of Pepsi-Cola was 10; its 1928 high, 19. The September high of Philip Morris was 12; its 1927 high,41. The list, even if confined to well-known stocks, could be extended to astonishing length. The motor stocks, in particular, were in a virtual industry-wide depression. Studebaker, Hudson, Hupp and Graham-Paige, at that peak of the most celebrated stock boom in history, were down from their previous highs by 22, 25, 43 and 55 percent respectively. And even General Motors, the very bellwether of the boom all through the decade, was down over 10 percent. The persistence of the idea that all stocks were going through the roof in the autumn of 1929 is a monument to the power of popular myth."
Mr Gresham
(01/02/2000; 14:17:31 MDT - Msg ID: 22060)
FOA
Wow! First read amazing. Like walking between rows of trees in a great forest, going through those sentences was. Tangible, it felt like I was holding something in my hands the whole way.

This must be the process of undoing a lifetime of propaganda, to see things so simply again?

I'll start in on another read, if my 3-year-old calling me allows me to deflect her for another half-hour (unlikely :) but my slow absorption rate could take a couple more reads today at two-hour intervals anyway.

I used to get this in school, when something finally jumped out at me out of geometry or calculus from a favorite teacher who loved teaching.

oops gotta go, wife back, sunny day, you know the next moves!
TheStranger
(01/02/2000; 14:25:15 MDT - Msg ID: 22061)
"Get Real"
Cheryl Strauss-Einhorn, "Barrons"'long time commodities bear has begun to change her tune. Towit, from today's "Barron's":

"The new millennium should begin well for most industrial commodity markets. Bloated inventories have largely been drawn down amid capacity closures and, more recently, re-emerging Asian demand.

"Against this positive backdrop, there is growing evidence that, for the first time since 1996, the world could be largely recession-free. We may experience synchronous economic growth in 2000 as all the major regions of
the world pull in the same direction at roughly the same time.

Yet given the length and strength of the current business cycle in places likethe U.S., which accounts for 28% of global output, such robust economic
activity could stretch manufacturing limitations, causing inflation to rise as stocks of essential raw materials continue to fall.

The result is an environment potentially ill-suited for financial assets, such as stocks and bonds, which perform best when economic conditions are poor
and the potential for improvement is highest. Commodity prices, which tend to rise in periods of high activity given their direct exposure to the physical economy, should on the other hand find such an environment quite hospitable."

Strangers Note: A lot of people read Strauss-Einhorn. She is interviewed almost daily on CNBC. Who knows, perhaps inflationists will start being invited to parties again!
Leigh
(01/02/2000; 14:37:26 MDT - Msg ID: 22062)
Stranger
Hi, Stranger! Did you see this post on Kitco this morning?

Sunday Jan 02 2000 10:34
yellowcab (barron's commodities columnist chick to hatch!)
einhorn is scheduled to pop, on maternity leave till july. YEAH! HAPPY NEW YEAR!

Perhaps hormonal fluctuations are causing Ms. Eichorn to behave in an uncharacteristic way.
TheStranger
(01/02/2000; 14:40:09 MDT - Msg ID: 22063)
Jon
Thanks for asking me about this Jon, but I am afraid I haven't got a good answer for you. I have bought gold and Japan in the last 18 months because I thought both were at or near major important long term historical bottoms. I still believe I was right. I, as yet, see no reason to sell either one. To show you how dumb I am, though, I actually visited Singapore at the very bottom of their stock market in 1998 to check out the opportunity there. It is without a doubt one of the most wonderful countries in the world and has an economy which just about anybody could envy. Yet, coward that I am, I failed to buy a single share there, while you obviously did not. Bravo!

We actually have had an occasional poster from Singapore here at the Forum. I do not recall his handle, but, hopefully, he will see this conversation and share his thoughts on the market there. Meantime, I wish you all the best, whatever you decide!
TheStranger
(01/02/2000; 14:47:33 MDT - Msg ID: 22064)
Leigh and Michael
Leigh - Hello, dear person. No, I did not see that at Kitco,
but, if it is true, then Hooray for hormones!

Michael - Thanks for everything. It is great to be back among people I care about.
Cavan Man
(01/02/2000; 15:34:05 MDT - Msg ID: 22065)
Cavan Man 22051
complement: 2.the amount or number needed to fill or complete 3. an entirety; complete set 4. something added to complete a whole; either of two parts that complete each other.

I meant to say FOA and Stranger complement one another not, compliment; although in due course I hope they will do that as well.

It requires a leap of faith (which I have made) to agree with FOA. Regarding Stranger, his analysis is of course more conventional and RIGHT ON THE MONEY!

I hope the case for gold becomes as clear to all as it has become for me thanks to these two fine minds.
canamami
(01/02/2000; 16:15:03 MDT - Msg ID: 22066)
Thx MK, FOA, the Stranger - USAGOLD Rules Again!
I would like to thank MK for maintaining this excellent site and inviting the Stranger back, FOA for welcoming the Stranger back and thereby impliedly accepting the Stranger's apology, and the Stranger for apologizing to FOA and agreeing to return. This generally seems to be a friendlier site among the gold internet sites (one gets a sense of the personality of the posters here), and the analysis is almost always of good quality and often of excellent quality. This has always been my first choice for posting on general issues concerning gold, and now my comfort level with the site is greatly restored.

I'm presently fighting off a (not-Y2K) bug, but will aim to reply to to FOA before Tuesday, and perhaps post and repost on some other points.

RAP
(01/02/2000; 16:40:32 MDT - Msg ID: 22067)
Fed Funds
http://www.bloomberg.com/markets/rates.htmlCan anyone tell me why the Fed Funds are down to 1.5%?
Is this important, or is it just due to low volume?
TheStranger
(01/02/2000; 16:56:46 MDT - Msg ID: 22068)
RAP
Don't pay attention to those numbers for a few days. End of year book squaring always creates a momentary anomaly, and, with Y2k this time, who knows what they mean.
Netking
(01/02/2000; 17:04:19 MDT - Msg ID: 22069)
Bill Gates; Y2K Comment
http://dailynews.yahoo.com/h/nm/20000102/bs/yk_gates_2.html"...Bill Gates, chief executive of software giant Microsoft Corp. (NasdaqNM:MSFT - news), said he expected some relatively minor year 2000 computer glitches to crop up in the coming weeks, even though no major disaster followed the changeover to the new year..."
Chicken man
(01/02/2000; 17:10:12 MDT - Msg ID: 22070)
How come the BIS plays with REAL gold chits
http://www.bis.org/Go to the annual reports.....notice that even the dividend to the "members" is figured in gold francs.....and this is at gold valued @ $209/oz.....why aren't they playing with bank numbers like all the rest of the banks...?
Netking
(01/02/2000; 17:23:10 MDT - Msg ID: 22071)
NYSE sets Circuit Breakers for First-Quarter 2000
http://dailynews.yahoo.com/h/nm/20000102/bs/bonds_outlook_1.htmlNYSE Sets Circuit Breakers for First-Quarter 2000;
Traders returning to the floor of the New York Stock Exchange Monday will have a new set of circuit-breaker and trading-collar trigger levels, effective throughout the first quarter of 2000. Circuit-breakers suspend trading for declines in the Dow Jones industrial average of 10 percent, 20 percent and 30 percent. As the Dow has escalated sharply since the circuit breakers were first implemented in April 1998, the circuit-breaker levels have risen as well.
Beginning Monday, a 1,100-point drop in the Dow before 2
p.m. will halt trading for one hour; for 30 minutes if the
drop occurs between 2 p.m. and 2:30 p.m.; and will have no effect if at 2:30p.m. or later. In the fourth quarter of 1999, a drop of 1,060 was necessary before trading was halted.
A 2,250-point drop in the Dow before 1 p.m. will halt
trading for two hours; for one hour if between 1 p.m. and 2 p.m.; and for the remainder of the day if at 2 p.m. or
later. In the fourth quarter, the level was set at 2,150.
A 3,350-point drop will halt trading for the remainder of
the day regardless of when the decline occurs. That's up from 3,200 in the fourth quarter.
The NYSE also imposes trading collars, which restrict some
computer-driven trading. Those will be triggered when the Dow moves 220 points or more above or below its closing value on the previous trading day and removed when the Dow is above or below the prior day's close by 110 points.
When circuit breakers were first imposed following the market crash of October 1997, trading was suspended for a half-hour if the Dow dropped 350 points and for one hour if the index fell 550 points. Under the old rules, the market would close for the day if the 350 level was reached at 3:30 p.m. or if the 550 level was hit at 3 p.m.
AEL
(01/02/2000; 17:40:14 MDT - Msg ID: 22072)
2 January 2000: all clear!

It is now 2 January 2000 and obviously there have been ZERO
infrastructure disruptions, to everyone's relief, including mine. The
euphoria is so great, and my own gratitude so profound, that my
emotions are tempting me to think of this thing as over and done
with. This in spite of the fact that none of the most credible Y2K
analysts expected dramatic "show-stoppers" on 1 January, at least not
in the U.S. I almost believed them: I thought that there was at least
a small risk of a disastrous "big bang" on the Big Day, and that
there was a moderate risk of a handful (or more) of local or regional
disruptions and breakdowns, including possibly some pretty serious
ones (e.g. no heat in the north for a week, in January, is "pretty
serious").

Hence, I must admit that the *total* absence of infrastructure
problems worldwide -- power, water, sewage, etc. -- was a surprise. I
was certainly not alone in this. I think it even took most of the
optimists by surprise. My expectation of infrastructure problems was
one of the main reasons that I prepared and encouraged others to do
so -- in the event that we were affected by that "handful". The other
major reason was as an inflation hedge, and the jury will be out on
that for many months yet. The other (minor) reason was that I thought
that catastrophic infrastructure breakdown, precipitating still
more-catastrophic domino effects, was a small possibility, and I
thought that that was also worth preparing for, provided the preps
were of a "can-always-use-it-anyway" nature. And I still think that
maintaining such a low- or no-cost insurance program is a good idea.

Obviously, none of the infrastructure disruptions came to pass...
Thank Whoever... and it now seems that the embedded chips issue --
one of the biggest single wildcards, and the aspect of the problem
that would have led to dramatic infrastructure problems -- was vastly
overstated. (... just as it now seems that my basement tunafish
larder is vastly overstocked..... ;) )

But that does not mean that 600+ billion bucks (largely for software
remediation) were spent on nothing. Nor does it say much, necessarily,
about the success of that remediation. Most of the vulnerable software
was not even running over the weekend, and most of it does not control
stuff in which errors would become evident overnight, anyway.

The Gartner Group, one of the largest non-governmental groups
monitoring the Y2K phenomenon from the start, predicted that less
than 10% of all Y2K-related failures would occur during the first two
weeks of January; that might be about right. I am reminded of the
words of Dale Way (the IEEE Y2K guy; see further quotes below): "the
rollover fallacy [the expectation of dramatic disruptions on Jan 1]
has so skewed the dialog and the public consciousness that society
has been forced to focus on the 5% of the Y2K crisis that is least
dangerous and easiest to deal with and obscured from clear view the
other 95% of the problem that has the potential to do great damage to
the economic and social order." ... And the words of programmer Lane
Core (see excerpt below): "I spent ten weeks and more writing essays
to explain why obvious, spectacular failures at The Rollover were not
the real issue. The experts I cite and quote most frequently all
agree, and have for quite some time, that it was unlikely there would
be obvious, spectacular failures at The Rollover, by and large, and
that they weren't the real issue anyway."

With the infrastructure holding everywhere, the true doomsday scenarios
are, thankfully, moot; those scenarios were predicated on serious
infrastructure problems, which were in turn predicated on major embedded
chips problems. But millions of computer systems were idled over the
weekend and have yet to demonstrate functionality. There are potential
glitches in end-week, end-month and end-quarter back-office computer
runs, etc., with impacts that might not be evident for weeks or months.
Lots of question-marks loom ahead: banking, stock markets, oil, trains,
international financial settlements, enterprise computer systems in
general (the systems that run the big organizations), the postal
service, government programs, the IRS and etcetera.

Mainframe programmer Cory Hamasaki seems to have called the embedded
problem correctly on the day before the rollover: "The embedded problem,
if it is a problem, will happen fast and will be flashy. We'll know in a
week or two. It's the enterprise systems that will fail over months,
corrupt databases, kill organizations, put people out of work..." (see
below).

For now, I am thankful that the software remediation and fix-on-failure
efforts will proceed without being hobbled by infrastructure problems.
And I am hoping that the government and IT experts were half as wrong
about the software problem as they were about the embeddeds problem (...
and as wrong as I was about the availability of tunafish...)

To follow: some pertinent clippings.

-- Alan

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

(These are comments from Dale Way that I sent out to most of you in
November; pardon if this is repeated, but I think his comments are worth
a review for understanding where we are right now..................)

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001jnW

Dale Way, IEEE Y2K Committee Chairman

.....

BOTH the Chicken Littles and the Pollyannas ARE WRONG.

The Chicken Littles, who most often exhibit the hand-wringing/ embedded
chip/ physical control systems/ "we could lose power and everything!"/
utilities/ hazardous material plants/ Bhopal & Chernobyl trajectory are
wrong because they do not understand the basic mechanism necessary to
force a Y2K error and what relatively minimal opportunities in those
systems for those mechanisms to play out. They are wrong because they
have no concept of the nature of those systems and how, and under what
value and incentive systems, the overall, often life-critical systems
(the ones containing all the embedded components and subsystems) were
ENGINEERED to withstand regular failures of almost all of its parts at
one time or another without ceasing to function. They do not understand,
on top of these other advantages, how well these systems are understood
by their care- givers. How much simpler they are in comparison to those
systems we must be concerned about. Those that the Pollyannas cannot
see.

The Pollyannas are in denial not because they do not see threats that
are not really there, but because they do not understand and appreciate
the massive size and complexity of software-intensive, intensely
interconnected/interdependent/data sharing enterprise management systems
normally associated with accounting and administrative functions. They
do not understand how prevalent and long-lasting are the opportunities
for Y2K errors to emerge in systems here and how much more difficult and
time-consuming it will be to track them down and neutralize them. They
do not understand how resistant these systems are to remediation,
especially fundamentally flawed, "compliance-based" traditional invasive
software remediation that pushes its most difficult problems out into
the beleaguered testing phase. Pollyannas do not understand how little
these systems are really understood by their caregivers and how
ill-disciplined, how CRAFT and occasionally ART-based are the doings
here, having been carried on under a decades-long succession of trendy,
fashion-based technologies and methodologies however competently (or
not) executed by an equally long succession of different maintenance
teams.

But before the Chicken Littles (and everybody else) run over to the
other side of the boat, the accounting/administrative computing side,
threatening to tip it over in to despair, take great comfort from the
fact that most of these "errors" will not be very destructive, or that
destructive to things that really matter. We can, to a large extent,
isolate and contain, or compensate for in other ways, most of the
errors, including just slowing things down to the rate we can manage.
Some transactions will get kicked out, some systems will stop, but only
more frequently than they do now, not stop as if they have never stopped
before; most non-trivial systems fail regularly already. Plus, as I have
indicated, the problems will tend to correct themselves when the
vulnerability windows of systems close as all their data representations
clear the century boundary and inhabit only the 2000 side. Accounting
systems do not DIRECTLY threaten life and limb. We have more flexibility
in dealing with their short comings.

Do not think of me as a Pollyanna (more precisely a mealy-mouthed
apologist) because I know the electrical system is going to function
very close to, if not totally, normally through and beyond the rollover.
And don't think of me as a Chicken Little because I see the weakness in
the administrative computing infrastructure. I am a bell-curve centrist.
The extremists on both end are wrong. As Will Rodgers said "It's not
what we don't know that hurts us, it's what we know that ain't so."

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

http://www.kiyoinc.com/WRP134.HTM

cory hamasaki's DC Y2K Weather Report

December 31, 1999 - 0 Full days to go. - WRP134

..... "The embedded problem, if it is a problem, will happen fast and
will be flashy. We'll know in a week or two. It's the enterprise
systems that will fail over months, corrupt databases, kill
organizations, put people out of work. I'm worried about the big old
systems. Some big systems run daily but most are weekly, monthly,
quarterly, or annual jobs.... The poor fools at the various public
"Year 2000 monitoring sites" don't understand what goes on in the big
computer centers...."

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

http://hv.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=002Bld

Thousands of crisis teams are in place right now, in medium and large
businesses, overseeing their companies' information systems as they test
the transition of vital business systems. How are they doing? To judge
from the wire services, no one has bothered to ask. The country's
railroad network shut down last night, for safety. Did it come up again?
No one is saying. And of great concern, a huge number of oil and gas
pipelines, highly susceptible to the embedded chip problem, also shut
down to avoid trouble. Are they running again? How strange that no one
seems to know or care.

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

http://hv.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=002AzH

There hasn't been but less than 24-hours pass since the rollover (at the
most). Date calculations require date RANGES in most cases - there needs
to be at least a few days' space here. I'm going to be interested in
seeing how business systems deal with this once they are back online and
start making calculations involving "today" and "previous dates". Just
rolling a computer clock over to 2000 won't necessarily cause a problem
until some program decides to calculate a value based on the current
year and some previous year. Your PC games won't likely fail, nor will
your e- mail. Lets see what happens to all the payroll, order processing
and other business type systems when they hit their next calculation
interval. That's where we'll start seeing errors. -- Bruce
(broeser@ccgnv.net), January 01, 2000.

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

http://hv.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=002Arq

Until we see Medicare, Medicaid, Food Stamps, I.R.S., to name a few,
operating with precision and dependability, we are very vulnerable to an
economic nightmare. Government accounts for a huge segment of employment
in this country. Add to this the incredible amounts of money that is
issued into circulation in the form of benefits and such, and the truly
amazing unanswered questions as to where the U.S. is at this point
remain unanswered. I have viewed my preps as not only "meal insurance"
against interruptions in the supply chain, but as an economic hedge
against rising prices in the months ahead. I cannot believe I am alone
in thinking this way. Interest rates are going to march upward; housing
may well take a hit. Mortgage brokers will be doodling on pads of paper
as they realize there is less and less business(to name but one example
of an industry vulnerable to rising interest rates).

Most of the really important problems, e.g. Def. Dept., pipelines that
were shut down (and may be pesky to restart), will be kept from public
view as a matter of national security.

And what about the many computer viruses that may be running around,
looking for infrastructure to disrupt? Seems there are MANY more things
yet unknown to hoist a victory flag over this country and y2k. (The only
victory so far is preventing massive public panic; well, there is the
additional victory of propaganda over a national audience--YECH!)

Two very alarming things to me are: 1) The overall complacency of our
nation (not going totally unnoticed by folks like China and Sadam) and,
2) HOW EASY IT IS TO STILL MAKE PRUDENCE TO APPEAR LIKE FOOLISHNESS! An
extra comment on this 2nd point is the incredible amount of folks
reporting they feel foolish and embarrassed. If you really want to
feel/experience both of these emotions, then chuck your preps and begin
running around trying to get folks who prepared for NOTHING, to accept
you back into their "fold of foolishness". Then, when fallout begins to
become apparent, you will realize the true meaning of foolish,
embarrassed, and UNPREPARED!

Just as the coverage of y2k was so incredibly shallow and simplistic in
the press for the past few YEARS, so too is the thinking that we are
over the worst of y2k. Just cuz my T.V. works, doesn't mean it is
"all-clear!". And one night of CNN pics. of lights on all over the world
hardly gets me feeling even remotely confident that things will not be
"so bad". (This line of reasoning wouldn't work on a 6 year old child.)

The most unfortunate side-effect of y2k roll-over so far (IMHO) is the
"innoculation effect" that is occurring among some who prepped. How
willing will they prepare or stay prepared for the unforeseen yet not on
this nation's radar screen?

In closing, I will add that this nation is in and will remain in a
window of vulnerability for some time. Just as a cancer patient never
knew the day, time and hour that a tumor began to form within
themselves, so too this nation appears to be generally clueless as to
our vulnerabilities to attack and outright breakdowns in necessary
infrastructure that are now present. When rollover occurred, every
unremediated line of code became a cancer cell in this country's
economy. Whether the Nation's "immune system" of bug busters can heal
all of these conditions, before they grow into a sizeable tumor remains
a HUGE question, at least to me.

I therefore will remain ready to "roll with the punches". Old habits are
hard to break: Why let CNN and the "crowd of fools" do your thinking for
you?

-- (He Who) Rolls with Punches (JoeZi@aol.com), January 01, 2000.

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

http://hv.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=002B9C

So, where was I wrong?

Did I say we'd have obvious, spectacular failures at The Rollover?

No.

What's Wrong with the Way the World Thinks about Y2K --
http://users.sgi.net/~elcore/whatswrong1.htm

Indeed, I spent ten weeks and more writing essays to explain why
obvious, spectacular failures at The Rollover were not the real issue.
The experts I cite and quote most frequently all agree, and have for
quite some time, that it was unlikely there would be obvious,
spectacular failures at The Rollover, by and large, and that they
weren't the real issue anyway.

Since there were no obvious, spectacular failures at The Rollover, I'm
wondering exactly how it is that I (and they) have been wrong. Except,
of course, in the minds of those who never cared what I have really
thought or written, but who wanted to lump me in with the Collapse of
Civilization Crowd. And in the minds of Doomers who thought that they
were right just because Pollyannas were wrong.

As far as I can see, things are proceeding so far as I have thought they
would. And as I have been writing about for many months. You'll say I'm
backpedalling, but I'm not. I have maintained this position publicly for
months: but you don't know that, because you don't care what I think or
write, or you deliberately chose to not understand or to distort.
(Indeed, one of my motivations for getting it all on record in the last
three months of 1999 was that I knew the Pollyannas would try to distort
what I had been saying.)

I am more optimistic now than I was six months ago, not because there
were no obvious, spectacular failures at The Rollover, but because there
haven't been serious, widespread deleterious effects on business and
commerce from errors in the past three months. What happens over the
next month will be determinative of the future course of events.

-- Lane Core Jr. (elcore@sgi.net), January 01, 2000

http://users.sgi.net/~elcore/whatswrong1.htm

What's Wrong with the Way the World Thinks about Y2K --

Essays in the WWwtWtWTaY2K Series

1. A Modest Endeavor
2. Y2K is Not a Crisis
3. Y2K is a Chronic Situation
4. Y2K is Not a Bug
5. Y2K is Not a Bug (continued)
6. Whispering "Fire" in a Theater Ablaze (US Senate version)
7. Whispering "Fire" in a Theater Ablaze (White House version)
8. Whispering "Fire" in a Theater Ablaze (mainstream media version)
9. Bits and Pieces, Odds and Ends
10. What Will the Future Bring?

AEL
(01/02/2000; 17:47:24 MDT - Msg ID: 22073)
more y2k clippings, fyi...
http://dailynews.yahoo.com/h/nm/19991229/ts/yk_impact_1.html

Wednesday December 29 3:27 PM ET

Y2K Impact to Be Largely Hidden at First - Expert

WASHINGTON (Reuters) - The full impact of the year 2000 computer
glitch will be largely hidden until mid- to late January, the head of
a U.N.-sponsored Y2K data clearinghouse said on Wednesday.

``By the third week in January, we'll be able to really tell what the
overall impact is,'' said Bruce McConnell, head of the International
Y2K Cooperation Center, which is funded by the World Bank.

Meanwhile, mistakes may pile up, cause ``lots of inconveniences,''
erode productivity and possibly disrupt world trade, McConnell told
reporters.

Separately, the U.S. Federal Emergency Management Agency said it had
begun an unprecedented effort to prepare for every conceivable Y2K
emergency, up to and including a meltdown at a nuclear plant.

``Any emergency that could happen, any emergency,'' Robert Adamcik,
deputy associate director for response and recovery, said when asked
what FEMA was prepared to handle in a worst-case scenario.
``Explosions somewhere, widespread power outages somewhere ...
nuclear plant meltdowns.''

FEMA -- which coordinates the federal response to any emergency that
overwhelms local and state governments -- said it had deployed
liaison personnel from its Washington headquarters to each of the 50
states and the five U.S. territories.

Preparations Are Described

In addition, each of FEMA's 10 regional offices has been activated
and a state ``mutual aid assistance team'' has been set up, Bruce
Baughman, chief of operations for response and recovery, told a news
conference.

McConnell predicted ``few if any'' immediate ``serious disruptions''
anywhere in the world in vital services such as electricity and
telecommunications when computer clocks roll into 2000 on Saturday.

This confidence reflects the way that such systems work rather than
the completion of steps needed to make sure computers involved
recognize the new year and process the date correctly.

``The computers that control electricity and telecommunications
perform management functions for the most part,'' McConnell said.
``And so even if there is a Y2K problem, it doesn't cause the power
to go out or the phones to go out.''

Instead, he said, Y2K glitches may quietly accumulate in the
``back-office'' systems that handle administrative tasks for
governments and organizations, including accounting, billing and
keeping track of personnel.

``We have never gone through a global event like this in which all
the world is affected by one thing at the same time, something that
has the potential to disrupt commerce,'' McConnell said.

``And so it has the potential, but it's hard to know how big that
potential really is going to be.''

``MANY'' ERRORS, ``MODERATE'' IMPACT?

He has predicted ``many'' Y2K errors but only a ``moderate'' impact.

``The reason that I say that it will be moderate is that the problems
that will be run into will happen slowly over a period of days and
weeks and that people will find ways to work around them. And so
there won't be a chain reaction of effects,'' he said.

McConnell formerly served as chief of information policy and
technology at the White House Office of Management and Budget. The
organization he now heads was set up in February under the auspices
of the United Nations. It has been working with about 170 countries
to cushion the impact of Y2K.

The problem is a design flaw that, left uncorrected, may cause
computers to recognize only the last two digits of the year in a date
and assume that the first two are ``1'' and ''9.'' On Jan. 1,
machines that have not been fixed may interpret the year 2000 as 1900
and possibly crash or not work properly.

McConnell cited cases of Y2K glitches that have already prompted
dunning notices on bills supposedly 100 years overdue and calls for
people to report for jury duty in 1900.

Initially, many of an organization's internal glitches may go
unreported to the public, McConnell said. But he said he expected to
see some early problems.

``There will be some systems that just refuse to work or that produce
incorrect data ... in business and accounting applications,'' he
said.

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

http://www.abcnews.go.com/wire/US/ap20000101_914.html

01/01/2000 17:16:00 ET

Despite early smooth sailing, experts say the bug will still bite

NEW YORK (AP) _ After the 21st century dawned without a crippling Y2K
catastrophe, some people branded the millennium bug an exaggerated
threat, a huge angst-washed waste of money that got mounds more
attention than it deserved.

Not so fast, the experts said Saturday.

Tens of millions of the world's business systems have yet to reboot. And
why should anyone be surprised that the computers guiding the globe's
vital power, telecommunications and air traffic infrastructure didn't
fail?

Their software was the focus of the most diligent millennium bug removal
efforts. Experts never expected anything but a few failures in such
systems.

"Throughout the world I think you'll find that almost a trillion dollars
was spent on Y2K work. There ought to be some results," said Ian Hugo, a
British information technologist who helped write his country's Y2K
standards.

"The more cautionary news is that only 10 percent of the world's systems
went to the gym last night. Ninety percent of them weren't exercising,"
noted Howard Rubin, a leading Y2K expert in the United States who was
nevertheless amazed at how well the world did.

Institutions including the CIA and U.S. State Department had said the
Year 2000 computer problem might spawn major blackouts or phone outages
in countries including Russia, Ukraine and Indonesia.

None of that appears to have happened so far, though a slew of glitches
_ from merely nagging to worrisome _ were reported.

snip

"Things are looking very good," said Bruce McConnell, director of the
World Bank-funded International Y2K Cooperation Center. "This is
consistent with, although on the bright side, of our prediction of few
if any serious disruptions."

He cautioned, though, that it's too early to declare victory.

Most of the world's business systems don't go back on line until Monday
or Tuesday after extended holidays _ some of them intended to give banks
and stock markets extra time to fix any bug errors that have cropped up.

Chile, for example, told the Y2K center that two-thirds of its computer
won't go back on line until Monday.

"It is very, very premature at this point in time to declare victory,"
said Peter de Jager, a Canadian Y2K pioneer: "We expected the
infrastructure to be OK, but wait until next week to start drawing
conclusions about how successful or unsuccessful we've been."

Unready at this point to celebrate was Tony DeRosa, of Spencerport,
N.Y., who has paid attention to the pundits who say many glitches won't
show up for days or even weeks.

"It's like a baseball game, we're only in the third or fourth inning
maybe," he said. "I don't think we're out of the woods." DeRosa stocked
up on MREs (Meals Ready to Eat) for his family of four and filled four
55-gallon drums with tap water.

snip

Holzer listed the two main reasons for his cooperative's hard Y2K work
and contingency planning.

"One, we had a responsibility to fulfill, and, two, the fear that we
were going to get sued," he said. "The lawyers were just lining up to go
after people if there were any problems."

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

http://hv.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=002B3o

The First Post-Rollover BD Report (01/01/2000)

It's understandable that relief over the unexpectedly low reports of
utility system outages around the world is leading to premature
declarations of victory by doomers and pollies alike. Understandable,
but wrong.

Don't get me wrong. I am thrilled so far. I love the idea that those who
mocked Y2K and didn't prepare aren't in the "dark" today, scared and
desperate. My family is so much the safer as a result.

I am thrilled that -- so far -- terrorism has been nearly non-existent
and that the nukes did stay in their silos. Let's leave the near and
far-future (years) for another thread.

OTOH, regular posters know that I have been saying for months that I had
become more optimistic about power and telecom. Rollover for utilities
is not a "wrong prediction" on my part. Note that I will feel better
still even about utilities after 01/07/2000 when the post-mortem is more
complete -- and I note that Rick Cowles, who ALSO expected a calm
rollover, anticipates potential (not definite, but potential) power
problems later even than that (ditto Dick Mills).

So I am not surprised by the result so far EXCEPT by the unexpected
DEGREE of grid calm.

Read that again -- the notion that I (can only speak for myself)
predicted a grid collapse as the basis for a doomer expectation was
already wrong months ago. And, yet, I continued in the face of that
expectation (and continue) to come in at a 8.5 for Y2K impacts. Why?

The primary reason is that serious Y2K defaults will take weeks or
months to emerge (funny how some bubbly obscures sensible analysis on
this board). "Or not". But the point is, it will take until May before
we can either wrap this up as a wonderful polly victory AND/OR determine
the severity of the impacts to come. There will be defaults. Whether
those defaults will add up to a "3" or a "8.5" can't be determined on
01/01/2000.

To a few specifics:

--- Banking and markets.

We know almost nada at this point. It will take days, weeks and/or
months to determine whether the system has been corrupted. If banking
goes down, TEOTWAWKI will be just as sure as if utilities had gone down,
though it is obviously nicer to endure a terrible depression and
worldwide chaos when the lights are on (or, at least, "on" if you can
pay your bills).

--- The rest of the embeddeds

Oil, air traffic, chemical, water/sewage, agriculture, medical, etc.
Again, we know almost nothing so far since some of these systems are
just now coming up today and degradation in systems will take days,
weeks or months to reveal long-term impacts. I am confident that our
insiders (rc, gecko, etc) have NEVER had a stake in a disaster. If the
inside dope from these sectors proves positive over the coming days,
they will report it and it will be awesome. But we don't know yet.

Ditto military systems.

While the surprising absence of utility downs might be encouraging,
embeddeds vary significantly by sector. If we see a consistent and
unexpected type failure in a given sector that has not yet "reported",
we will be in the deep stuff for that sector.

--- Government applications

The jury remains out on Medicare, IRS, USPS and a range of other
applications that drastically affect the lives of tens of millions of
people and entire industries. Consequently, gauging the impact of their
relative remediation is a task for the coming weeks and months.

--- Business applications

The fact my lights stayed on doesn't help me determine the status of
50,000 enterprise mainframes around the world ("hey, Fred, the lights
are on, you can go home now and stop FOFing the iron") nor the viability
of millions of SMEs who have chosen to FOF [Fix On Failure]. Does big
iron "matter"? Were the SMEs smarter than "me"? Mebbe. Mebbe NOT. Again,
time will tell. If "not", will the effect on the supply chain be
minimal, significant or disastrous? Stay tuned.

DO I really have to go on?

What we have apparently learned so far is that utility folks like Malcom
Taylor and Rick Cowles were correct that the advanced grids would handle
rollover. Great. But that's about ALL we have learned. As for Russia et
al? Keep watching the news for a week or two, as I've said all along.

If the same holds for telecom (I haven't seen any first-hand reports),
that will be somewhat more surprising to me, since many doomer and polly
analysts have been predicting problems there right up to yesterday.
Again, great.

As for how the "forum" is behaving, I can't say I'm surprised one way or
the other. Most are playing to "type" -- a mix of trolling, blaming
"Ed", claiming "victory" or feeling like they were "duped".

Hang in there, folks. The home team (that's all of us) had a good first
inning. Now, let's keep playing while the rest of the game unfolds.

-- BigDog (BigDog@duffer.com), January 01, 2000

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

http://hv.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=002Bwq

Let's Put An End To The Hidden Error Debate ....

Look, I'm still expecting an 8.5.

But let's find some common ground about Y2K glitches that are "hidden"
within organizations.

First, no organization with any brains reports problems externally that
can be solved internally. That's not conspiracy - it's simply sensible
business.

Of course, many, if not most, Y2K impacts internally will be minor. They
will be fixed without fanfare.

An unknown percentage may be moderate to critical. These will either be
fixed; a work-around will be designed and the bug will be fixed later or
leave this world when the system is replaced sometime in the future; or,
if the impact brings down a critical system, the red alert will be
sounded and enormous energy will be applied to the problem.

To be sure, we don't know whether or if the accumulated load of minor
problems will swamp support operations at a given point. We debated this
without resolution on this forum last year. Milage will vary for many,
many reasons. If problems swamp support, we don't know at what point
they will become visible to customers and the world. Nor do we know at
what point, for a given operation, failure means business failure.

The same is true for the "red alert" situations, though their dynamic is
obviously more intense, acute and immediate.

It will take days, weeks, months or "never" for Y2K problems to be made
visible to US, consumer-users. By visible, I mean that business failures
are occurring that affect the customer (or supply-chain partners, who
are also customers). If business failures do not occur visibly, Y2K is a
"victory" for all of us even if there were billions of Y2K glitches
behind the scenes.

Moreover, it is obvious for a host of political and legal reasons that
some organizations will never report a business failure as "Y2K" while
others may report non-Y2K failures as Y2K failures - ironically, this
may be safer legally, given legislation passed last year by Congress.

In sum, we're in for a period of weirdness while we WAIT to see Y2K's
world impact (no, kids, 01/01/2000 wasn't the end of the "wait", just
the optimistic beginning).

Meanwhile, let's not expect entities to report hidden glitches. Let's
not assume that the absence of reporting means "bad" things are
happening behind the scenes. Let's not assume that the absence of
visible failures on 01/02/2000 means "good" things are happening behind
the scenes.

We've spent two to five years preparing for Y2K. Unlike "Joanne", yes,
we are now IN the window of impact. But even the fiercest pollies
(Koskinen at al) are looking for weeks of impacts. They expect minor
impacts. I expect major impacts.

Still hope they're right and I'm wrong. And still don't know more about
THAT than I did 12/31/1999.

-- BigDog (BigDog@duffer.com), January 02, 2000
RAP
(01/02/2000; 17:51:59 MDT - Msg ID: 22074)
Crash chart
http://www.futuresfax.com/tops/stkcom1.gifComparison of 1929 vs 1999/2000.
Looks serious to me.
SteveH
(01/02/2000; 18:15:11 MDT - Msg ID: 22075)
LT bond
L.T. bond is taking it in the gut tonight. Yield is up big-time.

Feb. gold down $2.8
Peter Asher
(01/02/2000; 18:17:34 MDT - Msg ID: 22076)
Steve
Also down 6.90 for the S&P is heavy for this hour
Netking
(01/02/2000; 18:27:33 MDT - Msg ID: 22077)
Crash Chart
Sir Rap(22074), watch that space!...serious action promised by March.
FOA
(01/02/2000; 18:34:26 MDT - Msg ID: 22078)
Comment
TheStranger ( Msg ID:22056)

Thanks Stranger, that's all in the past now.
The future is before us.

------------------------------------------------------------
Mr Gresham (1/2/00; 14:17:31MDT - Msg ID:22060)

Thanks Mr. G..
My #22048 was a hard complicated piece to produce. After reading it again I saw many spelling and english usage mistakes. But I hope it offered a springboard for concept. I'll write it again more clearly if you want.

This perception is the basic foundation that has fuelled the drive for a new reserve currency. Even if this only amounted to an establishment of another like the dollar (without the lineage of debt for baggage). Understand the reasoning in this and we can clearly see where the dollar was going without any political leverage to change the US course. A world wide hyperinflation that would impact every economic aspect of world trade. Today, that same inflation results will be contained by devaluing the dollar in gold with another reserve currency available for use in international settlement and reserve holdings. Instead of a world-wide event, the effects will be mostly felt only in
countries that have little gold and no Euroland trade reserves. Yes, the US has some gold, but this limited amount is frozen from effective use by the "duality" of the dollar. Today, the dollar is a citizen of two worlds even as the gold that must back it belongs "politically" to the a single
American people. There can be no clean resolution of this as we can't print a new money and we can't back the one we have.

Granted, this transition will amount to a financial paper deflation and goods price hyperinflation in some of the largest economies (US, Japan, Canada, Australia, etc.), but the majority of the worlds population will be somewhat shielded.
I am jumping way ahead of the fact here and should wait for political motives to set gold on this new trend line. But, I feel many here will understand this now. We shall see.

Thanks FOA

Note: This week is going to be big. I bet gold ends the week with a gain and the dollar is hit.
Al Fulchino
(01/02/2000; 18:49:09 MDT - Msg ID: 22079)
Welcome back,Stranger.
Good to have you back
mhchuck
(01/02/2000; 19:52:49 MDT - Msg ID: 22080)
USAGOLD
Thanks for your response, and your assessment of the factors likely to effect the gold market. Given your years of experience in the trade, your bullish forecast is not one to be dismissed lightly, if at all.
Solomon Weaver
(01/02/2000; 20:21:21 MDT - Msg ID: 22081)
watch 2 k
Well, the electric is on for two days now�phones work�.the internet up�.the worst case scenario for y2k is no longer coming true�

I have always thought that y2k would go one of two ways (in relation to financial markets):

The first outcome would be such utter collapse and chaos that markets would not be able to trade because of infrastructure problems�If that had happened, most of the developed world would have been blind to the amount of value destruction going on behind the scenes, until when the markets reopened, and almost all things were trading at a steep discount.

The other outcome (which I think we are now in) is that the infrastructure stays up, the markets stay open, and the world can have a play by play view of the slow meltdown�having y2k problems is like having AIDS�nobody wants to admit that any current computer problems are "y2k" related� the reason why I think meltdown is coming is that the entire USDollar reserve asset base worldwide is tied to the economy which has the largest amount of information jobs per capita. If 5% of that information becomes unreliable, the trust level will start to plummet.

What we have already seen is that the physical infrastructure appears to hold. It is important to remember that electric, phone and internet are all networks�.all are able to lose as much as 20% of their function and still get by because the remaining nodes pick up the work. It is not really true that there were no problems�it was rather that these networks were able to adjust. Additionally, the "problems" are visible in real time and mechanisms are in place to correcting for imbalances.

In the coming week, we will now test the information infrastructure. Maybe the problem has been solved�but if it hasn't been solved well, then the primary value added layer in America's economy will erode in function. Like no other country, America is an information economy�.dollar bulls will point out that this technology is the strength of our dollar�that cyber economics are here to stay and that it is a fountain at which all may grow "dollar wealthy". The truth of the matter is that "problems" in the information economy are sometimes obscure, visible not in real time, but with delay, and many failures of the coming week will not have mechanisms in place for correcting them.

An interesting contrast: In Japan, two nuclear reactors were taken off line after midnight�other electric production locations immediately take up the slack�but imagine what would happen if two major Japanese banks would suddenly go offline (say they couldn't settle trades and balance books for 3 days).

My family made y2k preparations�some of it is maybe more than we will need, but we were considering that some of our food might need to feed neighbors..that time may still come. Most of it was in things that I now call wealth�like if oil goes up a lot�at least we have the option to heat more with wood.

We have all been blessed that much human suffering has been avoided

We will have a lot to watch these next few weeks.

And the least of that will not be the great diversity of persons who all sit at this round table.

Poor old Solomon
mhchuck
(01/02/2000; 20:29:16 MDT - Msg ID: 22082)
FOA
Hello and welcome mhchuck,Thanks for responding----Yes, I have been on this trail for what seems an eternity, and I intend to finish the hike, hopefully in "YOUR" lifetime. (smile) A few months back I made the adjustment in my holdings to reflect more "physical" gold.(Having already been "crushed" in paper) If most of the mines have sold much of their future production at $300-$350, then their fate is obvious, should gold indeed rise.
There's an old saying that "A man with one watch, always knows what time it is, but a man with two, is never really sure."... I have discarded all other time pieces...you're it. It is not such a dangerous maneuver for me personally as some might think. You see, I "know" where the trail is going, but with your higher perch, I will improve my visibility. But whether or not any of your "pre-vision" comes to fruition, matters not, (although it might matter to you for having put it forth) ....the fact is, I like the way you tick.
Number Six
(01/02/2000; 21:16:54 MDT - Msg ID: 22083)
@Mchuck and poor old Solomon/AEL/Stranger
Mchuck - Good choice! - you will not regret it. We are entering turbulent times.

POS

An excellent post which sums up my views pretty well too!

I spent 6 years in realtime coverage programming with VISA - I dealt with transaction errors on a day to day basis with banks and financial entities all around the globe. My point is that even on a daily basis these transactions are tremendoulsy complicated - no two to be honest are ever really the same. I am expecting serious data corruption problems to surface (and perhaps propagate, although the jury is still out on that one) in the banking community. Cast your mind back just one month to DeutscheBank - they went belly up for just 24 hours - but it was enough to almost grind the system of systems to a halt. If we get similar occurrences, with more than one major bank, at the same time, we will be in serious trouble, it will goodnight Vienna! Then what happens to gold/silver/commodities...

Thanks also to AEL for the y2k roundup below.

I have particular regard for a fellow named Big Dog, who has written two excellent summaries (also below), well worth another gander.

This week should be interesting to say the least. Silver just up another 3 cents to $5.45 at MRCI.COM...

Watch the banks :o)

And "Hello Stranger!"
Black Blade
(01/02/2000; 21:41:22 MDT - Msg ID: 22084)
Stranger and Number Six
Howdy Stranger! Good to see you back. Should I find myself back in SLC I shall have to look you up and take you to the Dead Goat Saloon (my treat). I understand that there is some good old time Boogy Blues tomorrow night. Now that we have made it through the roll-over without much trouble (barring any delayed/unreported problems), the question of course is, will the foreign investors declare an "all clear" and withdraw from the US "safe haven" markets? Also if the Asian contagion is really over and it is clear sailing ahead, does it not seem that industrial commodities, petroleum, metals, would rise at least proportionately? And would this likely spike petroleum prices well above the recent doubling in price, therefore dragging other commodities along for the ride? I know that this is much to think about as well as being some very broad-based general questions. We just haven't had your imput for a while ;)

Number Six: I have read your posts on the other "site", I was not aware of any real problem other than the usual banter among the participants. The only reason I ask, is that I generally agree with the oil/gold correlation as it relates to inflation, etc (ala OPEC 1973, etc.), and the embedded systems such as SCADA, etc. did present some reasonable concern for oil production, refining, and distribution. Was there something else going on there since Dr. V. (the new Number Two?) was a big proponent of the Oil/Gold correlation as well?
Number Six
(01/02/2000; 21:55:38 MDT - Msg ID: 22085)
@Black Blade
Was there something else going on there since Dr. V. (the new Number Two?) was a big proponent of the Oil/Gold correlation as well?
============================================================

I don't know what Vronsky's problem is. He took umbrage at my posting on oil and gold and commodities in general. He e-mailed my privately saying I had an "agenda" (actually I just have a palm pilot but thats neither here nor there :o) ), so I composed what i thought was a gracious farewell message to the GE site, basically saying that I believed that in this day and age in order to understand gold and its role in the world you couldn't just do it in a vacuum, you also had to factor in oil, inflation, geo-politics and all the rest.

No sooner had I posted the message it was pulled along with my password. So now all the folks at GE think I am some sort of flake that has disappered into the ether... I was very PO'd to say the least. As I said though, I'm in good company, not the first and not the last to be viciously blackballed by the old goat :o)

I also, like yourself, am interested to see how the markets react to the "apparent" y2k non-event. this is clearly the way the media at the direction of the powers that be wanted it to play out.

Where does this leave Greenspan and his excess liquidity?

Where does this leave Wall street if foreign moola deserts US equities?

And what of all those "investors" who put off bailing out last week because of the tax hit? many will no doubt bail on Tuesday, but how many?

Will it turn into a stampede?

I really don't know - I can't figure out these market at all anymore...

However I do think I know why FOA has said gold will rally this week... :o)

Watch the banks :o)
beesting
(01/02/2000; 21:58:10 MDT - Msg ID: 22086)
@Chicken Man#22070 How come the BIS plays with real Gold chits?
http://www.bis.org/index.htmFirst: HAPPY NEW CENTURY TOO EVERYONE!!!
Second: Welcome back Sir Stranger, again.

Chicken Man, you didn't quite research far enough at the BIS site.It's under profile of the BIS.

The following proves the world is still on a Gold standard, because the BIS is the Central Bank for all the other Central Banks of the world, and they change all the fiat currencies, including U.S. Dollars,into Gold Francs in their books, as explained below.

From:PROFILE OF THE BANK FOR INTERNATIONAL SETTLEMENTS.

The authorised share capital of the bank is 1,500 million Gold Francs, divided into 600,000 shares of equal nominal value (2,500 Gold Francs per share), of which 517,165 shares are currently issued. They are paid up to 25% of their nominal value (625 Gold Francs per share).The amount of the paid up capital in the balance sheet of the BIS at 31 March 1999 thus stands at 323.2 million Gold Francs.
The Gold Franc of the BIS has a Gold Weight of just over 0.29 Grams of fine Gold, which is identical with the Gold parity of the Swiss Franc from 1930 to Sept. of 1936. The BIS employs the Gold franc solely as a unit of account for balance sheet purposes, assets and liabilities in U.S. Dollars being CONVERTED into Gold Francs at a fixed rate of U.S. $208 per ounce of fine Gold(approximately equivalent to one Gold Franc = U.S. $1.94) and ALL other currencies being converted into Gold Francs on the basis of market rates against the U.S. Dollar.

7.Bank Balance Sheet:
At 31 March 1999 the Banks balance sheet total stood at 66.2 billion Gold Francs, with the Banks published own funds ( capital and reserves) at 2.9 Billion Gold Francs, expressed in U.S. Dollars with Gold at the then CURRENT MARKET PRICE the figures can be put at $131 Billion and U.S. $ 5.7 Billion respectively.

The total of the currency deposits so placed with the BIS amounted to about U.S. $112 Billion at 31 March 1999, representing ""7%"" of WORLD foreign exchange reserves.
Most of these funds are placed in the market mainly in the form of investments with top quality commercial Banks and purchases of short term Government Securities, it also conducts a range of foreign exchange and Gold operations on behalf of its customers.
In addition to placing funds in International markets, the BIS sometimes makes short term advances to Central Banks, these usually are in the form of SECURED CREDIT AGAINST GOLD!!!!

My Comments:
This last statement insures Central Banks will keep Gold on hand, to act as collateral in the event a loan is needed from the BIS.
The next time someone says"Gold is a barbarous relic", show them a copy of this post.
By the way the U.S. is well represented on the Board of Commissioners of the BIS!!

We walk this Golden road of new awareness together.....beesting.
BTD
(01/02/2000; 22:19:59 MDT - Msg ID: 22087)
Steve H, Number 6 - Comex is closed tonight
The Comex is closed tonight and tomorrow. The prices you are quoting are Thursday's closing prices:

"Feb. gold down $2.8"

"Silver just up another 3 cents to $5.45 at MRCI.COM"

MRCI.COM gives a current time and date, but the quote is the last closing price. You can check the current spot price at http://www.kitco.com/gold.graph.html
Number Six
(01/02/2000; 22:31:46 MDT - Msg ID: 22088)
Oops
Too used to looking at the mrci night quotes!
Netking
(01/02/2000; 22:32:50 MDT - Msg ID: 22089)
"Relief rally in store" (spare us)
http://dailynews.yahoo.com/h/nm/20000102/bs/yk_markets_5.htmlExcerpt; ...`With Y2K out of the way investors and central bankers can now focus on the underlying economic fundamentals which point to
a strong global economy and ample liquidity,'' said Gerard Lyons, strategist at Standard Chartered in London.

``That will be reflected in surging stock markets in January in the U.S., in the UK, on the continent (of Europe) and also a
reinforcing effect in Asia.''

Number Six;Perhaps the good Dr heard about your going long on oil from monitoring this site!

Black Blade
(01/02/2000; 22:41:52 MDT - Msg ID: 22090)
Early indicators? Is the game a foot?
S&P futures are still down (currently -3.80) and Bonds are moving lower. I would venture a guess that we could see yeilds rise substantially in short order at the open. Could this be an indicator of foreigners preparing to bail out of dollars and/or investors moving to other investment vehicles? This week should be interesting.

Number Six, thanks for the explanation. Their loss...our gain. We also gained YGM in a similar situation. We do have a few "cross-posters" here as well. Take care.
canamami
(01/02/2000; 22:43:33 MDT - Msg ID: 22091)
Reply to FOA - Possible Demands re Gold Breach of Contract
FOA,

I believe the recent demands made against Germany/Switzerland flowing from World War Two, and the end of gold convertability under Bretton Woods, are almost completely disanalogous; I don't see any demands ever arising against the US flowing from August 1971.

The demands against Germany/Switzerland are heavily tied in with moral questions relating to Holocaust-type issues, and all that that entails. Whether rightly or wrongly, portions of world opinion (particularly important groups in the US, and the broader world community) continue to view a continuing moral culpability on the part of Germany and Switzerland. On the other hand, the end of gold convertability was a pure commercial matter, somewhat akin to a bankruptcy, not giving rise to important moral issues. Remember, every other country ended gold convertability, and some of these countries did not disestablish the previously gold-backed currency - for example, Canada kept its dollar and Britain kept its pound, though gold-backing ended for these currencies. Also, neither Germany nor Switzerland expressly stated - "no more claims will be recognized flowing from World War II". However, the US has expressly extinguished any demands for gold against the Treasury, except for some very old issues of certificates and dollars. Thus, the US has made an express policy decision that no demands are to be made against its gold. This has not stopped the rest of the world from continuing to view the dollar as the pre-eminent currency.

The bottom line: the US will not entertain any claims against its gold on either a moral or legal basis, and I don't believe any claims will be made against it either. This matter has been resolved, and the US would disregard any attempts to make this an issue, though I doubt such attempts would even be made.
pdeep
(01/02/2000; 22:51:55 MDT - Msg ID: 22092)
A Few More Cuts
http://home.kyodo.co.jp/cgi-bin/m_conciseStory#20000103807The Devil is in the details....
Number Six
(01/02/2000; 23:10:49 MDT - Msg ID: 22093)
@Netking
Number Six;Perhaps the good Dr heard about your going long on oil from monitoring this site!
=================================

I am being philosophical about this :o) Win some, lose some. There is a great deal of debate in my little circle about how the experts got it so wrong on the embedded chip problem with regard to oil production. I am actually long in call options out to April so i'm basically waiting and watching to see what happens... however I do find it quite surreal that absolutely ***ALL*** Oil Companies in ALL countries without exception have reported NO glitches whatsoever... and I'm the sugar plum fairy! :o)
Number Six
(01/02/2000; 23:32:00 MDT - Msg ID: 22094)
The infamous Infomagic speaks...
From csy2k

"I have watched with amusement as the pollies rattled their cages and "jumped the gun", claiming the Y2K rollover is a non-event. As usual, I decline to respond to their insults and choose to speak, instead, directly to those who have chosen the side of caution and preparation in this debate. Perhaps you need a word of encouragement, right now, and a caution not to undo your wise preparations. In fact, increase them if you can.
First remember that this is a _Year_ Two Thousand problem, not just a New Year's Evil, stroke of midnight computer annoyance, as some would have you believe. There are a number of problems, all timed for the year 2000, with which we will have to deal throughout the entire year, and for many years to come (that has been the essential point of all my writings).

I have _always_ said that Y2K is only the trigger, and the real target is "the economy, stupid". The bullseye is bubble.com and the sights have been aligned for and by the God of Ages. Last Friday, at midnight, the trigger was squeezed, but we will have to wait some time before the bullet leaves the barrel, before it strikes the bullseye, and before the target falls down dead.

In ballistic science, this process is called the "lock time" of the weapon and the flight time of the projectile. In the case of my own, personally accurized pistol, with a Colt 1911 "single action" design, the process is as follows:

Starting with a loaded chamber, one either pushes down on the safety (if already cocked), or pulls back the hammer to cock it, or, one racks the slide to both load the chamber and cock the hammer at the same time. Either way, all of these events produce a noticeable sound, especially in the middle of a "social" conversation. This was the preparation event the pollys reacted to in terror and disbelief.

After aligning the sights over the correct target (something done by someone far greater than I) one gradually increases pressure on the trigger until it releases (unexpectedly, if you do it right).

Depending on the weapon, and a certain willingness to place one's ear close to the weapon's action, one can hear the release of the trigger sear, which releases the mainspring, to push against the hammer. In a cheap weapon it sounds like grains of sand, grinding against parts of delicate machinery. In my pistol, with a sear hand-honed to a three and a half pound letoff, all you hear is a very sharp click. In a weapon forged and honed by God I would expect an even sharper, clearer release.

This was the sound the pollys reacted to on new year's eve, when they quite literally "jumped the gun" and assumed nothing had happened. It really hadn't. The gun had not yet gone off. But it will.

After the mainspring is released, there is no audible sound, it just takes time, a relatively long time, for the hammer to strike the firing pin and force it into the primer. This is the longest part of the "lock time" and it's duration is dependent on the mass (inertia) of the hammer and of the firing pin. One can shorten the time by reducing the inertia of the hammer (by cutting parts of it out) or of the firing pin (by using lighter titanium instead of steel). But, as I have found in my experiments, these also reduce the force of the blow passed to the primer. In effect, the reliability of detonation of the primer is reduced. I don't think the One who has planned all this would go for it, especially since His aim is so perfect and He doesn't need to reduce the lock time for accuracy purposes.

In any case we must still wait for the primer to silently detonate and ignite the powder, for the gas pressure to build and push the massive bullet out of the case, and for the bullet to accelerate and twist down the barrel until it finally exits, followed by a visible flash. This part can be accelerated by using faster primers, more powder and/or lighter bullets. Unfortunately, all of these tend to produce greater variations in muzzle velocity and accuracy, reducing the reliability of hitting the target, even with His perfect aim. I don't think the One would go for it.

After this, we must still wait for the bullet's flight to strike the target. And, again, this time can be reduced by using more powder and lighter bullets for greater velocity but, again, the reliability of the shot is reduced (less accuracy and less energy delivered to the target). Again I don't believe the One would go for it.

At roughly this point, we would finally hear the sound waves, recognize the flash and realize the gun has actually been fired, even though the target is not yet dead or even seriously damaged.

I don't believe this point will be reached until about the middle of March. And even then we must wait a whole lot longer to watch the target fall down dead. After all, after the shot of 1929, it took several _years_ for most people to realize they were really living in a "depression".

But we have another problem to keep us from realizing what is happening. Somebody, other than the One, has put a silencer on the gun, just to confuse us. Remember the lies? Remember certain Grabit agencies and Biztwits telling us all their "mission critical" systems were done and even lying about that? Do you really think they've stopped?

On New Year's Evil, right at midnight, a US spy satellite system failed in it's ground component. For a couple of hours, no data was available and, even now, the emergency backup system is still compromised and producing only limited data. As the Commander-in-Chief-in-Name-Only, Komissar Klinton was immediately informed of this (as we know from independent reports). Nevertheless, the next morning he continued to lie his skumbag heart out and insist there had been _no_, _zero_ failures!

This should not surprise us since, by definition. all pollyticians are liars -- whether thay are elected by the sheeple or erected through the Peter principle in "independent" business.

The history of Y2K remediation and early failures has been nothing but one lie after another. Not one single organization has ever told the truth, either about the state of their remediation or the facts of their actual failures. It has taken _months_ for serious failures to become generally known, and that process will inevitably continue. And, as the paid recipients of advertising revenue, the mainstream mediots will be only too happy to go along with the big lie (for the sake of the "children" of course).

The proof of this is in the _lack_ of reports of major failures since the rollover. The reported failure rate is not just lower than I and other "doomers" have predicted, it is lower than even the technically competent _pollys_ have predicted! This defies all logic and any rational technical explanation! The technical debate between doomers and pollys has never been about _whether_ there would be failures, but only about the number and magnitude of the failures and whether or not they could be fixed without entering a chain reaction. To say there have been _no_ significant failures is clearly a lie and the victims are the pollys, not the doomers.

In any case, the rollover failures we have seen so far apply only to a very limited sample of systems and hardly at all to the business systems that Cory Hamasaki, I, and others have always identified as the key to this problem. Except for embedded systems failures causing permanent damage to the physical plant they control, most rapidly detected, obvious failures will also be rapidly repaired, yes, even in a couple of hours (for example the year 19100 failures on Internet web pages). The real problem is the deeply embedded "quiet" failures which don't show themselves for weeks or months and in the meantime continue to generate invalid data which cannot be corrected later, even after the problem has been identified. These are the ones which will break Charlotte's web.

Contrary to Cory's belief, these are not just "enterprise" system failures. They can also apply to small scale users. I spent the New Year at the party of a federal biologist who has been a friend for many years. At home, he has a Packard Bell which I made SURE was compliant by reinstalling the software and personally checking the BIOS time stamp after the rollover. Nevertheless, at work, he uses an early Pentium running under DOS and, sometimes, Windows 3.1. On this machine he stores massive amounts of research data stored with a non-compliant version of dBase for DOS. Like most Grabit employees he has received zero help from any IT support specialists. Say no more. He's part of the 0.01% of the Grabit which Komissar Klinton admits has not been fixed and which I say is really 90% of Grabit computing. But at least his kids will be still able to play the games we gave them for Xmas!

My advice is to wait. Wait for the remaining 90% of business systems to be started on Monday, or Tuesday, or Wednesday, whenever "they" think they have escaped the problem. Then wait a few months more for the truth to come out and the effect of the real failures to be felt. In the meantime ignore the lies, the spin, and hang on to your supplies and preparations.

=====================================
y 2 0 0 0 @ i n f o m a g i c . c o m
=====================================


. . . one thousand nine hundred ninety nine,
. . . two thousand !
. . . Ready or not, I'm c.o.m.i.n.g !!!"

Journeyman
(01/02/2000; 23:41:12 MDT - Msg ID: 22095)
Stealing is not immoral? @canimami
The stealing of the gold from "foreigners" in 1971 by the US Gvt. in cahoots with the Federal Reserve by refusing to redeem redeemable notes, specifically redeemable in gold and as specified in the US Constitution was the SECOND biggest robbery in the history of the world. The FIRST biggest heist was pulled off by the FED & USA Corp. in 1933 when the same perps, this time headed by Franklin Delano Rosevelt, similarly stole the gold from its own citizens.

The question is, I guess, since these two events are the two biggest thefts in history, is "Is stealing immoral?" Well is it?

Or do you excuse those organizations calling themselves "government," no matter what they do?

Or is only when YOU are the beneficiary that anything goes?

Regards,
Journeyman
beesting
(01/02/2000; 23:46:03 MDT - Msg ID: 22096)
See if this news makes the price of Gold rise.
http://abc.net.au:80/news/newslink/nat/newsnat-3jan2000-30.htmFire causes $1.5 Million in damage at the Perth (Gold) Mint in Australia.
Mr. Higgins(Firechief)said," it was quite difficult to get into the building because of the tight security. See full story above.
Comment: I hope someone checks those firemens pockets.
Those in the know....buy Gold.....beesting.
Netking
(01/03/2000; 00:08:26 MDT - Msg ID: 22097)
GATA; Gold's propensity to retain purchasing power over the long term.
http://www.egroups.com/group/gata/330.html?Latest GATA post; Reginald H. Howe, lawyer and former mining executive, examines the prospects of a world financial order totally disconnected from gold in this essay, "Interest Rates: The Golden Connection." Implied is a forecast of hyperinflation for the United States and other nations relying on the U.S. dollar.

Excerpt; "...Gold's propensity to retain over long periods of time a
reasonably constant purchasing power is widely
recognized. Less widely appreciated but just as
significant is the long-term stability of gold interest
rates. Both together are the defining attributes of
gold money, features that governments have heretofore
proven incapable of replicating with their fiat money
substitutes..."
SHIFTY
(01/03/2000; 00:14:22 MDT - Msg ID: 22098)
Irrational Exuberance ?
I spent my afternoon siting here reading, with a cup of coffee and some home made fudge. Spent some time outside in my garden, ( I live in FL.) just a real nice day. I feel like a weight has been lifted. I hope it's not irrational exuberance setting in on me.
We will soon see.

Just wanted to say thank you to all.
Netking
(01/03/2000; 00:32:11 MDT - Msg ID: 22099)
Asia roars to life.
http://dailynews.yahoo.com/h/nm/20000103/bs/markets_asia_3.htmlHong Kong and Singapore share markets hit record highs on Monday up 1.6% & 2.5%.
SteveH
(01/03/2000; 01:06:13 MDT - Msg ID: 22100)
BTD
Thanks.
Goldsun
(01/03/2000; 01:42:24 MDT - Msg ID: 22101)
When Ducatis Are Priced In Euros
can oil and gold be far behind?
Goldsun
Goldsun
(01/03/2000; 02:25:13 MDT - Msg ID: 22102)
Wave Reversal
Canuck
Y2K ok causes US equities decline.
Y2K not ok causes US equities decline.
At least, that's how I've placed my bets.
Great mining story! Did the other miners consider you a little strange? BTW, when the pressure wave hit the end of the tunnel you were heading toward,it reversed sign and direction. That's what moved the smoke back, rather than vacuum. The same thing happens in the exhaust pipes of internal combustion engines and has long been used to increase the power of small, high specific output engines like those found in motorcycles.
Like you, I turned to explosives to explain Y2K peace and quiet. Y2K is like a minefield. Rollover armed the mines.
Goldsun
PERMAFROST
(01/03/2000; 02:31:57 MDT - Msg ID: 22103)
FOA Msg ID: 21859 Part 1
Dear Sir,

Thanks for your response.
You are advocating a global financial system predicated on the peaceful and mutually-beneficial "concubinage" of gold and the "new girl in town" fiat money the Euro which you unwarrantedly presume to be relatively more "chaste" than the Old Whore, the US dollar, ONLY because it is not "backed" by as much debt as the dollar, and its "lovers" (the EU Central Bankers, the Rothschilds?; an assorted variety of Illuminati and various other power brokers playing both sides [the sheeple?] against the middle [more sheeple]) tip their hat at gold without solemnly declaring their allegiance at sovereign money, PM etc.
This fiat money is necessary, you say, because it will allow management [manipuation] of the economy without suffering the deleterious side effects that a rigid gold standard has saddled us with in the past. Would you care to draw for the benefit of the forum the the philosophical line that separates you from, say, an Alan Greenspan, as per the gold/fiat money relationship? do we not have TODAY a fully-floating POG alongside the dollar? What shall we gain in re-baptizing fiat money with a different name, i.e., the Euro? except the prolongation of the Game? IF gold IS money than nothing else is. Disagree?
PERMAFROST
(01/03/2000; 03:02:19 MDT - Msg ID: 22104)
Reply to FOA Msg. ID: 21859 Part 2
Capitalism, this familiar but insidious term really stands for the willful confusion of a descripitive proposition [that private property exists] with a PRESCRIPTIVE one [that private property and the wealth that can be generated from it is GO(O)D]. It's a logical fallacy that doesn't survive the glare of critical analysis.
Omit the adjective "private" from the premise and what you end up with is the other side of the coin, or communism. Both systems are basically worship of materialism and humanistic (man is the measure of the universe) propaganda.
Now, whereas communism theoretically aims at generating its "GOD", or 'goods and services' in economic parlance, via the sweat and toil of its fellow gods (the proletariat), capitalism is predicated on CONSTANT INSTABILITY [the insidious rhetoric of the bankers notwithstanding] of the prices of these very goods and services, the [managed] fluctuations of which allow the people Greenspan works for to earn wealth they did not work for.
Therefore; I find myself obliged to conclude that, due to your avowed devotion to the Euro and the "The King is dead; long live the King" tradition it propounds, the only difference between you and an "Alan Greenspan" lies in your respective handles. If you already are not one of them, you wanna join 'em. Incorrect?
PERMAFROST
(01/03/2000; 03:09:12 MDT - Msg ID: 22105)
Reply to FOA Msg. ID: 21859
Lastly,

As to even the 'emperor running to higher ground when he sees the flood coming'--if he were to do so, he'd be emperor no more for what makes an emperor an emperor is the "land" he rules. Without it he's nothing.That's why captains do not abandon their sinking ships; and why sometimes even emperors get their heads chopped off. To die an emperor is perhaps preferable than to live as a normal human being for some...You?
PERMAFROST
(01/03/2000; 03:35:05 MDT - Msg ID: 22106)
Dear FOA
Sir,

Having noticed that the last of my three part posting is shown first, I thought you may mistake the tone to be on the inflammatory side. It's not the case. I consider it a privilege to have an intelligent conversation with people of knowledge. Please go to Msg. #1 then proceed "upwards."

Thank you!
PERMAFROST
(01/03/2000; 03:44:49 MDT - Msg ID: 22107)
Request for a little information...
Dear Forum;

Could you please tell me what an 1/2 Oz. Gold Eagle vintage 1989 goes for?

Thanks!
Number Six
(01/03/2000; 04:09:19 MDT - Msg ID: 22108)
Gold drains away in Perth Mint fire...
http://www.theage.com.au/breaking/0001/03/A4984-2000Jan3.shtml
Pity it wasn't Comex or the LBMA!!!!!!!
THC
(01/03/2000; 04:09:55 MDT - Msg ID: 22109)
Questions for FOA & Oro
Gentlemen,

I would like to second the questions asked by Permafrost. There has been much written here about how the Euro will dethrone the US$, and how the Euro will be pro-gold. It has also been suggested that the Euro is necessary for the convenience of �gdigital payment systems.�h

I have struggled with this for some time, and I have yet to find this to be completely logical from my perspective.

1. Is the Euro not just another fiat currency?
The Euro is not worth a fixed quantity of gold or any other commodity. How does this differ from the US$ and all other fiat currencies? Why would the oil producers or others who want gold settle for payment in Euros?

2. Why not digital gold?
It would be technically quite simple to set up a digital banking and international trade payment system based on gold should there be the will to do so. Why should those who truly desire an honest and fair global monetary system settle for a fiat currency like the Euro instead of gold??????

I think that these questions deserve to be settled, and I look forward to your thoughts.

Many thanks,

THC
FOA
(01/03/2000; 06:13:31 MDT - Msg ID: 22110)
Reply
PERMAFROST (1/3/00; 3:35:05MDT - Msg ID:22106)
Dear FOA
Sir,
I thought you may mistake the tone to be on the inflammatory side.

Hello again PERMAFROST,
Did you ever go to a family gathering where everyone is in the living room after dinner. They are all talking over each others conversation,, get the picture. Then someone asks uncle Bill a question about his favourite political / religious subject. He goes on and on and soon is on the edge of his chair talking ever louder. Next he is up, walking around waving his arms in the air and seemingly telling everyone about his views. Finally, someone says, "Bill why are you shouting?" Bill says, "I'm not shouting"?

PERMAFROST asks, FOA, why are you answering in a defensive way? FOA says, "I'm not defensive!" (big smile) Sorry PFrost, I'll try to sit down when I talk.

Be back later (answer the rest)
FOA
Black Blade
(01/03/2000; 06:49:32 MDT - Msg ID: 22111)
Interesting day on Wall Street today?
S&P futures up +9.80 and bonds plunging. What next? Meanwhile Au up +0.70. Let's see if any "bugs" crop up.
TownCrier
(01/03/2000; 07:58:01 MDT - Msg ID: 22112)
Perhaps the dollar was the primary beneficiary of pre-Y2K jitters, now it suffers
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=0ad5f79c53148a0f994ac7c4e3386e32U.S. Treasury Bonds fall to nearly two-and-a-half year low prices, the yield of the bellwether bond rising so far today to 6.55 percent.
Bloomberg reports that for the year 1999, holders of 30-yr bonds lost 12.6 percent (including reinvested interest), their worst performance since regular sales began by the Treasury in 1977.

Can their be much doubt that the days of the dollar's reign are thus being signaled as nearing the end?
Cavan Man
(01/03/2000; 08:12:15 MDT - Msg ID: 22113)
Townie and all
According to the WSJ, today's edition; paraphrasing.....all economists (those interviewed for the article) agree rising productivity, tame inflation and rising consumer spending will keep the economy "humming in 2000".

CM question(s): What am I missing here? What are forum members missing? What is the WSJ missing?

I suppose everybody is entitled to their opinion and events will determine future economic context. (?)
TownCrier
(01/03/2000; 08:12:33 MDT - Msg ID: 22114)
Answer for PERMAFROST?
You asked "Could you please tell me what an 1/2 Oz. Gold Eagle vintage 1989 goes for?"

Assuming this is not some sort of trick question, with a spot price per ounce near $290, the gold content on a half-ounce coin would be $145, but the final price would also include a fabrication and distribution premium, (some of which you would recoup upon selling the coin.) MK could give you a quote based on current market conditions. Give him a call or e-mail if you're interested. The unbinding ballpark price anticipated from this tower outpost is $160-$165, plus or minus. What's the significance of 1989?
Aggie
(01/03/2000; 08:31:15 MDT - Msg ID: 22115)
not the y2k bug
http://biz.yahoo.com/rf/000103/b8.htmlwhat will this do to oil and commondity prices?
TownCrier
(01/03/2000; 08:38:01 MDT - Msg ID: 22116)
Cavan Man, regarding the spectre of self-doubt
You posted, "all economists (those interviewed for the article) agree rising productivity, tame inflation and rising consumer spending will keep the economy "humming in 2000"" and wondered what you were missing.

You are missing nothing other than proper perspective in coming to terms with this "news." You are genuinely interested in these affairs of gold, have done your research, and by your presence here we'd wager you are better versed in the developments that will "blindside" these economists.

Your self-doubt is only in your misplaced confidence in the quality of these unknown economists. Similarly speaking, you wouldn't likely expect the great former coach and professional football announcer, John Madden, to have any inkling of your local high school football programs. This isn't to say that gold is amateur in the realm of economics, but that it is not an area into which many so-called professional economists give much attention. Their opinion wouldn't affect the progression of events (as we see them unfolding) anyway. Had we been among them, the article would simply be altered to read, "*most* economists agree..." etc.
RossL
(01/03/2000; 08:39:27 MDT - Msg ID: 22117)
Oil and Gold charts
http://www.usatoday.com/money/charts.htm#SP500_GOLD
Wow take a look at these charts. Must be a bug.
Gold is at 11506 !!
TownCrier
(01/03/2000; 08:44:32 MDT - Msg ID: 22118)
Indonesia's Central Bank Needs Government Cash to Remain Solvent
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=7201e74ebee8ca07e33c3dea67ebb8d1The headline says enough.
USAGOLD
(01/03/2000; 08:45:34 MDT - Msg ID: 22119)
Today's Market Report: London, New York Closed Today
Market Report (1/3/00): The London and New York gold markets remained
closed today. We do have some market-making in the $290 area this
morning which essentially reflects the Thursday close. The big story
this morning is the bond market which is taking a major hit -- down
nearly a full point. There was some talk over the weekend that this
might happen given the fact that the dollar has been viewed
internationally as a Y2K safe haven. The theory is that if Y2K ends up
being a minor, or non-event, then a dollar exodus would begin. As most
of our readers know, the U.S. Treasuries market struggled through most
of the last quarter of 1999 under the threat of a Fed interest rate hike
sometime early this year and rampant money creation through most of
1999. Today's action could very represent an acceleration of trends
already in motion in the Treasuries market. The dollar seems to be
holding its own despite the bond market woes -- up marginally against
the European currencies and down marginally against the Japanese yen. So
far the world's computer systems appear to have passed the Y2K bug scare
with only minor problems.

That's it for today. We'll see you here tomorrow.
TownCrier
(01/03/2000; 08:54:13 MDT - Msg ID: 22120)
Wall Street Volatility
No play-by-play to waste your time and space, but in a market snapshot less than 90 minutes into trading, the Nasdaq has plunged 130 points into negative territory from its post-Y2K euphoric opening. Volume now exceeds half-billion shares. Incredible blow-off look to this stuff.
elevator guy
(01/03/2000; 08:58:07 MDT - Msg ID: 22121)
@ RossL (22117)
That gold chart has to be someones idea of a joke, or wishful thinking. Every other chart on that page seems reasonable, (except oil?)

Someones having a laugh right now, I think!!!!
TownCrier
(01/03/2000; 09:00:47 MDT - Msg ID: 22122)
Fed seen fighting expiring repos, still adding cash to maintain banking reserves
http://biz.yahoo.com/rf/000103/gx.htmlThe Fed added $8.99 billion through overnight repurchase agreements...approx 3/4ths were as mortgage-backed securities.
18KARAT
(01/03/2000; 09:02:41 MDT - Msg ID: 22123)
Interesting comment from Australian website
http://www.afr.com.au/content/000104/news/news2.htmlHappy new year to you all fellow bears and bugs.

18K
mhchuck
(01/03/2000; 11:13:27 MDT - Msg ID: 22124)
WORLD CURRENCY?
The success of any single world currency must have the backing and/or redeemability in a standard of value that has more intrinsic worth than paper. If it has no commodity backing, then it will be backed with GUNS, and we will have global Totalitarianism. In the economic sense, the one world "Big Brother" voice would in essence be dictating to its minions, "We shall dilute and pillage the fruits of your labor in terms of any remunerations you have received at our discretion." "All saving will be at your own risk--We do not encourage saving."(Not much unlike today)

In this upside down convoluted Keynesian economic world, the Japanese, with a savings rate of twenty percent-plus, are said to be mired in depression, while the prototype of the
keynesian model, the U.S., has a negative saving rate, continuous "record" twenty-five billion dollar monthly balance of trade deficits, and is said to have a robust economy. What's wrong with this picture? I think History will one day view John Meynard Keynes as the "Adolph Hitler" of economists.


"Of all the contrivances of cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money.
Daniel Webster.

"It is important to remember that government interference always means either violent action of the threat of such action. Taxes are paid because the taxpayers are afraid of
offering resistance to the tax gatherers. They know that any disobedience or resistance is hopeless. As long as this is the state of affairs, the government is able to collect the money it wants to spend .Government is in the last resort the employer of armed men, of policemen, of gendarmes, soldiers, prison guards, and hangmen. The essential feature of government is the enforcement of its decrees by beating,
killing, and imprisoning. Those who are asking for more government interference are asking ultimately for more compulsion and less freedom."
Ludwig Von Mises.

"There seems to be a correlation between the
intensity of the official attacks on gold and
the severity of monetary crises."

Hans F. Sennholz.

"Never have the world's moneys been so long cut off from their metallic roots."

Murray N. Rothbard.

Gandalf the White
(01/03/2000; 11:43:16 MDT - Msg ID: 22125)
PERMAFROST's and TownCrier's discussion -- Re: '89 half oz Eagle
The Hobbits wish to supplement TC's answer to PERMAFROST
-----
TownCrier (01/03/00; 08:12:33MDT - Msg ID:22114)
Answer for PERMAFROST?
You asked "Could you please tell me what an 1/2 Oz. Gold Eagle vintage 1989 goes for?"
Assuming this is not some sort of trick question, with a spot price per ounce near $290, the gold content on a half-ounce coin would be $145, but the final price would also include a fabrication and distribution premium, (some of which you would recoup upon selling the coin.) The unbinding ballpark price anticipated from this tower outpost is $160-$165, plus or minus. What's the significance of 1989?
******OOPS -- you are getting closer Townie -- yes, the 89 Half oz. was a low mintage year and does command a prem! -- In fact the present ask price is $300. (yes, you are seeing correctly -- THREE HEUNDRED for a 89 half oz. !!)
The only thing is to find someone that wants to buy one !!
Other years like 90 and 91 also command prems because of low mintage.
<;-)
elevator guy
(01/03/2000; 12:09:16 MDT - Msg ID: 22126)
@mchuck
And so it would seem, given TPTB are hell bent on attacking gold, that we wait for an end game to play out, where the worlds economic powers will either stay at the dollar table, and continue to do business on "our" terms, or if they will find another way out for themselves.

So the "Washington" agreement is signifigant, because it is clear public policy by the ECBs not to support whole hog gold bashing, and also the launch of the Euro is signifigant, because it begins a new alternative currency system to the USD.

My prognostication is that the FED/US gov/Big Business, et al, will continue to bash the paper price of gold, to support the USD, and try to manipulate our local economy to appear that nothing is wrong. Kind of a loss management statedgy.

And what can keep them from doing this indefinitely? Nothing that I know of, except victory by GATA, or a change in the general public's perception of gold as an investment or inflation hedge.

I may be a little behind the curve of understanding of possible outcomes to this dollar vs gold scenario, since I am not an economist, nor do I study even USA GOLD enough to absorb all that is said here (seing how there are no pictures), but I am catching on. At least I can see what Another means when he says "Things are not as before" Slowly, I am seeing through the fog, thanks to USA GOLD.
elevator guy
(01/03/2000; 12:10:39 MDT - Msg ID: 22127)
@mhchuck...correction
Sorry, I didnt get your handle right the first time, Sir "mhchuck"!
Aristotle
(01/03/2000; 12:28:13 MDT - Msg ID: 22128)
Question/comment for mhchuck
On your Keynes/Hitler comparison, you might have it turned around. Given the breadth of the social infamy of Keynes against the specific depth of individual infamy of Hitler, it is already said in some circles that it is Hitler who played second fiddle--the John Maynard Keynes of national leadership.

On your comments about a world currency, I wish you would elaborate on your thoughts as expressed in the first paragraph specifically. A lazy policy-maker might read your words and say, "Fine, let's return to the gold standard as existed internationally through Bretton Woods until 1971, or else let's return to the gold standard as existed prior to 1933."

My thoughts being, as long as we are giving ourselves license here to define the perfect monetary system, how would you suggest we overcome the failings of either of those systems, each of which at face value would seem to fit your demand."

Gold. A simple solution in a complex world. ---Aristotle
beesting
(01/03/2000; 12:39:23 MDT - Msg ID: 22129)
1989 1/2 ounce Gold Eagle!
From Coin Prices magizine January 2000 edition:

Date........Mintage..........Unc.............Prf.

MXMLXXXIX(1989) 44,829-------$400----------------

MCMLXXXIX(1989)P 44,264----------------------$305.

Seems like Gold is valued at either $800 per ounce or $610 per ounce if you are smart enough to hold it in that form.
Coins are collectibles which may raise value thousands of dollars above Gold content.
Anyone that owns coins should invest in an up to date coin book to find the latest published value of their coins, In My Humble Opinion.
Hope this posts correctly......beesting.
Goldy Locks Guy
(01/03/2000; 12:43:28 MDT - Msg ID: 22130)
Putin and platinum shipments
Hi folks....I'm just wondering if anyone has in input on the platinum shipments from Russia since the new guy is on the block. I'm assuming he will be a good boy until he actually gets re-elected, thus signing the papers for shipments to begin.....Any comments from you guys that know alot more than me???

Thanks....Goldi
Netking
(01/03/2000; 12:48:51 MDT - Msg ID: 22131)
Goldy Locks Guy (01/03/00; 12:43:28MDT - Msg ID:22130)
I was under the understanding these had already kicked off again. If you are thinking however that Russia's exports will affect the worldwide price, I have already been down this trail ... and as they only make up about 15% of world supply there will be no real threat here either way. (As an aside, Putin's background concerns me a little) Cheers Netking.
SteveH
(01/03/2000; 13:13:42 MDT - Msg ID: 22132)
Long term bond yield
6.598% ouch!
CoinGuy
(01/03/2000; 13:20:39 MDT - Msg ID: 22133)
test
test
nickel62
(01/03/2000; 13:22:06 MDT - Msg ID: 22134)
The American Barrick Web page
I was recently reading on the barrick web ppage trying to understand their specific exposure to a rising gold price and I was shocked to see the following assertion:"keeping in mind that Gold has never
consistently risen in price and stayed there. It is a volatile
commodity."
From the American Barrick Web Page regarding their hedging policy.

Are they not aware of the move from $20.67/ounce to $35/ounce in 1934 thanks to Roosevelt and Mellon forcing the devaluation of the US dollar? And the rise from $42.50 to the prices of the last twenty nine years ? I know this quote has come up before, if someone could shed some light on what was said about it I would appreciate it.
TownCrier
(01/03/2000; 13:28:29 MDT - Msg ID: 22135)
Hear ye! Hear ye! Witness gold that is earned, not bought!
Gather around to witness the conclusion to the challenge raised by our host in the final days of 1999 to list the five most significant events to shape the physchology within the gold market.

Let a new year begin with the proper recognition of those knights who by their efforts of illumination have rendered valuable service to us all at the Round Table.

On behalf of MK, let me first thank everyone for their participation...this latest call to service proved particularly challenging for our judges to narrow the precious candidates down to match the precious quantity of metal offered for this challenge. Well done, one and all!

After the difficult selection of the three entries to be considered for the French 20 franc gold "rooster" coin, and the two American silver Eagle coins, it was generally felt that we had a virtual tie for the top award. Therefore our good host MK gave the nod for the appropriate alteration in the awards.

Congratulations and a French 20 franc gold coin are offered to Sir Farfel (12/26/99). We particularly liked these three nuggets found among his top five events...
+
On Martin Armstrong denouncing gold while acquiring his own impressive cache of metal: "His actions may well
prove to be the micro- metaphor for what is really transpiring amongst the central banks as they trumpet their gold sales to the world whilst actually acquiring cheaper gold in a most quiet, shrewd manner."
+
On the IMF stats that total Central Bank gold inventory has actually risen since 1997 despite the highly publicized sales: "This net gain suggests that these sales might more appropriately be perceived as interbank transfers, coupled with the acquisition of additional gold from nonbank sources. So the next time a major media organization headlines another Central Bank gold sale, gold investors should realize that the vast majority of the gold sale will likely NEVER reach the public trading markets."
+
On the mobilization of Kuwaiti gold: "America appears to have persuaded Kuwait to lease its entire gold reserves immediately following Europe's surprise announcement to cap gold sales and terminate gold leasing. ... immediately following Kuwait's gold lease announcement, the US government declared it would provide almost two hundred million dollars of military aid to Kuwait. In doing so, the US government proved that it is much easier today to print millions of dollars than it is to obtain a mere 79 tons of gold."

Congratulations and a(nother!) French 20 franc gold coin are offered to
Sir R Powell (12/26/99). In addition to his good choice of events, he provided this most exceptional conclusion:
"General Review--
This past year has shown that gold is money! Backing the Euro with gold and defending the same with the Washington Agreement emphasizes this fact. More importantly this agreement implies limits on the supply of gold which, with central bank sales and leasing, had been unlimited for years. This should refocus the psychology of all gold investors back to the basic fundamentals of supply and demand. No market can be manipulated forever. Simply stated, gold is money and supply is not unlimited."

And finally, congratulations and a silver Eagle are offered to Sir Gandalf the White (12/22/99). We particularly liked Gandalf's culmination of events toward the conclusion, in Gandalf's words, that we now have "[the] GREATEST buying opportunity of the last two decades ...[which]...allowed the Hobbits the opportunity to gather together their lifetime financial insurance for their future years and therefore was the most important happening of the year."

Thank you, one and all. The Castle's heavy treasury doors have been ordered open wide so that this metal may now be sent by trusted couriers to your own future care.

Let the good thoughts and discussions continue!
Journeyman
(01/03/2000; 13:38:39 MDT - Msg ID: 22136)
Old Gold standard problems -- how about a comprehensive list?
Many posters here allude to severe short-commings to the "old" (pre 1933) free-market gold standard. I believe the Austrian economists had answers to most or all of these. Perhaps I'm just out of date? Or are some people just ass-u-me-ing that since the standard was abbrogated, there MUST have been something severely wrong with it?

Most of these references to such problems seem to me to be somewhat nebulous and/or overblown, or trivial when compared to fiat currencies' records. I believe, over the course of many posts, I've covered some of the classic Austrian answers to the more specific objections to gold as the primary trade medium -- shortage of gold, exacerbation (or perhaps even a cause) of normal business cycles, etc.

Could someone out there perhaps come up with a somewhat comprehensive list of objections to the pre 1933 gold standard (for "official" currencies) so I can either find an answer to them, or failing that, convert from free-market (competing currency) Austrian to monetarist or neo-Keynsian? Thanx!!

Regards,
Journeyman
CoinGuy
(01/03/2000; 13:40:04 MDT - Msg ID: 22137)
Thanks MK
Welcome back Stranger!

I haven't posted in awile, have to admit I was upset about the whole Stranger ordeal, but I believe in letting bygones be bygones. Glad to have Stranger back though...again Thanks MK

FOA: been some greating reading from your posts, still catching up...Where does gold end the week?

CoinGuy
USAGOLD
(01/03/2000; 13:45:58 MDT - Msg ID: 22138)
Farfel...
We need your new address. Please call or e-mail me. Thanks Marie
SteveH
(01/03/2000; 13:51:46 MDT - Msg ID: 22139)
must read!
http://www.gold-eagle.com/gold_digest_00/butler010300.htmleom
Netking
(01/03/2000; 14:22:53 MDT - Msg ID: 22140)
Fed Rate Rise Looms As Y2K Fears Fade
http://dailynews.yahoo.com/h/nm/20000103/bs/economy_fed_1.html"...Investors breathed a sigh of relief Monday over the uneventful passing of the millennium bug, but celebrations were overshadowed by mounting fears that U.S. interest rates may rise yet again as early as next month..."
Aristotle
(01/03/2000; 14:32:56 MDT - Msg ID: 22141)
nickel62 and Barrick--
I don't recall seeing this issue discussed before, so maybe you've started the ball rolling. I'm not a fundamental supporter of investment in public mining stocks, so what I have to offer on Barrick you'll have to take with a grain of salt. (Please be aware of the distinction that this postion does NOT equate with me being anti-mining. As an organizational business structure or corporation, I feel the best operations would be among those that are PRIVATELY held. If you literally "had a Gold mine," would you be hasty to give it away in an IPO? By way of contrast, internet companies all rush toward IPO's because many are dogs, and this represents their only real payday. Not so if you have a good Gold claim.")

Having said that, mining companies available for public investment are first and foremost CORPORATIONS--corporations that happen to be primarily in the business of mining in their efforts to turn a profit. In this era of the mega-merger, we are all accustomed to the acquisition of one corporation by another. They don't even have to be in related fields. Isn't it true that RJReynolds (cigarettes, etc) and Nabisco (OREO cookies, etc) are as one?

Corporations often cross industry or sector lines in their efforts to turn a buck or otherwise enhance their position. I could look into Barrick's principle shareholders, or the nature of individual that populates their management team and board of directors, but I'll leave that effort to those of you that are actually interested in buying into partial ownership of that particular corporation. My point, founded or not, is that any given corporation such as Barrick may in fact be more aligned with banking or hedge fund interests than with pure mining interests of such Goldhearts as our very own YGM, for example.

I seem to recall that George Bush and like individuals once served on Barrick's boards, or some other such nonsense. Are these guys miners with every fiber of their being, or are they merely three-piece-suits that feed their agenda, employing miners in the course of pursuing that agenda?

This candid opinion comes from a guy who has worn both a mining hat and a three piece suit (NOT at the same time!)

In an extension of my post yesterday building an analogy with the game Monopoly, imagine a hypothetical Monopoly property called Goldshaft Mines (located near the Short Line Railroad.) Would buying that particular property bring you any closer than owning Boardwalk (replete with commercial development) toward having the real-world assets you need to function when the game ends and the table is cleared for the evening meal? I'll maintain my contention that the special square called USAGOLD next to the Free Parking corner of the board would serve you the best. This is where you could convert your gaming assets to universal, immutable assets.

Thanks for the excuse to wander around amongst the cobwebs of my mind. I'm just a babe in the woods, so if this makes no sense at all, blame it on lack of adequate worldly perspective.

Gold. The best pacifier I've found. ---Aristotle
Cavan Man
(01/03/2000; 14:52:00 MDT - Msg ID: 22142)
Ari
I recently read for the third time (thick-headed Irish) your wonderfully illuminating five part series. Are you quite certain about all of the background information you presented? Do you have anything to add? Each time I read your series of posts, I am a more convinced goldheart.
Thanks.
Aristotle
(01/03/2000; 14:52:10 MDT - Msg ID: 22143)
Journeyman -- Msg ID:22136
Thanks for chiming in on this issue. Your question, "Could someone out there perhaps come up with a somewhat comprehensive list of objections to the pre 1933 gold standard...?" is along the same path I was hoping to travel in my earlier post to mhchuck. I could immediately offer some thoughts on the matter, but I've found that the more time I spend talking, the less progress I make on these issues. Hence the Golden pacifier.

Gold. Make you some. (an oldie but a goodie, thanks to FOA) ---Aristotle
Thriver
(01/03/2000; 14:53:10 MDT - Msg ID: 22144)
Aristotle, re Monopoly
Aristotle, your analogy of Monopoly can be taken a step further. Consider the recent movie, The Matrix: A web of citizens plugged into paper. Unplug, and what do you find?

Gold - welcome to the real world!

(or to steal another good scene from the movie) "Do not try
to break the dollar; for the dollar doesn't exist. Only recognize that it is the perception of a dollar that is in your mind."

This is indeed a good forum for such rehabilitation.
Back to lurking...
Solomon Weaver
(01/03/2000; 15:04:01 MDT - Msg ID: 22145)
price chart
When I went there the price was around $899

Not too far off if the unit is 100 grams.

Remember, some of the world thinks in grams.

Vielliecht werden Amerikaner nochmals Deutsch lernen mussen.

Poor old Solomon
nickel62
(01/03/2000; 15:09:34 MDT - Msg ID: 22146)
Aristotle thank you for your response.Your thoughts are always welcome.
I was intrigued by your earlier post concerning the various weaknesses of the gold standard as instituted between 1922 and 1931-33. and the Bretton Woods version between after the Second World War and 1971-72.As I remember the 1920's version allowed foreign currency to be included with gold for reserves and this led to an exhorbitant creation of money in several national economies.
ORO
(01/03/2000; 15:29:09 MDT - Msg ID: 22147)
Happy Y2K to all
Hello people

Happy Golden Millenium to us all.

Wellcome back Stranger.


FOA, Aristotle, mhchuck, Golden Truth, Permafrost, thanks for the many thoughts and questions.
FOA, your latest big post on the trading of stuff'n srvice through the currency is a marvel. Thank you.

--------------
Market comments:

Watch Dollar and Bond.

See the institutionals dump stock.
See small speculators who spent the 1st weekend of the millenium deciding which techno trollop stock to buy. See trollops jump on market buy orders put in before the the morning open.

See ball drop from Wall Street hands with 5% NASDAQ decline in 40 mins. See speculators jump back in, yelling dip! dip! dip!

Euro and Asia money exits as the flight to safety liquidity in the US is falling away. Who will buy the bonds? American speculators seem not to be of a mind to pick them up. Perhaps the Fed will buy the bonds - turn some of the temporary money into permanent money? What happens when the yields are enough to pull Americans from stocks?

We have broken solidly out of the 6.5% bond yield range. Well on the road to 7%. The value stock January effect has all but disappeared so far.

Will be back with some postings.
nickel62
(01/03/2000; 15:35:56 MDT - Msg ID: 22148)
Is Chris still with us?
Has the CIA operative Chris disappeared with the past?
Solomon Weaver
(01/03/2000; 15:41:59 MDT - Msg ID: 22149)
gold bashing vis-a-vis monetary crisis
"There seems to be a correlation between the
intensity of the official attacks on gold and
the severity of monetary crises."

Hans F. Sennholz.

Hey mhchuck - thanks for posting this simple but lucid quote.

Gold (and and little brother silver) as well as its cousin oil, are about the only liquid assets outside of fiat paper that play major roles in hedgebooks worldwide.

In a time when almost all nations abuse seniorage rights, create massive government debt, the safety net is built by massive portfolios of counterbalanced risks as seen in hedge books. The math behind these books, being the basis of Nobel Prizes is of course worshiped and used worldwide.

Sorry to say this in a goldheart forum, but it is probably true that gold is a monetary relic...well at least in the sense that in a barbaric world, gold was used instead of trust.

Today's world is more glittering (Times Square, Wallstreet and the like) but it is still barbaric. Ted Butler's recent accusations of Barrick and Goldman's behavior to the point.

The world moves too fast today (electrons). Gold in hand will have to be augmented by digital receipts. In order to understand the value of gold, we must take a barometer reading on the level of trust in international finance.

Poor old Solomon
nickel62
(01/03/2000; 15:47:31 MDT - Msg ID: 22150)
Aristotle the 1922-1933 gold standard
If i remember correctly the use of foreign currency caused the banking reserves to balloon in the late twenties.The money was put to work too aggressively and the French I believe began to be concerned about the real value standing behind the British pound. The British had four times as much sterling outstanding as they had gold to cover it and the French i believe began to convert their foreign currency sterling into gold and ship it out of London. The English were already in a deflationary enviroment due to their attempt to repeg their pound to the price of gold at the pre war rate which by then was unrealistically high. The french draining of their gold caused them to have to raise interest rates at a time when their economy needed the opposite.The threat of devaluation caused a panic of currency conversion and the world central bankers rapidly converted their foreign currency holding into gold and in the process quickly drained all the liquidity out of the world system. The resulting devluations and subsequent break from gold convertibility caused a panic into gold hording of momouth proportions. I believe the ensuing panic caused 3100 tonnes of gold be horded in 1931 alone when total world production was only 600 tonnes /year.
Aristotle
(01/03/2000; 16:45:41 MDT - Msg ID: 22151)
Thanks Cavan Man. My fingers have only just now recovered from the typing.
Anything to add, you ask? Only that the sum of all that I've encountered since then further supports rather than refutes that blueprint.

If I were asked to evaluate its primary shortcomings, I'd say that I got rather hasty to bring the epic to a conclusion, and therefore came up short on painting the clearest picture on the various forms of "paper Gold" and what their existence portended for the fate of our currency and the price of Gold. It isn't enough for me (or anyone) to TELL you (or anyone) something. The challenge is to SHOW the path and let others reach an understanding. Blind following gets nobady anywhere with any degree of comfort along the way. If you clearly see the path, you will be better able to step over the odd tree root that lies ahead.

It might help you to understand the context in which this was written. Then, as now, we had FOA as a grand tour guide offering the "recollections" of a seasoned traveller of the road ahead. It seemed that too many people, perhaps based on a lack of knowledge, where too quick to see FOA's message as something akin to a conspiracy rather than the rare insight that it was and is. It was important to help people work through their historical and monetary ignorance (not said as disparagement--a plain fact is that most people have simply never made a study of their own money) so that they could concentrate on the content of FOA's message without distractions of the boogeyman lurking in the hedgerows. Simply put, you can't learn alegebra until you are comfortable with addition and multiplication.

Although in my haste I may have come up short in my original goal to work toward building people's understanding of the various species of paper Gold, and to give the reader an better appreciation for the "other side" of these deals that seemingly have been getting crapped on all these years, it was of no matter--shortly after its completion such sharp minds as John Hathaway took the effort to thorough completion. I encourage anyone who hasn't done so to read John's "Golden Pyramid"--you can track it down quite easily in USAGOLD's Gilded Opinion page.

Where I feel I did succeed, maybe to an excessive degree, was in giving the reader an appreciation for the fluid and evolutionary nature of our monetary system. I guess subconsciously I had decided that making this point was the more important of the two. Why? To stave off the debilitating notions of that "conspiracy-boogeyman" mentioned earlier that too easily befuddled the minds of many that by chance stumble upon this same trail of ours. Far be it from me to foist any manner of religious views upon another, and only in that context do I offer this thought attributed to Karl Popper in "Conjectures and Refutations." He writes:
---- The conspiracy theory of society...comes from abandoning God and then asking: "Who is in his place?" -----

Hopefully I have successfully helped to demonstrate that there is no diabolical hand in all of this. (I encourage people to read the good words of Holtzman for more on this notion.) More importantly, I hope I have helped the reader see that the natural hand of man has greatly bumbled through an attempted departure from the universal and natural money (Gold), and has in fact failed. The end of this experiment is necessarily at hand.

However, it would be a mistake to think that history will repeat itself, or that the coming rise in Gold will be a simple, symmetrical mirror of its fall. It will more likely be very sudden, and will be more like a reflection of the steep mountain of accumulated credit. My final thoughts on the matter is that rather than blame others for anyone's perceived misopportunities (such as through holding Gold instead of various internet stocks,) I'd suggest that these same people at least acknowledge that they are both playing Monday morning quarterback AND counting their chickens before they have hatched. (I'd also recommend that they read MK's good words on that topic posted Saturday.) Essentially, I would encourage people to seek historical monetary awareness and to read the road ahead with the help of the many patient and interested Goldhearts found at this forum. There is nothing to be gained by anyone (other than demonstrating immaturity) through publically bemoaning missed "opportunities" that are seen with 20/20 hindsight. I'm willing to use my hindsight to suggest that these same people may have as easily lost their butts on the whipsawing of the Nasdaq today.

Cavan Man, you're one of my favorites. Thanks for giving this simple child a chance to share his thoughts with you.

Gold. Get you some. What can stop you in this most natural, intelligent financial act? After all, you earned it. ---Aristotle
Blue Sky
(01/03/2000; 16:45:50 MDT - Msg ID: 22152)
Happy New Year
I sure hope you get your site up and running. Miss one and all.
Blue Skies to all.
Aristotle
(01/03/2000; 17:39:33 MDT - Msg ID: 22153)
A quick explanation before we get put off the track by misunderstanding
I can see where my comment to mhchuck is possibly causing some unecessary hand-wringing. Let me walk through this. I suggested that in response to mhchuck's plea, a hasty politician might plunge recklessly back into the past, where there is no doubt that there were problems. Please bear with me. Further, I said,
"as long as we are giving ourselves license here to define the perfect monetary system, how would you suggest we overcome the failings of either of those systems, each of which at face value would seem to fit your demand."

The key thing to recognize is that I didn't say the failing was with the Gold itself. Nor did I say that the problem was with the implied convertability standard of pre-71 or pre-33 (although I will now state without hesitation that any system in which the people cannot own Gold--as in pre-71--is financially AND morally bankrupt.) The proper recognition/conclusion to be drawn is that the SYSTEM (not the "standard") failed. We can't be hastily returned to that same "sytem."

What do I mean by 'system'? That would be the entire financial architecture that includes not only the fixed Gold convertibility, but also the banking structure. I've said it before and I'll say it again. In my puny little childlike mind I can't conceive of sustainability for FIXED Gold convertibility of any currency that exists concurrently with tolerance for fractional reserve banking. You can have one or the other, but not both over an enduring span of time.

I think it is fair to say that fractional banking has become an entrenched fact of life that we must all live with. Therefore, Gold must be set free to float in a new financial "system" that reaps no benefit from the restraint of Gold. Savers (individuals and Central Banks) will hold Gold because it will gain in value over time. Spenders will borrow fiat currency from banks, and repay with interest, because that is what they do. Even as we can see and must admit today, a fiat currency is not utterly worthless as long as the loans are performing, and that the monetary policy is managed such that a credit contraction isn't allowed to collapse the banking system or the economy.

For some reason, people are more comfortable to see supply inflation erode the purchasing power slowly over time--to get pay raises and to pay higher prices--than they are to renegotiate lower prices and lower rents and wages due to a currency that gains value over time. In this perfect system, the Gold savings will gain (or simply hold) value without the need to risk it on loan for a share of interest. Today we can see that dollars must be "risked" in a banks' savings account, and yet that still falls short of inflation.

Allow me to be so bold as to suggest directly to ANOTHER, if you are in a postion to shape these wheels that turn the Earth (don't laugh, people...even I have had my hand upon wheels in other realms of endeavor), my perception leads to this recommendation. Gold must be the immutable North Star of the monetary world, and therefore it must itself be kept immune from the pricing influences of fractional reserve lending, forward sales, and the like. Financial operations with Gold must be managed such that no person thinks they have "ownership" of Gold when in fact it has be lent out for another entities use. It must be like the money in my wallet that I loan to a friend, not like the money in my savings that a bank loans to my friend. Clearly, in this later case we both believe we have the same currency, and that is the supply inflation that erodes its value over time...just as the current supply and use of paper Gold has hidden the real value of real Gold. You of course know all of this, but my perception is that you want to know if it matters to anyone else. It does. And I'm nothing more than a babe in the woods. Imagine what better minds might say if they looked at this as I have done. I look forward to FOA shedding more light on the potential for this protection of Gold being entrenched. It would seem that the ECB's (and others') Washington Agreement was a glimpse in this direction.

Gold. Nothing else will do. ---Aristotle
Netking
(01/03/2000; 17:48:26 MDT - Msg ID: 22154)
Euro Celebrates Birthday With Rally
http://dailynews.yahoo.com/h/nm/20000103/bs/markets_forex_23.html...go Euro!
Aristotle
(01/03/2000; 18:05:44 MDT - Msg ID: 22155)
Hi Thriver
Thanks for the Matrix endorsement. I see too that ORO has seen it, as have many others here. Your comment was the last straw--I'll have to make a point to rent it. To return the favor, I thought "Three Kings" to be fine piece of cinema, with lots of Gold as an added bonus! Seriously, though, it carried a very good human lesson. I also seem to recall JCTex (or another poster) saying it sparked a new intrest in Gold within his son. That, my friend, is a very fine thing!

Gold. Get you some. ---Aristotle
FOA
(01/03/2000; 18:06:02 MDT - Msg ID: 22156)
Long over due reply to ORO!
ORO (12/29/99; 12:15:39MDT - Msg ID:21792)
FOA - Pump

Hello ORO,
Your follow up post about the IMF money pump was very interesting. You state: ----- You are indicating (FOA), it seems, that the current consensus in the G20 is that the dollar reserve system should be allowed to slowly dissolve into cash full oblivion. --------

Yes, offering this analysis from the view that the dollar is being driven into a "cash position" is right on the mark. In hind sight, this would be the only way to prevent the reserve currency from deflating through the obliteration of world dollar debt. Further, as the Euro takes a larger and larger portion of debt financing, the left over dollars holders are forced into an ever more short term maturity. If you were a dollar holder and could see the transition ahead, you would not want to lend long either. This effect is well understood looking backwards, as it was usually caused from the Fed tightening credit. Today, the squeeze (on longer term dollar credit) comes from a perception that this market may be falling away. Making room for the Euro. Eventually culminating in an "almost cash" position for the dollar, the fastest moving currency derivative of them all.
I think this has to be the first stage of "flight" before a true gold run begins. This is the period where no past guidelines direct the trading. Everyone is looking around and saying, what are you going to do? Most will shorten maturities offered and feed slowly into the Euro and gold as a hedge. As you know my thoughts about the paper gold market; the enormous sums of floating dollars will easily crush this illusion. Long before any significant paper is exercised into physical gold that market will discount cash price in a big way and close.
Back to your thinking; notice how the Fed is still pumping money even after the year turn over! The liquidity squeeze is arriving and it has nothing to do with price inflation, Y2K or the stock markets. Another force is at work in the world today and it is attacking the dollar behind the bushes. You mentioned the Japanese and Eu banks in the carry trade. The Japanese are and always have been up to their eyeballs in US paper. They have to stay this way because of their dollar trade deficit. As they continue to decend into deflation, the strong Yen still locks their hands from selling our debt and the BOJ has always known this. So, they continue to add dollar reserves on balance with this deficit in an effort to keep the Yen from rising even higher and killing their US market share. These people are done in and will eventually print Yen (hyperinflate) in and effort to match any US dollar price inflation. Locked step to the end! The EU can play the carry game as long as they hedge in Euros (or gold) because it will balance the dollar fall. They will some day be seen borrowing Euros at 4% (??) and buying Eurodollars at 30% (??) or something like that. What else can be done with the eventual pool of Eurodollars floating offshore the US? It will already have
been devalued against gold and they will still want to trade with the US. After working through Exchange Rate controls that is.

ORO, more clearly, the period directly before us will be like a fiction book. Good reading, but I don't believe this is happening! Once the Euro gets it's legs, there will be no use for a Eurodollar holding as long as the US keeps it's trade deficit wide open. As the dollars flood in, we cannot
spend them in Europe because we will have to buy Euros first. As the existing Eurodollar holdings go further into cash mode their value must fall. And fall big!
These paper bullion boys at the front desk talk about all the excess ECB gold that must be sold. They are going to sound like the Y2K bugs after the fact. When the ECB and the BIS start moving unneeded reserve dollars for official bullion (this has started already) off market, we will see it in the US % rates (like today) and the Exchange rates (like today). The real bugs in 2000 are going to be in the paper gold market. Just watch it all unfold!

Thanks FOA


TheStranger
(01/03/2000; 18:20:20 MDT - Msg ID: 22157)
Black Blade #22084
Sorry to make you wait for a response. I think the answer to all of your questions is "probably yes". Clearly, the U.S. bond market was getting some support from fear of Y2k. Part of this was safe-haven investing. Another part of it was, no doubt, belief in the Yardeni recession scenario. All of that is gone now, and I think there is little to hold bond yields below 7% at this juncture.

It is evident tonight that we are also getting some selling in oil and gold which I relate to disappointment on the part of those who were expecting (hoping for?)a y2k disaster. I have fretted for months that those who didn't see the entire picture might pull the plug at this point. I can only hope the selling is very short-lived as I have no idea how much of this disappointment is out there.

1999 was the worst year for the 30-year long bond since they invented the darn thing back in 1977. Likewise, Alcoa, an aluminum company, was the DJIA's top performing stock. All of this should reassure us that we are not the only ones who have smelled this recovery in inflation. I do not yet see any reversal in this picture, so I think it obvious that gold will come alive soon and OPEC is not about to take leave of their senses. There is hope!

Dead Goat Saloon. The name alone is enormously appetizing, is it not? Still, I'll raise a glass with you anytime, Black Blade, dead goats or no. Maybe turbohawg will join us!

Thanks again to everybody for the warm wishes. I'd just like to know how the heck I am going to live up to this.
FOA
(01/03/2000; 18:46:32 MDT - Msg ID: 22158)
This tells it all! I'll be back much later.
http://www.siliconinvestor.com/insight/contrarian/Read it on this site!

http://www.siliconinvestor.com/insight/contrarian/

On borrowed time?... Last but not least, I want to share something that Dennis Gartman wrote late last week when I was out. It is the perfect period piece to capture the mood of what is really going on. To any sane person, it should be frightening; but then again, anyone who's frightened isn't having any fun. And those who are not frightened are making gobs of money speculating their heads off. Here's what Dennis said:

"As a final aside for the year, we went to our local branch bank yesterday to transact some business [Ed. Note: we actually got some cash for the Y2K `turn'...just in case!], and spent some time chatting with the branch manager. She does not know what business we are in, so when we asked her if she'd seen any increase in personal loans she replied out of hand that indeed she had. Indeed, the personal loan demand at her branch had escalated rather substantively.

"She then proffered that the sole reason for the sharp rise in personal loans was the investment in the stock market. She said that local doctors, lawyers, farmers, auto dealers... all of the leading figures of the local economy (and their wives) had been in recently to borrow money to `put into the market.' We asked her how long this had been going on, and she said that the branch had been making personal, signature loans like that for some while, but that the demand had really escalated in the past several months and has really become `hot' in the past several weeks. She
wondered if it was too late for her to join in the market's enthusiasm!

We said, `We don't know,' and left bemused and afraid.

"It is perhaps not new news, but we find it odd that the public is borrowing money on signatures without collateral (other than CDs and/or sizeable demand deposit accounts) that is then used to buy stocks, very probably upon margin. The leverage is immeasurable, for the public is apparently `Reg-T'ing' money that it has already borrowed with nothing down. She said that those who've been borrowing the most indicated that they `could get more out of the market than the interest charge,' and considered it unwise not to take advantage of the circumstance.

"Friends and clients, if this is not rampant, tulip - bulb' - like speculation of the worst sort, we've no idea what is. Of all of the things that we've read about, heard about and discussed at length concerning the mania that is the U.S. stock market, this is the most manic of all. When speculation comes to small-town southern Virginia, it is rampant and it is dangerous. We have at this point said enough."

Al Fulchino
(01/03/2000; 18:57:24 MDT - Msg ID: 22159)
Thanks FOA......
.... for the article (link). Even I understand it!
Al Fulchino
(01/03/2000; 19:07:27 MDT - Msg ID: 22160)
Lookeee here...didn't know he would put his email address out....
Is it him FOA? If not tell him there is another Another :)

GOLD? SOON YOU WILL HEAR THE POWER, FURY AND THE THUNDER OF GOLD.

"As I breath and walk today, gold will rise to the stars with the greatest triumph and fury the world has ever seen.
Will be gone for some time.

ANOTHER

"YES, I AM ANOTHER. GOLD MARKET IS NOT LIKE ANY BEFORE. IN YOUR LIFETIME THIS EVENT ONLY BE ONCE. WEALTH WILL BE FOR THOSE BRAVE HEARTS.

Will be gone for sometime.
ANOTHER"

-- ANOTHER ( another@geneva.com ) , January 01, 2000


Al Fulchino
(01/03/2000; 19:12:35 MDT - Msg ID: 22161)
Posted on TB2000
1/1/2000
Netking
(01/03/2000; 19:18:58 MDT - Msg ID: 22162)
FOA
FOA(22158) - Good comment Sir, when the Taxi drivers, Bar Maids & Firemen are throwing (being the operative word) all they have (and next years as well) into the market.... 'tis indeed time to run for them hills!
(The propensity for human misery only increases when we continually see this happening around us in both of our locations). Cheers Netking.

R Powell
(01/03/2000; 19:20:55 MDT - Msg ID: 22163)
Thank you!
Hello and thanks
Chicken man
(01/03/2000; 19:27:52 MDT - Msg ID: 22164)
beesting - Thank-you....!
Thank-you for responding to my question.....you were right....I did miss that part....! got to thinking about the gold bit...and I smells like lack of trust.....as long as all the players have gold held by the house,every body is honorable and there is no need to worry about one country kitting checks so to speak.....I don't think the China deal and BIS is so much as China "wants" in,as how mush the BIS wants China in the "system" to keep China honorable in there dealing with the world.(They had some GITCs default and then there is the big sugar default not so long ago)

But then why the 208 value of gold.....it doesn't work out converting US$ to gold at 208......I'm missing something here(A lot of you think I'm missing a whole lot).......pesonally...thought there would have been more heavy duty thinking on the subject....

See you either here or "there"....{;)}
Goldfly
(01/03/2000; 19:33:23 MDT - Msg ID: 22165)
Al,... geneva.com
http://www.geneva.com/Is a steel company in Utah. The have a link up to Geneva Switzerland as a courtesy though....
mhchuck
(01/03/2000; 19:35:53 MDT - Msg ID: 22166)
ARISTOTLE
Aristotle. Your five part series was a gem!

Aristotle (01/03/00; 12:28:13MDT - Msg ID:22128)
Question/comment for mhchuck
On your Keynes/Hitler comparison, you might have it turned around. Given the breadth of the social infamy of Keynes against
the specific depth of individual infamy of Hitler, it is already said in some circles that it is Hitler who played second fiddle--the
John Maynard Keynes of national leadership.

On your comments about a world currency, I wish you would elaborate on your thoughts as expressed in the first paragraph
specifically. A lazy policy-maker might read your words and say, "Fine, let's return to the gold standard as existed internationally
through Bretton Woods until 1971, or else let's return to the gold standard as existed prior to 1933."

My thoughts being, as long as we are giving ourselves license here to define the perfect monetary system, how would you
suggest we overcome the failings of either of those systems, each of which at face value would seem to fit your demand."



Let me unequivocally state that I am not an economist, (I am probably brighter than that) nor am I an expert at verbal jousting. Frankly, I have a distaste for it.

In response to your questions: I let my Keynes/Hitler comparison "Stand." You may interpret it as you like. I guess if you were my college professor and I had submitted a term paper, I would consider your critique.

To your statement that I was giving myself license to define a perfect monetary system (Gee, I didn't realize I was doing that) But I will say that there is no "perfect" monetary system, and from my readings, it was my understanding that the gold standard is the one that worked best, because it precluded the possibility of bankers and politicians from stealing and cheating.

"The metal gold might not possess all the theoretical advantages of an artificially regulated standard, but it could not be tampered with and had proved reliable in practice."

John Meynard Keynes.(From: "Inflation and Deflation")

Now I'm not an expert Keynes, nor have a read a lot of his material, but I have read some of it.
And let me tell you this man makes Bill Clinton look honest. I will be posting others Quotes and lengthy passages from JMK.


So the point of my Post is quite simple. Either we go back to free markets, or we continue on this road of interventionism to its logical conclusion....Totalitarianism.


Gold. It will do you no good in an unfree world.
R Powell
(01/03/2000; 19:39:16 MDT - Msg ID: 22167)
Thanks
Hello again I was dazzled when I read my name as a co-winner of the holiday contest. Most of my understanding and knowledge of the gold market is directly attributable to this forum and referenced sites from posting found here. I have been what you refer to as a lurker for some time because I am impressed by the information, imagination and presentation of knowledge found here. I don't always agree with everything but I'm most always impressed with the thought and research expressed. I feel truely honored to be a co-winner with Farfel among such company! Also a question-- Have both houses of the Swiss parliment okayed the upcoming 1300 ton Swiss gold sale? If not, when do they vote?
mhchuck
(01/03/2000; 19:43:52 MDT - Msg ID: 22168)
Prior Post
Hope my priore post below is not unclear. My response to Aristotle begins with. "Let me unequivically state....
Cavan Man
(01/03/2000; 20:13:13 MDT - Msg ID: 22169)
Aristotle 22151
Who is your Socrates?

Although I am the product of a mediocre midwestern university and poor planning on my part (don't feel bad for me I turned out OK), I have had a few good teachers along the way. Let's see, there were my HS french teachers; oohlala(!); two history teachers, one "stat" and one algebra teacher and, two wise old "beer men" down in Houston; Goober and Clayton.

Seriously though, the very best teachers I have ever had are right here and you, my friend are one of the very best. To what do we owe such kindness, patience, understanding and wisdom? My return on your investment of time and intellect can only be to, "pass it on". I am in the process of doing just that.

Thank you for taking the time to reply. Gramercy good Sir Knight!......CM
Cavan Man
(01/03/2000; 20:18:13 MDT - Msg ID: 22170)
Why I Recommend USAGOLD
For learning about wisdom and instruction,
for understanding words of insight,
for gaining instruction in wise dealing, righteousness, justice and equity; to teach shrewdness to the simple,
knowledge and prudence to the young--
Let the wise also hear and gain in learning,
and the discerning acquire skill,
to understand a proverb and a figure,
the words of the wise and their riddles.

Proverbs 1. 1-6

Thank you MK et al.
canamami
(01/03/2000; 20:32:43 MDT - Msg ID: 22171)
Reply to Journeyman - #22095
Journeyman,

Of course stealing is immoral, and it would have been preferable for the US to comply with Bretton Woods, or to withdraw while it was still able to meet extant obligations, so there would not figuratively have been a "breach of contract".

That being said, we are dealing with the actions of sovereign states, which are indeed immune from the ordinary principles of contract law, including the principles of private international law as they relate to contracts. My post related to the assertions of FOA, that the US would face demands for the honouring of gold backing just as the Swiss and Germans faced demands relating to Holocaust-related matters, years after the fact. I countered that the two matters are too dissimilar for there to be a valid analogy - i.e., like comparing apples and oranges.

However, if obligations relating to 1971 are to be dug up, then the US is free to dig up the defaults of countries after WW1. Back then, basically all currencies were completely gold-backed. In the course of WW1, the major countries became indebted to the US. Except for Finland, all the Europeans defaulted on their official debt to the US. So, if some countries can dig up ancient breaches of contract like 1971 (at law, an ancient issue, and I would also say a breach that has already been waived even on a moral level), then the US can dig up the WW1 breaches of contract by European countries - with accumulated interest. Also, such demands for compensation are made against Ger/Swit because Germany/Switzerland are willing to listen to such demands. On the other hand, the Japanese have ignored demands to compensate Hong Kong veterans and others who were tortured, and to compensate the victims of the Rape of Nanking. Thus, few demands are even directed at Japan. This is how sovereign states generally operate. Given that most of the putative complainers concerning 1971 have "shafted" the US in the past, I doubt any demands for the honouring of the Bretton Woods gold backing will be made.

Some of your post could be interpreted as asserting that I somehow benefitted from the closing of the gold window in 1971. I will assume that "spin" could not possibly have been intended by you. FWIW, I'm not an American, but a Canadian, so I'm not talking my country's book, so to speak.


canamami
(01/03/2000; 20:43:44 MDT - Msg ID: 22172)
POG Down $3.00
The POG's getting whipped tonight. Any theories or news explaining why?
summicron
(01/03/2000; 20:55:21 MDT - Msg ID: 22173)
$3 Drop in the POG is presumably for the same
reason that the long bond is going down: the Y2K fears are over and the safety of gold is thought to be no longer needed.
Aristotle
(01/03/2000; 20:58:53 MDT - Msg ID: 22174)
Thanks for the compliment, and for the reply, mhchuck
No need to be on your guard around me; to the core I'm just a simple country boy. I didn't intend to engage you in verbal jousting, or to test your mettle as an economist, or to imply you were presumptious in devising the perfect monetary system. To address these three items in reverse order: for the purpose of exploring our opinions, it was I that gave us license to devise the perfect monetary system. Why? Because we can do that here--we're not bound by our words like a high official at a press conference.

Second, you seemed to have some strong emotions and opinions regarding what should and shouldn't be in the monetary scheme of things. I wanted to know what was important to you--not necessarily looking for a clinical dissection of past monerary ills. (If you look at my Msg ID:22153 you see my own concessions and desires on this same matter.) Thanks for sharing your additional opinions with the latest post. I would guess that some of my current neighbors don't hold an opinion on these matters at all. Sad, but true.

And finally, my guess is that your verbal jousting comment was in regard to my turning the tables to paint Keynes as the greater villain. I hope that wasn't seen as something done in bad taste, but considering that this is an economics oriented forum, and my indication that Keynes' infamy was one of a broader nature, I felt people might see where I was coming from and get a wry smile out of putting that sunnuvabich in his proper place. Sure, Keynes had his moments of brilliance, but I can't help but lay primary blame at his feet for the spoiling of America through the influence he had on Roosevelt and his economic cronies.

After the country had learned the best possible long-term monetary lesson in the hardest of ways (speculative stock market crash followed by several years of crippling bank failures), Mr. Keynes offered a viper's voice to the sympathethic New Deal ears of a misguided and na�ve Administration. However, it could also be argued that America was destined to make this mistake whether Keynes had come along or not. Anyway, judging from your own comments, it would seem that you might agree with me in choosing to paint him as the greater villian--insofar as an economics forum is concerned. ---Aristotle
PH in LA
(01/03/2000; 20:59:55 MDT - Msg ID: 22175)
Another's e-mail address
Al Fulchino:

Wouldn't the e-mail address have to reside at the website? "geneva.com" is the website of the Geneva Steel Company, located in Provo, Utah; hardly a likely place for the poster and sage we know as Another to reside. In any case, can you direct us to the site you refer to as TB2000? What is the policy there on internet identities? Are posters required to register and use passwords like we do here at USAGold? The message you quote could not be considered to be a very original message from the poster we know here as "Another". At first glance it looks to be an attempt to imitate his style and message, something the real "Another" would be very unlikely to do since he has always been a very original thinker.
TheStranger
(01/03/2000; 21:16:45 MDT - Msg ID: 22176)
Jam Yesterday, Jam Tomorrow, But Never Jam Today
http://www.gold-eagle.com/editorials_99/dvcohen122299.html I just reread Farfel's impassioned letter to Congress in which he indicts nearly everybody for just about everything. (I am just teasing you, David. It is a marvelous piece, or I wouldn't have read it twice).

This subject of central bank interference raises a question in my mind. Towit: Why do we criticize paper money so, on the one hand, and yet denounce central banks for trying to maintain its value on the other? And if we hold central banks responsible for maintaining cross-CURRENCY exchange rate stability, then why all the sturm and drang over their efforts to maintain an orderly exchange rate for real money (GOLD)?

Clearly, though some may disparage these activities as market manipulation, there is a de facto gold-standard which exists today, is there not? Why should it be considered any more or less suspect than the de jure one which was so easily abandoned in 1971? The point is, in the absence of monetary discipline, aren't both approaches equally ill-fated?

In 1971, official gold-backing failed to stand up to rapid currency inflation. To be sure, significant effort had been expended to depress the price of bullion in those days. The result, as we all know, was that what could have been a more gradual increase in gold prices was transformed into a tectonic shift. Perhaps today's attempts at unofficial gold-backing, if you will, will turn out just the same.

Gandalf the White
(01/03/2000; 21:21:11 MDT - Msg ID: 22177)
a VERY humble, "Thank You" MK
"The Ol'e Wiz" truly thanks USAGOLD for award of the Silver Eagle. Most of the Hobbits think that it is far more than enough for you to allow the Ol'e Wiz to sit silently (but sometimes mumbling) at the TableRound, and soakup wisdom from the mouths of the Giants, -- but to reward the Ol'e Wiz with tokens of SILVER for just awaking long enough to relay a few golden thoughts, is like the Hobbits seeing the White Tree of Minas Anor flower again!! ALL Hail MK!!
<;-)
elevator guy
(01/03/2000; 21:21:43 MDT - Msg ID: 22178)
@ canamami (22172)
In answer to your question, I humbly offer my limited perspective and insight.

Many gold bugs, myself included, were hoping, (against Stranger's better admonitions), for a Y2K driven rally, which never materialized.

Now that Y2K has been shown, (up to now), to be a non-critical event, weaker hands dump what they see as a losing position.
TheStranger
(01/03/2000; 21:24:47 MDT - Msg ID: 22179)
PH in LA
" Provo, Utah; hardly a likely place for the poster and sage we know as Another to reside."

I beg your pardon. That's right near where I live! ;-)
Solomon Weaver
(01/03/2000; 21:32:11 MDT - Msg ID: 22180)
Stranger, how did you read my mind??
This subject of central bank interference raises a question in my mind. Towit: Why do we criticize paper money so, on the one hand, and yet denounce central banks for trying to maintain its value on the other? And if we hold central banks responsible for maintaining cross-CURRENCY exchange rate stability, then why all the sturm and drang over their efforts to maintain an orderly exchange rate for real money (GOLD)?

When gold becomes money, she will always be attacked by the fiat princes...in her wisdom, even in her sleep she eventually wins out?

Poor old Solomon
Solomon Weaver
(01/03/2000; 21:37:34 MDT - Msg ID: 22181)
y2k goldbugs cashing in
Now that Y2K has been shown, (up to now), to be a non-critical event, weaker hands dump what they see as a losing position.

Hey elevator guy.....the number of people who believed in y2k enough to buy gold may have been enough to give guys like MK some extra business...but even if they all went en-masse to return their physical gold to the market, the massive short covering gang would just "sssssuuuuckkkk up" that new supply like nothing....

Although, I won't be surprised to hear of a murder story where some pedestrian gets killed by a guy who throws his unit of junk silver out the apartment house window.

Poor old Solomon
THX-1138
(01/03/2000; 21:44:26 MDT - Msg ID: 22182)
Y2K gold dip
I hope the price keeps falling until next Monday.
I get paid this Friday and want to get a couple more ounces.
At least I hope I get paid.
Crossing my fingers that the Gov't payroll system is working.
More than likely will also be cashing in the extra $400 I had in cash for another coin this weekend.

Solomon Weaver
(01/03/2000; 21:47:48 MDT - Msg ID: 22183)
who killed more people, Keynes or Hitler?
Aristotle

And finally, my guess is that your verbal jousting comment was in regard to my turning the tables to paint Keynes as the greater villain. I hope that wasn't seen as something done in bad taste, but considering that this is an economics oriented forum, and my indication that Keynes' infamy was one of a broader nature, I felt people might see where I was coming from and get a wry smile out of putting that sunnuvabich in his proper place. Sure, Keynes had his moments of brilliance, but I can't help but lay primary blame at his feet for the spoiling of America through the influence he had on Roosevelt and his economic cronies.

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

My wife is from Russia. Her parents still live in a southern republic now free....free to be poor that is...they see how friends die of disease because they cannot afford medicine. The death count is slow and people don't blame anyone really....just the times.

Keynes realized that easy money was both the opiate of the masses and the heroine (hero) of the Gov. If there is a coming economic collapse, which impoverishes Americans, it will also impoverish many around the world...who will suffer much, and die prematurely.

The people of the future will just have to find some way to avoid creating money in pyramid schemes...or they will all die like fruit flies when the apple is tossed.

Poor old Solomon
USAGOLD
(01/03/2000; 21:47:51 MDT - Msg ID: 22184)
Deja Vu...
I thought it a deja vu. This afternoon I read the following in Adrian van Eck's "Money Forecast Letter" for January which I received about two weeks ago and just got around to:

"The New York Fed (which controls much of the money supply and deals with foreign banks and currencies) issues a decree that foreign bonds will now be accepted for the first time as collateral at the Fed's re-discount window. It is though they expect serious Y2K financial problems overseas despite reassurances that all is well. We think something big and bad is brewing behind the scenes. And we decide to put up a red flag warning DANGER MAY LIE AHEAD IN THE ECONOMY."

"We are of the opinion that the Money he and the Fed have been creating in the past two months ( going on $200 billion...an awesome amount ) reflects his efforts to avert a crisis situation that is being kept hush-hush."

Then this evening I read this in FOA's #21792:

"Back to your (Oro's) thinking; notice how the Fed is still pumping money even after the year turn over! The liquidity squeeze is arriving and it has nothing to do with price inflation, Y2K or the stock markets. Another force is at work in the world today and it is attacking the dollar behind the bushes."

So what am I missing here, guys?

By the way, the last time Adrian raised the Red Flag on the cover of his newsletter?

Your guessed it.

1987.
RAP
(01/03/2000; 21:51:00 MDT - Msg ID: 22185)
IRS Y2K Problems
I have a very close relative who is an IRS agent, gun and all. They said they can't get there files out of there computers, and are waiting for "experts" to come and unlock them. This was a whole group of agents, not just one.
Y2K is not over!
Solomon Weaver
(01/03/2000; 22:00:21 MDT - Msg ID: 22186)
no leverage needed
summicron (01/03/00; 20:55:21MDT - Msg ID:22173)
$3 Drop in the POG is presumably for the same
reason that the long bond is going down: the Y2K fears are over and the safety of gold is thought to be no longer needed.

canamami (01/03/00; 20:43:44MDT - Msg ID:22172)
POG Down $3.00
The POG's getting whipped tonight. Any theories or news explaining why?

------

OK folks, Alan Greenspan just loaned out a bunch of dollars (on the order of $200 billion) based on repos of low quality debt instruments....the last thing he wants right now is for hedge books to start exploding....

If the S&P 500 futures market, and the gold market were fixed before y2k, why should anything be different?

FOA is right...at some point, gold buyers are going to realize that possession is 9/10 of the law and all these paper games are going to catch on fire.

Like MK said the other day....what is the real price for physical when he can't even find a supply of coins for a large client to buy???

The POG we see on the screen is the POG for a guy who is using a lot of margin...trading fast. That margin is what gives your physical all that leverage that FOA keeps pounding into our heads.

Poor old Solomon
beesting
(01/03/2000; 22:04:01 MDT - Msg ID: 22187)
Reply to Chicken man #22164
Your words:
But why the $208 value of Gold.... it doesn't really work out converting US $ to Gold at $ 208.....I'm missing something here.

BIS statement:
The BIS employs the Gold Franc SOLELY AS A UNIT OF ACCOUNT for balance sheet purposes, assets and liabilities in US Dollars being converted into Gold Francs at a FIXED RATE of US $208 per ounce of fine Gold(approximately equivalent to one Gold Franc=US$1.94).

My comments:
Chicken man I had trouble understanding that also, but see if this sounds logical.
The $208 per ounce of Gold is a fixed rate set many years ago.At this point in time it has to be a fixed rate because of the minute by minute fluctuating "spot" price of Gold worldwide,It would make math calculations changing by the minute, to complicated.They could have used Swiss money as a fixed rate, but chose US Dollars because thats what the world is using in their paper calculations.

Look at it this way,the paper currencies float against each other constantly,each changing value against each other by the minute, some of these exchange rates are questionable.The BIS converts all the worlds paper currencies into a fixed rate ($208= 1 ounce) of Gold, then into any currency they want to,to conduct business.
One Gold Franc(0.29 grams fine Gold) is worth $1.94 Dollars(paper money).
I would suspect as the paper loses value over time, it takes more paper to equal a Gold Franc.
Example given:
At March 31,1999 it took $1.94 to = 1 Gold Franc.
Right now it may take $2.00 to = 1 Gold Franc.
The BIS's Gold Franc is the real base of the worlds monetary system, not the US Dollar!!

I hope this hasn't confused both of us even more.Maybe some of the other Ladies or Knights can explain this better than me.....beesting.
Black Blade
(01/03/2000; 22:04:37 MDT - Msg ID: 22188)
oil and gold reaching new highs (wink-wink).
http://www.usatoday.com/money/charts.htm#SP500_GOLDThanks to RossL for the link. If it were only true but good for a cheap laugh. Y2K bug?
THX-1138
(01/03/2000; 22:05:06 MDT - Msg ID: 22189)
IRS computer files
If the IRS can't get computer files out of their computers, is that rally a bad thing?

Go gold, Go GATA, Go Alan Keyes.
Solomon Weaver
(01/03/2000; 22:10:39 MDT - Msg ID: 22190)
the swiss vote
Also a question-- Have both houses of the Swiss parliment okayed the upcoming 1300 ton Swiss gold sale? If not, when do they vote?

---

As I understand it, the issue must be voted on by the common folk...Referendum

Having lived some years in Switzerland, I learned this much about Swiss politics....most referendums do not pass....but, the parliment looks very carefully at the outcome of the vote (numbers and regional balance) and smaller laws which do not require a referendum are often enacted that help to satisfy the balance of those who wanted it passed.

My prediction therefore: The general public will not pass a referendum to sell gold in large amounts...but based on a 30% yes vote, the government will initiate capital investment projects (railroad expansions etc. as well as selling minted coins to citizens) to slowly let go of gold.
I also believe that the Jewish will be given Euros (not gold) in any settlement.

Poor old Solomon

Black Blade
(01/03/2000; 22:12:36 MDT - Msg ID: 22191)
Solomon Weaver
I saw some gold and silver miners "safety and attendance" awards at one of the local pawn shops here in Au country. I haven't seen them appear all that often, but now since the new year began maybe PM's will be unloaded or maybe some outta work miners need to pay for Christmas. I continue to snap em' up though. This of course is only a localized observation, but coupled with the current drop in POG who knows?
THX-1138
(01/03/2000; 22:15:53 MDT - Msg ID: 22192)
What about Cambior?
Didn't Cambior or Ashanti have their loan calls pushed out to 12/31/99. Are they being called in again or were they renegotiated?
Solomon Weaver
(01/03/2000; 22:16:41 MDT - Msg ID: 22193)
what I forgot to say about the Swiss
On very large danger to the Swiss folk is their gold...

The Swiss Franc has so much gold behind it, and the numbers of Swiss Francs is miniscule compared to Yen, DM, Pound, Dollar...

If there is any sustained rush to gold and Euro, the Franc will surely rise like a rocket...making Swiss folks rich...but they might wind up earning the equivalent of $200 per hour...that will kill any export business...and tourism is an export business..

Thus, it behooves Switzerland to rid themselves of (some)gold and back themselves with (some) Euros.

FOA, ORO, GANDALF, ANYONE, please refute me on this story with the SFR...perhaps you insiders see it better than I do.

Poor old Solomon
Black Blade
(01/03/2000; 22:17:42 MDT - Msg ID: 22194)
THX-1138 and IRS (Internal Racketeering Service)
THX-1138, Ditto on your last post! The IRS has been known to be wwwwaaaaayyyy behind on their y2k preparations for quite some time. Now just think if most people simply "forgot" to pay their tax this year..............hmmmm.....
BTW great handle and movie too!
Black Blade
(01/03/2000; 22:24:25 MDT - Msg ID: 22195)
Solomon and Swiss Au sales
The Swiss have not given the go-ahead on the sale yet. There is a waiting period to allow for petitioning for a referendum that expires in March. BTW if the Swiss Franc rises from a corresponding rise in POG, I'm switching from Nestle's (too expensive) back to Hershey's ;)
Aristotle
(01/03/2000; 22:33:12 MDT - Msg ID: 22196)
Golly, Solomon--
One of the few times I venture to use a relatively unsavory term, and wouldn't you know it...somebody feels compelled to paste it up for a second viewing. Never again.

Your question is my question exactly--which one killed more people? Certainly, one was directly responsible for deaths with malice aforethought, but what of Keynes? His school of thought was one that reached well beyond the U.S. and U.K. How many emerging nations failed to emerge because they could never build the wealth to climb out of abject poverty? How many others have been reduced to poverty because savings once meaningful became a currency that was poorly managed (with best intentions?) and reduced to nothing. How much malinvestment has resulted based on easy credit and too-big-to-fail mentality, putting us on the brink of economic and civil calamity?

Perhaps I've misinterpreted your words, but it seems that you are saying that the masses need the Keynesian type of money to survive/thrive. Please clarify if I've missed your mark.

But to that end, I'll leave you with this simplest thought from my innocent mind, which to me rings with a certain truth:
"There is nothing that a fiat currency can buy that can't also be bought with real Gold money."

So there you have it. Who needs Keynes, eh?

But in the interest of meeting Keynes halfway, I refer you to my prior Msg ID:22153 several inches lower on this page--for what it's worth. So it must be when we live in a world of compromise as this.

Gold. Better than paper every day of the week. ---Aristotle
TheStranger
(01/03/2000; 22:59:21 MDT - Msg ID: 22197)
Get To Know Me
http://utah.citysearch.com/E/G/SLCUT/0000/09/75/cs1.htmlThe above article is about me and may be of interest to some. (I am David Davenport).
Peter Asher
(01/03/2000; 23:06:46 MDT - Msg ID: 22198)
YO! DAVID
Wher's the "G" Word ???
PH in LA
(01/03/2000; 23:07:22 MDT - Msg ID: 22199)
Provo and Another (reply to Stranger)
Greetings Stranger, and welcome back!

I'm pretty sure you understood my comment about Provo and Another. (Many suspect that Another resides outside of the USA and that FOA almost certainly lives a bit to the East of Provo.)

No doubt Provo is a very nice place to live, though. Even if the climate can't compete with LA, and it's kind of inconvenient for sailing, too. (smile)

TheStranger
(01/03/2000; 23:09:48 MDT - Msg ID: 22200)
Peter
Remember, I didn't write it. You'll find a mistake or two also if you look carefully, but I think the guy did a pretty good job, all in all.
Peter Asher
(01/03/2000; 23:13:55 MDT - Msg ID: 22201)
Sorry David
Didn't mean to shout. did you try to slip in some gold advice and get stone-walled?
TheStranger
(01/03/2000; 23:16:30 MDT - Msg ID: 22202)
You Are a Good Man, PH
Actually, Provo sits on the large Utah Lake, and the sailing is pretty good when it ain't snowin' outside. By the way, you have a friend in me forever. I'll bet you know why.
lamprey_65
(01/03/2000; 23:22:48 MDT - Msg ID: 22203)
TheStranger...Talk about coincidence
My dad has an account with your firm (don't get excited, he lives in Alabama!). Anyway, I just recommended NEM to him about two weeks ago - he's dubious on gold's future. I'll send him the article and highlight your firm and Newmont...maybe he'll take it more seriously!

Lamprey
TheStranger
(01/03/2000; 23:29:21 MDT - Msg ID: 22204)
Peter
No, not exactly. But the article was supposed to be about investing in tech stocks. I did wonder if he might shelve the whole thing if I only talked about gold. As it turned out, the word "gold" didn't even get in. Too bad. I tried.
Still, I was surprised at how close he came to what I did tell him. I have been interviewed for television numerous times and been featured in print, but they never get it exactly right.
Black Blade
(01/03/2000; 23:36:03 MDT - Msg ID: 22205)
Chinese proverb (or curse) "may you live in interesting times"
Au still getting hammered (now -$4.45 at $283.35), crude down -0.78, bonds down slightly, and s&p futures trending lower. Let us see what happens when London opens for it's first trading day of the year.
TheStranger
(01/03/2000; 23:37:29 MDT - Msg ID: 22206)
Lamprey
Please be very careful! As the article suggests, my views do not necessarily represent the official recommendations of the firm. Morgan Stanley Dean Witter currently rates Newmont only a "Hold". They also are not very optimistic about gold at the moment.

I semi-retired from the firm some years ago, and I have no right to try and represent the views of so many hard working and professional people. PLEASE make that clear to your father so that I don't get sued!
lamprey_65
(01/03/2000; 23:41:23 MDT - Msg ID: 22207)
Stranger
Will do.

L.
SteveH
(01/03/2000; 23:43:02 MDT - Msg ID: 22208)
Bond
down .09 at 89.19.

Gold down $4.1 at $285.50

Crude down .75 at $24.85

SteveH
(01/03/2000; 23:55:43 MDT - Msg ID: 22209)
I actually wrote this to a friend when he sent me a rosy
outlook of the US from Stratfor. I did get a question on the source of the information whereby the EU marks gold to market. Did I get this wrong or do I remember that at the end of each quarter they mark their gold to spot? Anybody have a source on that?

Euro Speaks

Stratfor has been accused by some readers of being an Intelligence organization front and tends to ignore certain key elements that might otherwise be obvious to other analysts, including ignoring Y2K and the Euro.

For example, the Euro is directly competing with the dollar for market share as a world reserve currency. At first glance that doesn't seem frightful because Europe and the US both have about the same amount of gold (which everyone says is dead, except all the people who have bought the 10 thousand tonnes of metal that has been sold short into the market) with the EU at 11,000 tons and the US at 8,000 tons. The US has burned its gold bridges twice: first was with the US citizen back in 1932 when Roosevelt made all US citizens turn in their gold. Next, President Nixon defaulted on the dollar's gold backing in 1971. This is considered by some experts to have been the reason for the Mid-East oil crisis, as the Arabs love their gold and didn't want to give up their oil for fiat dollars (fiat is faith in Italian).

As a result of this default, the Jamaica Accords saw the demonitization of gold and an allegedly secret deal that would keep dollars strong and gold weak while the Arabs become the Fanny Mae, Freddie Mac of paper gold delivery contracts from large mining companies. In other words, the Arabs were able to take long-term delivery of gold mining production while the dollar was kept strong and oil kept low as the Arabs were able to buy cheap gold with cheap dollars. This is the reason, again per some experts, that gold has been held down and actually dropped over the period of 20 years since 1979.

Currently the Federal Reserve and Goldman Sachs and other bullion banks have been actively participating in a large paper gold sales effort culminating in the Bank of England auction whose direct result was to knock gold down to its 20-year low of $252 per ounce. Some suggest that the BOE gold auction is being orchestrated to keep the price of gold down while certain key bullion banks unravel some of their 10K to 14k ton paper-gold short position. Paper gold is defined as gold derivative contracts that leverage physical gold at times up to 100 times the actual amount of metal available.

Why are bullion banks trying to restrain gold? Gold is earmarked informally in some circles as the great inflation indicator. We have all heard the express gold only goes up in times of inflation. One analyst I know believes that inflation is currently running at 6-10% per year. One thing is certain is that 79 billion dollars have been added to the money supply in the last several months in direct anticipation of Y2k. Now, if your entire dollar supply (physical dollars) is only $400 billion or so dollars and you add to that in one year by almost 25%, one might construe that inflation isn't dead. Certainly gold isn't reacting to normal market forces as excess dollars compete with gold.

As I see it, the US dollar is likely to lose its stature as a world reserve currency. When that happens, the Euro will takes its place. Signs of this are evident now. EU long term bonds seem to be equal or better sellers than US long-term bonds. I am even hearing discussion of oil contract settlement in Euro dollars versus US dollars. As oil turns the world, as oil countries prefer gold to dollars, and as the Euro is less encumbered with debt than the US is, whose debt is estimated to be 5.7 Trillion dollars and whose derivative positions and counter-party risk contracts go into the 10's of trillions, the Euro and EU investments will likely become more enjoyed by savvy investors, including gold-based investments, stocks, and bonds.

The EU is going to treat gold differently this time than at any other time in history. They have said they will allow their currency to be marked to market or be valued at the price gold on the open market at the end of each quarter. If the price of gold were to double, that would back the Euro effectively with a 30% gold-backing. If gold doubled again, they their current money supply, which is all digital currently, would be backed by 60% gold. This is sufficient to interest the Saudi's in their quest for gold instead of dollars. For when Saudi oil is gone they don't want dollars, they want the gold.

So what does this mean for the US? I believe it means a massive stagflation or inflation of commodities and gold ($10K gold ?) and a recession where current housing prices and real estate come down as this market mania unwinds with the flow of dollars overseas to EU investments.

Is this a guaranteed analysis? No, but it certainly breaks a mold of current CNN and CNBC financial guru's and wizards who talk their book and predict the trend. Any market at an all-time historical high is subject to a massive reversal coming out of left field, from where nobody suspects. I say watch the gold market, watch the EU, and watch England. They are making noises about jumping the dollar ship and moving into the EU. Further, watch the settlement of oil. If that moves towards the Euro then the writing is on the wall.

One other factor may also surprise people. The stock option plans of the tech companies creates a bookkeeping profit only if the prices of these stocks continue to rise. Here is how it works:

Company A hires employee for less than good wage with stock options. Employee A sees that stock rises and exercises options. Company A gets to expense at the tax rate of the employee the amount of the options exercise and puts the cash from the sale of options into its bank account. Company A profit rises as a result of the write off. Now, if the stock doesn't go up, Employee A doesn't exercise his or her options. Company A doesn't get the cash, doesn't get the write off, and their profit is reduced accordingly. Profit goes down, stock price drops further.

If the company isn't making a profit then the pattern intensifies.

Combine these factors and the rosy outlook of the US economy becomes somewhat susceptible to foreign inflow of cash and an ever rising high-tech stock market. Combine that with a competing Euro for world reserve currency status that will orphan lots of excess dollars whose sole purpose was a reserve of a foreign CB. When that money needs a home, where will it go? The US.

When that situation reverses because of the liquidity that is constantly being pumped into this market dries up then this could turn out to be worse than the crash of 1929. Keep in mind that the 30-year old stock broker has never seen a bear market, never seen a depression or a recession and never handled a one-ounce gold coin. That tells me since they have been trained to buy on dips, they may just buy all the way down on the dips of the big dipper. Interesting thought anyway. I know that I have held stocks down to a low, in hopes of a reversal, and I did it even knowing about recession and stock collapses. What of the 30-year olds out there. Are they that smart they will know when to get out of a down market? Not.

No, somehow, we have gotten used to an ever increasing stock market that now can't afford to go down. When the momentum dies, then so will lots of wealth. The market is friendly to the least amount of people possible. When the market breaks that rule then it is time to turn on the bear sensors. Beware the Ides of March not to mention any oil disruptions as a result of Y2K glitches (FED EX already announced a 3% surcharge on shipment prices as a result of high oil prices).

lamprey_65
(01/04/2000; 00:39:45 MDT - Msg ID: 22210)
Sound Familiar?
http://www.gold-eagle.com/editorials_00/hickel010500.htmlA nice summary of the market/gold/euro

L.
Simply Me
(01/04/2000; 00:44:48 MDT - Msg ID: 22211)
The Fed's Unseen Assailant
Hello all,
Since I usually only get to read the day's posts after everyone else has gone to bed (the effort is always well worth the loss of sleep), everything there is to say (on a level I'm capable of comprehending) has usually been said.
But tonight, a thread has been left hanging that intriques me. MK referred to:
FOA's #21792:
"Back to your (Oro's) thinking; notice how the Fed is still pumping money even after the year turn over! The liquidity squeeze is arriving and it has nothing to do with price inflation, Y2K or the stock markets. Another force is at work in the world today and it is attacking the dollar behind the bushes."
Please, bear with this train of thought that really has no substantiating facts or logical conclusions. I am trying to follow hints and inuendos concerning actions that are hidden.
There is a "war of currencies", yes? In this war, the Fed is a VERY LARGE and powerful foe, yes? Therefore, one must engage in guerilla tactics...never engaging the enemy face to face. (Lao Tsu; Only fight battles you can win.)
The Fed, and thereby the US Dollar, has been placed in an unusually vulnerable position: [1]Ballooning stock market with political (election year + Y2k vulnerability) blocking any possible graceful retreat. [2]Liquidity (life's blood) pouring out all over the place! [3] Internet stocks holding up appearances while being leveraged paper thin. Bought with signature loans, repayable with nothing tangible! [4] Gold maneuvered into a range where, if it goes up or down the game is over. Up and the miner's get shaft...Down and Asia is ready to buy with both hands.
It seems to me the Fed (the Dollar) is bound and gagged, has an artery cut, and is hanging over the edge of a cliff! All done with the artful use of opportunity, leverage (meaning balance, not loans) and skilful hiding of one's moves (or motives)until the point where they are unstoppable. It also reminds me very much of ju-jitsu, where the skill and knowledge of the smaller, weaker opponent overcomes the brute strength of the attacker. Although, I readily admit, the moves may only be hidden from me!
It seems to me, though,an excellent time to administer the "coup de gras"...before the giant can regain a foothold on the cliffside, climb to safety and staunch his wounds.
Whoever is "attacking the dollar from the bushes" might even be clever enough to get the giant to commit "hara kiri" in dispair! Would it be stupid of me to suggest that maybe a forced "rate hike" at just wrong time will do it!?
Then some mighty fine gold mines will belong to whom?
OK, so I'm no economist. Maybe I'm just plain nuts to try and figure out what's so well hidden from general knowledge. But as long as I still can't figure out derivatives, I might as well try to see what's moving in the shadows behind them.

Rock covers paper. Physical Gold wins everytime.
simply me

SHIFTY
(01/04/2000; 01:09:26 MDT - Msg ID: 22212)
Simply Me
Im left wondering if the Fed's wounds are not self inflicted.
Simply Me
(01/04/2000; 01:09:33 MDT - Msg ID: 22213)
Gold $283 at London Open 1/4/00...Ouch!
Sure hope that's paper I smell burnin'!
SHIFTY
(01/04/2000; 01:16:22 MDT - Msg ID: 22214)
Simply Me
What if it is all by design. To bring down the U.S.A. and give us their New World Odor!?
PERMAFROST
(01/04/2000; 01:44:52 MDT - Msg ID: 22215)
TownCrier re Msg. ID: 22114
Thank you Sir for the information. No, it was not a trick question. I'm not familiar with American gold coins as my interest in them coincided with the years I lived between France and Constantinople. As for the mintage year, I thought that its being out of production might make it more valuable. Apparently not the case.
Looking forward to reading your regular posts!
Simply Me
(01/04/2000; 02:27:21 MDT - Msg ID: 22216)
Shifty
Nothing left to do tonight except tease the paranoid?
I'm not such a nut case in real life. But the stuff I know about aren't subjects for this forum (nothing kinky). I'm just doing the best I can to participate. Who knows, one of my crazy ideas may spark a direction of discussion no one thought of before!
simply me
simply me
Black Blade
(01/04/2000; 02:29:01 MDT - Msg ID: 22217)
Pass the rolaids and asperin please!
Au down -$7.25 at $280.55, T-Bonds trending lower, and s&p futures off -3.20. It looks down-right ugly.
Simply Me
(01/04/2000; 02:38:18 MDT - Msg ID: 22218)
Black Blade
http://www.usatoday.com/money/charts.htm#SP500_GOLDWierd. These charts put Feb. gold at $866.61 and Oil at $42.75. Probably not true...but a lot more fun to look at than Kitco tonight!

It's a good time to say goodnight.
Hoping for better tomorrow.
simply me
nickel62
(01/04/2000; 02:51:39 MDT - Msg ID: 22219)
Simply Me
I liked your post for its honesty. You of course know that most of us are as confused most of the time as you claim to be. I took heart a few years back when both George Soros and Allan Greenspan admitted that they didn't really understand derivitives either.
Farfel
(01/04/2000; 03:23:36 MDT - Msg ID: 22220)
Wall Street/Clinton Spinmeisters Target Gold for Drop Today
Gold dropping like a rock tonight. It would be scary if it were not so damn funny.

You see, it works like this: if there had been any notable significant infrastructural y2k problems, then Wall Street and its subsidiary media whores would have stomped on the gold price, claiming that the current low gold price already discounted EXPECTED y2k problems, and now that the news was in, it was time to sell the yellow metal. The old adage, "Buy on the expectation, sell on the news," would have been heard all over The Street by each and every heavily gold short bullion bank.

Of course, the dominant spin today will be that everybody in America/the world is selling his/her gold because Y2k proved to be no more than a fart in the wind. Forget that such spin completely contradicts the earlier mainstream media spin claiming that the populist and institutional y2k gold purchases were relatively insignificant, especially in comparison to recent Bank of England gold auctions.

Remember, we are living in a New Paradigm whose hallmarks are the complete absence of so much as a single scintilla of logic...the proffering of one oxymoronic statement after another...the requirement that the American public's collective memory MUST never extend beyond one week (at best).

As a nation, America is fast moving into a final vortex of unbridled mania...a final frenzy of mass indulgence and social depravity never before seen in the country. With madness spilling over, all standards must be subverted and revoked. And GOLD remains an historical standard that must be overthrown if the current Establishment is to have its way free of all societal restraints.

Gold remains in a lose-lose situation because, no matter what the outcome, the Wall Street/Clinton spin machine always looks at the glass as half empty where gold is concerned.

So witness gold as it is sold down in paper terms today by those Establishment interests who have no dearth of official American paper by which to effect such sales Yet realize that nothing has changed! The gold short position is still a physical position. It requires obtaining physical real AVAILABLE gold to cover that position and there is only a small amount readily available relative to the astronomical gold short position.

At some point in time, some powerful entity or some shrewd collective will step forward from left field and make a grab for that physical gold, demanding to take delivery. Nor will they need any y2k scares to inspire them to make such a dramatic move. Instead, simple basic logic, common sense, and an overwhelming profit motive will drive them to do it. When that happens, all hell will break loose.

Those who panic and dump gold in order to chase hot air Ponzi schemes on the NASDAQ are not simply abandoning a metal...they are abandoning the last vestiges of logic and sanity with it. You can call basic logic or good common sense or pragmatism an OLD PARADIGM or any other pejorative. But words alone will not kill the heart of reason. It will survive, it will resurrect, it will have its day again. Without reason, there is only chaos, the pre-Millennial madness that now spills across the American nation.

The problem with "thinking OUTSIDE the box" in terms of each and every action in life is this: castles in the air, New Paradigms, and dreams are necessary ingredients in life, but they are not sufficient. Humans greatly need some historical standards, they crave some absolutes, and any new fashionable mass intellectual movement that threatens to eliminate them altogether does so at its own risk.

Thanks

F*
CoinGuy
(01/04/2000; 03:51:19 MDT - Msg ID: 22221)
Farfel, and an update...
Farfel,
I concur wholeheartedly with your posting, but I do believe we have become a society of risktakers, or fools, whichever term you prefer. I have neighbors that just moved into my neighborhood, new houses go for 325-500K. Their forgoing new furniture so they can put all their money in the market. They only put %5 down on the house...enough said.

S&P futures down 12 at last check, with a fair value of +3.92. Yield on the long bond, still ugly. Gold spot bid down 5.92 at 281.88. Overseas markets down anywhere from %1 to %3. CNBC seems to be mentioning the world is worrying about a rate hike in the US. I'm going to have to agree with Stranger, the bond goes to %7 in no time flat...Before or after the FOMC, I don't know.

screw the asparin and rolaids, I own physical...

CoinGuy
tedw
(01/04/2000; 04:50:45 MDT - Msg ID: 22222)
Y2k
Http://www.usagold.com
I was wrong about Y2k and I apologize to anyone that may
have been harmed in anyway by anything I posted or any links
I provided: (especially Jim Lords Newsletter).

Jim Lord,Worldnetdaily, and Gary North did not due their due
diligence (in my opinion) especially in regards to embedded
chips.

So, again I apologize, I relied on their advice and I should not have done that.

PERMAFROST
(01/04/2000; 05:31:50 MDT - Msg ID: 22223)
Thanks beesting and Gandalf the White...
...for clarifying the issue on that 1/2 oz. coin. I paid 200 dollars for it after haggling a bit with a local merchant. It was my first coin purchase since 1987....
It loooked so beautiful amogst all that nondescript Middle-Eastern jewelery I couldn't resist!
RossL
(01/04/2000; 06:00:46 MDT - Msg ID: 22224)
Permafrost

The earlier American Eagle coins with the Roman numerals are beautiful works of art, aren't they? I have one (1/2 oz.) coin from the first year. I don't know if that one is low mintage or not, I'm having trouble finding an online price guide for bullion coins.
I wonder why the mint dropped the Roman numerals in the 1990's? Too confusing for the masses?
Hermit Club
(01/04/2000; 06:07:16 MDT - Msg ID: 22225)
$billions return to fed?
www.cnn.comno message
Hermit Club
(01/04/2000; 06:09:57 MDT - Msg ID: 22226)
again
http://www.cnn.comtest
ORO
(01/04/2000; 06:15:22 MDT - Msg ID: 22227)
tedw - hold your fire
Before falling on your sword. Take into consideration that the fears were justified, though repairs turned this corner better than one could have expected. I can now say with certainty that the process control industry can now join the rest of computerdom in putting in last minute, or rather after last minute, fixes in. We are now ready to start remediation of Y2K on a full scale, fixing the small problems.
As far as the rest of the problems - including embeded chips - they were never supposed to keel things over in their entirety. Definitely not at once, and not at the date receiving so much attention. Only the chips with longer horizons than a day had any reason to keel over - the ones controlling service functions rather than the process. Even so, failures that have occurred, were probably overcome through workarounds prepared long ahead of time.

One of the things I think occurred, was that a methodology of running fixes for problems on a fix on fail bassis, but on running parallel copies of systems and system simulations some few months ahead of the actual date. This should have helped immensely, so long as they are actually ahead. Whether they will manage to keep ahead is another question altogether. Let's hope so. Larger corporations that have started on this early are only 6 months ahead.
Hermit Club
(01/04/2000; 06:25:03 MDT - Msg ID: 22228)
Just a thought...
Would the drop in gold be because many are selling their paper gold holdings? who's buying it or are they just getting dollars for their paper contracts?
PERMAFROST
(01/04/2000; 06:29:43 MDT - Msg ID: 22229)
Cavan Man...
I'm presuming your message was addressed to me. If so, thanks for the kind words.

As to the gist of the matter, the "background information" you inquiried about: the things I say are corroborated by sources as disparate as Karl Marx, common sense and the Bible itself. In fact, the holy book strictly prohibits usury--you know, that stuff you call T-Bonds, repos et al. In effect, our present-day financial system is wholly antinomic to Christian (or Jewish or Moslem for that matter) ethics, being nothing but an upside-down pyramid built on a mountain of debt.
I have the inkling that the bit about perpetual fluctuation
and instability being what generates "profit" is what got your intellectual eye blurry. I'll illustrate my point with two anecdotes: one referring to an actual recent crisis; the other, my personal musings as to why money (paper) and economy (wealth) are incompatible. [I consider gold to be a form of wealth and not a mere "medium of exchange" or "unit of account".]

Remember the Asian Crisis of '98? Here's what happened in a nutshell.
A) The Western banker chants the mantra of the "formidable Asian Tigers" and tells the Asian boys: 'Good boy! here's a loan denominated in dollars; go and build a factory with it!' RESULT: interest earnings on loan start accruing. [fluctuation/profit #1] B) The same banker cabal borrows from, or jawbones into printing, local Asian currency from the same (stupid) Asian which they swiftly proceed into selling short against the dollar making a killing on the FOREX. [fluctuation/profit #2] The new mantra now is, "too
many factories!" C) The Asian can no more afford to service debt denominated in USD due to the crash of his national currency; goes bankrupt. RESULT: the very same banker cabal that loaned them the money for the factories in the first place buys them back at fire-sale prices, say, 10 cents on the dollar [fluctuation/profit #3] PROVIDED D) even the 10 cents must come out of someone else's pockets in the form of an "IMF bailout package" [fluctuation/profit #4 E) The IMF loans really are taxes on Western citizens which are surreptitiously levied on them by the selling of bonds (borrowing money) in THEIR name by their respective governments. [different terminology for fluctuation/profit #4] F) Now Americans start paying interest on loans they did not take to build factories they do not own. [fluctuation/profit #5] AND ALL THIS IS TRIED-AND-TRUE OLD-FASHIONED STAID "FINANCIAL ENGINEERING"....
I'll post the next in a little while...
Cavan Man
(01/04/2000; 06:51:46 MDT - Msg ID: 22230)
PERMAFROST
Not sure what post of mine you are referring to. Sure glad you joined the discussion here. I'll do you one better; would you agree that the gold and silver formations on this planet were put here for a reason? Just curious.
Al Fulchino
(01/04/2000; 07:22:33 MDT - Msg ID: 22231)
PHinLA and Tedw
http://hv.greenspun.com/bboard/q-and-a.tcl?topic=TimeBomb%202000%20%28Y2000%29PH, I agree it would seem not to be Another, but take a look at the link above. I thought maybe FOA would shed some light on it. Either way, it is not really anything new as far as content. But simply a curiosity at this point.

TedW,

Takes a lot of character to apologize. But! 250 Billion dollars WERE spent. It never was going to be teotwawki, but like you, I prepare for inclement weather in the winter, and when I get a sixty degree day like yesterday and today, I take my jacket off and enjoy the respite. To be honest, I now have such a nice security blanket now that I am thankful for y2k coming along.

Best to all and nice to see your writings again Aristotle.
Ray Patten
(01/04/2000; 07:31:49 MDT - Msg ID: 22232)
Crude oil rally...

Does anyone know if there is any particular reason why crude oil had a 70 point rally from last night's low. I've searched some news sites but can't find anything.
PERMAFROST
(01/04/2000; 07:43:18 MDT - Msg ID: 22233)
Now the second one...
I shall briefly state why I disbelieve that any form of a financial system that assimilates to any degree fiat money and its concomitants (the bond and stock markets) cannot cohabit the same planet with a real, self-sustaining and stable economy.

A stable economic environment proscribes EXCESS REVENUE OR GROWTH, which are necessary conditions to turn a profit. Such a situation is anathema to the financial markets because it eradicates the very reason to invest in them: the potential for profit. Who would put money in a stock with ZERO yield or capital appreciation?

For here's how a truly stable economy would function.

Let's scrutinize the basic economic process in a barebones paradigmatic model of such a system. Let us postulate that there is a demand for good or service X and its production is our ONLY concern--the satisfaction of the consumer/citizen. To produce it necessitates 1)Investment in infrastructure including factory, roads, utilities, education for the work force etc. 2)Paying the salaries of the employees, from blue-collar to highest management-level white-collar; 3)Incurring distribution/marketing costs. IF all the aforementioned were so achieved as to generate enough return on capital to make reinvesments to compensate for depreciaton and redundancy of assets of production AND continue paying the workers' wages; in a truly free market [not "free" to the extent that it impinges on basic human rights and needs] where various enterprises compete against each other without any unfair market manipulation present, an equilibrium price will naturally assert itself WHEREBY ALL THE AFOREMENTIONED CONDITIONS ARE FULFILLED AND PRODUCT X IS MANUFACTURED/REALIZED----BUT----Such an economic model that caters solely to the material satisfactions of man, PRECLUDES PROFIT, or unnecessary growth and excess revenue, which, in financial terms, correlates to the charging of a price for product X that is higher than the equilibrium price.
No one one in their right mind would invest in financial instruments related to such a "business"; but, deep in their hearts, I sincerely believe that everyone would like to work in one--or at least have one in their town.
I assure you, I didn't smoke NOR inhale anything!
Nor do I think it's a "utopian" dream. I think this is what the economic workings of a humane society could look like.
Goodnight everyone!
PERMAFROST
(01/04/2000; 07:46:33 MDT - Msg ID: 22234)
Cavan Man
I'll up the ante: How do you know that you know?

see you tomorrow!
ORO
(01/04/2000; 08:09:17 MDT - Msg ID: 22235)
Talking Physically.
FOA (01/01/00; 14:42:33MDT - Msg ID:21993)
--->All the while, the bullion buyer slowly amasses a large "highly leveraged" position, just by channelling his would be trading loses into paid up physical and rare gold coins.

FOA has clarified the issue further, but I will post this anyway.

In the way of clarification for others, I think FOA is trying to tell us that the leverage is indeed there, just that when one buys bullion without leverage, the leverage you have is that put against you by the couner pairs to your "cash" position. Most notably, the counterparties in a typical gold transaction have claims traded among themselves and physical gold sold into the market. The trades involve a lender, a borrower, a bullion bank, and a physical buyer.
--The bank is both long and short gold denominated or gold indexed obligations. This is a complex multiple contract position. More on this later.
--The borrower is short "physical" which is due for delivery. This is a contract obligation. Gold miners and bank trading desks, as well as speculators hold these positions.
--The lender is long gold denominated obligations. This is a contract position. The contract is as good as the counterparty. If you own a gold account, or are long a derivative contract, this is what you have.
--The cash buyer holds gold bullion and is obligated to nobody. His holdings do not rely on anyone fulfilling an obligation.

The leverage built into the market, which we goldbugs will benefit from in the long run, is that of the many obligations denominated in gold. We need not buy leveraged instruments, because the leverage comes from the extreme volume of gold obligations issued within the "paper gold" trading arena described above. The same elements that make gold an attractive investment at this time and a long term store of value (over a lifetime), particularly during banking crises, make the various forms of leveraged gold unattractive. One should note the point of gold being protection from an environment of default on obligations. The same obligations that gold derivatives are.

The most important aspect of gold as financial disaster insurance is that it is immune from default. The second point, particularly important for the gold mining investor, is that in financial crissis, desperate governments are prone to disregard the property rights of large holders of industrial assets. The most captive form of industrial asset are the mine and the oil well. The most attractive asset for taxation and expropriation in time of crissis is a gold mine. Very large hoards of precious metals may prove attractive to a government seeking survival. The small hoards remaining in the West are not attractive targets.

The use of gold futures and options in the battle for financial self preservation during a financial crissis is equivalent to a knight charging at his enemy with a shaking kielbasa. Gold mining shares are similar to waving one's title to the land in face of the Mongol horde's charge. Wouldn't it be rather smart to hold a sword on top of the ramparts of a castle?
Taking our little Midieval setting further, one does not complain of the building of the castle, though long after its construction came no attack. The expense of time and effort, of missed opportunities and reduced performance will come to be appreciated when disaster strikes.
ORO
(01/04/2000; 08:16:45 MDT - Msg ID: 22236)
A (bullion) BANK NOTE
A note about the implication of the banker's situation: through the banker's borrowing and lending, all modern bullion owned outright has an equivalent part, nearly three times larger, of paper gold. The bankers have formed a 60,000-80,000 ton gold banking system using 20,000 tons of gold, most of which is now held by "cash" holders.

Common estimates of private gold bullion holdings available to the financial markets, most notably the one produced for the Fed in 1997 (estimated for 1995), put the gold at 20,000 tons. I have reason to believe that there are 10,000 tons more, bringing the total to some 30,000. I will not go into the iffy details of the estimate, but note that one of the major components is "Yamashita's treasure", which has been in the gold markets since 1984, some of it even before that date. Whenever stories come up about the reappearance of that hoard to act as an overhang on the markets, you can rest assured that it has already been introduced to them in its entirety. These 10,000 tons are in "semi-official" hands of Royals of the Oil countries, the Vatican. Much of the rest of the remainder (once the gold jewelry deficit is accounted for) sits in Rothchild vaults, and a few other large holders, "giants" much as described by FOA and ANOTHER.

The volumes of gold paper traded by the LBMA become much clearer when taken in context of the gold banking system rather than in context of annual gold production. The 1000 tons traded daily are well proportioned to the normal trading patterns in currencies. Eurodollar interest derivatives constitute about 5.5 $T traded on New York exchanges, and another 55 $t or so are traded OTC with 62% netting (figures are from memory so don't shoot me if I'm off a little) bringing it to 19 $t. This is equivalent to the estimated 21 $t in Eurodollar debt outstanding (my estimate). This comes to 7%to 7.5% of outstanding positions traded daily. Applying this proportion to the gold market's 1000 tons, one comes to 14,000 tons of net debt - the same kind of debt as Eurodollar debt. This is debt generated by the sale of physical gold in the four part transactions.

While the physical supply actually went into hoards of all sorts, the paper remained circulating in the markets. The gold accounts now stand at an incredible level of over 40,000 tons by my reckonning. Nearly 30,000 tons are owed by bullion bankers directly - without counter obligations denominated in kind. They have only 4,800 tons in credible gold mining company obligations, and another 9,000 tons were borrowed by speculative funds playing the carry trade. The remaining reserves, some 10,000 tons, can not be used to pay off the gold denominated debt because the reserves are mostly borrowed and must be kept on hand to cover obligations to Oil Royals (the major lenders of these reserves). Of the other 20,000 tons in private gold hoards, only 6,000 remain in private hands outside of the Bullion banking system. 14,000 were supplied to the market over the years, and hang around the necks and in the noses and from ears of a billion people. The total commitments of bullion banks (including derivatives) are most probably around 60,000 tons, with an imbalance of some 35,000 tons, where gold was "borrowed" by the bankers (in reality only dollars arrived at the bank for most of this, and the bank issued a gold denominated obligation), and the lending by the bankers was in dollars.
Their remaining gold denominated assets:
- Gold reserves are 10,000 tons, (I hope)
- mining company obligations are at 5,000 tons,
- Speculative fund obligations are 10,000 tons.
The remaining counters to the bullion banker's gold obligations are denominated in currency.

Physical gold lent TO bullion banks, about 25,000 tons.
Physical gold lent BY bullion banks, about 15,000 tons.
ORO
(01/04/2000; 08:20:41 MDT - Msg ID: 22237)
SteveH - historical commets to one of your previous posts
SteveH

--->As a result of this default, the Jamaica Accords saw the demonitization of gold and an allegedly secret deal that would keep dollars strong and gold weak while the Arabs become the Fanny Mae, Freddie Mac of paper gold delivery contracts from large mining companies. In other words, the Arabs were able to take long-term delivery of gold mining production while the dollar was kept strong and oil kept low as the Arabs were able to buy cheap gold with cheap dollars. This is the reason, again per some experts, that gold has been held down and actually dropped over the period of 20 years since 1979.

I think there is a small error here. The gold miners had only minor involvement in the 1976-1980 period. The thought seems to have been that the bridge to gold would go through oil. However, physical gold was being bought by Oil Royals, paper and physical were bought by westerners. By 1971, oil was the largest component of international trade as measured in dollars. The major reason Europe went along at that point was because the new format allowed European countries to use dollars accumulated over the 60s and then in the 70s to buy something they needed, oil. France was building nuclear plants and needed much less coal and oil than other European nations, and thus found less to be gained from the arrangement than its neighbors. In 1976-80 gold and oil continuesd to trade in tandem as the Fed continued to raise the float through the end of 79. All that was needed in order to stabilize the dollar was a direct relationship between the three components, oil, gold, dollars. Prior to 1971, gold was tied to the dollar at a fixed amount - allowing central banks to arbitrage between them. Already in 1969, oil was trading for dollars exclusively. The dollars were traded for gold and for whatever other economic needs the Arab oil countries had. Up to 1976, the situation was out of control, the gold auctions by the IMF were not helping the situation because they allowed the investing public to see the bids coming from private investors and Oil Royals cashing in their oil dollars.
After 1976 (Jamaica Accords) the US was to put its house in order and straighten out its trade deficit. Carter made serious efforts to have that happen. Among other things, the agreements required less foreign expenditures on arms - meaning less arms purchases by Israel, which brought about the peace with Egypt, which was pushed by the Oil states into a peace that assured Saadat's political death. The defense expenditure of the US fell significantly at that point. Carter attempted to bring US exports to balance with imports. But all was to no avail, because of the physical needs of the baby boomers and women coming into the workforce as a result of the splitting of households (divorce and gays ceasing to mary) and the change in attitudes towards women working. The new workers needed cars and oil to get to and from work, and needed new housing and furnishings. This had to come from somewhere, it came from abroad. Furthermore, the Carter administration and the Burns Fed did not want to raise real interest rates because of fear of returning to massive riots still fresh in the minds of politicians who lived through the late 60s. In 1979, new household formation tapered off to a steady rate, as demographics no longer pushed in this direction.
By this time, oil was in the sky rising beyond $40 after the Iranian revolution. Less developed countries were sinking quickly into debt spurred by arteficially low US rates and the need to obtain oil. At the new prices, gold proportions to the Fed's dollar float were back to the original ratio of backing. New gold exploration was coming up with great new finds in North America, and gold reserves in South Africa had increased. If oil conversion to gold were to be done just a few years down the road, the gold could be obtained at a lower dollar price. The North Sea oil was found and Mexican Gulf oil was found, which allowed some leverage over OPEC. A new arrangement could be assembled. The terms were as follows (as far as I could ascertain):
-The US will put the dollar float undertight control.
-Interest rates in the US would be sufficiently high to force dollar debtors to absorb new dollar creation (in the form of new debt and US trade deficits), whether within the US or without.
-The dollar float would be backed by private gold debt, to be purchased at a regular quantity in proportion to oil sold into the markets by the OPEC countries.
-The accounting for gold purchases would be maintained outside the markets at an official price related only to this arrangement. (In a way, the "right" to buy certain amounts of gold were traded at a high premium to market prices of the gold being purchased.) Keeping tight reigns on gold demand.
In this way, a fixed arbitrage could be maintained between oil, gold, and the dollar, though they were all floating in the markets. The arbitrage was available only to central banks. The tight money would assure Europe of a sufficient return on dollars so that non-US and non-oil goods could be obtained from third parties at favorable exchange ratios.

This arrangement was functioning quite well but for one hitch. The oil to gold ratio could not be maintained. The rapid development of Japan and emergence of Asia, had brought new demand for oil along with the dollar debt of Asia (contrary to South American debt and World Bank loans, this was invested in useful productive capital). Oil volumes increased as a result, increasing the amount of gold necessary to trade for it. Much of the expected growth in gold production never materialized. By 1985 global gold production in general, but particularly North American gold production had ceased to grow. Non OPEC oil production flattened, and there was no longer any way to avoid growth in OPEC market share. The gold price of oil had to be reduced without the markets being aware of the result.
Note on Japan: Japan had decided to maintain trade surplusses with the US in return for greater US defense expenditure in Asia, and maintenance of steady oil supplies

Interest rates needed for the maintenance of dollar demand were too high for US banks to grow, and Emerging Market economies were severely strained by the burden, and near default. The default would have eliminated future dollar demand, and undermined the arrangement. As interest rates were lowered in the US to combat this problem, the dollar plunged and gold prices started rising. The credit markets needed to come back to equilibrium. Japan lowered rates and the Fed raised rates through 87, but the dollar was not helped sufficiently, and the dollar rates were too high for the US, creating a liquidity shortage that the monetization limits prevented the Fed from solving. In 1987 Europe (Germany) refused to cooperate to help. The US equity markets tanked. A new plan was necessary. The arrangement was about to collapse.

To accomodate the reality of interest rate needs, the arrangement was modified to allow for a higher off-market gold price (lower oil price as denominated in gold), and an extension of the buying period for gold. One key aspect was that Europe would guarantee gold accounts and forward contracts, in effect setting of gold interest rates by acting as lenders of last resort to the gold banking industry. Europe had to start taking aggressive action to unify and issue a single currency that could serve Europe and its trading partners.
ANOTHER and FOA tell us that the studies of monetary history in preparation of the single currency negotiations revealed that there was not a single case of a paper currency surviving long term. The conclusion was that even if the politicians doing the negotiations and coming to agreement don't want to talk about gold being involved, the only way to create a common currency with solid fundumental structure was to have it backed by gold. In order to prevent the kind of short term instability in banking arising from the tight control of the gold redeemability standard, the currency was to be let free to float, acting much like a semi-closed end gold bullion fund. Long before things were finalized in the negotiator's minds, the inclusion of gold was already a done deal in the eyes of some of the important parties.

By 1992, the EU accords were finalized, and then written in the Maastricht treaty. Britain came to a monetary crissis by running bad current account balances and had to drop out of the Euro precursor's ERM=Exchange Rate Mechanism.

The low interest rates in the US at the time caused an incredible boom in the Emerging Markets. Gold prices stabilized and then started rising. The EU Central Banks had difficulty in maintaining low gold prices, and so lowered gold interest rates while keeping ex-US short rates high. The result was a huge growth in gold derivatives and gold banking. The gold price surge was capped but the size of the gold obligations outstanding grew tremendously. The Fed raised rates following this, in 94-5 and the Japanese and EU lowered rates substantially, carry trades were put on in enormous proportions, Gold interest rates were so low that the risk of a price rise was outweighed by the great spread on rates. The increases in oil purchases by the Asian nations in the last years of their boom was causing a great issuance of paper gold as the Asians were draining physical supply. The Europeans had to come forward and support their commitments to keep the market going till the Euro was ready for prime time. Had they not done so, the dollar would have imploded as gold skyrocketed in the way ANOTHER indicated would happen, though he talked of this as an imminent event, I think it was a thinly veiled threat rather than an immediate forecast. The threatened gold spike did not happen because of the agreement to assure further lending and some selling by EU member CBs. This continued till 97, whereupon gold tanked because of the cessation of Asian buying, their selling of some of their accumulated gold, and the hysterical hedging by gold miners. At this point, Oil Royals were aware of the disproportionate overhang of gold debt and ceased buying paper gold. The fall in gold prices continued as each new ounce of physical supply was accompanied by an extra ounce of paper gold. The physical gold went away and the paper version continues to circulate, just as Gresham's law would predict.


--->...the Euro is less encumbered with debt than the US is, whose debt is estimated to be 5.7 Trillion dollars ...

The numbers you are quoting are on an original sum bassis. There are no official values available for accrual numbers, which include relending and interest accrual. The IMF and OECD are attempting to assemble the statistics. Simple calculations give the number 21 $T. FOA thinks this is higher, perhaps around 40 $T.

The Market Cap of the US equity markets stands at some 17 $T. Global Market Cap is about 32 $T. Yes, the US bubble is (was?) over half.
USAGOLD
(01/04/2000; 08:42:21 MDT - Msg ID: 22238)
Today's Gold Market: Bug Remediation Times Two
Market Report (1/4/00): When the dollar and U.S. Treasuries took a
major hit yesterday and the financial pundits blamed it on market
remediation of successful Y2K remediation, many in the gold market
braced themselves for remediation in the gold market as well. And
remediation there has been -- almost $10 worth at one point and now it
looks like our old friend -- Yellow -- is saying enough is enough and
has retraced about $3.50 of that loss. We'll see if the bounce becomes a
trend.

Meanwhile, the equities markets have been bitten by a bug of their own
called "interest rate remediation" courtesy of the Fed. Since Y2K is no
longer a problem, the Fed appears to be reaching for the bug spray to
deal with the "maniacs" on Wall Street. Every bug has its day...and its
remedy. At last look the S&P was down a formidable 16.70 on the Globex
and the DJIA was in the usual
"my-computer-trading-program-made-me-do-it" lock step with the S&Ps.
Pass out the gas masks.

Previous to this morning's decline, gold had been on a winning streak
partly because of last minute insurance buying by some of the big
players. They are the ones seemingly unwinding their positions in the
early going. Once its over, the market could actually get back to the
base-building business. The amount of money created by the Fed and
pumped into the economy at record levels is no illusion; neither is the
overblown stock market nor the carnage in the U.S. Treasuries market.

When private investors look around at the investment landscape,
opportunities look a bit on the thin side. A drop in the gold price
might be just what these investors are looking for, hence the early
morning bounce from the lows in New York. $280 looks to be at least a
temporary support zone. One London trader was philosophically objective
about the whole thing: "There is good physical demand all the way
down...but it is still pretty quiet. I think we will wait to see what
New York does. They have not traded since last week," the trader said.
Reuters adds this comment: "Once the current spate of sales are absorbed
the market is expected to recover with the short-term objective seen
around $285.00."

So we watch with interest, holders of the bullion itself -- without
angst, without anxiety, without margin calls....

That's it for today. We'll see you here tomorrow.
beesting
(01/04/2000; 08:54:10 MDT - Msg ID: 22239)
Why is Gold taking a hit right now? Some speculation!
http://quote.yahoo.com/m2?uThe European and America's stock markets are all in correction mode, see above URL. It had to happen eventually.

Now, many here believe the Gold markets are manipulated, by the big boys with the solid approval of the US FED. With that in mind, as the stock markets correct in order to prevent a mass exodus from stocks into Gold, the "spot" Gold price is forced down big time to give the illusion that Gold is not a good place to store assets, looking for a home.
If Gold was climbing real fast today, it could spark a landslide correction in stocks.Follow the mob mentality.

FWIW......beesting.
The Invisible Hand
(01/04/2000; 09:03:09 MDT - Msg ID: 22240)
TB 2000
http://hv.greenspun.com/bboard/q-and-a.tcl?topic=TimeBomb%202000%20%28Y2000%29PH in LA,
This should be the link
SteveH
(01/04/2000; 09:06:15 MDT - Msg ID: 22241)
Beesting
Agreed. Except I believe that gold is so far off most everyone's radar screen that they aren't even looking. Now if gold did another $85 rise and then another $85 rise then I think people would sit up and take notice.

beesting
(01/04/2000; 10:00:31 MDT - Msg ID: 22242)
To FOA
http://www.bis.org/index.htmSteve H- "Good one #22209!"
ORO- Great posts today--Thank You!!

FOA, I have researched the above URL "BIS" site, and my conclusion is, the BIS only conducts business with Central Banks. So, in the recent Dutch sale of Gold, and future Gold buying by the BIS, ALL that Gold would stay withen the Central Banking System, and have NO effect on world "normal consumption" of Gold.

FOA, do you agree with that analysis? Or, do you think the BIS could enter the world Gold market, replace the LBMA, and buy and sell non-paper Gold only?

In My Opinion it would be a large European Bank that would first compete with the LBMA, and then after a collapse of paper Gold, join forces with The LBMA, sometime in the future.

Your thoughts and opinions are always greatly appriciated....beesting.
mhchuck
(01/04/2000; 10:19:30 MDT - Msg ID: 22243)
ARISTOTLE
Aristotle

Thanks for the (what should have been unnecessary) clarification of your thoughts, I did get defensive at the nature of your inquiry because I didn't know the specific "failings" of the Bretton Woods, or the Pre -1933 Gold Standard you requested of me. I should have pleaded my ignorance in the matter.

Sorry I didn't read your Keynes comment in the nature you intended it, but more as a personal criticism. Had I read your words carefully, I wouldn't have made the mistake. You were making a good point, and It was discussed in subsequent posts, that maybe Keynes was indeed the "outright" greater villain (sans even the "wink" and the "economics forum" consideration.)
I regret and apologize for my misunderstanding you.


It seems to me that these so called "monetary scientists" are practicing in a discipline that just won't give itself over to the term " science." Too bad for them...and sadly, tragic for the world.

I contend that the transition to the era of "managed finance" at the expense of "honest money" i.e. the gold standard, was made to accommodate (allow pilfering privileges to) bankers and statist politicians. This is corrupt and dishonest, and has spawned innumerable forms of corollary dishonesty and corruption. While some might say "That's life, we have to live with it," Others, like REP. Ron Paul, of Texas, introduced a bill in Congress to abolish the FED.

The blueprint for this state of affairs crystallizes in the writing of Keyne's. What does this have to do with gold? Plenty, I think, since Keynes was not a friend of gold in the least.

mhchuck.
mhchuck
(01/04/2000; 10:30:29 MDT - Msg ID: 22244)
John Meynard Keynes: The Banker's "Machiavelli"
From 1930..."But we may remind the reader of what he knows well--namely that gold has become part of the apparatus of conservatism and is one of the matters which we cannot expect to see handled without prejudice. One great change, nevertheless--probably in the end, a fatal change--has been effected by our generation. During the war individuals threw their little stocks into the national melting-pots. Wars have sometimes served to disperse gold, as when Alexander scattered the temple hoards of Persia, or Pizarro those of the Incas. But on this occasion war concentrated gold in the vaults of Central Banks; and these banks have not released it. Thus, almost throughout the world, gold has been withdrawn from circulation. It no longer passes from hand to hand, and the touch of the metal has been taken away from men's greedy palms. The little household gods, who dwelt in purses and stocking and tin boxes, have been swallowed by a single golden image in each country, which lives underground and is not seen. Gold is out of sight-gone back again into the soil. But when gods are no longer seen in a yellow panoply walking the earth, we begin to rationalize them; and it is not long before there is nothing left.

.....It is not a far step from this to the beginning of arrangements between central banks by which, without ever formally renouncing the rule of gold, the quantity of metal actually buried in the vaults may come to stand, by a modern alchemy, for what they please, and its value for what they choose. Thus gold, originally stationed in the heaven with his consort silver, as sun and moon, having first doffed his sacred attributes and come to earth as an autocrat, may next descend to the sober status of a constitutional king with a cabinet of banks; and it may never be necessary to proclaim a Republic. But this is not yet--the evolution may be quite otherwise. The friends of gold will have to be extremely wise and moderate if they are to avoid a Revolution."

John Meynard Keynes.

mhchuck.
beesting
(01/04/2000; 10:34:46 MDT - Msg ID: 22245)
CRASH-TIME!!
http://biz.yahoo.com/rf/000104/to.htmlThe London FTSE ends with record point loss!!!
Down 264.3 a 3.8% loss.
Eclipsing the 250 points lost in the 1987 crash!
Article goes on to say,"It's no big deal, only a small correction."
US Stocks are currently nose-diving also!
Keep the faith people, Gold WILL have it's day.....beesting.
CoinGuy
(01/04/2000; 10:47:08 MDT - Msg ID: 22246)
TedW
TedW,
I'm impressed by your forthrightedness, but I think it was uncalled for. I don't think any person knew for sure what was going to happen with Y2K. I respect your willingness to step out and show concern for other peoples welfare. I thought "the bug" could have been a heck of an event as well.

I appreciated all of the articles that were posted here on Y2K(yeah SteveH, you too). They were informative, and got me off my duff to do a little preparing for myself. I learned that it's nice to be more self sufficient. I guess that's why I own gold.

get physical, Armstrong did...

CoinGuy
Cavan Man
(01/04/2000; 11:06:27 MDT - Msg ID: 22247)
Whither gold?
Noon CST

DOW -251
NDQ -125
S&P -38
beesting
(01/04/2000; 11:22:45 MDT - Msg ID: 22248)
Margin Calls Initiated!!
http://quote.yahoo.com/q?s=^DJI&d=tI don't think the PPT can stop it today!
ALL US Stocks Plummeting today!
Today may be known as Black Tuesday with over 2 1/2 hours of stock trading time left.
I'm sure glad I don't have my life savings in stocks, right now!!

Those in the Know.....Buy Gold.....beesting.
silent runner
(01/04/2000; 11:36:42 MDT - Msg ID: 22249)
i confess. i started the meltdown.
being overloaded with gold and silver bullion i decided to buy into a mutual fund. i thought it was sound 20%gold 5%silver all physical purchase and held by the fund the other 75% was made up of 15%aggressive growth stock and solid conservative placements. sorry everyone, oh well if the fund performs as described the metal should make it hold its own. fund sign is prpfx
beesting
(01/04/2000; 11:37:03 MDT - Msg ID: 22250)
For those that insist on staying in Stocks!
http://quote.yahoo.com/q?s=GOLD&d=1dGold Fields Ltd. (NASDAQ -[GOLD]) is up 2.10% for the day!
Those in the Know....Buy Gold.....beesting.
TownCrier
(01/04/2000; 11:41:37 MDT - Msg ID: 22251)
Fed stays on sidelines today in both open market operaions and reserve adjustments via RPs
http://biz.yahoo.com/rf/000104/js.htmlIf you read this article you will see that economist don't have a clue as to what prescription is called for at this time. If the "experts" can't see what must me done (add vs. drain reserves) we are surely on thin ice of some sort.
Blue Sky
(01/04/2000; 11:48:42 MDT - Msg ID: 22252)
Y2Koed,
My computer must have taken a shot to the brain..couldn't pull up the forum..thought it was down.. last post I could get was Dec. 31 A.M.....My bookmark was wrong, or did the url change? I was out of loop quite abit in Dec..
Happy to have found my way, started withdrawal symptoms.
B.S.
nickel62
(01/04/2000; 11:51:15 MDT - Msg ID: 22253)
ORO
Your analysis as usual is very interesting stuff. Thanks for your time.
Cavan Man
(01/04/2000; 11:55:11 MDT - Msg ID: 22254)
beesting
Can you explain....

Stocks down
POG down
"GOLD" up
"NEM" down

I don't get it???????????
ORO
(01/04/2000; 11:58:01 MDT - Msg ID: 22255)
PERMAFROST - "usury"
The line of thinking you put in your last post is near the truth, but far far from it.

The wheat grown by an iron age farmer is 50%+ profit. Only one extra grain was available from agricultural production for every grain sown.

The wage of a laborer is his profit from provision of service.

The businessman's profit is a result of judgement, gumption and the trust of investors (whether justified or not). Trust brings us to the tiny world of top executives of major corporations, where networks of acquaintance, at times older than the nation, make for this important component of the businessman's profit.

It is often profitable to take time from the routine operations of making a living in order to improve the tools of the trade, or to invent new ones. When the economic structure is appropriate, there would be someone who sells these improvements or sells the service of making them. There would be profit for both the tool seller and the tool buyer if the buyer consumed less of his production, and traded the excess for the tools that improve his production. The price the tool buyer is willing to pay is limited in one of three ways. (1) Given an equivalent alternative to the new tool, the lowest cost tool. (2) if the productivity improvement is expected to be very great, the buyer would be willing to pay the portion of his production that is not necessary to assure smooth continuation of his production and does not threaten survival - in short: whatever he can afford. (3) If the expected improvement in future production at the same level of effort can be quantified, the tool buyer will pay a certain portion of the expected improvement in production.

Often times, one sees large scale irrigation systems dating back to the 4th millenium BC in Egypt, for example. The producer/s had undertaken a lifetime's work to improve their lot in life. The second limit, that of the ability to pay was obviously breached. The capacity of the people to do so stems from their coming to an understanding as to the division of labor. There are a few ways to accomplish this feat.
1. The people join together to support the familly of the person taking on the responsibility of making the tools or improvements. The flaw here is in that the person is motivated to put in a lesser effort than he would put into work for his own direct benefit.
2. They all join together and pool the necessary production "surplus" into a "fund". They have one person manage the fund and the project. His task is to find an available and capable person to put in the improvement, negotiate the price, quality, and timing of the work. This contract manager would not necessarily have a large interest in the efficiency of the project, though the problem of the dis-motivation of the person doing the work was solved by putting up a contract to specify what must be complete before payment is made.
3. One producer may calculate that he could obtain a certain excess production in each of the forthcoming seasons if he could get the improvements made, but having dealt with the problems above, he thinks of doing the following. He will borrow from each of the others around him and hire the tool/improvement maker, paying him other's production during the work. The lenders, in order to assure themselves of compensation in the event of the borrower not meeting his obligation, come to demand that the borrower lose his productive property to them if he does not make the promised payments.
Of course, of the many trustworthy people, the one offering the greatest return is the one expecting the greatest benefit from the improvements. In both fear for losing his property and livelyhood, and in his greed for the benefits of the improvements to production, the borrower will keep close tabs on the expenditure of his contractor.

The rate of return that will satisfy the lenders and the borrowers is the interest rate. It would be high enough to entice the lenders not to consume their production, and low enough to allow the borrower a decent return, sufficient to compensate him for the risk of losing his property.

This is the basis of "usury", the "renta", the time value of money. It is the reward for one's foregoing of current consumption for the purpose bettering one's position in the future. It is also the cost for having now, what you could otherwise not afford.
TownCrier
(01/04/2000; 12:04:07 MDT - Msg ID: 22256)
Another gift from the Bank of Japan last night
http://biz.yahoo.com/rf/000103/2c.htmlDollar holders received a new year's gift as the BOJ propped up the American currency in the course its continuing effort toward curbing the escalation of their yen. This is a good bulletpoint-style article that provides an overview of the conditions in place today.

Of particular note, despite the Japan Finance Ministry's efforts through the BOJ in a thin market to get the best bang for their yen, dealers noted that dollar selling interest was strong among interbank operators and by Japanese exporters. In these thin conditions, they said that without further intervention from the BOJ, the dollar could quickly give up its gains.

It should be getting clearer to you by now that if you are holding dollars, you don't have a lock on your own destiny...you're on a tightrope on a windy day, and others are holding the net (if any).
ORO
(01/04/2000; 12:10:51 MDT - Msg ID: 22257)
Silent runner - Casey's portfolio
http://quote.yahoo.com/q?s=prpfx&d=3mhttp://biz.yahoo.com/p/p/prpfx.html - description

http://biz.yahoo.com/p/p/prpfx_h.html - holdings/portfolio

This fund is run according to Casey's structured "permanent portfolio" Which includes gold, silver, TED spread (maybe dropped from the lineup at some point -methinks), Real Estate and natural resource stocks, aggressive growth stocks, and a hefty chunk of cash and equivalents.

It was originally designed to hedge price inflation, credit crunches, and general political/economic/financial instability.
ORO
(01/04/2000; 12:14:52 MDT - Msg ID: 22258)
Beesting, Nickel 62 - all
Thanks.

If you care to spend some time on it, please do question and comment.
Twice Discipled
(01/04/2000; 12:18:33 MDT - Msg ID: 22259)
Bars vs. Coins
Are 1 oz bars considered bullion?
Are there any disadvantages to owning a bar instead of a coin?
I have never seen this discussed before and I am considering a few more oz's as they continue to discourage AU purchases by sheople as the stock market falls.

Thanks in advance,
Twice Discipled
TownCrier
(01/04/2000; 12:38:41 MDT - Msg ID: 22260)
Mull this one over, if you will...
http://biz.yahoo.com/rf/000104/qs.htmlAs revealed by the Dutch bank's release of their weekly balance sheet for last week (ending December 30), it became known that the Dutch central bank moved another �27 million in gold through their stated program of sales conducted clandestinely through the Bank for International Settlements. A Dutch CB spokesman confirmed the action, "The gold reserves went down 27 million euros and we sold three tonnes of gold (last week)."

What we here in The Tower want all of you knights gathered at the round table to appreciate is that this gold was moved during that mid-holiday week...the slowest of all possible weeks in the gold market...and shorted to boot. Does any doubt remain that these sales are officially channelled, and at "official prices" that aren't market dependent? Bottom line: get your own will it is cheaply available at these prevailing market prices...we don't know for how long they will *prevail*.

Sir SteveH, in answer to your inquiry in yesterday's final post; Yes, the ECB partcipates in conformity with the best international practice of periodic gold asset revaluations through, in the ECB's case, quarterly revaluations marked to market. By comparison, the Bank of Canada we believe revalues their gold assets weekly. From our above discussion, you can readily see that a misguided market price which is improperly low has an adverse effect on these most important CB (and personal) assets.
TownCrier
(01/04/2000; 12:58:02 MDT - Msg ID: 22261)
Sir Twice Discipled's questions...
"Are 1 oz bars considered bullion?" --Yes.

"Are there any disadvantages to owning a bar instead of a coin?" --On a bullion to bullion comparison, and assuming you won't adopt a "day-trader" strategy of frequent buys and sales on every price swing, it comes down to personal preference. I mention the day-trader bit because on frequent turnover of bullion, you might find there to be some small advantage in the premium spread betweed buy and sell prices. And further, there is the chance that as one form of gold comes "into vogue," it may command a larger premium over other forms...just like one beanie-baby versus another. But in general, bullion is bullion...solid gold.

There are possibly some other subtle elements that MK's near 30 years of experience might reveal. Give Michael a call (800-869-5115) and chat things over. He's a great one to talk with, and there's never any pressure for you to buy. He's all about helping people live under their own terms. A most noble businessman if ever there was one! Here in The Tower we'll also be putting his service to use. As Sir beesting says, "Those in the know...buy gold."
Strad Master
(01/04/2000; 13:07:51 MDT - Msg ID: 22262)
Interest(ing) juxtaposition
I just looked over at Quote com and found these two market news items back-to-back. I find their juxtapositon to be quite fascinating. Make of them what you will:

Market Update: Tues., Jan. 4, 2000

Stocks opened sharply lower this morning, prompted by weakness in the bond market. After ignoring the bonds for a little over two months, traders coming back from the New Year's weekend found that they could no longer be disregarded with the yield on the thirty-year Treasury bond trading at its highest levels in the past two years. The sell-off in bonds has sparked a worldwide fear of rate hikes, which is focused on the Federal Reserve meeting the first week of February. The growing concern is that in order to prevent any disasters that could come as a result of Y2K, the Fed took a much looser approach to monetary policy than intended to maintain to boost liquidity. As a result, a series of rate hikes is now required in order for the Fed to reign in the economy.

Clinton Renominates Greenspan

Alan Greenspan, who has guided the nation's monetary policy since Ronald Reagan was president, has been chosen by President Clinton to serve a fourth term as chairman of the Federal Reserve, White House officials said.

Meanwhile the Dow is down 360 points!
TownCrier
(01/04/2000; 13:27:33 MDT - Msg ID: 22263)
Clinton Nominates Greenspan for 4th Term as U.S. Federal Reserve Chairman
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=aa4c75a52f59edbe648bf14f78427dc1Rather surprising that this news didn't prop up the stock markets more than it did. But then again, how much worse might things have been?

This article is a must read. Speaking for myself, knowing Chairman Greenspan's favorable disposition toward gold, I'm pleased to see him remain at the helm if/when this goldilocks economy comes unglued. (Even Bloomberg reports that the Fed is in a delicate spot.) The Chairman said he accepted the re-nomination because he's "enjoyed every minute...It's truly been an extraordinary challenge."

Getting to Know the Man...

On a personal note, Bloomberg wrote of the 73-year old Fed Chairman:

"---Greenspan is a devoted tennis player and a fixture on
Washington's social scene. He's a disciple of free-market
novelist Ayn Rand, and for several years in his youth, a
professional jazz musician.
"I played tenor saxophone, clarinet and bass clarinet. If I
were a lot better I would probably be still doing that at the
moment," Greenspan told the House Banking Committee
on Feb. 11, 1999.
Greenspan is married to NBC News correspondent Andrea
Mitchell. ----"
beesting
(01/04/2000; 13:58:58 MDT - Msg ID: 22264)
Hi, Cavan Man--Can I explain stock actions--
I can only guess why NASDAQ- ("GOLD") is going up in price, while everything else is going down.
Gold Fields Ltd. is a newly formed company(1999), that last week completed another phase of their of their formation, 100% ownership of St. Helena Gold Mines.

They consolidated several smaller Gold mines into one big company.( 2nd largest in South Africa behind Anglogold)Now produce over 4 million ounces of Gold annually.
It's my understanding their hedge book is very small, and their making every effort to stop hedging complete-ly.They are dependent on a rise-ing price of Gold for their profits. South African Gold mines and Gold Companys have historicaly paid much better dividends than all the other Gold mines in the world.They are making every effort to help cause the price of Gold to rise.(bought Gold at the 2nd BOE auction)The president of the company has publicly stated, he feels the price of Gold is going to rise.They have recently opened an office in Denver USA, a gathering site for major companies in the Gold business.

IMHO the stock was trading low awaiting the final outcome of the St. Helena merger, now that the merger is complete,(Dec.28, 1999) as the price of Gold rises, the stock price of Gold Fields will rise in relation. I honestly feel as the price of Gold moves towards $400, Gold Fields stock price should climb to the $40 to $50 Dollar range.

Of course Cavan Man, none of this is meant as stock advice, only a few random thoughts.
Thank You for asking......beesting.
TheStranger
(01/04/2000; 14:16:06 MDT - Msg ID: 22265)
Gold Closes At Its High Of The Day In New York
Sure, it was higher last night, but at least it rallied this afternoon. I don't know if this takes care of all the misguided y2k fugitives or not, but I suspect it does. In fact, I think much of the selling was from those who had covered their shorts prior to New Years and simply wanted to replace their positions. But, whatever it was, it is probably already over.

Nearly everyone is expecting higher interest rates now. That means nearly everyone is finally seeing the inflation argument. Boy, what a difference a year makes.

If you didn't buy gold today, you will soon wish you had.
TheStranger
(01/04/2000; 14:22:59 MDT - Msg ID: 22266)
Sopping Up The Liquidity?
Lots of people think the Fed is going to run around sopping up liquidity now that y2k is passed. Ask yourself what you would do if you were the Fed and you saw the stock market in freefall. Would you contract the money supply?
CoinGuy
(01/04/2000; 15:43:47 MDT - Msg ID: 22267)
Stranger
I agree with you about contracting the liquidity injected into the system. Didn't the institutional investors realize it would be taken out on the other side of Y2K? I guess my simple logic would go like this: Y2K bad = stocks down, Y2K good + Fed contraction via RA's + fed tightening( probably throw maniacal valuations in here as well)+ long bond = stocks down.

As a side, any way to trade stocks cheap, via the AAA account?

CoinGuy
R Powell
(01/04/2000; 15:55:39 MDT - Msg ID: 22268)
Good read
Found this from Mr. or Ms. Permabear on Kitco's forum www. gold-eagle. com/editorials 00hickel 010500. html
Netking
(01/04/2000; 15:57:25 MDT - Msg ID: 22269)
Hold that gold...
Bloodbath in Techland (aka Bubble.com)
http://cnnfn.com/2000/01/04/markets/techwrap/

Meltdown on Wallstreet' http://cnnfn.com/2000/01/04/markets/markets_newyork/
TownCrier
(01/04/2000; 16:25:09 MDT - Msg ID: 22270)
Must Read/Must Comprehend the Implications
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=21aa0d674a00a2c4ec561fedd090a51bThis offering from Bloomberg does a nice job giving you some of the insight you need into the forces at work.

In a nutshell, the Japanese government is trying to foster an economic recovery fueled by international demand for Japanese exports...demand that is curbed if the yen is "expensive" compared to the importing nation's own currency. To that end, even while other market forces are trying drive the dollar lower against the yen, the Bank of Japan is right there to meet them halfway...selling yen and buying dollars such that the exchange rate between these two currencies is maintained at roughly �102 = $1. The larger effect is that they both go into the toilet together while the euro remains safely on the sidelines. Grab your own safe seat on the sidelines with gold...a safe seat that also offers a potentially thrilling rocket ride to the moon.
lamprey_65
(01/04/2000; 16:25:35 MDT - Msg ID: 22271)
TheStranger...Today was NOTHING
It seems few understand where the averages are in relation to both the '82 Bull Market trend and the '95 "Super Bull" Trend. Let me throw out a few numbers:

The DOW closed today at 10,997.93...just to touch the '95 up trendline, it could fall all the way to 9700 -- this bull move would STILL BE INTACT!

The DOW would have to break below 6700 or so to break the '82 Bull Market trend line.

It has been my opinion that we were starting to get our much needed pullback in October when the markets were paying attention to rising interest rates...unfortunately, "Easy Al" threw money into the system (just like he did in '98) to protect against Y2K and the financials used it for a quick pop in the equity high fliers (what else could they do with it? -- 90 days is too short for loans). This hyper move since '95 has been too much, too fast...it's only FED liquidity that's propt it up for so long.

Today should be nothing less than a beginning of a much deeper correction...in a rational environment - we don't live in such times. Today's move down is nothing...until the buy on dips crowd learns some fear, I'm afraid 400 points on the DOW is not going to mean much -- we need several days like today just for starters.

Lamprey
Cavan Man
(01/04/2000; 16:33:01 MDT - Msg ID: 22272)
Townie
Didn't Another and FOA warn of this?

"We told them long ago to buy gold but listen they would not." Something to that effect?

I recall that statement about the time FOA was verbally mauled by someone exhibiting sychophantic behaviour.
TheStranger
(01/04/2000; 16:47:36 MDT - Msg ID: 22273)
Lamprey and Coin Guy
You guys have a better grasp of this stuff than most professionals. Gees, maybe you are professionals.

Coin Guy, I can't answer your question about AAA. Because the forum is a proprietary service of USAGOLD, I am committed to keeping my relationships here away from my professional activities. I hope you understand. But thanks for asking.
nickel62
(01/04/2000; 18:09:00 MDT - Msg ID: 22274)
Lamphrey
I enjoyed your post and couldn't agree with you more. The stock markets have gotten so far removed from reality that they don't even seem to reflect anything except gambling anymore. Very sad and very dangerous.
TownCrier
(01/04/2000; 18:23:34 MDT - Msg ID: 22275)
Sir Cavan Man's 22272... Right you are!
I do recall that phrase you mentioned distinctly provided for our benefit long ago. And a quick check of the archives yielded this related tidbit as recently as yesterday from Sir FOA:

"Another force is at work in the world today and it is attacking the dollar behind the bushes. ... The Japanese are and always have been up to their eyeballs in US paper. They have to stay this way because of their dollar trade deficit. As they continue to decend into deflation, the strong Yen still locks their hands from selling our debt and the BOJ has always known this. So, they continue to add dollar reserves on balance with this deficit in an effort to keep the Yen from rising even higher and killing their US market share. These people are done in and will eventually print Yen (hyperinflate) in and effort to match any US dollar price inflation. Locked step to the end!"

And also, our Tower's minions game up with this other related sentiment from the archives that may be of interest in this matter. You've gotta love the archives, and having trained minions to search them for you!

These are excerpts from Sir Aragorn III (2/20/99; 19:17:11MDT - Msg ID:2603):

"Answer to Stranger's Question #4: 'Is this week's decline in the yen temporary?'
Everthing is relative. I trust that you mean a decline relative to the dollar? As I showed in the original Msg 2506 (repeated below for continuity) the yen has every opportunity to rise against the dollar, or they could lock arms and stride step-by-step into fiat oblivion, neither rising or falling significantly against the other, but falling steadily against real goods and gold. It seems that these chapters are soon to be written."

[TownCrier's note: for perspective, The Stranger's question came after a 6-week period in which the yen had fallen from �110 to over �120 against the dollar, over half of that coming in that recently elapsed week. Followning this post, the yen did in fact promptly stabilize at �122 +/- for a four month period, then began to steadily strengthen against the dollar from July's �122 level to September �105, at which point it has essentially leveled off "in lock step" with the dollar amidst many BOJ interventions along the way. Continuing with some catchy tidbits...]

"The stock market is a bee upon your face. (But the bond market is a rhino charging at your back!) One may sting. The other will change your life. [From elsewhere in this post it was stated: "Woe is he that does not understand the dollar stands upon bonds alone."]
+
got perspective?"
koan
(01/04/2000; 18:48:02 MDT - Msg ID: 22276)
fed and macro economic trend
If the mkt goes into freefall the fed will increase liquidity.

I think the important concept that is being overlooked by many regarding the valuation of all stock mkts, is that whereas the stock mkt may be overvalued, in the short run, the technological revolution is impossible to quantify other than to say it sits right up there with the discovery of fire, the invention of farming and the industrial revolution in its impact on our species.

General productivity will keep rising at an exponential rate, which cannot be understood or quantified; and which means no one can really tell if our stock mkt is overvalued or not, in the long run (long run - just a few years as most )
Leigh
(01/04/2000; 18:52:13 MDT - Msg ID: 22277)
Town Crier, Cavan Man
The post in which Another talks about Japan is #14770 on September 28, 1999. That was an unforgettable one.
Cavan Man
(01/04/2000; 19:01:50 MDT - Msg ID: 22278)
Leigh
Thanks. That sent a chill down my spine then and it does now as well. My daughter wants me to put clothes on her "naked barbie" so must run...CM
Netking
(01/04/2000; 19:06:57 MDT - Msg ID: 22279)
Y2K Apologies continue
Ed Yardeni from Deutsche Bank securities on CNN just now; "I was wrong about Y2K" ... bring on the sackcloth & ashes guys!
TownCrier
(01/04/2000; 19:07:40 MDT - Msg ID: 22280)
Thanks for the assist, Leigh.
On the issue of the stock market valuation vis-�-vis the technology revolution, I always knew that the Fed Chairman was a visitor to this site. Now I know who he is...thanks for showing yourself, "koan." And congratulations on your re-nomination today. You've really got your hands full with this one. But don't worry too much about engineering a soft landing, just make sure it's a golden landing. :-)
RossL
(01/04/2000; 19:24:18 MDT - Msg ID: 22281)
Japan, Hong Kong, Singapore, Korea, NZ, Australia
http://quote.yahoo.com/m2?uMarkets take a dive in the opening hours.
FOA
(01/04/2000; 19:24:50 MDT - Msg ID: 22282)
Comment
ALL:
I guess everyone knows by now that I am somewhat "irregular" in my replies here. Still, I read
most everything when time comes my way. My linkup saves all the forum (even when I'm not around).
A few quick notes:

Aristotle (01/03/00; 17:39:33MDT - Msg ID:22153)
Aristotle, you prove the point that one person cannot understand everyone, nor can everyone understand the thoughts of one. You have a wonderful way of presenting things. Thanks, so much!

PH in LA (01/03/00; 20:59:55MDT - Msg ID:22175)
Another's e-mail address
" Geneva Steel Company, located in Provo, Utah;" ????

PH,
I'm thinking real hard as to why someone would set up in Provo to do that,,,,,,,,,'still thinking.
No, can't make any connection in my mind. (smile)

There is an old saying; "children of the sand curse the sun, yet run from the night". Adults often act the same way when they lack understanding of the world around them.

I'll be back when I can, PH. And be certain, so will Another.

FOA
TheStranger
(01/04/2000; 19:26:15 MDT - Msg ID: 22283)
koan and Japan
koan - that is the answer I was looking for, especially in an election year. We shall see. BTW, thanks for everything, buddy. You are Joe Cool in my book.

For all my crowing about Japan, I sold out today. I hope nobody invested there in recent days because of anything I said. (I told Jon just 2 days ago that I saw no reason to sell). The problem is the weakness in New York is of a magnitude that I would expect it to continue for awhile and to spread round the world. Again, we shall see.

Follow the yellow brick road!
TownCrier
(01/04/2000; 19:29:42 MDT - Msg ID: 22284)
Sir ORO, excellent posts today!
Thanks for sharing your time and talent. For lunch I had The Tower's kitchen staff send up a bite...I enjoyed a toasted sandwich, bowl of soup, and fine french roast espresso while reading every word. Much better than anything offered by the BBC! Thanks again.
TheStranger
(01/04/2000; 19:35:02 MDT - Msg ID: 22285)
Top Stocks For '00
http://biz.yahoo.com/rf/000104/4k.htmlI just found out today that Newmont Mining made Goldman Sachs' top stocks pick list for 2000. Homestake is on Standard and Poors' pick list for 2000. Hey, we're starting to get respectable around here!
canamami
(01/04/2000; 19:41:25 MDT - Msg ID: 22286)
Town Crier, koan
In defence of koan, his theory has been propogated by George Gilder for years, and Gilder is the pre-eminent thinker of our time (at least outside the world of science, about which I know next to nothing).

Not a day goes by without my questioning the wisdom of opting for gold, a decision contrary to most of my beliefs prior to about July/August of last year. Technology and mutual funds may have made the equities markets a viable investment vehicle for many due to risk and cost reduction, thereby causing a permanent upward revaluation in shares' values. Moreover, relatively few predicted the ease with which the equities markets shook off last summer/fall's correction (though perhaps at the price of an influx of liquidity which has yet to make itself fully manifest). On the other hand, current valuations just defy logic and sanity, and must somehow be reconciled to reality, at some point.

For good or evil, technology has further democratized our society. Without a doubt, real knowledge of the markets and the economy is more diffused than ever. However, the "quantum" of knowledge is not as important as the "direction" of knowledge- i.e., in other words, sometimes one is better off knowing less. Better to have 2 units of knowledge, and make the right decision based on expert advice, than to possess 5 units of knowledge and get it wrong on a do-it-yourself basis. To use a example from the field in which I was trained: Who is better off, the unsophisticated client who allows an expert to do it right, or an intelligent layman who acts as his own lawyer, inflicting harm on himself becuase he knew just enough to get himself in trouble?

Perhaps we in North America are going through what the Albanians went through, only we are somewhat further along in the process. They went through their primitive Ponzi scheme, and we are now going through the same process, but at a more advanced level. To steal from Blake, perhaps we are losing innocence through experience, only to achieve a higher order of innocence, as part of the diffusion of knowledge through our society and the achieving of a broader-based maturation of our society.

I forgot the original point of this, so I'll stop here.

R Powell
(01/04/2000; 20:01:53 MDT - Msg ID: 22287)
Agreement with TownCrier
I was shocked by your equating Koan with the Fed chairman so I reread Mr. Koan's post. I agree with both the opinion of the post and with your opinion that if those weren't the chairman's words they must have been written by his speechwriter. Sure sounds like him replying to a congressional question. Mr. Koan, thanks for the post.
TownCrier
(01/04/2000; 20:02:50 MDT - Msg ID: 22288)
Sir canamami...
"In defence of koan..."???
Have we mixed signals again? My comment regarding Sir koan's recent post was highly complimentary. In today's search for news I twice encountered seperate quotes by the Fed Chairman that were exactly echoed by the words of koan. A review of the TownCrier announcement of Mr. Greenspan's re-nomination will confirm that I personally hold the Fed Chairman in highest regard. Unlike the impression conveyed by some who fault him for the stock market's excesses, I have never personally had my arm twisted by Alan forcing me to participate in those excesses. I have used the opportunity to add to my gold holdings. If/when the markets collapse from their own weight, I will be watching from atop The Tower with calm emotional detachment. I'm unsure of your predispostion toward Mr. Greenspan, but I can see now with hindsight that the possiblity existed for those that held the Chairman in contempt to see my playful post to koan as derisive. I assure you all, it was not. I like them both. Perhaps I'd better turn the rooftop over to another 'Crier for the GOLDEN VIEW...
TheStranger
(01/04/2000; 20:08:18 MDT - Msg ID: 22289)
Gold Up 30 Cents in Hong Kong Amidst Stock Market Carnage
The second leg of the new bull(ion) market has begun!
CoinGuy
(01/04/2000; 20:11:43 MDT - Msg ID: 22290)
Stranger
No problem here at all...I should do the research myself anyway, and I understand your respecting the forum. I should have too.

Got physical, might go Newmont Mining,

CoinGuy
canamami
(01/04/2000; 20:14:33 MDT - Msg ID: 22291)
Reply to Town Crier
I'M the one who should stop posting, in that it seems I'm conveying the wrong impression in my recent posts. I understood your comment to koan to be a "playful" one, not an attack. It did appear you were expressing disagreement with koan's views, but like I said in a "playful" manner.

Re my views of Greenspan, he was an associate of Rand's, so he must be okay. My view is that Greenspan is Chairman of the Fed, not dictator of the Fed. The Fed's actions are not necessarily Greenspan's, IMHO.

Re your posts, they are excellent and informative, and I greatly enjoy and appreciate them. I think I need a posting holiday, to facilitate conveying my intended meanings more accurately.
CoinGuy
(01/04/2000; 20:31:31 MDT - Msg ID: 22292)
Asia
WOW! The Hang Seng down 1000 pts in the first five minutes of trading? Japan down 770. Could tomorrow be as interesting in the US? Or, are the Asians following our cue from today and the bull market continues tomorrow? Anyones guess...

Coinguy
Peter Asher
(01/04/2000; 20:38:13 MDT - Msg ID: 22293)
They don't GET it!

Yardini on CNN says "This may even give the economy a boost. People will be selling their stocks now and buying things with the money."

FACT, the sellers of stock have had money to buy things all the way up. The "flow through" is a zero sum game. Money "in" the market equals money "out" of the market. What will change is that lower prices will mean less money is circulating through the market as a whole. More importantly, as equity prices decline, less outstanding margin will mean some of the money supply goes back from the brokerage houses, to their banks and then into the black hole of the Fed from whence it came.

The economy will be altered by the fact of affluent people who have put off their furniture purchases and home improvements, now doing so instead of feeding the market. Conversely, what ever people were buying with their hot and heavy profits will have a slow down.

The other thing that will happen, is that when people realize that their "Perceived" savings were just that, then more of their money will go into real savings and less into spending.

There will be a shake out and hopefully a return to more rational consumerism and the better survival of those who produce quality goods and services in a sane economic world.
BTD
(01/04/2000; 20:43:08 MDT - Msg ID: 22294)
Ray Patten - Crude Oil Rally
http://pub3.ezboard.com/fdownstreamventurespetroleummarkets.showMessage?topicID=17.topic"Does anyone know if there is any particular reason why crude oil had a 70 point rally from last night's low. I've searched some news sites but can't find anything."

There is an article on the Petroleum Markets forum (see link above) about 3 refineries that are having problems.
Solomon Weaver
(01/04/2000; 20:43:48 MDT - Msg ID: 22295)
gold down to protect hedge books
beesting (1/4/00; 8:54:10MDT - Msg ID:22239)
Why is Gold taking a hit right now? Some speculation!
http://quote.yahoo.com/m2?u
The European and America's stock markets are all in correction mode, see above URL. It had to happen eventually.

Now, many here believe the Gold markets are manipulated, by the big boys with the solid approval of the US FED. With that in mind, as the stock markets correct in order to prevent a mass exodus from stocks into Gold, the "spot" Gold price is forced down big time to give the illusion that Gold is not a good place to store assets, looking for a home.
If Gold was climbing real fast today, it could spark a landslide correction in stocks.Follow the mob mentality.

----
Beesting

Perhaps Alan Greenspan and his buddies, when looking at the structure of hedgebooks like those at LTCM, have discovered that the gold carry trade is jeopardizing almost every one of the big ones....

I have always had my personal belief the the "plunge" protection team works on the S&P 500 and at the same time they can be called the "surge" protection team when speaking of gold.

If there is a big drop in the major US stock indexes, there is certainly a lot of margin money being called in...possibly requiring physical gold longs to cash in so they can ante up on their losses....with so many longs in the stock market melting down the big "too big to fail" hedgebooks can't afford misbehavior in gold.

Poor old Solomon
ORO
(01/04/2000; 21:14:10 MDT - Msg ID: 22296)
FOA, TownCrier - a request
If I may, I would like to ask you both for comments on the posts I put up earlier today.

The historical post and the bullion banking post contain many details. Many of these are difficult to estimate, some are shrouded in an opaque fog where barely an outline can be discerned, let alone seeing an image to the detailed level I've drawn.
I am trying to put together a more complete and more accurate historical overview.
FOA any comments - particularly errors of fact you may (probably will) find, would be greatly appreciated.

Thank you.

All, of course, are invited to comment.
lamprey_65
(01/04/2000; 21:16:46 MDT - Msg ID: 22297)
Batten down the hatches!
http://biz.yahoo.com/rf/000104/beq.htmlI don't think we'll know for sure until we get at least one failed bounce...nevertheless, it's sure looking like rough seas!

Lamprey
lamprey_65
(01/04/2000; 21:20:39 MDT - Msg ID: 22298)
Updated Story
http://biz.yahoo.com/rf/000104/bes.html
Peter Asher
(01/04/2000; 21:42:50 MDT - Msg ID: 22300)
koan (1/4/00; 18:48:02MDT - Msg ID:22276)

I have always agreed with you regarding the exponential expansion of this "Second"technological revolution and it's unique place in history. However, the "Stock market" as a whole, has many companies that are not part of this new business world and some will even be hurt or wiped out by it. For instance, what will on-line commerce do to Wall-Mart, Target, and Penny's and Sears etc. Or conversely will they overpower Net-only rivals with their own on-line operations.

It would be interesting to know what percentage of overall Market Capitalization, or overall corporate intrinsic value, is part of this technological paradigm.
lamprey_65
(01/04/2000; 22:17:23 MDT - Msg ID: 22301)
The Internet Revolution
Are we really seeing a revolution?...I believe we are, of sorts. I do believe, however, that it may not be as great in some areas as people believe, and possibly greater than they think in others.

For example, let's look at a favorite of mine -- Ebay. I love the company - I'm a coin collector and have found their auction process to be the very best on the net. The company is growing rapidly and is profitable NOW. I have perused other auctions such as Yahoo's -- no contest...Ebay is far superior in number of items offered, quality, and number of bidders. Ebay already has critical mass and should continue to remain far ahead of competitors.

HOWEVER, the stock valuation is completely ludicrous. There simply is no justification to pay a 2000+ PE for anything, imo. The point here is -- one must separate the company from the stock. If Ebay ever sports a PE under 50, I'll start to be interested.

Now, that's auctions - business to consumer (Amazon, Cyberian Outpost, Buy.com, etc. etc. etc.). Forget it. It's the Sears catalogue concept online and it's just too early to figure out who will survive and how long before any of these companies can make money. In addition, although growing rapidly, let's get a grip...there is an upper limit to how much people will buy online, no matter what hype CNBC et al may tell us. Most people like to shop...they like to actually see and feel what they are buying and many enjoy the social experience. This sector of the net is not a good investment IN MY OPINION. (Of course, that does not mean you can't make money trading the stocks!)

Next, the picks and shovels...Rare Medium or Razorfish and the like. They make websites and provide integrated software solutions for companies establishing an online presence. They really are like the sellers of picks and shovels during the gold rush...they should make money regardless of how well individual businesses do (as a matter of fact, they are turning away contracts, they are so busy). Definately a sector to look at, but also currently overextended - like just about everything else.

The last on my list...business to business. This really will be huge and where much of the revolution takes place...the buying of items by businesses through online companies. I will be researching this sector and hope to build some long positions AFTER we have a real pullback (not holding my breath!).

After a year of trading and watching this sector, I truly believe that most of it is hype and that most of the i-net companies on the NASDAQ will not survive (Anyone ever heard of CyberGold?...amazing what venture capital can do to help you get a listing).

A little off topic, but hopefully helpful to someone here. Yes, this is a true revolution -- no, the stock prices, for the most part, are not justified.

Lamprey
lamprey_65
(01/04/2000; 22:18:36 MDT - Msg ID: 22302)
Disclosure
I hold no positions in the stocks mentioned in my last post...nor do I intend to in the NEAR future.

L.
Mr Gresham
(01/04/2000; 22:26:54 MDT - Msg ID: 22303)
Analysis of M3 increase by Paul Kasriel
http://www.ntrs.com/rd/rd35/pos2000/pos_econ_04jan.htmlPassing the day at Prudent Bear's chat threads; wanna see a bunch of happy bears?! This was a link from there -- a lot of people digging up good stuff!
SteveH
(01/04/2000; 22:44:16 MDT - Msg ID: 22304)
Feedback and ORO
Oro,

Your on a roll today. Am still digesting. And for your pleasure, I got this question from a person. What are your thoughts?

Not to nit pick, but you mention that the Euro is not as indebted as the
dollar.

If you go to the EU Web page and add up the cumulative debt of the 11 Euro
states you will find that the ratio of debt to GDP exceeds that of the US.

This is the one element that has made the potential for the success of the
Euro suspect to me.
GFD
(01/04/2000; 23:16:59 MDT - Msg ID: 22305)
Koan
The thing with "technological revolution" is that it will not have a uniform impact on the economy. The net will certainly allow revolutionary things to be done in the area of business to business interactions. And it will allow catalog companies to operate more efficiently. But it certainly will not make it any easier to produce a ton of steel.

The markets reflect this spottiness. Some areas are very hot but those sectors reflecting the bread and butter of the economy have definitely seen better days. If you could filther out the noise caused by the net hype and the distortions by a lot of liquidity chasing a relatively select and scarce group of stocks I wonder what kind of a picture the overall economy would present.

SteveH
(01/04/2000; 23:21:43 MDT - Msg ID: 22306)
Interesting
http://www3.techstocks.com/stocktalk/msg.gsp?msgid=12461836eom
TownCrier
(01/04/2000; 23:31:23 MDT - Msg ID: 22307)
The GOLDEN VIEW from The Tower
To borrow from Charles Dickens, "It was the best of times; it was the worst of times." In a 24-hr period, we've been given a lesson how quickly fortunes can change on the stock market. Yesterday after a session of wild price swings, the Nasdaq Composite Index closed at its highest mark ever, and today it closed down, suffering its largest point loss in Nasdaq history (229 points, 5.7%). Far be it from us to rub salt in others wounds, so we'll move on without further comment.

From The Tower's lofty view over the financial plains, here is the reason bonds collapsed yesterday but recovered today, and why gold was sold down today despite the stock market woes.

Fortunately for all of us (we hope you agree), the world didn't end with the Century Date Change. Thanks to this pleasant discovery, many of those who had taken defensive financial positions likely resolved themselves when the Sun came up on Saturday morning to liquidate these postions at their first opportunity in order to join the party on Wall Street--a party which they watched from the sidelines in the final days of 1999...pouting no doubt, (but hopefully stress-free over the uncertainty of the coming rollover.)

Those that had bonds to sell were able to do so Monday because the bond market was open Monday, but not so with gold. As a result, the bond closed sharply lower yesterday, and was better positioned to gain today in a flight to safety as the stock market tanked. Those who had predetermined to sell their gold were naturally doing so today on this first day back from the holiday...overshadowing any similar flight to safety effects that benefited the bonds today. You'll also recall from our post earlier in the day that the Dutch Central Bank comfortably moved three tonnes through the BIS during the "non-week" between the two holidays last week. When we pause to reflect on the situation, we can not conceive of any condition that would justify gold prices being sold lower by any rational trader. (That is, unless the world were to be swept suddenly by another Asian Contagion-style currency crisis in which citizens were forced to spend their only remaining viable savings--with the dollar remaining immune once again from the contagion. We see this as unlikely.) While we have been gold buyers out of prudence these many past months, we are now buyers with the added confidence that no amount of waiting would likely yield significantly better prices.

Many people have tried to call the bottom...and somebody's got to get it right at some point. The $250's in August was likely it, and we seem to have shaken through the final downside-correction to the Washington Agreement run-up. In this spate of post-Y2K selling, spot gold reached $282.20 when NY closed on this first round-the-world trading day since last Thursday's close of markets for the New Year's holiday. The February futures contract on COMEX closed down $5.90 to end at $283.70.

There is no open interest in the current COMEX contract month, but February gold futures stood at 67,872 contracts when trading began this morning. Gold movement in the warehouse was limited to 2 kilos being withdrawn from the Scotia Mocatta vault.

OIL

February crude also traded sharply lower on NYMEX's first day back from the four day weekend. It slid in early trade by 85�, likely on the same initial knee-jerk sale instinct that swept through bonds yesterday and gold today. Before trading concluded for the day, this effect had largely been worked through, and short covering ahead of the API's anticipated afternoon report of crude stockpile declines lifted crude back up to its starting point, ending the day down only 5�. Brokers estimated a decline in U.S. crude inventory by 2 - 4 million barrels, but the report released at day's end revealed a somewhat disappointing decline of only 1.568 million barrels. We'll wait and see what tomorrow's DOE data reveals.

And that's the view from here...after the close.
ORO
(01/05/2000; 00:39:10 MDT - Msg ID: 22308)
SteveH - Internal vs external debt
The main point is that the EU and most of its members have no external debt. They are net creditors of other countries. There is no overhang of EU bonds in every central bank in the world.

The internal debt is similar to debts within your household. The familly is not in danger of losing the house because of it.
Netking
(01/05/2000; 00:56:05 MDT - Msg ID: 22309)
Nasdaq - The morning after the day before
http://dailynews.yahoo.com/h/nm/20000104/bs/stocks_nasdaq_7.htmlAfter Nasdaq's biggest ever one day points fall (8th in terms of percent) what's in store today? More of the same or consolidation or mutuals looking for buying oportunities(smile).
SteveH
(01/05/2000; 00:58:09 MDT - Msg ID: 22310)
ORO
You're incredible, man!

I spent several hours reading and re-reading your material.

You are coorborating Another and FOA. You are validating their message. You are saying that physical gold delivery is in jeapordy against paper-contracts.

Most importantly you are saying that gold's role in world economic affairs is as strong as it ever was, it has merely been placed in reserve ball section of the big economic pinball game in order to allow the dollar ball its turn on the board and it has been bouncing around since 1971. As long as the dollar was the only ball able to be played, all the bumpers and flippers have been keeping it bouncing around and using the ball to keep the game the game going.

For some reason, it became politically unexpedient to have gold be tradeable currency when the dollar defaulted gold in 1971. It even became dangerous to have gold be considered an alternative and so it was allowed to drop in price to where we are today. And that is why gold isn't popular and yet remains the most sought after asset next to oil of any asset. Incredible move on the players part.

To rephrase, gold and gold backed currency abounded up until 1971. Dollar defaults, then gold begins a ten-year meteoric rise in price until 1980. From 1980 gold is seen as a loosing proposition by citizens while in the background gold is traded off line just like before except with a twist of derivatives and hedges. In the first 3/4 century it was "gold-is-official." In the ensuing years, it was gold is "dead" but it really isn't because we will just use gold and trade it off market and hidden from view but we all know how important it was, is, and will be.

Somewhere along the way and in the last five years, oil demand outstripped the ability of gold production and pricing to keep up and so now we have a supply-demand disparity of 30K tons if I am reading you correctly. That is 30,000 tons of gold that needs to be settled up some how and what we are witnessing now is how the folks who are interested in settling this matter are trying to figure out how to do that without destroying the dollar and causing gold to replace the Euro ball in line for the board or the gold ball from replacing them all on the board. In any event, the way this plays out depends on many factors, none of which you nor I have control over, except to say buy physical now while it is cheap because yours and FOA's and Anothers and MAK's and Ari's and Strangers and Peter's And Gandalfs and TC's and TC's and all the remainder of us believe that no matter what the folks do with flippers and bumbers, the fact remains that the shoot at the bottom, the one between the flippers is ready and waiting for the dollar ball and just because the folks are trying to shake the game table without tilting it, there will be a tilt and the ball will drop and be replaced with the Euro ball. Is that pretty much what you were getting at?
SteveH
(01/05/2000; 01:06:31 MDT - Msg ID: 22311)
repost
www.kitco.comrepost:

Date: Wed Jan 05 2000 02:44
Jack (CaptainKirk...Peabody don't like them banknumber either and dirivatives may ruin Barrack too) ID#210169:
Copyright � 1999 Jack/Kitco Inc. All rights reserved

What if the investments that Barrack has placed the gold loan proceeds in go belly up?

Complacency Abounds

Today's Wall Street Journal was replete with complacency. Of the 53 economists surveyed, not a single one was forecasting an inflation rate ( as measured by the CPI ) of over 3.0% in the first half of the year 2000, and only two forecasted 3%. On average, economists are forecasting only a 2.5% rate of inflation in 1H�00, versus the 2.3% rate at year-end 1999. Given what the commodity indices are telling us ( see my report entitled "Commodity Inflation is Broad-Based" dated December 30, 1999 ) , I would like to take the other side of that trade, particularly if the Fed continues to drag its feet. My position remains that the long bond will see a 7% handle in the first half of this year ( i.e., a 4% risk premium on top of core inflation of over 3% ) .

Why should anyone care? Because of the amount of leverage in the system. The one product area where leverage dwarfs the system is in derivatives. Of the $35.7 trillion in notional value of derivative contracts, some $28.2 trillion ( or 79% ) is related to interest rate instruments. As over 90% of these contracts are "over-the-counter" and 60% have a maturity of greater than 1 year, they expose the participants to greater credit risk and tend to be less liquid. J.P. Morgan ( JPM-$123-SELL ) , Chase Manhattan Corp. ( CMB-$73-SELL ) and Citigroup ( C-$54-Not Rated ) derive the greatest dollar amount of trading revenues from interest rate-related derivatives, but these instruments also represent significant risk to end users ( e.g., Fannie Mae [FNM-$59-SELL], Bank of America [BAC-$49-SELL], First Tennessee National Corp. [FTN-$27-SELL], etc. ) .

Admittedly, as an outsider, an investor can't be 100% sure ( given the poor disclosure ) whether a bank is managing its derivative exposures well. But then again, investors can't be assured that, when rates rise as much as they have, a bank is not in harms way, either. My gut tells me that, after two decades of disinflation ( which tends to create a new permanent mindset ) and repeated benign forecasts ( such as those in today's Wall Street Journal ) in the face of rising pressures, most bankers are not yet positioned for a lasting rise in rates ( see report entitled "Higher Rates Still Impacting Industry" dated December 29, 1999 ) . In short, I expect interest sensitive sources of income to continue to disappoint as the industry adjusts to a new "inflationary" environment. Be long commodities!
canamami
(01/05/2000; 02:03:11 MDT - Msg ID: 22312)
Reply to SteveH
Two quick comments after a quick scan of your excellent, well-reasoned posts.

"Gold was "allowed" to fall." Sounds like it would have to be forced down by one awesome conspiracy, that somehow essentially didn't leak out for a long time. This does not accord with my experience of humanity.

"Gold production could not keep up with oil production". The point being, at the market price of gold and oil. The Cerro Casale reserves, with which you are familiar, is generally viewed as holding about 23 million ounces of reserves - all we need is $350 an ounce gold. We're also aware of a certain, still undeveloped/not fully explored project in the Carlin Trend, which would be in better shape (as well as our pocketbooks) if gold were a good $70 to $120 an ounce higher. I'm sure there are others upon others of possible projects which could fly if the POG were higher. Gold production would then catch up very quickly.
el St.One
(01/05/2000; 02:35:33 MDT - Msg ID: 22313)
Y2K
http://www.dingdingding.com/commentaryMassive Y2K Coverup by some major media houses and government: NO Serious problems after the
rollover! Some talking heads now suggesting that the bug might even have been a hoax! Even Bill Griffeth of CNBC when
interviewing Y2K-expert, Peter DeJager. Don't believe a word of it. There were hundreds of largely unreported, problems and
glitches - some very serious. Watch for our Y2K Coverup story and follow-up right here beginning January 7, 2000. Be
sure to tell your friends and any fact-based or reality-based media you know. We want to encourage any media with a conscience
to report some of these stories. And please send us your emails with any links to Y2K news that we can research and verify.

Is the so-called Y2K problem solved? Worse: Was it all a hoax? Let's turn ... not to the so-called Y2K experts ... but to a
source most of us would agree is reliable, at least in this one instance: "The full impact of the year 2000 computer glitch
will be largely hidden until mid to late January, the head of a U.N.-sponsored Y2K data clearinghouse said on
Wednesday" (ABC News online). According to Bruce McConnell, head of the International Y2K Cooperation Center, which is
funded by the World Bank, "lots of inconveniences" will "'erode productivity and possibly disrupt world trade." Was Y2K all
about the power and water going out on January 1st as some so-called Y2K experts and the major media would have us believe?
Since so little happened on January 1st, was the whole thing a "hoax" as some would suggest?

McConnell said, on December 29, 1999, that "The computers that control electricity and telecommunications perform
management functions for the most part ... And so even if there is a Y2K problem, it doesn't cause the power to go out
or the phones to go out." The question then is this: why is the media basing its reports of total success on the very thing the
government and World Bank say was never a serious problem? And the smaller problems have either not yet been reported - or
have not yet happened - during the first three days of January.
PERMAFROST
(01/05/2000; 03:32:33 MDT - Msg ID: 22314)
ORO Re Profit/Usury/Renta Msg. ID: 22255
Due to ingrained intellectual "habit", You are confusing 'profit' with 'necessary and beneficial generation of wealth'.

The "extra grain" the farmer, the wage of the laborer, or the Market's rewarding of the more efficient therefore more successful businessman by putting the money (proxy for wealth) in HIS hands which have proven themselves to be better at managing it fall into the latter category. And they are good and necessary, as common sense dictates.
On the other hand, Profit is the acquiring of UNEARNED wealth. Now this would have been the case if the farmer received more than the "extra grain" the earth is capable of giving [impossible in earth's case but NOT SO where the digital presses of the bankers are concerned]; or if the worker whose skills rightly qualified him for a job with a salary of 2,000 dollars were to get 4,000 instead [his boss would never concede to such a thing; but their "boss", Alan Greenspan, delivers the extra green to his masters on a silver platter along with their morning WSJ].

As for the businessman, prey tell, how can it be justifiable or acceptable that a creature as morally and intellectually bankrupt as Bill Gates be allowed to lord it over so much wealth and power [all due to an overlooked detail in his contract with IBM, if I recall correctly]?

I also read in the editorials section of GOLD-EAGLE--I think the piece was called "On the Side of the Golden Angels"--that the actual wealth of the Rothschilds must be several hundred TRILLON dollars by now, if they only turned a profit(sic) of 6-7% per year on their capital. ???????

As for your justification of debt--I think you referred to it as "renta"--as the instrument or catalyst whereby the otherwise-impossible accomplishment of MORE would not have been envisagable...

What's the rationale for having, desiring this "MORE"?
Why should we literally waste most of our limited lifespan on this Earth towards a frenzic orgy to produce ever MORE people, pollution, misery, depletion of natural resources? instead of devoting the time we have left once daily chores are taken care of to LESS (intellectual and spiritual growth; religion or philosophy, according to one's temper)?

This is the very "Life of Contemplation" that produced (sic) the rational foundation of the (Western) Civilization you now are the champion of?

Why must you have "now, what you could otherwise not afford"?
PERMAFROST
(01/05/2000; 03:33:42 MDT - Msg ID: 22315)
ORO Re Profit/Usury/Renta Msg. ID: 22255
Due to ingrained intellectual "habit", You are confusing 'profit' with 'necessary and beneficial generation of wealth'.

The "extra grain" the farmer, the wage of the laborer, or the Market's rewarding of the more efficient therefore more successful businessman by putting the money (proxy for wealth) in HIS hands which have proven themselves to be better at managing it fall into the latter category. And they are good and necessary, as common sense dictates.
On the other hand, Profit is the acquiring of UNEARNED wealth. Now this would have been the case if the farmer received more than the "extra grain" the earth is capable of giving [impossible in earth's case but NOT SO where the digital presses of the bankers are concerned]; or if the worker whose skills rightly qualified him for a job with a salary of 2,000 dollars were to get 4,000 instead [his boss would never concede to such a thing; but their "boss", Alan Greenspan, delivers the extra green to his masters on a silver platter along with their morning WSJ].

As for the businessman, prey tell, how can it be justifiable or acceptable that a creature as morally and intellectually bankrupt as Bill Gates be allowed to lord it over so much wealth and power [all due to an overlooked detail in his contract with IBM, if I recall correctly]?

I also read in the editorials section of GOLD-EAGLE--I think the piece was called "On the Side of the Golden Angels"--that the actual wealth of the Rothschilds must be several hundred TRILLON dollars by now, if they only turned a profit(sic) of 6-7% per year on their capital. ???????

As for your justification of debt--I think you referred to it as "renta"--as the instrument or catalyst whereby the otherwise-impossible accomplishment of MORE would not have been envisagable...

What's the rationale for having, desiring this "MORE"?
Why should we literally waste most of our limited lifespan on this Earth towards a frenzic orgy to produce ever MORE people, pollution, misery, depletion of natural resources? instead of devoting the time we have left once daily chores are taken care of to LESS (intellectual and spiritual growth; religion or philosophy, according to one's temper)?

This is the very "Life of Contemplation" that produced (sic) the rational foundation of the (Western) Civilization you now are the champion of?

Why must you have "now, what you could otherwise not afford"?
Black Blade
(01/05/2000; 04:23:26 MDT - Msg ID: 22316)
Asian markets hammered, Wall Street set to open higher.
S&P futures are steadily rising (currently +10.80), Au off $0.50 at $281.70. Off to the races at the market open? Meanwhile Pacific rim markets take a beating. Hang Seng off over 1200 pts (7%+ decline), Nikkei down about 800 pts. etc. Crude down again (currently -0.39). Could be an interesting day again.
CM
(01/05/2000; 05:51:52 MDT - Msg ID: 22317)
PERMAFROST Re Profit/Bill Gates -- msg #22315
I was quite amused by your remarks on the "evils" of private enterprise.

Guess I missed the news of Bill Gates being hauled before some high tribunal and being found to be "morally and intellectually bankrupt." (But with all of his money, he probably didn't mind it so much.)

Also wasn't aware that all of Gates' wealth was simply due to some "overlooked detail in his contract with IBM." You must be referring to his retaining the rights to the original disk operating system (DOS). I believe that Mr. Gates made quite a few other fortunate decisions that, over a period of time, allowed him to amass a great fortune.

But since you have decided that Mr. Gates obviously doesn't deserve to be rich -- let me help out. I hereby volunteer to take all of that "filthy lucre" off of his hands (heh heh).

Let's see, oh yes, concerning the "Life of Contemplation." I agree 100%. People shouldn't be allowed to control their own lives. We just can't trust them! I hereby volunteer to spend the rest of my pointless existence in studying the mysteries of life. Of course you'll help me out, won't you? I can probaby get by on an annual stipend of $30,000 or so. Shall I send you my mailing address for the checks?

SteveH
(01/05/2000; 06:04:22 MDT - Msg ID: 22318)
Canamami
Ah...the Carlin Trend...

Regarding 'allowed to fall,' I believe that is the logical conclusion of ORO's piece, explicit or implicit. The deal was oil-gold-dollars. The effect was a steady or lower gas pump price in dollars, oil for gold, and ultimately cheaper gold for dollars. At some point, in a decade or liftime later, gold would rise. Most us hope that gold would rise now, but not at the expense of oil or dollars, but someone seems to have backed all of us into a corner such that to like gold means all the rest. Not fair, exactly, you know.

I believe it takes up to five years to bring a mine into production so there would be a lag once mines like you mention are brought on line.
RossL
(01/05/2000; 06:13:58 MDT - Msg ID: 22319)
Permafrost
quote
"On the other hand, Profit is the acquiring of UNEARNED wealth. Now this would have been the case if the farmer received more than the "extra grain" the earth is capable of giving [impossible in earth's case but NOT SO where the digital presses of the bankers..."

I'm trying to follow your logic. It's OK to use the earth to create wealth, but not OK to use other people to create wealth? Right? How does the farmer grow extra crops without the tools sold to him by someone else at a profit? How do we get past the hunter/gatherer stage in civilization? I am lost into the fog of collectivism when I try to justify this concept in my mind.

Cavan Man
(01/05/2000; 06:31:25 MDT - Msg ID: 22320)
PERMAFROST
I see we have a "CM" posting here now. I believe your message is intended for that party.

IMHO, there can be no utopian economic organization of humanity in this life for us. Any supposed "perfect system" will surely be corrupted by the proclivity of our species to, corrupt and, gain individual and collective advantage from any economic order. What we can hope for is continued remediation of economic injustice and the unintended consequences wrought by the system(s) utilized today. Only in the hearts not the minds of man can harmonious economic accord be found for all. It is in the heart (and soul) of man where the problem lies IMHO.

Should the world economic system as we know it today be wrought asunder, it would no doubt be replaced with another model of imperfection and corresponding inequality.

The Euro may be just another patch on the bicycle tire but for this moment in monetary history, it will serve better than nothing.

Enjoy your posts much.
Cavan Man
(01/05/2000; 06:34:13 MDT - Msg ID: 22321)
ORO: (SteveH 22310)
Sir Knight,

In replying to SteveH could you please highlight the significance of the Jamaica Accords or perhaps do so in a subsequent post? Thank you.
PERMAFROST
(01/05/2000; 06:55:41 MDT - Msg ID: 22322)
Cavan Man...
YES! You put it very well. I wholly agree with what you're saying. I decided not to add anything more on this topic as its focus is getting lost in cyber haze.
Now, could you tell me what "IMHO" stands for?

Thanks!
Al Fulchino
(01/05/2000; 06:56:11 MDT - Msg ID: 22323)
Steve H/Pinball Wizard
Great analogy. Back in my younger days, I always sought out the machine with the best odds. When we found it, we played it until it smoked . Sooner or later the owners realized there little profitability in the machine or took it away and junked it. When, the current manipulators of gold realize that they can't squeeze any more money from the machine, either small gold owners like you and I will lose our gold and or the rules will change. All the same I would rather own it and take my chances.
PERMAFROST
(01/05/2000; 07:03:11 MDT - Msg ID: 22324)
Dear RossL..
What I'm saying is this: Do you think it would be right to sell something that costs you 1 to produce and market on a regular basis for 100?
Then answer this one: would it be right for you to sell AT ANY PRICE something that costs you NOTHING to produce on a regular basis? The latter is exactly what the bankers are doing.
I'm not saying don't buy what's necessary to make your product. Just don't SCREW people--and don't get SCREWED!
That's all I'm saying, my friend!
nickel62
(01/05/2000; 07:15:29 MDT - Msg ID: 22325)
I need to find a post from several days back relating to China
I need to locate a post from several days ago relating to China and the statement of a Chinese official that they might consider increasing their gold weighting. Can someone please tell me if there is a searchengine on the Forum that would help me retrieve the needed post without searching manually. Thanks
RossL
(01/05/2000; 07:15:37 MDT - Msg ID: 22326)
Permafrost

"What I'm saying is this: Do you think it would be right to sell something that costs you 1 to produce and market on a regular basis for 100?"

If I desired the product and it was the cheapest price I could find, it would be OK. If it were not a free market transaction, and you had used force or government laws to limit your competition, then it would not be OK.
PERMAFROST
(01/05/2000; 07:16:46 MDT - Msg ID: 22327)
CM...
Like all of us, you will one day die. I hope you will be able to look back and see SOMETHING you've done that was better than the posting of your recent message.
the act you're disparaging gave us Jesus and Gandhi and many others you could not pronounce the names. I guess "Hitler" and "Clinton" rolls off your tongue easily enough?
How 'bout Greenspam? (pun intended.)
PERMAFROST
(01/05/2000; 07:21:36 MDT - Msg ID: 22328)
RossL...
100-1=99. Not OK by me. Others in the past, and I'm talking about History, actually "disagreed" a bit more. Bloodshed and misery ensued. That OK with you as well?
RossL
(01/05/2000; 07:29:31 MDT - Msg ID: 22329)
Permafrost

I'm afraid you may have missed the point. The only way someone could keep a 100:1 profit ratio is through force or corrupt government laws. "Profit" or usury is not the villain. Force and corrupt government is.
PERMAFROST
(01/05/2000; 07:40:20 MDT - Msg ID: 22330)
OK RossL...
Thanks for pointing out that the difference between the symptom and the disease causing it...

As for me, time to go. Goodnight eveyone!
PERMAFROST
(01/05/2000; 07:41:25 MDT - Msg ID: 22331)
OK RossL...
Thanks for pointing out that the difference between the symptom and the disease causing it...

As for me, time to go. Goodnight everyone!
flierdude
(01/05/2000; 07:55:21 MDT - Msg ID: 22332)
What do you think of this? F.O.A. Oro Stranger Others?
Date: Wed Jan 05 2000 04:24
GoldBird1a (Armstrong-Republic-manipulations) ID#396247:
Copyright � 1999 GoldBird1a/Kitco Inc. All rights reserved
Whilst I have read a lot on this site about Armstrong and his supposed short gold position etc etc etc. I just thought
everyone should know that it is all BS. I have worked insided Republic Bank and quite frankly the whole thing stinks of a
major set up intended to frame Armstrong big time. Armstrong was right about the manipulation of silver and a whole lot
more . Not only was silver manipulated, they do it all the time. If you want to know the truth, it was Republic who has
been behind almost every manipulation I know of for at least the last 10 years, I've seen it first hand. Buffet is not lilly
white and this silver purchase of his was not the first. The manipulation by PhiBro in 1995 when they exercised the call
options way out of the money was executed by Andy Heck who now works for Republic. The CFTC went to PhiBro
demanding to know who the client was behind the trade and they refused to give up the name. The CFTC did not do
their job as usual and just walked away demanding that they exit the trade. PhiBro was owned by Soloman Bros and the
authorization to squeeze silver was given personally by Buffet. Does anyone really think that a small sub like PhiBro
could do a $1 billion trade without board approval from above? It doesn't end there. Bribes were paid to Russian
officials to "recall" platinum so it could be inventoried. Republic helped Tiger corner the market in palladium and stored it
for them just like they moved the silver from NY to London for Buffet. This thing even goes back to the manipulation of
the US Treas Auctions. The gov't boys are so stupid, when they threatened to take the license away from Soloman
Bros, Buffet came to the rescue. Ha! He was behind that trade as well and his name was concealed then as always.
Then that trader left and started LTCM and had a real merry old time. Look at who his investors were! Just before it
blew up, Buffet agreed to bailout that operation and wrote a letter stating that if his offer was ever revealed, it would be
void. That letter was published in the WSJ because it blew up before Buffet could put the deal to bed.

The point is, Armstrong was trying to fight the crowd. He knew what was going on and the word inside the bank was
that he might even have tapes of converstions between a lot of the players. Everyone is really worried about that for sure.
These guys take the market up get all you suckers believing the rally is real and then slam it again. How do you think they
make their billions? They don't care about bull markets. They shag the markets to make their billions off of the people
who don't have a clue. They rotate between the markets. All the same names were on the short-side in copper.
Sumitomo tried to fight these guys. They baited the Japanese into the trades offering them untold credit. They then would
short copper against them. Sumitomo tried to defend their position and ended up buying the entire inventory. When they
had Sumitomo loaded, they ran to the authorities and did them in calling it a manipulation. They made a fortune on that
short trade. To add insult to injury, Sumitomo ran to Goldman Sacks for help, Goldman started selling thousands of
contracts in copper that day and then accepted the work out the following day after front-running their own client. Jimmy
Goldsmith was involved in this one as well as Safra, Tiger and a host of others. They amazingly are all on the right side of
everyone of these trades.

Hell - bribes were even paid to bank officials at the Central Bank of Thailand to start the Asian Crisis! That was the
evidence the Japanese took to the G7 meeting and demanded controls against the organized hedge funds. The US gov't
refused to do anything against the group of players because this thing is so dirty nobody wants the truth out there. They
told the Japs they would agree to sanctions only. That's why Armstrong is being served up as the Xmas turkey. Quite
frankly, he knows too much.

Safra was paying bribes to people inside the IMF as well. They all thought they had the IMF in their pocket. That's why
they all invested so much into Russia. They even set up Bank of New York on behalf of a revial group of thugs in Russia
and because Republic hates Bank of New York because they are not part of the club.

These markets are never going to breakout until someone breaks up this organized mob of billionares. The gov't is either
too stupid or they are involved with them ==== a high probability! After all, Armstrong had a $1 billion credit line in the
bank and everyone knew it. Suddenly, his credit line was pulled and Republic took $500 million of his clients money
pretending it was never there. That order came from good old Mr. Safra himself and was carried out by George
Wendler personally. And if anyone believes that story about Safra's death, I guess they believe in Santa Claus and a few
other sudden deaths when the heat got turned up. If Armstrong or his clients got Safra on the stand, the whole thing
could have unravelled. His bodyguard was changed just after this affair started. You fill in the blanks.

Armstrong was never short 700 tons of gold. In fact, to get the silver manipulation going, Armstrong was out of the
country and they ran their orders through Republic to make everyone think it was Armstrong covering short positions he
never had. The records are all there!

All this stuff is on tapes, docs and emails. The question is, will the gov't go along with the big boys and cover everything
up again? If so, they say already Armstrong won't make it to trial. They cannot afford a open trial with everything
Armstrong knows. He probably knows far more than what has been written here. They just can't afford for the world to
know how rigged this game truly is and how these billionares really make their money at the expense of everyone else.

That's the real story. Take it for what it's worth.

Return to Kitco Homepage
Peter Asher
(01/05/2000; 07:56:22 MDT - Msg ID: 22333)
Ross,CM Peramafrost
Since the fur is flying on this sujectthis morning, I'm posting a part of an as yet incomplete article.

Fair exchange is not Marxism. Marx preached "From each according to his ability and to each according to his need." That is properly called THEFT. When he said "Workers of the world, unite, you have nothing to lose but your chains." he was talking about the power of the holders of the means of production to command cheap labor by having cornered the market on land and factories.
In response to that inequity, he came up with it's antithesis.

Many philosophers have perpetuated a massive lie by being idolized for a profound truth and emotionally blind-siding their worshipers to the falsehoods. The reason that Capitalism and communism have been the fodder for conflict is that each has within it an ethical truth and also a means for exploitation. The follower of each, is impassioned with that ethical truth and resists being aware of the harmful aspect.
Blue Sky
(01/05/2000; 08:01:57 MDT - Msg ID: 22334)
Ramblings
Good Morning All
Peter post 22300 re; Walmart competing w/e-bus...I know they are working at setting up their own, but I cannot envision them selling much at a lower price+shipping than they do at their physical stores. Nor do I see any e-bus competing in their market at this time or next few years. They and Target(plus others) attract the price not quality purchasing consumer, you get what you pay for, a MTD mower vs a John Deere.
Now if they set it up such that you e-mail your order for dederant and sox, then we pick-up at the drive-up window. Hmmm ,,,register that as my I idea, Do I need a Trademark or Patent???
I listened to a good book on tape, "Gravity". I didn't write down the author, about super virus from outerspace.
Steve H re; OIL.... Co I'm leased to locked in diesel at $1.229 for Jan. .05 cheaper than Dec. 31...Maybe reserves not as depleated as stated.
Maybe I'll be able to pay off my Y2K purchases at a higher rate of earnings. Spent NYears Eve with a vocal detractor of the Bug,,,got to eat my crow w/humble pie. Still smiling though , I still have my insurance premiums in hand.
I GOT GOLD, and always will have.
Blue SKY to all

PS : Scrappy ,how you doing?
Peter Asher
(01/05/2000; 08:06:15 MDT - Msg ID: 22335)
RossL
"lost in the fog of collectivism"

Simple, and succinctly exact
phaedrus
(01/05/2000; 08:10:35 MDT - Msg ID: 22336)
impressive
Got real time quotes here...just saw the Nasdaq 100 futures drop 50 points in less than 3 seconds. Now down about another 150 points.

Yowza.

Come on Mr. Market, you know I've got put spreads on, don't tease me...don't tease me...
USAGOLD
(01/05/2000; 08:19:43 MDT - Msg ID: 22337)
Today's Gold Market Report
Market Report (1/5/00): Gold gave up a little more ground today in the
New Year adjustment that began yesterday. FWN reports one London trader
as saying "The market is supported at $280, with some solid buying
coming in at this level. I think we may see some more short-covering
from the US this afternoon." The stock market is getting some support
this morning after the announcement yesterday that Alan Greenspan will
stay on for another four year term. That support, however, appears thin.
Asian trade was quiet with no surprises. Most of the Asian action was
centered around the platinum market where traders can't decipher whether
or not Russia is going to deliver any significant amount of the white
metal in the near future. One wonders what the Japanese really want.
They have a fear verging on paranoia over any weakness in the dollar and
move resolutely at the slightest provocation to squash their own
currency. Meanwhile, their forex reserves gained $16.1 billion in
December -- a record high level. According to the Bridge News report
last night, the CFTC is delaying processing its gold numbers due to a
non-Y2K computer glitch. The report being quoted in various media
contains "incomplete or inaccurate information" according to the news
agency. The surprise so far in 2000 has been the strength of the euro --
now in the $104 range.

That's it for today. We'll see you here tomorrow.
Cavan Man
(01/05/2000; 08:25:24 MDT - Msg ID: 22338)
PERMAFROST
IMHO-In my humble opinion
Gandalf the White
(01/05/2000; 09:36:19 MDT - Msg ID: 22339)
Test
<;-)
Gandalf the White
(01/05/2000; 09:37:34 MDT - Msg ID: 22340)
HELP ! --
The Hobbits want to know -- What happened to the price of the Long Bond at 11:31 NY time ?
<;-)
Gurn Blanston
(01/05/2000; 09:52:29 MDT - Msg ID: 22341)
Permafrost: IMHO means?
www.usagold.com/cpmforumMy guess is that "IMHO" means "In My Humble Opinion."

Gurn Blanston
TownCrier
(01/05/2000; 09:56:31 MDT - Msg ID: 22342)
Fed adds $6.8 billion to bolster reserves of the banking system
http://biz.yahoo.com/rf/000105/rb.htmlToday we have a comment that confirms our suspicion of yesterday when we stated: "you will see that economists don't have a clue as to what prescription is called for at this time. If the *experts* can't see what must be done (add vs. drain reserves) we are surely on thin ice of some sort."
James Blumenthal, Fed watcher at MCM Moneywatch, told Reuters "I wouldn't be surprised to see them come in and do matched sales sometime soon. But they themselves (the Fed) ... are also playing this day-by-day." The Fed had stayed on the sidelines for the second straight day during their regular 9:30 open-market intervention period...with overnight repo operations remaining a possibility.

Kim Rupert, economist at Standard & Poor's MMS, admitted that though an add need seemed to remain, there were too many factors to make a reliable prediction, saying, "it depends on how fast a lot of these factors run off. We know the schedules for maturing repos but we don't know the others."

Shortly thereafter the Fed did indeed participate in $6.8 billion in overnight repurchase agreements to provide the reserves needed by the banking system.
TownCrier
(01/05/2000; 10:03:54 MDT - Msg ID: 22343)
Here's one for TheStranger...HEADLINE: Strong U.S. Growth Will Push Up Service Prices
http://biz.yahoo.com/rf/000105/to.htmlIn a teleconference today, Ralph Kauffman, chairman of the National Association of Purchasing Management's non-manufacturing survey committee, said, "If the economy continues to grow strongly, price pressures (in the non-manufacturing sector) will continue."
TownCrier
(01/05/2000; 10:15:05 MDT - Msg ID: 22344)
Is Brazil on the ropes? Their foreign exchange reserves have plunged 16% since the end of November
http://biz.yahoo.com/rf/000105/nk.htmlWith these international reserves being Brazil's primary ammunition to fight off unwanted currency fluctuations in the foreign exchange market, you've got to be somewhat concerned by the 16% depletion since December began to the current level of $35.388 billion. By no means was all of this amount accounted for by their program of offering dollar-denominated repos through the century date change.
ORO
(01/05/2000; 10:22:38 MDT - Msg ID: 22345)
PERMAFROST
PERMAFROST (1/5/00; 3:32:33MDT - Msg ID:22314)

---->On the other hand, Profit is the acquiring of UNEARNED wealth. Now this would have been the case if the farmer received more than the "extra grain" the earth is capable of giving [impossible in earth's case but NOT SO where the digital presses of the bankers are concerned]; or if the worker whose skills rightly qualified him for a job with a salary of 2,000 dollars were to get 4,000 instead [his boss would never concede to such a thing; but their "boss", Alan Greenspan, delivers the extra green to his masters on a silver platter along with their morning WSJ].
----> As for the businessman, prey tell, how can it be justifiable or acceptable that a creature as morally and intellectually bankrupt as Bill Gates be allowed to lord it over so much wealth and power [all due to an overlooked detail in his contract with IBM, if I recall correctly]?

As you are revealing, one needs to use violence in order to gain UNEARNED wealth. Government, in "realpolitic" terms is the organization with the control of more means of violence than any others in a given territory. Violence is the only means of gaining from uneconomic activity, which is that activity that produces no profit. The warrior collects the fruit of other's labors by putting the producers to the sword and taking their production.
To equate Greenspan's actions as an agent of government with those of a Bill Gates in his heyday (the early 80s, not today), is absurd. What the Rothchilds and the Barings do in concert with government is not of the same stuff of free markets and personal actions. They do not produce profit, the produce booty, and their business is better known as plunder.
The true business opportunity exploited by Gates and Jobs right along with him, was to make use of inventions of others, that were not making the expected profit for their original inventors, most notably the ossified Xerox, and putting them to use by selling DOS to IBM or creating the Mac. These acts of vision and judgement are those bearing the greatest rewards. IBM's "overlooked detail" is in reality a lack of understanding, vision, and a lapse of judgement. They deserved what they got.
---->As for your justification of debt--I think you referred to it as "renta"--as the instrument or catalyst whereby the otherwise-impossible accomplishment of MORE would not have been envisagable...
----What's the rationale for having, desiring this "MORE"?
----Why should we literally waste most of our limited lifespan on this Earth towards a frenzic orgy to produce ever MORE people, pollution, misery, depletion of natural resources? instead of devoting the time we have left once daily chores are taken care of to LESS (intellectual and spiritual growth; religion or philosophy, according to one's temper)?
----This is the very "Life of Contemplation" that produced (sic) the rational foundation of the (Western) Civilization you now are the champion of?
----Why must you have "now, what you could otherwise not afford"?
These are the choices people make on an individual bassis. Perhaps the "life of contemplation" is more fulfilling to our spiritual well being when our stomachs are full, when we lay on the soft bed in a warm house flicking channels on a 500 channel contemplation machine with a 60 inch screen?
rsjacksr
(01/05/2000; 10:25:45 MDT - Msg ID: 22346)
Re: Gandalf the White (1/5/00; 9:37:34MDT - Msg ID:22340)
The Hobbits want to know -- What happened to the price of the Long Bond at 11:31 NY time ?30-year Treasury Bond Index Industry:
INDEX: TYX.X
Delayed as of 01/5/2000 12:17 EST
Last Sale 65.85
Change 0.53
% Change 0.81%
Volume 495
� Quote.com 1999
TownCrier
(01/05/2000; 10:58:13 MDT - Msg ID: 22347)
G-7 to Discuss Yen's Rise at Tokyo Meeting This Month
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=865421e4a8d064ee16ac68eebce51b21A good Bloomberg article to walk you through Japan's currency problems. The government wants the yen to be weaker to benefit exporters...ostensibly to bolster the economy in general and not just the corporate profits, and to benefit a class of Japanese investors by protecting the value of investments that they are currently holding abroad. (In this latter case, eventually the investors decide to cash out of their foreign investments and bring their profits home. If the yen is strong compared to the currency that denominated the investment, then they don't end up with as many yen to show for their efforts...although the yen they WOULD have would be stronger. Go figure. At any rate, you can see clearly that the class of citizen that gets the shaft is the simple domestic worker and saver that holds yen.)

Japan wants other members of the G-7 to assist in the efforts to flood the world with yen, but so far they've been told that they are on their own in this management matter. The Bank of Japan did finally capitulate to a degree in September, throwing honor out the window and making changes to their money market operations to allow for an increase in the yen supply. September has been the point (as we discussed in two important posts yesterday) at which the yen and the dollar have joined arms to stride into the fiat boneyard accompanied by Elgar's "Pomp and Circumstance March No. 1".

Meanwhile, the Euro has reached nearly a 2-month high. Get the drift?
mhchuck
(01/05/2000; 11:08:38 MDT - Msg ID: 22348)
Final Post.

All roads lead to gold.



mhchuck.
Ray Patten
(01/05/2000; 11:41:45 MDT - Msg ID: 22349)
canamami...

Please tell me who owns the Cerro Casale Gold reserves. I may want to buy some of their stock.
YGM
(01/05/2000; 12:08:06 MDT - Msg ID: 22350)
Town Crier
http://skybusiness.com/yukon-gold/index.htmlTC...I have linked USA Gold to my soon to be completed Gold Website.....I'll be away from the keyboard for a few weeks so keep up the good fight guys.....Ken...(YGM)
Goldy Locks Guy
(01/05/2000; 12:24:36 MDT - Msg ID: 22351)
china selling silver reserves
Hi...I know this is a gold forum, but do any of you precious metals buffs have any input on China selling into the market? Silver tanked today because of it, but I'm wondering if it's a kneejerk reaction or could the 29,000 tons actually make a difference in the big picture...Thanks...goldilocks
sstins
(01/05/2000; 13:21:47 MDT - Msg ID: 22352)
Mortgage Rates (FWIW)

Today's Par Fixed Rates (Par rate assumes standard closing costs plus pts)

30yr fixed rate locked for 30 days - 8.125%
15yr fixed rate locked for 30 days - 7.875%

Housing market slowing soon???

"I got gold and am getting some more."
Cavan Man
(01/05/2000; 13:22:36 MDT - Msg ID: 22353)
To Leigh
RE: Another 14770

On Japan and oil--If my memory serves me correctly, it is Yergin's contention in his "The Prize" (excellent BTW) that the real cause of Japan's murderous ambush at Pearl was the fact that the US cut back and/or embargoed oil exports to Japan. Frightfully ironic that Japan is the $'s staunchest ally isn't it? BTW, did you know that the incidence of mortality in Japanese POW camps was much higher than their German counterparts? That's a fact. Never forget PH.

I read Another's post one last time. I'm convinced of their (FOA & Another) authenticity and believe they make the effort they do so that they will live long knowing they did their best to warn of the "road ahead"; effectively with clear conscience. They post for at least two years; are driven from at least one other forum with ridicule; arrive here welcomed by a wise and open-minded host; and continue on using the best medium (widest range/no filter/free to all) to broadcast their message. What could they do; take out an ad is USA Today? Their message is anathema to many. That is one of the reasons I believe what I read from their hand.

Methinks 30% allocation is not high enough for PM. Suggest calling MK @ CPM today.
Usul
(01/05/2000; 14:27:16 MDT - Msg ID: 22354)
Gold for Oil
http://www.msu.edu/~kreinin/It would be great if someone with good library resources
(unlike myself, unfortunately)
could look this up and post relevant text... it does
look interesting, does it not? It is the only
authoritive reference to Gold for Oil I have
found on the Net (Yes, I know USAGOLD and other
gold forum sites talk about Gold for Oil incessantly).
Unless there are references in
MK's book (which I have not seen).

FOA, perhaps you have some literature references to
the Jamaica Accords?

Perhaps someone knows a reference buried in the Hall of Fame
or on the labyrinthine Eagle site?

The strength of a case in learned discourse is
supported by authoritive references to published
literature.

Usul (12/2/99; 15:57:43MDT - Msg ID:20078)
Gold for Oil

"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
Netking
(01/05/2000; 16:26:06 MDT - Msg ID: 22355)
"Bargain Hunters Squash Nasdaq Decline"
http://www.7am.com/cgi-bin/wires02.cgi?1000_00010506.htm"Bargain Hunters Squash Nasdaq Decline" - Are we missing something here folks Professors of precious metals & Macroeconomics as we are? When a 'Bubble.Com' stock has P.E. of only 100's we should be rushing in!(smile)

beesting
(01/05/2000; 17:15:30 MDT - Msg ID: 22356)
IMF researchers say Pound should fall to join EMU
http://biz.yahoo.com/rf/000105/bba.htmlBritians labor Government is committed in principle to introducing the Euro, subject to a referendum(vote) early in the next parliament.
For full story click above URL.....beesting.
Gandalf the White
(01/05/2000; 17:17:38 MDT - Msg ID: 22357)
Thanks rsjacksr for the message #22346
Why I ask, was that I was watching the LiveCharts on Quote.com -- when at 11:31 the line dropped off the chart!!! I now when I look at the end of the day, I see a yellow line at the 11:31 time which must be the erasure line to correct the error. -- WOW ended at 6.631% today!!! -- Will someone please awaken me when the Long Bond hits the rate of 7.00% yeild. -- The Hobbits are going GOLD shopping again tomorrow as they can not believe the after Xmas sales!!!!
<;-)
R Powell
(01/05/2000; 17:23:08 MDT - Msg ID: 22358)
Non-commercials short again
The imfamous commodity funds have increased their net short contracts position from 20553 on Dec. 14 to 28982 on Dec. 28 I used 'Consenus' COT figures for Dec 14 and figures from www.futuresource. com/cgi-bin/art? 000103/145302 for the Dec. 28. Most of the selling took place between Dec 14 and the 21. These are net short numbers and means that upward gold prices in the futures market for any-any reason will bring about short covering by the fund managers. The trap has been reset and baited and POG held its own fairly well during the selling. Noteworthy also, it was those concidered small speculators by the Commitment of Traders Report who supported gold during the selling. Something is needed to start an uptrend to force some shortcovering and perhaps the next move up will receive more support from John Q Public. Maybe?
pdeep
(01/05/2000; 17:30:40 MDT - Msg ID: 22359)
The Road to a Banana Republic
I read with some amusement today the growing feeling of unease amongst various economic poobahs at the thought that AG might migrate to parts unknown. Having the Fed automatically target a 2% inflation rate was one of the more laughable solutions.

So here is a modest proposal for his replacement. It has certain advantages: it is apolitical, it responds to feedback, its operation is the same as the departed Chairman, and bribes are easily uncovered.

Materials:

1 large cage
1 large monkey
Lots of large bananas

Methods:

Place the monkey in the cage. Feed with regular monkey chow for 50% of daily caloric intake. Begin by throwing in 20 bananas/day to supplement monkey chow.

Look at the weekly DJIA. If less than week before, remove one banana from daily ration. If more than week before, keep daily banana ration the same.

Hang a bunch of plastic bananas just outside of monkeys reach outside cage. Now count how many times the monkey reaches outside the cage for the bananas, per week. Divide by 7 to get a daily average. (This can be automated using a simple photoelectric circuit attached to a non-compliant old 486 not good for much else)

Multiply this amount by $1 billion. That is the amount the Fed adds to the money supply the next week.

And there you have it. In addition, when anyone exclaims that the Fed is monkeying around with the stock market, you can answer in the affirmative.


SteveH
(01/05/2000; 18:56:16 MDT - Msg ID: 22360)
Wrote this to another friend
I watched CNN Moneyline and then Crossfire regarding Greenspan tonight. I concluded that the information flow available to the talking heads (commentators) is limited by their traditional sources of information, in which phone calls, letters, and contacts (with books to protect) provide their base of wisdom. Well educated these folks are but somehow they seem to be so pleased that all traditional, conservative values of monetary policy have been thrown to the wind and that their 401K's are making them wealthy beyond their dreams. In that image of their world, they are presuming that inflation is low, when you take out oil. This is their fatal flaw, in my opinion. By removing oil from the equation, they are presuming that all is well. Oil is rearing its head for the exact opposite reason they presume -- the oil barrons are shaking their discontentment with manipulation, derivatives, and paper gold. The Long-term Bond would appear to be the great equalizer and thermometer here. What oil is telling us is they don't want dollars under its current bubble mentality, they don't want dollars that inflate regardless if it is seen in the price of goods. That is how I see this, but so far my friends just say, "Steve, you have been saying that for two years now and I have tripled my money, and look at you!"

Damn frustrating, eh?
SteveH
(01/05/2000; 19:33:44 MDT - Msg ID: 22361)
How soon before the bear?
Pretend for a moment that you were no longer a gold bug. Rather, imagine that you have $10K and you want make money like everyone esle is today. You sign up for *ebrade, you deposit your money. You make a few play trades to get the hang of it. That seems easy enough. Now here goes nothing.

You want to buy Frisco but can't, because you don't have enough. 100 shares at $100 less commission puts you over. So, you borrow some money from your bank account and send it to *ebrade. Hey, now I can buy 125 shares. Great. You post the transaction and get confirmation. Now, for the next three weeks everyday five times at work and five time at home you are slave to your *ebrade browser.

After three weeks you note you aren't ahead or behind. The stock just sits there. Common Frisco, go make the money I know you will make me. Suddenly, the stock drops $20 per share. Hmmm! That is not right. Wait. Talking heads say, good buying opportunity. Let me get some cash from my credit card...$2000 should do it.

You send that in to the *ebrade. Great, now I can buy more shares. Wait I need to buy 100 share lots. Well I will pick *iwin. They are cheap and the chat room says these are hot. You get 100 shares. Three weeks go by and you are still slave to the *ebrade browser. Yet it just sits there.

One day it goes down $5.00 dollars. Hey wait. This isn't cool. I start with $10K, bump another $4500 and I got squat.

Talking heads still say good buying opportunity. Maybe if I sell these and buy others...repeat above.

Anybody got the urge, because I know if I bought stocks right now, this would happen. So we must be about six weeks away from the big drop, eh?
elevator guy
(01/05/2000; 20:00:01 MDT - Msg ID: 22362)
@SteveH
Yes, thats a pretty accurate scenario for market gamblers, and all who are led astray by the lure of easy money.

As soon as it seems like a sure-fire bet, the hook is in the mouth, and the fool and his money are soon parted.
RAP
(01/05/2000; 20:27:56 MDT - Msg ID: 22363)
How soon before the bear?
That sound like what I have been going through with gold stocks for the past several years.
On a more serious note, I want to than MK for the silver eagle I am receiving from the last contest, just for entering it. I also want to thank him for this forum. I feel as though I should be giving him the silver eagle for the privilege of using it. I have to thank all the great people who give away all there knowledge for free at this forum.
Thanks again to all.
canamami
(01/05/2000; 20:34:20 MDT - Msg ID: 22364)
Reply to Usul, 22354
Are you a detective or private investigator in your non-posting life? One wonders whether "Contributor and Occasional Guru to the USAGOLD Forum" ought to be added to that resume? Check out the academic articles, particularly with reference to the 1970-74 period, when gold-backing died.
RAP
(01/05/2000; 20:35:01 MDT - Msg ID: 22365)
than???
Spell checkers think "than" is just fine in place of THANK!
Solomon Weaver
(01/05/2000; 20:53:07 MDT - Msg ID: 22366)
Oil and Steve H
Steve H

I saw the same show...and had the same thoughts.

What I also thought was funny was how that handsome young Economist said he wished that Alan Greenspan and the FED would put out a standard policy in numbers, for example...if inflation is above 2% vs. below 2%...economists just love spread sheets don't they???

Again, I think of that Arab Sheik story in Ascani's writings who gets a ton of gold sovreign coins for oil rights on his land...he didn't need a spread sheet to count all that gold....and he didn't trust anyone to do it for him.

Poor old Solomon
Solomon Weaver
(01/05/2000; 20:58:19 MDT - Msg ID: 22367)
pdeep and the FEDchimp
pdeep

great idea...just seems to have one problem...

There is no mechanism to determine if the FED should reduce the money supply...even if the monkey dies it is only down to zero.

Poor old Solomon
Solomon Weaver
(01/05/2000; 21:06:54 MDT - Msg ID: 22368)
a snippet from beesting's link
http://biz.yahoo.com/rf/000105/bba.htmlBeesting

Interesting to see signs that at least one party in Europe is thinking of joining in with the EU..Labor obviously thinks it will be worse for the common man if they don't.

This snippet caught me.....

``The results indicate that the pound should depreciate considerably before entering EMU,'' said the paper, which was written by researchers from the IMF, the World Bank, the Bank of Spain and Germany's Deutsche Bank.

The authors said their research calculated equilibrium exchange rates ``in a way that guarantees global consistency.'' The data showed that the euro was some 7.5 percent undervalued against the dollar at the end of 1998 ``which implies an equilibrium nominal rate of 1.26 euros per dollar.''

Poor old Solomon
RAP
(01/05/2000; 21:09:27 MDT - Msg ID: 22369)
PERMAFROST,ORO@profit
On the subject of "profit".
Since I am "intellectually bankrupt" myself, I do not want to get into this discussion, but I think I have something to offer. Is there any distinction between proceeds from gambling and "profit"? I think we all agree gambling is immoral and wrong. Just where do we draw the line between the two? At some point profit turns to proceeds from gambling, and therefore I thing you are both right, you just have not defined profit completely. IMVHO.
rsjacksr
(01/05/2000; 21:12:26 MDT - Msg ID: 22370)
Re: Beesting
Currency valuationsRead beesting post on "IMF researchers say Pound should fall to join EMU". Can someone please tell me what they use as a yardstick for determining the relative value of currencies and against what???

Solomon Weaver
(01/05/2000; 21:20:58 MDT - Msg ID: 22371)
some more on China and Silver
Goldy Locks Guy (1/5/00; 12:24:36MDT - Msg ID:22351)
china selling silver reserves
Hi...I know this is a gold forum, but do any of you precious metals buffs have any input on China selling into the market? Silver tanked today because of it, but I'm wondering if it's a kneejerk reaction or could the 29,000 tons actually make a difference in the big picture...Thanks...goldilocks

Hey Goldilocks

The following was a message I got from Ted Butler about silver sales out of China. I did not add the copy since it is copyrighted and I want to respect Ted's material...but If you go over to Kitco...it makes a good read..dealing exactly with Silver....and China.

A brief overview...according to TB China has a 100 million ounce reserve...which seems to be about 3,000 tons...where did you get the number 29,000?

Thanks for your note. Here's a post I made on the topic a little ways back on
kitco

Date: Sun Dec 19 1999 10:57
ted butler (China's silver) ID#370209:

Poor old Solomon
Gandalf the White
(01/05/2000; 21:26:18 MDT - Msg ID: 22372)
Poor old Solomon's calculation
Poor Ol'e says: "The data showed that the euro was some 7.5 percent undervalued against the dollar at the end of 1998" which implies an equilibrium nominal rate of 1.26 euros per dollar. <==
****The Hobbits read that quote a little bit differently, Sol. -- As the Euro did not exist in 1998, and when the Euro was born it was thought to have a value 7.5% GREATER than the US$, which would make the Euro = US$1.08 when it was about to begin its life. However, the Euro was born much more robust than that and quickly grew to = US$1.17 only to come back to "earth" near parity. -- Notice the strength of the Euro now. -- Wonder what it will be like when that "Black Gold" becomes priced in Euro's? -- AND then what it will be like when REAL GOLD gets used to price Gold ?
<;-)
ORO
(01/05/2000; 21:27:55 MDT - Msg ID: 22373)
Gambling
Can be fun and exciting if there is no problem of addiction. If the game has fair odds, you can play quite a while. Realize that the game is a less than zero sum game. Odds favor the house, and there is much danger.

If windsurfing, hang-gliding, parachute jumping, walks in Hyde park (Chicago), bunjee jumping and roller coaster riding are not evils, neither is gambling.

As a drink of wine is not alcoholism, neither is a weekend in Vegas. A lifetime in Monaco, however, is a different story.
FOA
(01/05/2000; 21:29:01 MDT - Msg ID: 22374)
CHINA VOTES NO FOR SILVER
NO LINKWednesday January 5, 5:24 pm Eastern Time

Silver Falls on Dumping Fears

By The Associated Press

Fears that China will dump silver on the market sent silver
futures prices sharply lower in trading Wednesday on the New
York Mercantile Exchange.------------------

------------Silver prices plunged on a report in the semi-official Peoples Morning News that the Chinese
government will sell some of its silver reserves. The amount of silver to be sold was not mentioned. However, China is believed to have 93 million ounces of silver in reserve, according to analyst James Steel of Refco. Inc.

China is currently producing about 1,300 tons of silver annually, while consumption in that country is about 800 tons, making it plausible that a sale would take place, Steel said.--------------------------
Solomon Weaver
(01/05/2000; 21:34:31 MDT - Msg ID: 22375)
Gandalf and more discussion on the Euro
Greetings Gandalf

Love your handle by the way...since I read LOTR over and over again..still a Hobbit at heart.

actually the calculation was not MINE...it was the calculation that I snipped out of that article that beesting posted a bit earlier...

I am aware that at the birth of the Euro, it made a massive slide (like when the new kid in town moves in and the other boys bully him just to see how he reacts)...also curious that on the one year birthday it starts to look stronger again....

Just thought it was interesting that a consortium of thinkers (including the IMF and World Bank which are americocentric) could whip up spreadsheets that showed that the Euro should stabilize at a higher level...

One small thing to remember...the number crunching for this report was probably done before all those repo dollars started flowing in very late 1999.

Poor old Solomon
ORO
(01/05/2000; 21:38:43 MDT - Msg ID: 22376)
The Euro and Japan
It is the Japanese doing Euro for Yen instead of Euro for dollars .
It's stupid, but they can do what they wish.

Aside from that, the first annual refinancing of Euro debt has arrived. Euro must be obtained to return this first batch of coupon payments.

But! Oh no!! We have no Euros, we only have dollares, what shall we do? We must part with les dollares and buy Euros.

Goldy Locks Guy
(01/05/2000; 21:41:27 MDT - Msg ID: 22377)
solomon and China/Silver
Sol,
Sorry about the 29,000...it was 2,900 tons....as you have said....I couldn't find the article from Ted Butler at Kitco would you mind terribly to email to me...@ Magnison@aol.com ???

Also, the post you mentioned on Dec 12....is that in the USA gold forum?

Thanks for your reply.......Goldilocks
Solomon Weaver
(01/05/2000; 21:46:51 MDT - Msg ID: 22378)
question to Oro
ORO

Is it the Japanese who have to repay Euros and are cashing in dollars to do it?

Or is it a Euro carry trade by non-Japanese parties who used the Yen to hedge the transaction???

Is Japan a net borrower of Euros???

Poor old Solomon
CoinGuy
(01/05/2000; 21:58:00 MDT - Msg ID: 22379)
How do I?
Now that you computer geniuses are done remediating code for Y2K, can you tell me how to pull up the S&P futures over at livecharts.com?

Gold is like a box of chocolates...ahhh nevermind,

Coinguy

RAP
(01/05/2000; 22:13:15 MDT - Msg ID: 22380)
Sir ORO, gambling
If gambling is a "less than zero sum game" it cannot play any part in a sound economic system, can it?
ORO
(01/05/2000; 22:17:31 MDT - Msg ID: 22381)
Solomon
Sorry for the confusion, they are buying Euro with Yen.

They are in no way Euro debtors. The new Euro debtors are in South America and Southeast Asia. They are also to be found in Germany's former elbow room.
ORO
(01/05/2000; 22:23:27 MDT - Msg ID: 22382)
Rap - it is entertainment
Gambling is a form of entertainment for those who can control themselves, and it can be the bassis of an economy relying on tourism.

It can't be a foundation for an economy in general, just as entertainment can't be the foundation for the US economy, though entertainment expenses are 10% of today's disposable income on average in the US - it is better than 6% of the economy.

Srocks, by the way, are not a zero sum game by nature. Historically, they are a better than 0 game.
beesting
(01/05/2000; 22:34:56 MDT - Msg ID: 22383)
rsjacksr #22370
Your Question:
Can someone please tell me what they use for a yardstick for determining the relative value of currencies and against what?

Excellent question rs, I have been trying to figure that one out in understandable terms for many years.
About 2 years ago I called my Broker and asked the same question, and here is what they sent me:

<< FLOATING EXCHANGE RATE:
Movement of a foreign currency exchange rate in response to changes in the market forces of supply and demand; Also known as FLEXIBLE EXCHANGE RATE. Currencies strengthen or weaken based on a nations reserves of hard currency and Gold, its international trade balance, its rate of inflation and interest rates, and the general strength of its economy.>>

Now the more I read this the more confused I got, when I went to the currency exchange site at yahoo and saw that some very small nations have stronger currencies than the U.S. One of which is England. How can their money possibly be worth more than U.S. money when you add the above mentioned statistics together. Ireland 1998 was another one, the irish PUNT was/is worth more than the U.S. dollar, haven't checked it recently tho.

I think the above statement from my broker was written by Casey Stengel(if you remember who he was) and translated by Alan Greenspan. It's english but if you think about it, it doesn't come out right. Like 2 plus 2 = 7.

I think there is also a population factor in the currency conversion equasion somewhere, they just left that out of my definition.
We know Japan holds a lot of U.S. debt and has a surplus trade balance to make their currency strong, but someone explain Ireland to me. Was their money tied to the English Pound?
There are others that are hard to figure out, off hand I think Cyprus is one, that has money more valuable than U.S.

I think The Bank of New York sets the currency exchange rates for everyone in the world except the BIS.They probably have a computer that someone constantly feeds financial data to from around the world, and the computer figures the rates. The trouble is whoever programmed the computer died and now no-one understands completely how it works.
It's all monoply money anyway, the only real money is....GOLD.

Those in the Know....Buy Gold.....beesting.


TownCrier
(01/05/2000; 22:59:15 MDT - Msg ID: 22384)
HEADLINE: Sony sends rare 'bubble' alert on shares
http://biz.yahoo.com/rf/000105/bez.htmlYou've gotta love the candor of Sony President Nobuyuki Idei. He told reporters that the company's shares were overvalued at the current price--like a "bubble." He felt the appropriate value would be the equivalent of $192 per share. Sony was presently trading at $247. Percentage-wise, that doesn't seem near as "bubbly" as many other tech stocks out there. Look out beloooooow...

One trader said, "It is surprising for a president to make such (bubble) comments about his company's own shares. It could bring some adverse effect on other high-tech stocks."
SHIFTY
(01/05/2000; 23:26:25 MDT - Msg ID: 22385)
Lemetropole Cafe
Intrigue abounds.
A must read. Keep an eye on GATA site I think it will be posted soon.
SHIFTY
(01/05/2000; 23:36:52 MDT - Msg ID: 22386)
(No Subject)
I see some of the info has already been posted by Flierdude msg Id : 22332. Glad to see nothing gets by this site!
TownCrier
(01/05/2000; 23:45:07 MDT - Msg ID: 22387)
HEADLINE: Europe to see next big wave of wealth
http://biz.yahoo.com/rf/000106/x.htmlJean-Francois Rischard, vice president--Europe for the World Bank said "It looks like European countries are now getting ready to catch the wave that started in the U.S. around the new technologies." He said in regard to a correction in the U.S., it would be hard to predict. "People have been wrong year after year...forecasters in general have not been doing very well." But he also said that "if Europe continues to grow at this pace, if there happens to be a weakening of the growth rate in the U.S, then Europe would be able to keep on going."
beesting
(01/05/2000; 23:56:06 MDT - Msg ID: 22388)
From Verdigris at Kitco about Warren Buffett..
http://cbs.marketwatch.com/archive/19991227/news/current/brk.htxArticle says:
The stock price of Berkshire Hathaway a holding company comprised of Buffetts favorite stocks is on the way to posting it's first annual decline since 1990. The stock has dropped 23%. Mr. Buffett refuses to invest in high tech stocks. Click URL for full story.

Now I think I have a little insight into Mr. Buffetts huge Silver purchase almost 2 years ago.
Mr. Buffett believes in tangible assets!Mr. Buffetts holding company owns many companies. If the stock market nosedives and his companies own buildings outright, real-estate, machines, equipment etc.,those things will still have value, and if the companies produce products that are always in demand, he is still in business.(batteries??)

Silver is an industrial metal and a store of wealth! If there is a great downturn in the economy and stocks lose much of their value, Mr Buffett is still in great shape because the Silver should go way up in value along with Gold.The rich get richer no matter what!....beesting.
CoinGuy
(01/06/2000; 00:41:53 MDT - Msg ID: 22389)
Bloodbaths and the S&P futures
ALL: Can anyone tell me where there is a good place(besides livechats.com) to check the S&P futures?

Bloodbath in Hong Kong again...down 1030.

Boy you know things are bad when Russia's looking bullish...

CoinGuy
Netking
(01/06/2000; 01:02:06 MDT - Msg ID: 22390)
Sony gives rare "Bubble Alert"
http://biz.yahoo.com/rf/000106/bu.html2.35am EST - Excerpt "...Sony Corp's president Nobuyuki Idei told Reuters on Thursday that his company's shares were overvalued, unleashing a ``Sony shock'' slide in Japan's high-tech sector and helping take the entire Tokyo index lower again.The outspoken Idei said that 20,000 yen ($192) was an appropriate price for his company's stock, given its current earnings levels. Anything above that would be ``a bubble,'' he added. On Thursday, Sony was trading around 25,700 yen.
...It closed at 25,700 yen after declining a daily limit of 2,000 yen or 7.22 percent in the morning, and off 20 percent from an all-time high of 32,250 hit on Tuesday..."
(Keep watching this space folks)


Peter Asher
(01/06/2000; 01:05:12 MDT - Msg ID: 22391)
Coin Guy
SP0H and hit "All sessions"0 is for the year digit, and H is for March.
CoinGuy
(01/06/2000; 01:07:45 MDT - Msg ID: 22392)
Thanks
Peter Asher,

Thank you kind sir...

CoinGuy
SteveH
(01/06/2000; 01:24:51 MDT - Msg ID: 22393)
repost
www.gold-eagle.com[ Add Message ] [ Register ]



Select Previous Periods Dec 31, 23:00Jan 01, 07:00Jan 01, 10:00Jan 01, 12:00Jan 01, 14:00Jan 01, 16:00Jan 01, 23:00Jan 02, 07:00Jan 02, 10:00Jan 02, 12:00Jan 02, 14:00Jan 02, 16:00Jan 02, 23:00Jan 03, 07:00Jan 03, 10:00Jan 03, 12:00Jan 03, 14:00Jan 03, 16:00Jan 03, 23:00Jan 04, 07:00Jan 04, 10:00Jan 04, 12:00Jan 04, 14:00Jan 04, 16:00Jan 04, 23:00Jan 05, 07:00Jan 05, 10:00Jan 05, 12:00Jan 05, 14:00Jan 05, 16:00Jan 05, 23:00 Current Postings


@TheBox and Dines' recommendation of FN
(kidklondike) Jan 06, 02:54

FYI, Franco-Nevada, not only has royalties on gold mining companies (including Barrick) but has royalties on Stillwater's palladium as well.



@Flambeur
(skyred) Jan 06, 02:43

Re: "I used to be one who thought this talk of a gold cabal was way too "out there" to warrant wasting time on. Now, I am not so sure."

Welcome to the school of believers! Now you're beginning to understand. It is like looking at one of those holographic pictures. At first you see only a jumble of colors, then suddenly: Bam! You see it! The real picture beneath the surface is as clear as anything. Keep asking questions! You are very astute. I'm sure you'll be able to explain all of this for our benefit.

A Bientot!



Hello
(nasdaqbubble) Jan 06, 01:07

Prediction:Nasdaq top=4192 (January 4,2000)

Dollar Versus Euro
Why is the bottoming of the Euro versus the dollar so Important to me?
Several Reasons, but i'll focus on two straightforward ideas:
1)leverage-speculators are using the weak euro to convert that currency to dollars and eventually play in the u.s equity and bond markets. Similiar to what the weak yen versus the dollar meant for u.s bonds until about 18 months ago.(hint:carry trade opened the door for speculators to borrow yen very cheaply, convert into dollars and then buy u.s bonds. The disparity in rates between the U.s and Japan gave investors an easy 3-4% As long as the dollar remained strong, foreign repatriation was profitable. If the dollar weakens then converting back into home currency proves less profitable.Basically, u.s bond demand was artificially strengthened and u.s rates remained low thanks in part to that weak yen.
Importance-source of cheap liquidity,take away the trade and the unwinding process becomes quite painful. Lots of leverage to unwind, Folks!

2)Psychology-Eventually a strong euro will represent a currency that is in favor by investors because of its strong backing towards gold.(The euro has a larger percentage of reserves backed by gold then the dollar). I believe that a serious move into the euro and out of the dollar will signal that the big boys percieve trouble with the paper world and must look for the safest fiat currency to protect their money.
You could just put your money into physical gold and avoid sleepless nights due to a future currency crisis.
Why make life easy?HMM?

A theory- The bottoming of the euro versus the dollar should coincide pretty closely to the second and final bottom for Gold.
Ramifications- If the euro has bottomed or if the euro has to test the bottom again versus the dollar and then proceeds to hold the bottom. My theory says that Gold should then bottom out in the not to distant future .

Guess- if the euro bottoms within a month or if it has already bottomed then gold should produce a second bottom somewhere between 260 and 280.
Maybe my theory is wrong, but its my best guess to how this whole big game plays out.

Stock market- You know the bulls will come out defending the market. i would not be suprised to see an attempted rally to new highs. I just don't see news high for the Nasdaq. I am bearish and will stay so even if my statements end up being wrong. I will accept being stupid and move on.

The reality of the matter- my bearishness is for real. what i want to make clear is my purpose. I post to let people know about the risks inherent in the u.s equity market. I just want to see people protect their hard earned money. That's all. If the market goes up forever and your in stocks then good for you. Bless You. If I am right, then i hope people will have heard both sides of the story before it plays out.. At least then, the investor can say that,"yeah, it was a bubble"," yeah, i knew there was risk , yeah, i knew that stocks could go down , but i decided to take the risk and accept the consequence whether good or bad!
Peace,
Nasdaqbubble
THE FOLLOWING STATEMENTS ARE ALL OPINIONS AND SHOULD NOT BE CONSTUED AS INVESTMENT ADVICE. READ MY POSTS FOR HUMOR IF NOTHING ELSE.
PEACE,
NASDAQBUBBLE


el St.One
(01/06/2000; 01:44:12 MDT - Msg ID: 22394)
S&P 500
CEF Centeral Fund Of CanadaAs of 3 AM EST S&P 500 Down 15.50 During the over night session.

Also is anyone watching CEF. It is down from 4.25 to 3.75 in 3 days. Unusually large move. Looks bigger than the drop in Gold and Silver. Any info or guesstimates?.........el

Netking
(01/06/2000; 03:32:33 MDT - Msg ID: 22395)
el St.One
Morning - Looks like POG touched around 279 territory this morning. Commercials (Comex) appear to be net short again...I think that there will probably be drifting & a little weakness for a while until the equity shakeout in Q1 is complete & we find a bottom here. Then we'll see further strength in the precious metals. There may be some very short term equity consolidation soon until Mr Greenspan confirms his numbers...a rate increase by a full point or what, then more drops on the markets, the shakeout this time could get 'ugly'.




PERMAFROST
(01/06/2000; 04:42:35 MDT - Msg ID: 22396)
Final thoughts...
Dear forum participants,

I've visited with you for a while and now it seems I shall be disappearing soon from the vista of your computer screens...

Last comments before je m'en vais...

I'm disappointed that many of you compartmentalize life, reducing it to a VERY-LOW common denominator, "It's the economy, stupid!" Not good, IMHO (now that I know what the acronym stands for).

As for the Euro being consecrated the next fiat/ponzy scheme champion...It ain't gonna fly because the conditions that induced the almighty dollar to earn its seignorage CANNOT be reproduced to birth the dollar bis (the Euro).

These included:
1) The virtual self-annihilaton of all the industrialized nations of the world (WW1 and WW2) EXCEPT the USA.
2) The Marshall Plan extravaganza which lulled and coerced the world entire into believing that the USD had real lasting intrinsic value. Various schemes and means of implementations were employed. To give you an example; the country I reside in today, Turkey, was given millons of dollars of credit with the attached stipulation that only AMER�CAN tractors be bought with the money. Similar things were done in Europe on a greater scale. This amounted to the US writing itself a check when it had no money in the bank. Later, when the Europeans and the rest of the world refurbished their infrastructure and began producing goods and services America printed more dollars and gladly exchanged them for their products. More dollars were injected into the financial system in the process. The hapless foreigners KEPT the dollars they received and "saved" them in dollar-denominated financial instruments inadvertently filling the empty coffers of the Bank (the USA) that had printed them in the first place. Effectively, the US received another check out of the blue, as it were. The rest of the world having thus converted half a century of labor and goods produced into dollars, the dollar became the global villagers' de facto TRUE currency which has superseded all prior forms of value. Everything and everyone has its price and that, you can bet your coin that "legal tender" dollar it is.

To implement the dollar bis, or the Euro, would require nothing short of WWIII. Not in the cards. To attempt measly little schemes like getting South America etc. indebted in Euros to force them to sell dollars to service Eurodebt is financial nonsense and monetary hara-kiri. Why? a)The Euro is officially backed by a big NOTHING, hence NOT a value in itself; b) the dollar constitutes a greater portion of EU reserves than gold and selling dollars (emptying one reservoir) to buy Euros (into another) will diminish the intrinsic value of the Euro itself (leaves you with the same amount of water); c) When the Europeans sell their A�rbuses or Mercedeses or French wines they receive DOLLARS in return--to get Euros instead would prescribe another Marshall Plan type con job (printing paper that a desperate, decimated population is willing to accept as if it were as good as gold) whereby the Europeans surreptitiously inject massive amounts of new paper to supersede the old paper. Again, that spells WWIII and a big NO WAY!

Cavan Man, you're right about human nature...

I will finish by repeating what I always said, in one form or another: If the Game ends, the "wise men" (Oro, FOA, Stranger et al.) along with their stillborn champion the Euro, will lose as well. For the end of the game spells REALITY and that's anathema to lies--the lifeblood of fiat currencies, immorality and injustice.

Mankind, having cut off all bridges leading out of Wizard Of OZ land and standing without a grape leaf before the One beyond description has become to reality what disease is to a body. One or the other has to "go".

I'll go first. :)
Black Blade
(01/06/2000; 06:24:42 MDT - Msg ID: 22397)
More fun today?.......Coin Guy this link's for you.
http://www.cnnfn.com/markets/us_markets.htmlS&P Futures down -9.90, could be fun on the street today. Au down -0.65 ($280.10), and bonds up slightly. Coin Guy: the above link is OK for s&p futures and world markets, etc.

Just a little trivia on rising bond yields:
Historically when short-term rates such as T-bills and Fed funds rise, then it is probably a sign that markets are about to correct. T-bills (90 day) are now more than 20% higher than their 12-month lows. On 6 previous occasions since the early 1970's the markets corrected well in excess of 10%. This includes the bear market of the early 1970's, 1981, and the Oct. surprise in 1987. 30 year Bond yields closed up 6.63% yesterday. Many believe that FED rate hikes are in the cards. Let us watch the action these next few weeks.
Canuck Gold
(01/06/2000; 07:50:09 MDT - Msg ID: 22398)
beesting (1/5/00; 22:34:56MDT - Msg ID:22383)
I've been lurking for a while because I don't have much time to post at the moment but I thought I'd respond to your question regarding the Irish punt. The Irish economy has been booming since they joined the European Union. Due to the vagaries of the EU funding formulas, Ireland has been the recipient of huge influxes of funds for various projects courtesy of the mandarins in Brussels. Unemployment is way down and income levels have take a big jump.

CG
USAGOLD
(01/06/2000; 08:28:51 MDT - Msg ID: 22399)
Today's Market Report: Keep an eye on Ecuador, Gold Starts Day Quietly
Market Report (1/6/00): Gold was off slightly in the early going today
with little in the way of news to take the market one way or the other.
Bridge News reports light short covering in Asian trading and London was
quiet. Keep an eye on Ecuador in the days and weeks ahead as it seems
that country has begun the long slide into chaos. This is the country
that defaulted on its Brady bonds, whose Harvard educated president just
declared a state of emergency (He has a 9% approval rating.) and whose
currency has been destroyed in another Latin American inflationary
nightmare. This could spillover to Wall Street's international banks and
reignite the set of conditions in Latin America that almost took it over
the edge last year -- debt default, currency debasement and economic
chaos/social unrest. The Ecuadoran problem could ignite similar problems
in other South American countries besieged by high debt, low exports,
and currency printing. The Ecuadoran sucre depreciated by 67% in 1999
and plunged another 15% to start 2000. Gold has skyrocketed in that
beleagured country.

That's it for today. We'll see you here tomorrow.
Cavan Man
(01/06/2000; 09:21:09 MDT - Msg ID: 22400)
Canuck Gold & beesting
I was in Ireland recently. The change from my last visit nine years ago was quite profound. There is certainly a bit of irrational exuberance noticable there in the real estate market as one example. Real estate prices rival either US coast and maybe a bit more. Ireland, impoverished for so many years is catching up to the rest of us almost all at once. Many US comapnies have operations there. The Irishman's opinion is that if the US gets a cold Ireland might come down with the flu (short term). The longer view for Ireland is quite positive I believe. Ireland is increasingly a very European country. Also, the Irish people do like US citizens unlike so many other global inhabitants FWIW.
Cavan Man
(01/06/2000; 09:50:00 MDT - Msg ID: 22401)
USAGOLD
Ecuador is very small. How can something so small cause so much harm? Don't understand because of the "size" of the problem. Thanks.
PH in LA
(01/06/2000; 09:56:21 MDT - Msg ID: 22402)
New graphics!! (smile)
`. .�

~-~
USAGOLD
(01/06/2000; 10:32:45 MDT - Msg ID: 22403)
Cavan Man...
How can a debt and currency problem in a small place like Thailand become an infamous "contagion" spread to the entire Pacific Rim and from there threaten the entire international banking sector?
Cage Rattler
(01/06/2000; 10:50:33 MDT - Msg ID: 22404)
Are the yen carry trades starting again ?
Heard very reliably that xxxxxxx bought a billion GBPJPY six months outright today. Seems that the carry-traders are still very keen and have only just started.
fox
(01/06/2000; 11:34:35 MDT - Msg ID: 22405)
Harmony's confidence




Breaking News Sport Technology Special Reports News Roundup




netAssets news
Harmony offers R780m for Randfontein
Harmony Gold Mining Co offers a premium of about 36% over the January 5 closing market price for Randfontein Estates


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

Independent gold producer Harmony Gold Mining Company Ltd is seeking to take control of Randfontein Estates Ltd in a deal worth R780m.
A statement from Harmony said the offer was for the entire existing issued share capital and the existing listed options of Randfontein at ratios of 31 new Harmony shares for every 100 Randfontein shares held and 7 new Harmony shares for every 100 Randfontein listed options held.

In addition, Harmony is offering a cash alternative of R11 a Randfontein share. There is no cash alternative for Randfontein's listed options.

Application will be made to list any new Harmony shares that will be issued on the Johannesburg Stock Exchange (JSE), the London Stock Exchange (LSE) and the Paris Bourse, where Harmony is currently listed.

Based on Harmony's closing price of R37.85 a share on Wednesday, and assuming the share offer is taken up in full, the offer values each Randfontein share at just over R11.57 a share and the entire issued ordinary share capital at some R750.29m.

The valuation does not include the proposed interim dividend of 50c a Harmony share to which accepting Randfontein shareholders will not be entitled.

The offer also values each Randfontein listed option at 261.45c a listed option, and all the listed options at approximately R31.37m, making for a total buyout in excess of R780m.

Harmony said the share offer represented a premium of approximately 36% over the closing market price per Randfontein share of 850c on January 5, while the cash alternative represents a premium of approximately 29%.

As for the offer for Randfontein listed options, the offer represents a premium of approximately 41% over the last closing market price of 185c each.

The deal is subject to various conditions, including the scheme of arrangement proposed by Western Areas Ltd (WAR) on December 6 last year between it and Randfontein not being implemented.

In addition, valid acceptances from Randfontein shareholders holding not less than 75% of the issued ordinary share capital (or such lower percentage as Harmony may decide), approval as may be required by the Competition Commission, the JSE granting a listing of the new Harmony shares, and all other necessary regulatory clearances will be required.

"There is a natural fit between Harmony's and Randfontein's assets, and this combined with Harmony's proven track record in transforming high-cost, mature operations, such as Randfontein, into low cost high productivity producers, will result in unlocking considerable operational and shareholder value as we have recently demonstrated with Evander," said Harmony chief executive Bernard Swanepoel.

"Harmony is confident that the acquisition will create value for Harmony shareholders, in which the Randfontein shareholders can participate through the exchange offer," Swanepoel added. "Our confidence is reflected in the board's decision to fully back the offer with cash."

A successful acquisition will see Harmony become the sixth biggest gold producer in the world in terms of ore reserves and production, with annual production increasing by more than 50% to approximately 2.2 million ounces.

Hilton Shone, I-Net Bridge















� I-Net Bridge (Pty)Ltd
Disclaimer
Add to Favorites








Breaking News Sport Technology Special Reports News Roundup




netAssets news
Harmony offers R780m for Randfontein
Harmony Gold Mining Co offers a premium of about 36% over the January 5 closing market price for Randfontein Estates


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

Independent gold producer Harmony Gold Mining Company Ltd is seeking to take control of Randfontein Estates Ltd in a deal worth R780m.
A statement from Harmony said the offer was for the entire existing issued share capital and the existing listed options of Randfontein at ratios of 31 new Harmony shares for every 100 Randfontein shares held and 7 new Harmony shares for every 100 Randfontein listed options held.

In addition, Harmony is offering a cash alternative of R11 a Randfontein share. There is no cash alternative for Randfontein's listed options.

Application will be made to list any new Harmony shares that will be issued on the Johannesburg Stock Exchange (JSE), the London Stock Exchange (LSE) and the Paris Bourse, where Harmony is currently listed.

Based on Harmony's closing price of R37.85 a share on Wednesday, and assuming the share offer is taken up in full, the offer values each Randfontein share at just over R11.57 a share and the entire issued ordinary share capital at some R750.29m.

The valuation does not include the proposed interim dividend of 50c a Harmony share to which accepting Randfontein shareholders will not be entitled.

The offer also values each Randfontein listed option at 261.45c a listed option, and all the listed options at approximately R31.37m, making for a total buyout in excess of R780m.

Harmony said the share offer represented a premium of approximately 36% over the closing market price per Randfontein share of 850c on January 5, while the cash alternative represents a premium of approximately 29%.

As for the offer for Randfontein listed options, the offer represents a premium of approximately 41% over the last closing market price of 185c each.

The deal is subject to various conditions, including the scheme of arrangement proposed by Western Areas Ltd (WAR) on December 6 last year between it and Randfontein not being implemented.

In addition, valid acceptances from Randfontein shareholders holding not less than 75% of the issued ordinary share capital (or such lower percentage as Harmony may decide), approval as may be required by the Competition Commission, the JSE granting a listing of the new Harmony shares, and all other necessary regulatory clearances will be required.

"There is a natural fit between Harmony's and Randfontein's assets, and this combined with Harmony's proven track record in transforming high-cost, mature operations, such as Randfontein, into low cost high productivity producers, will result in unlocking considerable operational and shareholder value as we have recently demonstrated with Evander," said Harmony chief executive Bernard Swanepoel.

"Harmony is confident that the acquisition will create value for Harmony shareholders, in which the Randfontein shareholders can participate through the exchange offer," Swanepoel added. "Our confidence is reflected in the board's decision to fully back the offer with cash."

A successful acquisition will see Harmony become the sixth biggest gold producer in the world in terms of ore reserves and production, with annual production increasing by more than 50% to approximately 2.2 million ounces.

Hilton Shone, I-Net Bridge















� I-Net Bridge (Pty)Ltd
Disclaimer
Add to Favorites




Aristotle
(01/06/2000; 11:44:16 MDT - Msg ID: 22406)
Jean-Luc Picard meets Ebenezer Scrooge
Here's some food for thought, somewhat appropriate with the holidays still near at hand. I had the good fortune to once again extend my tradition of listening to the pleasant voice of Patrick Stewart in his performance of his one-man adaptation of Charles Dickens' "A Christmas Carol." Don't miss it if you get the chance.

My purpose with this post is to inspire a bit of thought--in a novel way--regarding the value of money, particularly the value of Gold. We have come so far from the days when Gold was used directly in payment that many of us haven't the foggiest notion what Labor is worth in terms of real money compensation. While this example doesn't hold the many variables constant in this "Then vs. Now" comparison, I believe it comes close enough for a non-scholarly approach to merit my time writing and your time reading. If not, you have my permission to pull my hair or pinch my nose.

The following scene is from the beginning, just as Scrooge's nephew paid a visit to Scrooge's counting-house, failed at bestowing his uncle with good cheer, and was dismissed from the old miser's office with a curt "Good afternoon!"
___________________________________________________
...His nephew left the room without an angry word, notwithstanding. He stopped at the outer door to bestow the greetings of the season on the clerk, who cold as he was, was warmer than Scrooge; for he returned them cordially.
"There's another fellow," muttered Scrooge; who overheard him: "my clerk, with fifteen shillings a week, and a wife and family, talking about a merry Christmas. I'll retire to Bedlam."
___________________________________________________

This is where we get our lesson for today. Bob Cratchit, Scrooge's clerk, was able to scrape by on 15 shillings a week with a wife and six children, though admittedly, his eldest daughter, Martha, had already left home by this time. He sure couldn't pull off that feat today. So when did he?

The setting in time I can't state with certainty, though when Charles Dickens penned the prefatory note he signed and dated it with 1843. I don't believe he wrote the novel to be taken as a view of antiquity, nor a glimpse of the future. A contemporary novel is what we have then, and the setting is London in the early-1800's.

To make some sense of Bob Cratchit's 15-shilling-per-week salary, we'll also have to look at what a clerk makes today in the year 2000 (in terms of modern money), and then find some common ground for the two.

I shall implore our fellow poster, Usul, or anyone else intimately familiar with the British monetary system of the time, to ensure that my numbers have merit. By my understanding, one pound Sterling silver (92.5% silver, 7.5% alloy) at that time in the realm was comprised of 62 --a result of a long history of monetary fiddling whereby the value of the shilling was debased by the successive monarchs. (At least, I can say that as of 1798 the value as minted was 62 shillings per pound Sterling; cf. Sir Charles Jenkinson, 1805.)

So, Bob Cratchit's weekly salary of 15 shillings was slightly under one-fourth of one pound Sterling. It is now important to know that the beautiful British Gold sovereigns that our very good host sells were minted to be the convenient single Gold coin equivalent to the otherwise unwieldy pound Sterling. (My own oldest gold sovereign dates back only to 1880, so I rather doubt that Scrooge himself ever held it.) For those of you that don't know this, a British Gold sovereign contains slightly less than one-fourth of an ounce of Gold (0.2354 to be exact.)

Here's where this story comes together. Bob's weekly salary of one-fourth pound would have also been one-fourth of a sovereign. Bob Cratchit would have to work four weeks (one whole month) to earn a full Gold sovereign--on which he supported his wife and large family.

Let's look at a typical clerk's wages (and the labor price of Gold today.) I'm going to assume a "wretched" clerk like Bob Cratchit, working for a miserly boss like Scrooge today would be making $6.25 per hour; but perhaps it would be higher--could he support a large family on $6.25/hour?? The weekly salary in a 40 hour week would be $250--the equivalent to Bob's 15 shillings. At the end of the month, that would be $1,000--the equivalent to Bob Cratchit's Gold sovereign.

Gold is the Great Equalizer throughout human history, so I suggest you try to temporarily dismiss its paper price as measured in currency. Instead, try to focus on Gold's true value as measured by its "labor price." Sure, it might fluctuate a bit, but is the above example reasonable? Assuming for convenience that a Gold sovereign was priced at a nice even $100 each, our modern-day clerk could convert his monthly salary into 10 sovereigns, whereas Bob Cratchit only got one. Is the labor of the modern clerk at $6.25 per hour worth ten times the relatively equal service (adjusting for the expectations of the era) of Bob Cratchit?

In terms of Gold, Bob Cratchit was probably fairly paid, whereas with the absurd Gold price today, our modern clerk is grossly overpaid. The only problem with my math is whether or not it is reasonable to expect a modern clerk to be paid only $1,000 per month. Whatever dollar salary you want to give this modern clerk, that should be nearly the currency equivalent of the labor value we find in one single Gold sovereign. If $1,000 is fair, then we have a currency price for Gold that is $4,000 per ounce (four sovereigns per ounce.) If a modern clerk is paid $2,000 per month for his labor (can he support six kids on that?), then Gold value should more appropriately be priced at $8,000 per ounce.

Take a lesson from Bob Cratchit...a man in simpler times who provided for his large family on one tiny sovereign per month. Should Gold's recognized value make its long overdue adjustment to its historical labor-value, I hope you have been setting aside a simple clerk's wages in Gold during this modern-day era of excess and cheap Gold. Paid in dollars, you are surely underpaid. If you convert to Gold, you don't deserve it!! Smile big, and enjoy your life!

Gold. Earn you some. ---Aristotle
rsjacksr
(01/06/2000; 13:31:49 MDT - Msg ID: 22407)
Report finds audit violations at PriceWaterhouseCoopers
http://biz.yahoo.com/rf/000106/6u.htmlBy Peter Ramjug

>>>>>WASHINGTON, Jan 6 (Reuters) - Nearly half of the partners at PricewaterhouseCoopers LLP, the
huge accounting and consulting firm, admitted violating rules that prohibit auditors from owning stocks
in companies whose books they examine, according to an independent report released Thursday.

Written by Jess Fardella, a New York lawyer appointed by the Securities and Exchange Commission in
March to review auditor independence violations at the firm, the 127-page report found ``serious structural and cultural problems,''
the SEC said.

Pricewaterhouse Chairman Nicholas Moore and Chief Executive Officer James Schiro said in a letter to employees: ``These
infractions of the independence rules, however unacceptable, did not in any way impair the professional objectivity and integrity of
any of our audits.''

The firm said it has put in place new measures to prevent future violations.<<<<<<

Yeah! Right! Want to by a bridge???
ORO
(01/06/2000; 14:06:32 MDT - Msg ID: 22408)
Equity market out of kilter
The January effect in beaten down value stocks is in full bloom. The advance decline line looks better than it has in quite a while, yet the SP futures have been under heavy selling since the last trading day of last year.

The indexes are so laden with low float tech stocks that the selling of the SP500 and ND100 futures is having a strong negative effect on these stocks (where the selling is receiving the same leverage on the way down that had exaggerated the move up).
The stocks on the economically sensitive front, those that did well in the end of last year's first quarter - oil, paper, aluminum/metals, are all doing well, though the stock indexes have been below fair value for over 1/2 the time since the open of trading Monday.

For some reason, the portfolio insurance fiasco of 1987 comes to mind. Futures are being sold and individual value stocks are being bought. This could be the result of hedgers using the SP and ND to hedge their heavy exposure to these stocks while they transfer funds to value stocks.

Bank and utility stocks are saying that rates have done most of their move for a short while - say somewhere around one month, perhaps longer.

Town Crier, has the Fed actually drained liquidity from the banking system?
Au-some
(01/06/2000; 14:41:54 MDT - Msg ID: 22409)
Y2K Cash Infusion
A New York Times article from last weekend states that "The Federal Reserve filled vaults with an extra $70 billion infusion in anticipation of a frenzy that never happened. The money could end up shredded in a landfill."
A landfill? What does this tell us about the true value of a FRN? Garbage in, garbage out.
beesting
(01/06/2000; 14:48:16 MDT - Msg ID: 22410)
The United States Mint
http://www.usmint.gov/bullion/annualsales/sales1999.cfm#goldtotalsFrom the U.S. Mint Webpage:
In the more than 200 years since Congress created the U.S. Mint on April 2, 1792, the Mint has grown to a fortune 500 size company with more than 1 Billion in annual revenues and 2,200 employees, and the worlds largest manufacturer of coins, medals, and coin based consumer products.

Some figures:

1998 - Sold 1,839,500 ounces of Gold, or a little over 57 tonnes. A new sales record up to this point in time.

1999 - Sold 2,023,000 0unces of Gold, or almost 63 tonnes. A new all time sales record, and I don't know if these are the final figures for 1999 or not.

Comment:
The Mint is without a doubt one of the worlds largest companies with over 1 Billion in annual sales. Where I live little or no high pressure marketing of products, in fact a seemingly continuous negative main stream media blitz, of their base products.
Sales prove a HUGE retail demand for precious metals in the United States and worldwide.

Can anyone reading this imagine how much product would be sold with marketing like, Taco Bell, or Coors Beer, or any of the automobile companies?
Gold is an obsolete relic, SSSHHHHEEEEEEEEESSSHHHH!!!!Get Real!!!!

Those in the Know.....Buy Gold.....Statistics prove it.....beesting.
ORO
(01/06/2000; 15:05:40 MDT - Msg ID: 22411)
SteveH - An Evolution of Understanding
SteveH (1/5/00; 0:58:09MDT - Msg ID:22310)
Thanks for the kind words.
--->You are coorborating Another and FOA. You are validating their message. You are saying that physical gold delivery is in jeapordy against paper-contracts.
I am incorporating their message into the steel girders of my building. I do believe it is steel, since all the tests available to me reveal it as such. Their story, with significant modification, comes to 1/4 to 1/3 of mine. I have validated the message as far as I could, and now use it as part of mine.
----------
There are only three resources available on this planet, knowledge, labor, and oil. There is only one kind of catalyst for these to come together and form prosperity: freedom. Respect of property rights at all levels being the foremost. Oil can be replaced, but at a tremendous cost. Labor can be educated and capital can be brought in to make it effective. Knowledge is key to economic strength, as is the function of utilizing knowledge through entrepreneurial freedom, economic and fiscal discipline, and a healthy regulatory environment.
The US, with the anti-culture egalitarian attitude of its people and the imported English and German academic mysticism, self destructed on the education front. Because of the short sightedness of the industrial and political leaders doing the calculus of the old industrial world of the middle of this century, they let the un-knowledge academic mutants from Oxbridge's dank dungeon take over American education. Though the US continued to import the best minds of science, most of its natives were too far gone by the time they hit the universities. Their brains just could not come to speed after years of neglect at public schools. Though elite education is still the finest there is, the diffusion of trained and cultivated brainpower in the US is limited to a minuscule portion of its people.
The result has been a continuous losing streak in the use of the many technologies invented or perfected in US universities and laboratories. Far better educated Japanese, Europeans, and now Chinese, Koreans, Taiwanese, Singaporeans, Israelis, and even Indians, could take American inventions and reproduce them, improve them, and produce them more efficiently. Much of the deep brains of US high tech come from the newly - and well - educated technical elites of these countries. The American educational experience has been so overwhelmingly negative, as to overcome the much healthier regulatory and entrepreneurial culture of the US. Had Reagan closed the borders to these people as many of his voters wanted, we would have been the backwater hicks of the globe, a standing lesson in how a superpower turns to dust.
Part of the reasoning behind the crazy accounting standards for tech companies today (ESOPs) comes from the need to hang on to leadership in the cutting edge technologies and to do so without the government making the choices, but the markets themselves. The technology sector was given this bookeeping trick to help in getting leadership first, and then maintaining it. In order to do this, the paramount concern was the price of US techies, that is the highest in the world, be kept off the books. Because of their scarcity, capable techies garner a much greater premium for their services than they do anywhere else. Of course, the US and California entrepreneurial culture and easier regulatory climate also make them more valuable here, because a higher return can be obtained from their services (at least prior to the ESOP thing going so far out of hand).
---------
--->Most importantly you are saying that gold's role in world economic affairs is as strong as it ever was, it has merely been placed in reserve ball section of the big economic pinball game in order to allow the dollar ball its turn on the board and it has been bouncing around since 1971. As long as the dollar was the only ball able to be played, all the bumpers and flippers have been keeping it bouncing around and using the ball to keep the game going.
For years, I could not understand how the dollar could stabilize in 1980. It was a complete mystery to me. Austrian monetary theory, which I studied with the intense interest of youth, alongside Monetarist theory, was giving no clue as to how the dollar could be stable at all once the arbitrage to gold through redeemability was closed to everyone - CBs included. You see, up to 1971 there was someone somewhere that could exchange dollars for gold at a fixed exchange rate. That is all you need to keep a currency stable. The rest of the currencies could then be tied to the only one having a fixed exchange to gold.
According to Mundell's version of Gresham's law, the dilution of currency begins when the float of a fully convertible currency exceeds backing. The effect is at the margin. The currency would be accepted at face value outside the country of issue up to the point of the volume of notes in circulation leads those outside the country to suspect the issuer would not redeem all currency in specie (gold). In the US, 1933 marked the poing at which the external float of the dollar was made the target of gold backing. The conversion of dollars within the country ceased. Thus, in effect, using Gresham's law in reverse. The external float was backed completely. This allowed the retention of monetary expansion within the country, while removing the problem of discounting conversion at the margin. The dollar had retained its value by allowing exporters to the US to convert their dollars to local currency at the local Central Bank, which could arbitrage between the dollar and gold - through redemption in specie by the Fed.
The obvious experience of the 1970s was that in a floating exchange regime, all currencies would lose value constantly. No manner of government intervention could stop the world from the realization of an inflated currency being worthless. The only way this slide could be stopped was the re-establishment of a fixed exchange to gold or another commodity of value. The newspapers and the financial magazines never revealed such was in existence.
1980 to date saw a mechanism constructed and tinkered with to stabilize the system. The Romans took over all the gold and silver mines in all the territories they took over. They took their seigniorage from the fact that they controlled the only sources of the commodity backing their money. Even then, the value of Roman coin fell in accordance with its diluiton by non-precious components. Something of that nature must have occurred. ANOTHER and FOA gave us quite a few clues as to how this was done. They showed us how oil was used to pull it off.
Like the Romans before us, Americans got the dollar back on track by taking control of the only sources of the alternative commodity money, oil. It was only possible because of fortune's toss of the oil dice; the concentration of the cheapest oil in such a confined area and in the hands of such a very small group of people (the oil Royals) willing to cooperate fully in return for services they needed for protection of their underground wealth and for the continuation of their young dynasties.
In fortune's cast of the golden dice, the gold "just hapenned to fall" within the British Commonwealth (BC), now being administered from Washington and New York, but financially managed in London by the gold experts. The remnants of Empire taken over by Americans at war's end provided what gold was necessary for the sustenance of the dollar and the world economy. The external partners of this revived Rome, now ruled by a Barbarian Emperor, were mainland Europe, Sovietsky Soyuz, Japan, Emerging Asia, South America, Arabs and Gulf oil. The BC (a.k.a. NWO, or US/IMF, all now rather old and ragged), had all the resources needed but for oil. It had all the gold needed to trade for this oil. It had all the military force outside of SSSR since the end of WWII, and could take the oil if it became necessary to do so (e.g. running out of gold). The limit to this being that the rest of "those that could do something about it" didn't.
Mainland Europe was the major consumer of Gulf Oil and would retaliate against any attempt by the US "Grabit" (I just love Infomagic's term), leader of the BC, to take hold of the black blood of Europe's economy by unleashing its great Circus Bear, which cost alot less than the BC Elephants and Mules, but was more dangerous to use because of its carnivorous/omnivorous nature. Did you ever think of the "why" old Sovietsky was lent so many dollars to default on if they could not feed their own people? Wouldn't it have been better for the West to let their archenemy starve? Reagan, of all people, got this ball rolling - feeding the people of the Evil Empire with US grain. By the time Gorbachev was in the Soviet display window, Europe was getting natural gas from him to heat its cozy appartments. Obviously, there was something of a play by Mainland Europe to keep the two sides going at each other on the military front, and to work the one major (Saudi and satelites) and the three minor (Venezuela/Mexico, Russia/Caucasus nations, UK/Norway) energy suppliers against each other.
We don't speak of this often, but there were three major countries that lost WWII, Germany, Japan, and France (Italy isn't and never was a major). The French lost to Germany, the Japanese and Germans to the BC and SSSR. The French were allied to the reconstructed Germans since WWII, and they have become very chummy. The rest of Europe has joined together around them. I am referring to Europe Ex UK, which was still vacillating between its BC remnant of the past, and being just another unequal among the many of the EU.
The role of South Africa and Israel in the situation is very interesting, particularly as it pertains to China. Much of the gold needed to pay for Arab Oil in particular and for BC commerce with the rest of the world, in general, could only come out of South Africa. Furthermore, it had to come out of South Africa in direct trade for dollars, and nothing else. The embargo against them, in the name of eliminating Appartheid was intended to pressure them, through the control of their borders, to play along with gold deal, and not make one with Arab Oil and Asia (China in particular, but it's quaking neighbors too). In the mid 70s, Israel started trading with China. Israel gave weapons and training to China at unheard of premiums. This was the result of Chinese skirmishes with the Vietnamese.
The US experience of the Vietnam war was the catalyst for the Chinese break with the Four's cultural revolution legacy of destruction. The Chinese were impressed by the US equipment, though not with the soldiery or pollitical will. They decided to turn away from Moscow because of the danger of Vietnamese from the South and Russians from the North threatening their survival. Having turned away from Moscow and having swept the country of nearly all capacities, particularly military abillities, the Chinese were not capable of fending off the Vietnamese. Washington was willing to keep the Vietnamese occupied, but not willing to trade weapons directly with China. Israel took upon itself the role of building China's military. The story was recently published, you can read it in the Times (London) or the English edition of Haaretz (if you wish to pay their rather high price for an otherwise excellent foreign newspaper) on the net at http://www3.haaretz.co.il/. The Chinese traded goods for Israeli technology, training, and military supplies. The goods were traded for dollars, the dollars were traded for raw materials and gold from South Africa. Without this help, the Chinese would not have opened up as far as they had.
The friendly relations of Israel and South Africa were necessary for the secret trade relations with China, and to provide an additional conduit for South African gold to go to the West. I don't know how pivotal the connection was, but I know it was there. South Africans got to purchase whole industries back from European and US corporations at a super steep discount. In return, gold was smuggled out to maintain the dollar. Some materials were also traded with China directly and through Israeli and Swiss intermediaries.
The global trade system needed the dollar to survive in order for the SSSR to be defanged and to make it let go of the Central European states that the EU would eventually need for trade, a manufacturing base and investment. China and Asia needed to come alive economically because the US, Europe and Japan were all aging quickly and could not possibly find the resources to both care for the aged and produce the goods the caretakers need. I have not discussed this much, since I am still burried in the spreadsheets, combing through demographic statistics.
All of the major parties to the global economy needed this to happen, and they cut the deal with China to that end, and become a fourth pole for a multipolar military world. The one thing left was to reach a means for savings which would be fair for all involved (particularly to the mildly belligirent BC and the Russian bear, but also for China and it's quaking neighbors). It became obvious, at some unknown point, that the gold trade would have to come to the surface for the world economy to allow for transnational savings. One of the keys, however, was that the actual money, the gold, go to the Chinese, Asians, etc. who would supply the goods for the old retired Europeans only at a later stage. When Asia redeems the currency for gold only after European liquidation of its holdings in Asia. In this way, the goods could be kept flowing without their gold price rising significantly while Europe goes through their baby boom retirement hump.
China's baby boom generation will reach peak productive output in 2020, if I remember right. Those of other Asian nations will be coming into their best years within 10 years before and after the Chinese. If the deal could be made that would allow Europe, Japan, and (when Americans finally feel like saving something) the US to invest where the demographics run counter to their own, then both sides would benefit if there is either an ingrained system of respecting private investments, or the final say remains in European hands through starting out with an incovertible, but completely backed currency, and later transitioning to a convertible currency, when the Europeans are at their most vulnerable demographically.
The Japanese, going through a similar demographic hump, though a more severe one, had to meet the problem earlier, and had chained themselves to the dollar. Either because of theoretical difficulty with the economic analysis of the EU and Oil economists, or because of some other issues, perhaps the need to have the US protect it from China and Russia, the Japanese did not come on board and they rely on a stable dollar yen to both buy up US productive assets, and to have the US capable of buying its production till it tapers off with the declining poppulation. The buildup of Japanese owned productive capacity in the US was necessary so that the US supply it with real goods in return for dollars repatriating to the US. When the time comes for it to redeem the dollars in its portfolio (Treasuries) for goods produced in the US, there must be something produced here for them to buy. Further down the road, they would sell these assets, and use the proceeds for the purchase of additional goods.
By the way, if Japan's economic statistics are coupled with the US statistics, you get a much healthier economy than each seperately.
--->For some reason, it became politically unexpedient to have gold be tradeable currency when the dollar defaulted gold in 1971. It even became dangerous to have gold be considered an alternative and so it was allowed to drop in price to where we are today. And that is why gold isn't popular and yet remains the most sought after asset next to oil of any asset. Incredible move on the players part.
--->To rephrase, gold and gold backed currency abounded up until 1971. Dollar defaults, then gold begins a ten-year meteoric rise in price until 1980. From 1980 gold is seen as a loosing proposition by citizens while in the background gold is traded off line just like before except with a twist of derivatives and hedges. In the first 3/4 century it was "gold-is-official." In the ensuing years, it was gold is "dead" but it really isn't because we will just use gold and trade it off market and hidden from view but we all know how important it was, is, and will be.
These are all nice summaries, but the main thrust is that there actually was an attempt at the time to do the fixing of the dollar on the public markets. It didn't work well because of the missing dollar demand to satisfy debt, which just was not there till later in the 70's. The dollars paid for US oil imports just flooded the market. Furthermore, the dollars Arabs used to buy gold still had to go somewhere. They bought F-14s and F-15s till they could not find enough candidates for floight school to take the aircraft off the ground. They still could not do anything with the dollars but to dump them into the European banks, over and over.
The Fed, had to continue monetizing the debt from the late 50s debt bubble, or face bank collapses. The banking laws limiting interest rates payable to depositors, and creating of the mortgage guarantee resulted in the formation of a debt aggregation industry, that caused an increase in borrowing just as the US was undergoing the biggest labor force expansion it had ever seen.
--->Somewhere along the way and in the last five years, oil demand outstripped the ability of gold production and pricing to keep up and so now we have a supply-demand disparity of 30K tons if I am reading you correctly. That is 30,000 tons of gold that needs to be settled up some how and what we are witnessing now is how the folks who are interested in settling this matter are trying to figure out how to do that without destroying the dollar and causing gold to replace the Euro ball in line for the board or the gold ball from replacing them all on the board.
The whole point of having central banks has allways been to allow an exit from this kind of problem by the printing of fresh funds. The simple fact of the central bank's guarantee of liquidity prevented the gold account holders to move to full allocation.Full allocation at current gold prices can mean a 1% annual dollar loss for insurance and storage. This stands against a 1 - 2% return in the unallocated account. The CB guarantee was enough to allay concerns of account holders while the guarantees were good. Having the guarantees limited to current ammounts and supply demand deficit in the physical market being only met half way by the CBs should push investors to move away from the unallocated accounts to the allocated accounts.
This seems to have been limited by the current motion of many small CBs to provide liquidity. Presumably at the behest of the more influential account holders in the respective countries trying to protect their assets using their nation's gold reserves. The deals involved are probably very attractive. Either in terms of rates of return, or in equivalent asset value. However, they prevented the loss of confidence in the bullion banks. The gold accounts were not reallocated, and the flow of funds into gold accounts did not stop because of the liquidity problem, but increased because of the price rise. This raises the bank's gold liabilities, but still prevents people from straight out buying the bullion. Thus the accumulated diversion of funds from purchasing physical gold continues to grow. The bankers are only increasing their reserves slowly, and are likely not going to be able to obtain enough credible commitments to even come close. The fact that in LTCM bailout style they had come together to stop each other from lowering exposure is telling.

One of my thoughts about the reasons for the BOE sale have to do with shifting of positions away from European banks into US banks. The participation of the US banks in these markets has grown from 25% in 95 to 42% by my estimate for the last figures. Bankers Trust, a subsidiary of a European bank, had unloaded nearly its entire bullion banking business on JPM and CMB (Morgan Guarantee, and Chase) in one single quarter. It is probably the opportunity to unload commitments on other bankers that brought the BOE and IMF calls for gold sales. During the decline in May-June, non US banks had covered positions aggressively (hoping to get confirmation in Feb or March). US banks, however, had increased volumes tremendously in Q3.
Cavan Man
(01/06/2000; 16:06:03 MDT - Msg ID: 22412)
Aristotle 22406
Wise Teacher:

Why was the British Pound "Sterling" and not gold from the beginning? Why did the British go off gold after WWI and in what year? Was it to inflate because of the damage wrought by the war? I assume it was a liquidity crisis of some sort but not sure what sort and when.

What I am really trying to sort out is the history of "world reserve currencies" prior to Bretton woods. If you or anyone can field this I would be grateful. Thanks.

(no Plato moi)
CoBra(too)
(01/06/2000; 16:25:54 MDT - Msg ID: 22413)
Evolution of overload!
Dear ORO,
as much as I appreciate your hard work and your meticulously assembled -and mostly proven wisdom - please be so kind as to break up your affluent seminars to digestable parts and pieces for peasants like ME.
Thank you - and don't even consider my quest! -


Hallo, Fremder - GOOD TO SEE YOU BACK! -PROSIT 2000!!!
Cavan Man
(01/06/2000; 17:14:52 MDT - Msg ID: 22414)
Dear ORO
Second CB2.

So, where are we heading. Do you still favour gold metal, gold mines and inflation bonds and over what term?

Hope I am the first to buy your book.

Thank you.
CoBra(too)
(01/06/2000; 17:15:18 MDT - Msg ID: 22415)
Financial Analysts are way behind Reality -
Lehman Bro's 4th. Quarter profits more than quadrupled, as in line with Morgan Stanley and Goldman Sachs, all beating Street estimates by far. These reports bode well for the giants like ML & DLJ, which will report their (windfall?) later this month.
In view of rising interest rates - cost of funds - these kind of growth rates are more than suspect-and may derive from derivative business. A game, which conservatively can't
be upheld to continuosely promote the bottom line - It will rather corrupt the bottom line - until the line hits its bottom - Orange County, Barings, LTCM, PEI et al may just be the (corrupt?)signs - the trillions of paper debt - the trail for destruction!

- I believe in reality - I BELIEVE IN G O L D !!!
pdeep
(01/06/2000; 17:37:47 MDT - Msg ID: 22416)
ORO
Awesome post. Put me in line to buy your book!
ORO
(01/06/2000; 18:42:23 MDT - Msg ID: 22417)
CB2, Cavan and thanks
Thanks be to Pdeep and Cavan for the kind words.

Cavan -
As for the the recommendations I gave before, I still stand by them. I am somewhat cooler to the inflation adjusted bonds, but at the time they were trading at a significant discount to their value. The yield spread now is still good, but not great. The main caveat, though, is the tinkering with the CPI stats. Though the I-bonds would still provide certain protection against price inflation, the spread between CPI and my perceived price inflation (see ECRI-Economic Cycle Research Institute) would still "eat" some of the yield. I would still preffer them, hands down, over any bond or note maturing oney year or longer for the long term fixed income portion of a portfolio. The emerging market bonds/bond funds are no longer as attractive as they were when I pointed them out. There should still be an upside to the currency, but it seems that local interest rates across Asia and South America are not falling further - at least not at a great speed. They still give a good spread of some 2-4% over treasuries, but that is not enough to justify an increase of their weighting in a fixed income portfolio.
One new suggestion for fixed income would be the inclusion of some Freeport McMoran gold bonds.
If you have contacts at gold companies, you may ask them to issue gold bonds bearing gold interest. For one, they would not require the company to post margin if gold prices rise, while still protecting pricing for some of the future production.

The income the big investment banks are producing is coming from a drop in the market value of the derivatives they sold to the markets, to the pension funds and smaller banks. The BIS reports that there was a 700 $B drop in the market value of outstanding derivatives over last year (June over previous June). Most of this would be pocketed by the trading desks of the global investment banks. I suppose somewhat lesser returns continued through the past two quarters as the volatility portion of time premiums continued downwards. Spreads are higher today, particularly the TED, but I am sure the banks are positioned to gain from that as well.

The rest of their income is coming from normal investment banking ops, like mergers, acquisitions, and public and private offerings.
K Golden
(01/06/2000; 18:51:41 MDT - Msg ID: 22418)
Yo! Andy aka No. 6
http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=002FTOLooks like there are whisperings of your "visa is toast" scenario coming down.

The folks over at TB2000 are paging you for comments.
canamami
(01/06/2000; 19:18:55 MDT - Msg ID: 22419)
Effects of Nasdaq Meltdown?
It has been speculated that Nasdaq capital gains from the recent sell-off are being channelled into the Dow stocks, and also the S&P. What will cause some of this Nasdaq money to come to gold? Will it keep coming to gold if all rallies in the POG are killed by "big players" manipulating the POG? (Will official Japan ever buy gold with yen? Why is the BOJ so in thrall to $US purchases, given that Asia-ex Japan is its natural sphere of economic interest in many respects?)

The Nasdaq is the home of the momentum-driven, margined-to-the-hilt retail investor. Evidently, Nasdaq "gains" are often used a collateral for more margin, and the cycle goes on, with only the Nasdaq's dizzying rises keeping it going as long as it has. When will the margin calls on retail investors send the Nasdaq into a true tailspin? What is the effect of there now being a number of big exchanges and indexes, and the large number of investors using non-brokerage, non-margined debt; will margin calls have the same tailspin effect as previously, given the relatively larger porportion of non-brokerage debt?

If the Bill Murphy, "no buyers" scenario comes to pass on the Nasdaq, what will be the broader implications of such a decline in the so-called market cap of the Nasdaq stocks, such decline respresenting a massive "destruction of wealth", or at least paper wealth. Will these broader implications benefit gold, and how will such mechanisms work?

What will be the public policy and creditor response to a Nasdaq meltdown? Will the public trusts (Social Security in the US, Canada Pension in Canada, state and provincial pension funds, etc.) do a "Hong-Kong" and become the buyers of last resort, to prevent a meltdown of the equities markets? Will the continued suppression of the POG be in the cards, to preclude an alternative investment to the equities market from arising? Will banks delay realizing on pledged or seized shares, to militate against a crash?
rsjacksr
(01/06/2000; 19:25:40 MDT - Msg ID: 22420)
Beesting and Oro
http://www.kitcomm.com/cgi-bin/comments/gold/display_short.cgi#startBeesting.
Thank you for responding to my question. I'm glad to know that I'm not the only one groping in the dark. I lifted this from kitco. I haven't had time to digest it, if ever, but it may contain a clue as to what is going on with rates. I'm sure there's more. Nothing in the world of politics and economics is that simple.

>>>>>>SDRer () ID#290174:
Xag/xau-this has, for three years, been the steadiest and most reliable of the relationships; all the monitored currencies
have ALWAYS been in lockstep on this baby. However, on 1/4/99
Xag/xau--0.018790 [China]
Xag/xau--0.018791 [US]
Xag/xau--0.018895 [Japan]
Xag/xau--0.019165 [Germany]
Xag/xau==0.019165 [Euro]

Managed news results
1/5/99
Xag/xau--0.018960 EVERYONE

Ain't power wonderful?<<<<<<

ORO (01/06/00; 15:05:40MDT - Msg ID:22411)
SteveH - An Evolution of Understanding
Oro. I don't know if I've ever thanked you for posting. Thank you. There are times when you are fluid and easy to read and other times when after reading you, I find the nearest wall and bang my head against it for relief. You sir can only be you. Again, thank you.


ORO
(01/06/2000; 19:26:02 MDT - Msg ID: 22421)
New Leading Indicator for Price Inflation
http://www.joc-ecri.com/Journal of Commerce and ECRI come up with new index for early signs of "inflation".
JOC-ECRI IPI

See chart.

We are already well on the way up.
The Alphabet Soup index joins with ECRI's other indices in indicating prices are set to blow.
SteveH
(01/06/2000; 19:29:04 MDT - Msg ID: 22422)
Protecting gold
Each of us has seen the biased reporting of stocks and bonds and gold. The press has lots its independence and is widely used for the bias of those who have the ear of the press. Although this isn't about gold or stocks. It is about the same issue:

Media Accused of Gun Control Bias
WASHINGTON (AP) - A conservative media group accused television networks Wednesday of biased coverage of the gun control debate.
The television networks are so badly spinning the gun control debate in favor of gun control they have become the ``communications division of the anti-gun lobby,'' said Brent Bozell. He chairs the Media Research Center, which released its study of two years of television news stories on gun control.
The study analyzed the morning shows and evening newscasts between July 1, 1997, and June 30, 1999, on ABC, CBS, CNN and NBC.
``There's a powerful, pervasive bias in the media,'' said Oliver North, the former Iran-Contra figure who now hosts a political talk show and is a national board member of the National Rifle Association. ``This blitz of bias is having an extraordinary impact on public policy and legal opinion.''
CNN spokesman David Bittler defended his network's reporting, saying, ``We do not advocate for or against any particular position and we stand behind the balance and fairness that goes into all our reporting.''
Calls made to the three other networks were not immediately returned.
The issue of guns has increasingly been in the news as the nation has grappled with school shootings in places like Littleton, Colo., Paducah, Ky., and Pearl, Miss.
Bozell's group says it examined 653 morning and evening news stories on gun policy issues and found that stories advocating more gun control outnumbered stories opposing gun control 357 to 36, or a ratio of 10 to 1. Another 260 stories were neutral, the group said.
In many cases, the study said, pro-gun themes were not covered and gun proponents were not given air time.
Naomi Paiss, spokeswoman for Handgun Control, called the complaints ``lovable chutzpah'' on North's part.
``Add to that the right-wing domination of talk radio, the towing by congressional Republicans of the NRA's line, the slavish devotion of the Republican presidential frontrunner to the NRA message and this is clearly the comedy press conference with which to start off the new year,'' Paiss said.
Peter Asher
(01/06/2000; 19:54:13 MDT - Msg ID: 22423)
Gary North's Reality Check, #45
Excerpt

The Dow Jones Industrial Average touched 11,568.72 on
> December 30. Then it fell back. Just one decade earlier,
> to the week (maybe to the day), the Japanese stock market
> peaked at just under 40,000. It has never come close to
> 30,000, except on its downward slide.
>
> This 11,568.72 number is curious. Let me explain.
>
> I am not a follower of Elliott Wave theory. It's too
> complex a system for my abilities. But last May, I
> received a detailed essay from a Jean Comeau of Quebec, a
> commodities advisor -- registered, he says, in Chicago. He
> wanted me to post the essay on my site. It was not Y2K-
> related, I told him, so I didn't.
>
> Yesterday, he sent it to me again. His essay said
> that the Dow's top would be 11,550-11,600. He wrote,
>
> "WAVE 5: WHEN DOW JONES HITS 11560 TO 11600
> POINTS. END OF MAJOR BULL MARKET, PERIOD.

He then got even more specific:
>
> Wave 5 or 1999 = Fibonacci number 34 times 339
> equals 11526 plus 43 (crash low) equals 11569.
>
Mr. Comeau is predicting a fall of over 5,000 points
> in the Dow in the next two months. I think I will ask him
> to do more writing for me as soon as it falls by 2,000.
>
pdeep
(01/06/2000; 20:04:17 MDT - Msg ID: 22424)
That pesky Euro sopping up the ca$h
http://www.goldensextant.com/commentary7.html#anchor6534Where has the liquidity gone?

"In 1999 euro-denominated bonds were issued in the amount
of $602.2 billion on international markets, compared to $572.5 billion of bonds denominated in U.S.dollars and $174.2 billion in other currencies, including sterling, Swiss francs and yen. In percentage terms, the euro took 45% of the market, the dollar 42% and other currencies 13%. In 1998, 48% of all bonds sold on international markets were denominated in dollars, and only 22% were denominated in European currency units or the currencies of the 11 EMU countries."
Gandalf the White
(01/06/2000; 20:16:57 MDT - Msg ID: 22425)
Notice of forthcoming "Serial" story.
The Hobbits think that they need much more time to let these lessons from the first of this year become fully understood. (Afterall they were saying that these last few days were part of the "HOLIDAYS", as Hobbits have a different calendar than most folks.) -- Soooo, they have ask me to tell everyone a story that does not require the deep thought of such lessons as from the likes of FOA, ORO, PeterA, Ari and SteveH, PLUS all the other newbies. -- UNLESS the Wiz hears differently from either Townie or MK himself, the "Serial" will begin soon. (like the old Tom Mix or The Lone Ranger and Batman short movie clips from the USA GOLDEN ERA) -- PS: the Title is "Mystery of the Lost Ozarks Silver".
<;-)
THX-1138
(01/06/2000; 20:27:51 MDT - Msg ID: 22426)
Next BOE gold sale question
When is the next sale?

Does anyone think that the FED and BOE are trying to keep the price down before the next sale takes place?
PH in LA
(01/06/2000; 20:37:29 MDT - Msg ID: 22427)
LaRouche: Back in the Headlines!! (well, at least here at USAGold)
http://www.larouchecampaign.org/pages/smauelson991228.html LEESBURG, Dec. 28 -- Democratic presidential candidate Lyndon LaRouche issued the following statement here today:

Remember economist Paul Samuelson, perhaps the most famous of the authors of "Economics 101"? Paul, who taught 1960s university students of the Baby Boomer years that "built-in stabilizers" would prevent an August dollar collapse 1971 from happening, has a son, Robert J. Samuelson, who regularly writes economics columns for the Washington Post. Robert Samuelson has now warned Washington Post readers and other people [WAPO Dec. 28]: "People are acting as if economic risk is declining, when it may be rising."

Samuelson is only one of a growing number of leading senior economic writers, economists and bankers who are now warning the world against signs of an early collapse in a world-wide financial bubble. Many among these are saying that the current financial boom is nothing but a new tulip craze, a bubble ready to pop.

Some in print, and many more bankers, economists, and statesmen privately, are warning that the world is faced with something far more serious than a stock-market crash. The world's financial system is doomed to a systemic collapse, from which only a radical return to earlier pro-nation-state policies could rescue humanity.

On the darker side, while most people in the upper 20% of U.S. family-income brackets are fanatically deluded enthusiasts for investing in money-management schemes, the insiders in the really top brackets, are getting out of these markets, buying up the kinds of assets which they believe would represent a continuing income-stream even after the total collapse of the existing financial system.

Does this mean that any politician talking about the smart ways to balance the budget is living in a dream-world? Absolutely. What kinds of people are foolish enough, still today, to vote for those kinds of political candidates?
SteveH
(01/06/2000; 20:51:49 MDT - Msg ID: 22428)
Hall of fame and question
Ok folks, admit it. OROs macro view in response to my question merits his posts admittance into the all of fame. I nominate, any seconds?

For ORO,

Please take a look at a few of the questions on your last paragraph. If you could develop this a bit further, I think most of us would appreciate it. Also, please answer you best guess as to when the price of gold will no longer be able to be sustained. I think you have go a good idea how much longer the BS can go on. Dare you?

The simple fact of the central bank's guarantee of liquidity prevented the gold account holders to move to full allocation.Full allocation at current gold prices can mean a 1% annual dollar loss for insurance and storage.

This stands against a 1 - 2% return in the unallocated account. The CB guarantee was enough to allay concerns of account holders while the guarantees were good. Having the guarantees limited to current ammounts and supply demand deficit in the physical market being only met half way by the CBs should push investors to move away from the unallocated accounts to the allocated accounts.
This seems to have been limited by the current motion of many small CBs to provide liquidity. Presumably at the behest of the more influential account holders in the respective countries trying to protect their assets using their nation's gold reserves. The deals involved are probably very attractive. Either in terms of rates of return, or in equivalent asset value. However, they prevented the loss of confidence in the bullion banks. The gold accounts were not reallocated, and the flow of funds into gold accounts did not stop because of the liquidity problem, but increased because of the price rise. This raises the bank's gold liabilities, but still prevents people from straight out buying the bullion. Thus the accumulated diversion of funds from purchasing physical gold continues to grow. The bankers are only increasing their reserves slowly, and are likely not going to be able to obtain enough credible commitments to even come close. The fact that in LTCM bailout style they had come together to stop each other from lowering exposure is telling.

One of my thoughts about the reasons for the BOE sale have to do with shifting of positions away from European banks into US banks. The participation of the US banks in these markets has grown from 25% in 95 to 42% by my estimate for the last figures. Bankers Trust, a subsidiary of a European bank, had unloaded nearly its entire bullion banking business on JPM and CMB (Morgan Guarantee, and Chase) in one single quarter. It is probably the opportunity to unload commitments on other bankers that brought the BOE and IMF calls for gold sales. During the decline in May-June, non US banks had covered positions aggressively (hoping to get confirmation in Feb or March). US banks, however, had increased volumes tremendously in Q3.
TownCrier
(01/06/2000; 20:54:41 MDT - Msg ID: 22429)
Ask, and you shall receive...usually.
THX-1138 (01/06/00; 20:27:51MDT - Msg ID:22426)--Next BOE gold sale question
"When is the next sale?"

January 25th, 2000, 11:30 London time.

"Does anyone think that the FED and BOE are trying to keep the price down before the next sale takes place?"

There are likely a great many who do think that, however, a quick survey reveals no one in The Tower to be of that opinion. At this juncture, what remains to be gained?
PH in LA
(01/06/2000; 21:21:49 MDT - Msg ID: 22430)
Deja vu all over again!!
The latest flap over the China factor in the silver market sounds all-too-familiar to observers in the precious metals markets lately.

Once again we have the "explainalists" (financial analysts whose "analysis" consists of after-the-fact explanations that their "analysis" failed to hint at beforehand) enlightening us with the fact that "China could sell some of their silver stockpile" which is supposed to explain the recent fall in silver prices; as if the Chinese are as stupid as the BOE in announcing their intentions in advance to insure the worst possible price for the sale of their product.

What the "explanationists" are careful not to point to is the eighteen-cent runnup two days before (after months of tight trading range activity that had silver trading within pennies day after day after day). The hope is that nobody notices that the upward blip was nothing more than a loading up for the coming short-sale attack that was hoped to take the market lower. Unfortunately, even coupled with a blatant disinformational announcement about China's intentions, the metal has only fallen back to its former moribund price range.

What seems worth taking note of here is the pathetic little rise the manipulators had to content themselves with as shorting ammunition. In better times, they could have dared push the price up $.50 or more before pulling the plug with their short-selling attack. Yet everytime they do this, they make it worse in the end. What plans do these "experts" have for that?

Same old, same old! How long do they think they can keep doing this before people start to notice?

SteveH: I'll second your motion!
TheStranger
(01/06/2000; 21:22:54 MDT - Msg ID: 22431)
The "Wizard Of Oz" Allegory For Those Who Didn't Already Know
The U.S. presidential election of 1896 pitted Democrat William Jennings Bryan against Republican William McKinley. At the time, America was on the gold standard, and a limited supply of bullion was believed to bear an aggravating influence on the nation's persistent deflation problem. Bryan was an advocate of bimetalism, a proposal which could introduce inflation by adding silver to the nation's money supply. He saw himself as a defender of deflation's victims, which included indebted laborers and farmers. In his most famous speech that year, he declared, "You shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold." But, when November came, it was McKinley, and his support for the single gold standard, who prevailed at the box office.

Shortly thereafter, a midwestern journalist named L. Frank Baum penned an allegorical children's book about the campaign of 1896. Originally entitled "The Emerald City" but later renamed "The Wizard of Oz", the book tells the story of a lost girl named Dorothy who was meant to represent traditional American values. Dorothy and three friends, a scarecrow (the farmer), a tin woodsman (the laborer)and a cowardly lion (William Jennings Bryan) set out upon a yellow brick road (gold) to find the Emerald City (Washington D.C.) where everyone sees the world through green glasses (paper money). There, it is hoped, the Wizard (William Mckinley) can help Dorothy find her way home. But the Wizard turns out to be a fraud, incapable of living up to people's expectations. In the end, Dorothy discovers that silver slippers (they only became red when the story was rendered in technicolor) are all that's required to solve her problem.
TheStranger
(01/06/2000; 21:30:38 MDT - Msg ID: 22432)
Lamprey 65 und CoBra(too)
Lamprey - I loved your #22301 night before last. That would be a great post to put in a time capsule.

CoBra(too)- Servus und vielen dank!
TheStranger
(01/06/2000; 21:38:48 MDT - Msg ID: 22433)
Metals Stocks Booming Down Under Tonight
http://www.bloomberg.com/markets/asia.htmlCheck it out!
Peter Asher
(01/06/2000; 21:39:25 MDT - Msg ID: 22434)
Steve H, Town Crier, ORO and MK

Permit me to apply my profession of Design/Build, to the Castle Architecture.--- Frank Lloyd Wright picked up the slogan from his mentor Lois Sullivan, "Form follows function."

Gentlemen! The hall of fame needs some renovation. A great library may start out as a single hall, but a time comes when different categories and topics require their specific spaces to accommodate the scope and individuality of specific subject matters.

As the collection of great works builds in the HOF, threads are emerging that eventually will be best placed in their own individual reading rooms. I believe ORO's works have come to that point. I am sure I am not alone in failing to have time to read much of his brilliant theses. Even if there were a CD ROM of all the Archives it would not be possible to sort out the pertinent works from the more casual commentary. It is time for some partitions to be erected. As in all remodeling, agonizing decisions must be made. Do it piecemeal? Have a grand master plan? Put it out for bid? Time and material?? Plus, when your dealing with Castle construction, Every decision is literally cast in stone.

Certainly though, we are at the point where ORO should have at least a "virtual" alcove dedicated to his posts. I would also suggest, as a point of discussion, that the content of this be partly decided by ORO himself, (He is, after all, writing a book out of these posts) with perhaps the collaboration of Steve and the others who ORO has been repetitively bouncing ideas with.

Well, I should have warned you, I have a reputation for coming up with grandiose schemes that break budgets, It's an incurable compulsion.

Whatever happens, we do not want to take out equity financing to achieve this. The Castle must always remain free and clear!

Got a Design committee?
Peter Asher
(01/06/2000; 21:48:55 MDT - Msg ID: 22435)
Stranger
Life is allegoized by art which is alegorized back into life.

I believe a few of us have referred to AG as "The man behind the curtain." I had no idea that was a full circle deja vu.
TownCrier
(01/06/2000; 22:50:19 MDT - Msg ID: 22436)
The GOLDEN VIEW from The Tower
From The "We're-up-to-our-eyeballs-in-cash" Department

The volatile action of the stock markets seems to have inspired the movement of sufficient cash funds into such channels as savings accounts...providing banks with an influx of reserves beyond their minimum maintenance requirements. So even with the first of the longer repos established in October beginning to come off today, banks suddenly found themselves with dollars of the worst kind...earning no interest. The Fed obliged the banking system's desire to put these extra funds to work through $8 billion split evenly between overnight and 7-day matched sale-purchase agreements.
+
With the various repos maturing set against the rate of currency write-off, predictions of Fed action defies prediction. Some analysts today actually were calling for the Fed to add reserves instead of the matched sales drain of reserves. Carol Stone, senior economist at Nomura Securities International, told Reuters "There's a great deal of uncertainty about any of their operations these days."

From The "I-should've-bought-some-gold" Department

How many of the twelve-and-a-half million people of Ecuador are saying that these days? The Ecuadorian currency, the sucre, lost 67% of its exchange value last year, and has already lost 18.3% in the first four trading days of this new year. With the sucre losing another 4% on Thursday, Reuters reported that the country is growing "increasingly distrustful of the government's ability to lead it out of a crushing economic crisis," with some protestors calling for President Jamil Mahuad to step down, but getting a state of emergency declared instead.
+
How can gold help you keep what you have when the system fails? Take a look at these numbers...
Right now, the sucre is of such limited value that 25,575 are required to buy one dollar. Should you throw them all into a travel trunk and sail to some port of stability, you'd find your sucres to be ill received, if they survived the length of your trip, that is. If an Ecuadoran were to have been parking his savings into physical gold, these would be the figures that would be familiar:
Exactly one year ago, one ounce of gold could be bought or sold for 2,000,000 sucres.
By the arrival of June, this price would have risen 50% to 3,000,000 sucres.
With the arrival of October, the price of gold had climbed to 5,000,000 sucres.
And now, three short months later, the going rate for gold in Ecuador is 6,500,000 sucres. Set sail with your gold, and you can be sure you'll be well received in any port of call. Get the picture?

From The "Gold-in-Euroland" Department

For the benefit of those gone on vacation during our last GOLDEN VIEW of 1999, here's an excerpt from our December 30th report regarding Euroland's gold assets:
+
"For what it's worth, we did some preliminary number crunching to get an idea in advance of the next European Central Bank financial statement what to expect in regard to the value of the ECB's official gold assets. At the last ECB quarterly gold revaluation, we were on the cusp of both the Washington Agreement and the IMF's plans to revalue their own gold holding to market prices instead of conduction "sales." Gold had recently risen to $300 per ounce, each euro was going for $1.07. That translated into European System of Central Bank gold reserves being officially valued during this quarter at �280 per ounce. Turning to today's values, the London market closed with gold priced at $290 and the euro was priced approximately at $1.01. This translates into an increase in the ECB's per ounce book value to �287 per ounce through the next quarter. The ECB gold assets continue their track record of higher valuation each quarter...exactly as it should be when priced by a fiat currency. Can you see the beauty of this system, and can you project that someday all currencies must be valued this way? We knew that you could."
+
Here's the news we were anticipating. Yesterday, the European Central Bank released its weekly financial statement for the week ended December 31st, which has significance to us for two reasons. First, the numbers reflected the 27 million euro reduction in gold assets as a result of the three tonnes of Dutch gold that was moved that week through the Bank for International Settlements. Second, and more significantly, the quarterly revaluation of the remaining gold assets more than compensated for this 3-tonne reduction. Despite this sale, the total gold assets of the European System of Central Banks rose by a net 1.765 billion euros, now at 116.483 billion euros.

On the other side of the Atlantic, Canada's gold holdings at December's end were were unchanged from their previously reported level, standing at 1.8 million ounces.

From The COMEX Department

Spot gold finished marginally up today (25�), and was last quoted in NY at $281.00. February gold futures derivatives traded on New York's COMEX climbed 30� to $282.40, nearly the top of its $282.80 - $280.20 range for the day. David Meger, senior metals analyst at Alaron Trading indicated in a FWN report that physical buying is expected to provide support below $280, and that hedge funds are less likely to press the market below this level.

Yesterday 1,903 ounces were withdrawn from Registered COMEX stocks, but today saw no changes.

OIL

There was plenty of bullish news today, but traders were apparently in the mood to sell. February crude closed down 13� at $24.78 in the face of several instances of extended refinery downtime, export problems in Nigeria, and surveys showing OPEC compliance with supply cuts remaining high... 86.8% in December, compared with 86.7% in November.

And that's the view from here...after the close.
Gandalf the White
(01/06/2000; 22:51:07 MDT - Msg ID: 22437)
HELP ORO --- The Hobbits beg you to SLOW down !
You said in ==> ORO (01/06/00; 14:06:32MDT - Msg ID:22408)
Equity market out of kilter -- "The January effect in beaten down value stocks is in full bloom. The advance decline line looks better than it has in quite a while, yet the SP futures have been under heavy selling since the last trading day of last year."
******WHOA -- I see that the $PREM (S&P futures -- I THINK) has been manipulated by the PPT to the greatest extent of the level during all of last year! Look at where they start it most days, +25 or so! AND when they wish to kill a downdraft -- pop goes the $PREM +10 or so, with the market drop then slowing down and going up for a while. Please advise what you are looking at to see the picture that you are discussing.

THEN you say, "The indexes are so laden with low float tech stocks that the selling of the SP500 and ND100 futures is having a strong negative effect on these stocks (where the selling is receiving the same leverage on the way down that had exaggerated the move up)."
****THIS is confusing to me, as the futures have no direct relation to the individual stocks that are being sold because of the rush to lockin some of that "profit" from the irrational run-up of those stocks, to which you refer.
Please go slow and explain this to me in more detail. TIA
<;-)
Gandalf the White
(01/06/2000; 23:02:22 MDT - Msg ID: 22438)
Howdy Stranger !!
The Hobbits loved your "Wizard of OZ" story and you are making it difficult to start out the new "Serial" with a story like that!! BTW -- WELCOME BACK to the TableRound!!!
<;-)
lamprey_65
(01/06/2000; 23:44:03 MDT - Msg ID: 22439)
January 7, 2000 Remember this date!
Lucent (LU) warned after the market closed yesterday, they will miss earnings by a country mile. This is it, folks...let the true correction commence. Up until now we've had a few days of profit taking with a little bit of recognition of rising interest rates - the LU warning is a bombshell (for those not expecting it). LU means internet...we are now in fundamentals land, my friends...look out below! Add rising rates into the equation and it could be very, very ugly. Don't be surprised to see the FED turn around and start ADDING liquidity again if it all starts to fall apart too quickly.

Lamprey
lamprey_65
(01/07/2000; 00:11:22 MDT - Msg ID: 22440)
January 7, 2000 Remember this date!
(Reposted to get on today's board)

Lucent (LU) warned after the market closed yesterday, they will miss earnings by a country mile. This is it, folks...let the true correction commence. Up until now we've had a few days of profit taking with a little bit of recognition of rising interest rates - the LU warning is a bombshell (for those not expecting it). LU means internet...we are now in fundamentals land, my
friends...look out below! Add rising rates into the equation and it could be very, very ugly. Don't be surprised to see the FED turn around and start ADDING liquidity again if it all starts to fall apart too quickly.

Lamprey
Gandalf the White
(01/07/2000; 00:35:32 MDT - Msg ID: 22441)
First Serial
(Forward � The Hobbits were helping me clean out the lower catacombs at the bequest of the Queen of the castle, when they unearthed an old file with a silver ribbon around it. I had not seen that file for a few decades and it brought tears to the eyes of the Ol�e Wiz, as it had been given to me by a friend about a year before he had died. That older friend was a man of class, who showed me the correct road of both business and adventure. He was also a precious metals advocate and loved to prospect wherever he traveled. The file contained his research and documents together with field notes and data relating to his exploration trip, during which he had fallen down a steep rise and broken his leg. He had intended to return to that area, but time and age changed his plans, so he gave me the file to enjoy. That file contained a story that he had found in a magazine many years ago. That story was titled, "Mystery of the Lost Ozarks Silver", and I have the privilege to share it with you, word for word, as it was printed.)

"Mystery of the Lost Ozarks Silver"
Written by Tom Bailey and illustrated by Al Martin Napoletano
(oh Goldfly, for that scanner to show these pictures and drawings)
Published in the FRONTIER TIMES, Austin, TX -- Summer, 1961.
----
"A SILVER mine in the Missouri Ozarks?" "Lift that other eyebrow, Hombre, and listen well." Documentary evidence proves there is silver in the Ozarks � BUT whether it is native to the land or imported is a question you can argue down around Cassville, Missouri, and Eureka Springs, Arkansas, until the cows come home. Most anybody you talk to will tell you there's a whopping big mine buried from thirty to forty feet under the backwaters of the Table Rock Dam on the White River which was completed in 1959.
If what the Missourians say is true, you would need a skindiver's rig to go looking for it, and then you might not find it considering the fact that men have been searching for it for 200 years.
There is general belief in the area that the silver is native to the Ozarks and with some justification , for silver ore has been mined at Fredrickstown, Missouri, for several years. However, from a study of the old documents and the history of the early Spaniards, it would seen that the cave in which the silver is said to have been found was used by the Spaniards as a depository for the metal they brought from what is now Colorado and stored there against the day it could be shipped to Spain.
Proof of this is to be found in the diaries of two men who inspected the cave. Both said they carried away silver bars; certainly native silver would not be found in bars unless melted down and moulded as the Spaniards are known to have done.
How much silver the cave contains is anybody's guess, but if we look closely at the old diaries and maps, we must conclude that there is quite a bundle of it.
If the silver is buried beyond man's reach, as the Missourians say it is, lost-treasure hunters will see no useful purpose in the publication of this account, yet it's a story worth the telling, because the Missourians may be wrong. The cave might not have been buried by the waters of the White River, now impounded by the dam.
For many years the story of "the lost silver mines of the Ozarks" has been a growing legend in that hilly country. Descendents of pioneer families, some now in their eighties and nineties, heard it when they were children and have passed it along to their children and grandchildren. Any version that does not conform to the one that has prevailed all these years is considered not worth listening to by the natives.
======
END of the First Serial �
<;-)
el St.One
(01/07/2000; 02:31:40 MDT - Msg ID: 22442)
FOA
FOA Have you noticed the open interest in EURO fx futures contracts. Do you have any thoughts as to why they are mostly March.

March 55,546
June 163
Sept. 97
Dec. 0..............el
Mr Gresham
(01/07/2000; 04:05:02 MDT - Msg ID: 22443)
Peter's HOF proposal: Second!
I, too, am suffering "Oro-lag". During the Fall I kept up fairly well by maintaining my own ORO document and clicking over to Word each time I wanted to capture his posts (along with his partner in dialogue.) Haven't had time yet to re-read that document.

A quick check shows 55 pages from 9/21 to 10/23, ending with the Yellin of Troy replies. That's not very up-to-date. If others are duplicating the same type of work, then perhaps a Room d'Oro could be a work in progress, as I remember he is seeking feedback from us all.

I've copied all of the Forum from November into one document, hundreds of pages, not yet sorting by poster I want to retain. But at least it's searchable. December's document is still awaiting completion.

I want to do justice to the stimulating learning opportunities being presented here. But I had to get away from the computer for two days with two cartons of paperwork sitting for too long untouched on the desk. I also needed time to enact the investments we discuss here. My lifelong tendency is to "study it to death" and miss the move.

Being a contrarian (to myself) I catch myself thinking "Aha, now with Y2k out of the way, I'll have time to ______ ....". That's just when it will probably rear its head. But most of my preparations were for a depression scenario anyway. Perhaps Unemployment shall be Nature's way of saying: "Hey! Catch up on those Forum months you skipped over so lightly!"

The problem, as most of you are fully aware, is that you bring out the best in each other, and in my five months here I have seen each of you shine many times with golden brilliance.
ss of nep
(01/07/2000; 04:43:06 MDT - Msg ID: 22444)
P.A. MsgId 22423
Taken from Kitco + fixed some typosDate: Tue Jan 04 2000 20:24
JESUS FREAK (Dow) ID#25193:
Copyright � 1999 JESUS FREAK/Kitco Inc. All rights reserved
I found this and thought it was a good time to re-post this.
My name is Jean Comeau from Quebec, Canada and I am a commodity trading advisor registered in Chicago. I have studied the stock market in a technical way for over 25 years and with a detailed technical analysis which follows, I have come to the conclusion that a stock market crash in the year 1999 is inevitable.
The Dow Jones Industrial average should hit 11550 to 11600 points on an intraday basis and a crash will then be triggered. Since we are almost there, I took that liberty to write the following as to perhaps help others to make a decision in regards to whether stay in or bail out of the market before the iceberg finally hit. . .
In order to understand more clearly the main core of the following analysis, I shall begin by referring to pioneers in terms of researchers in the technical analysis field.
ELLOIT ( Wave Theory ) : a market trend usually moves in 5 waves UP and then 3 waves DOWN and so on. . .
FIBONNACCI ( Perfect Numbers ) : .382 and.618 1-2-3-5-8-13-21-34-55-89-144 etc. . . These numbers play a major role in technical analyses of any sort when it comes to mathematical calculations.
W.D. CANN ( Square Rule ) : Time and price ( space ) meet at a turning point or as in this case the square root of 34 as it will be demonstrated.
Now, let us go back in 1929 to possibly obtain a better comprehension of the last major WAVES DOWN of the crash that occurred then and realize why the enormous potential for it to repeat is just around the corner.
CRASH OF 1929 - 3 waves down
October 1929 = High or end of previous major 5 waves up = Dow touches 382 points or Fibonnacci .382
Then,
CRASH - Wave 1 = Within 2 months from the high ( 382 ) , the Dow touches 200 for a total move down of 182 points.
CRASH - wave 2 = Within the following 6 months, the market recovered to 290 or 90 point gain. Here, notice that half of the retracment is made back up from the original 182 point down ( wave 1 )
CRASH - Wave 3 = Finally in June 1932 ( after 34 months from the high ) the market touches the 43 point level and establish the end of the major bear market
NOTE: Form any wave to be confirmed as fitting the picture the market will usually and normally retrace half of the last move either up or down from the previous major low or high which it actually did in Crash - WAVE 2.
NOW, ON THE WAY UP. . .
WAVE 1 = ( last quarter ) D.J. hits 1051
WAVE 2 = ( last quarter ) D.J hits577
In this case, the total move down is 474 points or half retracement form 43 ( 1932 low ) to ( 1972 hgh ) 1051.
WAVE 3 = 1987 ( August ) D.J hits 2746 ( inrtaday basis )
WAVE 4 = 1987 ( October ) D.J. hits 1616 ( intraday basis )
In this case the total move down in 1130 points or half of the retracement form 1974 low or 577 or high of 2746.
WAVE 5 = WHEN DOW JONES HITS 11550 TO 11600 POINTS. END OF MAJOR BULL MARKET PERIOD.
We achieve our goal by using Fibonnacci numbers as follows:
Wave 1 or 1972 = Fibonnacci number 3 times 339 which is the total down move of the last crash ( 1929 ) totals up to 1017 plus 43 ( crash low ) equals 1016 and the actual hight in 1972 was 1051
Wave 3 or 1987 = Fibonnacci number 8 times 339 equals 2712 plus ( crash low ) equals 2745 and the actual high in 1987was2746
Wave 5 or 1999 = Fibonnacci number 34 times 339 equals 11526 plus 43 ( crash low ) equals 11569
Also note: W.D Gann Square rule is now in full strength 34 times 340 ( square root of 34 ) = 11560. Note that the number 339 was rounded up to 340 When that number is hit, the 3 waves down will be in affective mode. We are to expect then that I MARKET WILL DROP FROM 5560 TO 6000 POINTS within the following 2 months ( has retracement of full move from 43 to 11569 ) which will signal the very next GREAT GREAT DEPRESSION and a rendez-vous with destiny and Y2K. . .
What was the high in the Dow??
ss of nep
(01/07/2000; 04:43:57 MDT - Msg ID: 22445)
Gann Square Rule ?


Can anyone explain it to me ?


714
(01/07/2000; 05:22:37 MDT - Msg ID: 22446)
Asher & Gresham re: Oro's posts
Grow up, Ye Knights of Ye Round Table. Learn to use the scroll button on the right hand side of your web browser.

Oro adds quite a bit to this forum, which help to bring it up to snuff, IMHO. Compared to the "other" forum (I won't mention any names), posts here are rather sparse. Although I do not read everything Oro may post, I look forward to his posts as much as anyone's here, perhaps more so. He is among the most knowledgable and analytical posters, and it would be a shame to relegate him to some backroom here at USAGold.

p.s.--What happened to Y2K? Has it hit yet?
Cavan Man
(01/07/2000; 06:35:53 MDT - Msg ID: 22447)
The Stranger & "The Great Commoner"
Thanks so much. What is your reference for the allegory?

A good bio of Bryan has been done by Louis W. Koenig. It is a good read and many here might have an interest because of Bryan's involvement in creating the Federal Reserve System and the Federal Income Tax. He was not a "hard money" advocate as his "Cross of Gold" speech might imply.

TR thought him to be a very dangerous man; anarchy incarnate. Although Bryan did author and support much legislation ameliorating social conditions of the time, IMO, he was a classic opportunist an advocate of big government. He would have prospered in this day and age.

Pat B. couldn't carry water for this guy.
Usul
(01/07/2000; 06:51:27 MDT - Msg ID: 22448)
"Jean Comeau from Quebec"
http://forums.cosmoaccess.net/forum/y2k/The following was found on an Alta Vista search on
"Jean Comeau from Quebec".
The original link has disappeared and there don't seem to
be any postings from Jean Comeau currently.
The text "My..." matches the start of the article posted
below, so it seems very probable that it was posted on
May 10, 1999. It does say a crash in 1999, but then
waves can vary in timing.
But what if Godzilla was looking at the waves,
decided he didn't like those ones, and proceeded
to stomp about on them?

1. Rendez-vous: Market crash and Y2K
Rendez-vous: Market crash and Y2K. [ Follow Ups ] [ Post Followup ] [ Year 2000 Forum ] [ FAQ ] Posted by Jean Comeau on May 10, 1999 at 17:47:52: My...
URL: forums.cosmoaccess.net/forum/y2k/messages/1711.html
Last modified on: 21-May-1999 - 10K bytes - in English
Peter Asher
(01/07/2000; 07:23:34 MDT - Msg ID: 22449)
714 (1/7/00; 5:22:37MDT - Msg ID:22446)
Hey, young whippersnapper, careful how you talk to the senior citizens. Us old folk you told to "Grow up" even know how to use 'edit' and 'find in page' (on the upper-left BTW) Beats the scroll button all to ---. Perhaps you need another pot of that morning coffee. Also, when did the Hall of Fame become a "Back Room"???

Maybe you have misunderstood the HOF. Posts are ALSO viewed there, not "Relegated" to it. The Hall is a place of honor where one may read in quite contemplation, undisturbed by the confused and distracting chatter that occasionally erupts in the main hall.

As to where Y2K is, perhaps you missed last nights post here on the credit card billing that ran amok. or yesterdays mainstream news about the eastern half of the USA sitting at the Airport going nowhere while the "Non Y2K computer glitches that happen from time to time" kept everyone grounded for many hours.


714
(01/07/2000; 07:41:17 MDT - Msg ID: 22450)
Peter Asher
(;^)I'm glad to see you have a sense of humor. Mine has been tested quite a bit this week. I'm the computer guy for a small business and we've had our accounting software bug out this week after being told it was Y2K compliant. The patches we're getting from the software company are simply replacing one problem with another. We're working around it though and will be replacing it by the end of the month. It's hopeless, but fortunately, it is nothing serious!

p.s.--You got my goat. Can I have it back now?
Peter Asher
(01/07/2000; 07:58:13 MDT - Msg ID: 22451)
714
Oh, that was YOUR Goat? Sure can. Now that Y2K is over, we can get milk at the store.

Seriously, though, do you see that the HOF, besides being a collection of best posts, is a way to seperate them out from this 6000 page Archive. If one hasn't culled along the way, as Mr G has, it would be a day long task to put anyone's thread together, and sometimes almost impossible to sort out and align coherently.

Try locating something even with "Find" over a one week Archive period, and you'll be ready to tear your hair out. Or spring for the latest instant high-speed download technology.
714
(01/07/2000; 08:13:08 MDT - Msg ID: 22452)
Peter
I certainly have been to the Hall of Fame, but I must admit to suffering from "information overload". Posters such as FOA, Oro, & Aristotle are unique, and although Kitco has posters of similar (and not-so-similar) quality (rhody, dabchick, sharefin, etc.), USAGold is a quicker read on a busy day. I do enjoy the earthiness of the other forum when I have time though. I am grateful from what I glean from such knowledgable posters. And speaking of busy days, I got to go...more patches for some funky software.

p.s.--I left out my favorite, Holtzman. Sorry, Holtzman.
nickel62
(01/07/2000; 08:36:49 MDT - Msg ID: 22453)
Lamphrey's earlier post
Just wanted to thank you for youe earlier heads up on the significance of the Lucent shortfall.Thanks
nickel62
(01/07/2000; 08:36:57 MDT - Msg ID: 22454)
Lamphrey's earlier post
Just wanted to thank you for your earlier heads up on the significance of the Lucent shortfall.Thanks
USAGOLD
(01/07/2000; 09:05:01 MDT - Msg ID: 22455)
Today's Market Report: Gold Recovering from Post Y2K Syndrome
Market Report (1/7/00): Gold began to recover from the post- Y2K
syndrome today registering gains in most international markets. The
Yellow started to go positive toward the end of yesterday's New York
session then picked up support as trading progressed around the globe.
FWN reports "one large NY trade house" being the featured buyer. $280 is
viewed by many traders as a strong support zone. Reuters reports one
Swiss dealer as saying, "At the moment we're trading a range between
$278 and $282 but we could go above that on short covering before the
weekend." A London trader added this observation: "The pressure on gold
earlier in the week was coming from positions taken out as insurance
against millennium problems being unwound, it wasn't indicative of a
longer-term trend." We'll close today with this from Standard Bank of
London: "Gold has now survived three forays below $280 with physical
buying a feature and its ability to hold above this key level could
prompt a return to the $285 resistance." So we go into the weekend on a
positive note.

That's it for today. We'll see you here Monday. Happy Weekend!!
goldfan
(01/07/2000; 09:17:40 MDT - Msg ID: 22456)
PH in LA (01/06/00; 21:21:49MDT - Msg ID:22430)
http://www.usagold.comPH in LA
In your post last night re silver manipulation you said"How long do they think they can keep doing this before people start to notice?"
I don't understand the mechanism by which this manipulation is being effected. What people do you think would notice, and what could they do about it?. I have read and believe that there is a great silver shortage, sufficient to drive the price sky-high. I own a lot of silver out of that belief. But, going by the market, there seems to be no shortage at all. How is this done? In particular, how can the price be artificially held down for so long on something that is in great industrial demand? Sure, I understand doing this for a while by short selling, but for years?? Maybe someone like Buffett with a big stash of the stuff could do this, but why would he?

INMHO the manipulation in Au and AG however it is being done, will not be ended by any government or legal action, in spite of the good and valiant efforts of the morally upright such as GATA, but only when the people get so scared of the possible loss of their wealth they start buying PMs in large quantities out of that fear.

Would sure appreciate any comments anyone could make.

Goldfan
JCTex
(01/07/2000; 09:40:51 MDT - Msg ID: 22457)
Martin Armstrong letter
The following letter was sent to Chris Powell, GATA Treasurer/Secretary, from Martin Armstrong.

Dear Chris:

Obviously this latest bit of news posted by Bill has had its usual backlash of inquiries and emails headed my way. Though this posting is interesting and I would love to be free to comment on the current subject, I am restricted by law. The receiver appointed by the court has also banned me from writing and the US government now seems to have claimed that they now control my First Amendment rights as well. I think things would have been fairer if we didn't have a constitution.

In any event, I am at liberty to speak about subjects other than my own case. To set the record straight, I have disagreed with GATA that the depression of gold has been an organized manipulation on the part of central banks. I have never denied that there is a cartel of "private" groups, funds and individuals who do herd together to manipulate as many markets as they possibly can.

At the start of the silver manipulation. I was flat. I had taken all profits and closed out all short positions. Silver was trading around $4.29 when PhiBro walked across the ring and handed to my broker an order to buy 1,000 lots of silver every penny down for as far as you could see. They intentionally showed me the Buffet order. Later, Bob Gotlieb from Republic Bank call me and tried to get me to join the manipulation. He said "something big is coming down in silver" and when I asked who was behind its he said "your friends in CT."

After being approached several times to join the manipulation, I reported to our clients that "they" were back. I would not have used the term "they" if it had been someone other than the same crew as in 1995. I was told that the target was $7. I reported that information on our website. I was NOT short. I knew what they were capable of doing. I left the country for my usual fall tour. I was invited by the government of China to discuss the Asian Crisis. I visited the government there in December of 1997. Upon my return, silver was at $6.40 and everyone indeed had been led to believe it was me because the orders were routed through Republic to give the marketplace the impression that it was me buying the silver. In fact, it was Republic buying the silver itself and moving it to London.

It is true that I was very mad. I did not like being accused of doing something I did not. I would have to have been crazy to be short silver after reporting to the world that a manipulation was underway and that the target was $7 and then leave town for 3 months.

I was not short 700 tons of gold and never was. My own forecast called for a June low and a rally into October. I made forecasts of hunreds of different markets. I does not mean that I must also have a position in that market. I have been bullish on stocks since the turn in 1994, but by law I am also prohibited from owning any stock and have not owned anything since 1980.

Just because someone has a long-term forecast that disagrees with your own does not mean that I must have been also short. I view the world from a global correlation perspective and it just doesn't seem possible to achieve a raging bull market in metals when stocks are the flavor of the month. Bull markets are historically created when capital concentrates and that focus is in the stock market for now. When that concentration breaks, capital will then look around for the next great investment. That should be the commodity cycle between 2002-2007 and perhaps extend out as late as 2012.

For now, either the metals make their final lows in 2001 or 2002. Either way, they should be contrasted by a bubble top in stocks.

As it stands now, indeed the government intends to put me in jail tomorrow because I am taking the 5th Amendment. I must do so to protect my defense until trial. They are using a civil action of contempt arguing that I have no 5th Amendment rights. I will go to jail tomorrow willingly before I bend before this corrupt thing we call government.

Keep in mind one thing. If the government is intent upon silencing you, you suddenly find that they are no better than Russia. They need no proof. They strip you of your assets to prevent you from defending yourself. They attack and threaten your attorneys with jail for contempt and try to take back any money they have already spent even though it was unfrozen by a judge previously. In other words, the US has become no better than Russia. They even threaten your family, your employees and your friends. This is what America is now all about.

They know my life has been threatened and quite frankly the government most likely cheerishes the thought of me being killed while in prison. That way, everybody wins. The truth will never come out and my name will be forever tarnished as some two bit crook who defrauded clients but strangely never diverted a single wire out of $3.1 billion.

Sincerely:

Martin A. Armstrong
JCTex
(01/07/2000; 09:53:28 MDT - Msg ID: 22458)
goldfan: manipulation
You could be right that legal action may not work. You are probably right that the gummit won't enforce any laws against people as powerful as these. The so-called mainstream media damned sure won't be any help in exposing the manipulation.
BUT sometimes just opening the door and shining the light on them will make the cockroaches and rats run for cover.
Goldy Locks Guy
(01/07/2000; 09:54:59 MDT - Msg ID: 22459)
Goldfan and Silver
Hi,

One thought that was put to me last night concerning Buffet is that although is has a big bunch of silver, most of his ungodly wealth is in stocks...And perhaps he is holding out right now on taking possession on the silver because he's waiting for the stock market to correct. Making a big play in silver at this point would most likely tip the scales in some area's that would endanger his wealth outside of silver....just a thought. At some point, surely he will make a play, or why else would he even ownt he stuff?
Chris Powell
(01/07/2000; 10:55:55 MDT - Msg ID: 22460)
Martin Armstrong knows too much; pray for him
http://www.egroups.com/group/gata/332.html?There are lots of market manipulations.
Will he live to tell about them?
Chris Powell
(01/07/2000; 10:56:24 MDT - Msg ID: 22461)
Martin Armstrong knows too much; pray for him
http://www.egroups.com/group/gata/332.html?There are lots of market manipulations.
Will he live to tell about them?
Chris Powell
(01/07/2000; 10:56:37 MDT - Msg ID: 22462)
Martin Armstrong knows too much; pray for him
http://www.egroups.com/group/gata/332.html?There are lots of market manipulations.
Will he live to tell about them?
PH in LA
(01/07/2000; 10:56:47 MDT - Msg ID: 22463)
Silver manipulation
Goldfan:

As you probably know, the writings of Ted Butler have focused on the current humongous deficit in the silver market. For centuries, civilized man has accumulated and hoarded silver, which for most of human history was utilized as money. Until recently, the US Government had one of the largest strategic stockpiles of the metal in existence which was further enlarged when silver was withdrawn from the US currency. As it turns out, silver is not even a particularly rare element. It is found together with many other even more common metal ores and its production is mostly a by-product in the mining of copper, zinc, magnesium, etc. (That's why it is so hard to find a pure silver mining stock.) For this reason, the silver market has always been a highly manipulated market and highly susceptable to the vagaries of public perception.

However, according to Butler, much of this traditional underlying fundamental reality has been profoundly changed by the practise of leasing. For example, the US Government admits that its gargantuan strategic stockpile has been largely liquidated. The same goes for other nationally-inspired strategic hoards. By selling short far more than the annual production of new silver, the so-called "manipulators" have kept the price of silver falling for decades and appear to be in the final throes of this process (which I personally do not pretend to fully understand from a technical trading point of view) which is manifesting itself in virtual rigormortis in the silver market. As long as this unnatural state of affairs is allowed to persist, the pressures build and the eventual price breakout is expected to be just that much more dramatic.

This is the point at which FOA's expectations with regard to the demise of the LBMA and Comex marketplaces interface with Ted Butler's thoughts. As the situation becomes more and more surreal, ie prices refuse to reflect the actual fundamentals in the markets and rather reflect a derivitives market gone berserk, FOA forecasts (hopefully?) that investors will gradually recognize the true situation and stop participating in what has become a fantasy world. The derivitive world will give way to a physical world and prices will finally be allowed to reflect a sane reality. Ted Butler harbors no such illusions and expects supplies to be literally exhausted unless the authorities exercise their responsibilities in time; something they have steadfastly refused to do, (in large part to protect the illusion of value in the dollar). Either way, silver (and gold) will someday be much more expensive.

Nobody knows how this will resolve itself. Traditionally, the laws of supply and demand have always mandated that consuming more than can be produced results in higher prices. From this point of view, those standing in the way (cabals, bullion banks, politicians... all the usual suspects) appear to be subverting the natural order of things. Their efforts are seen as manipulation, although the perpetrators call it a "new reality" and profit from it in all the usual ways. But their days are numbered!

Your observation that "manipulation will (only) be ended when the people get so scared of the possible loss of their wealth (that) they start buying PMs in large quantities out of that fear" fails to take into account much of the hard evidence presented here daily by FOA, ORO and others pointing to even more potent undercurrents in the precious metals/foreign exchange markets that serve as the foundations of our modern civilization. People's fear of the "possible loss of their wealth" will manifest itself soon enough as these powerful forces take hold. Investors will all jump together onto the wagon that has been prepared for them!

At least that is the theory.

Chris Powell
(01/07/2000; 11:05:01 MDT - Msg ID: 22464)
Pray for the man who knows too much
http://www.egroups.com/group/gata/332.html?Martin Armstrong is starting to talk
about the many market manipulations
he knows about.
silent runner
(01/07/2000; 11:15:55 MDT - Msg ID: 22465)
ORO
thank you for your input regarding prpfx
The Invisible Hand
(01/07/2000; 11:32:06 MDT - Msg ID: 22466)
Y2K: no problem?
http://news.bbc.co.uk/hi/english/world/americas/newsid_594000/594698.stmWhy is Clinton today speaking about computers today?
As I got rightly reprimanded for the inference I made on December 31, I will not draw any conclusions from this.
I do however want to use the opportunity to apologise for my newyear's eve Y2Kraziness.

US crackdown on cyber-terrorism

snip
(Clinton) said the feared threat to computer networks from the Y2K computer bug - a problem ,caused by the millennium date change - highlighted just how much the country was dependent on computers and their increasing inter-connection.
beesting
(01/07/2000; 12:06:56 MDT - Msg ID: 22467)
From Verdigris at Kitco: HSBC UPGRADES GOLD MINING STOCKS!!
http://biz.yahoo.com/rf/000107/tr.htmlNote, this article has a follow up with more information.

Comment:
The article is not complete-ly accurate, but the headline is IMHO!!
HSBC(Hong Kong Shanghai Banking Corp, doing business in 79 country's) The huge international bullion banking conglomerate headquartered in London, that recently took over Republic Bank of New York( a bullion bank) has upgraded the entire worldwide Gold industry with this announce-ment.
Which means mainstream stock buyers worldwide may become very interested in the whole Gold mining industry.
Again In My Humble Opinion, it also may mean the big players have had time to sort things out since the Ashanti/Cambair debacle, to let the "Spot" price of Gold follow a normal supply-demand price ratio.

Special Note;
This announcement was not made by Goldman Sachs, Merrill Lynch or the other brokerage houses, it was announced by a higher authority and should have very positive effects for the entire world Gold industry....For What It's Worth.
Those in the Know.....Buy Gold.....beesting.
RobertG
(01/07/2000; 12:35:37 MDT - Msg ID: 22468)
ss of nep - Forget about Elliot and Gann
The ideas of dead market gurus such as R.N. Elliot (Elliot Wave Theory) and W.D. Gann (Gann Lines) never seem to go away. Neither of these men made any money in the markets and neither will any of their followers. For an interesting and objective discusssion of market gurus read Trading for a Living by Dr. Alexander Elder, Winner Takes All by William Gallacher, and The Dow Jones Guide to Trading Systems by Bruce Babcock. These books reveal the many scandals that seem to be associated with most gurus.

As Dr. Elder accuratley states: "The public wants gurus, and new gurus will come. As an intelligent trader, you must realize that in the long run, no guru is going to make you rich. You have to work on that yourself."
beesting
(01/07/2000; 12:48:56 MDT - Msg ID: 22469)
Singapore and BIS to host Central Bank meeting on Monday!
http://biz.yahoo.com/rf/000107/eh.htmlThe meeting is to provide Central Bank Governors and senior officials an opportunity to exchange views on current economic developments.(???????)
Participants are:
Reserve Bank of Australia.
Reserve Bank of India.
Bank of Japan.
Peoples Bank of China.
Bank Negara Malaysia.
Bank Indonesia.
The Bank of Korea.
The Hong Kong Monetary Authority.
The Federal Reserve Bank of New York.
The European Central Bank.
The South Africa Reserve Bank.
The Bank of Sweden.
The Bank of England.

Comments:
Look at the names attending this meeting.
Besides banking most are major players in Gold, one way or another.
Does anyone beside me think Gold is going to be discussed bigtime?
Was this a spur of the moment meeting,I haven't heard anything about it before?
Does this meeting have anything to do with todays announcement by HSBC?
Goldhearts want to know, WHATS UP!!!

Those in the Know.....Buy Gold.....beesting.
PH in LA
(01/07/2000; 12:59:57 MDT - Msg ID: 22470)
"Como dec'amos ayer..." More notes on manipulation
I think it was the Spanish intellectual and writer Unamuno who was imprisoned for years by Franco. When he was released and returned to teaching at the University, his first lecture was standing room only. He began matter of factly with the now-famous phrase: "As I was (we were)saying yesterday..." ("Como dec'amos ayer...")

(From Kitco today:)

Date: Fri Jan 07 2000 01:48
GO GOLD (Ashanti news) ID#428144:
Copyright � 1999 GO GOLD/Kitco Inc. All rights reserved
I was lucky enough to spend some time over Xmas with a Standard Bank employee who told me that as primary lender to Ashanti, they were very close to going under. The bank that is. If the BOE had not stepped in to underwrite Standard, in return for them not calling in their debts from Ashanti, then Standard would no longer be around. Standard had no option other than to comply, since the BOE made it clear that they would have had to have stood in line with other creditors, and they would never get all there money back.

Now. Why would the BOE involve itself in corporate issues like this? unless they were sh*t scared of Ashanti not being around any more to deliver that lovely gold into the market. I just think the whole thing STINKS. I just cannot believe that the powers that be out there are quietly manipulating the market while publically and very loudly pushing the open and free markets. What a bunch of A***HOLES!!! I eagerly await their downfall.

Date: Fri Jan 07 2000 12:18
ted butler (GO GOLD@01:48) ID#317184:
Copyright � 1999 ted butler/Kitco Inc. All rights reserved
Thanks for the profound post. While we debate all sorts of aspects of the markets this ongoing business with Ashanti (and Cambior) is clear-cut current proof of manipulation in the gold market. In fact, I can't imagine it being any clearer and I wonder why all participants and students of the markets, be they bull, bear, or agnostic, aren't outraged.

The nub of the issue is this: after months, Ashanti's short position has not been closed out. (Even if corrupt Goldman Sachs has closed it secretly recently, it doesn't change the fact that the short wasn't covered when it should have been). What this means is that Goldman and all the other crooked counterparties, with the sanction of the BOE and the Fed, blatantly interfered with the most basic workings of the market. When you or I have a margin call, we must meet it. That Ashanti was allowed to avoid covering a short position, that by the rules of fairplay had to be covered, destroys beyond question the very integrity of the market. Just because they didn't want the price of gold to rise, as Ashanti's covering would cause, doesn't give them the right to suspend and change the rules midstream. Where the hell were they when the short was put on? It's OK to short your ass off to beyond any measure of being able to complete the transaction, but not OK to have to fess up to the truth and buy back. This is a billion times worse than what they did to the Hunts in 1980.

By openly and brazenly flouting the most basic rules of the market, the banksters have fouled the water for all. They have collectively decided that this crisis warranted the destruction of the rules we thought we were all playing by. The reason I can publicly malign Goldman Sachs, Chase Manhatten, Republic, AIG, JP Morgan, UBS, et al, with no fear of reprisal ( of the legal kind at least ) is the open and obvious proof of their criminal activities. These firms are truly scum.

The broader issue revolves around this - that this manipulation in gold and silver is allowed to continue so openly casts doubts on the integrity of all markets (stocks and bonds) . These firms that I continue to label as criminals are at the very top of the food chain. They are the prime players in all markets. Their obvious criminal activity in gold and silver diminish all of us.

Here's a tip to my friends at GATA - stop publicizing the scumbag Armstrong and his lies that silver was ever manipulated up in the past 15 years, and use your press contacts to question why a known public short position is allowed to remain open when the basic rules of the market demand it be covered. Just because it will cause the price to go up ain't good enough anymore.

CM
(01/07/2000; 13:00:18 MDT - Msg ID: 22471)
Manipulation of gold and silver
Just a few thoughts on the "failure" of supply and demand to reflect the true value of gold and silver.

The normal context of supply and demand is that an ongoing stream of demand must be fulfilled by an ongoing stream of supply. The market price then acts to bring these two streams into balance.

For most commodities, this context holds true. However this is not the case with gold and silver, which have large above ground stockpiles that can be used to secretly (or sometimes not so secretly) increase the supply stream and thus hold down the price.

As to who owns these stockpiles of gold and silver and why they want to hold down the price, the usual suspects include the US government, among others.

Regarding my ill advised posting to PERMFROST, I want to apologize to that person and this forum for my bad behavior. Most people are quite proud of their beliefs and do not take kindly to some stranger poking fun at them.
beesting
(01/07/2000; 14:05:14 MDT - Msg ID: 22472)
Another second (of Steve H's motion)for Sir ORO if needed.(need 3 seconds??)
I see ORO as a true-ly gifted contributor, along with many of the others here, and sure-ly deserves special recognition in the USAGOLD Hall of Fame!!!....beesting.
Twice Discipled
(01/07/2000; 14:37:04 MDT - Msg ID: 22473)
Day Dreaming
With gold in such short supply according to the physical deficits shown by the WGC (1000 tons short supply each year), I was trying to figure out if a single investor could make a dent it this price situation. When I tried to calculate how much money someone would have to have to buy just a ton, it blew my mind.
$280 / ounce * 16 oz / lb * 2200 lbs / ton = $9,856,000 / ton
10 ton = $98,560,000.
Being extremely na�ve, I don't think that there are a fair number of people out there with this kind of money. Are all of the gold bugs, just small time people like you and me?
Even so, they would probably laugh at 10 tons and this probably would not effect their ability to manipulate the price, BUT then I thought of a few billion people in China who will now be able to legally purchase gold. My perspective changed and I thought, maybe the Chinese government is trying to accomplish the same thing I was in my mind.

I guess I have been sitting here too long trying to figure out how I could make a difference in this game they are playing with us.
Twice Discipled
(01/07/2000; 14:49:24 MDT - Msg ID: 22474)
Day Dreaming (cont)
Are there any PM investment funds which invest in physical (take delivery) instead of buying paper?
Now that might be a place which would have the capital to buy $98 million worth of physical or maybe a lot more. Anybody ready to start a fund where it invest in nothing but physical?

Just have to get these off the wall thoughts out of my head so I can concentrate at work.
ORO
(01/07/2000; 15:04:27 MDT - Msg ID: 22475)
Putting it all together
Thank you all for the kind words. I do appreciate it. Quite flattering.

The postings come out to quite a chunk and have links to charts, data, and articles that are not always working. Some of the sites I use do not store the charts etc. for more than a day. Putting all the stuff together would make for as difficult a browse through as the current format. I have to say that it would be nice to have someone else redo the threads so that I can check my own collection for completeness.

One more thing is that there is an evolution of ideas and the view of history in my postings. I avoid the error of consistency, though many are driven up the wall by the kind of contradictions I am willing to deal with. Some of the postings would be contradicted by other postings as a change in view may occur.

So...Would I like to have all the threads I participated in put together? Yes, of course.
I would rather have a searchable database of the postings as at the Kitco site. Though I understand it would not be a profitable effort on MKs part due to the simple fact of there being no way to charge for it. The CD-ROM concept is nice, but us net surfers are way too used to free stuff to pay up for anything, much less a CD-ROM that would need to be updated repeatedly.

If anyone would like an ORO corner or an FOA or ANOTHER or Stranger or a somone else's corner for the threads of ideas we communicate in (something I would find very useful), I would say, go ahead to MK, if he wishes to do so. However, MK would still face the lack of incentive, as it is unlikely to be profitable. One of the problems, though, is that it is difficult to browse through the messages by ideas because they do not have a live links. This is because the messages are not stored seperately but grouped by date and don't have direct access. This is a technical difficulty that has stymied many. In some boards, such as Yahoo's chat sites, you can do searches and get title lists, also one can browse through the messages in sequence of response, but can not look at a whole day's text at one go. Hopefully, someone will find out a way to put all these options together in a workable, cheap, and easy way. It may be out there but I have not seen it yet.
Jon
(01/07/2000; 15:10:51 MDT - Msg ID: 22476)
Oro's suggestion of a "corner"
I would be interested in seeing a running commentary on inflation, strength of US$, and POG by the Stranger.
Jon
(01/07/2000; 15:13:30 MDT - Msg ID: 22477)
Msg to Twice Disiplined
I believe the Central Fund of Canada, listed on Amex will be of interest.
Broken Oak
(01/07/2000; 15:17:48 MDT - Msg ID: 22478)
Monday BIS meeting, 10th January 2000
Occuring the last day of the 21 day forex transaction holiday set in place by the BIS (Dec 20th through Jan10th) because of Y2K concerns.

I doubt they would convene this meeting if there was nothing to talk about. I would speculate that there IS something to talk about at the highest levels of these organizations and it has nothing to do with 'business as usual'.

More to come. Watch those Forex markets very, very closely.

BTW Deutchs Morgan Grenfeld tried to run their 'Y2K' ready forex system on Dec 1st in a live transaction environment and it spewed crap into the system for ten (10) hours before they shut it down. 100,000 bad transactions occured. They had to roll back to their old non-ready system.

But I doubt THAT has any significance, do you???

Remember the rule is if it didn't happen at the very stroke of midnight 12/31-01/01 then by definition it is not a "Y2K" problem. Call it anything else that you like, but don't call it a Y2K problem lest the lawyers smell a trace of blood.

Where there's smoke ...
RossL
(01/07/2000; 17:10:01 MDT - Msg ID: 22479)
Twice Discipled - Msg ID:22473

I'm going to be a little nitpickey about your figures so I regret to inform you of a slight error in your Msg ID:22473.

The Gold price is in Troy ounces. There are about 14.6 Troy oz. per pound. Also, those who talk about "tons of gold" refer to metric tons, which is 1 million grams. There are about 32151 Troy oz. per metric ton. So,

$280 x 32151 = $9,002,280 per metric ton.

I noticed Jon in Msg ID:22477 called you "Twice Disiplined" Haha I got a chuckle out of that one!!!
JCTex
(01/07/2000; 17:25:51 MDT - Msg ID: 22480)
ORO (1/7/00; 15:04:27MDT - Msg ID:22475) Putting it all together
MK,
If you need to charge us something for this site, it is a bargain, and I would like to be the first one signed on. The worst thing about this site is that I think my wife is beginning to suspect [or prefer] another woman.
Twice Discipled
(01/07/2000; 17:32:52 MDT - Msg ID: 22481)
Physical PM Fund
Thanks Jon,
I have printed all of the material out from their web site and will consider this. This is an alternative for those of us who have money tied up in 401k or IRA accounts, but want to invest in physical.
I have talked to several peers at work who say, yeh investing in gold is a good idea, but all of my net worth is tied up in my 401k or IRA. I now have an alternative to offer.
Does anyone have any pros/cons experience with this fund?

MK, I hope you do not see this as a competitor and we can discuss options like this for those of us with money tied up in retirement accounts.

Thanks,
TD
Twice Discipled
(01/07/2000; 17:39:37 MDT - Msg ID: 22482)
RossL
Thanks for your correction on my math. I'll write these down so I don't get disciplined in the future. This makes it a little easier for some wealthy investor(s) or investment fund to take physical delivery of a few tons (if they can find them) and start making a difference.

Twice Disciplined is how I feel sometimes.
TownCrier
(01/07/2000; 17:45:59 MDT - Msg ID: 22483)
Sir JCTex and all
Thanks for the kind sentiment. You needn't worry about a charge of any kind for this or the additional services that are currently in the works. All we ask is that when you at least contact Centennial Precious Metals / USAGOLD when you feel the time is right for you to add precious metal to your portfolio of wealth. We're sure you will like the friendliness of service and the exchange rates (prices). It is your decision to purchase through CPM/USAGOLD that nourishes this site. It is our mutual desire to keep the fire blazing upon the hearth.

The comments about refinements have been welcome, and The Tower has taken them under advisement. (In regard to better service, it's been a busy day of computer-oriented administration and coordination here at The Tower...brick, stone, mortar, and information technologies wrapped together in copper wire.)
tedw
(01/07/2000; 18:11:07 MDT - Msg ID: 22484)
Exposing Gold Manipulation
http://www.usagold.com
I would like to suggest a course of action.

Last weekend I heard a radio interview by worldnetdaily columnist/reporter JR Nyquist with David Tice of The Prudent Bear Fund. Mr Tice was asked if the FEd was manipulating the POG and he said "I dont think its the Fed,but I think the Bullion Banks and Hedge funds are manipulating POG."

Mr Nyquist seemed to be intrigued and he has a platform on the #1 internet site in the world. I suggest that people like "Go Gold" in the post below contact Mr Nyquist and ask him to do an expose in Worldnetdaily. They do investigative reporting and its right up their alley. Anyone with any information regarding illegal manipulation should contact Mr Nyquist, and maybe it would help if a lot of us e-mailed him asking worldnetdaily to do some investingating into the alleagations that illegal Gold anti-trust activity is going on. At any rate,its better than sitting on your hands.

Mr Nyquist can be e-mailed at www.worldnetdaily.com
TownCrier
(01/07/2000; 20:14:37 MDT - Msg ID: 22485)
The GOLDEN VIEW from The Tower
How many times have you heard Wall Street described as a wild ride? Forest Gump's mamma would surely liken it to a box of chocolates..."you never know what you're gonna get." Swings that in one breath exclaim "the end is nigh!" and are recanted with the very next breath "jump in, you CAN'T LOSE!!" In daily trading that defies rational explaination, the DOW ended the week up 0.23%, enough to claim a new record high by 25 points. The Nasdaq ended the week down 4.6% from Monday's record level, and in the process it set new records for both the largest daily point loss AND the largest daily point gain. NOT the signs of a fundamentally healthy market.

That's why we like physical gold in our wealth portfolios, especially in times like this. "You ALWAYS know what you've got," (to take literary license with Mamma Gump.) And because gold is our sturdy alternative to a house of cards, in it rests the potential to surprise us to the upside...because card houses aren't know to transmogrify into brick and mortar, but they are known to collapse without fair warning (assuming the fore-knowledge of the ways and means of card houses isn't fair enough.) We are seeing this even now in a small Andean country known as Ecuador, as we described in yesterday's GOLDEN VIEW. The local price of gold since last January has lept from 2,000,000 sucre to 6,500,000 sucre. Got savings?

Closer to home, the gold market has held nicely through the determined post-Y2K sigh-of-relief selling. Although today's overall gold trading activity was described by Reuters as thin due to the past holidays, the price has found its preferred upward path again. Spot prices last quoted in NY were up 50� at $281.50, as were the February futures on COMEX, which settled at $282.90. Traders there said it was significant that gold held above the $280 support level in this environment. In the Republic National branch of the COMEX gold depository, 2,025 ounces of Registered gold were called home...by someone weary of chocolates?

The newswires apparently looking this far ahead to include it in their reports, but in light of the question raised at the Forum yesterday, we'll continue to give you the "Head's up" and repeat our answer that the next Bank of England auction is scheduled for January 25th. Because "players" were suprised by the strong figures posted in the September auction, they set themselves up for a disappointment in November. Now that they have their expectations properly grounded, their reaction to this next auction should be a positive one. Any emotionally detatched assessment of the nature of these auctions (occurring parallel to what is supposed to be a fully functioning spot market) would beg the conclusion that these auctions are being used to supply a very vital supply to a strapped market where not all is as it appears.

Housecleaning at Ashanti...

Bridge News reported today Mona Caesar-Addo, Ashanti's group treasurer in charge of the mining company's hedging committments, gave notice of her resignation at the end of November, and has now left with the entire treasury staff.

Bridge News also tells us that the good people of the world continue to take their share of gold...because they can. According to a statement from the Ministry of Finance, Taiwan's gold imports for this past December tipped the scales at 7.651 tonnes, a 7.5% increase over the same month one year ago. (Do you think the Ministry of Finance reports on such things as rice and beef imports, too?) Ahhhh....gold. Good stuff. It knows no boundaries.

OIL

February crude futures traded on the NYMEX ended down 56� at $24.22 per barrel. Traders were said to be anticipating that inventory drawdowns ahead of Y2K were significant, and with that hurdles seemingly past, stockpiles will likely rebound in subsequent API reports.

On another note, we're happy to see Venezuela calling their own tune, after months ago seeming to be acting more as a puppet at the end of a long arm of the American government. Those days of suggestions for price bands and whatnot seem to be behind them, and they seem to be more comfortable now singing the OPEC song.

Venezuela's oil minister Ali Rodriquez hosted a meeting in Caracas today with Mexico's oil minister Luis Tellez, reaffirming their commitments to supply cuts through March as had been agreed, and beyond if necessary. What constitutes "necessary"? In an FWN report, Mr. Tellez said, "What we want is stability at good prices." Mr. Rodriquez himself echoed his president's earlier assurance that Venezuela would not seek to increase their production ahead of the March deadline. He had himself floated a trial balloon that with OPEC's blessing Venezuela might seek to raise production to provide disaster relief funds in the wake of that country's devastating flooding. It would seem that OPEC has orchestrated some admirable degree of solidarity...and it should be remembered that Mexico is not even an OPEC member.

Here in The Tower we see this as not an issue of oil producers versus oil consumers, but rather an organized act of entities having valuable goods and looking for a valuable return in a world where value has been hard to come by. Gold, anyone?

And that's the view from here...after the close.
Cavan Man
(01/07/2000; 20:21:12 MDT - Msg ID: 22486)
William Jennings Bryan
I mentioned earlier that Bryan, briefly a champion of bi-metalism was instrumental in passing into law the Federal Reserve Act and, The Federal Income Tax. Of course, he is better known for having run for President four times a loser coming closest I believe in 1896 vs McKinley. WJB had a tremendous impact on this nation. He was I believe, along with TR, the dominant political figure of his generation.

"Bryan's own philosophy of monetary policy was rapidly evolving. This philosophy was by no means limited to silver and carried him away from old positions, in which as a good Jeffersonian he once called for a minimum of government. In the crisis of depression, he took new positions which accorded government an ever-larger place in monetary management. His changed thinking is evident is his moves against a bill to repeal the ten per cent tax on state bank notes. He launched a counterproposal that the federal government alone issue paper money. He objected to the existing system of banks of issue-state and national banks-and its effect of placing in the hands of interested private parties the power to regulate the volume of currency and through it the market value of all other property. Also, he contended, banks of issue become interested in preventing the circulation of any money that might operate to the disadvantage of their currency and resisted any public regulation of their control over finances. He recalled Jefferson's remark to John Taylor, "I sincerely believe with you that bankin establishments are more dangerous than standing enemies".

"What would Bryan substitue for private banks as a source of currency? He urged that government adopt a "managed currency", as many other nations had. In rhetoric that would become familiar four decades later in Franklin Roosevelt's New Deal, Bryan proposed that government put paper money into circulation to pay for public works. This pump priming as the later new dealers would call it, would jog the economy from the doldrums of the depression. Government as currency manager could render "complete justice" by inflating the currency sufficiently to restore the balance between prices that were in wild disarray since the "Crime of 1873". All government money, according to Bryan, should become legal tender, and contracts calling for payment only in gold should be banned. Again, he anticipated the New Deal."......................

In the ongoing context of discussion here, I find this bit of history particularly relevant and thank everyone for their indulgence of band width to post this.

From: A Political Biography of William Jennings Bryan by Louis W. Koenig.

Recommended as a good read by Cavan Man who borrowed the book from Cavan Man Sr. many years ago.
Cavan Man
(01/07/2000; 20:30:48 MDT - Msg ID: 22487)
the Stranger, Aristotle and all
http://www.micheloud.com/FXM/MH/crime/carricat.htmWorth a visit
TownCrier
(01/07/2000; 20:36:27 MDT - Msg ID: 22488)
A liberal application of White-Out
"The newswires apparently **AREN'T** looking this far ahead..."

Gads. Sometimes it is just better to post and then never look back....

It must be break:30
Cavan Man
(01/07/2000; 20:39:59 MDT - Msg ID: 22489)
http://www.micheloud.com/FXM/MH/Crime/carricat.htm
Try this. If unsuccessful, do a search @ Yahoo for "Crime of 1873"
Cavan Man
(01/07/2000; 20:41:20 MDT - Msg ID: 22490)
(No Subject)
http://www.micheloud.com/FXM/MH/Crime/carricat.htmSorry.
DIRECTOR
(01/07/2000; 21:42:00 MDT - Msg ID: 22491)
Physical PM Fund
TWICE DISCIPLED
Hello to you Sir.Would you please post what the Web Site Address is for the Central Fund of Canada. I am in the same posistion as you concerning my IRA. Having sold out of my Equity Funds some time ago, I have been trying to decide on the best place to put my cash which is still in an IRA. Looking for a good safe place to put it for the rough road that is just around the corner.
Thank You.
canamami
(01/07/2000; 22:19:04 MDT - Msg ID: 22492)
Some Thoughts/Possible Discussion Points
Here are some theories and ideas I've come across lately, some with spins of my own.

1. Apparently, a Japanese investor would have done better last year in Japanese government bonds than in the Dow, because the rise of the yen relative to the dollar more than compensated for low rates on the JGB and the rate of return on the Dow. This puts the US stock markets'performances in a somewhat different perspective.

2. Foreigners' holdings of US dollars (except for foreigners' holdings in the US equities markets) have probably declined as a percentage of foreigners' overall portfolio holdings, because of economic growth in those countries plus perhaps the decline in the relative value of the US dollar (this would apply outside Europe). This would appear to make the US current/capital account deficits less serious than they would otherwise appear to be. In any event, foreigners still appear to be willing to hold US dollars and assets. (Further, the global nature of many of the US large caps means that they reflect the values of many countries and currencies, not just the US or the US dollar.)

3. Greenspan's theory is that the Japanese asset deflation (particularly stock market deflation) caused or led to the Japanese general deflation. Greenspan fears deflation as the ultimate evil. Therefore, the equities markets will not be allowed to fail as a means of avoiding general deflation, and this is now the central focus of central bank activity. Thus, if the markets begin to fail, liquidity will be added to prop them up. Recent infusions of liquidity have not appeared to cause inflation as measured in prices. (I disagree with part of this theory, in that at some point an excess infusion of dollars must result in price inflation, somehow and eventually). However, I do believe the stock market will be saved at all costs. The number of stockholders now greatly exceeds gold or bond holders. I'm viewed as a near-demon at work for not cheering the markets and for fixating on gold. Some outrage is expressed for my allegedly wanting a market failure so that gold will rise. The majority will cry for their salvation, and fairness for holders of other asset classes will not be a consideration. Gold-holders have been victimized by government, the courts and the general society more than once last century in the Western world; there is no reason to believe it won't happen again.

4. Bonds (especially long term bonds) may now primarily be a long-term hedge against what little risk the equities markets are still perceived as possessing. In a sense, it could be argued that bonds will serve the role that gold once served - hedge against systemic failure.

Generally, if the failure of the US equities markets is a sine qua non of the decline in the dollar, both of which are theorized to be sine qua non of the gold bull, how can the gold bull start if the US equities markets will never be allowed to fail, i.e., if preserving the equity bull is now the ultimate goal of CB and government policy?












3.
Solomon Weaver
(01/07/2000; 22:22:01 MDT - Msg ID: 22493)
think in grams
RossL (01/07/00; 17:10:01MDT - Msg ID:22479)
Twice Discipled - Msg ID:22473

I'm going to be a little nitpickey about your figures so I regret to inform you of a slight error in your Msg ID:22473.

The Gold price is in Troy ounces. There are about 14.6 Troy oz. per pound. Also, those who talk about "tons of gold" refer to metric tons, which is 1 million grams. There are about 32151 Troy oz. per metric ton...

----------

Wouldn't it just be easier for all of us just to remember that there are 1 million grams in a metric ton and forget about the ounces???

I suggest that the knights at this round table take upon themselves the mental training of quoting the POG in Euros per gram....like when someone you know says "Did you see the price of gold lately?"" "Yes, it is up above 10 Euros per gram, if it gets to 10.8 per gram it breaks resistance."

Knights always train their skills for surviving in future battles.

Der alte und aerme Solomon
ORO
(01/07/2000; 23:27:09 MDT - Msg ID: 22494)
Canamani - JGBs
The JGB investor in Japan would have lost nearly half his capital earlier this year, when the tiff between the Ministry of Finance and the Bank of Japan brought down the JGB from yielding less than 1% to more than 1%.

Shorting the JGB was one of Jim Rogers favored concepts trades for 99. A damned good one, together with oil and oil stocks. I wish he'd stop with the travels and get back on the financial talk show circuit.
pdeep
(01/07/2000; 23:43:38 MDT - Msg ID: 22495)
Market Rotation
It was an interesting week. Watching the lambs jump the fence from bonds to equities, back and forth. Led by the sheep dogs, of course....
canamami
(01/07/2000; 23:57:32 MDT - Msg ID: 22496)
Reply to Oro
Thx for your reply.

However, if one thinks of the JGB in terms of US dollars, would not any decline in the face value of the JGB in yen terms due to the rise in rates (still a very small difference, perhaps unlike the effect of interest rate changes on the face value of bonds in the 1970's or early 80's) be offset by the decline in the US dollar relative to the yen? I'm not up on this field, but my gut instinct would suggest that, at such low rates of return, the JGB is not really held or valued for the .25 % or 1% rate of return, but because it is perhaps a more secure store of value than an account in a Japanese bank - thus, would one see a 50% decline in its face value due to these sorts of tiny interest rate fluctuations in absolute terms?

In any event, I just found it interesting to assess the "gains" in the US market by converting them to other currencies, where the decline of the $US re the yen makes such gains look less impressive.

Just my speculation; like I said, this is not my field.
ORO
(01/08/2000; 00:08:17 MDT - Msg ID: 22497)
Gandalf - an answer to the Hobbitses on spoos
Gandalf the White (01/06/00; 22:51:07MDT - Msg ID:22437)
HELP ORO --- The Hobbits beg you to SLOW down !
You said in ==> ORO (01/06/00; 14:06:32MDT - Msg ID:22408)
Equity market out of kilter -- "The January effect in beaten down value stocks is in full bloom. The advance decline line
looks better than it has in quite a while, yet the SP futures have been under heavy selling since the last trading day of
last year."
******WHOA -- I see that the $PREM (S&P futures -- I THINK) has been manipulated by the PPT to the greatest
extent of the level during all of last year! Look at where they start it most days, +25 or so! AND when they wish to kill
a downdraft -- pop goes the $PREM +10 or so, with the market drop then slowing down and going up for a while.
Please advise what you are looking at to see the picture that you are discussing.
---------------------
The observations are correct. The $PREM is what I look at. What I saw was that up to today, the premium on the SP500 was spending way more time in negative territory than usual. Today the rescue ops kicked in, together with the broad public and kicked the $PREM through the roof for a few key moments, causing the reversal in techs we saw over the last two days.
Before this, we had a stretch of futures selling coupled with individuals and institutions buying last year's losers that were sold down to the ground for tax loss generation.
It is one of the oldest distortions introduced to the markets by the tax code. The second is the capital gains preference that equates to a 50% preference to a dollar earned in long term capital gains vs. a dollar earned in dividend of interest.
$1 in capital gains leaves you with 83 cents
$1 in interest gains leaves you with 65 cents

In normal times, one had a rough equivalence or a preference of income over capital gain.
Instead of say 5% interest rates being the equivalent of 5% of capital gains, the interest is taxed at a higher rate, so 5% of interest return is equal to a 4% return by capital gains, both provide you with the same income, $0.035 per $1.
Once state and local income tax chime in, you have some 20% on capital gains and 42%, so that the 5% from interest is actually more like $3 and equivalent to a 3.6% return from capital gain.

Given a stock with a P/E of 20 (5% earnings yield, negligible dividend) with some growth prospects, and a bond yielding 5%, the taxable investor would happily shell out for the stock and ignore the bond. Instead of the current 6.54% long bond yield implying a P/E of 15.3, it actually implies a P/E of 21.

On top of this, the Federal "Grabit" lowered the holding time for long term capital gains from 1.5 years to 1 year.
If it ever occurred to you that the government is trying to drive the stock market higher, know that you were right.

THEN you say, "The indexes are so laden with low float tech stocks that the selling of the SP500 and ND100 futures is
having a strong negative effect on these stocks (where the selling is receiving the same leverage on the way down that
had exaggerated the move up)."
****THIS is confusing to me, as the futures have no direct relation to the individual stocks that are being sold because
of the rush to lockin some of that "profit" from the irrational run-up of those stocks, to which you refer.
Please go slow and explain this to me in more detail. TIA
<;-)
--------------------
The index futures that are traded are arbitraged by the trading desk sellers, as are the options. They care only about making their time premiums, and will borrow to do the hedging for the arbitrage, or just push the market away from what they sold. Right now, they (trading desks of the banks) are selling SP and ND futures and creating some of the selling pressure by sending the arbitrageurs that buy the options and futures when they sell well below fair value, to lock in the arbitrage profit by shorting the individual stocks. This is what is often referred to as program trading. These are kicked in automatically for arbitrageurs doing the futures gig and those doing delta hedging on index options sold to the public or sold OTC.
ORO
(01/08/2000; 00:42:08 MDT - Msg ID: 22498)
canamani - JGBs
canamami (1/7/00; 23:57:32MDT - Msg ID:22496)
However, if one thinks of the JGB in terms of US dollars, would not any decline in the [market] value of the JGB in yen terms due to the rise in rates (still a very small difference, perhaps unlike the effect of interest rate changes on the [market] value of bonds in the 1970's or early 80's) be offset by the decline in the US dollar relative to the yen? I'm not up on this field, but my gut instinct would suggest that, at such low rates of return, the JGB is not really held or valued for the .25 % or 1% rate of return, but because it is perhaps a more secure store of value than an account in a Japanese bank - thus, would one see a 50% decline in its [market] value due to these sorts of tiny interest rate fluctuations in absolute terms?
---------------------
Unfortunately for the Japanese investor, the only way to enjoy the drop in the US $ is to go out and buy US made products. The more sophisticated Japanese investor would have been able to just short $ futures in Tokyo, or short Treasuries in London or NY. The loss for a holder of long term bonds is pretty much proportional to the interest rates. If they went from 0.75% to 1.5%, the value of your 10 yr zero coupon long bond went from 92 to 86 on a 30 yr bond, you lost 18%. From peak to bottom, I think there was a loss of 10% on your 10 yr, 34% on the 30 yr, (all zeros) since that bond nearly touched 2% earlier in the year (if I remember right).
If one bought long bonds in the US in the panic of the Russian default and LTCM, the capital loss was near 20%, 14% on a total return basis.

The formula:
Present value of income stream R (the income stream from the bond's coupons) =
[1-1/(1+i)^n]/i * R
i is the interest rate as a fraction
n is the number of years to maturity.

For a zero coupon:
1/(1+i)^n * Face value
Gandalf the White
(01/08/2000; 00:51:03 MDT - Msg ID: 22499)
ORO -- The Hobbits thank you for your education !
It is marvelous what you, ORO the GREAT, with good eyesight and the broad understanding can see in the same figures that the Ol'e Wiz sees with foggy vision and sinility. -- Thanks for going slow and explaining your visions. -- NOW tell us all, what does your crystal ball look like in timing of the "pop" of the bubble, as to mine, it looks as if next week should be another DOW and NAS downleg.
<;-)
Gandalf the White
(01/08/2000; 01:49:46 MDT - Msg ID: 22500)
Serial #2 of the "Mystery of the Lost Ozarks Silver"
RECAP -- At the END of the First Part of this Serial, we heard the question, "SILVER in the Missouri Ozarks?" --was a question you could have argued down around Cassville, Missouri, and Eureka Springs, Arkansas, "until the cows come home". The story of "the lost silver mines of the Ozarks" was a legend in that hilly country. Descendents of pioneer families had heard it when they were children and have passed it along to their children and grandchildren. Proof of this is to be found in the diaries of two men who inspected the cave. How much silver the cave contained is anybody's guess, but if we look closely at the old diaries and maps, we must conclude that there is quite a bundle of it.
--
"Mystery of the Lost Ozarks Silver" � PART Two --
Written by Tom Bailey and illustrated by Al Martin Napoletano as Published in the FRONTIER TIMES, Austin, TX -- Summer, 1961. (Please read carefully as it is transcribed just as it was written, and my spellchecker is not conversant in 1960's Texas English.)
--
Mrs. Ola Farwell of Eureka Springs, Arkansas, has (1961 era) in her possession old maps and diaries which tell the story of the lost silver. They were found in St. Louis � or what was then the makings of the great city of the present day � in 1830 by a man whose name on one of the worn maps is now illegible, although the notation that he wrote above his signature is legible. It reads, "I found these maps in an old bun barrel while trading in St. Louis in 1830. I am going west and if I ever come back, I will look for the owner."
Apparently he never came back.
Experts who have examined the documents say they are as old as they appear to be. The paper, which is crinkly and falling apart has in no way been treated to give it the appearance of being ancient.
The story goes that two men named Pu Deville and Pierre heard of the cave of silver from a Choctaw Indian who drew a map of the region. In what year this all took place is uncertain for the papers are not dated, except the entries are listed as 'October 4� and so on without revealing the year. It must have been about the time of Lewis and Clark or possibly later � say about 1820.
From the Indian's description of the location, and the map he drew and to which the two men added names they apparently dredged up out of their own heads, they found the cave, just as the Choctaw had described it. They found silver stacked against the wall of the cave in bars. There also was some loose bullion on the floor of the cave.
Pierre's dairy tells the story. He and Pu Deville obtained financial backing, or what amounted to a grubstake, from a man named Leduc and a Dr. Smith at St. Charles. By October 8, they were ready to start. After making three new maps under the Indian's instructions, they had a drink with the Choctaw, Leduc and Dr. Smith, then shoved off. The third map showed the cave to be two-and-one-half miles South of "the Anderson house". There is no record today of an Anderson family living in the region; however, there were early settlers of which there is no written record.
The next notation is on October 10 when Pierre says they traveled forty miles and that it was an exceptionally fine day. The notation, "White Sin is a fine fellow." is not understood. Whether he referred to a third man with them is not known, but apparently he did. This man may have been an Indian guide.
End of Serial #2
<;-)
SteveH
(01/08/2000; 03:22:08 MDT - Msg ID: 22501)
repost
www.kitco.comReason for this repost is because it refers in multiple places to the Jamaica Accords. What is more, there appears to be an eary resemblance to the present here. Note the 20:1 leverage expected by gold players in 1975. And that is what happened four years later (long time to wait for gold to rise, but a 20 bagger is always worth waiting for):

Date: Sat Jan 08 2000 01:14
sharefin (SDRer - worthy of a full posting?) ID#284255:
-
Topic #1--THE INTERNATIONAL MONETARY FUND "GOLD SALE AGREEMENT"
AND THE DETHRONING OF THE UNITED STATES DOLLAR


At the end I also hope to mention some brief hints about what
you, the individual concerned American, can do to help stem the
tide and save our beloved land.

Topic #1--In my monthly AUDIO LETTER No. 2 for July 1975 I
discussed the setback which David Rockefeller experienced at the
June meeting of the "International Monetary Fund", or IMF.
Speaking through his agents in the United States Treasury, he had
expected to succeed in persuading the member nations of the IMF
to sell all of the IMF gold, and was ready to buy the IMF gold as
soon as it was sold. Much to David's surprise and chagrin he
failed in June 1975 because of French opposition based on their
own awareness of the true status of Fort Knox and America's gold
reserves. As I mentioned in that AUDIO LETTER, the Rockefeller
interests went to work in a feverish search for a means of
achieving their objective--that is, a decision to sell IMF gold
at the next IMF meeting in September, this month. And if you
paid any attention to the news early this month, you know that
this time the Rockefellers did achieve a hasty compromise
agreement. In a moment I will explain exactly what was decided
about potential gold sales at the early September meeting of the
IMF, but first I want you to notice the startling quid pro quo
which the Treasury accepted on behalf of David Rockefeller as the
price of selling the IMF gold.

For years now the United States Treasury has been debunking
the monetary role of gold as obsolete, barbaric, and no longer
needed. In this connection, the Treasury has been fighting for
years to bar Central Banks from buying gold on the free market.
The reason for this is to allow the interests controlled by David
Rockefeller to corner the gold for themselves while their
deliberately-produced runaway inflation ruins the rest of us
stuck with paper money that has no backing. But at the September
1975 IMF meeting this position which the United States has stuck
to uncompromisingly for years was suddenly abandoned. Why? What
was it that made the United States agree to let Central Banks buy
gold? They already had the right to sell it. What caused such a
total defeat for David Rockefeller and such a dramatic reversal
of a fundamental policy built up now for years?

My friends, what caused the result is the spreading effect of
our exposure of the Fort Knox Gold Scandal. The general American
public still doesn't know about it, thanks to the news blackout
imposed by CBS, ABC, the New York Times, the Washington Post, the
Los Angeles Times, and other major media which are controlled and
intimidated by the Rockefeller Brothers themselves. But the most
knowledgeable people in the financial community here and abroad
increasingly do know that something is very fishy indeed about
the United States Treasury Department. In short, the heat is on!

Since we revealed the existence of the Central Core Vault in
July and explained its role in the gold theft and fraud at Fort
Knox, the Treasury knows that we know exactly what they have been
doing, and how. The Conspirators know that if my associates and
I ever are allowed to present our evidence in a court of law
before a grand jury or in a Congressional investigation, their
fate is sealed. Their game, therefore, is to try to keep that
from happening by keeping the public fooled and unaware of the
truth. To this end, the Rockefellers made their big concession
at the September IMF meeting in order to get some IMF gold
returned to the Treasury.

Under the terms of the Agreement, five-million ounces of IMF
gold is to be returned to the United States, from whence it came.
This gold was originally promised for sale to the "insiders"
within the Rockefeller circle, but now they wanted instead to
display or use it in gold auctions to keep the public fooled. In
this connection, on August 21, 1975, shortly before the latest
IMF meeting, the Treasury even held a well-publicized meeting
with private gold dealers to discuss the question of holding
auctions. This was pure propaganda and bluff, and intended to
lend weight to any future auctions of gold obtained from the IMF.
The frantic maneuverings to snatch some IMF gold for propaganda
auctions is simply a replay of what they did last December to
have a little gold to auction off. On December 9, 1974, the
Treasury illegally emptied the tiny "Exchange Stabilization Fund"
of its two-million ounces of gold, as I have mentioned in
previous tapes. That was done simply to have something for the
Treasury to sell in small propaganda auctions, since the rest of
our gold reserves were long gone.

With this important perspective in mind, listen please to what
the IMF did on August 31, 1975, at the beginning of their
so-called September meeting:

No. 1--The widely publicized "Gold Sale Agreement" of the IMF
is an agreement in principle, a conditional agreement. The IMF
is to meet again in January 1976 in Jamaica to discuss the
Exchange Rate question. If, and only if IMF members agree on
that in January, then the conditional Gold Sale Agreement, which
has just been announced, will take effect. The stakes are so
high for David Rockefeller and his partners in crime that I
predict agreement will be reached at the January meeting in
Jamaica. The political will is there. The IMF gold will then be
officially released, although I am informed that steps are
already being taken now behind the scenes, illegally and
prematurely, to take possession of the five-million ounces of
gold and put it back in Fort Knox.

By the way, there have been rumors lately that Mrs. Mary
Brooks, the Director of the United States Mint, has tendered her
resignation, but that it has not yet been accepted because it
would look so bad. There are indications that her superior said,
in effect, quote: "Just hang on for a few more months, Mary,
while we get this whole thing about Fort Knox out of the way.
Then you can go, if you like." Be that as it may, we had one of
our sources contact Mrs. Brooks, and here is what she said,
quote: "There is nothing amiss at Fort Knox. I was there
recently. I have never tendered my resignation, and I don't
intend to do so. I don't know why these rumors keep coming up."
Asked if she knew about the rapid retrieval elevator system to
the Central Core Vault, she did not deny it but just replied,
quote: "Those kind of rumors come along all the time." Our
source suggested to Mrs. Brooks that it would be a simple matter
to open Fort Knox wide open to prove Dr. Beter wrong and, quote:
"put an end to this matter once and for all." Her reply--and
this is her exact reply--and I quote: "Oh, no! It would take
weeks." All I can say to that, my friends, is: "Yes, Mary, it
will take weeks to get the five-million ounces of gold back in
Fort Knox." That is why I am informed there is some activity
going on right now in Fort Knox. Meanwhile Mary Brooks is trying
to brazen it out.

Returning to the IMF Gold Sale Agreement though, I should
point out one other thing: Should there fail to be an agreement
about Exchange Rates by the IMF in January in Jamaica, an
unlikely event, than we will be back to Square One on IMF gold
sales. Should that happen, David Rockefeller and his fellow
"insiders" will have used the IMF gold sales decision as a scare
tactic throughout this fall of 1975 to run down gold prices and
take all the gold they can out of weak hands. Also, they made
billions of dollars going "short." When the public becomes aware
of this, gold prices will start up again.

No. 2--The interim or conditional Gold Sale Agreement
specifies the following:

Of the approximately 150-million ounces of gold now owned by the
IMF, one-sixth or 25-million ounces is to be sold on the open
market or to member Central Banks. The latter is what will
actually occur. True to Rockefeller tradition, by the way, this
IMF gold sale to suit their own purposes has been painted as a
philanthropic move to raise money to aid poor and developing
nations.

Another one-sixth or 25-million ounces is to be returned to
member nations of the IMF in proportion to the amounts of gold
each nation originally contributed. Each nation may then keep or
sell this returned gold, but you can bet they will keep it.
Their own citizens will hang their Central Bankers if they don't.

Under this clause the United States is to receive about
five-million ounces worth about $700,000,000 at current market
prices. This amount, I am informed, has already been promised to
the "insiders", but events may undo this when the Fort Knox Gold
Scandal breaks nationally and world-wide. It is this
five-million ounces of gold, equal to only about two percent ( 2% )
of what the United States Treasury officially claims to have,
that the Conspirators want desperately to get their hands on in
case they need it for propaganda auctions or even another
carefully-staged "peep show" at Fort Knox.

The remaining two-thirds of the IMF gold, or about 100,000,000
ounces, is to "stay put" in the IMF for the time being. There it
will remain as backing for the so-called "Special Drawing
Rights", or SDR's, of the IMF. The SDR is to become the new
international monetary unit or standard of measure, the
yardstick; and then the other strong currencies that now make up
part of the basket of the 16 currencies which constitute the
SDR's, will be the reserve currencies of the future, at least for
the next two years. The dollar, therefore, is giving up its
sovereignty as a sole reserve currency. The joker in this deck
is that over half of an SDR is made up of the American dollar and
British pound sterling, both of which lack gold backing. In the
tremendous inflation ahead, the SDR will therefore be hobbling
around on one leg with its only real support consisting of the
strong gold-backed currencies which comprise less than half its
face value.

No. 3--and very important. Beginning January 1976 the IMF
members have agreed not, repeat NOT, to affix an official gold
price for a period of two years, provided the January 1976
agreement on Exchange Rates takes place. This is exactly the
development I have been warning about for over a year, based on
information from my own confidential sources. They are behind
schedule in obtaining this agreement, but the agreement itself is
precisely on track. Once it is in place, they can easily make up
for lost time in their plan to visit economic catastrophe on the
United States and the world.

What the IMF agreed to in principle is to allow its members,
including the United States, to ask their respective governments
to abolish the official price of gold, which is now $42.22 an
ounce, once the Exchange Rate agreement is reached in January
1976. This means that for the following two years there will be
only a "market price" for gold, subject only to supply and demand
plus massive massages by the Rockefeller interests to cause the
price of gold to skyrocket. In other words, gold will be going
private for two years starting in January 1976. The gold zoom
signal of $180 an ounce, which I explained in my AUDIO BOOK
recorded in October 1974, will be penetrated and cataclysmic
inflation and economic chaos will erupt. After two years of
this, with the economy of the world and especially of the United
States in smoking ruins, David Rockefeller--the man who
orchestrated the whole thing in the first place--presently plans
to call an "International Monetary Conference" to at last restore
gold to its traditional monetary role. David's plan is to
officially repeg gold then at $2,000 an ounce--twenty times the
current official price of $42.22 an ounce!

No. 4--After the two-year period just mentioned, according to
the Gold Sale Agreement just reached by the IMF, Central Banks
will be allowed to buy all the gold they want. As I have already
pointed out, this complete reversal of a key feature of the
Treasury's long standing gold-debunking campaign is directly
traceable to the steadily building pressure of the Fort Knox Gold
Scandal and the desperate need of the Conspirators to keep it
covered up.

No. 5--Until January 1976 no sales of gold will be made by the
IMF to world gold markets or to Central Banks at market prices.
It would not yet be legal to do so, but I fully expect that
agreement will be reached at Jamaica in January, and that IMF
gold sales will then take place according to plans. Thus the
United States dollar is now way over-valued.

The United States Treasury is most anxious to get its house
back in order, in appearance at least, to prevent the public from
becoming aware that Fort Knox is truly empty of its gold. The
Treasury now holds less than 800,000 ounces of gold--a mere
pittance left over from the 2,000,000 ounces it illegally took
from the Exchange Stabilization Fund on December 9, 1974. The
rest was used for the propaganda auctions by the Treasury in
January and June of this year.

Gold fever will spread across the land in the near future as
soon as the full significance of the IMF action is widely
understood, and then the only questions will be not the price but
the availability of gold. The gold market today is very thin as
it is, and the "insiders" had to scare the weak sisters in order
to make them disgorge their holdings.

As of now, David Rockefeller still plans for gold to be pegged
at $2,000 an ounce, and for the new SDR's to be the standard unit
of measure. The United States dollar will lose its status as a
world currency reserve. Even now David Rockefeller's Chase
Manhattan Bank is already linking some of its loans to SDR's.
After all, who should know better than David that dollars are to
be avoided?

For the next two years after January 1976, those countries
having gold in their Central Banks will be able to enjoy a fast
markup in the value of their gold reserves of 20 to 1. Can you
imagine!--20 to 1. Therefore during that period, Central Banks
will buy up at market prices the 25,000,000 ounces that will be
for sale by the IMF. That gold will never reach the private gold
market at all. But the United States has been deliberately made
gold poor by the Rockefeller Brothers.

Having no gold left of any significance, we are now in the
same leaky boat as Britain. And look what is happening to
Britain, which is already on the road to advanced socialism!
Cataclysmic inflation, deepening unemployment, and social and
economic upheaval on the way to dictatorship are in store for all
of us soon if the gold situation is not rectified. And so, my
friends, we are in a race against time. David Rockefeller and
his collaborators in and out of the Treasury seek delay, delay,
delay. They want to use the IMF gold and other tricks to keep
the American people fooled until it is too late. Time,
unfortunately, is on their side. Those of us who would like to
see our nation saved, on the other hand, are pressing with every
means at our disposal for a full, open, honest INVESTIGATION of
the whole thing without further delay.

In this connection, I want to read some telling words from the
front page of the Daily News Digest for the week of September 1,
1975. ( Their address, by the way, is: P. O. Box 27496, Phoenix,
Arizona 85061. ) The headline is just one word: "WHY?" I now
quote:

"The Fort Knox gold story is far from dead. There is something
rotten, and the stink has spread across the land like a fog.
Thousands of readers have followed our series closely. Like
them, we have waited in vain for satisfactory answers to
questions raised by Dr. Peter David Beter and his associate, Ed
Durell. An exchange of letters with the United States Bureau of
the Mint has produced nothing but double talk.

The key question regarding the Central Core Vault still remains
a mystery. Is the gold there or isn't it?

Why is it so difficult to send a delegation to Fort Knox, open
the Vault and reveal its content--or lack of content? Why have
no members of Congress taken it upon themselves to settle this
matter? Is courage such a missing virtue in Washington that this
can't be or won't be done?!

Why has the nation's press avoided the story with an intensity
that is amazing? Is this not perhaps the biggest news story in
the civilized history of the world? It certainly has that
possibility. An evil group of individuals that can loot a
nation's Treasury, as has been charged, to the tune of
$11,000,000,000 certainly deserves some attention, doesn't it?

And the radio and TV industry didn't even mention the initial
charges, and covered only the "peep show" staged at Fort Knox
last September.

But the newspapers, where are they? Why the blackout on the
Fort Knox story? Is there some powerful force that scares them
into submission? Or would they lose so much advertising that
they can't run the story? Or do the major editors think the
story is so outrageous as to merit no attention? Outrageousness
certainly didn't prevent Jane Fonda and others from getting
front-page coverage!

Yes, something stinks. IS THE GOLD THERE OR ISN'T IT? Which of
our Congressmen has the guts to find out?"


From:
ftp://ftp.trawna.com/pub/misc/Dr_Beter_Audio_Letter/dbal04
Goldfly
(01/08/2000; 06:25:38 MDT - Msg ID: 22502)
Cavan Man
http://www.micheloud.com/FXM/MH/Crime/carricat.htm
What a great link! I had never heard of "The Crime of 1873" before.

That bit about Oz was great too. A golden axe with a silver handle!
RossL
(01/08/2000; 06:52:19 MDT - Msg ID: 22503)
Solomon Weaver - think in grams

Yes, sir. Think in grams. Good idea. But a lot of my coins were manufactured in units of 31.103 grams. Such a clumsy denomination to remember. I will have to put up with it until the paper market fails, I suppose.
Cavan Man
(01/08/2000; 07:11:19 MDT - Msg ID: 22504)
Thank you Goldfly
Yes, that is an excellent link. Now, I am really intrigued with the monetary history of the $USD from 1792 to 1933. Does anyone know of a timeline depicting critical events along this path at the very least?
Jon
(01/08/2000; 07:19:00 MDT - Msg ID: 22505)
Central Fund of Canada
www.centralfund.comHere's web site. E-mail sspicer@nas.net for add'l info.
Jon
(01/08/2000; 08:06:18 MDT - Msg ID: 22506)
Msg to Invisible Hand
Re: your msg # 22466 - shows a lot of class. I'm glad to be amongst those who lurk and post here.
Twice Discipled
(01/08/2000; 08:25:37 MDT - Msg ID: 22507)
...
DIRECTOR ...
Jon has provided the link below, it was a long week so early to bed and late to rise last night.

Solomon Weaver ...
Interesting notion, I will have to break out the spreadsheet to accomplish this task. Most sites quote the price in ounces. But my biggest hurdle will be mental with this one. As discussed by many people, gold (money/wealth) has meaning in what we can exchange it for when needed. I have no personal correlation between Euros and what a Euro can purchase at my grocery store, Wal-Mart, etc. Although I realize the current exchange ratio is ~ 1/1.04.
Interesting thought though.
Thanks and relaxing weekend to all.
TD
Tanglewild
(01/08/2000; 08:54:01 MDT - Msg ID: 22508)
Re: Cavan Man
http://www.ex.ac.uk/~RDavies/arian/amser/chrono.htmlThis site is pretty vague but may help you a bit as to the chronology of money. ttyl
nickel62
(01/08/2000; 08:56:30 MDT - Msg ID: 22509)
Twice Displined The following URL is about the average ownership
http://www.gold-eagle.com/editorials_99/madhok081999.htmlof gold in India. It is written by Suni Madlock an excellent analyst in Abu Dabbi that has written many articles on the current gold situation. The Indian population have a long tradition of knowing they can not trust either their national currency or their banks so gold savings are very high. Almost 25% of total world supply.
ORO
(01/08/2000; 09:00:33 MDT - Msg ID: 22510)
Wiz - Please don't call me names..;-
Thanks for calling me "great". A treat. Not deserved, and an exaggeration. Keep it for people who do deserve it. We do get rather effusive here. Lets keep it under control.

In my crystal ball is red snow, witches on brooms and silver slippers (for three left feet), and Santa Claus' back end flying his sled home.

However, the gold mining industry is running out of grading tricks, the banksters and their Grabit partners (I don't remember which was the broom and which the witch) do not have many hoards left to tap and will need to take out reserves. Since the latter is very risky, they are unlikely to do so. The Fed has been backed into the corner by the ECB's success in eating the dollars liquidity pie. Considering the numbers from the previous quarter relative to end year numbers, I think that the end of 1999 saw a strong displacement of dollar debt issuance out of the markets. I believe that during the Q4 the Euro debt issuance was at 50% and the dollar issuance at 40% or slightly below. Since Brady bonds and their Asian equivalents require the borrowers to hold a portion of the funds in the form of Treasuries, that means that as bond debt is rolled over into Euro, treasuries get dumped. The elimination of new dollar debt issuance without the death of the respective currency by IMF and now British action means that while liquidity is being squeezed, the Fed is pushed to grow the monetary base even beyond the IMF's work. This increases the ratio of cash dollars to gold and will show up quickly enough in a higher POG. The lag time from monetary growth passing the 10% annual growth rate to a significantly higher POG is some 6 to 9 months. That brings us to March as the time frame by which we should see a significant rise from this level.

At $280 - $300 assuming no significant global dollar price inflation, the calculations show the miners reducing output by 4% per year beginning next year. That increases the supply deficit by nearly 10% per year. The funny thing is that if prices rise, the output would be reduced further. The current growth in Asian buying is at about 10% per year, raising the deficit another 15% per year, for a total of 25% annual growth rate. The result is a 1250 ton deficit rate by the end of the year. The 400 ton per year sales from ECB members + Swiss and BOE would need to be supplemented by another 800+ tons, there are only 4000 tons left in the hands of CBs outside the Washington agreement and USA. This has been tapped already (Jordan, Kuwait etc.), and little should come out of this source in future.

Phos
(01/08/2000; 09:01:15 MDT - Msg ID: 22511)
Gold leasing
http://www.individualinvestor.com/tbd/anfdt_frm.asp?ff_id=786rAn article on gold appeared on the Individual Investor Website by John Tompkins. The comment below was in the text.
--------------------
"Morgan Stanley Dean Witter's gold analyst, Douglas M. Cohen, comes down on the bear side of the fence. No crisis seems able to trigger a rise in gold and continued central bank lending are his principal negatives. Indeed, he says that Venezuela, Germany, Portugal, Austria, and Switzerland are new entrants into the gold lending market. "
---------------------
I thought Germany and Austria were party to the Washington aggreement to stop gold leasing. Has anyone else heard anything about this situation? Is Cohen all wet or has leasing started up again?
De Ronin
(01/08/2000; 09:02:05 MDT - Msg ID: 22512)
An Elliott Wave Perspective on Pending Oil Price Dive
http://server3.ezboard.com/fdownstreamventurespetroleummarkets.htmlFor those of you that think gold and oil prices should correlate....

Oil prices seemed to have topped out on too much stockpiled y2k fuel and a warm weather pattern. Here's some technical analysis that seems to confirm these bearish fundamentals. Its from an ezboard forum on oil markets:

I can't cut and paste or link in because its a passcoded subscription deal in Adobe but here's the jist of Bob Precter's Elliott Wave analysis on oil. Its his featured commodity perspective in his general financial newsletter because its just completed a classic 5 wave pattern.

Prechter's got a graph of crude prices which does depict a pretty classic 5 wave pattern from a Feb '99 low of $12.81 to a Dec '99 high of $26.85. He's now expecting a 3 wave decline to $19.83 - $21.49 area basis Feb.

The fifth wave of this past bull move forms a diagonal triangle- which is an ending pattern occuring after a substantial move and calling for a sharp swift return to the original pattern. So in addition to a likely decline to $19.83-$21.49, we can also say the drop shold occur by the end of April. Key resistance for this bearish outlook (point for stops) is $26.85-$27.88.
nickel62
(01/08/2000; 09:18:07 MDT - Msg ID: 22513)
Can gold continue as money if a price rise of sufficent proportion
raises it to such a price level that mining is tremendously stimulated and productions soars? I was involved in a discussion of this nature with several other posters several weeks before Christmas when other events took me away from the Forum and I never was able to find the answers from the other maembers if their ever was one. Could someone throw in any information about this matter.
ORO
(01/08/2000; 09:20:08 MDT - Msg ID: 22514)
Continued
Next mark up fot Euro gold reserves is at the end of March. So as the Euro goes, so gold should track. The Euro would not wait beyond the 15th of March, so I would be fully in by then.

I would not wait too long for the COT to turn super bullish.

Watch Plat and Silver to see whether they turn. Gold should follow or precede by at least bottoming.

Without convincing changes in the gold arena, such as people massively converting back out of paper gold to dollars and currencies, I do not see any way for the bullion bankers to put their hands on enough gold to make their survival a possibility.

I still see a threat from the IMF selling its hoard, but do not believe they will do it because they have the precedent of using their new money pump, which is way more valuable for their future survival as an organizations than the dollar, which they seem to expect would fail.

Overall, the stable consolidation period for gold can not last for more than 2 years anywhere near this price range.

The slow treck upwards for gold as driven by the Euro, should accumulate to significant gains so long as the EU hangs together. If there are problems of solidarity, then it may skyrocket along with the dollar.

I expect Plat to bottom within 4 weeks and gold to start moving up after the next BOE auction.

Watch for lease rates for 3 or less months beginning to go up, while 1 year rates are stable.

So... I expect a bottoming within 4 weeks, and a significant rise by the end of March (that swing to begin mid March).

Gold may start moving earlier than that.
nickel62
(01/08/2000; 09:24:55 MDT - Msg ID: 22515)
ORO could you elaborate?
Please shed some more light on the concept that production will decline if the POG rises.
Nightrider
(01/08/2000; 09:44:18 MDT - Msg ID: 22516)
Are the Blind leading the Blind?
It was reported yestereday that 315,000 new jobs were created and wages moved Up 6 cents per hour and the unemployeement numbers stayed at just 4.1% And the Markets rallied on the News??.

Wand is going on ????
nickel62
(01/08/2000; 09:55:50 MDT - Msg ID: 22517)
Nightrider I have been wondering what has been going on for the last seven years.
I continually am amazed at the ablility the US markets have to gyrate in ever higher circles despite the bewildering fundamentals. Either no one in America has gotten any wage increases or the government reporting is failing to pick it up for some reason.
nickel62
(01/08/2000; 10:00:38 MDT - Msg ID: 22518)
Derivitives? Or the wonders of limitless money creation?
Or magic? I don't know. I have watched as the stock market has not only exceeded any realm of reality but then doubled from there. It is tempting to call it a massive mania or maanipulation but that does little to explain it and nothing to expose it. And even less to protect us from the aftermath of its collapse.The answer could probably be uncovered collectively from the minds assembled here at this table. So lets hope they are able to begin to unravel the mystery wrapped in an enigma.
Gandalf the White
(01/08/2000; 10:01:46 MDT - Msg ID: 22519)
Thanks ORO for the view of your Crystal Ball
AND you are "GREAT" !
<;-)
TheStranger
(01/08/2000; 10:06:26 MDT - Msg ID: 22520)
Cavan Man, Gandalf, canamami
Cavan Man - The "Oz" allegory was related to me by my daughter who is at the London School of Economics. She says she read about it in one of her textbooks.

Gandalf - Hello to you, too, my friend.

canamami - Your Socratic questioning of the room last night has got me thinking. You asked:

"Generally, if the failure of the US equities markets is a sine qua non of the decline in the dollar, both of which are theorized to
be sine qua non of the gold bull, how can the gold bull start if the US equities markets will never be allowed to fail, i.e., if
preserving the equity bull is now the ultimate goal of CB and government policy?"

What you are, in effect, asking is: Have we entered a period where the creation and allocation of capital have become so efficient that we can now expect to avoid the kinds of imbalances which have lead to economic dislocation in the past? I think your answer lies in the excessive speculation we are experiencing today. In recent months, Dell, Intel,
IBM, Hewlett-Packard, and Compaq have all lately failed to meet analysts expectations, indicating the pace of growth in computer sales is likely slowing. Other important technology names, such as Xerox, Lexmark, Amazon.com, CompUSA and now Lucent have either failed to make money at all, publicly indicated a slowing in their markets or actually prewarned of declining earnings. Yet the party continues, with many investors perversely opting for the stocks with the most overinflated market caps.

Meanwhile, the 60% of the NYSE which declined last year, many of them solid money makers, can't seem to catch a wind.
If this isn't misallocation of capital, I don't know what is. We had some hopeful signs early this week when market leadership appeared to be shifting, but Friday's rebound in the techs is not encouraging in my view. Perhaps the aborted shock in the Nasdaq was just a foreshadowing of things yet to come. I don't know. But I don't think the Fed is out in front of this curve, not by a long shot.
mike55
(01/08/2000; 10:18:18 MDT - Msg ID: 22521)
Twice Discipled & DIRECTOR, Re; CEF
In addition to holding physical PMs, I stay diversified in stocks, bonds, cash, real property, etc. As you've learned, CEF is a stock backed 100% by physical gold and silver at an almost 50/50 split. I have held CEF over the last year+, where it has traded in the US $3.75 to $4.25 range. Its five year performance has been similar. If you're in a 401K or other fund and are limited on where you can direct your investments (like many folks are, especially those who work for large companies, me included), then you might consider CEF if you want your contributions backed by physical. Stocks, of course, are not the same as holding physical, but this one's about as close as you can get in the paper (electronic) markets. That being said, I liken CEF very much to holding physical gold -- its price/value goes up and down in a relatively narrow range, it pays no dividend to speak of, but it's always there and will always be worth something. If you're looking at it for stability, honesty, etc., it's good. If you're looking for growth or dividends, you need to look elsewhere.
Gandalf the White
(01/08/2000; 10:26:31 MDT - Msg ID: 22522)
Serial #2 "ERRATA" -- Lost Ozarks Silver
See, I told you that my spellchecker does not work on 1960's Texas Angrit. A MAJOR error is contained in the #2 Serial!! -- It totally changes the meaning and is very laughable!!!! -- It is the quote of the written note from the unknown man who found the maps in St. Louis in 1830. The correct passage is restated below:

"I found these maps in an old GUN barrel while trading in St. Louis in 1830."

Sorry for the error, but you have to admit that in was "a funny one". Maybe I should not write late at night.
<;-)
nickel62
(01/08/2000; 10:29:42 MDT - Msg ID: 22523)
The stranger Great Post
Very good analysis of the market.I wonder (since after thinking about this problem for most of the last decade I clearly don't know)If this stock market situation isn't similar to a swimming pool being refilled constantly with a fire hose. The pool has massive cracks and they keep growing but as long as the chief can still turn on the fire hose(monetary easing)whenever the liquidity gets too low the pool never really empties and all the various rubber balloons can continue to float along on the water like inflated toys.Lucent might disappoint (which shows real weakness considering how lax the definition of proper earnings has become) and plunge beneath the waves for a day or two.But the liquidity in the pool is so grat and so permanent in apperance that any real money being lost by the collective players.(After all with 3.4 billion shares outstanding a $25 dollar hickey is serious money-$85 Billion)They see a coressponding increase in their other stocks that offsets that.As long as you own all the right stocks the boys in the know keep from getting too badly burned on any one.If you don't own the in group you are toast.Portfolio managers if nothing flexible have in general learned this truism and learned to play follow the leader after a smaller and smaller number of nifty stocks.All these stocks have prices in relation to their fundamental value that make a mockery of the word over priced so in effect they have become the perfect gambling chip. They are so far removed from economic fundamentals that the manipulators don't have to worry too much about reality asserting itself. After all if you will buy Microsoft which has revenue of under $20 billion for over $500 billion you clearly don't know how to do a proper net present value or more likely are smart enough to know that NPV doesn't matter.So to return to my leaking swimming pool analogy. The various balloons all are bubbling along. One or two sink beneath the waves but since the surviving money managers have learned to follow the leadership blindly a new one is inflated just as quickly to take its place.Lucent shareholders lose $85 billion in two days all the more reason to clutch at the next new idea brought to you by Goldman et all. To run to the sky with your clients money.Don't catch this one you won't have anything to divert your clients attention from Lucent's loss at the next client meeting.
PH in LA
(01/08/2000; 10:34:39 MDT - Msg ID: 22524)
Beter Audio Tapes and FOA
Bravo SteveH!
for recognizing the references to the Jamaica monetary meetings (which all seem to refer to the accords before they took place) in the Beter Audio Tape N� 4. I too stumbled across them, also via the SDRer thread on Kitco last night, (even though I have been aware of the Beter Audio Tapes for some time) and intended to bring up the subject here (again), and/but you posted about them first. The references seem to corroborate similar references by FOA to Jamaica Accords, which on first glance does seem to reinforce FOA's credentials as an insider. To my knowledge, the existence of these accords have been, in large part except for FOA's references, otherwise unsubstantiated and almost mysterious.

Another point that caught my attention was the very title of Dr. Peter David Beter's book, "The Conspiracy Against the Dollar" (found at ftp://ftp.trawna.com/pub/misc/Dr_Beter_Audio_Letter/overview). The thesis and description of the book reminds me of FOA's comment long ago to the effect that "the crumbling of the dollar was expected to take place as early as the 1970s in the aftermath of Nixon's default on gold payments and support of the dollar... but eventually was not allowed to take place until there was something else to replace it... " (ie. the Euro)

All of this fits perfectly with the Beter premises, even as the Jamaica references do.

There is a little more to my thoughts on this that I would be glad to share with you off-line. Contact me at: PH@PROdigitalRecords.com.
Peter Asher
(01/08/2000; 10:46:09 MDT - Msg ID: 22525)
http://www.theunionleader.com/articles_show.html?article=5576
Will no-one rid us of these miserable Priests?
Page 1 Editorial:
We Apologize


If readers or New Hampshire viewers of last night's Republican event in Durham are upset this morning, it is no more so than this newspaper.

We co-sponsored this Presidential primary program, as we did Wednesday night's Democratic one.

Unfortunately, last night's moderator did exactly what many of his brethren in the national media often try to do � decide the contest before the New Hampshire voters have a chance to do so. NBC's Tim Russert apparently decided to make this his own two-man show with candidates George Bush and John McCain,virtually ignoring the four others for much of the questioning. No wonder the two are ahead in the polls!

The national media have it all figured out for us. Bush the name versus McCain the hero. No others need apply. Talk about a self-fulfilling prophecy!

But as candidates Orrin Hatch and Steve Forbes attempted to remind
us, the real poll will be taken Feb. 1 by New Hampshire voters.

As they have done many times before, we hope the voters will set the national media straight. That's the New Hampshire way.
-- JOSEPH W. McQUAID Publisher
Peter Asher
(01/08/2000; 10:58:10 MDT - Msg ID: 22526)
Methinks the Larry doth protest to strongly
http://news.excite.com/news/r/000108/11/economy-goldSummers says U.S. not selling any gold reserves

Updated 11:11 AM ET January 8, 2000

BOSTON (Reuters) - The United States has not sold any of
its gold reserves and has no plans to do so, U.S. Treasury
Secretary Lawrence Summers said on Saturday.

"I categorically deny assertions that U.S. gold reserves were being sold off or that there is any plan to sell them off," Summers told reporters on the sidelines of an economics conference.
ORO
(01/08/2000; 11:15:34 MDT - Msg ID: 22527)
High POG = low production
Gotta go, so a short word:

Intermediate term phenom:
Low POG, mine high grades, more gold produced fewer dollars earned
High POG, mine low grades, less gold produced more dollars earned

As prices go up, the mine will tend to use progressively worse grades that are not economical at lower prices, and preserves high grade ores for last.

This is part of the reason for excess volatility in gold and the sharpness of intermediate term market swings.
Gandalf the White
(01/08/2000; 11:47:40 MDT - Msg ID: 22528)
Serial Part #3
(Forward �Serial #3 of the story titled, "Mystery of the Lost Ozarks Silver".)
RECAP -- In Part #2 of the Serial, we learned that a pioneer, headed west had found some documents in the barrel of an old GUN he had obtained by trading. (Most likely trading a very small amount of GOLD for the weapon.) We then learned of the financing of the search party and the starting of the search expedition by the pair Pu Deville and Pierre.
(Editor's note: The style of dehumanizing attitude, greed, treachery and journalism displayed in this document may also be interesting to the TableRound armchair sociologists.)
Part #2 ended with the entry -- On October 10, which was an "exceptionally fine day", the expedition party of three had traveled "forty miles".
(OK enough editorial � on with Part #3 of the Serial.)
-------
"Mystery of the Lost Ozarks Silver" � PART Three --
Written by Tom Bailey and illustrated by Al Martin Napoletano. Published in the FRONTIER TIMES, Austin, TX -- Summer, 1961. (Please read carefully as it is transcribed just as it was written, and my spellchecker is not conversant in 1960's Texas English.)
--
But on the next day (October 11) the pair (Pu Deville and Pierre) seems to have been traveling separately, obviously to avoid the possibility of both losing their lives in a surprise Indian attack. Pierre says in his diary, "Indians on hill. Lay still and hope they don't see me. Indians going north again."
Apparently the two partners agreed upon splitting up to keep a daily record of what happened so that if one were killed and the other found him, he would know what had transpired.
Pierre's next entry on October 16 is confusing, "Indians again. Found the hands and stones." By "stones" he could have meant that he had found stones with which the Indians ground corn, apparently at some point along the way the Choctaw had mentioned.
On the following day Pierre was still hiding. He wrote, "Looks like a bad fix."
October 18: "Indians gone. Map works great."
October 19: "Found the place. Two hours work. Great Scott, what a wealth of silver. Each bar weighs about five pounds. I am rich. To hell with the other fellows."
His reference to the weight of the bars ties in with the size of the bars the early Spaniards moulded, which averaged from four-and-a-half to more than five pounds as they used their flintlock pistol barrels to cast the moulds in clay. The silver bars were all the same size in circumference but the difference in weight was determined by how much of the pistol barrel was used in casting the clay mould.
On October 20, Pierre recorded, "Took bars and closed cave. Worked all day to clear away marks."
At this time Pierre apparently was joined by Pu Deville, for in the next line he mentions that they separated again, and he added "Damn. The same band must have found my trail. About fifty warriors going on."
October 21: "Found my trail. Hot on. Evenin."
October 22: "Give them hell. Left horse. Buried silver."
October 23: "Mountain top. Evenin. Indians in south. Two arrows in my leg. Up to me."
October 24: "Arrow in my shoulder. Last stand. If nothin� happens bullet for me."
October 24: "Indians all around. Can't move. God help. Red spot is point. Two-and-one-half miles from point on map. God help. Oh, little dearie."
===
End of Serial #3
<;-)
Peter Asher
(01/08/2000; 12:03:12 MDT - Msg ID: 22529)
Stranger, nickel162

I think that yesterday's activity took us out of the stratosphere and into the ionosphere. Fundamentals such as earnings dividends, market position, patents, performance history, all left behind in the earthly envelope.

Only by analyzing the phenomena as the "Tulipmania" that it truly is, can we clearly understand it. Stocks go up because they are going up!

The investing/speculating (Gambling) public has decided, in a classic incidence of mob psychology, that this is a one way phenomena. Reversals are the status quo pattern for buying into, it just naturally goes higher afterward. "Everybody" knows this and all contribute to it. The penultimate self-fulfilling prophecy; ---- until what??

That is really the only question to be answered. What will be the equivalent of the Dutch farmer, who when shown the exotic bulb his friend sold a townhouse for, said: "But this is only an Onion."

Even my thesis that the Market will soon outweigh the support of the money supply seems in doubt. That quantity has become as illogically inflated as the market it sustains. At some point, there should be a realization that the values are truly ridiculous, but we are seeing a phenomena of irrational perception, not optimistic computation.

Either a consensus will build that equities are no longer the agreed upon depository of 401K etc. funds. Or some major event will slap euphoria "up the side of the head." Or, the same ultra-insiders that are holding the PMs down will pull the plug on the operation, in whatever profit making scheme is undetectably underway.

Got comments??
Peter Asher
(01/08/2000; 12:40:20 MDT - Msg ID: 22530)
Years Ending in '0' Are Zeros for Stocks
http://news.excite.com/news/r/000108/00/business-stocks-weekExerpt:

Still, there was a creepy feeling of deja vu about Tuesday's
selloff. For the past 100 years, the first days of the years that
end with "0" have signaled the start of some nasty bear
markets.

In fact, since 1900, stocks have made important highs at the
start of most of those years before heading lower.
TheStranger
(01/08/2000; 14:13:01 MDT - Msg ID: 22531)
Phos on Cohen, Peter and Nickel
Phos - re your:

"Morgan Stanley Dean Witter's gold analyst, Douglas M. Cohen, comes down on the bear side of the fence. No crisis seems
able to trigger a rise in gold and continued central bank lending are his principal negatives. Indeed, he says that Venezuela,
Germany, Portugal, Austria, and Switzerland are new entrants into the gold lending market. "
---------------------
I thought Germany and Austria were party to the Washington aggreement to stop gold leasing. Has anyone else heard anything
about this situation? Is Cohen all wet or has leasing started up again?",

I believe Cohen is all wet. I don't know what he is doing now, but he was replaced as precious metals analyst just last month. Among his trespasses was the publication in April 1998 of his very untimely "100 Reasons to Buy Gold" (Gold was at $300/oz on its way down to $250). Then, when gold was at $250, he was bearish. Among his favorite stocks were TVX, which went from about 4 during this period to less than 1, and Cambior, which went from about 8 down to about 1.

I called Cohen in September of this year to ask why his research never included comments about hedging. I pointed out that such information could prove very important in the event of a gold price melt-up. His response was to say that hedging would make no difference. All the gold mining stocks would rise at about the same rate. Honest!

Finally, I might add, his office was right down the hall from the bullion banking boys. So, you can make of this what you will, Phos, but I guess my point is that everybody gets it wrong sometimes.

Peter and Nickel - The bond market is the ticking time bomb that will bring all of this to its rightful conclusion in my view. I do not think, however, that a general market crash is necessary or even probable, but I do expect some very serious sector rotation.

canamami
(01/08/2000; 14:14:49 MDT - Msg ID: 22532)
The Stranger, Oro
The Stranger,

You said it all! Straight, simply and to the point: This is a problem of misallocated investment. Talk about clearing away the cobwebs with a direct explanation.

To cite the somewhat related example of poorly used court time. In England, the Bar was traditionally split into two branches: Solicitors and Barristers. Solicitors did the non-courtroom stuff - corporate/commercial, wills, etc. One role was sending briefs to barristers. Some frivilous lawsuits were weeded out this way, in that they would never be sent to barristers. The Barristers probably did some further weeding out, such that the court's time was not spent on matters that should never go to court. In Canada, before the explosion in the numbers of lawyers, the "unified" Canadian Bar (all are both barristers and solicitors) weeded out frivilous matters, saving the courts' time. However, the explosion in the number of lawyers led to a decline in professionalism, plus the resulting economic exigencies resulted in almost anything going to court. Consequently, the courts get flooded and backlogged. Also, the rise of Small Claims Court means that no professional vetting takes place at that level.

I went through the above song and dance because the misallocation in investment is due to the rise of the self-directed investor (no professional vetting), coupled perhaps with the pressures on fund managers to meet the index on an annual basis, which inhibits the capacity of financial professionals to exercise independent professional judgement. This phenomenum may in turn may tied into the rise of self-directed investors, who look to annual performance in determining their fund investments. Thus, the rise of self-directed investors and the diminished professionalism of fund managers (decreased ability to exercise independent professional judgement) have led to this misallocation of investment. One need only look at the mess I made of my investment portfolio to see the dangers of amateurism run amok. I was going to muse on how this might end, but I have to scoot out in a couple of minutes. (P.S. thx for reiterating the distinction between the "market" and the "indexes", which I often forget. As you said, most of the market is not booming.)

Oro,

Thx for your further reply. I am impressed by the breadth of your intellectual interests, and I regret I have not been able to keep abreast of the majority of your writings. I look forward to your book. Have you come across Raymond Aron's "The Imperial Republic" in your researches? Although now dated, it touches on many of the same points as your writings. Further, if you are willing to disclose such facts, what proportions of your investment portfolio are in gold, gold mining shares, other commodities, equities, etc.? One gets the impression that your investment interests are quite broad, and you are obviously an aware investor who takes gold seriously. I was just curious as to your investment mix, as a baseline against which to assess my own, but again only if you wish to disclose such facts.

Gotta go. A plus tard, tout le monde.


Lafisrap
(01/08/2000; 14:25:58 MDT - Msg ID: 22533)
American Gold Eagles

I took the opportunity today to speak at length with the largest coin dealer in my area. He is buying back 1-ounce American Gold Eagles by the hundreds, many hundreds, all from people who purchased them on account of Y2K fears. His buy-back price is now at 2 dollars over spot, selling price at approximately 20 dollars over spot, depending on quantity, etc.

He said that in the last 3 weeks of 1999, several individuals each purchased in excess of one hundred 1-ounce American Gold Eagles, and that in the last few days most of those people sold them all back to him.

Lafisrap
Chris Powell
(01/08/2000; 15:32:06 MDT - Msg ID: 22534)
Treasury secretary feeling the heat about gold
http://www.egroups.com/group/gata/333.html?Friends of GATA, let's keep it up.
canamami
(01/08/2000; 16:26:59 MDT - Msg ID: 22535)
Summer's Comments (on a Saturday)
Summer's comments could be viewed as bullish for the POG -categorically stated "no plans to sell". Too bad it was made on a Saturday, instead of even on a Sunday, where there might have been more bang for the buck.
NORTH OF 49
(01/08/2000; 16:40:36 MDT - Msg ID: 22536)
Canamami, on the other hand---
Isn't there an old "rag" around that states that generaly "an official government position is usually confirmed once it has been officially denied"? Maybe he does "protest too loud"!

No49
Usul
(01/08/2000; 16:41:01 MDT - Msg ID: 22537)
The Oil Embargo and the Kreinin Letter
Let us hark back to the 1973-1974 period.

1973- was the year of the oil embargo.

From "Richard M. Nixon":
http://library.thinkquest.org/12587/contents/personalities/rnixon/rmn.html
"OPEC raises oil prices 400 percent (1973)..."
The rising cost of oil caused a major crisis and
shortage of petroleum products.

Popular Music of 1973:
Walk on the Wild Side- Lou Reed
Hocus Pocus- Focus
Dead Skunk- Loudon Wainwright III
Bad, Bad Leroy Brown- Jim Croce
Brother Louie- Stories
Crocodile Rock- Elton John
Killing Me Softly With His Song- Roberta Flack
Let's Get It On- Marvin Gaye
Midnight Train To Georgia- Gladys Knight & the Pips
My Love- Paul McCartney & Wings
Tie A Yellow Ribbon Round The Ole Oak Tree- Dawn
Top Of The World- The Carpenters
You're So Vain- Carly Simon

1974- Was the year Nixon resigned over the so-called
"Watergate" scandal [announced on August 8, 1974]
Earlier in 1974, [Nixon's] Secretary of State, Henry
Kissinger, negotiated disengagement agreements between
Israel and its opponents, Egypt and Syria. [see above URL].

A successful end... but how did they get there?
What price was paid?

Meanwhile, fighting continued in Vietnam between the
South and the North.

Popular Music of 1974:
I Can Help- Billy Swan
I Honestly Love You- Olivia Newton-John
Kung Fu Fighting- Carl Douglas
The Loco-Motion- Grand Funk
Seasons In The Sun- Terry Jacks
The Streak- Ray Stevens
TSOP- MFSB
The Way We Were- Barbra Streisand
(You're) Having My Baby- Paul Anka

From "Oil Price History and Analysis":
http://www.wtrg.com/prices.htm
"Yom Kippur War - Arab Oil Embargo
In 1972 the price of crude oil was about $3.00 and by the
end of 1974 the price of oil had quadrupled to $12.00. The
Yom Kippur War started with an attack on Israel by Syria
and Egypt on October 5, 1973. The United States and many
countries in the western world showed strong support for
Israel. As a result of this support Arab exporting nations
imposed an embargo on the nations supporting Israel. Arab
nations curtailed production by 5 million barrels per day
(MMBPD) about 1 MMBPD was made up by increased production
on other countries. The net loss of 4 MMBPD extended
through March of 1974 and represented 7 percent of the
free-world production."

Thus began the oil embargo of 1973 and a steep rise in
the price of oil!

These were pivotal times!

Saudi Arabia played a significant part in all this:

"The ARAB OIL EMBARGO of 1973-74"
http://www.forks.wednet.edu/high/SocialStudies/Giles/USHistory/USHII/assign/oilembargo.htm

"[The Arab-Israeli, October, Ramadan, or Yom Kippur, War]
...financed primarily by Saudi Arabia..."

"In late October, King Faisal of Saudi Arabia influenced
Arab oil producing nations who were also members of the
OPEC (oil exporting and producing countries) to agree to
an embargo of crude oil to Western nations who had
supplied weapons and other aid to Israel, as a punishment
to the friends of its enemy.

... the Arabs ended the embargo late in the spring of 1974...

...The Oil embargo of 1973-74 was a wake-up call for the
west, signaling an end to cheap oil, and demonstrating the
vulnerability of the developed world to such disruption in
supplies..."

These are lessons that have not been forgotton, you can
be sure.

Note especially the end of the embargo in late spring 1974...

The oil embargo led to [allegedly] consideration of use of
force:

"THE OIL WARS AND THE ONES THAT ALMOST HAPPENED"
http://www.africa2000.com/BNDX/BAO101.htm
"Shortly after the OPEC oil embargo of 1974, a special
committee of the U.S. Congress requested a study of U.S.
military options for seizing oilfields in several
countries. The report, which has never been released to
the public, was prepared to provide background material to
Congress about "possible military action against oil
producing states in the event of a crippling oil embargo,"
according to an introduction.

The document, titled "Oil Fields as Military Objectives: A
Feasibility Study," was prepared for the Committee on
Foreign Relations by the Congressional Research Service of
the Library of Congress, and is dated August 21, 1975.

Countries examined as potential targets included Kuwait,
Saudi Arabia, Venezuela, Libya and Nigeria.

"Analysis indicates that sustained sanctions by all or most
of OPEC's members would disrupt America's fundamental
lifestyle and degrade U.S. security, although survival
would never be at stake. By way of contrast, the vital
interests of our major allies could quickly be
compromised," the report advised"

What allowed the US to refrain from use of military force
to secure cheap oil?

From ANOTHER, Wed Mar 25 1998:
"What if, the US dollar was taken off the gold standard,
and gold was managed "upward" to say, $208 per ounce?
[Note: this is now the 'book value' of gold at the BIS]
The dynamics of the market would force oil to rise
and allow for much needed capital to search for the higher
priced oil that was known to exist! The producers would
find shelter in gold even as the price of oil was
increased in terms of a now "non gold dollar"! Price
inflation would rise, but gold and oil would also increase.
The dollar would continue to be used as the only payment
for oil, and in doing so replace gold as the backing for
this "reserve currency". All would be fair.
The war in 1973 and the Iran problem did make markets
"overshoot", but all did work to the correct end.
The result was "a needed higher price for a commodity that
was, as reserves, in much over supply by the wrong
countries"!
It was known that the public would never have accepted
this "proposition" as fair. To this end, we have come."

The New York Times of March 18, 1974, carried a front page
story titled:

"Arabs Again Fail to end oil Embargo;
Meet Today;
Price won't be changed"

"Sheik Ahmed Zaki al-Yamani, the Saudi Arabian minister of
Petroleum Affairs, said late tonight that
"You can say categorically the embargo will be lifted
tomorrow"...
"Production will be raised" he added...
Sheik Yamani said that the long meeting today had dealt
with issues "other than the embargo" but that full
agreement had been reached on ending the embargo and
restoring, at least partially, the cutbacks in Arab oil
production"

I wonder what the issues "other than the embargo" were?

This brings us to the Kreinin Letter... containing a most
interesting suggestion, that I will discuss later,
if there is sufficient interest.
FOA
(01/08/2000; 17:34:05 MDT - Msg ID: 22538)
Reply
To ALL: I'm trying to catch up now. More to follow.

Hello PERMAFROST,

Sorry to see you go (if you still are gone?). I'll reply to your comments, somewhat in order.

You write in :------------

PERMAFROST (1/3/00; 2:31:57MDT - Msg ID:22103)
FOA Msg ID: 21859 Part 1
Dear Sir, Thanks for your response.
--------You are advocating a global financial system predicated on the peaceful and mutually-beneficial "concubinage" of gold and the "new girl in town" fiat money the Euro which you unwarrantedly presume to be relatively more "chaste" than the Old Whore, the US dollar, ONLY
because it is not "backed" by as much debt as the dollar, and its "lovers" (the EU Central Bankers, the Rothschilds?; an assorted variety of Illuminati and various other power brokers playing both sides [the sheeple?] against the middle [more sheeple]) tip their hat at gold without solemnly
declaring their allegiance at sovereign money, PM etc. ------------------

No Mr. Frost;
I don't advocate that. I think this is your perception of future events. This transition will not be "peaceful" in any way. Any time one large official faction (Dollar/IMF group) has it's money power replaced by a new official faction (Euro / BIS), it's never peaceful and not without significant loss of wealth by some of the players. I add that both little and big players get hurt when these events happen. Usually, it's the little "uninformed" players that lose the most. Your observation that people are "sheeple" comes as they step in front of a train with no breaks. Then
you tell the world that "someone" is out to get them. My experience is that the average investor is much more intelligent than that and they can do a good job of "moving" off the tracks if it's pointed out to them that a train is coming.
The dollar is giving up it's reign as a reserve currency, not "only" because it has so much debt. It's being replaced because it's inflation (total money supply, dollar derivatives supply, dollar debt supply and the official liabilities foreign nations hold as reserves supply) has discounted so much future real US production, at a constant exchange rate, that it is losing the ability to function as a reserve currency. Every currency on earth has one day come to this end. We call it a "fiat money's timeline". At this point the users of this money begin to either "deflate it's supply" through debt and payment default, or the they devalue it by bidding up the value of real goods (price inflation). Once either of these begin, the money function of that reserve currency declines. Further, one will find
that deflation is only a choice is no other official world currency is available to run to. World citizens vote with their feet at this point and greatly discount unpayable debt thus causing said deflation. Inflation is the choice when people can "refinance" into another currency media. Leaving the old to contend with an ever increasing velocity of the useless money supply. This is the fate that waits the
dollar.
Is this some structure brought about by a New World Order? If you want to see it this way, then remember the world has been doing this from creation. I only add, why bother to put the "New" on it? Let's just call it "Next World Order"! Besides, it's only one peoples as a nation group (EURO / BIS) trying to protect their wealth because another nation group of peoples (Dollar / IMF) borrowed more that they could ever pay back! Still, I read this New World Order faction (NWOF) as loudly declaring the Euro as a fraud, yet they (NWOF) are hip deep the dollar assets of a country that "defaulted on it's gold delivery. Twice! Then they (NWOF) yell because no one is creating a new gold or gold backed currency. Why do that? So we can be defaulted again by the "NEXT World Order"?

You write:

-----------------
This fiat money is necessary, you say, because it will allow management [manipuation] of the economy without suffering the deleterious side effects that a rigid gold standard has saddled us with in the past. Would you care to draw for the benefit of the forum the the philosophical line that
separates you from, say, an Alan Greenspan, as per the gold/fiat money relationship? do we not have TODAY a fully-floating POG alongside the dollar? What shall we gain in re-baptizing fiat money with a different name, i.e., the Euro? except the prolongation of the Game? IF gold IS
money than nothing else is. Disagree?
--------------------------

No PM;
We don't have a fully floating price of gold today. This is the illusion (paper gold) that has many people (such as yourself) locked into a narrow view. Mr. Greenspan has always seen the gold money relationship from a US dollar perspective and holding the US as the only dominating
financial power. He knows that the dollar could never retain it's position if gold became a "separate settlement currency" through a true world free physical market. All of the dollar price inflation that is currently locked into the present dollar supply inflation would present itself. Dollar reserves held world wide would become useless unless they could be used to buy real US goods (at a non inflated price).
Truly, Mr. G. only sees gold from a Washington view and even that must be locked in the cellar. He manages a system built by others and must use the tools this system allows. The present paper gold market is as much a function of the dollar value as interest rates and it is controlled as such.
Today, gold is money, I agree! But, it is not and never can be a fluctuating (in supply) digital money of high speed settlement. For it to work it's past magic in this modern world, it must trade in physical form without derivative use. It will.
----------------------------

You write:

PERMAFROST (1/3/00; 3:02:19MDT - Msg ID:22104)
Reply to FOA Msg. ID: 21859 Part 2
Capitalism, this familiar but insidious term really stands for the willful confusion of a descripitive proposition [that private property exists] with a PRESCRIPTIVE one [that private property and the wealth that can be generated from it is GO(O)D]. -------------------

No PM, not at all.
This is the standard (higher level) teachings in modern Western education. History proves that "real private property" has and always has been both wealth and a purchasing power medium (money). Through the best of times and the worst of times, in war and peace, people have always had private property. Even in Russia of old, they had to allow people their things. Even if these positions weren't recorded "officially". A universal truth is that no form of
official ruler-ship can function unless people have some private wealth. Never has worked for even a short time and never will. Further, generating more wealth from private property (owned wealth) is only good if one can overcome the "RISK" that comes with it. This is nothing new to most of the world. It's just a different concept for modern Western man.

You write:
---------------
It's a logical fallacy that doesn't survive the glare of critical analysis. Omit the adjective "private" from the premise and what you end up with is the other side of the coin, or communism. Both systems are basically worship of materialism and humanistic (man is the measure of the universe) propaganda. Now, whereas communism theoretically aims at generating its "GOD", or 'goods and services' in economic parlance, via the sweat and toil of its fellow gods (the proletariat), capitalism is predicated on CONSTANT INSTABILITY [the insidious rhetoric of the bankers
notwithstanding] of the prices of these very goods and services, the [managed] fluctuations of which allow the people Greenspan works for to earn wealth they did not work for. -----------------

PF:
I'm glade you understand this ages old function of humanity. Through out time and space our life quest is influenced by others that try to control our desires. The successful time traveller lives his days in harmony by adapting to the "lay of the land". Today, it's time for gold and Euro assets. Indeed, what you have just written is the very action that has brought the dollar to the end of it's
timeline.
------------------------------------------

Again, your words,

PERMAFROST (1/3/00; 3:09:12MDT - Msg ID:22105)
Reply to FOA Msg. ID: 21859 Lastly,
As to even the 'emperor running to higher ground when he sees the flood coming'--if he were to do so, he'd be emperor no more for what makes an emperor an emperor is the "land" he rules. Without it he's nothing.That's why captains do not abandon their sinking ships; and why sometimes even emperors get their heads chopped off. To die an emperor is perhaps preferable than to live as a normal human being for some...You?--------------------------------

In addition PF, the history of gold shows how one may remain in their chosen land and retain their wealth. For gold needs not return to a native place to receive it's value. We do indeed chose the high ground, with or without our heads. (smile)


Further you add from :Msg ID:22104
-------------------------
Therefore; I find myself obliged to conclude that, due to your avowed devotion to the Euro and the "The King is dead; long live the King" tradition it propounds, the only difference between you and an "Alan Greenspan" lies in your respective handles. If you already are not one of them, you wanna join 'em. Incorrect?
------------------------------------

Very incorrect my friend. The difference lies not between myself and others, rather between the life experience of "you" and "I".
Somewhat like the movie "The wind and the Lion":
You like the wind hold the power of force in your words. I as the lion roar in defiance as the sand stings my eyes in a
land I cannot leave. Yet, as a lion, I know my place on earth while as the wind, you will never know yours!

Thanks much,,,,,,,,,,,,,,,FOA
Peter Asher
(01/08/2000; 18:00:01 MDT - Msg ID: 22539)
FOA, fan-tastic
WHAT A GREAT SEMANTIC HIGH!!You like the wind hold the power of force in your words. I as the lion roar in defiance as the
sand stings my eyes in a
land I cannot leave. Yet, as a lion, I know my place on earth while as the wind, you will never
know yours!
FOA
(01/08/2000; 18:04:52 MDT - Msg ID: 22540)
Comment
USAGOLD (1/2/00; 14:16:18MDT - Msg ID:22059)
Once in Golconda.....More Parallels: Soaring Averages a Rousing Spectacle/Decay Underneath
-----The persistence of the idea that all stocks were going through the roof in the autumn of 1929 is a monument to the power of popular myth." --------------

Michael,
Your Once in Golconda was wonderful. It speaks volumes of our present situation; the inflation of the dollar as it is presented in equity valuations. Mountains of currency supply with nowhere to go! The difference between now and then? Today, we have an alternative currency that unlike the
past gold standards will not force a "deflation effect". We will have our dollars and we will have them in good supply. To the end.
I (We) expect this to continue until the dollar is devalued thru a defaulted gold market (and soaring physical gold price) and further devalued from "settlement function" by the Euro. This is going to be an exciting time to witness. FOA

FOA
(01/08/2000; 18:06:38 MDT - Msg ID: 22541)
Comment
mhchuck (1/2/00; 20:29:16MDT - Msg ID:22082)
FOA
-------------There's an old saying that "A man with one watch, always knows what time it is, but a man with two, is never really sure."... I have discarded all other time pieces...you're it. It is not such a dangerous maneuver for me personally as some might think. You see, I "know" where the trail is going, but with your higher perch, I will improve my visibility. But whether or not any of your
"pre-vision" comes to fruition, matters not, (although it might matter to you for having put it forth)
....the fact is, I like the way you tick. ----------

Thanks mhchuck!

Watching the world turn with a physical gold watch will be an easy experience. And an educational one for us "regular people". The human interaction between "high standing" paper financial players will teach us all where the truth is. Indeed, they are not losing something they have. Rather something they perceive they have. A big difference. FOA
Cavan Man
(01/08/2000; 18:22:11 MDT - Msg ID: 22542)
FOA
Don't sugar coat it my friend!!!! What do you really mean?
Have you forgotten Cavan Man? Questions like; "...is Dr. Mundell's work just a coincidence from your perspective?" and, what is emperor AG up to? Will he take the high ground?

Kind regards this evening.....
Phos
(01/08/2000; 19:25:19 MDT - Msg ID: 22543)
Stranger - reply re gold leasing
Many thanks for for response. Don't here much from the hinterlands so we rely on commentary but you don't know what you can trust.

I also read that there is a 'special' BIS called central bank meeting on Monday in the Far East. Is there any significance to this meeting (some seem to think there might be)? Perhaps FOA is aware of it? There seems to be a lot of discussion about financial distress in some parts of the world such as South America (Ecuador in particular) and Indonesia. Russia remains a bit of a question mark, I would assume. I have also heard rumours that someone (the FED?) stepped into the market to buy S&P futures this week to settle the markets. Has anyone else heard anything about this.

Some time ago, I read on the Longwaves site that someone (a Fed representative?) stepped in when the Dow fell 500 in 1987 and started buying S&P futures and that was enough to turn the market and start the 13 year bull run. Perhaps, the Fed can keep the market rising by using derivatives periodically to calm fears. Does anyone know if there is anywhere one can check the S&P options trading data to see what is happening?
FOA
(01/08/2000; 19:55:11 MDT - Msg ID: 22544)
Reply
Hello canamami,

You write:
-----------------
canamami (1/2/00; 22:43:33MDT - Msg ID:22091)
Reply to FOA - Possible Demands re Gold Breach of Contract
FOA,
I believe the recent demands made against Germany/Switzerland flowing from World War Two, and the end of gold convertability under Bretton Woods, are almost completely disanalogous;I don't see any demands ever arising against the US flowing from August 1971. The demands against Germany/Switzerland are heavily tied in with moral questions relating to Holocaust-type issues, and all that that entails. Whether rightly or wrongly, portions of world
opinion (particularly important groups in the US, and the broader world community) continue to view a continuing moral culpability on the part of Germany and Switzerland. On the other hand, the end of gold convertability was a pure commercial matter, somewhat akin to a bankruptcy, not
giving rise to important moral issues. -------------

No Mr. C;
A great many people were impacted along with their lifestyles. The dollar was devalued through price inflation during all of the remaining 70s and this directly lead to much of the stress in world affairs. Many smaller countries saw their citizens almost starve because of the changing cost of goods.
Further, important people only recognize a wrong as a "moral issue" when a public door is opened for "resolution" of that issue. Regular people must wait for justice untill the force of reality comes into play. Just as the demands made against Germany/Switzerland were buried for decades,
that didn't mean they were concluded, nor would this repudiate other precedent setting actions that occurred later in time.

You write:
------------
Remember, every other country ended gold convertability, and some of these countries did not disestablish the previously gold-backed currency - for example, Canada kept its dollar and Britain kept its pound, though gold-backing ended for these currencies. ------------

Indeed, these countries held dollars "as their gold" by international treaty. Just as a person has no more money after being robbed, dollar reserve countries after 71 were forced to use whatever money existed (they had no gold because the law said the dollar was a contract for it). People are not so shallow as to accept your "disestablish" reasoning. Watch someone in a store, given a choice of two, they will purchase what offers the best value. Only when one item is offered does the obvious become a naive selection.
Canada and Britain did not later back their currencies with gold, did they. Nor will the US!

Your words:
---------------
Also, neither Germany nor Switzerland expressly stated - "no more claims will be recognized flowing from World War II". However, the US has expressly extinguished any demands
for gold against the Treasury, except for some very old issues of certificates and dollars. Thus, the US has made an express policy decision that no demands are to be made against its gold. This has not stopped the rest of the world from continuing to view the dollar as the pre-eminent currency.

Mr. C,
If the US expressly stated as policy that the sun will not rise are we to accept it? Again, a world pre-eminent currency is one accepted from a background of "choice". No other currency was presented for use in a major settlement function capacity. Today the Euro has.

I offer Journeyman's post (thanks Journeyman)as a further argument:

Journeyman (1/2/00; 23:41:12MDT - Msg ID:22095)
Stealing is not immoral? @canimami
The stealing of the gold from "foreigners" in 1971 by the US Gvt. in cahoots with the Federal Reserve by refusing to redeem redeemable notes, specifically redeemable in gold and as specified in the US Constitution was the SECOND biggest robbery in the history of the world. The FIRST biggest heist was pulled off by the FED & USA Corp. in 1933 when the same perps, this time headed by Franklin Delano Rosevelt, similarly stole the gold from its own citizens.
The question is, I guess, since these two events are the two biggest thefts in history, is "Is stealing immoral?" Well is it? Or do you excuse those organizations calling themselves "government," no matter what they do? Or is only when YOU are the beneficiary that anything goes? Regards,
Journeyman

Further from your post:
---------------------
The bottom line: the US will not entertain any claims against its gold on either a moral or legal basis, and I don't believe any claims will be made against it either. This matter has been resolved, and the US would disregard any attempts to make this an issue, though I doubt such attempts would even be made.------------------

Sir, you have spoken a very clear "Western viewpoint". Truly, it does look different from other directions.

Thanks FOA
FOA
(01/08/2000; 19:58:07 MDT - Msg ID: 22545)
Comment
Aristotle (01/03/00; 16:45:41MDT - Msg ID:22151)
Aristotle (01/03/00; 17:39:33MDT - Msg ID:22153)
----------- I look forward to FOA shedding more light on the potential for this protection of Gold being entrenched. It would seem that the ECB's (and others') Washington Agreement was a glimpse in this direction.--------------

Thanks for your presentation Aristotle. With your Thoughts, some can better understand where this is going. It may indeed become a rugged trail before all of this is over. We shall see better around the next turn.

FOA
canamami
(01/08/2000; 20:43:12 MDT - Msg ID: 22546)
Reply to FOA - #22544
FOA, for ease of reference, I will repost a reply I made to Journeyman, then I will add a few brief comments. First, here is the repost:

Of course stealing is immoral, and it would have been preferable for the US to comply with Bretton Woods, or to withdraw while it was still able to meet extant obligations, so there would not figuratively have been a "breach of contract".

That being said, we are dealing with the actions of sovereign states, which are indeed immune from the ordinary principles of contract law, including the principles of private international law as they relate to contracts. My post related to the assertions of FOA, that the US would face demands for the honouring of gold backing just as the Swiss and Germans faced demands relating to Holocaust-related matters, years after the fact. I countered that the two matters are too dissimilar for there to be a valid analogy - i.e., like comparing apples and oranges.

However, if obligations relating to 1971 are to be dug up, then the US is free to dig up the defaults of countries after WW1. Back then, basically all currencies were completely gold-backed. In the course of WW1, the major countries became indebted to the US. Except for Finland, all the Europeans defaulted on their official debt to the US. So, if some countries can dig up ancient breaches of contract like 1971 (at law, an ancient issue, and I would also say a breach that has already been waived even on a moral level), then the US can dig up the WW1 breaches of contract by European countries - with accumulated interest. Also, such demands for compensation are made against Ger/Swit because Germany/Switzerland are willing to listen to such demands. On the other hand, the Japanese have ignored demands to compensate Hong Kong veterans and others who were tortured, and to compensate the victims of the Rape of Nanking. Thus, few demands are even directed at Japan. This is how sovereign states generally operate. Given that most of the putative complainers concerning 1971 have "shafted" the US in the past, I doubt any demands for the honouring of the Bretton Woods gold backing will be made.



Thus, FOA, I disagree with your assertion that the US will ever face demands relating to the 1971 closing of the gold window. Subsequent to closing the gold window, the world agreed for a time to currencies directly pegged to the US dollar, and then that arrangement ended. However, the fact that the rest of the world adopted the US dollar as the baseline currency after the closing of the gold window suggests that most of humanity did not view that a great injustice had taken place by the closing of that window; in fact, that closing was seen coming for years prior to 1971. Remember, the US did not seek out the role as reserve currency to the world after WWII, it agreed to accept that role only after pleadings from other countries. Moreover, any country that distrusted US dollars could have demanded gold instead.

It is fanciful to believe that demands concerning 1971 will be made now against the US, and even more fanciful to believe that anyone would take such demands seriously. To use legal language, the limitations period has passed, and in any event the breach was waived. Further, a history's worth of demands could then be reopened. The US could demand repayment of WWI-era debts, with interest. It could demand reparations from Germany and Japan for WWII, against the Arabs for oil supply contracts broken during the Oil Embargo - it would never end. This is a can of worms the world will leave closed.
FOA
(01/08/2000; 20:52:00 MDT - Msg ID: 22547)
Comment
Only part of this post:
---------------
USAGOLD (01/03/00; 21:47:51MDT - Msg ID:22184)
Deja Vu...
I thought it a deja vu. This afternoon I read the following in Adrian van Eck's "Money Forecast Letter" for January which I received about two weeks ago and just got around to:
----"We are of the opinion that the Money he and the Fed have been creating in the past two months (going on $200 billion...an awesome amount ) reflects his efforts to avert a crisis situation that is being kept hush-hush."--------

Michael,
They may take some of this back, but only a small bit of it. All one has to do is follow ORO's posts to get a feel for what is happening. (ORO, I'm getting to your good stuff!) The dollar is being challenged by the Euro in a very big way. And it's happening even faster than expected. I think several other measures were available to the BIS if the transition had not already begun. It's possible that the dollar will come under massive pressure this year if we continue this way. The Fed has no choice but to cover the liquidity drain. Eventually, this will break the paper gold pricing grip on the physical metal. Truly, the ECB is letting the dollar system rip wide open from it's own hand.

FOA

FOA
(01/08/2000; 20:54:42 MDT - Msg ID: 22548)
Reply
Hello Beesting,

--------------
beesting (1/4/00; 10:00:31MDT - Msg ID:22242)
To FOA
http://www.bis.org/index.htm
Steve H- "Good one #22209!"
ORO- Great posts today--Thank You!!
FOA, I have researched the above URL "BIS" site, and my conclusion is, the BIS only conducts business with Central Banks. So, in the recent Dutch sale of Gold, and future Gold buying by the BIS, ALL that Gold would stay withen the Central Banking System, and have NO effect on world
"normal consumption" of Gold.----------------------

Actually Beesting, you hit the nail right on the head. The BIS is the only entity in the world that the dollar/IMF (and LBMA) worry about. That is because they can move gold between CBs at any value they want and do so without any supply passing through the paper markets first.
As this sinks into the minds of paper players, they will realize just how inflated the contract market is in relation to what physical gold is available to it. Remember, Euroland backed away from the dollar gold price illusion early last year. They would have stepped in and brought physical
to support the price. Instead they stood back and let it drop down to the $250 range, as they must have had the "Washington Agreement" in the works.
It no longer became a question of price, rather a question of when? I think it was because the Euro started out "too strong" in the beginning. They needed market acceptance and usage first, then begin the process of marking dollars to the gold price. I am expecting this year to produce some concrete moves in this direction.

You write:
-----------
FOA, do you agree with that analysis? Or, do you think the BIS could enter the world Gold market, replace the LBMA, and buy and sell non-paper Gold only? In My Opinion it would be a large European Bank that would first compete with the LBMA, and then after a collapse of paper Gold, join forces with The LBMA, sometime in the future. Your thoughts and opinions are always greatly appriciated ....beesting.-------------------

I think the ECB will eventually sanction a physical gold market in Europe that trades and settles only in Euros. The LBMA will eventually fall completely out of the picture as their product comes into question.

We shall see FOA

Cavan Man
(01/08/2000; 20:55:37 MDT - Msg ID: 22549)
canamami
..."it agreed to accept that role only after pleadings from other countries."

Could you please offer a reference to substantiate your assertion? After WWII, the world needed a reserve currency no? I think the $USD was the only currency able to fulfill that role. The upside potential for saying "yes" had to have US government and industry salivating. Why would the US refuse this request? What might have been the downside potential at the time for saying yes? Certainly there was popular support for withdrawing from the world stage in the late 40's. Although the rise of communism and HST wouldn't allow that, I suppose America could have feigned isolationism while assuming monetary and economic advantage. What country could have rebuilt Europe; Japan? Just curious. Thanks.
Solomon Weaver
(01/08/2000; 20:57:51 MDT - Msg ID: 22550)
by the way, did you know that the average brain is 3000 grams???
RossL (1/8/00; 6:52:19MDT - Msg ID:22503)
Solomon Weaver - think in grams

Yes, sir. Think in grams. Good idea. But a lot of my coins were manufactured in units of 31.103 grams. Such a clumsy denomination to remember. I will have to put up with it until the paper market fails, I suppose.
-------
Good point my Man. Now I know what kind of gold bug you are.
Just was pointing out that with a round million ounces in a ton, all of the folks who do these extended calculations to decide the value of a ton, would be easier served if they would be in a market where the price was quoted in grams...so what will the future hold???

1. Scandals and defaults close COMEX and the paper market crashes.

2. The gold Trading center of the world becomes EU...new and improved paper contracts...no naked contracts allowed...and quotes given in Euros per gram....

3. Price of gold rises in dollars due to both dollar devaluation and gold price rise in Euro.

4. American gold bugs still think in dollars per ounce when they sell their coins.

A rosy future??

Poor old Solomon
FOA
(01/08/2000; 21:08:07 MDT - Msg ID: 22551)
Comment
Peter Asher (01/08/00; 18:00:01MDT - Msg ID:22539)
FOA, fan-tastic
WHAT A GREAT SEMANTIC HIGH!!

Peter,
Thanks, I thought it made a point. (smile)

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

Cavan Man (01/08/00; 18:22:11MDT - Msg ID:22542)
FOA
Don't sugar coat it my friend!!!! What do you really mean?
Have you forgotten Cavan Man? Questions like; "...is Dr. Mundell's work just a coincidence from your perspective?" and, what is emperor AG up to? Will he take the high ground?
Kind regards this evening.....

Cavan Man,
No didn't forget, just trying to cover as much as I can. Dr. Mundell's work?? Well, I'm only one slice of a big information pie. As events progress, the opinions and thoughts of many will become reality.
No, AG cannot take the high ground. You read my other comments about him earlier? He is doing damage control, that's all.

Thanks, more later FOA


Cavan Man
(01/08/2000; 21:19:00 MDT - Msg ID: 22552)
the Stranger
http://www.micheloud.com/FXM/MH/Crime/WWIZOZ.htmMore on your allegory FYI.
Cavan Man
(01/08/2000; 21:21:39 MDT - Msg ID: 22553)
Thanks FOA
AG: Victim of Circumstances
Solomon Weaver
(01/08/2000; 21:27:25 MDT - Msg ID: 22554)
thinking in dollars
Twice Discipled (1/8/00; 8:25:37MDT - Msg ID:22507)
...
DIRECTOR ...
Jon has provided the link below, it was a long week so early to bed and late to rise last night.

Solomon Weaver ...
Interesting notion, I will have to break out the spreadsheet to accomplish this task. Most sites quote the price in ounces. But my biggest hurdle will be mental with this one. As discussed by many people, gold (money/wealth) has meaning in what we can exchange it for when needed. I have no personal correlation between Euros and what a Euro can purchase at my grocery store, Wal-Mart, etc. Although I realize the current exchange ratio is ~ 1/1.04.
Interesting thought though.
Thanks and relaxing weekend to all.
TD

-----

Twice Discipled

The first time I went into a cheese shop in Europe, I was stuck because I knew ounces would mean nothing...so I ordered 100 grams...when the slice was made I knew I'd rather have about 400 grams of the next type....not such a steep learning curve after all.

I would bet that at least 25% of the people in Europe would have a rough sense for what a dollar is worth in their currency. I would bet that less than 1% of Americans would have any idea of what any single foreign currency was worth in dollars.

The general attitude on this forum is that gold is the ultimate money. But, I think most people would agree that it will be very rare for people to "use gold" directly for transactions...so it is not very likely that you will see the prices of things you want to buy quoted in gold (ounces or grams).

The best of golden things to you.

Poor old Solomon
ji
(01/08/2000; 21:31:03 MDT - Msg ID: 22555)
money for nothin
In a letter to Thomas Jefferson in 1787, John Adams wrote, "All the
perplexities, and distress in America arise, not from defects of the
Constitution, not from want of honor or virtue, so much as from downright
ignorance of the nature of coin, credit, and circulation."

What was true then is even more true today.

If you write to the Secretary of the Treasury and ask where money comes
from you will get an answer similar to this: " The actual creation of money
always involves the extension of credit by private commercial banks." If you
write back and ask where the money comes from to pay the interest, you will
receive an answer like this: " It comes from the same place other money
comes from."

Credit (monetized debt) exist only in the mind. It is not a substance,
but an idea represented by bookkeeping entries and computer symbols.

A dollar is not money. It is the expression of money. A dollar is a unit of
measurement like an inch or a quart or a mile. The Coinage Act of 1792 fixed the dollar as a specific weight of silver in the form of a
coin and fixed the value of gold coin in relation to the dollar unit of
silver. If there are no gold and silver coins, there are no dollars of
anything.

Dollars cannot be money any more than quarts can be milk. A unit of
measurement cannot replace the "thing" for which it is the measure. However,
in our minds, this is exactly what has happened.

Under fractional reserve banking, banks lend money that did not exist
until they loaned it. Banks create money by monetizing debt-the debts of
government, business, and the people. Banks create money out of less than
nothing because a debt is a sum of money due. It is not possible to pay a
debt with a debt, but this is what the world is using as money!

Federal Reserve Notes are evidence of debts the US Government owes to
the owners of the Federal Reserve (a privately-owned corporation) the
payment of which is guaranteed by the collateral of all property and income
of US citizens.

When the US Government borrows money, the Treasury creates a bond,
which is a fancy word for an IOU and promises to pay a specified amount at a
specified interest on a specified date. This bond is evidence of debt.

This interest-bearing debt is the foundation for this nation's money
supply and its payment is guaranteed by the collateral of all property and
income of US citizens. The FED "buys" this debt by making a
bookkeeping entry for the amount and writing a check against no funds. In effect, the FED lends the US Government its own credit, our credit, and then charges interest on it.

Every Federal Reserve Note (FRN) created by the FED is debt for us, which the central bank collects interest on, in addition
to the interest from the bond created by the Treasury that put this
money machine in motion. Then the FED inflates the amount
of the bond in order to make even more loans and collect more interest on an
investment that costs NOTHING. Under fractional reserve banking, the amount
a bank can create is limited by the reserve ratio or fraction it is required
to maintain. For example, when the reserve ratio is ten to one, a bank can
create and loan ten FRN's for each one in reserve and charge interest on it.
The reserves of the FED is paper-nothing more than bookkeeping entries that
are a record of debt.

The absurdity of the situation is that if there were no debts, there
would be no money, since all paper currency and checkbook money is loaned
into circulation. In order to pay the interest, there must be another loan
because the banking system only creates the principle and not the interest.
In fact, the interest can never be paid because it is not possible to return
to the bank more FRN's than were created-making it inevitable that the FED
acquire title to all wealth in the nation.

The only source of inflation is the FED. Increasing the amount of
currency and checkbook money increases inflation. Creating new money reduces
the value of all money, resulting in higher prices.

Credit which is deferred payment, and debt, which is a sum of money
due, are the same thing, which is hidden by deceptive double-entry
bookkeeping where a debt becomes an asset by calling it a credit. Paper
money that redeems nothing only appears to have value because it can be
exchanged for things of value. When a piece of paper representing debt is
exchanged for wealth, someone has been robbed. FRN's expropriate wealth from
one person, then another, until the last person
who gets it will be stuck with it. What the first user gets for
nothing the last user will get nothing for.

The sole function of paper money that is not one hundred percent
redeemable in gold or silver coin is to get things without paying for them.
Those who issue and control bank credit as money get everthing for nothing.
Bank credit is a devise for confiscating wealth, where numbers of nothing are exchanged for things of substance and value. This theft occurs unnoticed because we accept pieces of paper with numbers on them in place of real money, not knowing the difference between the two.

When using wealth as a medium of exchange, government must receive
wealth from its citizens to pay for goods and services. When using credit,
government is independent of taxes and does not have to pay for anything,
which the illusion of taxes conceals from the people.

Though nothing is financed by taxes, consumption, the people's capacity
to use up goods and services is reduced. Subtracting credits from bank
accounts reduces consumption and eliminates previously created inflation.
Taxes regulate inflation.

The FED pumps money into the system and the IRS sucks it out. The tax
system reduces public allotment of credit in order to destroy some of the
bank created credit so that the bankers, and their government, can continue
to create more credit, and with this credit get unlimited goods and services
for nothing.


canamami
(01/08/2000; 21:38:55 MDT - Msg ID: 22556)
Reply to Cavan Man -#22549
From "The Imperial Republic: The United States and the World 1945-1973" by Raymond Aron, translated by Frank Jellinek, at pp. 202-203:

"Was the international monetary system, in the form in which it developed, with the dollar functioning as a transnational currency, concocted in advance and deliberately planned by the decision-makers in the United States with a view both to enabling the American corporations to make direct investments abroad despite the persisting deficit in the balance of payments, and to compel the central banks indefinitely to amass dollars which would ultimately become nonconvertable? No one would seriously make that assertion. At the time of the Bretton Woods negotiations the American representatives had opposed Maynard Keynes's far-reaching proposals put forward by the British, fearing that the burdens of their partners' deficits would fall on the United States if they consented to the creation of a central world quasi-bank for the whole of the free economy.....

........................

...We may accept - and it seems to me probable - that those responsible for United States policy in the early Fifties did not foresee the consequences of the role of the dollar when the central banks considered it equivalent to gold..."
FOA
(01/08/2000; 22:15:47 MDT - Msg ID: 22557)
Reply
More discussion, my friend:

-------------------
canamami (01/08/00; 20:43:12MDT - Msg ID:22546)
Reply to FOA - #22544
FOA, for ease of reference, I will repost a reply I made to Journeyman, then I will add a few brief comments. First, here is the repost:

Of course stealing is immoral, and it would have been preferable for the US to comply with Bretton Woods, or to withdraw while it was still able to meet extant obligations, so there would not figuratively have been a "breach of contract".

That being said, we are dealing with the actions of sovereign states, which are indeed immune from the ordinary principles of contract law, including the principles of private international law as they relate to contracts. My post related to the assertions of FOA, that the US would face demands for the honouring of gold backing just as the Swiss and Germans faced demands relating to Holocaust-related matters, years after the fact. I countered that the two matters are too dissimilar for there to be a valid analogy - i.e., like comparing apples and oranges.
-----------------------------

Mr. C.,
I ask, were not the Swiss and Germans also sovereign states? Were their actions allowed as related to international law? In addition, I'm not trying to draw an analogy as you perceive it. The precedent was that the dollar was a certificate for gold in storage, not a debt owed to someone else. The closing of the gold window in 71 was a "taking of physical property" in much the same
light as "taking someone's private property". I make this point not because the BIS "is" about to ask for gold, rather that the US will never again back the current US dollar with it's gold. They must create another currency medium first.

You state:
--------------
However, if obligations relating to 1971 are to be dug up, then the US is free to dig up the defaults of countries after WW1. Back then, basically all currencies were completely gold-backed. In the course of WW1, the major countries became indebted to the US. Except for Finland, all the Europeans defaulted on their official debt to the US. So, if some countries can dig up ancient breaches of contract like 1971 (at law, an ancient issue, and I would also say a breach that has already been waived even on a moral level), then the US can dig up the WW1 breaches of contract by European countries - with accumulated interest. Also, such demands for compensation are made against Ger/Swit because Germany/Switzerland are willing to listen to such demands. On the other hand, the Japanese have ignored demands to compensate Hong Kong veterans and others
who were tortured, and to compensate the victims of the Rape of Nanking. Thus, few demands are even directed at Japan. This is how sovereign states generally operate. Given that most of the putative complainers concerning 1971 have "shafted" the US in the past, I doubt any demands for the honouring of the Bretton Woods gold backing will be made.
----------------

Again, the closing of the gold window was not a debt issue. None of your above items are relevant. The US seized gold belonging to others by not shipping what was in vault storage.

You say:

------------
Thus, FOA, I disagree with your assertion that the US will ever face demands relating to the 1971 closing of the gold window. Subsequent to closing the gold window, the world agreed for a time to currencies directly pegged to the US dollar, and then that arrangement ended. ----------------
----------------------------------

My friend, the dollar reserves held in foreign banks were not these "pegged" holdings you speak of. Foreign moneys pegged through exchange rates to dollars is one thing. However, there were real dollars held as gold certificate reserves by these Central Banks. There was no arrangement on this issue. The US took their gold plain and simple.

Your words:
------------------
However, the fact that the rest of the world adopted the US dollar as the baseline currency after the closing of the gold window suggests that most of humanity did not view that a great injustice had taken place by the closing of that window; in fact, that closing was seen coming for years prior to 1971.
---------------------

In the same light, was the inaction on Swiss and German issue a sign of acceptance? Apparently not!

Onward:
------------
Remember, the US did not seek out the role as reserve currency to the world after WWII, it agreed to accept that role only after pleadings from other countries. Moreover, any country that distrusted US dollars could have demanded gold instead. ---------------

My point exactly. The very fact that the US shipped so much gold prior to closing sets the precedent that the dollar was a gold certificate, not a debt or IOU. It was payable on demand for many years.

Further in your thoughts:
------------------------
It is fanciful to believe that demands concerning 1971 will be made now against the US, and even more fanciful to believe that anyone would take such demands seriously. To use legal language, the limitations period has passed, and in any event the breach was waived. Further, a history's worth of demands could then be reopened. The US could demand repayment of WWI-era debts, with interest. It could demand reparations from Germany and Japan for WWII, against the Arabs for oil supply contracts broken during the Oil Embargo - it would never end. This is a can of worms the world will leave closed.
-----------------

I submit that it is "fanciful indeed" for one to think that the pre 71 dollar was a debt of gold. Clearly, all the evidence says it was not. The dollar represented gold held on deposit for any Central bank that requested it. Because most foreign citizens could own gold in their countries (US
citizens could not), they were free to ask for gold from their local banks in return for dollars. Thus, the US having taken the gold would become a private action if they ever backed the same dollar again Will this is a can of worms stay closed? Absolutely! The dollar will never be backed with deliverable gold again! Believe it!

Thanks FOA

ON to ORO!
Solomon Weaver
(01/08/2000; 22:27:12 MDT - Msg ID: 22558)
thoughts vs gold
A little philosophy tonight.....

Starting with a little science...

Thoughts are fluctuating patterns dancing on highly complex networks of neurons capable of inspiring insight and emotion. Thoughts are what we use to explore our jungle world, mapping, comparing, analyzing. Out of thoughts flow intentions and then actions...actions which change and build our world...our world now modified by our thoughts creates new insights..individually and collectively we shared these unstable patterns of belief and perseption.

Gold is a very satisfied metal. Chemically very fulfilled with a complete valence. Its molecules fall gladly into lattice arrays, leaving a dense and pliable matter which can he shaped into many forms, and always shines a bright yellow.

Gold is like the antithesis of our thoughts. Thoughts move and dance. Gold meditates. Our thoughts are like the wind. Gold is like a deep lake, almost motionless.

It is little wonder that prehistoric man was attracted by little gold nuggets at the bottom of a stream, or the shining gold vein in the caves where he may have dwelled. And the way thoughts go, one of them certainly tried to burn it in the fire. It is certain that little heirlooms fashioned by hand in gold far outlived the artist and became symbols of time gone by and of immortality.

Today, we have two currents which dominate in the world. Thought and Gold. Always they have been sisters. The two sisters have met one man, he is called "oil", and they have almost become enemies in their jealousy over him.

Gold as a political archtype is exemplified by Saudi Arabia. They are an old culture. Filled with thought structures which have been settled in over many centuries. Among them the love of and belief in gold and a distrust in the paper promises of anyone who does not hold gold. Also in these thoughts the fact that to acquire gold is to acquire wealth. When Saudis learned that they had vast quantities of oil, they started slowly to corner the market on gold.

Thought as a political archetype is typified by Japan. They are a young culture, an island nation changed dramatically by both China in the last 1000 years, and USA in the last 50 years. They love the order of social relationship. Wealth is primarily in the interconnections between people. Japan has no natural resources. They knew how to harvest the ocean. When they saw the technologies of the west sail into their harbors, and the famous and very liberal Emporer Meiji realized their power, he sent minions of men over to "learn" these new sciences. Using thought and all that flows from it, Japan has been able to go from rice patties to steel to microelectronics and they will probably be a powerful force in the exploration of space. There civil engineers have landed large contracts for bridges all over the world...they have built massive beehive cities and are talking about building a single building with the profile of Mt. Fuji (4000 feet tall).

Now back to oil. He is a lovely young muscular man, recently matured and full of potency. His desires can be channeled into beautiful forms, objects like chlothing, or fabrics...or they can be burned and harnesses to pull the yoke of a technological engine of thought. Both of these young women have sold their soul to him. Gold (Arab)craves him for the easy wealth he brings. Thought (Japan)craves him because she consumes him to light herself with millions of jewels and to pump her lifeblood. Gold owns oil, and Thought needs him.

But there is another young boy who has been discovered by Thought...he is quiet and gentle and patient...he is called Solar. He wakes up every morning and shines on all the world. He charges nothing and exacts no Gold. His fire is not as hot, and yet his energy has always shined on Thought. Thought has used his energy to grow her rice and bamboo...to eat and build houses with. The fish Thought loves to eat grow from gifts which Solar has let grow in the vast oceans. Thought now has learned how to harness the energy of Solar, to channel it into her body, and bend it to her needs. Thought has learned to change her body so that her needs for information and warmth can be more easily satisfied by solar.

Oil is strong today, but he is mortal, his fires can last another few lifetimes...perhaps a dozen lifetimes...solar is nearly immortal...

One day, or one season, Thought and Solar will make a final marriage. Thought will learn to love Solar more in time, how to hold his loving energy ever more tightly. Gold will be left counting her Oil and Oil will be left counting his Gold.

And this is how the story goes my dear fellows....perhaps just a bedtime story...perhaps a dream of our future...

Poor old Solomon
beesting
(01/08/2000; 23:26:29 MDT - Msg ID: 22559)
ji #22555 Money for nothin
Sir ji, that was such a clear post I'd like to nominate it for special recognition in the USAGOLD Hall of Fame. Remember to get it there we need 3 seconds from other Ladies or Knights.

Sir FOA, Thank you for your response to my previous question, give my best New Years wishes to ANOTHER.

Gandalf, love your adventure story.
Good posting by everyone tonight.


Here is a simple way to keep track of Grams of Gold in Dollars, if you travel abroad(metric country) write this on a small sheet of paper.

$280 per ounce Gold is a little over $9.00 per Gram.
$311.03 per ounce Gold is $10.00 per Gram.
$342.14 per ounce Gold is a little over $11.00 per Gram.
$373.24 per ounce Gold is a little over $12.00 per gram.
$404.34 per ounce Gold is a little over $13.00 per Gram.
$435.44 per ounce Gold is a little over $14.00 per Gram.
$466.55 per ounce Gold is a little over $15.00 per Gram.
$497.65 per ounce Gold is a little over $16.00 per Gram.
$622.06 per ounce Gold is a little over $20.00 per Gram.

When Gold goes over $20.00 per Gram, I'll post the calculations all the way up to $10,000 per ounce.
Those in the Know....Buy Gold....beesting.
FOA
(01/08/2000; 23:38:28 MDT - Msg ID: 22560)
Last post for a while
Hello ORO,

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

ORO (1/4/00; 8:09:17MDT - Msg ID:22235)
Talking Physically.
FOA (01/01/00; 14:42:33MDT - Msg ID:21993)
--->All the while, the bullion buyer slowly amasses a large "highly leveraged" position, just by channelling his would be trading loses into paid up physical and rare gold coins.

FOA has clarified the issue further, but I will post this anyway.

In the way of clarification for others, I think FOA is trying to tell us that the leverage is indeed there, just that when one buys bullion without leverage, the leverage you have is that put against you by the couner pairs to your "cash" position. Most notably, the counterparties in a typical gold transaction have claims traded among themselves and physical gold sold into the market. The trades involve a lender, a borrower, a bullion bank, and a physical buyer.
--The bank is both long and short gold denominated or gold indexed obligations. This is a complex multiple contract position. More on this later.
--The borrower is short "physical" which is due for delivery. This is a contract obligation. Gold miners and bank trading desks, as well as speculators hold these positions.
--The lender is long gold denominated obligations. This is a contract position. The contract is as good as the counterparty. If you own a gold account, or are long a derivative contract, this is what you have.
--The cash buyer holds gold bullion and is obligated to nobody. His holdings do not rely on anyone fulfilling an obligation.

The leverage built into the market, which we goldbugs will benefit from in the long run, is that of the many obligations denominated in gold. We need not buy leveraged instruments, because the leverage comes from the extreme volume of gold obligations issued within the "paper gold" trading arena described above. The same elements that make gold an attractive investment at this time and a long term store of value (over a lifetime), particularly during banking crises, make the various forms of leveraged gold unattractive. One should note the point of gold being protection from an environment of default on obligations. The same obligations that gold derivatives are.
-------------------------------------------------------

ORO,
Your presentation has described the leverage issue very well. This is the very essence of a gold run that manifests itself in the overflow "spilling out" from the paper arena into the much, much smaller physical arena. I doubt that very much paper gold will be forced into delivery before the
entire market stops contract trading. Still, some have said that official guarantees, insurance companies and the large financial reserves of players will be brought to play in making this market whole. In reality this is true. But further into reality, the more the resources become available to "cash out this arena" with gold delivery, the further away the physical gold price will run. The point
always was that no amount of contract supporting dollars could ever balance the gold owed. The more they try, the higher the price gets.
They could let it run, but at what price does it fully settle? $1000, 5000, 10000 ???? I have no doubts that it will be closed long before important people are killed (financially) in this. Further, before this comes to a head the total outstanding gold derivatives could double or triple in supply (building from the US side alone). All completely unbacked and issued in a effort to drive the paper price lower. We only know that in the maelstrom, just before the close, the paper leverage against each ounce could be unthinkable. This could impact your thinking in ORO #22236. We can discuss tomorrow.
I have but to add that there is another leverage issue that will take over once this one is resolved in a physical market trading at a much higher price. This later item is the leverage of a "true world-wide gold demand" in the format of gold being a settlement asset. It's effects on a limited supply, both mine and open market, would be incredible. Again, few of us understand how money gold would interact with the modern wealth of today. In no way has the world gold stocks increased in any form of proportion to the productive capacity we now know. Again, this view is taken across the valley where the dollar was butchered.

Further you write:

-------------
The most important aspect of gold as financial disaster insurance is that it is immune from default. The second point, particularly important for the gold mining investor, is that in financial crissis, desperate governments are prone to disregard the property rights of large holders of industrial assets. The most captive form of industrial asset are the mine and the oil well. The most attractive asset for taxation and expropriation in time of crissis is a gold mine. Very large hoards of precious metals may prove attractive to a government seeking survival. The small hoards remaining in the West are not attractive targets.
-------------------------------

Yes, sir. This seems as impossible as the question of the BIS going after gold rebacking the dollar. But, this is the way the world works and the dollar timeline is running out of it's future. The trick now is in getting some of your assets out of harms way, well before the fact. The problem is in the dreams of every gold mine owner; the spiking of gold! The next gold run will be caused from pressures far different in dynamics from price inflation. Indeed, it may rum so fast. so quick that every country closes it's borders to gold flow. Usually this is accompanied with foreign exchange controls. (Ever notice how gold is always included in these currency flows controls? Not silver, platinum, copper or oil. Just gold.). The next event would be an emergency 60% (or something to this effect) exchange rate tax on bullion that comes out of ore sellers pockets. Then, it's later made permanent in some form of "windfall profits tax" against the companies. Oh yes, the mines stay in
operation and the ore is milled, it's just that the costs (price inflation) and taxes do a number on the stockholders equety. This may not happen in every country. But that's another story.

Your words:
----------------------
The use of gold futures and options in the battle for financial self preservation during a financial crissis is equivalent to a knight charging at his enemy with a shaking kielbasa. Gold mining shares are similar to waving one's title to the land in face of the Mongol horde's charge. Wouldn't it be rather smart to hold a sword on top of the ramparts of a castle? Taking our little Midieval setting further, one does not complain of the building of the castle, though long after its construction came no attack. The expense of time and effort, of missed opportunities
and reduced performance will come to be appreciated when disaster strikes.

Ha, Ha! ORO, I sent your "waving one's title to the land in face of the Mongol horde's charge" to someone and they loved it! What better way to put it. Just great.

More much later, FOA
Netking
(01/08/2000; 23:48:13 MDT - Msg ID: 22561)
@De Ronin
Mr De Ronin (22512) - Good analysis, links & comment regarding oil. In terms of the link
between the two, there is no reason or in fact evidence why this should not still remain the
case (based on the historical models). During a collapse in the price of 'black gold' we
would see a lot of downward pressure on other precious metals (particularly white's) and
the POG would at best drift, particularly until we find a bottom in the equity market. As
an aside did you read about the huge discovery made by the Saudi's in the last week or
so...changes the reserve equation a little more. Generally a good time to go short.





Netking
(01/08/2000; 23:59:43 MDT - Msg ID: 22562)
U.S. Treasury Secretary Lawrence Summers "No plans to sell US Gold"
http://www.egroups.com/group/gata/333.htmlInteresting letter from Summers in this link...
(We have no, I repeat NO plans to sell your Gold, OK!?) (Don't mention Fort Knox)
JAS
(01/09/2000; 00:00:53 MDT - Msg ID: 22563)
Greetings to all (new poster)
Just like to say a word of thanks to many Legends. Another, for setting my feet to a path of reality to aquire the physical. My six year old son purchased his first
tenth oz. Most of the kids in his class have never seen a gold coin before. Indirectly Another; you can feel proud that you have made a difference to a small one. Someday you may see him on the big screen. Foa, you do have a fruit of kindness about you, perfect gentleman I'd say. Hard act to follow nowadays. A perfect man is able to bridle his tounge,and his whole body as well. James 3:2 Thanks for the ongoing knowledge you are imparting on the forum. Oro,beesting, I've read your postings as well over the course of 99, bravo!
It is interesting standing away and observing behaviour and seeing you all respond to the gold swings. I felt your pain as well. When BOE first announced, that was upsetting to say the least. I had a dream at that time, of a market crash due to a warlike event in the U>S> and sent a note to gata to watch for Feb.18 2000. In my dream ,I did get a date, but no year. I hear of terrorist arrests over the new years, so I wonder whats next? These money Kings think they are gods, and establish wealth in what they say is wealth. God in heaven already decreed that the silver and Gold are his along with the cattle on a thousand hills. He (LORD GOD) is the one that will catch (cabals)the crafty ones in suprise. I'd say this is about to explode. This fiat system is so fragile now. One mess up that they (MONEY CHANGERS) cannot put a spin on, and its all she wrote. They proved communism does not work, next the Us, US Capatilism or whats left of the Ponzi. Stir up a hornets nest and you will have need of real Tyrany. To all folks here and Mr.Kosares thanks again for the Round Table its like Starbucks in the morning refreshing!
We have won already Got some!
tedw
(01/09/2000; 00:05:18 MDT - Msg ID: 22564)
Bank of England Sales
http://www.usagold.com
Whatt is the B of E stated reason for these gold auctions?
Considering that many knowledgeable analys
ts say the POG should be $340 or higher, considering the average POG the last 18 years was $340, considering the recent price increase in October, how can the Bank justify
its sales? Why arent the people of England up in arms over these sales of Gold at prices everyone knows to be ridiiculously low?

Please explain.
Journeyman
(01/09/2000; 05:12:38 MDT - Msg ID: 22565)
BOE sales: Why aren't they up in arms?
@tedw

If you read back thru the archives, (only an Evelyn Woods champ would try) you'll find that many English are "up in arms" over the BOE sales (to the extent you can be "up in arms" when your arms have been stolen by the local "grabit.")

The glaring question these days is, "What do a people do when the elites who run the government which claims them gets way out of line?" I'm looking for a non-violent alternative myself. Anyone have any suggestions?

Regards,
Journeyman
Journeyman
(01/09/2000; 05:19:56 MDT - Msg ID: 22566)
BOE sales: addendum
@tedw
Ah, the consensus at this forum as to the REASON for the BOE gold sales seems to be that they are to keep the price of gold low so as to temporarily forestall the collapse of the world fiat money system, in particular to forestall the collapse of the dollar.

Regards,
Journeyman
714
(01/09/2000; 05:27:45 MDT - Msg ID: 22567)
Journeyman
"I'm looking for a non-violent alternative myself. Anyone have any suggestions?"

Buy more bullion...
RossL
(01/09/2000; 07:19:13 MDT - Msg ID: 22568)
Journeyman
http://www.founding.com/declare/index.cfm
Read this document if you need some inspiration.
SteveH
(01/09/2000; 07:49:31 MDT - Msg ID: 22569)
Repost with comments
www.kitco.comComments:

It isn't a coincidence that physical gold is not available to pay-off but a few gold contracts, that the US Stock Market is at all-time mania highs, and that the Euro stands ready to replace the US dollar as the world reserve currency.

These are all symptoms of the same disease: our past (US) leaders used a short-term solution to a long-term problem, that of defaulting on debt and staving off the inevitable greater correction under someone else's watch. After all, year 2000 was years away then (sound familiar?). I can see that our process of elections and terms of office often make tough decision be reactive and not proactive. Why stir the kettle and stand loosing the chance at another term whereby if I put the problem off it will 'their' problem to deal with and that will help my party. To heck with dealing with a problem that if not dealt with now, will most certainly come back later to roost at a much higher cost.

So now we find ourselves in a speculative bubble protected on the downside with little impunity to those who view the short-term gain their domain. We have a nearly defaulted paper gold market with virtually the only gold able to meet contract committments in the hands of Central Banks, the most of whom said it isn't leaving their vaults. Then we have the oil situation that by all accounts shows we have but 34 more years of oil remaining at current exploration and consumption rates. What is more, is those with the most oil don't want the dollar anymore because of the fiscal irresponsibility of the US over the last 29 years.

Then it seems that the investigative bodies whose job it is to monitor the markets to protect the investor has turned an eye or two away from the problem, whether by decree or by sheer number of problems to investigate.

Then we have the lawyers who feel their duty in life is to use the civil courts to line their pockets with frivolous law suits against corporations under the guise of public safety.

It is indeed a sad state of affairs whose outcome is politically extremely unpopular, so much so that the only place you will hear of such things is on the Internet but not on the keepers and guardians of liberty, the popular press. Is it because the message is so disheartening that they are in complete denial? Or, is it because they are so caught up in the euphoria of apparent wealth that the "if it ain't broke, don't fix it" mentality says hands off. Whatever the reason, the normal checks and balances seem to be broke or tilted.

Even though more people write their Congress more than ever about these problems, the Congress hasn't come to grips on how to read and filter the barrage of warnings and concerns from the very people they serve. Bill Murphy and I both sent a note to every Senator and Congress person via email that we could find and address for. Ninety-eight percent of the messages came back saying that due to the high number of emails they would only be able to respond if you included a regular mail address and only if you lived in their district and only if they managed to read the message (my words). I got back two messages in regular email that had nothing to do with the issues I wrote about. In other words, the Congress isn't listening to Internet email. So how could they know of these problems if they can't hear?

The Press is being manipulated because they have developed 'expert' sources of information who know they are the sources of information and only provide the information that suits their purposes. Any corroborating information seems by and large ignored by mainstream press. That this is most evident in the financial reporting today, doesn't find its boundries only their. No, recently an organization noted that on the issue of gun control, 10:1 articles in the major media centers were against or anti-gun in nature. It would appear that the uncomfortableness of the Second Amendment actually costing lives makes it an unpopular Ammendment to support. The media is simply owned by too view and serves the same few's best interest and this just isn't a healthy situation. It seems, gone are the days of Woodward and Bernstein. Now only those who Drudge up the news get to break up the scandals of our days.

That all of these events occur simultaneously isn't a coincidence. No, they are all symptoms of that greater problem of checks and balances, having been also manipulated for the sake of short-term political expediency. I am of the opinion that this next election for President needs to fought around the financial future of our country and the person most qualified to deal with a defaulting dollar, a crashing stock market, and saving the Second Amendment, the right of rights, need be elected into office. That the present candidates don't have an inkling of the above problems makes me greatly concerned. Since Nixon and Roosevelt (almost named Person of the Century) got us in this financial maelstrom and others failed to extricate us, I don't see the existing candidates any better at reacting to the mess we are winding up in. For their decisions will be largely partisen and largely made on a lack of in-depth understanding of the real challenges facing them.

I said before that this gold market may be elmered together until after the elections because if the Iceberg is melted prior to elections then the game will change dramatically as will the election results. I say vote for a candidate who has sound patriotic views with a mind to a great future for America who can deal with the above issues in a long and short term manner, no matter the political cost and someone who is a staunch supporter of the Second Amendment.

As Bill Gates spoke of in one of his books, let us hope that the spiral of our great country is not in a downward trend and one that can be reversed if it is. Here is praying for wise leaders and checks and balances that are turned back on, including a Press that does its job and does it well.
SteveH
(01/09/2000; 07:51:28 MDT - Msg ID: 22570)
Repost with comments
www.kitco.comHere is the repost (oops, btw, my point of this repost is that the author is right on but he too lacks the intricate knowledge of the gold dilema which makes the problem he talks of slightly more sever, imo):

Date: Sat Jan 08 2000 09:41
powmain (SOME ONE besides Kitco lurkers) ID#42251:
Copyright � 1999 powmain/Kitco Inc. All rights reserved
think that GREENSPAN and his merry leprechauns are supporting the
STK MKT
The Fed Should Act Now
It has let market speculation get out of hand

By David Rocker


The health and vitality of the U.S. economy have become dependent on a robust stock market. In an important speech at Jackson Hole, Wyoming, several months ago, Alan Greenspan indicated that the Fed is now sensitive to the potential for the stock market itself to cause an inflationary overheating of the economy. Based on the Fed's own model -- even after last week's selloff -- the market has never been as expensive as it is now. Not in 1929, not in 1987, never.

Much of the market's inexorable rise stems from the democratization of investing. CNBC, Bloomberg and CNN, among others, pour out a steady stream of stock-market information to homes, airports, bars and even the sides of buildings. The American people have gotten the message. Never before have so many invested so heavily, confident that the market cannot go down for any sustained period.


Investors have become increasingly complacent because there have been so few meaningful declines over the past two decades and markets have snapped back quickly from those setbacks. The assumption that past trends will persist, the essential analytical basis for the Dow 36,000 theorists, is a dangerous one. Long-Term Capital Management regularly earned nearly 40% a year. On that basis, one might have extrapolated a similar growth rate in 1998 with little volatility. They lost 90% of their capital in a month.

In the current feverish environment, it may be helpful to reflect on some traditional verities.

First, price matters in making an investment decision. While the Mercedes is a good car, it is probably not a sensible purchase at $500,000. While earnings of U.S. stocks have grown over the past decade, that growth rate has been unexceptional and P/Es have never been this high, even during periods of lower inflation and faster earnings growth.

Second, reported earnings are of sufficiently low quality that the Securities and Exchange Commission has become more vocal on this issue. Chief financial officers seem to have had at least as much to do with reported profit gains in recent years as chief operating officers. Corporations have been telling their shareholders a story far more optimistic than the one they're telling the tax collector. Federal corporate tax receipts were actually lower in 1999 than in 1998 and the Congressional Budget Office expects another decline this year. Investors have been piling into technology stocks to the exclusion of others because of their supposedly brighter earnings prospects, yet Dell, Intel, IBM, Hewlett-Packard, Lexmark and Xerox, among others, have recently had disappointing quarters.

Third, interest rates matter and they have been rising significantly around the world. Stocks have soared even though yields on long U.S. Treasury bonds have risen nearly 30% over the past year. Internet and other high-P/E stocks, which logically should have been the most adversely affected by rising rates because their multiples are high and their payouts more distant, have risen the fastest in this twilight zone of a stock market.

Fourth, as Long-Term Capital Management showed, leverage increases volatility. Investors have dramatically increased their leverage to maximize returns. Margin loans have risen vertically in the past several years to record levels. While it is not easily measured, it is also clear that large sums have been borrowed against homes and credit cards for stock purchases. Similarly, percentage cash reserves at mutual funds have been drawn down almost to all-time lows. Everyone owns the same small group of large-capitalization technology stocks. Investors are behaving like sheep on margin. The American public has committed the greatest percentage of its assets to the most expensive stock market in history at a time when the Federal Reserve is overtly tightening, our external deficit is swelling and cash reserves are low. This insensitivity to risk is dangerous.

The Federal Reserve and other government agencies have been significantly responsible for this euphoria because of the asymmetry of their policies. The Fed argues that markets should be free of government intervention, but it seems that such views are espoused only so long as markets are rising. When the market crashed in 1987, the Fed intervened. When banks and savings and loans were bankrolling wildly risky deals, the government looked on and did nothing. When this recklessness produced vast losses, the government stepped in to bail out the speculators -- at enormous public expense. When LTCM overleveraged itself, regulators sat idly by. When its collapse in 1998 led to a market decline, the Fed stepped in again to coordinate the bailout, cut interest rates and pump in money. Once again, the government stopped natural corrective forces from punishing speculators, as always cloaking its actions in the mantle of the national interest. The message to the investing public has been clear: "The government will protect you from the downside but will not restrain your upside." Why not speculate?

As the "buy the dip" mentality is now so fully ingrained as to prevent all but a sudden steep decline, the risk has risen that this market will end violently, threatening our prosperity. The economy would clearly suffer after a sharp selloff because so many consumers are now so heavily invested. Real-estate values would fall. With U.S. equities out of favor, the demand for dollars would shrink, forcing the U.S. to pay higher interest rates to attract foreign capital to cover our rising trade deficit. The combination of a weaker economy and rising interest rates would further depress the stock market. In essence, the whole positive cycle we have enjoyed in the past decade would be thrown into reverse. Of course, the Federal Reserve would then be expected to again intervene.

Fed officials have periodically expressed concern about market valuations and speculation, but then the governors reverse themselves with "new paradigm" speeches and commitments not to raise margin requirements. Each reversal has brought forth a new burst of unbridled investor enthusiasm. The 100 largest Nasdaq stocks rose 102% last year and are selling at over 130 times earnings. The IPO market has been on steroids. In a testament to these times, one magazine implicitly criticized Warren Buffett, who has made nothing but money, while another lionized Jeff Bezos of Amazon.com, which has lost ever-increasing amounts of money.

If the Fed is serious, it should send an unambiguous message to investors that excessive speculation is unwelcome. It should raise margin requirements and interest rates immediately with a clear warning that more increases will come in the future if this speculation persists. It is better to accept moderate pain now and reintroduce a sense of risk to the marketplace than to wait until a massive blowoff and subsequent collapse occur that could severely damage this nation for years.



DAVID ROCKER is general partner of Rocker Partners
Journeyman
(01/09/2000; 08:55:45 MDT - Msg ID: 22571)
Well, since it came up again @FOA, Canamami, all . . . .
http://www2.hawaii.edu/~rummel/20TH.HTMThere was a book by Reinhold Niebuhr entitled "Moral Man,
Immoral Society," which argued that while individual men
were required to be moral, society, in the incarnation of
the state, was not and could do those necessary dirty jobs
denied to individual men. I didn't find his arguments
convincing -- nor the results (which are easily observable
today as governments are and regularly have been run on just
this basis) desirable. You can see some of the more shocking
and high-profile of these results in the research of R. J.
Rummel:

New York, NY - An early July column in the Wall Street
Journal by R.J. Rummel confirmed what most libertarians
already know: that government is the biggest scourge of
mankind. According to Rummel's research, governments
of all kinds ... have killed 119 million people in the
twentieth century. The second runner up, war (also
sponsored by governments, usually) has killed "only"
35.7 million. -AMERICAN LIBERTARIAN Vol. 1 no. 2, Aug.
1986, pg. 8 [1]

This record has been "improved" since Rummel's 1986
research ---- in Afghanistan, Nicaragua, Bosnia, Iraq
(200,000+), Guatemala, Chechnya (100,000+), Somalia,
Rowanda, Grenada, East Timor, Panama, Kosovo 1999,
Yugoslavia 1999 (7000+), Waco (60+), etc. You can see
Rummel's research for yourself at the link above. Amnesty
International claims the government kill figure is now
closer to 200 million (200,000,000) men, women and children.

When placed in this context, Jefferson's remark that
"banking institutions are more dangerous than standing
armies" becomes an indication as to the relative degree of
damage done to the human race by "modern" economics if only
because armies are often used in behest of
industrial/banking interests. Incidentally, in this context
it seems clear to me that Keynes beats Hitler, Mao, and
Stalin combined, hands down.

I don't agree that a collection of individual men and women,
simply because they call themselves "government," (even
"United States Government") have any extra rights for doing
so. Thus I don't agree such groups can MORALLY claim such
rights. Stealing is stealing whether done by one robber, the
James Gang, or the US grabit.

I do realize these organizations do such murder and robbery
as a matter of course. And sure, governments like to claim
such things as "soverign immunity" etc. -- and the James
Gang would like to as well. For those blinded by the
dichotomy promulgated by Nehbur and ilk, and bamboozled by
such high-faluten legaleese, it might even work. But beneath
it all is the assumption that "might makes right," a very
dangerous operational precedent indeed for those of us who
wish to "secure the blessings of liberty to ourselves and
our posterity."

As for the claims that European countries owe the US as a
result of the Marshall Plan and WWI etc., they should indeed
be pursued as per the details of each particular agreement.
The US should pay-up the gold it illegally withheld
beginning with the closure of the gold window in 1971. It
should first redeem any "bearer on demand" gold certificates
presented at "the US Treasury or any Federal Reserve Bank"
for the gold they promise. The accounts should be cleared
and the books balanced -- or official bankruptcy (as opposed
to the current unofficial bankruptcy) should be filed.

Canamami: Indeed I wasn't referring to you personally as
benefiting by the US Government's 1971 hiest. What I had in
mind was the general tendancy of those of us who believe we
are benefitting in some way from the "Immoral Society"
embodied in some particular grabit, to find it extremely
easy to turn a blind eye to those inevitably damaged to
provide our perceived gain. This is well demonstrated by the
following interview:

Clyde Barrows' [of Bonnie & Clyde] sister says she
loved her bank robber brother Clyde because, "He was
just taking care of his family." Clyde bought her her
first bicycle and her first bedroom set. "We never
questioned where the money came from," she says.
-Interview after auction of Clyde's bullet riddled
death shirt. -CNN HLN, 04-15-97, 4:26pm EST

Regards,
Journeyman
Bonedaddy
(01/09/2000; 10:06:21 MDT - Msg ID: 22572)
Reply to Journeyman
The decision to seek non-violent opposition to grievances is a wise one. However, one should never fall prey to the idea that living peacefully is some sort of insurance policy against aggression. A government is not a thing to be feared more or less than any other force of nature. In dealing with governments, cetain types of behavior will get you killed. But, the same can be said of dealing with fire, flood, or cold. Never confront government with hostile intent. They will become annoyed and "Waco" your house down. It is far wiser to live simply, pay taxes, and wait for the storm to blow over. In recent times government is failing because the people have become self serving. Later, when all is blown asunder, there will come a time to make a stand for the cause of right. The current system will fail of its own weight and corruption.
But, when confronted on a personal level, violence requires a much different response. A criminal on your door step will demand immediate violent action on your part.


Gold ownership is the best defence against monitary violence.

Goventment violence is to be avoided at all costs.

The threat of personal violence is best met with a pre-emptive first strike that completely overwhelms and surprises your attacker.

May God bless you and keep up the wonderful posts. Yours in independence, Bd.
USAGOLD
(01/09/2000; 10:21:33 MDT - Msg ID: 22573)
Once in Golconda......The Babson Break and Mystery Declines
All mania have a certain sense of mindlessness, hence the title of the seminal work on manias -- "Extraordinay Delusions or the Madness of Crowds" written by Charles McKay in the 17th century. This is the book that Bernard Baruch claimed lay at the foundation of his legendary investment market thinking.

What is extraordinary in my mind about the current delusion is the re-occurrence of the nearly exact cultural patterns and individual mind-sets that occurred in the late Roaring Twenties. These alone should serve as warning. History repeats not so much because of any pre-determined human appointment with destiny, but because our natures lead to us to the same place in history time and time again. As Brooks points out in the excerpt below, the New York Times in 1929 was drawing parallels then to human behavior just prior to the Panic of 1907 -- the one arbited by J.P. Morgan and thereafter eventually laid the groundwork for the political acceptability of a central bank in 1913.

What is even more extraordinary in our own time is the re-visitation of the very same concepts that fueled the thinking of bulls in 1929 -- such concepts as a New Era ( distinctly different from all other eras -- a time where history is no longer a teacher but in fact has been defeated by New Man), and "investment trusts" wherein the public, it is believed, will automatically fuel an "endless boom" through contributions to the trust. Many believed then as now that old market measuring sticks like price earnings ratios, book value, price dividend and even profit were now unimportant. I was particularly interested to learn that then, as now, the Fed was dismissed by Wall Street as an essentially ineffective "annoyance" worrying granny-like about irrational market behavior needlessly. The only market dictum that had any relevance then, as now, was the "trend" and the sure knowledge that the Greater Fool Theory applied only to those less than fully committed to the market financially.

Brooks' reference to the "mystery decline" following the Babson Break is of more than passing interest to those of us who watched the stock market decline of the late 1960s and early 1970s. A few years back I had the pleasure of meeting with a veteran of those stock market wars from Kansas City. Unfortunately, he recently passed away. I asked him what precipitated that decline. He said he couldn't put his finger on any single event, announcement or forecast. "We came to work one day," he said, " and the market was down. It never came back. We started that day with 80 brokers in the office. By the end of it, in the late 1970s, there were only three of us still hanging on."

By the way, if I recall correctly, Adrian van Eck (Money Forecast Letter) who we referenced at the beginning of this series as raising the Red Flag on the current stock market (for the first time since 1987) claims fellow New England yankee, Robert Babson, in his intellectual lineage -- another interesting twist of historical fate.

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

From Once in Golconda by John Brooks:

But if a sort of slow, partial crash, invisible except to its victims, had been occurring over a period of at least three years, Tuesday, September 3, 1929 -- the day the market averages reached the all-time highs that were to endure for a quarter of a century -- was not a day when the public at large gave its attention to such a matter. It was the first day after the Labor Day recess, and thus by traditional stock market reckoning the start off the active season, almost the start of a new year. The fact that it was a record-setting scorcher in New York, with a maximum temperature of ninety-four degrees and brutal humidity, did not deter the mobs from thronging back to the downtown customers' rooms and trading in such volume as to set a September record. Thus unaware of its achievement, in the atmosphere of a steam bath, the market of the twenties achieved its Everest. Next day there was a general, if unsensational, decline. The daily column of market comment int he Times -- unsigned but presided over and often written in those days by the paper's justly celebrated financial editor, the learned Alexander Dana Noyes -- contained the sober remark, "The pace of advancing prices during the past week has been so rapid, and so regardless of the money-market position, as to inspire a growing sense of caution even among convinced speculators for the rise." The following day, September 5, there occurred the curious phenomenon ever-after called the Babson Break. A not especially well-known, and hitherto even less influential, financial adviser operating far from Wall Street -- a frail goateed, pixyish-looking man in Wellesley, Massachusetts, named Robert Babson -- said to an audience at a routine New England financial luncheon, "I repeat what I said at this time last year and the year before, that sooner or later a crash is coming." As Babson implied, his earlier warnings had been roundly ignored. He was, in fact, widely thought of as something of a nut. Evidently it was a slow day for financial news, because at 2pm Babson's words were quoted on the Dow Jones financial news ticker and thus read in brokerage houses across the country. Without the slightest hesitation the market went into a nosedive that carried Steel down 9 points, Westinghouse down 7, and Telephone down 6 in a frantic last hour of trading during which two million shares were traded. The tiny cause and the huge effect, by an logical standard were simply far out of proportion.

It was a prophetic episode -- and so recognized at once. After the Babson Break, the word "crash," entirely taboo a month earlier, suddenly became common currency in Wall Street. In its more conservative circles, the notion of impending crash came within days to be fully as much the received wisdom as the contrary notion of endlessly continuing boom. Babson was, of course, promptly and violently refuted by such New Era champions as Professor Irving Fisher of Yale; but five days later the Noyes column in the Times was still brooding on "the idea of utterly disastrous and paralyzing crash" in a most disconcerting way. The Times found certain parallels between the current situation and that of 1907, when unbridled panic had come totally unexpectedly. The best reassurance the paper could offer was that now there were the new forces of the Federal Reserve and the investment trusts, which would presumably serve to stabilize the market if necessary. Meanwhile, the market crept erratically downward until September 24, when there was another big break, this one unassignable to any cause at all and therefore dismissed as a "mystery decline."

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

Next time : October, 1929
USAGOLD
(01/09/2000; 10:25:29 MDT - Msg ID: 22574)
Once in Golconda...
Let me pass along a reminder:

"Once in Golconda" was not written in 1999, but in 1969.
canamami
(01/09/2000; 10:25:48 MDT - Msg ID: 22575)
Reply to Journeyman
Journeyman,

In reality, my personal position does substantially accord with yours, with respect to governments being bound by moral constraints.

My concern was with FOA's focusing on closing the gold window in 1971, to the exclusion of everything else in history. The bottom line: If that is opened up, the US can counter by opening up other events - for example, Europe's defaulting on its gold-backed obligations to the US after WWI, etc. Thus, I submit it won't be opened up. In domestic law, etc., limitation periods exist for various reasons. I submit they exist between nations because when there is no closure, everything that has ever happened is on the table, and then one has intercenine, centuries-old lunacies like the Middle East and the Balkans. Moreover, the US' closing the gold window is more like a commercial bankruptcy than the Holocaust. Moreover, even in Holocaust-type situations, the majority of countries simply don't allow such ancient disputes to be reopened. Only countries like Germany and Switzerland do so, and even then only in their own best interests, i.e., to keep peace with the Jewish community, which has a great deal of influence in the US, and also perhaps from a lingering sense of guilt, warranted or unwarranted. Most other countries' currencies were once redeemable in gold, and they closed their gold windows, so I fail to see the US' great relative (I emphasize relative) guilt in doing the same. I'm not going to belabour this point anymore - enough is now on the table for readers to ascertain whether they accept my position or FOA's.

HUM
(01/09/2000; 10:38:40 MDT - Msg ID: 22576)
FOA, ORO
http://www.usagold.comGreetings to everyone on this forum from a first-time poster. While I am grateful to everyone here for the informations and insights provided, I am particularly focused on FOA and ORO. Both are truly incredible. No false modesty should prevail there.

What prompted me to leave the lurker status are the following questions.

FOA
Somehow I don`t grasp, how you can be so positive for the EURO in comparison to the dollar. Myself being European I could see only 2 advantages for the EURO.
1. Because so many countries are behind it, by necessity it will be a big currency.
2. Because it is new it is at the beginning of ist lifeline, meaning, that it probably still has more capacity for debts.

But otherwise it is still just a fiat currency with some vague link to a relatively small amount of gold. Most of the countries in it`s formation continuously seek their small national advantages instad of seeing the greater common good. Thus there are lots of internal quarrels between these countries. There would be lots more to say, but I think I have made my point. Thus in my opinion there is even still the possibility of it failing altogether after a few years. Also, if the dollar really fails, which may well happen, I don`t see how the EURO could survive.
But assuming things work out as you predict, would you still recommend physical gold for me as an inhabitant of the EURO-zone as strongly as for those of the dollar-zone?

2. ORO
In your 22510 you take the annual deficit to be around 1000 tons. I have read this figure repeatedly on this forum, but wonder how it is arrived at. Now i am aware, that the annual production is roughly 2500 tons, whereas the annual demand is something like 3500 tons. What seems not considered is the annual supply of 600 tons gold scrap (reclaimed or recycled gold), thus leaving a gap of only 400 tons. Could you please clarify your numbers?


Thanks to both of you.
USAGOLD
(01/09/2000; 10:53:36 MDT - Msg ID: 22577)
HUM...
I happen to be here to answer your question about the gold deficit in behalf of ORO. I hope he doesn't mind...

Gold Fields Mineral Services estimates 1999 mine production at 3000 tons (2450 tons Mine Produciton + 550 tons Scrap reclamation)

GFMS estimates Demand at 4050 tons (including jewelry -- 3175 tons, electronics -- 450 and investment -- 425).

Estimated Gap = 1050 tons

In the past that gap has been filled by Mine Company Forward Sales, Gold Loans, Option Hedging (?) and Net Official Sector Sales.

It would seem that the ability to fill that gap has been injured by the Washington Agreement which limited sales to 300 tons annually for the next five years and capped leasing at the current levels (1998 leasing levels were 88 tons. Haven't seen a figure yet for 1999 leasing operations.)
USAGOLD
(01/09/2000; 10:59:28 MDT - Msg ID: 22578)
Correction:
Gold Fields Mineral Services estimates 1999 mine production at 3000 tons (2450 tons Mine Produciton + 550 tons Scrap
reclamation)

should read

"Gold Fields Mineral Services estimates 1999 "Total" production at 3000 tons (2450 tons Mine Produciton + 550 tons Scrap reclamation)"
FOA
(01/09/2000; 11:22:41 MDT - Msg ID: 22579)
Comment
Saturday, January 08, 2000
BOSTON (Reuters) - The United States has not sold any of its gold reserves and has no plans to do so, U.S. Treasury Secretary Lawrence Summers said on Saturday. "I categorically deny assertions that U.S. gold reserves were being sold off or that there is any plan to sell them off," Summers told reporters on the sidelines of an economics conference.
His denial came amid talk in the gold markets that some of the weakness in the gold price over recent years may have been caused by direct U.S. sales of gold. ---------------

ALL:
I posted once before that the US was not selling it's gold. Again, I completely agree with Mr. Summers statement and submit that it is a spoken truth in full context to the question.
Many reach for this easy reason (official gold sales) for our current low gold price. The reason this comes about is that without using this line of reasoning, one has to accept that: 1. the current gold price is mostly a paper contract fabrication 2. it's easily controlled as long as the "current price setting system" is functioning 3. this gold price everyone uses, could fall through the floor if the contract system comes into question 4. physical gold (dealers) prices could skyrocket in the future as no one accepts the credibility of any contract for derivative gold. Effectively destroying the paper equity of gold banking.
Most of the people in the gold industry do not want to hear this. For them, a break-up of the London gold market would destroy their financial partners and spike the physical gold price into uncontrolled levels. Most of the industry designed their business plan to embrace a "common
viewpoint" on gold. They expect, want and look for a return of a gold price that is in the range of $300 to $600. Something the paper marketplace can live with and their financing structure can survive "profitably". Above $600 and even ABX must post margin!
For one to embrace the knowledge that the "Washington Agreement" is real and that the other major nations are not selling into the market; we also must accept how the reverse leverage on physical gold will someday wipe out the entire dollar / gold marketplace. Clearly, this would imply the obvious, physical gold has more leverage than any of it's paper derivatives (gold stocks included). Truly, if you are selling a paper product, your income (and most likely your private investment position) depends on your finding another answer to the low gold price problem!
The sales of official CB gold must be the answer for many. We have for several years (longer than that privately) been discussing this gold market resolution and it's meaning to private physical gold advocates. Our position is that this is a long term evolution of the dollar reserve system. A system that was extended in life for a politically "fixed"
term by changing the very nature of the gold market. Further; Only recently (the last few years) has the timeline of the dollar begun it's final turndown from international "settlement use". Today, the signs are becoming increasingly clear that the Euro (for better or worse) is indeed breaking the grip of dollar financing and use. We expect this to continue and intensify it's effects on the very existence
of a dollar gold arena. As such, we now live in a period we call "the time for super gold". Perhaps our year 2000 marke the beginning od that change.
Prior to this, the accumulation of physical gold could only be viewed as a "long term , extremely secure saving account". One that would contain all the past investment gains an improving economy could produce. And represent those value gains in a future "money settlement roll" that only a free gold trading market would produce. Many have forgone the current financial craze with the complete security that the historical record of gold will not be broken. Truly, gold will later represent a buying power that makes current paper gains seem small!
We do not present this as an investment in the usual sense. Rather one should buy gold as the real wealth it has always been. No different that your car, house, etc. are real money wealth also. Only today, gold wealth does not reflect it's true dollar price value because the paper marketplace does not reflect the trading of real physical gold. Indeed, a clear advantage for persons that can step out from their "Western world" reasoning.

Onward:

Hello ORO,
Yesterday in my (FOA (01/08/00; 23:38:28MDT - Msg ID:22560), I mentioned how ""before this comes to a head the total outstanding gold derivatives could double or triple in supply"".
This is an extremely possible event that is in no way different from our current mania in US stocks. The final act out of a money supply inflation is always reflected in the trading of the "popular wealth" of that era. Weather it is "real things wealth" as seen in the past (price inflation) or our current "Western" fascination with "contract paper wealth", fiat money leverage always explodes right at the end. With the paper gold markets holding a base trading level around 1,000 tonnes a day, any rush of events could easily gun the creation of gold contracts into a much higher
level. And therefore increase the leverage for physical gold "after the fact".

You write:
---------------------
ORO (1/4/00; 8:16:45MDT - Msg ID:22236)
A (bullion) BANK NOTE
A note about the implication of the banker's situation: through the banker's borrowing and lending, all modern bullion owned outright has an equivalent part, nearly three times larger, of paper gold. The bankers have formed a 60,000-80,000 ton gold banking system using 20,000 tons of gold, most of which is now held by "cash" holders.

Common estimates of private gold bullion holdings available to the financial markets, most notably the one produced for the Fed in 1997 (estimated for 1995), put the gold at 20,000 tons. I have reason to believe that there are 10,000 tons more, bringing the total to some 30,000. I will not go
into the iffy details of the estimate, but note that one of the major components is "Yamashita's treasure", which has been in the gold markets since 1984, some of it even before that date. Whenever stories come up about the reappearance of that hoard to act as an overhang on the markets, you can rest assured that it has already been introduced to them in its entirety. These 10,000 tons are in "semi-official" hands of Royals of the Oil countries, the Vatican. Much of the
rest of the remainder (once the gold jewelry deficit is accounted for) sits in Rothchild vaults, and a few other large holders, "giants" much as described by FOA and ANOTHER.
------------------------------------------------

ORO,
I have no doubt that these figures are in line with reality. In fact, they are losing their relevance as the insanity continues. Most people only look at the "writers" (short) obligation to make good on the deal. Yet, few consider the implication that a market "shut down" would create. Literally, both sides of the deal would be looking for "GOLD". The short, of course! But, in addition, he may be drawn to buy his own position in physical and walk from further adding any "deal equity". In addition, the "long" would observe the obvious inability of the market to deliver and undertake a physical purchase outside his deal.
The point is that during a melt down, the entire human infrastructure of a paper market would be looking to buy. In other words, the gross total of world open interest times two (X2) running for gold. It does rather overload the little CB holdings, doesn't it?

You write:
--------------------
The volumes of gold paper traded by the LBMA become much clearer when taken in context of the gold banking system rather than in context of annual gold production. The 1000 tons traded daily are well proportioned to the normal trading patterns in currencies. Eurodollar interest
derivatives constitute about 5.5 $T traded on New York exchanges, and another 55 $t or so are traded OTC with 62% netting (figures are from memory so don't shoot me if I'm off a little) bringing it to 19 $t. This is equivalent to the estimated 21 $t in Eurodollar debt outstanding (my estimate). This comes to 7%to 7.5% of outstanding positions traded daily. Applying this proportion to the gold market's 1000 tons, one comes to 14,000 tons of net debt - the same kind of debt as Eurodollar debt. This is debt generated by the sale of physical gold in the four part transactions.
------------------------------

Sir ORO,
Prior to LBMA giving open figures, the trading was quite high. Even if one had no inside view of their arena, the fact that our 1,000 tonne figure didn't just arrive "overnight" should point to a long term trading build-up. We can be sure that from at least 1990 onward, the paper gold system was backing the dollar on a planned schedule of events.

You offer more:
----------------------
While the physical supply actually went into hoards of all sorts, the paper remained circulating in the markets. The gold accounts now stand at an incredible level of over 40,000 tons by my reckoning. Nearly 30,000 tons are owed by bullion bankers directly - without counter obligations
denominated in kind. They have only 4,800 tons in credible gold mining company obligations, and another 9,000 tons were borrowed by speculative funds playing the carry trade. The remaining reserves, some 10,000 tons, can not be used to pay off the gold denominated debt because the reserves are mostly borrowed and must be kept on hand to cover obligations to Oil Royals (the major lenders of these reserves). Of the other 20,000 tons in private gold hoards, only 6,000 remain in private hands outside of the Bullion banking system. 14,000 were supplied to the market over the years, and hang around the necks and in the noses and from ears of a billion people. The total commitments of bullion banks (including derivatives) are most probably around 60,000 tons, with an imbalance of some 35,000 tons, where gold was "borrowed" by the bankers (in reality only
dollars arrived at the bank for most of this, and the bank issued a gold denominated obligation),and the lending by the bankers was in dollars.
Their remaining gold denominated assets:
- Gold reserves are 10,000 tons, (I hope)
- mining company obligations are at 5,000 tons,
- Speculative fund obligations are 10,000 tons.
The remaining counters to the bullion banker's gold obligations are denominated in currency.
Physical gold lent TO bullion banks, about 25,000 tons.
Physical gold lent BY bullion banks, about 15,000 tons.
-------------------------------

Again, I agree, but ask the question "are these commitments becoming irrelevant in gold terms"? This is "gold banking" on a pure fractional reserve basis and very much reflects the dollar prior to 71. Years ago, we hit a point where the market place is just trading the price of gold, not gold itself. They have created a form of "gold currency" that is more a "gold price obligation" rather than
"gold supply situation". It simply could not function once real delivery was asked for. This is the corner the ECB / BIS have pushed the dollar into. Force a change in the need for "contract gold banking" and you break the credibility of the market. Break that credibility and the dollar is
exposed in a gold price move.
Here, we can get a sense of the massive effects a change in the use of the dollar would have on these liabilities. Once the dollar begins it's slide from trade settlement (happening now), a dollar gold currency is not needed. Any break in the gold banking market would render a "new price" for physical gold. That price would begin to reflect the past dollar money supply inflation.


Thanks ORO for your clear understanding. On to your #22237 later FOA


goldfan
(01/09/2000; 11:40:44 MDT - Msg ID: 22580)
Why no protests over Au sales, Tedw and others
http://www.usagold.comThanks to the many, particularly Ph In LA who responded to my query about Ag manipulation mechanics. Concerning the Au and Ag manipulations, Ted Butler says they're crooks and should be stopped. I certainly agree, and want to acknowledge him and the many others who have worked hard to shine a light on this fraud. But I'm afraid the crooks will not be stopped by legal action until the public leans on the politicians.

I think this won't won't happen over gold yet, because, in my experience, gold is an object of mystery and even fear for most people in the West. The public is afraid of gold. They haven't got any, can't afford it, don't know how to keep it safe if they do get it, aren't sure how to use it, how to resell it or whatever. They won't support goldbugs attacking the government. If they were asked about the Ashanti situation, they would say that holding off on foreclosing on Ashanti is just pragmatic, like offering aid to businesses and families ruined in a flood. Maybe if GATA or someone could mount class action suit based on some law that had been broken... but that would take years and cost millions and the outcome wouldn't bother the manipulators. Look at the Microsoft antitrust suit, an abysmal failure legally for MSFT, but it didn't affect their stock values or change their market place behaviors a whit. The really big guys are beyond government or legal control.

My guess is that the reason COMEX and other derivative markets don't shut down over this stuff is that the pro's who deal there know all about the manipulations, and just work around them..The way a professional poker player knows when a marked deck is put into the game by someone else, and just uses it to his own advantage.

So if someone tries to shut down the futures market by demanding delivery of an undeliverable, they'll just cancel his contracts, and carry on. Let him sue, they can bury him in legal costs, eventually settle out of court later, and then resume business as usual. The evidence they're not afraid to support the crooks is in the LTCM thing. These guys are right back in business, with all their major support systems in place. Look at the Canary Wharf guy, what's his name, Reichman, who screwed small and large investors for billions, went bankrupt, then got his buddies in the bank business to help him buy back in at fire sale prices and he winds up owning more of the action than he did in the first place.

I'm afraid gold won't be popular or priced much higher until the consumer society unwinds completely and we enter a long period of dreary economic winter. I'm aware of the argument that when there isn't any more physical available, prices will have to rise. But I'm suspicious of the statistics on supply, demand and inventories. Maybe all the numbers are being fudged. Who knows what the supplies really are?

I hope I'm wrong in that statement. I would welcome refutation.

I'm trying to get the data to prove to my simple-minded self, how close we are to a collapse of the "consumer-society". I believe this is the only way gold will be seen by Europeans and North Americans as a store of wealth and a standard for trade.

Somehow, I think the attitude of the "consumer" and the "goldbug" are incompatible. The consumer follows fashions and fads, even in investment for his/her pension. The "goldbug" reserves "fashion consumption" for disposable income. He/she makes investment decisions based on storage and husbandry of something of enduring value, always "in fashion".

As a woman friend of mine remarked when I talked to her about this, "it's a question of quality. Most people have got used to getting a lot at low quality, rather than having less, at high quality. So a lot of "paper" gold is worth more to them than a little physical. But in a fire, the paper will burn up, the gold will only change shape and be found unharmed in the ashes."
FWIW
Goldfan
Journeyman
(01/09/2000; 12:02:43 MDT - Msg ID: 22581)
Thanx @RossL, 714, Bonedaddy
Thanx for the feedback on nonviolent alternatives. And particularly, Bonedaddy, thanx for reminding me of the hazards of the alternative to nonviolent alternatives!!

Regards, J.
Gandalf the White
(01/09/2000; 12:13:01 MDT - Msg ID: 22582)
Serial #4 of the story titled, "Mystery of the Lost Ozarks Silver
RECAP -- In Part #3 of the Serial, we saw that indeed there was a cave having Spanish silver bars which was located by at least one of the two major persons of the expedition party, Pierre, by following a map. However, that cave was located in territory considered the property of others that did not wish to have trespassers upon their territory. It was also evident that there was a vast difference between the two groups (trespassers vs. territory protectors) in the level of means of weapons, being guns vs. the bow and arrows. Part #3 ended with the death of Pierre by his own hand. But now we look at Pu Deville's diary and the story can be seen much clearer. (OK enough editorial � on with Part #4 of the Serial.)
-----
"Mystery of the Lost Ozarks Silver" � PART Four --
Written by Tom Bailey and illustrated by Al Martin Napoletano. Published in the FRONTIER TIMES, Austin, TX -- Summer, 1961. (Please read carefully as it is transcribed just as it was written, and my spellchecker is not conversant in 1960's Texas style Angrit.)
--
Pu Deville did not date his diary and because of that, it is difficult to coordinate their activities. Apparently they traveled together at times and separated when danger lurked.
Pu Deville's scrawling hand tells his story after the same manner. "Ahead great care. Travel in creek. No Indians. Little creek came out of rocks with great noise. Not followed. Follow creek southerly, mouth of creek."
"Great river come up from southwest. Turn northwest. Camp. Pierre found good signs opposite camp. Horseshoe on mountain. One of the maps is wrong. All point across river. One points up a little valley northwest from the point on the map. Go over the river. Found ford on the map. Found the single rock. Found the red spot other map shows. Two-and-one-half miles northwest. Have to try both long and short. Long wins. Back to camp. Going in valley south and east of bluffs. Two narrow bluffs look like crackers. Pierre found ravine."
Pu Deville does not mention here that he and Pierre were back together again but obviously they were.
"All growth of brush. Some death signs. Some dead ones sure planted here." (Author added � Meaning Indians, no doubt.)
Up to this point the diary covers Pu Deville's movements while looking for the cave. Later he wrote: "Dug about half a day. Little opening. Made it bigger. Crawled in and slid down. Great big cave. All Indian stuff. Arrows. Lots of bones and human skulls. Silver lumps. Melted. Bars weigh about five pounds. Each take three."
Now here comes the part in Pu Deville's diary by which Missouri folk swear.
"Vein is over six feet high all around. Pierre says it is pure silver. At least we have found it. How far the cave goes we can not make out."
What could be better proof that the cave was a natural silver mine? Perhaps someone melted down some silver and cast it into bars. So what?
There are several reasons to suspect that the silver found was not native to the land. In the first place, the word "vein" in Pu Deville's handwriting is somewhat irregular, indicating it may have been changed by someone. Perhaps the original word was "wall" indicating a stack of silver bars, which was six feet high. Not the richest silver veins found on the Comstock were six feet high. Most of them ran from a few inches to a foot-and-one-half wide, no more. Finding a six-foot-high silver ore vein in southern Missouri would be most unlikely, especially in view of what the geologists and mineralogists say. There is no silver in Missouri in any great quantities, they contend, and shake their heads in disbelief.
===
End of Serial #4
<;-)

Journeyman
(01/09/2000; 12:14:10 MDT - Msg ID: 22583)
Old Debts @Canamami
You're right! Old debts can result in intractable problems. I'm relatively sure the land under the house I live in technically belongs to one "indian" tribe or another.

Unpaid debts get more stale and complex as time passes and can sometimes lead to violence. It's best to settle up as soon as possible. As Alan Greenspan has remarked, it's too bad there aren't bankruptcy protocols for countries -- but there aren't.

Regards,
Journeyman
tedw
(01/09/2000; 12:46:56 MDT - Msg ID: 22584)
B of E Sales
Htttp://www.usagold.com
I dont know that I find the answer that the B of E sales are to preserve a collapse of fiat money credible.

Could not the price of Gold rise significantly ($400,$500)
without fiat money collapsing. Gold has been that high before.

As for England what are the negative consequences of unloading their Gold at low prices? Or are their any?
Journeyman
(01/09/2000; 12:52:40 MDT - Msg ID: 22585)
"The Crime of 1873" -- an indirect indictment of gold
http://www.micheloud.com/FXM/MH/Crime/carricat.htm,
Peter Asher, Mr. Gresham, Farfel, Aristotle, TownCrier, FOA,
ALL

The above site from Cavan Man presenting "The Crime of
1873," is a real gem for many reasons. First, it's written
from the viewpoint of a monetarist and interprets history
from that viewpoint. It also, in my opinion, demonstrates an
inadaquate attempt to diss gold. It's a perfect opportunity
to examine a subtle and very good example of how historical
interpretation (or from my viewpoint, mis-interpretation)
can lead to all sorts of ultimately costly economic
experiments, in this case, monetarism. As Keynes himself
explained:

"It is astonishing what foolish things one can
temporarily believe if one thinks too long alone,
particularly in economics (along with the other moral
sciences), where it is often impossible to bring one's
ideas to a conclusive test either formal or
experimental. -J.M. Keynes, December 13, 1935 from the
introduction to his _THE GENERAL THEORY of EMPLOYMENT,
INTEREST, AND MONEY_

In the presentation of "The Crime of 1873," anti hard-money
(pro paper-money) advocates helped an inherent problem with
a FIXED RATE bi-metallic standard combined with an
unprecedented one-time historical "monetization" of human
interaction develop into an excuse to ditch official
currency disciplined by the realities of the physical
universe, that is, by the realities of mining, in favor of
paper money disciplined instead only by the whims and
desires of bankers and governments.

The implicit monetarist at the above website presents the
situation this way:

We see between 1875 and 1896 a deflation [currency unit
appreciation, remember -J.] of about 1% a year in the
general CPI. A[t] the same time the output rose by 6 %
a year. Economists reader should not say, < growth even with those declining prices!>>. It's
precisely this growth that made the prices go down.
With a fixed quantity of money if the number of
transactions rises and the velocity cannot rise
sufficiently, then prices have to fall.
...
All this led to a depression so great that you would
have to wait for 1932 to see the same again.
Unemployment peaked at 18 % in 1894. But some people
suffered more than others (more on this).
+
On the monetary side, this deflation made many bank
loans turn sour, as the debtors struggled to honor
their obligations with rising real value of their
debts. Some famous banking panics occurred (1892), but
globally the trust of the public in the banking system
increased. The ratio of deposits to reserves rose from
2 to 4 at the end of the period.
http://www.micheloud.com/FXM/MH/Crime/macro.htm

Particularly hurt were the net debtors, and among
them peasant class at most because they had to
face a rising value of their (generally heavy)
debts combined with a decline in agricultural
prices of about 3% a year.
http://www.micheloud.com/FXM/MH/Crime/crime.htm

Can we defenders of gold excuse such harsh conditions? Are
we able to defend hard money against these rather subtly
presented indictments?

Regards,
Journeyman
Usul
(01/09/2000; 13:02:51 MDT - Msg ID: 22586)
Extraordinary Popular Delusions and the Madness of Crowds
@USAGOLD (10:21:33MDT)- "Once in Golconda" is fascinating stuff to read, however, may I respectfully correct your aside regarding which century "Extraordinay Delusions..." was written in and contribute something to the discussion. Ed. 1 was dated 1841, Ed 2 was dated 1852. The author's name is Charles Mackay, LL.D.
For USAGOLD readers' information, here are some tidbits from the Wordsworth Reference print edition of 1995:

"Extraordinary Popular Delusions and the Madness of Crowds is important because it is an aide-memoire of the continuing folly of the human race and its institutions. It is said to be required reading in some of the literate Wall Street financial houses (along with that other classic masterpiece, Sun Tzu's The Art of War). Certainly, the great financier Bernard Baruch found it a useful reminder, much as a Roman general enjoying a Triumph is said to have had at his shoulder a slave whispering 'memento mori'."
From Introduction by Norman Stone, Professor of Modern History, University of Oxford, 1995.

Charles Mackay (1814-1889) was born in Perth Scotland. His mother died shortly after his birth, and his father, who had been in turn a Lieutenant on a royal Navy sloop (captured and imprisoned for four years in France) and then an Ensign in the 47th foot taking part in the ill-fated Walcheren Expedition where he contracted malaria, sent young Charles to live with a nurse in Woolwich in 1822. After a couple of years' education in Brussels from 1828-1830, he became a journalist and songwriter in London. He worked on The Morning Chronicle from 1835-1844, when he was appointed Editor of The Glasgow Argus. His song The Good Time Coming sold 400,000 copies in 1846, the year that he was awarded his Doctorate of Literature by Glasgow University. He was a friend of influential figures such as Charles Dickens and Henry Russell, and moved to London to work on The Illustrated London News in 1848, and he became Editor of it in 1852. He was a correspondent for The Times during the American Civil War, but thereafter concentrated on writing books. Apart from Extraordinary Delusions and the Madness of Crowds, he is best remembered for his songs and his Dictionary of Lowland Scotch.
lamprey_65
(01/09/2000; 13:06:32 MDT - Msg ID: 22587)
Market Thoughts and Gold
Don't be fooled by Friday's market action following Lucent's profit warning and subsequent explanations. The CEO's spin of "this is just a one quarter problem" just doesn't fly according to what I've read from Herb Greenberg (TheStreet.com), Olstein, Fleckenstein, and Tice. Granted most of the previous are bears, but their case makes more sense to me -- (Greenberg first warned this was coming with Lucent back in October) -- Lucent's problem is their long standing accounting shell game...something that is very prevelant in today's tech sector.

The markets wanted to believe Lucent's explanation - they immediately went out and gobbled up Nortel Networks, a Lucent competitor. This was a signal that the LU problems were perceived to be company specific. Be very careful, remember TYCO?...Tice broke that one and whispers are they WILL be fined by the SEC...another accounting issue. GTW, IBM, DELL, BMC -- they've all warned of problems recently...and remember, the Y2K boogey man can no longer be used as an excuse.

In order for the markets to truly correct, rallies like the one we had Friday have to fail...the buy on dippers are not going away without a couple of painful lessons.

As for gold -- did anyone pick up the extreme nervousness on the big point loss days last week in the markets? NOTHING HAPPENED - in percentage terms anyway. Can you imagine the panic if the market started taking some real hits? Panic in the streets would ensue, and where do people run to in times of panic? I think we all know the answer to that question.

Lamprey

USAGOLD
(01/09/2000; 13:15:08 MDT - Msg ID: 22588)
Thanks Usul...
I was going from memory. Don't have a copy of Mackay's book here. Also thanks for the background. Apparently, our Mr. Mackay had much going for him besides The Extraordinary Popular Delusions and the Madness of Crowds -- always thought that one of the great titles in literature.

Your corrections are taken in the spirit given. My best to you and yours for a successful 2000 and thanks for your on-going contributions here.
Journeyman
(01/09/2000; 13:35:18 MDT - Msg ID: 22589)
B of E sales @tedw
There's more to the price of gold and fiat failure than meets the eye. The most easily understood (well for me at least) is that gold has ALWAYS acted as a barometer for inflation. If gold goes up, that means the value of the dollar (or which ever other fiat currency you live your economic life in) is dropping in value. Such a currency token value depreciation is misleadingly called "inflation." So many people (investors, etc.) perceive an increased price of gold a sign that maybe they should unload (trade) their dollars (yen, etc.) for something else. This leads to further devaluation, as the available supply of currency tokens balloons, making it more likely others will unload their tokens, etc.

In this sense, the price of gold acts as a flag which in the past has signaled hyper-depreciation (hyper-inflation).

There are many other labarinthine connections between the gold markets and the fiat currency values, but others at this forum are more likely to be able to coherently explain these than I am.

Regards,
Journeyman
TheStranger
(01/09/2000; 13:40:31 MDT - Msg ID: 22590)
Miscellaneous Kudos
To Michael Kosares for the Golconda excerpts. I never tire of reading the story of 1929. It is so rich in the kind of dramatic irony that makes the story of the Titanic so fascinating. Thanks for taking the time, Michael.

To Cavan Man for his marvelous Oz/Bryan link which entertains as well as educates. Good show, CM!

To Lamprey who is already a major asset to this forum. I don't know how we found you Lamprey, but it was our good fortune, I assure you.
RossL
(01/09/2000; 13:42:00 MDT - Msg ID: 22591)
Summers using Clinton-speak?
Saturday January 8 3:00 PM ET
Summers: US Not Selling Any Gold Reserves
BOSTON (Reuters) - The United States has not
sold any of its gold reserves and has no
plans to do so, U.S. Treasury Secretary
Lawrence Summers said on Saturday.

``I categorically deny assertions that U.S.
gold reserves were being sold off or that
there is any plan to sell them off,'' Summers
told reporters on the sidelines of an
economics conference.



The statement by Summers refers only to the present tense and the future tense. His statement is carefully worded to avoid making a statement in the past tense. It is Reuters who is making the assumption that the past tense is covered in the statement by Summers!!! I will never underestimate the semantic games of these people!!!
Usul
(01/09/2000; 14:16:13 MDT - Msg ID: 22592)
Manias: Yesterday, today and tomorrow!
http://www.urbansurvival.com/week.htmAll the best back to you, sir, and all USAGOLD readers for 2000. Extraordinary Popular Delusions and the Madness of Crowds is surely one of the great (unappreciated by many) titles in literature. I recall my boss mentioning it many years ago... only after some time did I purchase a copy and read through the chapters on the Mississippi Scheme, the South Sea Bubble, and the Tulipomania, which still leaves about 2/3 yet to properly read. When one reads these chapters, one can not fail to compare events with today's stock markets (and Japan's 1990s markets) and feel deja vu.
I suspect a few more copies will be printed after the tech stock mania collapses (so easy to be wise after the event).

Speaking of manias... the charts at George Ure's site (see link) are getting very interesting!

Extraordinary Popular Delusions and the Madness of Crowds is on the Web here:
http://sailor.gutenberg.org/gutenberg/by-author/ma7.html
Mr Gresham
(01/09/2000; 15:40:58 MDT - Msg ID: 22593)
Derivatives Links
http://mt.sopris.net/mpc/finance.derivatives.htmlBig page of derivatives info -- caught link from Prudent Bear chat threads (which disappear after about a day, so it's a race to keep up, unlike the more relaxed pace around here -- thank you MK!)
Usul
(01/09/2000; 15:47:49 MDT - Msg ID: 22594)
The Oil Embargo and the Kreinin Letter (Pt. 2)
http://www.msu.edu/~kreinin/Mordechai E. Kreinin is accredited today as University Distinguished Professor, Department of Economics, Michigan State University, at the web URL above dated May 1999.
His Fields of Specialization are listed as International Economics, Money and Banking, Theory. His Ph.D. Thesis: "Exchange Stabilization Funds." Note that the point of
Exchange Stabilization Funds in general is to stabilize the value of paper currencies without the need for a gold standard.
The fact that Exchange Stabilization did not work to prevent
the fall of the Baht in 1997 should not have been lost on the Powers that Be. Curiously, Prof. Kreinin's "current work" is listed as including:
Problems of introducing the EURO;
The international currency crisis of 1997-9

Back in 1974, March 18th to be precise, Prof. Kreinin wrote to the New York Times. His letter opens like this:
---

To the Editor:

If We Gave Gold for Oil

Much has been said in recent months about the "immense burden" on the balance of payments of Western Countries created by the quadrupling of oil prices. Yet to the extent that the producing countries are willing to accumulate Western currencies (especially dollars), that burden can be alleviated or removed in a noninflationary manner by gradually disposing of official gold reserves on the private market.

It is the coincidental occurrence of two events that makes this possible. The adoption of flexible exchange rates by the industrial nations eliminates the necessity of maintaining official gold reserves. And second, the price of gold on the private market rose to four and one half times its official value precisely during the four fold increase in oil prices. Thus the U.S. gold stock, officially valued at $11 billion, is worth nearly $50 billion on the private market.

Assuming that this market is rather thin, it cannot absorb massive quantities of gold at a given moment of time, without the price tumbling. For that reason, it would be easier if France and some other countries preferred to hang on to the cherished yellow metal and leave this field of operation open to the United States.

In that event the U.S. gold stock should suffice to subsidize oil imports to this country over a ten-year period to the tune of $5 billion per year. By the end of that period, we should be on the way to self-sufficiency in energy production...
---

It seems to me that the potential for the U.S. gold stock to run out after 10 years according to the Professor's plan would be seen as somewhat alarming... today is over 25 years later and oil still flows to the U.S. in large quantities... In hindsight, the notion of self-sufficiency in energy production is clearly flawed. Later in his letter, the Professor refers to the "extent that the Persian Gulf Sheiks are interested in accumulating their wealth in gold". A concept that is well know to UAGOLD readers and is there in print, well understood in 1974. What to do about the limited lifetime of a gold-for-oil deal? At the time, the dollar was losing value from inflation associated with the funding of the Vietnam War. The price of gold is traditionally seen as an indicator of inflation. It would therefore be of advantage to have a system of exchange whereby the price of gold would not need to rise... perhaps by concealing the 'demand' side of the equation?
The recipients of the gold would not be worried by this, as they would receive more gold for the percieved price.
One party has gold available to a certain extent... the other party has oil available in great abundance, but still limited in the fullness of time. Would it not make sense, therefore, to modify Prof. Kreinin's original proposal such that a barrel of oil is paid for part in dollars, and part in gold, the gold fraction being allocated suitably so that the trade over time is well matched to the assets seen available on both sides? Furthermore, it would be an advantage that the price of the oil in dollars could be seen as stabilizing or even coming down from the dizzy heights triggered by the embargo, alleviating the inflationary scenario, while a payment component in gold need not necessarily be out in the open for all to see? Especially if those gold sales were considered "politically sensitive"...
Mr Gresham
(01/09/2000; 16:30:21 MDT - Msg ID: 22595)
Journeyman -- Crime of 1873
A quick answer (all I have time for now) would say that all economic activity is risky, especially the choice of a profession (especially agriculture), and that money plays a chaotic role in economics. Including gold. No guarantees -- except the absence of the "cheat factor" that exists with paper.

The gap in their reasoning is the appeal to the short-term horizon of what happened to certain "economic losers", vs. the long-term avoidance of a "cheatable" currency.

{note inserted after finishing:
SOAP BOX OUT -- "Scre-e-e-e-e-chhhh"}

I differ with absolute libertarianism in that I believe that economic society should exist circumscribed within the boundaries of civil society, and not engulf the civil society as its wholly-owned subsidiary. All life is NOT economics; today's message is a deadly one. The economy exists for people, and not vice versa. If the people, in such wisdom as they possess, want to temporarily subsidize a class of their neighbors, (I think of the small Japanese rice farmers) via private or public charity, then they may act outside the bounds of strict market dynamics with the money they choose to allocate.

Acquiring the wisdom to know how and when to do this, now, that's another matter; and I sometimes despair almost as deeply as the pure marketeers who've given up on human learning. I hear several among those assembled here who've not surrendered that hope, either.

Of course we know there are manipulations _within_ the market system, when big players are able to corner markets. And we know that the permanent institution of politicians and bureaucrats in control of gigantic public purses has created an 800-pound "cheat factor" working AGAINST public benefit. And when the "big players" can capture government as their errand boy, why then, the effects of The Cheat can be mega-magnified.

Honest Money. The theme here. When I think about the gulf in my lifetime between that philosophy and the idea of social compassion, and the fact that the liberal/radicals I've known for 30 years have ABSOLUTELY NO CONCEPT of gold as anything but a right-wing whacko paranoid plot,-- hell, no concept of monetary dynamics of ANY sort -- then I start wanting to meet some people from a younger generation who might someday GET IT.

{SOAP BOX AWAY} -- now out for some rare Northwest winter sun
Chris Powell
(01/09/2000; 19:16:43 MDT - Msg ID: 22596)
U.S. govt. starts responding to GATA questions
http://www.egroups.com/group/gata/334.html?Now we have to get rid of the wiggle room.
R Powell
(01/09/2000; 20:21:18 MDT - Msg ID: 22597)
Usul
Another book similar to Extraordinary Popular Delusions and the Madness of Crowds is Manias,Panics, and Crashes by Charles P. Kindleberger. John Wiley and Sons Inc. publisher.I had to work through parts of it and read with a pen and ruler for underlining so rereading can be done quickly. Well worth the read but I can't absorb it all at one sitting. One of my many shortcomings. Thanks for book reference as reading is a great pleasure for me.
schippi
(01/09/2000; 20:37:32 MDT - Msg ID: 22598)
Gold Sectors FSAGX & FDPMX
http://www.SelectSectors.com/agpm120.gifGold Sector trend still Up
Gandalf the White
(01/09/2000; 22:29:25 MDT - Msg ID: 22599)
Serial #5 of the story titled, "Mystery of the Lost Ozarks Silver".
RECAP -- In Part #4 of the Serial, we saw things from the perspective of the other principal character, Pu Deville. He mentions that both he and Pierre dug out the opening to the cave and found: "Great big cave; All Indian stuff; Arrows; Lots of bones and human skulls; Silver lumps; and Melted Silver Bars". Pu Deville's diary states that each explorer took three bars.
Part #5 of the story restarts with more from Pu Deville's diary.
(PS: Sundays were double features --- remember ?)

"Mystery of the Lost Ozarks Silver" � PART Five --
Written by Tom Bailey and illustrated by Al Martin Napoletano. Published in the FRONTIER TIMES, Austin, TX -- Summer, 1961. (Please read carefully as it is transcribed just as it was written, and my spellchecker is not conversant in 1960's Texas style Angrit.)
--
Pu Deville goes on: "Crawled out and closed everything. Back to camp. Pierre sees Indians on the river and in the valley. Go way up valley. Separate. Will meet again on river."
"I go straight south. Pierre northeast. Back on mouth. No sign of Pierre. Wait two days at mouth of river. Lay hiding."
The diary now conforms to that of Pierre.
"Found Pierre dead on top of mountain. Dead full of arrows. Bullet in head. Gun broke. Took map and his diary and put them with mine. Indians in valley all around. It shall go with me like Pierre and others before us."
"If anyone finds these maps and diaries bring them to Leduc in St. Louis. He owns and knows all. He knows Pierre's wife." (Signed) Pu Deville
Beneath his signature is the notation made be the man who found the papers in the gun barrel years later, and then disappeared into the West.
There is no record of who found the papers and delivered them to Leduc, who obviously stuffed them into the gun barrel for safekeeping.
After the old maps and diaries were found, men who tried to read and understand them came to the conclusion that the little lake which came out of the mountain with a great noise, as mentioned in Pu Deville's diary, could only mean Roaring River.
WAIT A MINUTE ! --- Pu Deville's diary said "Little creek came out of rocks with great noise.") OK, I must tell it as it is written. � Let's go on, <;-)
If the directions of the old map are to be relied upon, the "great river" which "came up from the south" could only be the White River, which would place the location of the fabulous cave somewhere in Barry county, near what is generally known as the Easley Ford. The land here was once owned by a man named Robinson. Later two men known as Murphy and Keitz bought the property. Murphy had come into possession of the old charts and felt certain the lost cave could be located on that land.
In 1940 these two men gave up hope of ever finding the cave and sold the place to Ola and Audry Farwell. The old papers went along with the deed. The Farwells did not buy the land because of the old papers that went with it, but after they acquired it they did engage in some exploration work, but without result.
(Included was a photo of well-dressed middle aged woman, Ola Farwell, sitting at a table looking at an old paper map approximately two feet square.)
Before the Table Rock Dam was built, treasure hunters by the score came onto the property and roamed up and down the river with all the latest gadgets known to man for the detection of metals underground, but no one found anything.
===
End of Serial #5 with the FINAL episode to come.
<;-)
AllanC
(01/09/2000; 22:38:31 MDT - Msg ID: 22600)
Extraordinary popular delusions by McKay
ftp://sailor.gutenberg.org/pub/gutenberg/etext96/ppdel10.txtThanks for the link Usul.

Here's the tulipomania part, for all to see. In this case, just substitute the word "internet company" for "tulip", "American" for "Dutch", "stock broker" for "tulip dealer", years "1998-99" for years "1634-35".
Happy reading!

From Project Gutenberg's Etext of Memoirs of Extraordinary Popular
Delusions, Volume One, by Charles MacKay


THE TULIPOMANIA.

Quis furor o cives! -- Lucan.

The tulip,--so named, it is said, from a Turkish word, signifying
a turban,-- was introduced into western Europe about the middle of the
sixteenth century. Conrad Gesner, who claims the merit of having
brought it into repute,--little dreaming of the extraordinary
commotion it was to make in the world,--says that he first saw it in
the year 1559, in a garden at Augsburg, belonging to the learned
Counsellor Herwart, a man very famous in his day for his collection of
rare exotics. The bulbs were sent to this gentleman by a friend at
Constantinople, where the flower had long been a favourite. In the
course of ten or eleven years after this period, tulips were much
sought after by the wealthy, especially in Holland and Germany. Rich
people at Amsterdam sent for the bulbs direct to Constantinople, and
paid the most extravagant prices for them. The first roots planted in
England were brought from Vienna in 1600. Until the year 1634 the
tulip annually increased in reputation, until it was deemed a proof of
bad taste in any man of fortune to be without a collection of them.
Many learned men, including Pompeius de Angelis and the celebrated
Lipsius of Leyden, the author of the treatise "De Constantia," were
passionately fond of tulips. The rage for possessing them soon caught
the middle classes of society, and merchants and shopkeepers, even of
moderate means, began to vie with each other in the rarity of these
flowers and the preposterous prices .they paid for them. A trader at
Harlaem was known to pay one-half of his fortune for a single
root--not with the design of selling it again at a profit, but to keep
in his own conservatory for the admiration of his acquaintance.

One would suppose that there must have been some great virtue in
this flower to have made it so valuable in the eyes of so prudent a
people as the Dutch; but it has neither the beauty nor the perfume of
the rose--hardly the beauty of the "sweet, sweet-pea;" neither is it
as enduring as either. Cowley, it is true, is loud in its praise. He
says--

"The tulip next appeared, all over gay,
But wanton, full of pride, and full of play;
The world can't show a dye but here has place;
Nay, by new mixtures, she can change her face;
Purple and gold are both beneath her care-
The richest needlework she loves to wear;
Her only study is to please the eye,
And to outshine the rest in finery."

This, though not very poetical, is the description of a poet.
Beckmann, in his History of Inventions, paints it with more fidelity,
and in prose more pleasing than Cowley's poetry. He says, "There are
few plants which acquire, through accident, weakness, or disease, so
many variegations as the tulip. When uncultivated, and in its natural
state, it is almost of one colour, has large leaves, and an
extraordinarily long stem. When it has been weakened by cultivation,
it becomes more agreeable in the eyes of the florist. The petals are
then paler, smaller, and more diversified in hue; and the leaves
acquire a softer green colour. Thus this masterpiece of culture, the
more beautiful it turns, grows so much the weaker, so that, with the
greatest skill and most careful attention, it can scarcely be
transplanted, or even kept alive."

Many persons grow insensibly attached to that which gives them a
great deal of trouble, as a mother often loves her sick and
ever-ailing child better than her more healthy offspring. Upon the
same principle we must account for the unmerited encomia lavished upon
these fragile blossoms. In 1634, the rage among the Dutch to possess
them was so great that the ordinary industry of the country was
neglected, and the population, even to its lowest dregs, embarked in
the tulip trade. As the mania increased, prices augmented, until, in
the year 1635, many persons were known to invest a fortune of 100,000
florins in the purchase of forty roots. It then became necessary to
sell them by their weight in perits, a small weight less than a grain.
A tulip of the species called Admiral Liefken, weighing 400 perits,
was worth 4400 florins; an Admiral Von der Eyk, weighing 446 perits,
was worth 1260 florins; a shilder of 106 perits was worth 1615
florins; a viceroy of 400 perits, 3000 florins, and, most precious of
all, a Semper Augustus, weighing 200 perits, was thought to be very
cheap at 5500 florins. The latter was much sought after, and even an
inferior bulb might command a price of 2000 florins. It is related
that, at one time, early in 1636, there were only two roots of this
description to be had in all Holland, and those not of the best. One
was in the possession of a dealer in Amsterdam, and the other in
Harlaem. So anxious were the speculators to obtain them that one
person offered the fee-simple of twelve acres of building ground for
the Harlaem tulip. That of Amsterdam was bought for 4600 florins, a
new carriage, two grey horses, and a complete suit of harness.
Munting, an industrious author of that day, who wrote a folio volume
of one thousand pages upon the tulipomania, has preserved the
following list of the various articles, and their value, which were
delivered for one single root of the rare species called the viceroy
:--
florins.
Two lasts of wheat.............. 448
Four lasts of rye............... 558
Four fat oxen................... 480
Eight fat swine................. 240
Twelve fat sheep................ 120
Two hogsheads of wine........... 70
Four tuns of beer............... 32
Two tons of butter.............. 192
One thousand lbs. of cheese..... 120
A complete bed.................. 100
A suit of clothes............... 8O
A silver drinking cup........... 6O
-----
2500
-----

People who had been absent from Holland, and whose chance it was
to return when this folly was at its maximum, were sometimes led into
awkward dilemmas by their ignorance. There is an amusing instance of
the kind related in Blainville's Travels. A wealthy merchant, who
prided himself not a little on his rare tulips, received upon one
occasion a very valuable consignment of merchandise from the Levant.
Intelligence of its arrival was brought him by a sailor, who presented
himself for that purpose at the counting-house, among bales of goods
of every description. The merchant, to reward him for his news,
munificently made him a present of a fine red herring for his
breakfast. The sailor had, it appears, a great partiality for onions,
and seeing a bulb very like an onion lying upon the counter of this
liberal trader, and thinking it, no doubt, very much out of its place
among silks and velvets, he slily seized an opportunity and slipped it
into his pocket, as a relish for his herring. He got clear off with
his prize, and proceeded to the quay to eat his breakfast. Hardly was
his back turned when the merchant missed his valuable Semper Augustus,
worth three thousand florins, or about 280 pounds sterling. The whole
establishment was instantly in an uproar; search was everywhere made
for the precious root, but it was not to be found. Great was the
merchant's distress of mind. The search was renewed, but again without
success. At last some one thought of the sailor.

The unhappy merchant sprang into the street at the bare suggestion.
His alarmed household followed him. The sailor, simple soul! had not
thought of concealment. He was found quietly sitting on a coil of
ropes, masticating the last morsel of his "onion." Little did he dream
that he had been eating a breakfast whose cost might have regaled a
whole ship's crew for a twelvemonth; or, as the plundered merchant
himself expressed it, "might have sumptuously feasted the Prince of
Orange and the whole court of the Stadtholder." Anthony caused pearls
to be dissolved in wine to drink the health of Cleopatra; Sir Richard
Whittington was as foolishly magnificent in an entertainment to King
Henry V; and Sir Thomas Gresham drank a diamond, dissolved in wine, to
the health of Queen Elizabeth, when she opened the Royal Exchange: but
the breakfast of this roguish Dutchman was as splendid as either. He
had an advantage, too, over his wasteful predecessors: their gems did
not improve the taste or the wholesomeness of their wine, while his
tulip was quite delicious with his red herring. The most unfortunate
part of the business for him was, that he remained in prison for some
months, on a charge of felony, preferred against him by the merchant.

Another story is told of an English traveller, which is scarcely
less ludicrous. This gentleman, an amateur botanist, happened to see a
tulip-root lying in the conservatory of a wealthy Dutchman. Being
ignorant of its quality, he took out his penknife, and peeled off its
coats, with the view of making experiments upon it. When it was by
this means reduced to half its original size, he cut it into two equal
sections, making all the time many learned remarks on the singular
appearances of the unknown bulb. Suddenly the owner pounced upon him,
and, with fury in his eyes, asked him if he knew what he had been
doing? "Peeling a most extraordinary onion," replied the philosopher.
"Hundert tausend duyvel," said the Dutchman; "it's an Admiral Van der
E. yck." "Thank you," replied the traveller, taking out his note-book
to make a memorandum of the same; "are these admirals common in your
country?" "Death and the devil," said the Dutchman, seizing the
astonished man of science by the collar; "come before the
syndic, and you shall see." In spite of his remonstrances, the
traveller was led through the streets, followed by a mob of persons.
When brought into the presence of the magistrate, he learned, to his
consternation, that the root upon which he had been experimentalizing
was worth four thousand florins; and, notwithstanding all he could
urge in extenuation, he was lodged in prison until he found securities
for the payment of this sum.

The demand for tulips of a rare species increased so much in the
year 1636, that regular marts for their sale were established on the
Stock Exchange of Amsterdam, in Rotterdam, Harlaem, Leyden, Alkmar,
Hoorn, and other towns. Symptoms of gambling now became, for the first
time, apparent. The stockjobbers, ever on the alert for a new
speculation, dealt largely in tulips, making use of all the means they
so well knew how to employ, to cause fluctuations in prices. At first,
as in all these gambling mania, confidence was at its height, and
everybody gained. The tulip-jobbers speculated in the rise and fall of
the tulip stocks, and made large profits by buying when prices fell,
and selling out when they rose. Many individuals grew suddenly rich. A
golden bait hung temptingly out before the people, and, one after the
other, they rushed to the tulip marts, like flies around a honeypot.
Every one imagined that the passion for tulips would last for ever,
and that the wealthy from every part of the world would send to
Holland, and pay whatever prices were asked for them. The riches of
Europe would be concentrated on the shores of the Zuyder Zee, and
poverty banished from the favoured clime of Holland. Nobles, citizens,
farmers, mechanics, seamen, footmen, maidservants, even chimney-sweeps
and old clotheswomen, dabbled in tulips. People of all grades
converted their property into cash, and invested it in flowers. Houses
and lands were offered for sale at ruinously low prices, or assigned
in payment of bargains made at the tulip-mart. Foreigners became
smitten with the same frenzy, and money poured into Holland from all
directions. The prices of the necessaries of life rose again by
degrees; houses and lands, horses and carriages, and luxuries of every
sort, rose in value with them, and for some months Holland seemed the
very antechamber of Plutus. The operations of the trade became so
extensive and so intricate, that it was found necessary to draw up a
code of laws for the guidance of the dealers. Notaries and clerks were
also appointed, who devoted themselves exclusively to the interests of
the trade. The designation of public notary was hardly known in some
towns, that of tulip notary usurping its place. In the smaller towns,
where there was no exchange, the principal tavern was usually selected
as the "showplace," where high and low traded in tulips, and confirmed
their bargains over sumptuous entertainments. These dinners were
sometimes attended by two or three hundred persons, and large vases of
tulips, in full bloom, were placed at regular intervals upon the
tables and sideboards, for their gratification during the repast.

At last, however, the more prudent began to see that this folly
could not last for ever. Rich people no longer bought the flowers to
keep them in their gardens, but to sell them again at cent. per cent.
profit. It was seen that somebody must lose fearfully in the end. As
this conviction spread, prices fell, and never rose again. Confidence
was destroyed, and a universal panic seized upon the dealers. A had
agreed to purchase ten Sempers Augustines from B, at four thousand
florins each, at six weeks after the signing of the contract. B was
ready with the flowers at the appointed time; but the price had fallen
to three or four hundred florins, and A refused either to pay the
difference or receive the tulips. Defaulters were announced day after
day in all the towns of Holland. Hundreds who, a few months
previously, had begun to doubt that there was such a thing as poverty
in the land, suddenly found themselves the possessors of a few bulbs,
which nobody would buy, even though they offered them at one quarter
of the sums they had paid for them. The cry of distress resounded
everywhere, and each man accused his neighbour. The few who had
contrived to enrich themselves hid their wealth from the knowledge of
their fellow-citizens, and invested it in the English or other funds.
Many who, for a brief season, had emerged from the humbler walks of
life, were cast back into their original obscurity. Substantial
merchants were reduced almost to beggary, and many a representative of
a noble line saw the fortunes of his house ruined beyond redemption.

When the first alarm subsided, the tulip-holders in the several
towns held public meetings to devise what measures were best to be
taken to restore public credit. It was generally agreed, that deputies
should be sent from all parts to Amsterdam, to consult with the
government upon some remedy for the evil. The Government at first
refused to interfere, but advised the tulip-holders to agree to some
plan among themselves. Several meetings were held for this purpose;
but no measure could be devised likely to give satisfaction to the
deluded people, or repair even a slight portion of the mischief that
had been done. The language of complaint and reproach was in
everybody's mouth, and all the meetings were of the most stormy
character. At last, however, after much bickering and ill-will, it was
agreed, at Amsterdam, by the assembled deputies, that all contracts
made in the height of the mania, or prior to the month of November
1636, should be declared null and void, and that, in those made after
that date, purchasers should be freed from their engagements, on
paying ten per cent. to the vendor. This decision gave no
satisfaction. The vendors who had their tulips on hand were, of
course, discontented, and those who had pledged themselves to
purchase, thought themselves hardly treated. Tulips which had, at one
time, been worth six thousand florins, were now to be procured for
five hundred; so that the composition of ten per cent. was one hundred
florins more than the actual value. Actions for breach of contract
were threatened in all the courts of the country; but the latter
refused to take cognizance of gambling transactions.

The matter was finally referred to the Provincial Council at the
Hague, and it was confidently expected that the wisdom of this body
would invent some measure by which credit should be restored.
Expectation was on the stretch for its decision, but it never came.
The members continued to deliberate week after week, and at last,
after thinking about it for three months, declared that they could
offer no final decision until they had more information. They advised,
however, that, in the mean time, every vendor should, in the presence
of witnesses, offer the tulips in natura to the purchaser for the sums
agreed upon. If the latter refused to take them, they might be put up
for sale by public auction, and the original contractor held
responsible for the difference between the actual and the stipulated
price. This was exactly the plan recommended by the deputies, and
which was already shown to be of no avail. There was no court in
Holland which would enforce payment. The question was raised in
Amsterdam, but the judges unanimously refused to interfere, on the
ground that debts contracted in gambling were no debts in law.

Thus the matter rested. To find a remedy was beyond the power of
the government. Those who were unlucky enough to have had stores of
tulips on hand at the time of the sudden reaction were left to bear
their ruin as philosophically as they could; those who had made
profits were allowed to keep them; but the commerce of the country
suffered a severe shock, from which it was many years ere it
recovered.

The example of the Dutch was imitated to some extent in England.
In the year 1636 tulips were publicly sold in the Exchange of London,
and the jobbers exerted themselves to the utmost to raise them to the
fictitious value they had acquired in Amsterdam. In Paris also the
jobbers strove to create a tulipomania. In both cities they only
partially succeeded. However, the force of example brought the flowers
into great favour, and amongst a certain class of people tulips have
ever since been prized more highly than any other flowers of the
field. The Dutch are still notorious for their partiality to them, and
continue to pay higher prices for them than any other people. As the
rich Englishman boasts of his fine race-horses or his old pictures, so
does the wealthy Dutchman vaunt him of his tulips.


In England, in our day, strange as it may appear, a tulip will
produce more money than an oak. If one could be found, rara in tetris,
and black as the black swan alluded to by Juvenal, its price would
equal that of a dozen acres of standing corn. In Scotland, towards the
close of the seventeenth century, the highest price for tulips,
according to the authority of a writer in the supplement to the third
edition of the "Encyclopedia Britannica," was ten guineas. Their value
appears to have diminished from that time till the year 1769, when the
two most valuable species in England were the Don Quevedo and the
Valentinier, the for